Danel Investments Pty Limited v Nexstar Investments Pty Limited (No 3)
[2011] ACTSC 125
•10 August 2011
DANEL INVESTMENTS PTY LIMITED v NEXSTAR INVESTMENTS PTY LIMITED & ORS (NO 3) [2011] ACTSC 125 (10 August 2011)
Court Procedures Rules 2006 (ACT), rr 1616 and 1703 and Schedule 2
Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406
Knight v FP Special AssetsLtd (1992) 174 CLR 178
No. SC 256 of 2007
No. SC 470 of 2007
Judge: Foster J
Supreme Court of the ACT
Date: 10 August 2011
IN THE SUPREME COURT OF THE )
) No. SC 256 of 2007
AUSTRALIAN CAPITAL TERRITORY ) No. SC 470 of 2007
BETWEEN:DANEL INVESTMENTS PTY LIMITED (ACN 116 723 918)
Plaintiff
AND:NEXSTAR INVESTMENTS PTY LIMITED (ACN 121 568 545)
First Defendant
DAVID JAMES CAMPBELL
Second Defendant
FULVIO GOBEO
Third Defendant
CHRISTOS VIZOVITIS
Fourth DefendantGEORGIA VIZOVITIS
Fifth Defendant
BETWEEN:DANEL INVESTMENTS PTY LIMITED (ACN 116 723 918)
Plaintiff
AND:CHRISTOS VIZOVITIS AND GEORGIA VIZOVITIS
Defendants
ORDER
Judge: Foster J
Date: 10 August 2011
Place: Sydney (via video link to Canberra)
THE COURT ORDERS THAT:
Proceeding No SC 470 of 2007
Judgment be entered in favour of the plaintiff against the defendants in the amount of $115,374.97 (comprising damages and other compensation in the amount of $81,771.40 and interest thereon from 1 January 2007 up to and including 10 August 2011 in the amount of $33,603.57).
The defendants pay the plaintiff’s costs of and incidental to this proceeding on an indemnity basis.
Proceeding No SC 256 of 2007
Christos Vizovitis and Georgia Vizovitis be added as fourth and fifth defendants respectively to this proceeding.
There be a verdict and judgment in favour of the first, second and third defendants against the plaintiff on the claims brought by the plaintiff against those defendants in this proceeding.
The proceeding brought by the plaintiff against the first, second and third defendants be wholly dismissed.
There be a verdict and judgment in favour of the third defendant against the plaintiff on the Counterclaim brought by the third defendant against the plaintiff in the amount of $11,388.17 (comprising $8,000.00 by way of refund of the deposit paid by the third defendant to the plaintiff in about August 2006 in respect of the sale of business transaction the subject of these proceedings plus $3,388.17 by way of interest thereon in respect of the period from 10 November 2006 to the date of these orders).
The fourth and fifth defendants pay the costs of the plaintiff and of the first, second and third defendants of and incidental to these proceedings as follows:
(a) Of the plaintiff, on an indemnity basis; and
(b) Of the first, second and third defendants, on the party/party basis.
On 28 July 2011, I published Reasons for Judgment in these matters (Danel Investments Pty Limited v Nexstar Investments Pty Limited & Ors (No 2) [2011] ACTSC 120 (the principal judgment). The only order which I made on 28 July 2011 was an order that:
Within seven (7) days of 28 July 2011, each of the parties submit his, her or its version of the orders which that party contends Foster J should make in conformity with these Reasons for Judgment supported by appropriate calculations and a written submission (if desired) of no more than two pages in length.
Each party has filed draft orders and a Written Submission in support of the orders which that party submits I should now make.
PROCEEDING NO SC 470 OF 2007
The parties to this proceeding are Danel Investments Pty Limited (Danel), as plaintiff, and Christos Vizovitis and Georgia Vizovitis, as defendants. In the principal judgment, I found that Mr and Mrs Vizovitis were liable to Danel. At [306] of the principal judgment, I said:
306.There will be a verdict and judgment in favour of Danel against Mr and Mrs Vizovitis for the total of the following amounts:
(a)$80,000 being the value of the lost brothel business and the lost sublease;
(b)The sum of all payments made by Danel to Mr and Mrs Vizovitis after 1 January 2007; and
(c)Pre-judgment interest on the total of the amounts referred to in (a) and (b) above at the rates provided in the Rules of Court for such interest, such interest to be calculated in respect of the period from 1 January 2007 up to the date when final orders are made.
In its Written Submissions, Danel claimed $80,000 by way of damages together with the following amounts:
$3,542.80
(Overpaid rent: two amounts of $1,771.40 each); and
$5,314.20
(Rental bond paid on 10 January 2007)
$8,857.00
The total amount by way of damages and compensation claimed by Danel in its Written Submissions (excluding interest) was, therefore, $88,857.00.
Danel also claimed interest on the amount of $88,857.00 at the rates for pre-judgment interest laid down in Schedule 2 to the Court Procedures Rules 2006 (ACT) from 1 January 2007 to the date of judgment.
Mr and Mrs Vizovitis submitted that Danel’s claims were inflated. They argued that:
(1) On 5 January 2007, Danel forwarded to Mr and Mrs Vizovitis two cheques, each for the amount of $1,771.40. Each cheque was dated 5 January 2007. The cheques were numbered 37 and 39 respectively. One cheque was for the rent due in respect of Unit 6 for December 2006. The other cheque was for the rent due in respect of Unit 6 for January 2007. Mr and Mrs Vizovitis submitted that Danel was entitled to a refund of only one amount of $1,771.40. They submitted that this was so because only one of these two payments related to the period after 1 January 2007 which was the cut-off date which I fixed in the principal judgment for the recovery of overpaid rent and other payments made under the sublease.
This submission is consistent with the conclusion which I reached at [304] of the principal judgment and with the reasons which I gave for that conclusion in that paragraph. I therefore propose to allow only one amount of $1,771.40 to Danel in the judgment which I will order in its favour against Mr and Mrs Vizovitis.
(2) On 31 January 2007, Danel paid to Mr and Mrs Vizovitis a further amount on account of rent for Unit 6. This amount was $1,777.09. This amount was refunded by Mr and Mrs Vizovitis to Danel on 28 March 2007. For this reason, Danel is not entitled to have that amount included in the judgment which I propose to order in its favour.
(3) The cheque for the rental bond in the amount of $5,314.20 was never presented nor was any amount for the rental bond ever actually paid by Danel to Mr and Mrs Vizovitis. Therefore, I will not include this amount in the judgment which I propose to order in favour of Danel against Mr and Mrs Vizovitis.
The principal amount, therefore, that is to be included in the judgment in favour of Danel against Mr and Mrs Vizovitis is $81,771.40 ($80,000.00 plus $1,771.40).
Danel is entitled to interest on that amount calculated in accordance with the rates for pre-judgment interest prescribed in Schedule 2 to the Court Procedures Rules 2006 (ACT) (as to which, see r 1616 of those Rules) for the period from 1 January 2007 to the date of judgment.
The calculations of interest in accordance with that Schedule are:
| · | Period 1: | 1 January 2007 to 30 June 2010 (1,277 days) | $25,747.91 |
| · | Period 2: | 1 July 2010 to 31 December 2010 (184 days) | $3,503.85 |
| · | Period 3: | 1 January 2011 to 10 August 2011 (222 days) | $4,351.81 |
| Total | $33,603.57 |
Therefore, the amount of the judgment to be entered in favour of Danel against Mr and Mrs Vizovitis is $115,374.97 ($81,771.40 plus $33,603.57).
In this proceeding (No SC 470 of 2007), I will order that:
(1) Judgment be entered in favour of the plaintiff against the defendants in the amount of $115,374.97 (comprising damages and other compensation in the amount of $81,771.40 and interest thereon from 1 January 2007 up to and including 10 August 2011 in the amount of $33,603.57).
(2) The defendants pay the plaintiff’s costs of and incidental to this proceeding on an indemnity basis.
PROCEEDING NO SC 256 OF 2007
In the principal judgment, I found that the first, second and third defendants were entitled to judgment as against the plaintiff and that the third defendant was entitled to a refund of the deposit of $8,000.00 which he paid to the plaintiff in August 2006 together with interest thereon. The third defendant, Fulvio Gobeo, who is the claimant in the Counterclaim and the person who actually paid the deposit of $8,000.00, submitted that interest should be awarded on the said sum of $8,000.00 from 10 November 2006 to the date of judgment. 10 November 2006 was nominated by the third defendant as the correct commencement date for the levying of interest because that was the date upon which he first demanded that the deposit be refunded. Danel submitted that 1 August 2007 was the appropriate start date for the levying of interest but it did not support that contention with any argument. 1 August 2007 does not have any rational basis in the evidence as the appropriate start date. I propose to fix 10 November 2006 as the date from which interest is to be calculated.
The amount which I propose to order the plaintiff to pay to the third defendant will therefore be $8,000.00 plus interest calculated in accordance with the rates for pre-judgment interest specified in Schedule 2 to the Court Procedures Rules 2006 (ACT) for the period from 10 November 2006 to the date of judgment.
The calculations of interest in accordance with that Schedule are:
| · | Period 1: | 10 November 2006 to 30 June 2010 (1,328 days) | $2,619.62 |
| · | Period 2: | 1 July 2010 to 31 December 2010 (184 days) | $342.80 |
| · | Period 3: | 1 January 2011 to 10 August 2011 (222 days) | $425.75 |
| Total | $3,388.17 |
Therefore, the amount to be awarded to the third defendant in his Counterclaim against the plaintiff is $11,388.17 ($8,000.00 plus $3,388.17).
In the principal judgment, I indicated that I proposed to order that Mr and Mrs Vizovitis pay the other parties’ costs of this proceeding (see the discussion at [341]–[346]).
In the Written Submissions filed by some of the parties, my attention has been drawn to the terms of r 1703 of the Court Procedures Rules 2006 (ACT) which prohibits the making of costs orders against non-parties, except in certain limited circumstances.
Counsel for the Nexstar interests submitted that, in order to avoid any difficulties presented by r 1703, I should now join Mr and Mrs Vizovitis to this proceeding as the fourth and fifth defendants. Such an approach is supported by the highest authority (Knight v FP Special AssetsLtd (1992) 174 CLR 178 at 203 (per Dawson J) and Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406 (per Callinan J)).
Counsel for Mr and Mrs Vizovitis agreed with the suggestion that his clients now be joined as party defendants in order to remove any technical impediments to the course which I indicated in the principal judgment that I would adopt. I therefore propose to join Christos Vizovitis as fourth defendant and Georgia Vizovitis as fifth defendant in this proceeding.
The first, second and third defendants have now sought an order that their costs be paid on an indemnity basis. This claim was opposed by Mr and Mrs Vizovitis.
In the principal judgment, I held that Danel’s costs in proceeding No SC 470 of 2007 should be paid by Mr and Mrs Vizovitis and that those costs should be paid on an indemnity basis. I explained my reasons for this special costs order at [307]–[311] of the principal judgment. For the same reasons, I think that Danel’s costs in this proceeding (No SC 256 of 2007) should also be paid by Mr and Mrs Vizovitis on an indemnity basis.
The costs of the first, second and third defendants in this proceeding are in a different category. Whilst I remain of the view that those costs should be paid by Mr and Mrs Vizovitis, I do not consider that an award of indemnity costs is warranted. There is no special or unusual feature of the present case warranting such an order as between the Nexstar interests, on the one hand, and Mr and Mrs Vizovitis, on the other hand. The reasons which I gave for making an indemnity costs order as between Danel and Mr and Mrs Vizovitis are not apt to be applied to costs as between the Nexstar interests and Mr and Mrs Vizovitis. I propose to order costs as between those parties on the party/party basis.
Therefore, in this proceeding (No SC 256 of 2007), I will order that:
(1) Christos Vizovitis and Georgia Vizovitis be added as fourth and fifth defendants respectively to this proceeding.
(2) There be a verdict and judgment in favour of the first, second and third defendants against the plaintiff on the claims brought by the plaintiff against those defendants in this proceeding.
(3) The proceeding brought by the plaintiff against the first, second and third defendants be wholly dismissed.
(4) There be a verdict and judgment in favour of the third defendant against the plaintiff on the Counterclaim brought by the third defendant against the plaintiff in the amount of $11,388.17 (comprising $8,000.00 by way of refund of the deposit paid by the third defendant to the plaintiff in about August 2006 in respect of the sale of business transaction the subject of these proceedings plus $3,388.17 by way of interest thereon in respect of the period from 10 November 2006 to the date of these orders).
(5) The fourth and fifth defendants pay the costs of the plaintiff and of the first, second and third defendants of and incidental to these proceedings as follows:
(a) Of the plaintiff, on an indemnity basis; and
(b) Of the first, second and third defendants, on the party/party basis.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Foster.
Associate:
Date: 10 August 2011
Counsel for the plaintiff: Mr J Pappas
(SC 256 of 2007 and SC 470 of 2007)
Solicitor for the plaintiff: Ben Aulich & Associates
(SC 256 of 2007 and SC 470 of 2007)
Counsel for the defendants: Mr G Blank
(SC 470 of 2007)
Solicitor for the defendants: DibbsBarker
(SC 470 of 2007)
Counsel for the first and third defendants: Mr RP Clynes
(SC 256 of 2007)
Solicitor for the first and third defendants: Phelps Reid
(SC 256 of 2007)
Counsel for the second defendant: Mr S Whybrow
(SC 256 of 2007)
Solicitor for the second defendant: Goodman Law
(SC 256 of 2007)
Counsel for the fourth and fifth defendants: Mr G Blank
(SC 256 of 2007)
Solicitor for the fourth and fifth defendants: DibbsBarker
(SC 256 of 2007)
Dates of hearing: 19, 20, 21 and 22 July 2010
Date of judgment: 10 August 2011
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