Bullabidgee Pty Ltd v McCleary (No 2)

[2011] NSWCA 343

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343

Hearing dates:

On the papers

Decision date:

09 November 2011

Before:

Allsop P at 1
Basten JA at 1
Young JA at 1

Decision:

1.Appeal allowed in part.

2.The unnumbered third order made by the Court on 19 April 2010 dismissing the further amended statement of claim of Bullabidgee Pty Ltd ACN 125 772 483, Towool Pty Ltd ACN 125 772 821, Towool West Pty Ltd ACN 125 772 670, Towool Water Pty Ltd ACN 125 772 723, Warrawool Pty Ltd ACN 125 772 769, Warrawool North Pty Ltd ACN 125 772 796, Warrawool Water Pty Ltd 125 772 778, MHD Echuca Pty Ltd ACN 108 901 579 and Mr Ian Tayles (the "purchasers") be set aside.

3.The declaration numbered 4 made by the Court on 19 April 2010 as to the entitlement of Mr Brian John McCleary and Mr Peter Joseph Rae (the "vendors") to forfeit the deposits be set aside.

4.The unnumbered order made by the Court on 19 April 2010 that the purchasers pay the vendors' costs of the proceedings at first instance be set aside.

5.Set aside the unnumbered judgment of 19 April 2010 and in place thereof give judgment for the purchasers (other than MHD Echuca Pty Ltd ACN 108 801 579 and Mr Ian Tayles) against the vendors in the sum of $183,404.33, such judgment to take effect on 20 April 2010.

6.The further amended statement of claim filed by the purchasers be otherwise dismissed.

7.The appellants pay 20 per cent of the respondents' costs of the proceedings at first instance.

8.The respondents pay 50 per cent of the appellants' costs of the appeal.

9.The parties have leave to file within 14 days a notice of motion to vary, or consent orders varying, the terms of these orders.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

ORDERS - costs - no question of principle.

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 98(1), 100, 101
Uniform Civil Procedure Rules 2005 (NSW), Pt 42, r 42.1, Pt 36, r 36.7

Cases Cited:

Ohn v Walton (1995) 36 NSWLR 77

Category:

Consequential orders

Parties:

Bullabidgee Pty Ltd (First Appellant)
Towool Pty Ltd (Second Appellant)
Towool West Pty Ltd (Third Appellant)
Towool Water Pty Ltd (Fourth Appellant)
Warrawool Pty Ltd (Fifth Appellant)
Warrawool North Pty Ltd (Sixth Appellant)
Warrawool Water Pty Ltd (Seventh Appellant)
MHD Echuca Pty Ltd (Eighth Appellant)
Ian Tayles (Ninth Appellant)
Brian John McCleary & Peter Joseph Rae (First Respondent)
JP & M Kerr (Billabidgee) Pty Ltd (Second Respondent)
Bullatale Pastoral Pty Ltd (Third Respondent)

Representation:

R S Angyal SC, A D Justice (Appellants)
B A Coles QC, S Galitsky (Respondents)
Maurice Blackburn Commercial Lawyers, Melbourne (Appellants)
Francis Kelly & Grant, Deniliquin (Respondents)

File Number(s):

2008/278153

 Decision under appeal 

Date of Decision:

2010-04-19 00:00:00

Before:

Brereton J

File Number(s):

2008/277814; 2008/278153

Judgment

1. THE COURT: On 2 September 2011, the Court delivered substantive reasons in this matter calling for submissions on the form of orders to resolve the appeal ([2011] NSWCA 259).

1. The terms of the orders made by the primary judge are not straightforward. They are recorded as having been made on 19 April 2010 and entered on 20 April 2010, as follows:

"I make declarations in accordance with paragraph 1, 2, 3, 4 and 5 of the document entitled Short Minutes of Order initiated by me, dated this day and placed with the papers.

I give judgment that the purchasers pay the vendors damages in the sum of $319,767.67.

I dismiss the purchaser's further amended statement of claim in proceedings 1813/2008.

I note that the damages comprised in the judgment given above comprise the amounts awarded for breach of contract only and do not include any component for trespass as it agreed that the value to the vendors of the crops grown on the land during the period from 20 March 2008 to 6 April 2009 exceed the prima facie damages for trespass.

I order that the vendors be released from their undertaking given to the Court on 23 March 2009 with respect to the distribution of the proceeds of the rice crop then grown on the land referred to in the Schedule to Order 5 of the summons in proceedings 2244/2008.

Ex temp judgment

I order that the purchasers pay the vendor's costs in both proceedings, I decline to make any indemnity costs orders.

I direct that unless a notice of appeal has been filed within 28 days the exhibits may be returned.

ORDER:

THE COURT DECLARES THAT:

1. Brian John McCleary and Peter Joseph Rae ("the vendors"), by Notice dated 12 March 2008, validly and effectively terminated the contract for sale dated 1 June 2007 between the vendors and Bullabidgee Pty Ltd ACN 125 772 483.

2. The vendors, by Notice dated 12 March 2008, validly and effectively terminated the contract for sale dated 1 June 2007 between the vendors and Towool Pty Ltd ACN 125 772 821, Towool West Pty Ltd ACN 125 772 670 and Towool Water Pty Ltd ACN 125 772 723.

3. The vendors, by Notice dated 12 March 2008, validly and effectively terminated the contract for sale dated 1 June 2007 between the vendors and Warrawool Pty Ltd ACN 125 772 769, Warrawool North Pty Ltd ACN 125 772 796 and Warrawool Water Pty Ltd ACN 125 772 778.

4. The vendors are entitled to forfeit the deposits paid in respect of the contracts I referred to in paragraphs 1, 2 and 3 hereof.

5. Bullabidgee Pty Ltd ACN 125 772 483, Towool Pty Ltd ACN 125 772 821, Towool West Pty Ltd ACN 125 772 670, Towool Water Pty Ltd ACN 125 772 723, Warrawool Pty Ltd ACN 125 772 769, Warrawool North Pty Ltd ACN 125 772 796, Warrawool Water Pty Ltd ACN 125 772 778, MHD Echuca Pty Ltd ACN 108 901 579 and Ian Tayles ("the purchasers") were trespassers on the land the subject of the contracts referred to in paragraphs 1, 2 and 3 hereof ("the land") during the period from 20 March 2008 to 6 April 2009."

1. The first unnumbered paragraph referring to paragraphs of short minutes said to be placed with the papers refers, we would take it, to the five numbered declarations set out in the second half of the document.

1. The parties have filed written submissions on the proper form of orders to reflect the President's conclusions in [84] of the substantive reasons.

1. The orders that should be made that are not truly in contest are as follows:

(a) First, the appeal should be allowed in part.

(b) Secondly, the unnumbered third order made by the primary judge on 19 April 2010 dismissing the purchasers' amended statement of claim should be set aside.

(c) Thirdly, the declaration numbered 4 as to the entitlement of the vendors to forfeit the deposits should be set aside.

(d) Fourthly, there should be an effective judgment for such of the appellants as were parties to the contracts for the purchase of land (which will exclude MHD Echuca Pty Ltd and Mr Ian Tayles) in the sum of $436,800 on account of the return of the deposits paid under the contracts for sale. For convenience we would order a joint judgment. If several judgments ought be made the parties can submit an order varying these orders within 14 days.

(e) Fifthly, the respondents should be entitled to set off against the amount in (d) above the amount of $319,767.67 awarded by the trial judge as damages in the unnumbered second order made on 19 April 2010, together with interest from 20 April 2010.

(f) Sixthly, the purchasers' further amended statement of claim and the appeal be otherwise dismissed.

1. The vendors are entitled to set off their judgment, with which this Court has not interfered, in an amount of $319,767.67, against the amount payable by them pursuant to the judgment of this Court. The parties provided schedules in respect of the relevant calculations of interest. Because there are differences of approach, it is necessary for this Court to resolve the outstanding issues. It is also appropriate for the Court to identify in its order the precise amount payable.

1. Pre-judgment interest awarded pursuant to s 100 of the Civil Procedure Act 2005 (NSW), may now be calculated, in accordance with Practice Note 16, at a rate 4 per cent above the cash rate for the relevant period. Post-judgment interest, payable pursuant to s 101 of the Civil Procedure Act , is calculated at a rate 6 per cent above the relevant cash rate: Uniform Civil Procedure Rules 2005 (NSW), r 36.7. The Practice Note with respect to pre-judgment interest commenced on 1 July 2010, but the parties both made calculations on the basis that it would operate in respect of relevant periods prior to that date. That assumption should be accepted.

Because the judgment in favour of the vendors took effect from 20 April 2010, the judgment in favour of the purchasers should also have effect, pursuant to the orders of this Court, from that date. Pre-judgment interest on the deposit (to the nearest dollar) from 14 July 2008 until 20 April 2010 is $66,372. Accordingly, the amount payable by the vendors, as at 20 April 2010, was $503,172. From that amount should be deducted the judgment in their favour, being $319,767.67. The balance payable was therefore $183,404.33. There should be judgment in favour of the purchasers for that amount.

1. The question of costs also separates the parties. The appellants seek orders that there be no order as to costs of the proceedings below and that the respondents pay their costs of the appeal. The respondents seek their costs of the proceedings below and on appeal. Thus, both parties accept that the usual rule of costs following the event is not appropriate here.

1. In our view, the just result as to costs lies somewhere between these extremes. The point of relief upon which the appellants succeeded was not precisely put, but was, as the President said in [84] of the substantive judgment, "conformable with the conduct of the case and the appeal". The point of liability upon which the appellants succeeded was the second representation. It was the less onerous case to run and prove. A significant proportion of the time of the preparation and running of the case at first instance and on appeal was taken up with the first representation; further time was taken up at first instance on issues that were lost by the appellants and not re-agitated, in particular, the chattels contract and the claims for trading losses. That said, the purchasers were successful in retaining the value of the crops sowed by them and should have been successful on the return of the deposits via the case based on the second representation. Further, the changes made in the direction and focus of the purchasers' case at first instance and the need for significant cross-examination of Mr Tayles should be taken into account, both of which matters would have led to an extension of the hearing with a consequent effect on costs. The primary judge was not persuaded (see the costs judgment: [2010] NSWSC 345) that the additional costs from the abandonment of the specific performance case were a "large proportion of [the] costs": see [2010] NSWSC 345 at [7]. Nor was his Honour persuaded that there was "sufficient delinquency in ... propounding then abandoning a claim for specific performance to justify a special costs order": see [9]. The abandonment came, as the judge noted, after the global financial crisis, affecting the purchasers' ability to raise funds.

1. We do not consider that individual issues should be isolated and weighed with minute precision. That said, the costs orders below and on appeal should be a just and fair reflection of the cases run, won and lost, given the range of issues litigated, the manner of running the trial and the basis of success. That course is not inconsistent with the prima facie rule that costs follow the event, depending on what the event is: Uniform Civil Procedure Rules , Pt 42, r 42.1. In this respect, the Civil Procedure Act , s 98(1) gives ample authority to determine the costs according to what is just and reasonable: Ohn v Walton (1995) 36 NSWLR 77 at 79.

1. In our view, considering the above considerations, the weight of issues run below and on appeal and their disposition, we would order that the appellants pay 20 per cent of the respondents' costs at first instance and the respondents pay 50 per cent of the appellants' costs on appeal. This will reflect the substantial issues run and lost by the appellants at considerable cost below and how those issues were approached and the substance of their victory on one part of the appeal.

1. There are a significant number of parties to the relevant contracts and to the proceedings. The parties will have the opportunity to make amendments to the orders should this be necessary.

1. Thus the orders of the Court are:

1. Appeal allowed in part.

2. The unnumbered third order made by the Court on 19 April 2010 dismissing the further amended statement of claim of Bullabidgee Pty Ltd ACN 125 772 483, Towool Pty Ltd ACN 125 772 821, Towool West Pty Ltd ACN 125 772 670, Towool Water Pty Ltd ACN 125 772 723, Warrawool Pty Ltd ACN 125 772 769, Warrawool North Pty Ltd ACN 125 772 796, Warrawool Water Pty Ltd 125 772 778, MHD Echuca Pty Ltd ACN 108 901 579 and Mr Ian Tayles (the "purchasers") be set aside.

3. The declaration numbered 4 made by the Court on 19 April 2010 as to the entitlement of Mr Brian John McCleary and Mr Peter Joseph Rae (the "vendors") to forfeit the deposits be set aside.

4. The unnumbered order made by the Court on 19 April 2010 that the purchasers pay the vendors' costs of the proceedings at first instance be set aside.

5. Set aside the unnumbered judgment of 19 April 2010 and in place thereof give judgment for the purchasers (other than MHD Echuca Pty Ltd ACN 108 801 579 and Mr Ian Tayles) against the vendors in the sum of $183,404.33, such judgment to take effect on 20 April 2010.

6. The further amended statement of claim filed by the purchasers be otherwise dismissed.

7. The appellants pay 20 per cent of the respondents' costs of the proceedings at first instance.

8. The respondents pay 50 per cent of the appellants' costs of the appeal.

9. The parties have leave to file within 14 days a notice of motion to vary, or consent orders varying, the terms of these orders.

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Decision last updated: 09 November 2011