Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 7]

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   CLAMBAKE PTY LTD -v- TIPPERARY PROJECTS PTY LTD [No 7] [2009] WASC 390

CORAM:   EM HEENAN J

HEARD:   16, 17 & 18 NOVEMBER 2009

DELIVERED          :   14 DECEMBER 2009

FILE NO/S:   CIV 1707 of 2003

BETWEEN:   CLAMBAKE PTY LTD (ACN 009 242 371)

Plaintiff

AND

TIPPERARY PROJECTS PTY LTD (ACN 054 744 713)
First Defendant

WARREN PERRY ANDERSON
Second Defendant

FILE NO/S              :CIV 2093 of 2003

BETWEEN              :OWSTON NOMINEES No 2 PTY LTD (ACN 001 769 099)

First Plaintiff

TIPPERARY PROJECTS PTY LTD (ACN 054 744 713)
Second Plaintiff

AND

CLAMBAKE PTY LTD (ACN 009 242 371)
First Defendant

LAND CAPITAL PTY LTD (ACN 058 548 806)
Second Defendant

IVOR FREDERICK COHEN
Third Defendant

WARREN PERRY ANDERSON
Defendant to counterclaim

Catchwords:

Guarantee and indemnity - Defence and cross-claim for modification of contractual terms - Trade Practices Act ss 80 and 87 - Cross-claim for injunction - Alleged estoppel and res judicata - Alleged abuse of process - Alleged privity between director of company and corporation - Accrual of limitation periods for claims under s 87 of the TPA - Relationship between new claims and counterclaims and causes of action previously determined - Interest on judgments - Merger of causes of action in judgment - Exceptions to doctrine of merger - Application for extension of order suspending enforcement of judgment

Legislation:

Civil Judgments Enforcement Act 2004 (WA)
Fair Trading Act 1987 (WA)
Supreme Court Act 1935 (WA)
Trade Practices Act 1974 (Cth)

Result:

CIV 1707 of 2003
Application for special rate of interest on judgment debt dismissed

CIV 2093
New claim by Clambake for indemnity against Mr Anderson for Clambake's liability to Owston dismissed
Judgment for Mr Anderson on his cross-claim against Clambake for relief under s 87 of TPA
Order for suspension of enforcement of judgment extended but on further conditions

Category:    A

Representation:

CIV 1707 of 2003

Counsel:

Plaintiff:     Mr P J Deakin QC & Mr S E McCarthy

First Defendant             :     Mr S Rushton SC & Mr J Giles

Second Defendant         :     Mr S Rushton SC & Mr J Giles

Solicitors:

Plaintiff:     Minter Ellison

First Defendant             :     Solomon Brothers

Second Defendant         :     Solomon Brothers

CIV 2093 of 2003

Counsel:

First Plaintiff                :     Mr M L Bennett & Mr C Chenu

Second Plaintiff            :     Mr S Rushton SC & Mr J Giles

First Defendant             :     Mr P J Deakin QC & Mr S E McCarthy

Second Defendant         :     No appearance

Third Defendant           :     Mr P J Deakin QC & Mr S E McCarthy

Defendant to counterclaim   :     Mr S Rushton SC & Mr J Giles

Solicitors:

First Plaintiff                :     Lavan Legal

Second Plaintiff            :     Solomon Brothers

First Defendant             :     Minter Ellison

Second Defendant         :     Sparke Helmore

Third Defendant           :     Minter Ellison

Defendant to counterclaim   :     Solomon Brothers

Case(s) referred to in judgment(s):

Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353

Arbuthnot v Bunsilall (1890) 62 LT 234

Ardrey v Bartlett [2004] WASCA 256

ASX Operations Pty…

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Details
Case
[2009] WASC 390
Decision Date

CaseChat Overview and Summary

Clambake Pty Ltd sought relief against Tipperary Projects Pty Ltd in the Supreme Court of Western Australia, challenging contractual terms, the accrual of limitation periods, and seeking modifications under the Trade Practices Act. The primary dispute involved the enforceability of a guarantee and indemnity, the accrual of limitation periods for claims, and the applicability of estoppel and res judicata. The court had to determine whether the contractual terms governing interest rates and limitation periods could be enforced post-judgment and whether the Trade Practices Act permitted modifications to the contractual terms. The court examined the effect of statutory provisions on contractual terms, particularly focusing on the accrual of limitation periods and interest rates post-judgment. The court referenced previous legal precedents and statutory changes, including the Civil Judgments Enforcement Act and the Trade Practices Act, to assess the enforceability of the contractual terms after judgment had been entered. The court concluded that the statutory provisions allowed for the enforcement of higher interest rates post-judgment, even if the contractual terms had merged in the judgment. It also found that the Trade Practices Act permitted modifications to the contractual terms to ensure a fair result, as long as such modifications did not impose a regime that the parties would not have agreed upon.

The court determined that the provisions of the Civil Judgments Enforcement Act allowed for the enforcement of higher interest rates post-judgment, even if the contractual terms had merged in the judgment. It held that the statutory provisions enabled the enforcement of higher interest rates, overriding the previous limitation to the statutory rate. The court also found that the Trade Practices Act permitted modifications to the contractual terms to ensure a fair result, but such modifications should not impose a regime that the parties would not have agreed upon. This decision clarified the interplay between statutory provisions, contractual terms, and post-judgment enforcement, providing guidance on the enforcement of higher interest rates and the modification of contractual terms under the Trade Practices Act. The court's reasoning and outcome provided clarity on the enforceability of contractual terms post-judgment and the permissible scope of modifications under the Trade Practices Act.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Counsel for Clambake point to the provisions of s 8(1) of the Civil Judgments Enforcement Act as authorising such an application for a higher rate of interest to be made and allowed notwithstanding that judgment has already been entered. So far as is applicable, that section provides:8. Interest on judgment sums(1)Interest is to be paid on the unpaid amount of a judgment sum from the date of the judgment until the date on which the judgment sum is paid -(a)at the rate prescribed by the regulations; or(b)at the rate set by the court in the judgment or by an order made after the judgment is given. Counsel assumed, and it was not contested, that none of the exceptions referred to in s 8(5) applies. So far as I have been able to discover, there has been no occasion for this court to consider or pronounce upon the effect of s 8(1) of the Civil Judgments Enforcement Act so far, presumably, because this is relatively recent legislation. It is, in part, the product of a recommendation by the Law Reform Commission of WA in its report 'Enforcement Of Judgment Debts - Project 61' in April 1977. But the LRCWA report did not deal with this specific issue. I note the Hansard debates in the Legislative Assembly record that a member raised the question of whether or not s 8(1)(a) might have the effect that the provisions in any contract governing the rate of interest payable would merge in the judgment, with the result that the debtor would gain a benefit if the prescribed rate of the regulations were lower than the contractual rate, but apart from an observation by the Attorney‑General that the provisions of the clause might deal with that problem, the issue was not resolved. Until the repeal of s 142 of the Supreme Court Act1935 (WA) by the Civil Judgments Enforcement Act and the enactment of s 8(1) of the latter Act, there was no statutory power for a court to award, or for a judgment creditor to recover, more than the prescribed rate of interest on a judgment from the date on which the judgment had been entered. The approach was that most contractual terms, which provided for a higher rate of interest on moneys owing, merged in the judgment. There were some exceptions but these were limited to instances where the contract itself provided specifically for the recovery of a higher rate of interest, even after judgment, until payment. These authorities revealed that, for a higher claim to post judgment interest to survive, the contract sued upon must state, specifically, that any judgment obtained for recovery of the debt should carry interest at the higher rate until payment in full and that this should form part of the judgment ‑ Re European Central Railway (1877) 4 ChD 33; Ex parte Fewing; Re Sneyd.(1883) 25 ChD 338; Arbuthnot v Bunsilall (1890) 62 LT 234; and Economic Life Assurance Society v Usborne [1902] AC 147. There is no doubt that, at least until the passage of the 2004 Act, the standard approach, subject to the exception described, was that an entitlement to interest contained in some contract upon which a money judgment was founded would merge in the judgment and thereafter the only entitlement to interest would be to the statutory rate applying in a case of judgment debts. The exception was described by Fry LJ in Ex parte Fewings; Re Sneyd, 355 as follows:Where there is a covenant for the payment of a principal sum, and a judgment has been obtained on the covenant for that sum, it is plain that the covenant is merged in the judgment, and, if there is a covenant to pay interest which is merely incidental to the covenant to pay the principal debt, that covenant also is merged in a judgment on the covenant to pay the principal debt. Of course, a covenant to pay interest may be so expressed as not to merge in a judgment for the principal; for instance, if it was a covenant to pay interest so long as any part of the principal should remain due either on the covenant or on a judgment.

Ratio Decidendi

Legal Principle Established

An example of a variation of a contract pursuant to the powers contained in s 87(2)(b) of the TPA is found in ASX Operations Pty Ltd v Pont Data Australia Pty Ltd [No 1] (1990) 27 FCR 460, a decision of the Full Court of the Federal Court (Lockhart, Gummow and Von Doussa JJ), although that was a case where performance of a contract according to its terms would have had the effect of substantially lessening competition in contravention of ss 45 and 46 of the TPA. The nature of the relief, if any, to be granted under s 87 was therefore reserved for further consideration. The extent of the relief granted under s 87 was dealt with in the subsequent hearing, ASX Operations Pty Ltd v Pont Data Australia Pty Ltd [No 2] (1991) 27 FCR 492 where, at 503, the court referred to a degree of reluctance to rewrite contractual provisions as to price evident in the anti‑trust laws of the United States although their Honours remarked that this may not translate to the position in Australia before saying:No doubt, in a case such as the present, the court has power under s 87 to vary the contract in question, even as to matters of price payable thereunder. Nevertheless, the court must be slow to impose upon the parties a regime which could not represent a bargain they would have struck between them. These considerations do not apply in the present case because no question of further performance of this lease or of the obligations under it guaranteed by Mr Anderson arises. Unlike the ASX v Pont Data (supra) litigation the focus in the present case is retrospective and any orders which might be made under s 87 will not affect the future commercial relationships between Clambake and Tipperary or, for that matter, with Mr Anderson. The breadth of the powers of variation under s 87(2) of the TPA were also examined in Trade Practices Commission v Milreis Pty Ltd (1977) 29 FLR 144 where the Full Court of the Federal Court rejected a demurrer contending that s 45 and s 87 of the TPA were beyond power and invalid. The powers of a court under s 87 do not involve the application of common law concepts: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 [24] and [116] and Murphy v Overton Investments Pty Ltd (supra) [44] and Master Education Services Pty Ltd v Ketchell (2008) 249 ALR 44 [28]; [2008] HCA 38; (2008) 236 CLR 101, 113. A comprehensive review of the conditions for and the purpose of the exercise of the remedial powers under s 87 of the TPA was undertaken in Tenji v Henneberry & Associates Pty Ltd [2000] FCA 550; (2000) 98 FCR 324 ‑ see French J (as the Chief Justice then was) at [5] ‑ [14]. Similarly, in Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174; (2005) 224 ALR 134 the Court of Appeal in this State also addressed the scope of the remedial powers under s 87 ‑ see per Steytler P at [66] ‑ [79]. In doing so, the learned President said:The section has been described by the High Court as conferring a wide discretionary power on courts to make remedial orders in appropriate cases in order to ensure a fair result: Kizbeau Pty Ltd v WG & V Pty Ltd (1995) 184 CLR 281 at 298. The power is broader than that provided for under the common law or in equity and the scope of the orders available is not to be constrained because, in particular cases, they may resemble common law or equitable remedies… [67]