Eckert v Roberts - [2020] SASCFC 71

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal in Private)
ECKERT v ROBERTS
[2020] SASCFC 71
Judgment of The Full Court
(The Honourable Justice Kelly, The Honourable Justice Blue and The Honourable Justice Doyle)
23 July 2020
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - BY LEAVE OF COURT
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - ASSESSMENT OF DAMAGES
Application for leave, to the extent necessary, to appeal against orders made by a Judge dismissing the appellant’s application for directions for the undertaking of an assessment of damages ordered in favour of the respondent.
Held by the Court:
1. It is appropriate to assume without deciding that leave to appeal is required (at [24]).
2. The decision of the Judge is attended by sufficient doubt to warrant the grant of leave to appeal (at [38]).
3. If leave to appeal were not granted, Mr Eckert would suffer substantial injustice (at [42]).
4. To the extent necessary, leave to appeal granted (at [47]).

ECKERT v ROBERTS
[2020] SASCFC 71
Full Court: Kelly, Blue and Doyle JJ
THE COURT:

This is an application for leave, to the extent necessary, to appeal against orders made by a Judge of this Court dismissing the appellant’s application for directions for the undertaking of an assessment of damages ordered in favour of the respondent.
Background
The respondent, Paul Roberts, is the registered proprietor of approximately 185 hectares of farming land at Langhorne Creek used for viticulture and broad acre cropping.
In August 2015 Mr Roberts instituted an action against the appellant, Christopher Eckert, claiming that Mr Eckert was in possession of the land as a lessee; Mr Roberts had validly terminated the lease by re-entry on 2 March 2015 or alternatively with effect one month after service of the statement of claim; Mr Eckert became a trespasser from the date of termination; and Mr Roberts was entitled to damages for trespass to land and conversion of grapes grown on the land from the termination date. Mr Eckert counterclaimed, claiming that he was in possession of the land as beneficial owner pursuant to an agreement between the parties and relying upon a constructive or resulting trust.
Mr Eckert remained in possession of the land pending the trial and determination of the action. He later swore an affidavit deposing that in respect of 2015/16 he received sale proceeds of $261,725[1] from the 2016 grape harvest and $55,326 for barley and hay. He deposed that he incurred expenses in order to generate this revenue and also paid $45,000 bi-annually to Mr Roberts in September 2015 and March 2016 and $40,000 in October 2016.
[1] All dollar figures are rounded to the nearest whole dollar unless otherwise shown.
On 20 December 2016 the trial Judge delivered reasons for judgment upholding Mr Roberts’ claim and dismissing Mr Eckert’s counterclaim.[2] However, the trial Judge found that Mr Roberts had not proved the date on which the statement of claim was served and hence the date on which Mr Eckert became a trespasser.
[2] Roberts v Eckert [2016] SASC 197.
The trial Judge made orders granting judgment in favour of Mr Roberts on the claim and dismissing the counterclaim. Although they were substantive orders by way of judgment and were to the same effect as the orders later made on 3 February 2017, they included an order that counsel be heard as to the form of the final orders.
In January 2017 Mr Eckert filed a notice of appeal against the judgment. He filed an interlocutory application seeking a stay of the judgment pending the hearing and determination of the appeal.
On 3 February 2017 the trial Judge made orders in chambers by consent (the judgment orders). The orders[3] included an order (strictly a declaration) that the lease was validly terminated one month from the date of service on Mr Eckert of the statement of claim dated 5 August 2015 without determining what that date of service was. They included an order that Mr Roberts was entitled to possession of the land, with the parties having liberty to apply as to the time within which Mr Eckert must give possession. They included the following orders:
5.The plaintiff is entitled to recover from the defendant damages for trespass to the Land as from the date of termination of the Lease being one month from the date of service upon the defendant of the statement of claim of the plaintiff filed on 5 August 2015 in this action.
6.The plaintiff is entitled to recover from the defendant damages for any conversion of the grapes grown on the vines on the Land after the date of termination of the Lease being one month from the date of service upon the defendant of the statement of claim of the plaintiff filed on 5 August 2015 in this action.
7.The assessment of the damages payable by the defendant to the plaintiff be conducted by a Master of this Court, and that the trial of all remaining questions in the action as to the assessment of the damages payable by the defendant to the plaintiff be remitted to a Master of this Court.
[3] The full text of the orders is set out in Roberts v Eckert [2020] SASC 27 at [7].
On 3 February 2017 the trial Judge also made orders in chambers by consent reflecting an agreement between the parties premised on Mr Eckert remaining in possession of the land, and the assessment of damages not proceeding, pending the hearing and determination of the appeal (the February 2017 orders). Mr Eckert gave an undertaking amongst other things to pay the proceeds of the 2017 grape harvest into a bank account in the joint names of the solicitors for the parties, with liberty to draw down from the joint bank account payments of reasonable costs incurred in the harvest of the grapes and viticulture on the land. He also undertook to make bi-annual payments to Mr Roberts of $40,000 each. The orders related to the preparation and hearing of the appeal.
After February 2017 Mr Eckert remained in possession of the land. He undertook the harvest of the grapes in the 2017 vintage, which were made into wine and stored by Riverland Vintners under contract. He did not ultimately receive the proceeds of the wine for reasons explained below. He deposed later that in January 2018 he received proceeds of the sale of barley of $38,062. He deposed that he paid to Mr Roberts $40,000 in each of March and October 2017. He deposed that he incurred various costs to generate the revenue that would be achieved from the 2017 vintage and in due course from the 2018 vintage.
On 22 December 2017 the Full Court delivered reasons for judgment dismissing Mr Eckert’s appeal.[4] Mr Eckert subsequently filed an application seeking special leave to appeal to the High Court.
[4] Eckertv Roberts [2017] SASCFC 176.
On 2 February 2018 orders were made by consent by a Judge of this Court (the February 2018 orders). They included order 2(c) permitting Mr Roberts to undertake the harvest of the grapes in the 2018 vintage notwithstanding that Mr Eckert was to remain in possession of the land until after the harvest; order 1 that Mr Eckert give to Mr Roberts possession of the land 14 days after notification of completion of the harvest; and order 6 that Mr Roberts have the conduct of the sale of the wine stored at Riverland Vintners made from the 2017 grape vintage. Orders 2(c), 7, 8 and 10 were in the following terms:
2.Before the date for possession the plaintiff … be at liberty to enter upon the Land for the purpose of:
…
(c)Harvesting and removing from the Land at such time or times as the plaintiff may determine the grapes growing on the grape vines on the Land…
7.The plaintiff pay into Court to the credit of this action ... the net proceeds of sale of the wine sold by the plaintiff in accordance with paragraph 6 of these orders … there to abide the further orders of the Court to give effect of the judgment pronounced in this action on 3 February 2017.
8.For the avoidance of doubt, it is noted that the plaintiff’s harvesting of the grapes in sub-paragraph 2(c) above and the plaintiff’s conduct of the sale of the wine in paragraph 6 above is without prejudice to any claim to be made by the defendant during the inquiry as to damages for any entitlement, set-off, cross-claim or adjustment (howsoever described or arising) in respect of his costs, labour, expenditure or potential loss on the grapes and the wine to the date of such harvest and sale, with it being further noted the plaintiff denies any such claim or claims.
…
10.The parties have liberty to apply further on short notice.
Mr Roberts undertook the harvest of the 2018 grape vintage and sold the grapes. He swore an affidavit deposing that he received proceeds of $208,812. On 18 April 2018 Mr Eckert gave up possession of the land to Mr Roberts.
Mr Eckert later deposed in affidavits filed in the action that the total costs that he incurred to generate the revenue that was derived from the sale of grapes or wine, grain and hay between January 2015 and March 2018 were $715,216.[5]
[5] He deposed that he had incurred and paid $633,838 and had incurred but not paid $81,378.
In August 2018 Mr Roberts filed an interlocutory application seeking an order discharging order 7 of the February 2018 orders.
On 24 October 2018 an order was made by consent by a Judge of this Court discharging order 7 (requiring Mr Eckert to pay into Court the proceeds of the 2017 grape harvest) on the basis that Mr Roberts undertook not to deal with the proceeds before 5 pm on 9 November 2018 (the October 2018 order). This was against the background that there were on foot proceedings in the Federal Circuit Court between Mr Roberts’ ex-wife (Mr Eckert’s daughter) and Mr Roberts, to which Mr Eckert had been joined as a party, and an application by Ms Eckert for an injunction restraining Mr Roberts from dealing with those proceeds was listed for hearing on 9 November 2018.
On 9 November 2018 a Judge of the Federal Circuit Court granted an injunction restraining Mr Roberts from applying the proceeds of sale of the wine from the 2017 vintage without the written consent of the wife or an order of the Court.
On 7 November 2018 and 23 January 2019 Mr Roberts swore affidavits in the Federal Circuit Court proceeding saying that in respect of the 2017 vintage by 23 January 2019 he had received $183,459 from Riverland Vintners and $19,836 in wine tax and he expected to receive a further $102,740 from Riverland Vintners. This totals $306,035. He did not refer to any further wine tax refund that he may receive. He said that he incurred $27,055 for the cost of the 2018 grape harvest.
In January 2019 Mr Eckert filed an interlocutory application seeking directions as to how the inquiry directed to be held by order 7 of the judgment orders was to be conducted and alternatively that an inquiry be taken as to the assessment of damages and the expenses incurred by, value of the labour of, and monies paid to Mr Roberts by Mr Eckert in growing the grapes after September 2015. The application was ultimately listed for hearing on 3 April 2019 before a Judge other than the trial Judge.
In March 2019 Mr Roberts in his outline of submissions elected not to pursue an assessment of damages pursuant to order 7 of the judgment orders and contended that as a result the Court had no jurisdiction to proceed with an assessment or inquiry as sought by Mr Eckert.
In April 2019 the primary Judge heard Mr Eckert’s application and in particular heard argument on the issue whether Mr Roberts could elect not to pursue an assessment of damages and whether this precluded the orders sought. Mr Eckert also invited the Judge to determine whether any assessment of damages should be on the “severe” basis of gross revenue from the sale of produce of the land or the “milder” basis of gross profit after deduction of expenses incurred to produce it. Mr Roberts submitted that the primary Judge could not and should not determine this second issue and it should be determined on the assessment of damages by the Master (if such an assessment were to proceed). Mr Roberts did not submit that it was not arguable that the “milder’ basis applied but did foreshadow a submission that it did not in fact apply. The primary Judge considered that it was desirable to determine this second issue and adjourned the hearing to June to hear submissions from Mr Roberts on that issue.
In February 2020 the primary Judge delivered reasons for judgment dismissing Mr Eckert’s application.[6] The Judge held that:
·orders 5 to 7 of the judgment orders provided for an assessment of damages in favour of Mr Roberts and did not provide for an inquiry or account capable of resulting in an order for payment of a net balance to Mr Eckert;
·it followed that Mr Roberts could unilaterally abandon the right to an assessment of damages; and
·the Court had no jurisdiction otherwise to undertake an inquiry in relation to the amounts owing as a result of the dealings and events occurring after the judgment orders were made on 3 February 2017.
[6] Roberts v Eckert [2020] SASC 27.
The Judge held that, given these conclusions, the question whether damages should be assessed on the “severe” or “milder” basis was hypothetical and should not be determined.
Leave to appeal
Mr Eckert contends that the order made by the primary Judge dismissing his application is a final order and therefore leave to appeal is not required. For reasons that will become apparent, it is preferable not to decide this question but to determine whether, on the assumption that leave to appeal is required, leave ought to be granted.
Decision attended by sufficient doubt
The first question to be considered is whether the decision of the primary Judge is attended by sufficient doubt to warrant the grant of leave to appeal.
Ordinarily, when a Court grants judgment for damages to be assessed, the assessor on the assessment has no jurisdiction to assess “negative” damages and order that the applicant pay an amount determined on the assessment to the respondent. It follows that, if no other orders had been made and no other relevant events had occurred apart from the judgment orders made on 3 February 2017, the primary Judge’s first conclusion referred to at [22] above would be unassailable.
However, the February 2017 orders, February 2018 orders and October 2018 order, and the conduct of the parties pursuant to them, raise quite different considerations and render this an extraordinary case.
The February 2017 orders and undertakings were premised on Mr Eckert remaining in possession of the land, receiving the proceeds of the future harvest of grapes on the land and paying expenses incurred therein out of those proceeds. It is arguable that those orders were made on the basis that the assessment of damages the subject of order 7 of the judgment orders was to encompass the future harvest and expenses incurred therein on the basis that Mr Roberts could contend for an assessment on the severe basis disregarding those expenses and Mr Eckert could contend for an assessment on the milder basis taking into account those expenses.
The February 2018 orders addressed the proceeds of the 2018 harvest by permitting Mr Roberts to harvest and sell the grapes but providing by order 8 that Mr Roberts’ harvesting of the grapes was without prejudice to any claim to be made by Mr Eckert “during the inquiry as to damages for any entitlement … or adjustment … in respect of his costs, labour or expenditure”, with it being noted that Mr Roberts denied any such claim. This gives rise to an issue of construction. On the one hand, it might be argued that the entitlement given by order 2(c) to Mr Roberts was not a final determination that he was entitled to the amount of the gross proceeds of sale but rather conferred on him an interim entitlement subject to the inquiry as to damages under order 7 of the judgment orders: if that inquiry determined that his ultimate entitlement was only to gross profit, he would be required to account to Mr Eckert for the difference between the amounts of gross proceeds and gross profit. On the other hand, it might be argued that the entitlement given by order 2(c) to Mr Roberts to harvest and sell the grapes was a final determination of the parties’ rights in respect of the 2018 harvest and expenses incurred to produce it in favour of Mr Roberts on the severe basis.
We consider that the former construction is sufficiently arguable to warrant the grant of leave to appeal. The existence and wording of order 7 suggest that Mr Eckert was not conceding that the severe basis was to apply for the purpose of the assessment. On the latter construction, order 7 appears to have no work to do because, once Mr Roberts had sold the grapes and received the proceeds, there would be no mechanism for the rights of the parties to be adjusted if the assessment of damages proceeded on the milder basis. In deciding whether to grant leave to appeal, it is neither necessary nor appropriate to determine whether Mr Eckert will succeed on appeal on this issue but merely whether he has sufficient prospects of success to warrant the grant of leave to appeal.
The February 2018 orders addressed the proceeds of the 2017 harvest by permitting Mr Roberts to sell the wine at Riverland Vintners but providing by order 8 that his sale of the wine was without prejudice to any claim made by Mr Eckert during the inquiry as to damages for an adjustment in respect of his labour or expenditure. This gives rise to a similar issue of construction as in respect of the 2018 harvest. In respect of the 2017 harvest, there is the additional consideration that order 7 required Mr Roberts to pay the proceeds of sale of the wine into court to abide the further orders of the Court to give effect to the judgment, which tends to support the former construction that the February 2018 orders were not intended to, and did not, determine on a final basis the relative rights of the parties. Otherwise, for similar reasons, we consider that the former construction is sufficiently arguable to warrant the grant of leave to appeal.
The October 2018 order removed the requirement that Mr Roberts pay the proceeds of sale of the wine from the 2017 vintage into court. A similar issue of construction arises. By the combination of the February 2018 orders and October 2018 order, the position in relation to the 2017 vintage was similar to the position in relation to the 2018 vintage. It is sufficiently arguable to warrant the grant of leave to appeal that the October 2018 orders were not intended to, and did not, determine on a final basis the relative rights of the parties or that Mr Roberts was entitled to the gross proceeds, as opposed to the gross profit, of the 2017 vintage.
In addition to the issues relating to the proceeds of the 2017 and 2018 vintages, Mr Eckert argued before the primary Judge that the market rental of the land, and hence the prima facie measure of damages for trespass to land, was between approximately $37,000 and $40,000 per annum over the period between September 2015 and April 2018. He argued that, if the assessment or inquiry as to damages determined that the damages for trespass to land were of this order, he would be entitled to repayment by Mr Roberts of the excess because he had made payments at the rate of $90,000 initially and later $80,000 per annum.
The payments totalling $80,000 made after the February 2017 orders were made pursuant to the undertakings given by Mr Eckert. An analogous issue of construction arises as to whether those payments were intended to be paid on an interim basis with the ultimate rights of the parties to be determined and adjusted on the assessment of damages or whether they were to be paid absolutely to Mr Roberts regardless of that assessment. For analogous reasons, we consider that the former construction is sufficiently arguable to warrant the grant of leave to appeal.

The payments totalling $130,000 made before judgment stand on a different basis. They were made voluntarily by Mr Eckert. If they were considered in isolation and if there were no grapes or crops grown on the land, there would be no basis on which Mr Eckert could seek an order on an assessment of damages for payment to him of any excess of that amount over the amount of damages assessed in respect of the relevant period.
However, the position is complicated by the fact that there were grapes and crops grown on the land. It is complicated by the fact that there is a potential overlap between damages for trespass to land when the land is used to grow grapes or crops and damages for conversion of those grapes or crops. It is arguable by Mr Eckert that the bi-annual payments of $45,000 or $40,000 that he made to Mr Roberts should be taken into account in the overall assessment of damages suffered by Mr Roberts as a result of the torts committed by Mr Eckert.
If the orders made after the judgment orders are construed as only giving Mr Eckert an interim entitlement to receive the monies the subject of those orders and undertakings, it is arguable that Mr Roberts could not unilaterally abandon the assessment of damages but is obliged to submit to the assessment to determine his ultimate entitlements with a consequential adjustment of the interim position potentially in favour of Mr Eckert.
In conclusion, the decision of the primary Judge on the issue determined by his Honour is attended by sufficient doubt to warrant the grant of leave to appeal.
Mr Eckert also contends that the primary Judge erred by not determining whether, on an assessment of damages, the severe or milder basis would be applicable. Given the Judge’s conclusion on the first issue argued by the parties, the second issue became hypothetical. If that conclusion stands, it is not reasonably arguable that the Judge erred in declining to decide the second issue. However, if the Judge’s conclusion on the first issue does not stand, different considerations arise, which we address below.
Substantial injustice
The second question to be considered is whether, if leave to appeal were not granted, Mr Eckert will suffer substantial injustice.
The decision by the primary Judge effectively prevents the matter proceeding to an assessment of damages. On the assumption that the decision is interlocutory, in theory Mr Eckert might bring a second application for the same orders, but any such application would be liable to be dismissed as an abuse of process if brought on the same basis.
If the decision by the primary Judge is incorrect, it entails that otherwise the matter should proceed to an assessment of damages. To the extent that Mr Roberts has received more than the damages to which he would be entitled on the assessment as a result of receiving the proceeds of the 2017 and 2018 vintages pursuant to the February 2018 and October 2018 orders and the bi-annual payments made to him by Mr Eckert, he would be required to pay to Mr Eckert the difference. On its face, if leave to appeal is not granted and if the decision of the primary judge is incorrect, Mr Eckert will suffer substantial injustice.
There was discussion before the primary Judge of the possibility of Mr Eckert bringing an independent action in restitution against Mr Roberts seeking to recover payment of expenses incurred by him, or the payments of $45,000 or $40,000 made by him, over the relevant period. If it were clear beyond argument that Mr Eckert could recover by an independent action in restitution the amounts that might be ordered to be paid to him as a result of an assessment of damages in this action, it might be considered that Mr Eckert would suffer no prejudice if leave to appeal were not granted. However, there are major differences between an assessment of damages in this action and an independent action by Mr Eckert in restitution.
On the one hand, on an assessment of damages in this action, Mr Eckert could not recover more than the difference between the damages assessed and the amount that Mr Roberts has received in respect of each of the 2015/16 to 2017/18 years; whereas in theory Mr Eckert would not be so limited in a restitution action. On the other hand, and critically for present purposes, to succeed in restitution, Mr Eckert would need to establish all of the elements of a claim in restitution and there is no doubt that Mr Roberts would deny that an action in restitution lies on the facts of this case and he may well be correct.
Conclusion
Leave to appeal against the orders made by the primary Judge should be granted.
On the hearing and determination of the appeal, if the Full Court upholds the decision of the primary Judge on the first issue, the second issue whether an assessment would have been undertaken on the severe or milder basis will remain hypothetical. On the other hand, if the Full Court holds that the primary Judge was incorrect on the first issue, it will be a question for the Full Court whether it proceeds to determine that the assessment should be undertaken on the severe or milder basis. Such a determination would be tantamount to determining a preliminary issue on the assessment of damages. On the limited material before us, it may well be preferable to leave that determination to be made as an integral part of the assessment of damages on the evidence adduced on the assessment. However, that will be a question for the Full Court that hears the appeal.
We grant leave to appeal against the orders made by the primary Judge.