Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 3)
[2014] NSWCA 130
•17 April 2014
Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 3) [2014] NSWCA 130 Hearing dates: 12 November 2013 Decision date: 17 April 2014 Before: Meagher JA; Barrett JA; Ward JA Decision: Notice of motion filed by Illawarra Hotel Company Pty Ltd on 25 July 2013 dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: PROCEDURE - application for leave to re-open after judgment - whether court proceeded on the basis of substantive misapprehension - no different result warranted - application dismissed Cases Cited: Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd [2013] NSWCA 6
Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 2) [2013] NSWCA 211Category: Consequential orders Parties: Illawarra Hotel Company Pty Ltd (Appellant)
Walton Construction Pty Ltd (Respondent)Representation: Counsel:
S R Donaldson SC/J Muir (Appellant)
M R Gracie/D Neggo (Respondent)
Solicitors:
Norbert Lipton & Co (Appellant)
Crisp Legal (Respondent)
File Number(s): 2008/290556
Judgment
THE COURT: On 11 July 2013, the Court published reasons (Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 2) [2013] NSWCA 211) for making certain orders in consequence of its principal decision of 11 February 2013 (Illawarra Hotel Company Pty Ltd v WaltonConstruction Pty Ltd [2013] NSWCA 6).
In doing so, the Court considered but rejected a submission by Illawarra that some part of the costs awarded to Illawarra at first instance should, in the proper exercise of the relevant discretion, have been assessed on an indemnity basis. Illawarra had contended for such an outcome because, it said, Walton had acted unreasonably in not accepting either of two settlement offers made in December 2008.
In reaching its view on that matter, the Court accepted that, as at December 2008, the pleadings were in a "state of flux", with several matters eventually litigated not then articulated by Illawarra.
Illawarra filed a notice of motion on 25 July 2013 seeking leave to make submissions in support of re-opening of this part of the decision on the basis that the Court had proceeded on a material misapprehension of the true position.
In reaching its conclusions published on 11 July 2013, the Court worked on the basis that Illawarra's case was, as at December 2008, pleaded in a cross-summons filed in April 2008. The true position is that a revised version of the cross-summons was served in November 2008; and that, of seven changes said in the judgment to have been made to the pleading between the time the settlement offers were made and close of pleadings, only two were in fact made during that period. The Court did not have before it the November 2008 version.
The two respects in which the final pleading of 17 June 2010 differed from the November 2008 version were:
(a) omission of a claim for the difference between the amount that would have been received once trading regained an equilibrium level after completion of the works (calculated by reference to the delay period) and the amount which was actually received during that period (or an alternative amount); and
(b) addition of a claim based on deprivation of the economic value of the enjoyment of the premises from 26 September 2006 to 29 November 2006 or 29 November 2006 to 10 July 2007, being loss of the opportunity to obtain rent from tenants or profit that would have been derived from direct trading or a sum calculated by reference to proper market value.
Illawarra says that, whatever may be the correct characterisation of the seven supposed departures referred to in the judgment, these two alone did not represent substantial amendments justifying the view that, as at November 2008, Illawarra's pleading was still in a state of flux. According to Illawarra, the "substance" of the matters raised in the two relevant parts of the pleading had been made "absolutely plain from the start".
Walton, in response, points to several matters. It says that the terms of Illawarra's claim in relation to late completion damages were not "absolutely plain" at December 2008 because, as at that time, the trial judge had refused an application by Illawarra to amend in that respect and Illawarra had filed a notice of intention to appeal from that decision. Leave to appeal was refused on 12 May 2009. Walton notes that no response to Illawarra's version of 28 November 2008 was forthcoming until February 2009 and that, in making that response, Walton adopted the expedient of dealing with the relevant part of the cross-summons on a contingent basis: "In answer to paragraph 10 in respect of which leave to replead is yet to be obtained ...".
Walton next refers to the fact that (b) at [6] above contains alternatives and that Illawarra had not, at the relevant time, chosen among them; also that that part of the cross-summons in its final form referred to damages calculated by reference "proper market value", a concept that was not introduced until an amendment made by leave granted on 10 November 2009. The only expert evidence that Illawarra had served as at December 2008 approached the question of loss by reference to a non-arm's length arrangement actually pertaining, as distinct from "proper market value".
The matters to which Walton refers are sufficient to show that, although only two of the seven originally identified changes to Illawarra's pleading were introduced after December 2008, the assessment that the pleading for the cross-summons was still in a state of flux at December 2008 was well-based.
It is also relevant to note that, as Walton pointed out, the parties served 23 affidavits, 32 reports and a Scott schedule in the period May 2009 to November 2010. This underlines the fact that significant aspects that played a part in the final contest were not available when settlement offers were considered in December 2008
For these reasons, the misapprehension as to the extent of the amendments to the cross-summons between December 2008 and June 2010 does not mean that there was any misapprehension as to the substantive matter that went to the exercise of the relevant discretion as to the basis of assessment of costs. Relevant matters were properly regarded as in a state of flux at that time.
The notice of motion filed by Illawarra Hotel Company Pty Ltd on 25 July 2013 is dismissed with costs.
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Decision last updated: 22 April 2014
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