Australian Customer Target Information Company Pty Ltd v Cabool Holdings Pty Ltd

[2003] NSWSC 753

CITATION:	Australian Customer Target Information Company Pty Ltd v Cabool Holdings Pty Ltd & Anor [2003] NSWSC 753
HEARING DATE(S):	11 August 2003
JUDGMENT DATE:	11 August 2003
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Interpleader refused
CATCHWORDS:	PROCEDURE - Supreme Court procedure - interpleader - rationale - when appropriate to be granted
LEGISLATION CITED:	Conveyancing Act 1919 Trade Practices Act 1974 (Cth)
PARTIES :	The Australian Customer Target Information Company Pty Limited - Plaintiff Cabool Holdings Pty Limited - First Defendant Ultimo - Pyrmont Real Estate Pty Limited - Second Defendant
FILE NUMBER(S):	SC 3416/00
COUNSEL:	S Galitsky - Plaintiff S Epstein SC - First Defendant CD Wood - Second Defendant/Applicant
SOLICITORS:	Haylen McKenzie - Plaintiff Frank Low Yeung & Co - First Defendant Pigott Stinson Ratner Thom - Second Defendant/Applicant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

MONDAY 11 AUGUST 2003

3416/00 THE AUSTRALIAN CUSTOMER TARGET INFORMATION COMPANY PTY LTD v CABOOL HOLDINGS PTY LTD & ANOR

JUDGMENT – Ex Tempore

1 HIS HONOUR: The action in which this Notice of Motion is brought is one which was brought by the purchaser of some commercial premises in Harris Street, Ultimo. It sues the vendor of those premises and also, the real estate agent who was acting for the vendor in connection with the proposed sale.

2 It is the plaintiff's case that there was a misrepresentation to it, conveyed by the real estate agent, about whether or not the premises were the subject of termite infestation.

3 The plaintiff, a long time ago, in 2000, terminated the contract. The matter which is before the Court now relates to the deposit. The plaintiff claims that a recision of the contract by the vendor was invalid, and that it should be able to recover its deposit. Alternatively, even if the claim that the recision was invalid fails, the plaintiff seeks to recover its deposit under section 55A of the Conveyancing Act.

4 There are allegations of misrepresentation against the real estate agent. Concerning those alleged misrepresentations, the plaintiff makes a claim under section 52 of the Trade Practices Act.

5 The damages which are sought against the estate agent, are of three different kinds. The first is that, if the plaintiff does not recover its deposit from the vendor, then it seeks the amount of that deposit from the agent. The second claim is in the nature of interest, which I take to be interest on the deposit. This is sought, even though the parties had, in the written contract which they entered, not required the deposit to be invested. The third head of damage is for unrecovered legal costs.

6 The contract was entered in 2000; the present application is one which is brought by a Notice of Motion which the second defendant filed on 10 June 2003. It was only in September 2002 that the second defendant was joined to the proceedings. The Notice of Motion was orally amended so that it seeks relief by way of interpleader (namely, that upon the second defendant paying the deposit into court, the proceedings against it be stayed), and in the alternative security for costs.

7 The power of the Court to grant relief by way of interpleader arises under Part 56 Rule 2 of the Supreme Court Rules. Under Part 56, Rule 2(b), if the person is sued, or expects to be sued, for or in respect of a debt or other personal property, by two or more persons making adverse claims to debt or property, then the Court may grant relief by way of interpleader.

8 If this were a conventional case of a real estate agent who had received a deposit, and there was a dispute about whether a contract had been validly terminated, or not, it would clearly be an appropriate case for granting interpleader.

9 The origins of the law of interpleader were in equity's concern for preventing multiplicity of proceedings; where there was a situation where a person who made no claim to be entitled to a particular item of property was likely to be sued by two different people concerning that property, the Equity Court would sometimes permit the property in dispute to be placed in the custody of the Court, and would allow the person who claimed no interest in that property to be freed of the litigation.

10 As the name suggests, part of the relief which was granted by the Court was requiring those parties who made claims to the property in dispute to plead amongst each other. Requiring them to “inter-plead” in that fashion was itself part of the remedy, and was the means whereby the person who made no claim to the property could be freed from all the claims against him or her.

11 In the present case, the rationale for the remedy is not present. That is because the real estate agent is being sued in its own right in connection with the conveyancing transaction. The granting of the relief by way of interpleader would not have the effect of freeing the real estate agent from the litigation that is brought against it. That is because the agent would still be sued for misrepresentation, even if the amount of the deposit was paid into Court.

12 In these circumstances, it does not seems to me to be appropriate to grant relief by way of interpleader.

13 One submission which Mr Wood, for the real estate agent, advanced, was that there is a claim made against the real estate agent for interest, even though the party had agreed that the deposit need not be invested.

14 It seems to me that that aspect of the claim is more appropriately dealt with at the trial, and after the facts have been fully ventilated. The award of interest is, after all, a discretionary matter for the court, and all appropriate considerations can be taken into account in deciding whether or not interest should be awarded, at what rate, and for what period of time.

15 Thus, I do not regard the stopping of interest running as being a reason for the granting of interpleader relief.

16 The second application which the real estate agent makes is an application for security for costs. The plaintiff is a company of no substance, so this is a case where it would ordinarily be appropriate to grant security for costs.

17 An unusual feature of the present case is that the real estate agent who was involved in the sale of the property, has already put on an affidavit giving his side of the facts, at a time before the second defendant was joined. Nonetheless, there is still a possibility that certain further evidence might be required from the real estate agent.

18 This possibility arises from the fact, which appears to be common ground, that the rentals department of the second defendant was aware of there having been some termite activity in the premises. However the real estate agent involved in the sale, Mr Fernandez, has put on an affidavit saying that there are two departments in the organisation, and he did not know of the information about termite activity, which people in the rental department knew about.

19 Mr Wood tells me that some further evidence may be needed to clarify the factual basis of any arguments that he might wish to put concerning whether knowledge residing in the rental department ought be attributed to the second defendant, concerning activities of the sales department.

20 The application is one which is brought after some delay - the second defendant first filed an appearance in September 2002, after having been joined on 27 August 2002, but the Notice of Motion seeking security was filed only on 10 June 2003. This was so even though a perusal of the file would have shown that on 11 March 2002, by consent, the plaintiff had been ordered to provide $20,000 security for the costs of the first defendant.

21 The solicitor for the second defendant has filed an affidavit which estimates the costs for which security is sought in the amount of $14,300. The plaintiff's solicitor has filed an affidavit saying that this is too much, and estimating costs in the sum of $8,525.

22 In my view, this is an appropriate case for the provision of security, in the sum of $10,000.

(1) I order that the plaintiff provide to the second defendant security for costs in the sum of $10,000, in the form either of cash, or a bank guarantee, in a form acceptable to the solicitor for the second defendant, on or before 4.00pm, 8 September 2003.

(2) If the security is not provided by that time, I order that the proceedings be stayed as against the second defendant.

(3) I grant liberty to the parties to approach me in the event that there is a dispute about the form of any security to be in the form of a bank guarantee.

(4) Costs of the motion are reserved.

(5) I grant leave to the first defendant to file in court a defence in a form in which I initial and date today's date.

(6) I direct the second defendant to file a defence by 4.00pm, 18 August 2003.

(7) I make the directions in accordance with paragraphs 7, 8 and 9 of the document headed "Directions", which I initial, date today's date and shall place with the papers.

For complete clarity, I note that, in the event that the matter is stayed pursuant to my earlier orders, those directions will not apply to the second defendant.

(8) I appoint Tuesday, 2 September 2003, before the Registrar at 9.00am for Return of Subpoenas and Notices to Produce.

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Last Modified: 08/18/2003