ANZ Infrastructure Services v Spencer
[2007] NSWSC 464
•4 May 2007
CITATION: ANZ Infrastructure Services v Spencer [2007] NSWSC 464 HEARING DATE(S): 04/05/07 JUDGMENT OF: Bergin J EX TEMPORE JUDGMENT DATE: 4 May 2007 DECISION: Specific performance ordered – undertaking given by defendant not to interfere – application for exemplary damages and indemnity costs declined. CATCHWORDS: [SPECIFIC PERFORMANCE] – Defendant obliged under Deed of Release to allow the plaintiffs to have access to his property to remove wind monitoring equipment – failure to provide access – whether specific performance should be ordered - [EXEMPLARY DAMAGES] – Whether defendant’s conduct high-handed or in contumelious disregard of his obligations – [INJUNCTION] – Whether injunction should be granted to restrain interference with removal process – [COSTS] – Whether plaintiffs should be awarded indemnity costs. PARTIES: ANZ Infrastructure Services Ltd (first plaintiff)
Acconia Energy Oceana Pty Ltd (second plaintiff)
Peter James Spencer (defendant)FILE NUMBER(S): SC 50035/07 COUNSEL: N Kidd (first and second plaintiffs)
PJ Spencer (in person)SOLICITORS: Allens Arthur Robinson (first and second plaintiffs)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST
BERGIN
4 MAY 2007
50035/07 ANZ INFRASTRUCTURE SERVICES PTY LIMITED & ANOR v PETER JAMES SPENCER
JUDGMENT – EX TEMPORE
1 These are proceedings brought by the plaintiff by way of Commercial List Summons and a Commercial List Statement filed on 16 March 2007. The plaintiffs, ANZ Infrastructure Services and Acciona Energy Oceania Pty Ltd, seek an order for specific performance of the defendant's obligations under clause 10 of the Deed of Settlement entered into by the plaintiffs and the defendant on 10 November 2006.
2 The plaintiffs also seek an order that the defendant forthwith grant the plaintiffs and any of their representatives, or those acting on their behalf, free access to the defendant's property at Saarahnlee, Shannons Flat, Cooma, New South Wales (the Property), for the purposes of removing the monitoring mast and equipment in accordance with the defendant's obligations under clause 10 of the Deed of Settlement.
3 The plaintiffs also seek an order that the defendant be restrained from hindering or otherwise interfering with the removal of the monitoring mast and equipment by the plaintiffs in accordance with clause 10 of Deed of Settlement. Although originally seeking damages for breach of contract in detinue and under s 82 of the Trade Practices Act 1974 for contravention of s 52 of the Trade Practices Act, Mr Kidd of counsel, who appears for the plaintiff today, has indicated that the plaintiffs no longer press for that relief. The plaintiffs do, however, seek exemplary damages and costs.
4 The plaintiffs entered into Heads of Agreement with the defendant on 24 May 2004. Put shortly it was agreed that the plaintiffs would install equipment to monitor the wind on the defendant's Property at Cooma. The detail of the background pursuant to which the Heads of Agreement were entered into is not necessary to recount for the reasons that will become clear.
The Facts
5 The defendant, Peter James Spencer, the owner of the Property brought earlier proceedings to effectively require the plaintiffs, by injunctive relief, to produce some data in relation to the readings from the mast. Some relief was granted to the defendant in those proceedings. Ultimately the defendant and the plaintiff met in 2006 and settled their differences in respect of that litigation and the Deed of Settlement (entitled “Deed of Release”) was executed on 10 November 2006. It is apparent that the defendant had legal representation at the time of the settlement.
6 The Deed of Release recited the entry into the Heads of Agreement on 20 May 2004; the fact that Mr Spencer commenced the proceedings on 10 March 2006; the fact that the proceedings at that time were "incomplete" and the fact that the releasees, being not only the plaintiffs in these proceedings but also the Australia and New Zealand Banking Group Ltd (the Bank), had denied all of the allegations and claims made by Mr Spencer; and that those three parties, the Bank and the two plaintiffs in these proceedings, and Mr Spencer as releasor, had agreed to settle their differences on the terms set out in the Deed.
7 Clause 2 of the Deed of Release provided as follows:
2.1 Payment2. Payment by the Releases
- The Releases shall pay AUD$125,000 (exclusive of GST) to the Releasor by way of bank cheque in favour of the Releasor on the date of execution of this Deed.
2.2 No admission by Releasees
- The parties agree that the payment referred to in clause 2.1, the agreement in clause 8 and the agreement in clause 9 in relation to the use of the Information is not an admission of liability by the Releasees.
8 There is no issue that the amount of $125,000 has been paid to Mr Spencer.
9 Clause 4 of the Deed provided as follows:
4.1 Discontinuance4. Discontinuance of Proceedings and Costs
- (a) The Releasor undertakes to take all steps necessary to discontinue its claim in the Proceedings as soon as practicable but within 21 days from the date of this Deed.
- (b) The Releasor undertakes to provide a signed Notice of Discontinuance of proceeding 1826 of 2006 and proceeding 50129 of 2006 in the form of Schedule B to this Deed at the time of execution of this Deed.
4.2 Costs
4.3 GST and Stamp DutyEach party shall bear its own costs of this release.
- The parties acknowledge that no tax invoices will be issued by them in relation to any payments made under this Deed because no GST is payable on this Deed or the transactions contemplated by it. The Releasees will bear any stamp duty payable on this Deed or the transactions contemplated by it.
10 The proceedings were discontinued with each party to bear their own costs.
11 Clause 7 of the Deed provided that Mr Spencer acknowledged that the plaintiffs and the Bank did not warrant the quality, completeness, accuracy, or interpretation of any Information and that they did not bear any responsibility for subsequent use or interpretation of that Information by Mr Spencer or any other party. The Information referred to included wind data provided or to be provided by the Bank and the plaintiffs to Mr Spencer or otherwise as described in Schedule A to the Deed.
12 Schedule A to the Deed provided as follows:
1. Actual location of mast base including map datum and height datum used (details provided in paragraph 3.2 of Appendix B to the Feasibility Assessment Report dated on or about 3 April 2006 (the Report ) and in file titled “Monitoring Station – Shannons2.pdf” provided to the Releasor on or around 15 June 2006).
2. Date of installation of mast (details contained in paragraph 3.2 of Appendix B to the Report and in file titled “Monitoring Station – Shannons2.pdf” provided to the Releasor on or around 15 June 2006).
3. Date of installation of instruments and logger (details contained in paragraph 3.2 of Appendix B to the Report and in file titled “Monitoring Station – Shannons2.pdf” provided to the Releasor on or around 15 June 2006).
4. Photographs of installation in progress, (details contained in file titled “Monitoring Station – Shannons 2.pdf” provided to the Releasor on or around 15 June 2006).
6. Electronic files containing:5. Data & Data Processing – 1V_T_HR.DLD, data logger program for Campbell scientific CR10X data logger (details contained in file titled “Monitoring Station – Shannons2.pdf” provided to the Releasor on or around 15 June 2006).
- (a) Wind speeds (details provided in raw wind and data summary files titled “Shannons2.zip” on 13 Mach 2006, 28 March 2006, 1 May 2006, 19 June 2006 and 28 September 2006);
- (b) Wind direction (details provided in raw wind and data summary files titled “Shannons2.zip” on 13 March 2006, 28 March 2006, 1 May 2006, 19 June 2006 and 28 September 2006); and
- (c) Average air temperature and air pressure (details provided in raw wind and data summary files titled “Shannons2.zip” on 13 March 2006, 28 March 2006, 1 May 2006, 19 June 2006 and 28 September 2006).
8. Summary of data collection success rate (see paragraph 4.3 of Appendix B to the Report and raw wind and data summary files titled “Shannons2zip” provided to the Releasor on 13 March 2006, 28 March 2006, 1 May 2006, 19 June 2006 and 28 September 2006).
7. Correlation data from nearby Bureau of Meteorology masts (provided to the Releasor on 13 March 2006).
13 Clause 8 of the Deed recorded an agreement by Acciona to provide to Mr Spencer by 31 January 2007 wind data for the period 26 September 2006 to 14 December 2006, in a form substantially similar to that in which data had previously been provided to him. There is no issue that this data has been provided.
14 Clause 10 of the Deed provided as follows:
10.1 The Releasor agrees that:10. Removal of the monitoring mast
- (a) the Releasees will be granted access to the Site on the giving by the Releasees of not less than one week’s notice for the purpose of removing the monitoring mast and equipment;
- (b) The Releasor will provide free access to the Site to the Releasees and any of their representatives of those acting on their behalf and notified to the Releasor and will not hinder or otherwise interfere with the process of removing the monitoring mast and equipment in any way.
The Releasees agree that:
10.2 Releasees to remove monitoring mast and equipment
- (a) they will remove the monitoring mast and equipment (including all guy ropes) from the Site;
- (b) they will remove the concrete footings to a depth of not less than 300mm and will place soil over them;
- (c) the work carried out at the Site is carried out at the risk of the Releasees;
- (d) the work anticipated by this clause will be completed within 4 months from 14 December 2006 and will be done so as expeditiously as possible within this period and with the minimum number of visits to the Site.
15 On 1 December 2006 Acciona wrote to Mr Spencer referring to the Deed and giving notice under clause 10.1 that it required access to the Property from 4 January 2007 to 10 January 2007 for the purpose of removing the monitoring mast and equipment. That letter outlined the proposed times, the activities and other relevant details for the access and work required. It also indicated that in the event of adverse weather conditions Acciona would notify Mr Spencer of any need to extend the period of attendance at the Property.
16 On 12 December there was a communication between Mr Spencer and the plaintiff’s General Counsel, Mr A Evans, in which Mr Spencer indicated that the proposed dates may be the only weekend that his wife had her holidays and that he would make further contact with Mr Evans. On 15 December 2006 there was a further conversation when it is apparent that Mr Spencer said, "It should be okay" but there was just an issue that they may be away.
17 On 20 December 2006 Mr Evans made a note that he called Mr Spencer and confirmed that access was granted. On that day Mr Spencer spoke with Mr Rob Hyland, a management consultant engaged by him, who then spoke to Mr Evans. Mr Hyland informed Mr Evans that Mr Spencer had spoken to him and that he wanted to buy the monitoring mast from the plaintiffs. Mr Evans advised Mr Hyland that the plaintiffs had been through this with Mr Spencer before "and he did not think further discussion should occur". Indeed, Mr Evans informed Mr Hyland that he was surprised that Mr Spencer wanted to buy the mast because that morning Mr Spencer had given the plaintiffs permission to remove it
18 Later that day in a telephone discussion Mr Spencer informed Mr Evans that he would like to enquire about buying the mast. He said he was not concerned about the integrity of the mast; he did not want to be seen to be holding up the agreement reached in the Deed; but asked Mr Evans to speak with the relevant officer of Acciona to see if the mast was for sale. Mr Evans advised Mr Spencer that removal of the mast and provision of the data to Mr Spencer, as agreed in the Deed and commercial discussions about any proposed offer to purchase the mast, were all independent issues and that the provision of the data pursuant to clause 8 of the Deed was not a pre-condition to the removal of mast. Mr Evans claimed that in this conversation Mr Spencer acknowledged and agreed that Acciona could remove the monitoring mast between 4 and 8 January 2007.
19 On 28 December 2006 Mr Spencer wrote by e-mail to Acciona and to Mr Evans in terms as follows:
As I have not heard from you and I do realise over this holiday period communications are difficult, since our phone conversation Friday - today being Thursday and with our final bookings and plans requiring attention to avoid disappointment our end - and to avoid confusion your end I confirm the following arrangements.
I confirm difficulties preventing Site visit January as per your letter, issues of concern were raised with you initially and - more comprehensively, conveyed, per phone conversation a.m Friday December 22, 2006.
I have no doubt you will find numerous suitable occasions during the following three months to achieve your objective and please be assured of our full assistance in this regard.As initially said, my wife's annual holidays only provide this one window during the children's school year - hence on consideration of the overall impact and disappointment on all concerned we have decided to proceed with the holiday as planned so January is not an option for your visit.
20 On 29 December 2006 Mr Evans wrote by e-mail to Mr Spencer setting out some history of what had occurred after the Deed had been entered into. That e-mail included the following:
As you are well aware clause 10.1 of the deed provides that 'the releasees will be granted access to the site on the giving by the releasees of not less than one weeks notice for the purpose of removing the monitoring mast and equipment.' Clause 10.2 also provides that 'free access to the Site' will be provided to the Site by the lessor. Acciona Energy has well exceeded the one week minimum required as an act of courtesy to you and your family.
The mast removalist shall attend at 10.30am next Thursday 4 January 2007 and shall ensure that the monitoring mast and associated equipment is removed as quickly as possible as consistent with our letter.To ensure that there is no confusion, I attach our letter of 1 December 2006 which contains all relevant details of the access agreed and required to be provided. If access is not provided, which would be contrary to what was agreed with you and what is legally required under the deed of release, take note that Acciona Energy intends to take the fullest available to it at law to obtain access and to recover any loss or damage it may incur from having access hindered or denied.
21 Mr Evans went on to suggest that if Mr Spencer wished to discuss anything with him he could call him on a particular mobile number that was provided. He concluded by saying that he looked forward to acting with expediency to remove the monitoring mast and equipment and receiving Mr Spencer's full assistance in doing so.
22 On 30 December 2006 Mr Spencer responded to Mr Evans's e-mail. There is a mixture of things in that e-mail. There is reference to some other litigation that the defendant is apparently conducting against various Attorneys-General. There is also a reference to the defendant's lack of any good hours of sleep and the stresses and strains that the current drought is having upon him and his family. There is then a recognition of his obligations under the Deed and a recognition underpinning that Deed that Acciona should not have to suffer any loss. Mr Spencer then put forward a proposition for the purchase of the mast, setting out what he seems to have thought would be commercially sensible for the parties to do, it being apparent that Mr Spencer had re-thought his options and wanted to keep the mast on the Property.
23 There are some unsatisfactory observations made in that email but they seem to have been precipitated by Mr Evans's somewhat ambiguous suggestion that Acciona would attend the Property irrespective of Mr Spencer's position. Mr Spencer drafted some Notices suggesting that Acciona should not trespass upon the Property.
24 In an e-mail of 2 January 2007, in a commendable change in approach, Mr Evans advised Mr Spencer that Acciona had determined not to attend the Property as previously agreed, and noted that Mr Spencer was keen to spend time with his family and that Acciona was happy to respect that wish. Mr Evans confirmed that Acciona did not wish to sell the wind monitoring mast and associated equipment to Mr Spencer and would remove it as agreed and required under the Deed. He advised that contact would be made with Mr Spencer shortly to advise of the dates for removal, consistently with the Deed. Mr Evans wished Mr Spencer an enjoyable time with his family and indicated that he looked forward to contacting him in due course for the removal of the equipment.
25 On 9 January 2007 Mr Evans wrote by letter to Mr Spencer, referring once again to clause 10.1 of the Deed and indicating that Acciona would require access to the Property for approximately a week. Mr Evans requested Mr Spencer to provide dates that may not be suitable for Acciona to access the Property by 21 January 2007. There appears to have been no response to that letter.
26 On 2 February 2007 Mr Evans wrote by e-mail to Mr Spencer referring to his letter of 9 January and asking him to call him. It appears there was a communication on 5 February 2007 in which Mr Evans advised Mr Spencer that Acciona was looking at late February or early March to remove the mast. Mr Spencer indicated that he would call back on 14 February 2007 to confirm the times.
27 On 19 February 2007 Mr Evans called Mr Spencer and advised him that the plaintiffs wanted access to the Property and that he had not returned the calls as promised. Mr Spencer advised Mr Evans that he would only provide access pursuant to a Court order because he was of the belief that Acciona was trying to be malicious in holding up his project. Mr Evans then tried to reason with Mr Spencer and said, "Peter, you agreed in the Deed of Settlement to give us access to your property for the purpose of removing the mast." Mr Spencer said that Acciona would suffer no loss because he, Mr Spencer, had offered to buy them a new mast. Mr Evans reminded Mr Spencer that that offer had been rejected and that Acciona wanted to obtain "our property". At that stage the conversation declined into Mr Spencer saying that he would see him in court, Mr Evans asking him why he would do that and Mr Spencer saying he had a good case.
28 On 21 February 2007 Mr Evans spoke again with Mr Spencer when Mr Spencer said that he would not be providing access because there was no need to destroy the footings to the mast and he was happy for the court to determine that question. Mr Spencer also advised there was another company in the wings that might enter into an arrangement with him. The footings referred to in that conversation are apparently those referred to in clause 10.2 of the Deed, being the concrete footings that the plaintiffs agreed to remove to a depth of not less than 300mm and put soil over them. Today, during the course of submissions, I asked Mr Kidd whether it was necessary for those concrete footings to be removed and Mr Kidd indicated that clause 10.2 of the Deed was included at the defendant's behest.
Specific Performance
29 Mr Spencer agreed in the Deed to allow the plaintiffs and the Bank onto his Property to remove the mast and the equipment. He should have complied with his obligation. He did not do so in the circumstances that I have outlined.
30 The plaintiffs have, through Mr Kidd, abandoned any claim for compensatory loss and any other loss in respect of alleged misleading or deceptive conduct. It is clear that that decision is a sensible one. In his evidence and submissions Mr Spencer has made claims about the past relationship between the parties and has claimed that there are intriguing political events in relation to the decisions to move away from the promotion of renewable energy projects. It is clear to me that Mr Spencer understands that he is obliged under the Deed to allow the plaintiffs to remove the mast. Mr Spencer has also indicated that on reflection the settlement may not have been the best thing for him and there was some reference to an unsatisfactory meeting with the lawyer but that has not been taken any further. It seems to me Mr Spencer accepts his obligations but now seeks to negotiate the purchase of the mast.
31 The plaintiffs are entitled to the orders they seek with respect to the specific performance of the Deed and I intend to make orders 1 and 2 in the Summons. It seems to me that it is important that such access be granted forthwith so that the plaintiffs can finalise their relationship with the defendant and these parties can move on with their respective lives.
Exemplary Damages
32 I will come back in a moment to the order sought for an injunction against Mr Spencer. I should deal firstly with the claim for exemplary damages. The plaintiffs have a high bar to meet in establishing an entitlement to exemplary damages. It is necessary to establish high-handedness or a contumelious disregard of an obligation and/or an order. Mr Kidd submitted that there was no reasonable basis upon which the defendant was entitled to resist performing his obligations under the Deed and that the conduct referred to above demonstrates high-handedness and contumelious disregard of his obligations.
33 I disagree with that submission. There are aspects to these parties' relationships that not are without complexity. The plaintiffs had an ongoing obligation under the Deed to provide the data and it is obvious that they did so. Having considered the position further Mr Spencer tried to open up the negotiations and it is clear from his correspondence and the third party approach to the plaintiffs, that he was seeking to negotiate a commercial outcome. He was attempting to find a way in which the equipment or at least some of the infrastructure, for instance the footings, could remain on his Property. This Court will not endorse non-compliance with obligations, which is why I intend to make the orders in paragraphs 1 and 2 of the Summons. However I am of the view that Mr Spencer’s conduct in trying to renegotiate and then indicating that he wished the Court to make a ruling does not evidence high-handedness or contumelious disregard for his obligation warranting an award of exemplary damages. Accordingly, I refuse to make the order sought in paragraph 5 of the Summons.
Injunction
34 I will now turn to the application for an injunction restraining the defendant from hindering or otherwise interfering with the removal of the monitoring mast and equipment. It is noted that the defendant undertakes to the Court not to hinder or otherwise interfere with the removal of the monitoring mast and equipment by the plaintiffs.
35 By consent the plaintiff is to give Mr Spencer one week’s notice of the dates on which it will attend the property to commence and complete (pending weather conditions) the removal of the mast and equipment. Such notice may be given by e-mail to Mr Spencer’s e-mail address as provided.
Costs
36 The plaintiffs seek costs on an indemnity basis. The plaintiffs rely upon the same conduct outlined above to claim an entitlement to the indemnity costs. The basis upon which exemplary damages and indemnity costs may be awarded are different. On the one hand one has to establish high-handed conduct and contumelious disregard for exemplary damages, on the other for indemnity costs the plaintiff has to establish that resistance to the case was manifestly hopeless or unreasonable.
37 It is true that the defendant should have complied with its obligations and it is true that the plaintiffs had to commence these proceedings to obtain the orders that are to be made. However the plaintiff also sought damages for breach of contract and in detinue and under s 82 of the Trade Practices Act for contravention of s 52 of the Trade Practices Act. Those claims were abandoned today. The plaintiffs also failed to achieve an award of exemplary damages. I am satisfied that the just result is not to award indemnity costs but to award costs against Mr Spencer on the usual basis, an order Mr Spencer conceded he could not resist
38 The defendant is to pay the plaintiffs costs of the proceedings on a party/party basis.
Orders
39 I make orders 1 and 2 in the Summons filed on 16 March 2007. By consent the plaintiff is to give Mr Spencer one week’s notice of the dates on which they will attend the property to commence and complete (pending weather conditions) the removal of the mast and equipment. Such notice may be given by email to Mr Spencer’s email address as provided. The defendant is to pay the plaintiff’s costs of the proceedings on the usual basis, that is on a party-party basis.
0
0
0