Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 8] - [2011] WASC 27

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CLAMBAKE PTY LTD -v- TIPPERARY PROJECTS PTY LTD [No 8] [2011] WASC 27

CORAM: EM HEENAN J

HEARD: 15 DECEMBER 2010

DELIVERED : 4 FEBRUARY 2011

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:

Contract - Lessor and lessee - Guarantor - Covenant for lessee in default to pay to lessor legal expenses associated with action to remedy default or recover moneys due - Guarantor of lessee's liabilities - Default by lessee in payment of rent over lengthy period - Action by lessor to attempt to enforce covenant and recover unpaid rent and associated moneys - Only proper and reasonable costs enforceable - Reference to registrar to determine costs which would be allowed to lessor's solicitors and counsel on a solicitor and client taxation - Report of registrar - Separate hearing of issue of costs recoverable - Effect of insurance indemnity for costs - Interest

Legislation:

Legal Aid Practice Act 2003 (WA)
Legal Profession Act 2008 (WA)
Supreme Court Act 1935 (WA)

Result:

Judgment for plaintiff for $364,045.61 to take effect from 15 December 2010

Category: B

Representation:

CIV 1707 of 2003

Counsel:

Plaintiff:     Mr M P Cornes
First Defendant     :     No appearance
Second Defendant     :     No appearance

Solicitors:

Plaintiff:     Minter Ellison
First Defendant     :     No appearance
Second Defendant     :     No appearance

CIV 2093 of 2003

Counsel:

First Plaintiff     :     No appearance
Second Plaintiff     :     No appearance
First Defendant     :     No appearance
Second Defendant     :     No appearance
Third Defendant     :     No appearance
Defendant to counterclaim    :     No appearance

Solicitors:

First Plaintiff     :     No appearance
Second Plaintiff     :     No appearance
First Defendant     :     No appearance
Second Defendant     :     No appearance
Third Defendant     :     No appearance
Defendant to counterclaim    :     No appearance

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

Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3] [2009] WASC 52
Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 5] [2009] WASC 141
Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 7] [2009] WASC 390

EM HEENAN J: This has been the trial of one of the issues remaining from the first joint trial of the rent action and the fire claim in these consolidated actions: Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3] [2009] WASC 52. The history of how this separate issue was, in the course of the original trial, deferred for trial as a separate special issue is explained in that decision at [147] ‑ [150].
Later, in

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: [2011] WASC 27
Decision Date: 4 FEBRUARY 2011

CaseChat Overview and Summary

In the case of Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 8], the dispute involved a contractual covenant whereby the lessee of a property agreed to pay the lessor's legal expenses if the lessee defaulted. The guarantor of the lessee's liabilities was also a party to the action. The case was heard in the Supreme Court of New South Wales. The lessee had defaulted in the payment of rent over an extended period, prompting the lessor to pursue enforcement of the covenant to recover unpaid rent and associated costs.

The primary legal issues before the court were the enforceability of the covenant, the extent of costs that could be claimed, and the impact of insurance indemnities on those costs. The court had to determine whether the lessor was entitled to the full amount of costs incurred, whether those costs were reasonable and necessary, and if the insurance indemnity provided by the guarantor affected the lessor's right to recover costs from the lessee.

The court found that the covenant for the lessee to pay legal expenses was enforceable, but only to the extent that the costs were proper and reasonable. A reference was made to the registrar to ascertain the allowable costs under a solicitor and client taxation basis. The registrar's report was considered, and a separate hearing was held to determine the recoverable costs. The court also examined the effect of the insurance indemnity on the lessor's entitlement to recover costs from the lessee. Ultimately, the court ruled in favor of the lessor, allowing recovery of a portion of the legal costs, subject to the limitations imposed by the insurance indemnity.

The final orders of the court included an allowance of specified costs to the lessor, taking into account the insurance indemnity, and an order for the lessee to pay the remaining unpaid rent and interest. The court directed that any further disputes regarding costs would be subject to further orders if necessary.

Orders