Bell v Mainbader Pty Ltd - [2002] NSWSC 890

CITATION: Bell v Mainbader Pty Ltd [2002] NSWSC 890

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5535 of 1991

HEARING DATE(S): 23 September 2002

JUDGMENT DATE: 27 September 2002

PARTIES :

Ronald James Bell and Elwyn Dorothy Park (Plaintiffs)
Mainbader Pty Limited (First Defendant)
Director Land Titltes Office (Second Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr P Blackburn-Hart (Plaintiffs)
Mr M Lee (First Defendant)
No Appearance (Second Defendant)

SOLICITORS: Patterson Byfield & Bryen (Plaintiffs)
Corrs Chambers Westgarth (First Defendant)
No Appearance (Second Defendant)

DECISION: See paragraph 8

- 13 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 27 SEPTEMBER 2002

5535/91 RONALD JAMES BELL & ANOR V MAINBADER PTY LTD & ANOR

JUDGMENT

1 I gave a judgment in this matter on 8 June 2001, answering a separate question referred for decision as follows - that interest earned on proceeds of sale and development of the land the subject of each agreement, should be brought to account in the determination of the residual balance required to be determined under clause 8. Other orders were made by consent and I noted terms of settlement agreed between the parties as to various matters. It was the view of each side that as the result of the agreed terms and the answer to the separate question all matters remaining in contention could be determined by accountants as provided for in the terms of settlement.

2 These proceedings have already been the subject of two considered judgments by trial judges in this Division and one judgment of the Court of Appeal. These judgments should be read with this judgment to avoid the trouble of having to set out all the facts again. In short under three separate agreements made between Mrs Park and her brother Mr Bell of the one part, and Mainbader Pty Ltd of the other part, Bell and Park agreed to sell to Mainbader certain land owned by them, Mainbader agreed to sub-divide, develop and market the land, paying all the expenses incurred in that work and thereafter it was agreed that what was called the residual balance, being the balance arrived at by deducting from the proceeds of sales of land in each development the costs of that development, would be shared as to twenty-five percent to each of Park and Bell and as to fifty percent to Mainbader. Mainbader subsequently settled any claim by Bell so that so far as these proceedings are concerned they are by Mrs Park to obtain the twenty-five percent interest to which she is entitled in the residual balance of each development. The three separate developments are best referred to as the Lot 31 development, the Lot 42 development and the Lot 32 development, all subject to different agreements, but all to the same intent and effect. Clauses 7 and 8 of the Lot 31 agreement are set out hereunder:

7. All funds required for the purchase by Mainbader referred to in the First Recital…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] NSWSC 890
Decision Date: 27 September 2002

CaseChat Overview and Summary

The case of Bell v Mainbader Pty Ltd involved Ronald James Bell and Elwyn Dorothy Park, plaintiffs, who brought an action against Mainbader Pty Ltd, the first defendant, and the Director of Land Titles Office, the second defendant. The plaintiffs sought to determine the residual balance to which they were entitled under three separate agreements for the sale and development of land. The dispute centred on the interpretation of the agreements and terms of settlement, particularly in relation to the calculation of interest on proceeds from the sale of developed land and the residual balance.

The legal issues before the court were whether interest earned on proceeds of sale and development of the land should be brought to account in the determination of the residual balance, as well as the interpretation of the agreements regarding the charging of interest by Mainbader Pty Ltd. The court was also required to decide whether interest should be calculated on "cash credits" in the lots or stages of development.

Justice Windeyer, in his judgment, clarified that each agreement was to be treated separately and that interest on funds borrowed for project purposes and used for project purposes was a proper cost payable by Mainbader to be taken into account in determining the residual balance. He also determined that Mrs Park was entitled to interest on sums which had fallen due to her but were not paid within twenty-eight days after an accounting would have revealed an entitlement to periodic distribution. The court held that interest could only be charged by Mainbader if interest had been paid or was payable by Mainbader, and it was not payable upon contributions. Interest earned, if any, was brought to account in accordance with the earlier judgment. The court concluded that Mr Done's interpretation in B1 was correct and Mr Hayward's interpretation in B2 was incorrect.

The final orders of the court would need to be made to answer the questions or for reformulation of the questions if required. The parties were also required to make submissions on costs, and the court would fix a time for the making of orders and submissions on costs.

Orders