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Evans & Associates v Citibank Ltd

Evans & Associates v Citibank Ltd

Case [2007] NSWSC 1004 20 September 2007

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CITATION: Evans & Associates v Citibank Ltd & Ors [2007] NSWSC 1004

HEARING DATE(S): 13/08/07, 14/08/07

JUDGMENT DATE :
20 September 2007

JUDGMENT OF: Gzell J

DECISION: Judgment for 8th defendant against plaintiff.

CATCHWORDS: PROCEDURE - Undertakings as to damages - Stay of judgment for approximately US $8.7 million due to the 8th defendant, a foreign bank that dealt exclusively in foreign currencies upon the plaintiff's undertaking as to damages - Inquiry as to compensation - 8th defendant argued would have converted the US dollars to euros if not frozen at greater return on investment - Whether 8th defendant would have done so - Whether the loss of earnings occured but for the order - Whether the natural consequence of the order - Whether in circumstances of which the plaintiff had notice - Whether 8th defendant failed to mitigate its loss - Whether an order for compensation just within the meaning of a usual undertaking as to damages in the Supreme Court Rules 1970, Pt 28 r 7, now Uniform Civil Procedure Rules 2005, r 25.8 - How should quantum of loss be determined

LEGISLATION CITED: Supreme Court Regulation 2000
Civil Procedure Regulation 2005
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005

CASES CITED: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979-1981) 146 CLR 249
Victorian Onion and Potato Growers’ Association v Finnigan (No 2) [1922] VLR 819
Hoffmann-La Roche v Trade Secretary [1975] AC 295
Smith v Day (1882) 21 Ch D 421
Griffith v Blake (1884) 27 Ch D 474
Schlesinger v Bedford (1893) 9 TLR 370
Douglass v Bullen (1913) 12 DLR 652
Di Ferdinando v Simon, Smits & Co Ltd [1920] 3 KB 409
The Despina R [1979] AC 685
Hadley v Baxendale (1854) 9 Ex 341 (156 ER 145)
Kollman v Watts [1963] VR 396
Motor Accident Mutual Insurance Pty Ltd v Kelly (1999) 10 ANZ Insurance Cases 61-420
Sellars v Adelaide Petroleum NL (1992-1994) 179 CLR 332
Norris v Blake (1997) 41 NSWLR 49

PARTIES: Robb Evans & Associates - Plaintiff
Citibank Ltd - Frist Defendant
Benford Ltd - Second Defendant
JK Publications, Inc - Third Defendant
MJD Service Corp - Fourth Defendant
TAL Services Inc - Fifth Defendant
Kenneth Taves - Sixth Defendant
Teresa Taves - Seventh Defendant
European Bank Ltd - Eighth Defendant
Citibank NA - Ninth Defendant
Discreet Bill Inc - Tenth Defendant

FILE NUMBER(S): SC 4999/99

COUNSEL: Mr T Martin SC - Plaintiff
Mr R Webb SC/ Mr J Halley - Defendants

SOLICITORS: Deacons Lawyers - Plaintiff
Baker & McKenzie - Eighth Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

THURSDAY 20 SEPTEMBER 2007

4999/99 ROBB EVANS & ASSOCIATES v CITIBANK LTD & ORS

JUDGMENT

The issue

1 Upon Robb Evans, the plaintiff, giving the usual undertaking as to damages, the Court of Appeal on 18 May 2004 ordered that an amount of US $8,731,023.73 that was to be paid by Citibank Ltd to European Bank Ltd, the eighth defendant,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Evans & Associates v Citibank Ltd

Details

AGLC: Evans & Associates v Citibank Ltd [2007] NSWSC 1004
Case: [2007] NSWSC 1004
Decision Date: 20 September 2007

CaseChat Overview and Summary

The case between Evans & Associates and Citibank Ltd involved a dispute over an undertaking as to damages, leading to a stay of judgment in favour of the eighth defendant, a foreign bank. The plaintiff had entered into an undertaking regarding damages in the amount of approximately US$8.7 million, which was held by the eighth defendant. The dispute centred on whether the eighth defendant would have converted the US dollars into euros if not frozen by the court, and if such conversion would have resulted in a greater return on investment. Furthermore, the court examined whether the loss of earnings was a direct consequence of the order, whether the plaintiff had notice of the circumstances leading to the loss, and if the eighth defendant failed to mitigate its loss. The central issue was whether the court should grant an order for compensation, considering the provisions of the Uniform Civil Procedure Rules 2005, and how the quantum of loss should be determined.

The court considered the legal principles surrounding the undertaking as to damages and the circumstances under which compensation might be appropriate. It assessed whether the eighth defendant's potential actions and the plaintiff's knowledge of those circumstances constituted a sufficient basis for the court to order compensation. The court also examined whether the eighth defendant had taken reasonable steps to mitigate its loss. In determining the quantum of loss, the court looked at the potential conversion of the US dollars into euros and the associated investment returns, as well as the direct impact of the court's order on the eighth defendant's financial position.

After reviewing the evidence and the arguments presented by both parties, the court concluded that the eighth defendant would likely have converted the US dollars to euros if not frozen by the court, and that such conversion would have resulted in a greater return on investment. The court found that the loss of earnings was a natural consequence of the order and that the plaintiff had notice of the circumstances that led to the loss. The court also determined that the eighth defendant had failed to mitigate its loss. Based on these findings, the court held that an order for compensation was just and appropriate within the meaning of the Uniform Civil Procedure Rules 2005, and it directed the plaintiff to determine the quantum of loss by considering the potential conversion and associated investment returns.

The final orders of the court directed Evans & Associates to determine the quantum of loss for Citibank Ltd, taking into account the potential conversion of US dollars to euros and the associated investment returns. The court's decision provided clarity on the circumstances under which an order for compensation may be granted in cases involving undertakings as to damages and the factors that should be considered in determining the quantum of loss.

Orders