Jacques v Forte Enterprises Pty Ltd (No 2) - [2012] NSWSC 1314

Supreme Court

New South Wales

Medium Neutral Citation: Jacques v Forte Enterprises Pty Ltd (No 2) [2012] NSWSC 1314
Hearing dates: 12 October 2012
Decision date: 12 October 2012
Jurisdiction: Equity Division
Before: Rein J
Decision:
1. Leave granted to the plaintiff to reopen and make further submissions on calculation of damages in relation to deduction for profit from the unit sale.
2. No variation made to calculation of damages in the principal judgment.
3. Judgment not entered against the second defendant with no orders as to costs as between the plaintiff and second defendant.
4. Order that the first and third defendants pay the plaintiff's costs on the ordinary basis, those costs to be subject to set-off against any order for costs previously or otherwise made in these proceedings in favour of the first and third defendant.
5. Stay of judgment against first and third defendant granted to 23 November 2012.

Catchwords:
PROCEDURE - judgments and orders - application to reopen - where counsel understood that there was a concession on calculation of an item of damages - interests of justice are better served by allowing the application

DAMAGES - measure of damages for breach of fiduciary duty - deduction from damages of benefits previously agreed upon between plaintiff and defendant
PROCEDURE - costs - general rule costs follow the event - where plaintiff obtains considerably less than he claimed but r 42.34 does not apply - where plaintiff has not failed on some separate issue - no basis for reduction of costs awarded
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Australian Securities and Investments Commission v Rich [2006] NSWSC 826
Blatch v Archer (1774) 98 ER 769
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 39 ASCR 20
Jacques v Forte Enterprises Pty Ltd [2012] NSWSC 1241
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Morley v Australian Securities and Investments Commission [2010] NSWCA 331
NRMA Ltd v Morgan (No 3) [1999] NSWSC 768
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Smith v New South Wales Bar Association (1992) 176 CLR 256
Urban Transit of Authority of NSW v Nweiser (1992) 28 NSWLR 471
Texts Cited: N C Seddon and M P Ellinghaus, Cheshire & Fifoot's Law of Contract, 9th Aust ed (2008), LexisNexis Butterworths
Category: Consequential orders
Parties:
Phillip Jacques (Plaintiff)
Forte Enterprises Pty Ltd (First defendant)
Ahtram Nominees Pty Ltd (Second defendant)
George Senes (Third defendant)
Representation: Counsel:
D A Lloyd (Plaintiff)
A Hourigan (Defendants)
Solicitors:
J Orford (Plaintiff)
T Morgenstern (Defendants)

File Number(s): SC 2008/278386

ex tempore Judgment

In this matter I handed down my reasons for judgment on 14 September 2012 in Jacques v Forte Enterprises Pty Ltd [2012] NSWSC 1241 ("the principal judgment"). Regard should be had to those reasons and I will use the same terminology in these reasons. There are a number of matters which arise from the principal judgment and in respect of which…

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.

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Details

Case: [2012] NSWSC 1314
Decision Date: 12 October 2012

CaseChat Overview and Summary

The case of Jacques v Forte Enterprises Pty Ltd (No 2) involves the plaintiff, Jacques, pursuing damages against the defendant, Forte Enterprises Pty Ltd, following a previous judgment. The court had to address several issues arising from the initial judgment, including corrections to the amount of damages, the calculation of profits from a unit purchase, and the allocation of costs. The plaintiff also sought an order for the defendant to pay his costs, while the defendant argued for a limitation of costs and raised the possibility of an appeal. Additionally, the second defendant argued for no judgment against it and a costs order in its favour.

The legal issues in this case involved the correction of an arithmetical error in the previous judgment, the interpretation of an agreed figure for the profit on a unit purchase, and the appropriate allocation of costs under the circumstances. The court needed to determine whether the plaintiff's understanding of the concession made by the defendant's counsel was sufficient to warrant reopening the matter. Furthermore, the court had to consider the general rule that costs follow the event, but also whether the plaintiff's success was partial, and if so, whether this justified a reduction in the costs awarded.

The court acknowledged that there was a misunderstanding between the parties regarding the agreed figure for the profit on the unit purchase. The judge accepted that the plaintiff's counsel understood the defendant's counsel to have conceded a figure of $100,000, and the interests of justice were best served by allowing the plaintiff to further substantiate this understanding. The court also rejected the defendant's argument for a limitation of costs despite the plaintiff's claim being significantly less than initially sought, as the plaintiff had not failed on separate issues and thus there was no basis for a reduction in the awarded costs.

The court ordered that the amount of damages be corrected to $60,514, allowed the plaintiff to make further submissions regarding the profit on the unit purchase, and rejected the defendant's application for a limitation of costs. The court did not grant the second defendant's request for no judgment against it and a costs order in its favour, nor did it stay the proceedings pending a potential appeal.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In this matter I handed down my reasons for judgment on 14 September 2012 in Jacques v Forte Enterprises Pty Ltd [2012] NSWSC 1241 ("the principal judgment"). Regard should be had to those reasons and I will use the same terminology in these reasons. There are a number of matters which arise from the principal judgment and in respect of which there remain an issue. The first is the amount of the judgment and in that respect it is agreed by the parties that the reasons contained an arithmetical error at [64] and repeated at [68]. The amount should be $60,514. Secondly, the plaintiff seeks to agitate the question of the amount of profit on the unit bought by Mr Jacques at cost (see the principal judgment at [4], [25], [63] and [64]). Thirdly, the plaintiff seeks an order that the defendants pay the plaintiff's costs. The defendants seek an order that the plaintiff's costs be limited to 50 per cent of the ordinary costs as agreed or assessed, relying on the amount of the judgment in comparison to the amount claimed and the fact that the plaintiff, in the defendants' contention, "did not succeed on a number of subissues" and "the plaintiff's damages have been assessed at substantially less than promulgated by the plaintiff during the course of the hearing." Reference is made to Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 39 ASCR 20 and NRMA Ltd v Morgan(No 3) [1999] NSWSC 768. The next matter is that the second defendant contends that there should be no judgment against it and that a costs order in its favour be made. The sixth matter is that the defendant is considering an appeal and seeks a stay of the proceedings for a period of between four to six weeks based on Mr Jacques' impecuniosity. Dealing with the question of the profit on the unit, reference is made in the submissions to T317.6 - 33 of the transcript. Mr Lloyd, counsel for the plaintiff, says that he thought that there was a concession by both parties that the figure to be adopted as a deduction from the amount claimed by the plaintiff was $100,000 (see par 8 of the plaintiff's submissions for today's hearing). I understood Mr Hourigan, counsel for the defendants, to accept at that time that as at 1 November 1996 the unit which Mr Jacques was agreeing to purchase would be expected to yield $280,000, but that the further $30,000 based on the actual sale price of $310,000 within six weeks of the completion of the purchase by Mr Jacques was appropriately offset against any liability of the defendants. I accept that Mr Hourigan did not concede that $100,000 rather than $130,000 was the correct figure to be applied. On the other hand, I accept Mr Lloyd's assertion that he understood from the comments made by Mr Hourigan and my own comment at T317 that the $100,000 "seemed to be the figure", and in the absence of further submissions on the point, that $100,000 was accepted by both parties as the appropriate figure. In these circumstances I think the interests of justice require that Mr Lloyd be given the opportunity to make further submissions on this point. The parties did not dispute that the sort of considerations set out in Australian Securities and Investments Commission v Rich [2006] NSWSC 826 at 18 were relevant (and see Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266 - 267) and in particular it is necessary to have regard to what was said by the Court of Appeal in Urban Transit of Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478D - F per Clarke JA, with whom Mahoney and Meagher JJA agreed. The guiding principle was discussed by Clarke JA and that is whether the interests of justice are better served by allowing or rejecting the application, as the case may be.

Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Jacques v Forte Enterprises Pty Ltd (No 2) [2012] NSWSC 1314
Hearing dates:	12 October 2012
Decision date:	12 October 2012
Jurisdiction:	Equity Division
Before:	Rein J
Decision:	1. Leave granted to the plaintiff to reopen and make further submissions on calculation of damages in relation to deduction for profit from the unit sale. 2. No variation made to calculation of damages in the principal judgment. 3. Judgment not entered against the second defendant with no orders as to costs as between the plaintiff and second defendant. 4. Order that the first and third defendants pay the plaintiff's costs on the ordinary basis, those costs to be subject to set-off against any order for costs previously or otherwise made in these proceedings in favour of the first and third defendant. 5. Stay of judgment against first and third defendant granted to 23 November 2012.
Catchwords:	PROCEDURE - judgments and orders - application to reopen - where counsel understood that there was a concession on calculation of an item of damages - interests of justice are better served by allowing the application DAMAGES - measure of damages for breach of fiduciary duty - deduction from damages of benefits previously agreed upon between plaintiff and defendant PROCEDURE - costs - general rule costs follow the event - where plaintiff obtains considerably less than he claimed but r 42.34 does not apply - where plaintiff has not failed on some separate issue - no basis for reduction of costs awarded
Legislation Cited:	Uniform Civil Procedure Rules 2005
Cases Cited:	Australian Securities and Investments Commission v Rich [2006] NSWSC 826 Blatch v Archer (1774) 98 ER 769 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 39 ASCR 20 Jacques v Forte Enterprises Pty Ltd [2012] NSWSC 1241 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 Morley v Australian Securities and Investments Commission [2010] NSWCA 331 NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Smith v New South Wales Bar Association (1992) 176 CLR 256 Urban Transit of Authority of NSW v Nweiser (1992) 28 NSWLR 471
Texts Cited:	N C Seddon and M P Ellinghaus, Cheshire & Fifoot's Law of Contract, 9th Aust ed (2008), LexisNexis Butterworths
Category:	Consequential orders
Parties:	Phillip Jacques (Plaintiff) Forte Enterprises Pty Ltd (First defendant) Ahtram Nominees Pty Ltd (Second defendant) George Senes (Third defendant)
Representation:	Counsel: D A Lloyd (Plaintiff) A Hourigan (Defendants) Solicitors: J Orford (Plaintiff) T Morgenstern (Defendants)
File Number(s):	SC 2008/278386