Hawes v Dean

The dispute in *Hawes v Dean* concerned contractual entitlements and the application of equitable set-off. The parties involved were David Richard Hawes and Glenside Group Pty Ltd (appellants/cross-defendants), Trevor Laurence Dean (respondent/first cross-claimant), Dean Investments Pty Ltd (second defendant), and Hawes Investments Pty Ltd (second plaintiff). The case came before the New South Wales Court of Appeal, comprising Bathurst CJ, McColl and Barrett JJA.

The primary legal issues before the Court of Appeal were whether the primary judge had correctly allowed an equitable set-off between money judgments obtained by one party against another and by an associated entity of the second against an associated entity of the first. This involved determining whether the rights and their sources were sufficiently closely connected to permit equitable set-off, particularly in circumstances where there was a lack of mutuality and separateness of the sources of those rights. The court also considered challenges to aspects of costs orders made at first instance.

The Court of Appeal found that the primary judge had erred in allowing the equitable set-off. The court reasoned that for equitable set-off to be permitted, there needed to be a sufficient connection between the rights and their sources, and a lack of mutuality and the separateness of the sources of the rights in this case precluded such a set-off. The court allowed the appeal in part, setting aside the order for equitable set-off and substituting it with separate judgments for the amounts owed between the respective parties and their associated entities. The cross-appeal was dismissed.