Chint Australasia Pty Ltd v Cosmoluce Pty Ltd - [2008] NSWSC 1054

CITATION: Chint Australasia Pty Limited v Cosmoluce Pty Limited [2008] NSWSC 1054

HEARING DATE(S): 3/10/08

JUDGMENT DATE :
8 October 2008

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: Einstein J

DECISION: Order to be made rescinding the instalment order made on 27 August 2008

CATCHWORDS: Practice and procedure - Plaintiff succeeds in substantial commercial list proceedings obtaining judgment in the sum of $5,000,333 plus interest - Defendant succeeds before Registrar in application to pay judgment debt in instalments over a period of two years under rule 37.3 Uniform Civil Procedure Rules 2005 - Plaintiff applies by notice of motion under rule 37.3 for rescission or variation of instalment order - Proceedings before Court by hearing de novo - Consideration of genealogy of provisions for payment by instalment orders - Principled approach to exercise of relevant discretion - Prima facie entitlement of party having succeeded in obtaining substantial success in major commercial litigation to be in a position to enforce the Court's order - Particularly special circumstances required to be shown to deny a successful party its entitlement to enforce a court order

LEGISLATION CITED: Civil Procedure Act 2005 [NSW]
Imprisonment of Fraudulent Debtors Act 1958 [Vic]
Magistrates (Summary Proceedings) Act 1975 [Vic]
Uniform Civil Procedure Rules 1995 (NSW)

CATEGORY: Consequential orders

CASES CITED: Cahill v Howe [1986] VR 630
Lewis v Leslie [2001] VSC 110

PARTIES: Chint Australasia Pty Limited (Plaintiff)
Cosmoluce Pty Limited (Defendant)

FILE NUMBER(S): SC 50065/07

COUNSEL: Mr MJ Leeming SC, Mr MJ O'Meara (Plaintiff)
Mr JM Miller (Defendant)

SOLICITORS: Corrs Chambers Westgarth (Plaintiff)
Dibbs Abbott Stillman (Defendant)

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

Einstein J

Wednesday 8 October 2008

50065/07 Chint Australasia Pty Ltd v Cosmoluce Pty Ltd

JUDGMENT

The background

1 On 27 June 2008 judgment was given in favour of the plaintiff (Chint) in the sum of $5.333 million plus interest from 16 June 2008 following a five day trial (see [2008] NSWSC 635). The defendant (Cosmoluce) has not appealed.

2 On 29 July 2008 Cosmoluce applied under Rule 37.3, Uniform Civil Procedure Rules 2005 (UCPR) to pay its judgment debt in instalments over a period of almost two years, commencing in August 2008 and ending in July 2010. The instalments proposed by Cosmoluce were seven instalments of $50,000 per month from August 2008 to February 2009, an instalment of $3,833,000 in March 2009, a further 16 instalments of $50,000 per month from March 2009 to June 2010 and a final instalment of $897,028.80 in July 2010.

3 On 27 August 2008, Registrar Walton granted Cosmoluce’s application (the instalment order).

The notice of motion seeking rescission of the instalment order

4 By notice of motion dated 10 September 2008, Chint applied under Rule 37.3, UCPR objecting to the instalment order.

The nature of the hearing

5 Chint’s application for rescission or variation of the instalment order under Rule 37.3, UCPR is a hearing de novo and is not in the nature of an appeal from the order…

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: [2008] NSWSC 1054
Decision Date: 8 October 2008

CaseChat Overview and Summary

In the Federal Court of Australia, Chint Australasia Pty Ltd filed proceedings against Cosmoluce Pty Ltd, seeking compensation for breach of contract. The dispute centred on an agreement for the supply of lighting equipment and services. The matter was heard in the commercial division of the court. After a comprehensive trial, Chint Australasia succeeded, and a judgment was rendered in its favour for the sum of $5,000,333 plus interest. Cosmoluce Pty Ltd subsequently applied to the Registrar to pay this sum in instalments over two years under rule 37.3 of the Uniform Civil Procedure Rules 2005. The Registrar approved this application.

The central legal issue before the Court was whether the plaintiff, having succeeded in obtaining a substantial commercial judgment, was entitled to enforce the full judgment without the need for the defendant to pay in instalments. The court had to balance the defendant's right to an instalment payment plan against the plaintiff's right to enforce the judgment in full. The Court was also required to consider the appropriate exercise of discretion under rule 37.3, particularly in light of the plaintiff's substantial success in the litigation.

The Court, in reviewing the matter de novo, examined the history and purpose of instalment payment orders under rule 37.3. It concluded that a party who has achieved a substantial success in a major commercial case should generally be in a position to enforce the Court's order fully. This principle was seen as reinforcing the importance of enforcing court orders. However, the Court acknowledged that there may be exceptional circumstances that could justify an order for instalment payments. In this case, the defendant failed to demonstrate any such special circumstances, leading to the plaintiff's application for rescission or variation of the instalment order being granted.

The Court ordered that the instalment payment order made by the Registrar be set aside, and that Cosmoluce Pty Ltd was to pay the full judgment debt owed to Chint Australasia Pty Ltd within 28 days. The Court emphasised that its decision was based on the general principle that a successful party in substantial commercial litigation should be able to enforce the court's order, unless there are compelling reasons to the contrary.

Orders