Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 6]
[2014] WASC 105
•28 MARCH 2014
COMPUTER ACCOUNTING AND TAX PTY LTD (in liq) -v- PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD [No 6] [2014] WASC 105
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 105 | |
| Case No: | CIV:2265/2006 | 4 & 5 APRIL, 7 MAY & 3 & 7 JULY 2013 | |
| Coram: | SIMMONDS J | 28/03/14 | |
| 48 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| A | |||
| PDF Version |
| Parties: | COMPUTER ACCOUNTING AND TAX PTY LTD (in liq) PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD DONALD CAMPBELL SMITH as Executor of the Estate of MARTIN PAUL BANNING |
Catchwords: | Civil procedure Enforcement of judgments Application for directions under Civil Judgments Enforcement Act 2004 (WA) s 104 claiming compensation or damages under s 105 in relation to receivership order Whether application lies where receivership order has been ended by discharge of receiver Civil procedure Enforcement of judgments Application for order under s 105 Standing for purchaser where receiver sold share under receivership order Civil procedure Enforcement of judgments Application for order under s 105 Meaning of 'irregularity' in s 105 Civil procedure Enforcement of judgments Application for order under s 105 Meaning of 'order needed to correct the irregularity' Civil procedure Enforcement of judgments Application for order under s 105 Whether power to make order under s 105 is discretionary Civil procedure Enforcement of judgments Application for order under s 105 How discretionary power under s 105 is to be exercised |
Legislation: | Civil Judgments Enforcement Act 2004 (WA), s 86, s 104, s 105 Civil Liability Act 2002 (WA), s 5AI, s 5AK Corporations Act 2001 (Cth), s 232 Evidence Act 1906 (WA), s 72 Interpretation Act 1984 (WA), s 19 Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 3, s 4 |
Case References: | Berry v British Transport Commission [1962] 1 QB 306 Burt, Boulton & Hayward v Bull [1895] 1 QB 276 Casley-Smith v FS Evans & Sons Pty Ltd [No 4] (1988) 49 SASR 339 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 2] [2010] WASC 318 Frigger v Campbell-Smith [2010] WASC 353 Frigger v Lean [2012] WASCA 66 Gray v Sirtex Medical Ltd [2011] FCAFC 40; (2011) 193 FCR 1 Huntingdale Village Pty Ltd (Receivers and Managers Appointed) ATF Huntingdale Village Unit Trust v Perpetual Nominees Ltd [2013] WASC 352 Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWCA 202 Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23 Ling v McDonald [1988] Tas R (NC) N17 Niblett Limited v Confectioners' Materials Company Limited [1921] 3 KBD 387 Pollnow v Garden Mews St Leonards Pty Ltd (1984) 9 ACLR 82 Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183 Saraceni v Jones [2012] WASCA 59; (2012) 42 WAR 518 Whitaker v Paxad Pty Ltd [2009] WASC 47 Wilton v Commonwealth Trading Bank of Australia [1974] 2 NSWLR 96 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD
First Defendant
DONALD CAMPBELL SMITH as Executor of the Estate of MARTIN PAUL BANNING
Second Defendant
Catchwords:
Civil procedure - Enforcement of judgments - Application for directions under Civil Judgments Enforcement Act 2004 (WA) s 104 claiming compensation or damages under s 105 in relation to receivership order - Whether application lies where receivership order has been ended by discharge of receiver
Civil procedure - Enforcement of judgments - Application for order under s 105 - Standing for purchaser where receiver sold share under receivership order
Civil procedure - Enforcement of judgments - Application for order under s 105 - Meaning of 'irregularity' in s 105
Civil procedure - Enforcement of judgments - Application for order under s 105 - Meaning of 'order needed to correct the irregularity'
Civil procedure - Enforcement of judgments - Application for order under s 105 - Whether power to make order under s 105 is discretionary
Civil procedure - Enforcement of judgments - Application for order under s 105 - How discretionary power under s 105 is to be exercised
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 86, s 104, s 105
Civil Liability Act 2002 (WA), s 5AI, s 5AK
Corporations Act 2001 (Cth), s 232
Evidence Act 1906 (WA), s 72
Interpretation Act 1984 (WA), s 19
Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 3, s 4
Result:
Application dismissed
Category: A
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Mrs A C T Frigger & Mr H H J Frigger : Mr S K Shepherd
Mr G T Lean : Mr J M Healy
Solicitors:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Mrs A C T Frigger & Mr H H J Frigger : David Thompson
Mr G T Lean : DLA Piper
Case(s) referred to in judgment(s):
Berry v British Transport Commission [1962] 1 QB 306
Burt, Boulton & Hayward v Bull [1895] 1 QB 276
Casley-Smith v FS Evans & Sons Pty Ltd [No 4] (1988) 49 SASR 339
Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171
Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 2] [2010] WASC 318
Frigger v Campbell-Smith [2010] WASC 353
Frigger v Lean [2012] WASCA 66
Gray v Sirtex Medical Ltd [2011] FCAFC 40; (2011) 193 FCR 1
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) ATF Huntingdale Village Unit Trust v Perpetual Nominees Ltd [2013] WASC 352
Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWCA 202
Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23
Ling v McDonald [1988] Tas R (NC) N17
Niblett Limited v Confectioners' Materials Company Limited [1921] 3 KBD 387
Pollnow v Garden Mews St Leonards Pty Ltd (1984) 9 ACLR 82
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183
Saraceni v Jones [2012] WASCA 59; (2012) 42 WAR 518
Whitaker v Paxad Pty Ltd [2009] WASC 47
Wilton v Commonwealth Trading Bank of Australia [1974] 2 NSWLR 96
- SIMMONDS J:
Introduction
1 This is the hearing of an application styled an application for directions pursuant to Civil Judgments Enforcement Act 2004 (WA), s 104 (the application for directions). That characterisation of this hearing comes from the document by which, under programming orders I made for the hearing, the application for directions was to proceed. It will become apparent that the application for directions has undergone significant changes over the course of these proceedings since then. However, I will throughout refer to it as the application for directions, for convenience.
2 These reasons are organised as follows:
(a) I begin by providing background to the making of the application for directions, including the programming orders for the hearing of it;
(b) I then describe the application for directions in some detail;
(c) I then describe, based on the ways these proceedings came to be conducted, the issues to be resolved;
(d) I then consider each of those issues; and
(e) the final section of these reasons is my conclusions and orders.
I turn now to the background.
Background
3 The following for the most part is not in contest between the parties. Where there is a contest I indicate its nature and my findings with the reasons for them.
4 The claimants, Angela Theresa Cecilia Frigger (Mrs Frigger) and Helmut Hubert Joseph Frigger (Mr Frigger), are husband and wife. I call them together the Friggers. The Friggers are directors and shareholders of the plaintiff in CIV 2265 of 2006, Computer Accounting and Tax Pty Ltd (CAT). CAT is now in liquidation.
5 On 21 November 2008 CAT obtained orders (the receiver orders) pursuant to Civil Judgments Enforcement Act s 86(1) appointing Mr G T Lean, the respondent, as receiver of one 50% share (the share) of Banning Holdings Pty Ltd (Banning Holdings). The share is an asset of the second defendant, the late Martin Paul Banning (Mr Banning). Mr Banning's personal representative is Donald Campbell-Smith (Mr Campbell-Smith). Mr Campbell-Smith is the second defendant in CIV 2265 of 2006. CAT had an unsatisfied judgment in that action (the judgment debt). The judgment debt was principally for the sum ordered in that judgment to be paid (the judgment sum), against the first defendant, Professional Services of Australia Pty Ltd (PSA), a company then in voluntary administration, and against Mr Banning. The receiver orders also provided (O 2) that the respondent for the purposes of the receiver orders was:
[A]ppointed in this action to appropriate and realise [the share] so as to satisfy the judgment debt.
6 At all material times there has been only one other shareholder in Banning Holdings. That shareholder was Mrs Sandra Banning (Mrs Banning).
7 On 16 December 2008, a transfer of the share to the respondent was registered in the register of members of Banning Holdings.
8 The corporate constitution of Banning Holdings (the corporate constitution) at all material times contained a provision (Article 22A of its articles of association) prohibiting the sale or transfer of any share in Banning Holdings until the requirements in the rights of pre-emption conferred by the provision (the pre-emptive rights provision) in favour of the existing shareholders of the company had been complied with. Those requirements included that a shareholder desiring to sell or transfer a share first give written notice to the directors so as to constitute them the shareholder's agent for sale at a price to be agreed between the shareholder and the directors or, failing such agreement, a price to be determined by the auditor of Banning Holdings.
9 The corporate constitution also contained a provision (Article 22) stating that the directors of Banning Holdings might decline to register any transfer without giving any reason for doing so.
10 On or about 10 February 2009 in TheWest Australian the respondent advertised the share for sale and invited expressions of interest.
11 On or about the same date, 10 February 2009, the Friggers lodged with the respondent a written expression of interest in purchasing the share.
12 On or about 27 February 2009 the respondent held a meeting for parties interested in purchasing the share. Approximately 15 interested parties, including the Friggers, attended the meeting. The respondent provided the meeting with certain information in relation to the share.
13 At that meeting, the respondent indicated that there was no copy of the corporate constitution of Banning Holdings to hand.
14 On 6 March 2009 a number of persons made offers to purchase the share. The Friggers made the highest offer (the Friggers' offer to purchase of 6 March 2009), for a consideration of $730,000. The next highest offer was for a consideration of $201,000.
15 It is convenient to set out here the terms of the Friggers' offer to purchase of 6 March 2009. Each of the offers to purchase was in this form. It was common ground that the respondent provided the form of offer all the offerors completed.
OFFER TO PURCHASE ONE SHARE IN BANNING HOLDINGS PTY LTD (ACN 009006437)
I/We [the Friggers] Of [address] are prepared to purchase One Share in Banning Holdings Pty Ltd
For $730,000
I/We are prepared to settle and pay this amount by 31 March 2009 subject to receiving simultaneously a copy of One Share in the Company and registered in the following name/names
'[the Friggers]'
Dated this 6th day of March 2009.
Signed By: [the Friggers]
Representing: [blank]
16 By letter dated 9 March 2009 from the respondent to the Friggers (the respondent's letter of acceptance of 9 March 2009) he stated that their 'offer to purchase' had been accepted by him as 'the highest bid'. The letter went on to ask them to 'remit your cheque to me for $730,000 and I will hand you the assigned share'.
17 On 10 March 2009 the Friggers and the respondent signed what both appeared to accept was a confirmation in writing of an agreement for a purchase of the share by the Friggers (the written confirmation of 10 March 2009) for a consideration of $730,000, with the Friggers having paid the deposit of $20,000 provided for in the written confirmation of 10 March 2009.
18 It is convenient to set out here the terms of the written confirmation of 10 March 2009 in full:
To Whom It May Concern:
We, [Mr Frigger and Mrs Frigger], both of [address], confirm;
(1) We have purchased from [the respondent] as Receiver One (1) Share in Banning Holdings Pty Ltd for $730,000.
(2) We have paid the Receiver $20,000 Deposit for this Share on 10th March 2009.
(3) We, undertake to pay the balance of funds being $710,000 to the Receiver on or before 31st of March 2009.
(4) We will indemnify you against any further legal fees or costs.
Yours faithfully
[signed by the Friggers and dated 10 March 2009]
AGREED as above
[Signed by the respondent, who is shown as 'Court Appointed Receiver' and dated 10 March 2009.]
19 There was some apparent contest before me as to what was or were the document or documents recording what was sold. It was common ground there was a contract for the share to be sold to and purchased by the Friggers (the contract for the sale and purchase of the share). It is convenient for me to deal with that contest at this point.
20 The Friggers submitted the contract for the sale and purchase of the share was recorded by the Friggers' offer of 6 March 2009 and the respondent's letter of acceptance of 9 March 2009. The written confirmation of 10 March 2009 was at most a supplementation of that contract that did not displace it.
21 The respondent submitted that the contract for the sale and purchase of the share was solely the written confirmation of 10 March 2009.
22 While I prefer the submission of the respondent, I will indicate why in my view the difference is not significant for my purposes.
23 I begin by noting there was uncontested evidence before me of a dispute, on or about 10 March 2009, between the parties as to the terms on which the purchase of the share by the Friggers would go forward. See affidavit of the respondent sworn on 24 August 2012 (exhibit 11) [32] and attachment GTL 19 (page 48). That attachment is an email sent 10 March 2009 at 1.55 pm from Mrs Frigger to Mr Lean requiring him to transfer the share by 4.00 pm that day. This requirement is stated after a reference to an opinion of the then solicitor for Mr Lean, a Mr Carles, which the respondent had sent to Mrs Frigger. Mrs Frigger states she does not agree with that opinion, adding that she would not spend 'unnecessary legal costs' to 'protect' him, apparently a reference to obtaining court approval of any sale and referring also to having been told by 'Chris Stokes' that the respondent might sell the share without the approval of the court. Mr Stokes was at the relevant time the solicitor for CAT.
24 The opinion referred to, which is not included with attachment GTL 19 or otherwise exhibited in evidence, appears to be in a letter of advice from Mr Carles to the respondent dated 10 March 2009 which the respondent in cross-examination (3 July 2013, ts 3618) acknowledged he received and which was to the effect the sale should be made subject to court approval. The respondent further acknowledged there was 'no follow-up on that advice' (cross-examination, ts 3619). These acknowledgements were not followed up in re-examination.
25 I note that the requirement in Mrs Frigger's email for transfer of the share by 4.00 pm on 10 March 2009 does not readily accord with the terms of the Friggers' offer of 6 March 2009. I further note that the exchange of views between the parties that email appears to refer to, as to whether or not there should be court approval of the sale, goes to a matter not apparent from the terms of the Friggers' offer of 6 March 2009 and the respondent's letter of acceptance of 9 March 2009.
26 I consider those circumstances indicate there was a measure of lack of finality that the parties understood to exist as to the terms of the contract for the sale and purchase of the share as at 10 March 2009, notwithstanding the coincidence of the Friggers' offer of 6 March 2009 and the respondent's letter of acceptance of 9 March 2009.
27 I further note that the terms of the written confirmation of 10 March 2009 are not on all fours with the terms of the Friggers' offer of 6 March 2009, most notably in the latter referring to a deposit of $20,000 having been paid where the former makes reference to payment of the total price but makes no reference to any deposit; the lack of any reference in the former to the receipt by the Friggers of the share registered in their joint names; and the latter stating '[w]e will indemnify you against any further legal fees or costs' where the former has no statement as to indemnification of any sort.
28 I would find from those differences, considered against those circumstances, that the written confirmation of 10 March 2009 was the form of the contract for the sale and purchase of the share at which the parties arrived as at that date. Whether it was a variation of, by substitution for, a previous contract represented by the Friggers' offer of 6 March 2009 and the respondent's letter of acceptance of 9 March 2009, or the culmination of negotiations of which those two documents formed a part, is not in my view significant.
29 I note in passing that my finding accords with the case statement of the Friggers dated 24 October 2011 [14] (see also [15]). I return to that document below.
30 However, the difference of position between the Friggers and the respondent in that respect is not in my view significant for my purposes. That is because it appeared to be common ground between the parties that it was a term of the contract for the sale and purchase of the share as at 10 March 2009 that the Friggers would receive a share registered in their joint names in return for the payment of the total consideration.
31 However, as I will explain below that, there are difficult issues in respect of the nature of that term, both as at 10 March 2009 and as at later dates.
32 On 20 March 2009 the then solicitor for the respondent received a letter from the solicitor for Banning Holdings and its directors of that date (the letter from the solicitor for Banning Holdings dated 20 March 2009) which in material part said this:
Further to recent communications I confirm that it has now come to my attention that the share in Banning Holdings Pty Ltd over which your client was appointed receiver is the subject of pre-emptive rights. I enclose herewith for your reference a copy of the Memorandum and Articles of Association of Banning Holdings Pty Ltd and refer you to Article 22A thereof.
It is trite that the appointment of your client as Receiver of the share gives them no greater rights in respect of its sales than those enuring to the owner of the share.
I would observe that it is abundantly clear that your client has not followed the process provided in the Memorandum and Articles of Association with respect to the sale of the share, and, on that basis the purported sale to Mr and Mrs Frigger may be set aside, and, that an injunction can be granted to restrain the purported sale. Further, the directors of Banning Holdings Pty Ltd are quite within their rights to refuse to register any purported transfer of the share to Mr and Mrs Frigger - which I am instructed they will continue to do.
I am further instructed by Mrs Banning that, if the share had ever been offered to her (which it has not), she would have wished to purchase it, and, may still wish to do so if your client is inclined to properly undertake the process proscribed [sic] in Article 22A.
- The corporate constitution of Banning Holdings was enclosed with that letter.
33 It was not in contest that this was the first occasion on which the respondent or anyone acting for him was made aware of that corporate constitution and the import of Article 22 and Article 22A.
34 On 25 March 2009, the Friggers completed the payment of the consideration for the share by paying $710,000 to the receiver. The Friggers completed a share transfer form apparently dated by them that date. As will be seen the respondent completed the form on 27 March 2009.
35 Also on 25 March 2009, the Friggers received a letter from the solicitors for Banning Holdings (the letter from the solicitor for Banning Holdings dated 23 March 2009) stating that the directors would not approve the registration of a transfer of the share to the Friggers. This was stated to be because the respondent had not complied with the procedures in the pre-emptive rights provision.
36 There is a sharp contest between the parties as to whether or not the letter from the solicitor for Banning Holdings dated 23 March 2009 was received by the Friggers on 25 March 2009 before or after the time they had completed the payment for the share. I will reach that contest later in these reasons.
37 On 26 March 2009 the Friggers received from the respondent's then solicitor a document styled a Deed of Indemnity, prepared the previous day on the respondent's instructions (the Deed).
38 The Deed among other things recited the payments of the deposit on the balance of the purchase price to the receiver under the contract of sale of the share and that the directors of Banning Holdings had through their solicitors advised in writing they would not agree to register a transfer of the share into the names of the purchasers. The Deed provided that:
1. the respondent agreed to apply the total purchase price in reduction of the judgment debt, after retaining $47,951 to be applied towards the respondent's fees and expenses;
2. the Friggers acknowledged the refusal of the directors of Banning Holdings to register any transfer of the shares;
3. the inability of the respondent to transfer a registered shareholding to the Friggers unless a court order to that effect were obtained;
4. the Friggers agreed not to make any claim against the respondent for a refund of any part of the purchase price paid by them arising from or relating to the inability of the respondent to pass a registered title to the Friggers, thereby releasing the respondent from any such claim; and
5. that the Friggers indemnified the respondent from any claims or demands that might be made against him by any party as a result of the respondent agreeing to apply the total purchase price in the manner provided for.
39 After receiving the Deed the Friggers by email of 27 March 2009 to the respondent (the Friggers' 27 March 2009 email) stated among other things that they did not agree to sign the Deed; and that they required a transfer of shares document signed by the receiver to be given as the consideration for the '$730,000 which he has taken for such share'.
40 As I previously indicated on 27 March 2009 the receiver completed the transfer of shares document signed by the Friggers.
41 Subsequently, but also on 27 March 2009, the respondent refunded to the Friggers the amount of $710,000 and informed them that settlement under the written confirmation of 10 March 2009 would be deferred because of the declared refusal by the directors of Banning Holdings to register any share transfer.
42 On 30 March 2009 the solicitor for the respondent sent an email to the Friggers (the email of 30 March 2009) in which he said this:
We maintain our view that it is now appropriate for the Friggers to bring a court application under separate proceedings to compel the directors to register [the share transfer].
- This email was part of an email chain which included the Friggers' 27 March 2009 email.
43 On or about 20 April 2009 the Friggers commenced proceedings in CIV 1727 of 2009 seeking orders including ones to have effect given to the transfer. The respondent was named as co-plaintiff in CIV 1727 of 2009.
44 On 21 May 2009 orders were made removing the respondent as co-plaintiff and adding him as the fourth defendant in CIV 1727 of 2009.
45 On 13 August 2009 PSA and Mr Campbell-Smith applied to have the respondent discharged from his receivership (the application for discharge from the receivership).
46 On 23 October 2009, the Court of Appeal delivered its decision in the appeal from my trial judgment in CIV 2265 of 2006. See Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183 (PSA [No 2] WASCA).
47 Following the decision in PSA [No 2] WASCA the Court of Appeal made orders, dated 16 December 2009 (the WASCA orders of 16 December 2009), including orders to the effect that the judgment sum be substantially reduced, and that CAT pay the first defendant and Mr Campbell-Smith certain amounts including amounts in respect of the taxed costs of the appeal.
48 On 10 September 2010 a hearing was held on the motion of the judge managing CIV 1727 of 2009, Kenneth Martin J, to determine whether or not proceedings on the statement of claim in CIV 1727 of 2009 should be permanently stayed. At the end of the hearing his Honour reserved his decision.
49 On 10 November 2010 I delivered my judgment on the application for discharge from the receivership. See Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 2] [2010] WASC 318 (CAT v PSA[No 2] WASC). For the reasons set out there I determined that the application for discharge from the receivership should be granted, with effect from 10 November 2010: see [100]. On that date orders were made, including an order to that effect.
50 On 2 December 2010 Kenneth Martin J delivered his judgment. See Frigger v Campbell-Smith [2010] WASC 353. For the reasons set out there he determined that an order should be made permanently staying the proceedings in CIV 1727 of 2009.
51 By letter dated 2 December 2010 from the Friggers, signed by Mrs Frigger, to the respondent and referring to the judgment of Kenneth Martin J, the Friggers demanded a refund of the deposit together with interest from 10 March 2009 to 3 December 2010.
52 On 21 January 2011 Mrs Frigger signed a receipt for the refund of the deposit plus interest, albeit the amount of the interest paid was less than the interest the Friggers had claimed.
53 On 9 February 2011 Kenneth Martin J made orders permanently staying the proceedings in CIV 1727 of 2009 and that the Friggers pay certain of the respondent's costs of those proceedings. On 27 March 2012 the Court of Appeal delivered its judgment on the Friggers' appeal against those costs orders. See Frigger v Lean [2012] WASCA 66. For the reasons set out there the Court of Appeal dismissed the appeal.
54 At the end of a hearing on 26 September 2011, which had followed the making of orders on 16 June 2011, I made programming orders (the programming orders of 26 September 2011) for a hearing for what subsequently became the application for directions.
55 It is not in contest that the programming orders of 26 September 2011 were superseded by orders I made on 26 September 2012. However, for reasons which will become apparent I should indicate the following as to the programming orders of 26 September 2011.
56 By the programming orders of 26 September 2011, the following were provided for, amongst other things:
• the document entitled 'Amended Submissions - Claim for Compensation', handed up by the Friggers at the hearing of 26 September 2011, be treated as an application by summons within CIV 2265 of 2006 and be filed accordingly;
• the Friggers file and serve a case statement setting out what facts in contention were relied upon by the Friggers, such filing and service to be by 24 October 2011;
• the respondent file and serve a response to the case statement of the Friggers that addressed the matters that were and were not in dispute between the parties, by 21 November 2011;
• the Friggers file and serve the affidavits upon which they intended to rely by 19 December 2011; the respondents file and serve such affidavits or affidavit as responded to the Friggers' affidavit or affidavits by 30 January 2012;
• the parties file and serve written submissions by 13 February 2012; and
• following compliance with the last order either party might apply to list the matter to be heard by special appointment.
57 On 25 October 2011 a Case Statement for the Friggers was filed (the Friggers' Case Statement).
58 On 23 November 2011 the respondent's response to the Friggers' Case Statement was filed.
59 On 25 January 2012, a document entitled 'Claimants Submissions on the Issue Stated at Paragraph One of the Order of the Honourable Justice Simmonds in Chambers on 16 June 2011' was filed. This document is in all other respects identical with the document 'Amended submissions - claim for compensation ordered to be filed', and I call it the application document for the application for directions.
60 On 17 April 2012 an affidavit of Mrs Frigger in support of the application for directions, sworn 11 April 2012 but dated 29 March 2012, was filed (the affidavit of Mrs Frigger of 11 April 2012).
61 On 22 June 2012, following a hearing on that date, I made orders for discovery by the Friggers and for mediation. This mediation was unsuccessful.
62 On 24 August 2012 an affidavit of the respondent, sworn on that date, was filed (the affidavit of the respondent of 24 August 2012).
63 On 26 September 2012, I made programming orders for what became the present hearing (the programming orders of 26 September 2012). It is necessary that I describe some of those orders in some detail.
64 The programming orders of 26 September 2012 provided, amongst other things, as follows:
• the application for directions be listed for a hearing with an estimated duration of two days on a date to be fixed, subject to compliance with the order for submissions below;
• the respondent file and serve any amended response to the Friggers' Case Statement by 15 October 2012;
• each of the parties file and serve written submissions on or before 29 October 2012;
• the affidavits filed and served by the Friggers and the respondent stand as those parties' witness statements in the application for directions; and
• any party intending to object to the admissibility of any affidavit or any part thereof by 29 October 2012 advise the party serving the affidavit of the objections and the grounds for them; and by 12 November 2012 the party serving the affidavit inform the other party whether any of the objections were conceded; and if any dispute concerning admissibility of any affidavit or any part of any affidavit had not been resolved the parties confer in an attempt to resolve the dispute.
It was not in dispute that the programming orders of 26 September 2012 superseded the programming orders of 26 September 2011.
65 On 15 October 2012 the respondent filed an amended response to the Friggers' Case Statement (the respondents' amended response to the Friggers' Case Statement).
66 On 29 October 2012 a schedule of objections to the affidavit of Mrs Frigger of 17 April 2012 was provided to the Friggers' then solicitors by the respondent.
67 On 27 March 2013 written submissions bearing that date for the respondent were provided to the court and the Friggers (the respondents' opening written submissions).
68 Also on 27 March 2013 an updated schedule of objections to the affidavit of Mrs Frigger of 17 April 2012 was provided to the court and to the Friggers (the respondent's updated objections to the affidavit of Mrs Frigger of 17 April 2012).
69 Finally, on 3 April 2013 the Friggers provided the court with written submissions for the Friggers dated 2 April 2013 (the Friggers' opening written submissions). The Friggers' opening written submissions also adopted the outline of submissions for the applicant dated 16 September 2011, which I took thereby to be incorporated by reference into the Friggers' opening written submissions.
The application for directions in more detail
70 The application document for the application for directions says this, in material part (numbering in the original):
1. The [Friggers] seek directions from this Honourable Court pursuant to section 104 Civil Judgments Enforcement Act ... as persons affected by an order made by this court.
2. The [Friggers] wish to claim compensation from the respondent for losses they have suffered resulting from irregularities in the carrying out of the order pursuant to section 105 Civil Judgments Enforcement Act.
PARTICULARS
- The respondent sold the share the subject of the Receiver orders contrary to [the pre-emptive rights] attached to the share.
3. Further the respondent failed to perform his duty as receiver whilst carrying out the orders made by this Honourable Court.
PARTICULARS
- 3.1 failed to report to this Honourable Court and the judgement creditor regarding the nature and details of [the share];
3.2 failed to provide accurate information to potential purchasers;
3.2 [sic] failed in his duty of care under [the written confirmation of 10 March 2009];
3.3 acted in bad faith in related proceedings CIV 1727/2009.
- As will become apparent, the Friggers did not pursue the matters in 3.
71 There are two further matters in respect of the application document for the application for directions I should note here.
72 One is that the remainder of the application document for the application for directions consists of a table of factual matters by date, with some of the descriptions containing what appear to be elements of an argument with respect to claims arising out of the matter in question.
73 The other is that, with those exceptions, the application document for the application for directions contains no submissions for the Friggers.
The hearings, the evidence and the parties' written submissions concerning these
74 The application for directions came on for hearing over two days, on 4 and 5 April 2013, at the end of which the hearing was adjourned to 7 May 2013.
75 At the hearing on 7 May 2013, there was a further adjournment, to 3 July 2013. This was the result of the condition of Mr Lean, who was to enter hospital the following day.
76 At the hearing on 3 July 2013, the hearing resumed and concluded with the making of programming orders (the programming orders of 3 July 2013) - which provided for the provision of written closing submissions by both parties and scheduled a hearing for oral closing submissions on 26 July 2013.
77 Written closing submissions for the Friggers, dated 25 July 2013 (the Friggers' written closing submissions), were filed on 26 July 2013. Written closing submissions for the respondent, dated 22 July 2013 (the respondent's written closing submissions), were filed and served in accordance with the programming orders of 3 July 2013.
78 I now briefly describe the proceedings and evidence given at the hearings on 4 and 5 April and 3 July 2013.
79 At the hearing on 4 April 2013, after I had determined the objections by the respondent to the affidavit of Mrs Frigger of 11 April 2012 including matters incorporated by reference into that affidavit, and counsel for the Friggers had made his opening, Mrs Frigger was sworn and gave as her examination-in-chief the contents of her affidavit sworn 11 April 2012, as amended to reflect the result of my determination of the objections. This amended affidavit ultimately became, with its attachments, exhibit 9. Additionally, a document headed 'Francois Carles' beginning with an email sent 30 March 2009 and marked up by Mrs Frigger was tendered into evidence as exhibit 1.
80 Mrs Frigger was cross-examined beginning on 4 April 2013.
81 On 5 April 2013 Mrs Frigger's cross-examination concluded. During that cross-examination on 4 and 5 April 2013 a number of documents were tendered into evidence through Mrs Frigger:
• a document described as a re-amended statement of claim pursuant to the order of Kenneth Martin J in CIV 1727 of 2009 was tendered into evidence as exhibit 2;
• a document described as an amended statement of claim in CIV 1727 of 2009 was tendered into evidence as exhibit 3;
• a document described as a defence and counterclaim of first, second and third defendants in CIV 1727 of 2009 was tendered into evidence as exhibit 4;
• a document described as the fourth defendant's defence to counterclaim in CIV 1727 of 2009 was tendered into evidence as exhibit 5;
• a document described as the plaintiff's reply in defence to counterclaim in CIV 1727 of 2009 was tendered into evidence as exhibit 6;
• a document described as a letter from Chris Stokes & Associates to Eastwood Law dated 6 July 2009 was tendered into evidence as exhibit 7;
• a document described as the plaintiff's further and better particulars of par 11.2 of reply and defence to counterclaim in CIV 1727 of 2009 was tendered into evidence as exhibit 8; and
• the affidavit of Mrs Frigger sworn 11 April 2012 with changes accepted by the deponent was tendered into evidence as exhibit 9.
82 On 5 April 2013 pursuant to leave I had granted arising out of my determination of the objections to the affidavit of Mrs Frigger sworn 11 April 2012 I permitted counsel for the Friggers to have Mrs Frigger in effect enlarge her examination-in-chief to include an affidavit of hers sworn 5 April 2013 and its attachments, which became exhibit 10, after which I permitted her to be further cross-examined. She was then re-examined.
83 Also at the hearing on 5 April 2013, after counsel for the respondent had made his opening, the respondent, Mr Lean, was sworn and gave as his examination-in-chief the contents of the affidavit of the respondent of 24 August 2012, which with its attachments became exhibit 11.
84 At the hearing on 3 July 2013 Mr Lean was re-sworn and was cross-examined. During that cross-examination a number of documents were tendered into evidence:
• a document described as the order for appointment of the receiver in CIV 2265 of 2006 setting out the receiver order was tendered into evidence at exhibit 12;
• a document described as the March 2009 draft report to the Supreme Court was tendered into evidence at exhibit 13;
• a document described as a GT Lean and Associates time sheet data in detail document 23 January 2010 was tendered into evidence at exhibit 15;
• a document described as an email chain headed 'Francois Carles 12 August 2009 11:52am' was tendered into evidence at exhibit 16;
• a document described as the defence of fourth defendant dated 30 June 2009 in CIV 1727 of 2009 was tendered into evidence at exhibit 17;
• a document described as the receiver's report to the court dated 10 March 2009 was tendered into evidence at exhibit 18; and
• a document described as the receiver's third report pursuant to order 5 of 21 November 2008 dated 10 March 2009 was tendered into evidence at exhibit 19.
85 A brief re-examination of the respondent concluded the evidence for the respondent.
86 On 26 July 2013 the parties presented oral closing submissions and I reserved my judgment.
87 By letter dated 31 October 2013 from solicitors for the respondent the Court's attention was drawn to Huntingdale Village Pty Ltd (Receivers and Managers Appointed) ATF Huntingdale Village Unit Trust v Perpetual Nominees Ltd [2013] WASC 352 [18] - [23] (Le Miere J) as providing 'further guidance' on the respondent's written closing submissions.
88 I provided the parties with an opportunity to make further submissions in writing as to the relevance of that decision to the present proceedings.
89 The respondent provided such written submissions dated 22 November 2013 (the respondent's written submissions on Huntingdale), while the Friggers also provided such written submissions, also dated 22 November 2013 (the Friggers' written submissions on Huntingdale).
The issues in the hearings
90 These are the issues as defined by the Friggers' opening written submissions and the respondent's opening written submissions and the ensuing proceedings.
91 I note that those written submissions referred to a number of the earlier written submissions and case statements I have listed.
92 The issues for determination are the following:
1. Does the court have jurisdiction under Civil Judgments Enforcement Act s 104 alone, read with s 105, or s 105 alone, to entertain the application for directions, particularly given that the Friggers are seeking by these proceedings compensation in respect of orders now cancelled?
2. If the answer to the question in issue 1 is yes, is there such jurisdiction notwithstanding Frigger v Campbell-Smith and Frigger v Lean?
3. If the answer to the question in issue 2 is yes, did the conduct of the respondent in the respects identified by the Friggers represent an 'irregularity' as to any of those respects in connection with the carrying out of the receiver orders within Civil Judgments Enforcement Act s 105?
4. If the answer to the question in issue 3 is yes, what is the power of the court to make orders in this case, and in particular is this power discretionary?
5. Did the conduct of the respondent cause the Friggers jointly or solely to suffer any loss or damage of which the Friggers have provided adequate evidence?
6. Is recovery of damages liable to be reduced for any failure of the Friggers to take reasonable care?
7. Is the liability of the respondent under an order under Civil Judgments Enforcement Act s 105 by virtue of Civil Liability Act 2002 (WA) s 5AK to be fixed at an amount the court considers just having regard to the conduct of the Friggers' then solicitors (Mr Stokes) in the respects the respondent alleges?
I turn to those issues, in the order indicated.
93 For reasons which will appear, it seems to me that the issues of determinative significance, for the present application, are issues 3 and 4.
94 I note the respondent's contention that the present application so far as it seeks any orders for Mr Frigger should be dismissed, on the basis that Mr Frigger provided no evidence, and in particular none as to reliance or causation.
95 I do not uphold this contention. As will become apparent the evidence from Mrs Frigger and from other sources included evidence relevant to the position of Mr Frigger. It did so not least because on the evidence before me the contract of sale and purchase of the share was entered into by both Mr and Mrs Frigger and the consideration provided under it moved from both of them. In my view that body of evidence indicates there is no distinction to be drawn between Mr and Mrs Frigger material to the disposition of the application for directions.
Issue 1: is there jurisdiction?
96 For the Friggers, as indicated by the application document for the application for directions, their case was initially put in terms of Civil Judgments Enforcement Act s 104 and s 105.
97 However, as I understood their case it came to be put as an application for directions under s 104 where the directions sought were those provided for in s 105, or alternatively as an application under s 105 without reliance on s 104.
98 I begin by noting that neither counsel was able to find, and my research did not produce, any authority on the matters I discuss in respect of this issue.
99 While I have my doubts that the application is one that can be put in terms of s 104, in whole or in part, I do not need to determine whether there is jurisdiction in terms of that provision, in whole or in part.
100 That is because I have determined there is jurisdiction which can be put in terms of s 105 without reliance on s 104.
101 My reasons are these.
102 Civil Judgments Enforcement Act s 104 and s 105, read at all material times, as follows:
104. Directions, court may give
(1) Any of the following persons may apply to a court for directions in respect of a matter arising under or in connection with the operation or carrying out of an order issued under this Act -
(a) the person who obtained the order; or
(b) a person to whom the order is addressed; or
(c) a person who is authorised to do anything under the order; or
(d) a person who is affected by, or whose property is affected by, the order; or
(e) a person who in the opinion of the court has a sufficient interest in the matter.
(2) Such an application must be made -
(a) if the order relates to personal property, to the court that issued the order;
(b) if the order relates to real property -
(i) to the Supreme Court if the order was issued by the Supreme Court;
(ii) to the District Court if the order was issued by the District Court or the Magistrates Court.
(a) give any directions that are just; and
(b) make any order as to the payment of the costs of the application as are just.
105. Irregular enforcement, courts' powers as to
If the court that made an order under Part 4 or 5 or section 101 is satisfied that an irregularity has occurred in connection with the making or carrying out of the order, the court may make any order needed to correct the irregularity including an order -
(a) that sets aside the order or an act done under the order;
(b) that requires the restitution of property or the payment of money, compensation or damages.
104 It was not in contest that the discharge had the effect of bringing the receiver orders to an end, although without prejudice to any liability of the receiver in respect of the carrying out of those orders.
105 While it might be thought there is power under s 104 to make orders for directions with respect to that liability, the language of 'directions' would not appear to me to be apt for the purpose. Further, much of the language of s 104 (see s 104(b) - (d)) is in the present tense.
106 Still further, to the extent it was contended that the language of s 104 permits the making of an order at least under s 105, it may be noted the language of the two provisions does not readily marry. Compare the 'order' described in s 104 with the 'order' described in s 105.
107 It seems to me the language of s 105 is apt to include a power to make an order even in respect of 'an order under Part 4 or Part 5 or section 101' which has come to an end. As I have previously indicated, the receiver orders were made under s 86, which falls under pt 4.
108 Further, I note the reference in the Explanatory Memorandum for the Civil Judgments Enforcement Bill 2003 (WA) with respect to 'Clause 105 Irregular enforcement, courts' powers as to' that one of the circumstances referred to as allowing the court to address irregularities is 'seizing property after the judgement debt has been satisfied'.
109 True it is there is no provision for standing to make an order under s 105: compare s 104(1). However, it is not in contest in this case that the Friggers have standing under s 105.
110 Further, it seems to me that standing should be regarded as appropriate for at least a person who has an arguable case that they have suffered from an 'irregularity' for which the court might make 'any order needed to correct the irregularity'. I note again, but in the present context, the circumstance from the Explanatory Memorandum previously quoted. It seems to me that that circumstance is meant to refer to the possibility of a corrective order at the suit of the person from whom the property was seized.
111 I would be satisfied the answer to the question in issue 1 is yes, and that the court has jurisdiction.
112 However, in view of my conclusions with respect to issues 3 and 4, it is not necessary for me to reach a final view on the resolution of this issue.
Issue 2: are these proceedings open notwithstanding Frigger v Campbell-Smith and Frigger v Lean?
113 For the respondent it was put to me that these proceedings should be seen as an abuse of process in view of the issues addressed in those two decisions. I understand the submission as follows.
114 The proceedings in Frigger v Campbell-Smith had addressed matters of the liability of the receiver to the Friggers in respect of the attempted sale of the share, including the liability of the receiver to them in negligence. I was referred to pleadings for the Friggers in CIV 1727 of 2009, both in draft form and as filed, as so indicating. See exhibit 3 and exhibit 2, respectively. Accordingly the respondents submitted it was an abuse of process for the Friggers to seek to have those issues, or ones like them, addressed again, in the present proceedings.
115 Further, the decision in the appeal as to costs in Frigger v Lean had addressed in particular one of the forms of irregularity relied upon by the Friggers. This was said to be the participation of the respondent in CIV 1727 of 2009. At the very least their reliance upon that form of irregularity in the present proceedings was an abuse of process.
116 The respondent did not indicate any line of authority in support of his submission as to the abuse of process. The categories of what constitutes of abuse of process are not closed, of course. See Civil Procedure in Western Australia, vol 1 (LexisNexis 1990) [1.0.5] (referring to Jago v District Court of New South Wales[1989] HCA 46; (1989) 168 CLR 23, 74 among other authorities).
117 However, I understood the respondent to be making his submission by reference to the proposition, supported by Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWCA 202 [107] - [108], [110], [119], and as formulated in Civil Procedure in Western Australia [1.0.5], that 'it is an … abuse of process when a litigant changes the form of the proceedings to set up the same case again'.
118 It seems to me that, for the reasons which will become apparent from my discussion of issue 3, I should not uphold the respondent's submission so understood. The matters addressed in Frigger v Campbell-Smith and Frigger v Lean do not make the present proceedings an abuse of process when the nature of the irregularities relied upon by the Friggers is compared with those matters.
119 I would be satisfied the answer to the question in issue 2 is yes.
120 However, in view of my conclusions with respect to issues 3 and 4, it is not necessary for me to reach a final view on the resolution of this issue.
Issue 3: was there an irregularity within s 105?
121 For the Friggers, it was put to me that 'irregularity' in s 105 should be understood by reference to the literal or ordinary meaning of that word.
122 So understood, on their submission 'irregularity' described the six matters on which they relied.
123 For the respondent, it was put to me that 'irregularity' needs to be understood in a more limited sense, and so understood was not apt to describe that on which the Friggers relied.
124 I consider that the meaning for which the Friggers contend is to be preferred to that put by the respondent.
125 However, on that meaning, it is not apparent to me that there is sufficient evidence before me of an irregularity in respect of any of the matters the Friggers relied upon.
126 My reasons are these.
127 There is no authority on the meaning of 'irregularity' in Civil Judgments Enforcement Act s 105 of which counsel were aware or which my own research produced.
128 In CAT v PSA[No 2] WASC [102] - [124] I expressed my views as to what might be irregularities within that provision. However, that expression was for the purposes of determining whether or not such irregularities as I was prepared to accept might have been present were sufficient, individually or in combination, to warrant an order to dismiss the receiver. I concluded they were not. I do not consider those views should be taken as indicating a final view as to the meaning of 'irregularity'.
129 The meaning of 'irregularity' upon which the Friggers relied was that given in The New Shorter Oxford English Dictionary on Historical Principles (Oxford 1990) 'irregularity' as follows:
A breach of rule or principle; an irregular, lawless, or disorderly act. The lack of conformity to rule, law, or principle; deviation from what is usual or normal; abnormality, anomalousness.
130 For the respondent it was put to me, as I understood the submission, that the meaning of 'irregularity' should be understood as conduct which would ground a known cause of action. What the Friggers relied upon did not ground a known cause of action because what in substance they relied upon was conduct in the making of the contract of sale and purchase that was a breach of a duty of care owed by a seller to a purchaser. There was no such duty in law.
131 I consider that the meaning of 'irregular', at least as identified from the quotation from the Oxford English Dictionary, is to be preferred to the more restricted meaning contended for by the respondent. I do so by reference to the fact it is an ordinary meaning confirmed by the legislative history.
132 For consideration of the legislative history of a provision like Civil Judgments Enforcement Act s 105 in the ascertainment of the meaning of that provision, see Interpretation Act 1984 (WA) s 19(1)(a), and in this case s 19(2)(e).
133 I have already referred to a part of the account of what is now Civil Judgments Enforcement Act s 105 in the Explanatory Memorandum for the Civil Judgments Enforcement Bill 2003. For present purposes I should set out that account in full:
Clause 105 Irregular enforcement, courts' powers as to
This clause provides that if the court issues an enforcement order and is satisfied that an irregularity has occurred with either the making of the order or its carrying out, the court can correct the irregularity including setting aside its previous order as well as ordering any necessary restitution of property, payment of money, compensation or damages.
Circumstances could arise such as seizing property at the wrong address, seizing property after the judgment debt has been satisfied or seizing in a manner that constitutes non-compliance with the rules of court or regulations made under the Act. The clause therefore allows the court to address irregularities and is necessary for the good administration of justice.
134 I also note the following from Western Australia, Parliamentary Debates, Legislative Assembly, 4 December 2003, 14278 (Second Reading Speech, Mr JA McGinty, Attorney General):
This Bill assists in achieving the objective of providing an efficient, flexible, unified and statewide civil judgements enforcement system in the Magistrates, District and Supreme Courts.
135 It seems to me, from the examples given in the second paragraph of the Explanatory Memorandum read with the statement of the Attorney General quoted above, that s 105 should be read as the Friggers contend, and not as counsel for the respondent's meaning would indicate.
136 I turn now to the six matters or forms of irregularity on which the Friggers relied. Those matters were the following:
1. offering to sell the share without first having identified the limitations in the Articles of Association of Banning Holdings represented by Article 22 and Article 22A;
2. failing to comply with Article 22A;
3. failing to obtain the directions of the court before contracting to sell the share, or failing to make the contract subject to such directions;
4. contracting to sell the share where, as circumstances transpired, the Friggers were unable to obtain the share registered in their names;
5. promoting the participation of the Friggers in the proceedings in CIV 1727 of 2009 to obtain the registration of the share in their names in which he was initially a co-plaintiff who then became a defendant; and
6. being a co-plaintiff or being otherwise involved in the proceedings in CIV 1727 of 2009 without first obtaining the directions of the court.
137 I should note that for the Friggers it was confirmed that there was no claim of irregularity put in terms of a breach of a duty of care owed by the respondent to the Friggers, either generally or in relation to any of the six forms of irregularity just described. That confirmation was made in oral closing submissions (see particularly 26 July 2013 ts 3693) and in my view rather more clearly made in the Friggers' written submissions on Huntingdale.
138 I accept that Huntingdale (see especially [18] - [23]), decided after I reserved my decision in the present matter, represents authority which did not have a counterpart among the authorities previously cited to me and which offers strong support for the view that a court appointed receiver does not, as such, owe a person in the position of the Friggers a duty of care of any kind.
139 However, in view of the confirmation of the Friggers referred to as to the forms of irregularity for which they contend, Huntingdale has no relevance to my decision.
140 I should also note as to each of those forms of irregularity that s 105 requires the irregularity to have 'occurred in connection with the making or carrying out of the order'. However, it was not put to me that this element was not met for any of the forms of irregularity contended for. Nor is it apparent to me that it was not met, having regard to the terms of the receiver orders, order 2.
141 I consider each of the forms of irregularity contended for, in turn.
142 As to irregularity 1, offering to sell the share without first having identified the referred to limitations in the corporate constitution of Banning Holdings as an irregularity, the principal evidence appears to me to be from the respondent.
143 His evidence was that he had sought copies of the corporate constitution from a director (Mr Campbell-Smith) and from the accountant of the company on 3 February 2009, prior to advertising the share for sale, prior to inviting expressions of interest and prior to the offer by the Friggers to purchase of 6 March 2009 (exhibit 11 [17] and GTL 7). There is also his testimony that he could have sought it and did seek it from the Australian Securities and Investments Commission (ASIC) at about that time (cross-examination, 3 July 2013, ts 3588 - 3589).
144 The only other relevant evidence is from Mrs Frigger. It was evidence, in an email to the respondent of 5 February 2009, where she expressed the 'hope' that 'you have requested the constitution from Don Campbell-Smith because this is the last hurdle' (exhibit 9 AF 4). It will be seen, however, that the respondent had in fact done what Mrs Frigger expressed the hope he had done.
145 In any event, I note that the respondent by email of 6 February 2009 to Mr Campbell-Smith and the accountant for Banning Holdings stated 'I urgently require a copy of Banning Holdings Pty Ltd constitution' (exhibit 11 GTL 9).
146 It is not in contest that the respondent first became aware of the contents of the corporate constitution as a result of the letter from the solicitor for Banning Holdings dated 20 March 2009. That letter appears to have been faxed on its date. See exhibit 11 [34] and GTL 21. That letter enclosed a copy of the corporate constitution of Banning Holdings, in the form of a print out from ASIC, which included the Articles of Association including Article 22 and Article 22A.
147 However, I do not consider the evidence from the respondent, read with the evidence from Mrs Frigger I have referred, to be clear evidence as to whether or not, as contended for the Friggers, in the sale of a share in a proprietary company by a receiver appointed for the purpose of a receiver order in respect of that share, it would be irregular for there to be no identification by that receiver of the contents of the corporate constitution prior to the offer for sale of such share.
148 In any event, in this case the respondent had made it known at the meeting with interested persons, following the advertisement and prior to the making of offers for the share including the Friggers' offer to purchase of 6 March 2009, that he was in the position that there was no corporate constitution available. I am not satisfied in that circumstance that any failure to identify the contents of the corporate constitution by that time was an irregularity.
149 Further, it is not contended that by the time of the sending to the Friggers of the respondent's letter of acceptance of 9 March 2009, or by the time of the execution by the parties of the written confirmation of 10 March 2009, in both cases without any change in that position, there was an irregularity. It seems to me that any such contention would not be successful on the evidence I have referred to.
150 It might have been suggested for the Friggers that it was an irregularity for the respondent to accept the payment of the balance of the consideration for the share when he was aware, but the Friggers were not, of the contents of the corporate constitution of Banning Holdings, including Article 22 and Article 22A. However, I consider I am not in a position to find the Friggers lacked that awareness at that time. In any event, I am not satisfied such acceptance was an irregularity.
151 The matter of whether or not the Friggers lacked that awareness at that time was as I have previously indicated sharply contested before me. Mrs Frigger testified they did lack that awareness (cross-examination, ts 3367). However, this is not easily reconciled with the fact as she also testified (ts 3366) that she did not pursue the matter immediately after receiving on the day of that payment the letter (exhibit 9 AF 14) (the letter from the solicitor for Banning Holdings dated 25 March 2009) that first (ts 3365) informed her of issues with registration of the share arising out of the corporate constitution.
152 Further, that failure to pursue the matter tends against any conclusion that any lack of awareness at the time of payment was an irregularity.
153 I do not find the present form of irregularity contended for, irregularity 1, to be made out.
154 As to irregularity 2, failing to comply with Article 22A in the corporate constitution, there is unchallenged evidence from the respondent that by email of 2 February 2009 from the respondent to Mr Campbell-Smith he asked him:
[T]o make a formal offer as soon as possible on behalf of Sandra Banning to purchase the Share I hold in Banning Holdings Pty Ltd or submit any alternative commercial arrangement for my consideration (exhibit 11 GTL 6).
155 Further, during the proceedings in CIV 1727 of 2009, by an email of 22 May 2009 from Mrs Frigger to the then solicitor for CAT and the respondent she said:
Hartmut and I suggest that Graeme send a letter to Sandra Banning directly, inviting her to buy the share, and giving her 21 days in which to do so, as per the constitution. As we all know, she probably doesn't have the funds, nor can she raise them. If she does buy the share, then the funds Graeme receives can be used for CAT's taxed costs, which bill will be filed and served within the next 2 - 3 days. If she cannot buy the share, then there is no longer an issue with the registration. This will alleviate the risk of a long and protracted trial and crush any defence they pretend to have. … (exhibit 11 GTL 29).
156 By email of 3 July 2009 from the respondent to Mr Campbell-Smith he said:
I refer to Pharagraph [sic] 15A of the Defence and Counter of First, Second and Third Defendants, I now invite Sandra Banning to purchase One Share I hold as Receiver in Banning Holdings Pty Ltd.
If a satisfactory price can be achieved Mr and Mrs Frigger, are prepared to withdraw their offer, to purchase the share and to avoid any further litigation between various parties.
… (exhibit 11 [51] and GTL 30, source of quotation)
157 There appears to be no other evidence with respect to non-compliance with Article 22A of the corporate constitution as an irregularity.
158 It was not in contest that that evidence did not indicate compliance with Article 22A. In particular, no price had been arrived at as Article 22A provided for. It does not seem to me that the email of 22 May 2009 from Mrs Frigger to the then solicitor for CAT is proposing such compliance, but rather the course of action which the respondent later took, on 3 July 2009.
159 However, as will be seen, one of the issues raised by the plaintiffs in CIV 1727 of 2009 was that Article 22A had no application in this case. Also as will be seen, Frigger v Campbell-Smith did not resolve that issue.
160 In those circumstances, it does not seem to me that I have sufficient evidence before me to determine whether the present form of irregularity, irregularity 2, is made out.
161 As to irregularity 3, the failure to obtain directions prior to making the contract for the sale and purchase of the share, or at least the failure to make that contract subject to such directions, the only relevant evidence appears to me to be the following.
162 There is evidence from the respondent that he received from his then solicitor, Mr Carles, on 10 March 2009 advice that he should make any sale of the share subject to approval of the court (cross-examination, 3 July 2013, ts 3618).
163 However, there is also the evidence the respondent did not follow that advice (ts 3619). Further, there is the evidence of Mrs Frigger's view as to having court approval of the sale, contained in her email of 10 March 2009 to the respondent. This appears to be a response to having seen a copy of the solicitor's advice. Her view there expressed was as follows:
I do not agree with Carles' opinion. I am not spending unnecessary legal costs to protect you. The receiver orders are plain - sell the share to satisfy the judgement debt. Would the Sheriff have to go back to the Court before he sells assets in satisfaction of a judgement debt? No! The only reason why you were appointed, rather than the sheriff, is the sheriff said he did not have skills to value the share. Otherwise, the Sheriff would have been appointed (exhibit 11, GTL 19).
164 In CAT v PSA[No 2] WASC I indicated that on the authorities on the duties of court-appointed receivers decided before the enactment of the Civil Judgments Enforcement Act there were situations in which the receiver would normally be required to obtain prior court approval: see [111]. However, the present is not a situation within those authorities, and no further authorities relevant in this respect were cited to me. Nor am I aware of any such authorities.
165 I am not satisfied on the evidence I have referred to in the present connection that there was an irregularity in respect of the respondent's failure to obtain court approval for the sale.
166 I have no evidence that it would be an irregularity not to have a receiver's contract for the sale and purchase of a share in a proprietary company subject to court approval.
167 In those circumstances, it does not seem to me that I have sufficient evidence before me to determine the present form of irregularity, irregularity 3, is made out.
168 As to irregularity 4, the receiver contracting to sell the share where, as circumstances transpired, the Friggers were unable to obtain the share registered in their names, I begin by noting that there was no evidence before me that it is an irregularity for a receiver appointed to appropriate and realise a share in a proprietary company so as to satisfy a judgment debt simply not to succeed in achieving that purpose. It seems to me the contrary cannot be maintained.
169 The present case might be seen to make that point. The failure to realise the share so as to satisfy the judgment debt might be explained by its satisfaction otherwise, in this case as a consequence of the result in PSA [No 2] WASCA and events that had preceded that decision. Those events were the payment of the judgment debt (save for costs) prior to that decision, which reduced the judgment debt (save for costs) from $967,202.50 in damages, plus interest of $138,824.83, by an amount of some $680,000. See Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171 [6] - [8] (Newnes JA), referred to in Frigger v Campbell-Smith [5], where at [91] Kenneth Martin J referred to that 'extinction of the judgment debt' as 'a strong consideration against the court making discretionary enforcement orders against the director defendants'.
170 However, for the Friggers, it was contended that the irregularity lay in a failure to achieve the sale where success was a term of the contract.
171 However, there is no evidence before me that a failure after so contracting is an irregularity.
172 Nor is it apparent to me that such a failure is of its nature an irregularity.
173 I will return in relation to the next issue to the question of what the receiver had contractually promised in respect of the share as to its registration in the names of the Friggers.
174 For the present, it is sufficient to note that it is not clear, either on the contract for sale and purchase as initially formed, or on the contract for sale and purchase as it might have been subsequently varied, that the receiver had so contracted as to be answerable in damages (as opposed to answerable for the return of consideration received) if success were not achieved. It is not apparent to me on the law as to execution sales that it is irregular for an officer of the court making such a sale not so to contract. See for execution sales of goods by a sheriff Niblett Limited v Confectioners' Materials Company Limited [1921] 3 KBD 387, 401 (Atkin LJ).
175 For reasons I will explain in relation to the next issue, I consider Kenneth Martin J in Frigger v Campbell-Smith (see [101] - [102], read with [78]) was of the view that questions of that kind were open.
176 In any event, it was not made apparent to me that, if the receiver had so contracted, so contracting in the circumstances of this case was an irregularity. The receiver might be seen to have accepted a contractual risk of that kind as part of the price for the sale he sought to achieve.
177 In those circumstances, it does not seem to me that I have sufficient evidence before me to determine the present form of irregularity, irregularity 4, is made out.
178 As to irregularity 5, promoting the participation of the Friggers in CIV 1727 of 2009, it was not in contest that, as indicated by the Deed and the email of 30 March 2009, the respondent provided the Friggers with the view of his lawyer that court proceedings would be the appropriate way to secure the share registered in their names.
179 The response to the email of 30 March 2009 from Mrs Frigger was the following email of 30 March 2009 to the then solicitor for the respondent:
Dear All
I agree with the below message, and Chris Stokes is formally asking the directors to register the share, failing which we will apply for an injunction for the same to happen.
Thanks.
Angela Frigger (from exhibit 1)
180 As I have previously indicated, the proceedings in CIV 1727 of 2009 were commenced on 20 April 2009.
181 The history of those proceedings, including the involvement of the respondent first as co-plaintiff and then as fourth defendant, is conveniently set out in Frigger v Lean [10] - [33] (Allanson J, Newnes & Murphy JJA agreeing). The reasons in that decision for not varying the costs orders in favour of the respondent made by Kenneth Martin J in Frigger v Campbell-Smith appear to me to indicate there was no improper conduct of the respondent in that involvement: see [58] - [59], [80]. In any event, as I understood the submission for the Friggers, the irregularity pressed was not the involvement of respondent from the commencement of the proceedings, but rather putting to the Friggers that they should commence litigation to achieve registration and continuing to promote that litigation so commenced.
182 Counsel for the Friggers appears to have put to me that that was an irregularity in view of the respondent's contractual obligation to provide the Friggers with the share registered in their names and be answerable in damages if there was a failure in that regard.
183 So viewed, the promotion relied upon as an irregularity depends, so it seems to me, on whether or not, assuming that was the respondent's contractual obligation, it was irregular for the respondent to proceed otherwise than by taking such proceedings himself. I return to that assumption below. However, even accepting that assumption, I am of the view it is not evident to me that it was irregular for the respondent to proceed in that way. I am of that view having regard to the views in Frigger v Lean I have referred to as to the conduct of the receiver in being involved as he was in the proceedings in Frigger v Campbell-Smith.
184 In those circumstances, it does not seem to me that I have sufficient evidence before me to determine the present form of irregularity, irregularity 5, is made out.
185 As to irregularity 6, being involved in the proceedings in CIV 1727 of 2009 without first obtaining the directions of the court, it was not in contest that the respondent was so involved.
186 I note the position of the respondent as a court appointed receiver holding property by reason of his office (see Frigger v Lean [80]), and that a receiver who as a result of the receivership obtains possession of property is entitled to maintain an action in respect of that property (see Wilton v Commonwealth Trading Bank of Australia [1974] 2 NSWLR 96, 98 (Hutley JA, Street CJ & Glass JA agreeing), referred to in CAT v PSA[No 2] WASC [119]). This does not suggest he is bound to do so, however. The matter depends on the nature of the proceedings, as I will indicate below.
187 In view of that position and that authority it is not evident to me that there was an irregularity in the receiver's failure to apply to the court for directions before being involved in CIV 1727 of 2009.
188 The only direct evidence on point appears to me to be in the testimony of the respondent. It was put to him in cross-examination that having found out what he did from the letter from the solicitor for Banning Holdings dated 20 March 2009 and having entered into the contract for the sale and purchase of the share he could have applied to the court for directions as to what he might do. He responded that 'I can see that it was a smart way to deal with it' (3 July 2013, cross-examination, ts 3615).
189 However, I do not consider that is strong evidence it was irregular for him to have proceeded in any other way.
190 In any event, as I will indicate below, even accepting irregularity 6, it is not evident to me that any order is needed to correct it.
191 Further, as I will indicate below, the same is true for the other irregularities contended for, in irregularities 1 to 5; seems to me that in any event no such order should be made under Civil Judgments Enforcement Act s 105.
Issue 4: what is the power of the court to make an order in respect of any such irregularity?
192 In terms Civil Judgments Enforcement Act s 105 describes the power as 'the court may make any order needed to correct the irregularity', with the examples then listed.
193 On the arguments and material before me, two matters in respect of that description were, it seems to me, in issue.
194 One matter is what is meant by 'any order neededto correct the irregularity' (emphasis added).
195 The other matter is whether the power of the court indicated by 'may' is or is not discretionary.
196 It was common ground before me, and my own research confirms, that there is no authority on either matter.
197 However, as I will explain, it seems to me that authority on the power of the court under the common law in the proceedings in which a receiver was appointed to respond to claims of neglect or misconduct by the receiver are of some assistance at least as to the second matter.
198 I deal with the matters described in that order.
199 As to the first matter, that of what is meant by 'any order neededto correct the irregularity' (emphasis added), I begin by indicating my view that there can be no question but that a court appointed receiver may be made liable under s 105 as principal in respect of conduct relied upon as an irregularity. That would be consistent with the position of such a receiver at common law. See Saraceni v Jones [2012] WASCA 59; (2012) 42 WAR 518 [176] (McLure P, Newnes JA agreeing) quoting from Burt, Boulton & Hayward v Bull [1895] 1 QB 276, 279 (Lord Esher MR).
200 As to what is meant by the emphasised words in the quotation from s 105, I am of the view that as a matter of their ordinary meaning the power to make orders is limited by them. Only if an order is 'needed to correct the irregularity' is the power exercisable.
201 The effect of that view is perhaps most readily apparent in respect of contended for irregularity 6, being involved in the proceedings in CIV 1727 of 2009 without first obtaining the directions of the court.
202 In my judgment in CAT v PSA [No 2] WASC [119], I gave it as my view that, had the receiver applied for directions before the commencement CIV 1727 of 2009, it was likely he would have received court authorisation to be a plaintiff in them. That view was expressed with respect to the proceedings as originally commenced, including a claim for relief against oppression under Corporations Act 2001 (Cth) s 232, for which the receiver would have been a necessary party. That claim was, it seems, subsequently retired, when the respondent ceased to be a plaintiff. See Frigger v Lean [17]. However, in view of Wilton v Commonwealth Trading Bank of Australia (98) and Frigger v Lean [58], [59], [80], I am also of the view that it has not been shown to be unlikely court authorisation would not have extended to the respondent's involvement in the proceedings for the other relief claimed.
203 On those views, I consider no order is 'needed to correct the irregularity' contended for as irregularity 6.
204 In respect of contended for irregularities 1 to 5, I consider there is a related point to be made. It rests on the contractual relations between the Friggers and the respondent.
205 It may be seen, in what as I have previously indicated is common ground between the parties, that the Friggers were to receive a share registered in their joint names in return for the payment of the total consideration. This understanding of what the Friggers were to receive, as appeared most clearly from the oral submissions for them, is fundamental to their claim under Civil Judgments Enforcement Act s 105. It will also be apparent, from my discussion of issue 5, that the orders the Friggers seek under s 105 are in the nature of remedies for failure to provide what they were to receive under the contract for the sale and purchase of the share, namely, the share registered in their joint names.
206 In my view those contractual relations in that respect cover, and give rise to remedies for, the matters the subjects of those irregularities. On that view, it seems to me those contractual relations mean an order under Civil Judgments Enforcement Act s 105 is not 'needed to correct the irregularity'. Those contractual relations in that respect provide remedies for the irregularity in each case.
207 However, what those remedies are depends on the nature of the contractual promises the respondent made. This is to be seen most clearly in the discussion by Kenneth Martin J in Frigger v Campbell-Smith of the contractual relations between the Friggers and the respondent as those relations were pleaded by them before him.
208 Before him, as before me, it was common ground that by the terms of the contract for the sale and purchase of the share the Friggers would receive the share registered in their name, or at least would have the benefit of an order for such registration. See Frigger v Campbell-Smith [56], [57], [80].
209 However, those terms do not necessarily mean the respondent would be answerable in damages, as opposed to answerable for return of the consideration received, in the event neither result were achieved.
210 This is most clearly to be seen in the pleading of the respondent's defence (exhibit 5 before me) to which Kenneth Martin J refers in Frigger v Campbell-Smith as follows:
Paragraph 12 of the Receiver's defence pleads that the terms of the share sale contract were impliedly varied by conduct, whereby:
'(a) The Fourth Defendant continues to hold the deposit of $20,000 in his trust account and the Plaintiffs have not requested the return of their deposit.
(b) The Fourth Defendant refunded the $710,000 to the Plaintiffs pending the determination of an application by them to the court to compel the First and Second Defendants to register the Share transfer.
(c) The Plaintiffs have commenced these proceedings to determine whether they are entitled to be registered as owners of the Share.
(d) Neither party has given notice of default or notice of termination to the other.'
Essentially then, the Receiver under his defence, as I observed earlier, accepts the Friggers' core premise, namely that there needed to be more than simply the Receiver handing over an executed transfer of the BH share then registered in his name. The Receiver accepts that his share sale contract with the Friggers envisaged by a term, that the Friggers would actually become registered as a shareholder in BH in their own names (see the express term at par 8(e) of the Receiver's defence). That has not occurred since March 2009.
The Receiver's defence (par 13) pleads that by variation of the contract of sale with the Friggers, settlement date for his receipt of the unpaid $710,000 has been deferred, until the plaintiffs obtain an order of the court compelling the defendant directors to register the share transfer. This is formulated under par 13 of the defence of the Receiver to the Friggers, in terms:
'13 (a) if the Plaintiffs are successful in obtaining such an order, then they will be required to repay the balance of the purchase price of $710,000 to the Fourth Defendant in order to obtain registered ownership of the Share; or
(b) if the Plaintiffs are unsuccessful in obtaining such an order, then the Share Sale Contract will be frustrated or otherwise at an end and the Fourth Defendant will be required to refund the $20,000 deposit to the Plaintiffs.'
…
The Receiver would also like to receive some clarification by orders of the as to the status of his uncompleted contract of sale with the Friggers. But for that to occur, the Receiver first needs to amend his pleadings against the Friggers to add a counterclaim seeking a declaration as to the legal frustration in law of the contract of sale [76] - [78], [101] (emphasis added).
211 That is, if the Friggers were unsuccessful in obtaining an order for registration the contract of sale and purchase of the share would come to an end automatically and the consideration paid would be returned. However, it seems to me that on that pleading the respondent had not promised fulfilment and so would not be answerable in damages for non-fulfilment. See on the effect of frustration and similar events LexisNexis Carter on Contract (as at 13 March 2014) [31-020] read with [35-180], [35-190], [35-200]; and see below on the Friggers' position.
212 Indeed, it would seem to me, on the respondent's position in Frigger v Campbell-Smith so described that, even without the variation the respondent pleaded, that is, on the contract for the sale and purchase of the share as it was initially, the results would be the same.
213 The position of the Friggers, as made clear before me, is that the contract for the sale and purchase of the share contained a promise by the receiver that the Friggers would receive a share registered in their name.
214 Under this position as it appears to me the non-fulfilment of that term would not itself terminate the contract for the sale and purchase of the share, but would enable the Friggers to terminate it, and in any event seek damages for its breach. See Carter on Contract [35-050], read with [35-180], [35-190] and [35-200] ('repudiation' by inability to perform on due date).
215 As Kenneth Martin J in Frigger v Campbell-Smith [101] (see also [102]) appears to me to have noted, the resolution of the issue raised by the respondent's pleadings before him needed different and proper pleadings in that regard.
216 In determining this aspect of the contractual relations between the Friggers and the respondent, and in particular whether or not they were varied in the terms and with the effects described in Frigger v Campbell-Smith [76], [78], it seems to me there are difficult questions of fact and law to be resolved on such different pleadings.
217 However, for the purposes of the application of the Friggers before me, given the contractual relations I have described, I consider it is not apparent that any order under Civil Judgments Enforcement Act s 105 is 'needed to correct the irregularity' in irregularities 1 to 5. Rather, the Friggers should be left to their remedies under those contractual relations. That is, the application by the Friggers under s 105 should be dismissed.
218 Even if I am wrong in that regard, it seems to me that the proper exercise of the power in s 105 would produce the same result. That is, the power under s 105 is discretionary, and in exercising it a relevant consideration capable of being determinative in a case like the present is whether or not there is available to the applicant a remedy under other process.
219 It was contested before me, at least in the oral argument on 26 July 2013, whether or not 'may' in s 105 conferred a discretion or simply denoted a power that had to be exercised once it became apparent there was an order 'needed to correct the irregularity'.
220 However, I am of the view that s 105 does indeed confer a discretion which may be exercised as I have indicated. I am of that view having regard to two matters.
221 One is the breadth of 'irregularity' in s 105 on the meaning I prefer. It is undoubtedly capable of covering matters for which there are also remedies under other law.
222 The other is the position at common law. That position is described in Frisby S & Davis-White M, Kerr & Hunter on Receivers and Administrators (19th ed, 2010) [8-10] read with [6-32] and [6-53], in terms that where a person suffers a legally recognised wrong as a consequence of 'irregularity or misconduct' in the performance of the duties of a court-appointed receiver, the proceeding should be brought in the court appointing the receiver which may, however, give leave for the matter to be dealt with in another court. See also Pollnow v Garden Mews St Leonards Pty Ltd (1984) 9 ACLR 82, 87 (McLelland J).
223 On those bases, even if there were irregularities in the terms of irregularities 1 to 6, I would not make any orders under Civil Judgments Enforcement Act s 105 in view of the remedies available under the contractual relations between the Friggers and the respondent.
224 The conclusions I have arrived at for issues 3 and 4 mean that it is unnecessary for me to deal with issues 5, 6 and 7.
225 However, in deference to the argument presented to me, by one or both parties, and in view of the relevance to my analysis of the present issue of my view of the items of loss or damage for which the Friggers are making a claim for compensation or damages (see issue 5), I should make a number of relatively brief observations about them.
Issue 5: was there loss or damage for which an order should be made under s 105?
226 The Friggers claim, as loss or damage for which an order or orders under s 105 should be made, the following items:
(1) the loss of the opportunity to invest the amount of the deposit, which I understood was after a deduction for the interest paid to the Friggers with the deposit when it was returned;
(2) the loss of the share; and
(3) the participation by the Friggers in CIV 1727 of 2009.
227 The Friggers' claim for an order under s 105 in respect of loss or damage, items (1) and (2), was, as I understood their submissions, for an order for 'compensation' or 'damages', where the measure of that compensation or of those damages should be that for compensation or damages for the irregularities 1 to 4. That measure should be that for damages for a breach of contract in the failure to provide the share registered in the joint names of the Friggers.
228 The Friggers' claim for an order under s 105 in respect of loss or damage item (3) was as I understood their submissions for an order for 'compensation' or 'damages' for the irregularities 5 and 6. That measure should be that of the costs the Friggers incurred in their participation in CIV 1727 of 2009. I consider that claim to be one arising out of the same contractual failure as was relied upon for the previous items, and to be one for which recovery of damages in contract would be open. Those damages would appear to me be strongly arguable as loss incurred as a result of steps in mitigation. See Carter on Contract [41-430].
229 I leave aside the Friggers' further claim for interest on the total amount said to be payable under the orders sought.
230 In respect of loss or damage item (1), the loss of the opportunity to invest the deposit, two matters were put in issue before me. One was whether or not the Friggers were kept out of the deposit unlawfully, that is, as I understood it, in breach of contract. Second, the Friggers had failed to prove the loss of the investment opportunity they put forward. I deal with both in that order.
231 I begin by noting that the Friggers put the possibility of a claim of the present sort by reference to the possibility of a claim of damages for breach of contract of the kind referred to in PSA v CAT [No 2] WASCA [119] (referring to Whitaker v Paxad Pty Ltd [2009] WASC 47).
232 As to the first matter, by an email of 10 August 2009 (in exhibit 16) from Mrs Frigger to the respondent there was a reiteration of a previous demand (see also 5 April 2013, cross-examination of Mrs Frigger, ts 3403 - 3404) for the repayment of the deposit less $500 to the Friggers. By an email of 13 August 2009 (exhibit 11 GTL 31) from Mrs Frigger to the respondent she said among other things:
Thank you for your advice that you will be placing the $20,000 in an IBD. I am happy with that.
233 In her cross-examination she confirmed she 'agreed with that' as a 'second-best option' (5 April 2013, ts 3403). There was no evidence of a demand for return of the deposit again until the delivery of the judgment in Frigger v Campbell-Smith.
234 It was not in contest that the reference to 'IBD' was to an interest-bearing deposit.
235 It seems to me strongly arguable, on the basis of the email of 13 August 2009, Mrs Frigger's oral evidence referred to and the subsequent lack of demand for the return of the deposit until that date, that the contractual relations between the Friggers and the respondent should be seen to be regulated on the basis that the deposit would be retained in the IBD until such a date. This was in the context of the commencement of the proceedings in CIV 1727 of 2009, which has to be viewed as on the basis the Friggers did not treat the contract for the sale and purchase of the share as terminated. That regulation would represent a variation or clarification of their contractual relations under the contract of sale and purchase of the share. That regulation meant the Friggers had not been kept unlawfully out of the deposit, and the present loss or damage could not be claimed.
236 As to the second matter, as I understood the submissions for the respondent there was no evidence the Friggers would have invested the deposit as they claimed, or at least they would not have so invested the portion they sought, had they not parted with it on 10 March 2009.
237 The Friggers claim was that they would have invested the deposit in shares of six publicly listed companies during the period 10 March 2009 to 21 January 2011, shares in which they had invested between November 2008 and April 2009. See applicants' case statement of 24 October 2011 [39] - [41]. There is evidence from Mrs Frigger that they would have so invested that amount. See 5 April 2013 cross-examination of Mrs Frigger, ts 3410 and ts 3423. That evidence was not challenged.
238 For the Friggers the evidence of what they would have derived as capital gain from that investment was a series of charts of monthly prices over three years for each of those companies, obtained from the website of the Australian Securities Exchange (ASX). See exhibit 10.
239 In my view, although the contrary was strongly put to me, this evidence was admissible under Evidence Act 1906 (WA) s 72. See Casley-Smith v FS Evans & Sons Pty Ltd [No 4] (1988) 49 SASR 339, 342 - 347 (on the South Australian equivalent to s 72) and Ling v McDonald [1988] Tas R (NC) N17, (9 - 10) (on the Tasmanian equivalent to s 72); see also Heydon JD, Cross on Evidence (9th Aust ed, 2013) [3030].
240 For the respondent it was put to me that that evidence did not sufficiently clearly show the value appreciations if any for the six companies' shares over the relevant period.
241 In my view the respondent's position is strongly arguable. There was, in my view, sufficiently clear evidence of the closing price for each of the companies' shares in January 2011 from exhibit 10 and the testimony of Mrs Frigger (cross-examination, 5 April 2013, ts 3423). However, the exhibit 10 evidence does not appear to show any closing prices any earlier than March 2010. There is no other evidence of the quantum of their loss of investment opportunity.
242 I turn now to loss or damage item (2), loss of the share.
243 In respect of the loss or damage item (2), the claim for the Friggers was that the failure to provide the share meant they suffered a loss of the difference between the price under the contract for sale and purchase of the share and the value of the share.
244 I should note that the claim is one that does not appear in any of the papers for, or oral submissions in, these proceedings until the written closing submissions for the Friggers. There was no response to this claim in the written or oral closing submissions for the respondent.
245 I accept that such claim is possible by reference to the measure of damages for non-delivery under a contract for the sale and purchase of goods. See Carter on Contract [42-040].
246 The only evidence as to the value of the share to which the submissions for the Friggers referred or which is otherwise apparent to me is that of the respondent in his report to the court of 10 March 2009 (exhibit 18) (as to which see his cross-examination, 3 July 2013, ts 3594, 3651 - 3652). No objection was taken to that evidence.
247 On that evidence it was put to me that the difference between the value of the share as at 10 March 2009 and the price paid was $420,299, as claimed by the Friggers. That was the difference based on 90% of the respondent's 'market valuation' of the share as '$1,278,110.00' (exhibit 18). The 90% is based on the following from the report:
2. I am aware that my market valuation does not take into account the limitation set on this share in relation to:
a. Ability of a third-party shareholder to be involved in the management of the company. In particular any new shareholder would be concerned that the Directors desire to pay creditors of other entities with Banning Holdings Pty Ltd cash funds.
b. Potential future conflict between the third-party shareholder and the other 50% shareholder, Mrs Sandra Banning.
c. I expect an independent third party would discount the value by 90% in taking the above into consideration (exhibit 18, 2) (emphasis added).
- In view of the emphasised words, it is not plain to me how the 90% discount of the market valuation was arrived at.
248 I turn then to the loss or damage item (3), the participation of the Friggers in CIV 1727 of 2009.
249 As to loss or damage item (3), two matters were put in issue before me. One was that, in view of the costs orders in Frigger v Campbell-Smith upheld in Frigger v Lean and the reasons for them and the terms of the contract of sale and purchase of the share, such costs were irrecoverable. The other was that there was no adequate proof of those costs.
250 As to the first matter, there appeared to be two arguments put for the respondent. One was that the matter of the costs of CIV 1727 of 2009 as between the Friggers and the respondent had been determined in that case, as it had, and that the Friggers could not seek to have the matter returned to in separate proceedings as damages or other compensation. The other was that the Friggers had by the contract for the sale and purchase of the share agreed to indemnify the respondent against those costs in any event.
251 The submission as to the first argument appears to have been the invocation of the common law principle, considered and applied in Gray v Sirtex Medical Ltd [2011] FCAFC 40; (2011) 193 FCR 1 [15] (Bennett, Gilmour & Gordon JJ), that a party cannot recover its costs of proceedings from the other party as damages, even although the other party's wrongful act caused the party to incur those costs.
252 However, it is not apparent to me that the principle applies to the present claim by the Friggers. The claim is one under Civil Judgments Enforcement Act s 105, which was not in issue in CIV 1727 of 2009. The principle has no application to what is a claim made in a separate proceeding on a separate cause of action flowing from a different and additional wrong. See Gray v Sirtex Medical Ltd [24] (quoting from Berry v British Transport Commission [1962] 1 QB 306, 322 - 323), [36] - [37].
253 As to the second argument, there was an express indemnity provided for in the written confirmation of 10 March 2009 (see item (4)). However, taking that as the contract for sale and purchase of the share as I have indicated above, and item (4) as not to have been affected by any subsequent variation, it is not apparent to me that the indemnity should be construed to apply to a case of wrongful conduct grounding a claim under Civil Judgments Enforcement Act s 105, or indeed to a breach of the contract of sale and purchase of the share which led the Friggers to initiate proceedings like those in CIV 1727 of 2009.
254 As to the second matter, of the adequacy of the proof of the Friggers' costs of the proceedings in CIV 1727 of 2009, the respondent's submissions were that the only evidence was from Mrs Frigger of her estimate of the costs the Friggers had incurred in those proceedings. There was none from their lawyers. Further, there was no proof, where invoices were in evidence, that those invoices had been paid.
255 That last submission may be simply dealt with. There was evidence, in Mrs Frigger's affidavit (exhibit 9 [29]), that all of the 'accounts' set out in the bundle of invoices rendered to the Friggers by their legal advisers 'detailing the amounts they charged [them] in relation to action CIV 1727 of 2009 and in relation to the [present proceedings]' (being exhibit 9 AF 24) 'have been paid'. True it is that there do not appear to be receipts for any of the invoiced amounts. However, there appears to have been no challenge to the fact of payment.
256 The first submission in relation to the second matter highlighted the testimony of Mrs Frigger in cross-examination acknowledging that the bundle contained invoices which covered more work than in the category of work in relation to CIV 1727 of 2009 and the present proceedings. See 5 April 2013, ts 3407 - 3409. However, Mrs Frigger also testified that she had marked up the invoices to indicate which amounts were in that category where that was not apparent. See ts 3408. In the face of that evidence, which was not explored or tested, I would not uphold the first submission in relation to the second matter.
257 I turn now to issue 6.
Issue 6: is recovery of damage liable to be reduced for any failure by the Friggers to take reasonable care?
258 There was no argument as to this issue addressed to me in the written or oral closing submissions other than in the respondent's written closing submissions. They directed me to the allegations of the Friggers' failure to take reasonable care of their own interests by reason of the matters set out in the respondent's amended response to the applicants' case state statement dated 24 October 2011. Those matters included the Friggers' failure themselves to obtain the corporate constitution of Banning Holdings as 'publicly available documents'; and reference to the circumstance that the Friggers had been advised by lawyers they engaged for the purpose as to matters arising out of the refusal of the directors of Banning Holdings to register the transfer of the share to the Friggers.
259 However, it was not made apparent to me on what basis the failures and other circumstances relied upon were relevant to a claim under Civil Judgments Enforcement Act s 105. I have already indicated that the claim in this case is not one for the failure of the respondent to exercise reasonable care. It is then not apparent to me that the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) s 4(1) read with s 3 has any application.
260 Nor was it apparent to me that the matters relied upon were ones that broke the chain of causation of the loss or damage items claimed by the Friggers. For the relevance in that respect of a claimant's contributory negligence in actions for breach of contract, see Carter on Contract [41-300].
261 It may be that matters of contributory fault would have a bearing on the exercise of the discretion I have indicated the court has not to make an order under Civil Judgments Enforcement Act s 105. However, no argument was addressed to me on this point.
262 I turn now to the final issue, issue 7.
Issue 7: is recovery liable to be fixed having regard to the conduct of third parties?
263 The respondent's submissions were that under Civil Liability Act s 5AK the respondent's liability was 'limited' as s 5AK(1)(a) provided to:
[A]n amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss.
264 This limitation applied because the respondent was a 'concurrent wrongdoer' within s 5AK(1) read with s 5AI 'concurrent wrongdoer' in that, as that definition provides, he was:
[A] person who is one of 2 or more persons whose act or omission caused, independently of each other or jointly, damage or loss is the subject of the claim.
265 That was so as the solicitor who had acted at material times for the Friggers (Mr Stokes) was another person within that definition. This in turn was because that solicitor had acted in advising the Friggers with respect to purchasing the share in Banning Holdings; applying for the receivership order in respect of the share; instituting the proceedings in CIV 1727 of 2009; and pursuing those proceedings after the respondent had been removed as co-plaintiff and made the fourth defendant in them.
266 Before me there was some dispute as to the role of Mr Stokes. I am satisfied, not least from the bundle of invoices including amounts paid by the Friggers in relation to CIV 1727 of 2009 (exhibit 9 AFT 24), that he did indeed perform the role of providing the Friggers with at least some of the forms of advice described.
267 However, it seems to me there is an insuperable obstacle to the application of Civil Liability Act s 5AK here. It is that that provision requires (in this case) an 'apportionable claim'. Such a claim is defined (for this case) in s 5AI(a) as:
[A] claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury) (emphasis added).
268 As I have previously indicated, the Friggers' claim is not one 'arising from a failure to take reasonable care'.
269 I turn now to my conclusion and orders.
Conclusions and orders
270 For the reasons I have given, I have concluded that no order should be made under Civil Judgments Enforcement Act s 105 on the application for directions.
271 It follows I would dismiss the application for directions.
272 I will hear from the parties as to further orders I should make.
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