Kumar v Sydney Western Realty Pty Ltd (No. 3)

[2021] NSWDC 481

District Court

New South Wales

Medium Neutral Citation:

Kumar v Sydney Western Realty Pty Ltd & Anor (No. 3) [2021] NSWDC 481

Hearing dates:

On the papers

Date of orders:

13 September 2021

Decision date:

13 September 2021

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph 73

Catchwords:

JUDGMENTS AND ORDERS - reasons published, with opportunity granted to parties to submit as to calculations on heads of damages - defendants complain of reasoning as to disputed heads of loss and seek correction - whether any correction may be made under 'slip rule' - whether application to reopen argument - whether any suggested misapprehension in reasoning solely attributable to conduct of defendants - whether jurisdiction to permit reopening is enlivened

CIVIL PROCEDURE - disputed claim for interest on damages - whether interest awarded on basis of aggregate amount for damages or individual heads of loss - whether interest recoverable on future losses

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 56, 57, 58, 59, 60

Supreme Court Act 1970 (NSW) s 101

Uniform Civil Procedure Rules 2005 (NSW) rr 2.1, 36.17

Cases Cited:

Autodesk Inc v Dyason (No.2) (1993) 176 CLR 300

Gaskin v Ollerenshaw [2010] NSWSC 788

Kumar v Sydney Western Realty Pty Ltd & Anor(No.2) [2021] NSWDC 446

Majak v Rose (No.5) [2017] NSWCA 238

Newmont Yandal Operations Pty Ltd v The J Aron Corp (2007) 70 NSWLR 411

University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481

Category:

Consequential orders

Parties:

Ms D Kumar (plaintiff)
Sydney Western Realty Pty Ltd (first defendant)
Mr A Singh (second defendant)

Representation:

Counsel:
Mr R O’Neill for the plaintiff
Mr M Klooster for the first defendant
Mr M Hutchings for the second defendant

Solicitors:
Keen Lawyers for the plaintiff
Clyde & Co for the first defendant
Gilchrist Connell for the second defendant

File Number(s):

2020/00062493

Judgment

BACKGROUND

1. On 31 August 2021, after a four day trial earlier that month, I delivered my reasons for finding the first defendant, Sydney Western Realty and second defendant, Mr Singh liable in damages, respectively, for misleading or deceptive conduct and professional negligence (in tort)^[1] . I found that the damages to be awarded were to be in the sum of $101,631.22. I further found the liability as between the first and second defendants should be apportioned at 25% and 75%, respectively. I directed the parties to confer with a view to providing short minutes of order to dispose of the proceeding.

   1. Kumar v Sydney Western Realty Pty Ltd & Anor (No.2) [2021] NSWDC 446.

2. The parties agreed on appropriate costs orders. However, they were otherwise unable to agree on the amount for the award for interest. This was primarily attributable to a dispute about the amount for damages; although there were some additional disputes about aspects of the award of interest. But on the award of damages, both defendants made criticisms of findings I made regarding two of the heads of loss in the damages section of the judgment; in particular, the loss associated with paying stamp duty and the ‘loss of value’ component to damages.

DAMAGES

3. The defendants now seek correction of those findings on those two heads of loss. They say that they are entitled to have these criticisms considered now, since the reasons on 31 August 2021 contemplated the parties reviewing the ‘calculations’ on damages and, more generally, the orders accompanying expressly invited submissions on final orders to dispose of the proceeding.

4. The plaintiff says that the Court should disregard the defendants’ criticisms: the points raised by the defendants represented an attempt to reopen the trial with evidence and argument which was not, but which could have been, raised in the hearing; and no good reason was advanced why the exceptional grant of leave to reopen should be made. Alternatively, the plaintiff contends that the criticisms made on certain findings for heads of loss should be rejected in any event as the Court’s findings on the two disputed heads of loss were correct.

5. To resolve these disputes, I proceed first to determine, as a threshold question, whether what the defendants are seeking is no more than availing themselves of the opportunity to make corrections to my earlier reasons or, as the plaintiff argues, they are really seeking to reopen argument. Secondly, I will refer back to the way the parties ran their cases on the disputed heads of damages, the findings on those heads of damages and the arguments that the defendants now raise. Only in this somewhat drawn out fashion will it be determined whether, if the defendants are seeking to reopen, they should be permitted to do so.

Does the defendants’ application exceed what the earlier judgment envisaged?

6. As indicated, the disputes concern aspects of my findings only on damages. After having summarised the plaintiff’s claim at the outset (at [5]) the section of damages in my judgment generally begins at [227]. The reasons on the ‘loss of value’ claim appear at [229]-[230] and the reasons for the ‘stamp duty’ claim appear at [239]-[242].

7. At [230], [238], [242] & [243], individual amounts for the recoverable heads of loss were identified.

8. At [247], I said:

“This leaves the plaintiff, by my calculations, subject to any deduction for contributory negligence, with damages for the provisional sum of $119,566.14. If my calculations are wrong, the parties have the opportunity to set out what they contend are the correct ones when short minutes are supplied after publication of these reasons.” (emphasis supplied)

9. At [265], as part of the summary of my findings, I said that I assessed damages “for the sum of $101,631.22”. This sum was derived after taking into account the (15%) deduction for contributory negligence on the provisional sum referred to at [247].

10. At [266], I ordered the plaintiff to bring in short minutes of order to reflect my reasons within 7 days and said:

“In that period, the plaintiff should consult with the defendants about appropriate orders to dispose of the proceeding (including, but not limited to costs).

11. At [268], I directed that should there be disagreement about those orders, the parties should supply further submissions.

12. There was no general grant of liberty to apply.

13. In the context of my reasoning and following on from my itemisation of the individual heads of loss, the word “calculations” stated (twice) in [247] was a reference to the individual amounts for each of the heads of loss which made up the ‘provisional’ sum of $119,566.14 and which, after the discount for contributory negligence, resulted in the aggregate sum of $101,631.22. What the parties were being invited, by [247] to do, was to add up for themselves the figures sustaining each head of individual loss. Neither in [247] nor in [266] or [268] was any more general invitation extended to the parties to make further submissions about the correctness of the underlying reasoning sustaining findings on the individual heads of loss themselves.

14. I agree with the plaintiff, therefore, that the defendants’ submissions, insofar as they invite the Court to substitute alternative findings on the disputed items of loss, were not sanctioned by the Court in its reasons for judgment of 31 August 2021.

15. Rather, what the defendants apply for, albeit without a formal notice of motion, is the exercise of power in support of what they argue were the correct findings on the disputed items of loss, for ‘loss of value’ and ‘stamp duty’.

Identifying the relevant power

Is the ‘slip’ rule engaged?

16. By their respective counsel’s written submissions (10 September 2021), both Defendants submitted that the Court’s power to make the corrections which they seek would be exercised under the slip rule (r 36.17 Uniform Civil Procedure Rules 2005 (UCPR)). Counsel for the first defendant also submitted that the Court may invoke the Court’s inherent jurisdiction.

17. As to the latter this Court is not a superior court and has no “inherent” jurisdiction; though it may have implied powers exercisable within its jurisdiction.

18. As to the former, what the defendants are seeking is no mere slip. Even if it was, it seems to me that r 36.17 is directed to the correction of a “judgment or order”. At this point only “reasons” have been published. They have not yet had any consequence in terms of orders made. But even if that interpretation about the scope of r 36.17 is unduly narrow, I would not exercise power under r 36.17. The slip rule is not customarily invoked where what is sought to be corrected involves a matter of controversy or substance or requires the exercise of an independent discretion^[2] . In this case, the corrections suggested by the defendants are strongly disputed by the plaintiff; and further, in view of the nature of the submissions now made by the defendants which, for reasons which are elaborated below, in my view go beyond what they submitted at the hearing, there may be a question whether the mistake about which the defendants now complain was wholly or partly the result of the defendants’ conduct, which makes recourse to the slip rule inapposite ^[3] .

    2. Newmont Yandal Operations Pty Ltd v The J Aron Corp (2007) 70 NSWLR 411 (“Newmont”) per Spigelman CJ (Santow JA and Handley AJA agreeing) at [140], [142].

    3. Newmont at [164]

The Court’s power to reopen and principles

19. By its submissions, the plaintiff did not dispute that the Court is empowered to allow a party to reopen its case up to the entry of judgment. Her essential point is that the Court should not do so in its discretion.

20. The UCPR does not specifically provide for the reopening of a party’s case. But r 2.1 does confer a general discretion as to the conduct of proceedings:

“The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient … for the just, quick and cheap disposal of the proceedings.”

21. This was the Court rule which Garling J invoked to allow a party to reopen in Gaskin v Ollerenshaw [2010] NSWSC 788. In that case the application was done at a time when judgment was reserved. In this case, reasons for judgment have been delivered, but final dispositive orders have not yet been entered. I am satisfied that in respect to a proceeding in which orders have not yet been entered, r 2.1 empowers the Court to permit a party to reopen in its discretion.

22. This conclusion is consistent with the general law. Thus in Autodesk Inc v Dyason (No.2) (1993) 176 CLR 300, Mason CJ confirmed (at 302) the Court’s jurisdiction to “reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders”. That is the situation here.

23. His Honour further observed that:

“the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law” (302).

24. But importantly, Mason CJ also said (at 303) that:

“It must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases”

25. His Honour emphasised the last point, later observing (at 307) that “the jurisdiction to reopen is not to be exercised simply for the purpose of giving a party the opportunity to present a case to better advantage”.

26. Brennan J (at 308), cited authority in a footnote (25) for the proposition that the approach of Courts from which an appeal lies (such as this Court) is not so strict, as it may be preferable to recall an unperfected but erroneous judgment rather than allowing it to stand until quashed on appeal.

27. In Majak v Rose (No.5) [2017] NSWCA 238, the Court of Appeal explained (at [12]), albeit with reference to another rule of Court (r 36.16), that the exercise of the power to reopen:

“.. does not give a licence to disgruntled litigants to re-agitate, in the hope of obtaining a more favourable outcome, issues that have been determined against them. Nor does it make of a court some sort of magic pudding from which unsuccessful litigants may take slice after slice, ever hopeful that the next will be more palatable than the last. The rule has a serious, but limited, purpose which is to permit readily identifiable, readily rectifiable, inadvertent errors to be corrected without the complication and expense of an appeal …. Abuse of the rule is detrimental to the administration of justice in unnecessarily and unfairly (to other litigants) taking up the time of the court. Nor does abuse of the rules facilitate the just, quick and cheap resolution of the issues between parties”.

28. Further, in University of Wollongong v Metwally (No 2)  (1985) 59 ALJR 481 (“Metwally”) at 483, in the context of an application to reopen a case following judgment, the High Court said:

“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had and (sic) opportunity to do so.”

29. Like all Court rules, r 2.1 is exercisable with reference to case management objects in ss 56-60 of the Civil Procedure Act 2005 (NSW).

30. Consideration of whether the Court should exercise its jurisdiction to reopen requires, initially, a review of what arguments marshalled during the hearing, the findings that the Court made in the judgement and both the identification and characterisation of the arguments that they now wish to make. Only in this way can it be established whether the Court acted on a misapprehension of fact and law and whether, if it did, that was solely attributable to the default or neglect of the parties.

The defendants’ submissions on the disputed heads of loss at the trial

The plaintiff’s schedule of damages

31. To place the defendants’ submissions on the disputed heads of loss in their proper context, it is as well to note that they were responding to the quantification, of each head of loss, in the plaintiff’s schedule of damages, which was MFI #2. The relevant parts of that schedule were as follows:

1.	Diminution in value due to absence of granny flat	$100,000
5.	Stamp duty paid but on real value of property none would have been payable	$14,690

The Second Defendant’s submissions

32. Counsel for the second defendant prepared and relied upon extensive written submissions, and thereafter provided closing oral argument.

33. In his written submissions (dated 5 August 2021) regarding the ‘loss of value’ claim, Counsel for the second defendant identified, as the relevant principle, the need to deduct the rent derived from the property. He submitted that:

“210. The unchallenged evidence is that the granny flat rented for $390 per week (69 weeks v $390 = $26,910). It is submitted that sum should be subtracted from the $100,000.”

34. At the level of arithmetic, deduction of $26,910 from $100,000 would, on the second defendant’s submission, result in an award for this head of loss to be the sum of $73,090.

35. In relation to the ‘stamp duty’ head of loss, Counsel for the second defendant wrote:

“218. This head of damage appears to rely upon a contention that the property could have been purchased for $620,000. That the vendor would have sold the property for that price has not been the subject of any evidence.

219. Further, the stamp duty evidence depends upon the plaintiff accessing the home buyer’s concession. For the reasons stated above, the plaintiff cannot establish eligibility for such a concession and the ordinary stamp duty regime ought not to be taken to apply.”

36. In his closing argument, on the ‘loss of value’ claim, Counsel for the second defendant submitted as follows (T 242):

“Your Honour, that leaves the first category which is the diminution in value. I deal with this issue at p 30 of my submissions. It in my submission is the ordinary test to deduct the value of the property at the date of acquisition from the purchase price and arrive at the difference and that represents the loss, or at least it's the starting point for that assessment. But in this case, your Honour, to my calculation the unchallenged evidence of Ms Shaktika Singh was that the property was rented for $390 a week.

Your Honour has a chronology that identifies the date at which the rental relationship for the granny flat ceased. I understand that to be - I misplaced the document, but in any event it's 69 weeks from the date of settlement. I've calculated there what that sum is, it's $26,910. And in my submission that ought to be deducted from the $100,000 identified in the valuation report because plainly that is a benefit that the plaintiff has derived from purchasing the property.”

37. On the ‘stamp duty’ claim, Counsel for the second defendant submitted (T 239-240):

“HUTCHINGS: I apologise, but I omitted to note the exhibit references that your Honour gave to the documents that my learned friend, Mr O'Neill, tendered being apparently stamp duty calculations obtained from a website, which I presume is the State Revenue's website.

HIS HONOUR: I'll just see if I can - I think it's exhibit C.

HUTCHINGS: I'm obliged. Thank you, your Honour. If your Honour looks at the content of exhibit C and more particularly, the document with the valuation of 620 applied to it, which obviously refers to the valuation evidence the plaintiff relies upon in this case, the preamble to that assessment calculation is that the person making the enquiry is doing so on the basis of eligibility for the first home buyer's concessional assistance in relation to stamp duty. And the zero value on a $620,000 is on the basis of accessing concessional stamp duty benefits. Your Honour could not assess, in my submission, damages that the plaintiff would be entitled to $14,690 in relation to stamp duty, the fifth category in the schedule of damages in circumstances where plainly the evidence establishes the plaintiff has no eligibility for that concession.

HIS HONOUR: This might be in your written submissions, Mr Hutchings, and if it is, I can refer - you can refer me to it, but in a nutshell what do you say is the absence of eligibility?

HUTCHINGS: The lack of residency at the property in the first 12 months for a continuous period of six months.

HIS HONOUR: Sorry, if you just repeat that again? The lack of residency?

HUTCHINGS: The failure to comply with the requirement to reside at the property for six months continuously within the first 12 months of ownership.”

The First Defendant’s submissions

38. Shortly before the commencement of the trial, Counsel for the first defendant supplied the Court with a concise outline of written submissions. However, that document did not address the topic of damages. The first defendant’s Counsel’s closing address followed that of Counsel for the second defendant.

39. In his closing address, on the item in relation to ‘loss of value’, one of the exchanges I had with Counsel for the first defendant was as follows (T 253-255):

“KLOOSTER: --and I say, if I say that's correct as a general principle but you also need to then account for any rent you have received.

HIS HONOUR: Well, that comes into, I thought that came into Mr Hutchings treatment of item 1?

KLOOSTER: Yes, and we embrace that. So if it, look. The $100,000 is hard for my client to quibble with that, your Honour, there's no expert evidence that my client's adduced to the contrary. I could have a go at the second head of damage, whether there's a sufficient evidence of the remedial costs are reasonable and necessary but it's the only evidence before your Honour.

There is evidence before your Honour as to exactly how much the plaintiff received from these properties at least while my client was the managing agent. That evidence starts at p 369 and goes through to the following eight pages. It is a rental ledger that shows expenses and income received. I had my instructing solicitor start to prepare a table which I'll send through to my learned friend and your Honour shortly.

But on our figures - just bear with me - the total net rent received by the plaintiff is a figure of - and I'll double check this again - but it's a figure of - just a moment - $58,284.16. And to assist the Court, if your Honour--

HIS HONOUR: is that in relation to both properties or just one--

KLOOSTER: Yes, it is.

HIS HONOUR: Yes?

KLOOSTER: Yes, it is. It's in relation to both. I haven't gone through the exercise of splitting which income is for--

HIS HONOUR: There's concern there though, in matter of principle. An interested prospective purchaser of the property generically might be, there may be a loss in rent that might be received on the main house might be affected by an assumption about the validity of the granny flat. It may not be, in other words, as attractive to a - there might be a purchaser who wants both the main house and the granny flat and may not want the main house without the granny flat. In which case that may mean a reduction on the value of the rent on the main house. Isn't that possible?

KLOOSTER: Well, anything's possible your Honour, but on the material before the Court--

HIS HONOUR: Why wouldn't that be an ordinary inference that the Court could draw?

KLOOSTER: Well, the facts before your Honour uncontested is that at this point--

HIS HONOUR: You're seeking a credit from a prima facie diminution in value. Isn't it up to you--

KLOOSTER: Correct.

HIS HONOUR: --it's up to you to establish, and Mr Hutchings, to establish how much such credit should be. It seems to me that you're predicating what it should be on a premise, a misapprehended premise about what the rent would have been on both the main house and on the granny property flat.

KLOOSTER: Can I avoid the problem this way, your Honour?

HIS HONOUR: Yes.

KLOOSTER: There is a rental ledger that I can work ascertain precisely the amount of rent that was received from the granny flat alone.

HIS HONOUR: Right.

KLOOSTER: As a matter of common sense that figure surely must be deducted from the diminution of value claim.

HIS HONOUR: And I think that that's what Mr Hutching's calculation was.

KLOOSTER: I will endeavour to work out whether - in fairness to Mr Hutchings I think that was a gross figure, it didn't take into account management expenses and what not, but it's probably a rough estimate and I'll get my instructing solicitors to prepare a proper table.

HIS HONOUR: All right…. ”

40. It may be seen that Counsel for the first defendant did initially raise a submission about rent that accrued on both the house and granny flat but following questioning from the Bench, he changed tack, towards the submission about the rent recovered only from the use of the granny flat being credited to the defendants.

41. This change of tack was confirmed when, as Counsel for the plaintiff was delivering his oral address, there was a level of intervention (solicited by the Court) in which Counsel for the first defendant spoke to a document (MFI #3) supplied to the Court on behalf of the first defendant after Mr Klooster had finished his closing argument. This exchange was as follows (T278):

“KLOOSTER: … it’s a spreadsheet titled “Income/Rental” attached to an email sent to your Honour’s associate this afternoon at 1.58pm.

HIS HONOUR: Yes, this is the spreadsheet though that speaks of rent at $25,598.86, is that right?

KLOOSTER: Correct. That’s the net rent received after taking out the fees charged by the agent. And just for the granny flat, your Honour.

HIS HONOUR: Right. From 31 July 19 through to 20 December 2021(as said) (sic). A spreadsheet indicating the net rental received - and I take it in connection only with the granny flat, Mr Klooster?

KLOOSTER: Correct, your Honour.

HIS HONOUR: In relation to the granny flat in the period from 31 July 2019 to February 2021 inclusive will be MFI 3.”

42. MFI #3 was identified, as the total of the net rental received for the granny flat, the sum of $25,598.86 (T 278). No spreadsheet, comparable to MFI 3, was ever supplied to the Court by Counsel for the first defendant indicating the net rental received from the use of the granny flat.

43. Counsel for the first defendant did not address the Court on the ‘stamp duty’ head of loss; effectively adopting the submissions of Counsel for the second defendant.

The plaintiff’s closing submissions

44. In Counsel for the plaintiff’s written submissions (5 August 2021), on the ‘loss of value’ head of loss, it was submitted that the lost value was $100,000. Nothing was said about any deduction in that figure to credit the defendants for rent received. On the ‘stamp duty’ head of loss, the plaintiff submitted that the plaintiff paid stamp duty at a rate which she would not have paid had the property been valued below the threshold for stamp duty $14,690.

45. In Counsel for the plaintiff’s closing address, and on the ‘loss of value’ head of loss, Counsel for the plaintiff (T276-277) was given the opportunity to respond to MFI #3, but did not do so. Indeed, it was also apparent that Counsel for the second defendant was given the opportunity to respond to it (T 277), but he did not do so either. Counsel for the plaintiff did not otherwise respond in substance to the defendants’ more general point as to the propriety of deducting rent received from the loss of value.

46. On the ‘stamp duty’ head of loss, I ultimately had the following exchange with Counsel for the plaintiff:

“O’NEILL: Yes, thank you, your Honour. I’m just trying to find it. She paid that amount of stamp duty, 14690. If you look to the following page, on the basis that she got the benefit of the first home buyer’s grant, those provisions, she saved $13,200. She still paid $14,690.

HIS HONOUR: So am I to draw from this that but for the concessional benefit that would have had to pay the sum of $27,990?

O’NEILL: Correct, your Honour. That’s what comes from that.

HIS HONOUR: But if valued at $620,000, what would be the relevant - what would the stamp duty in that have been?

O’NEILL: Your Honour, I think that comes from the following page. Sorry, your Honour, I put it away.

HIS HONOUR: It looks like it might have been $23,390.

O’NEILL: No, savings. It would have been zero.

HIS HONOUR: Right.

O’NEILL: If it was $620,000 the purchase duty amount would have been zero.

HIS HONOUR: Right.

O’NEILL: And at $620,000 the savings would have been $23,390. But that’s just the savings.

HIS HONOUR: Yes.

O’NEILL: If it was 600 and--

HIS HONOUR: But the relevant comparison, if she wasn’t eligible for the concessional benefit, then if she was purchasing at the sum of - which she did - at the sum of $720,000, the duty would have been $27,990. If however she purchased it at the value which you say was its value, there would have been no stamp duty.

O’NEILL: Correct, your Honour, yes.”

The findings on the disputed heads of loss

47. On the loss of value head of loss, the findings appear at [229]-[230]. It is apparent that the Court accepted the substance of the defendants’ submission: the defendants were credited with the rent actually received from the use of the granny flat. It is also apparent that the amount of rent deducted from the loss in value ($100,000) was identified by MFI #3, being $25,598.85. This was a more favourable deduction for rent than that which had been submitted by Counsel for the second defendant.

48. On the stamp duty head of loss, the findings appear at [239]-[242]. It is apparent that the Court accepted, as the premise, the defendants’ submission that the plaintiff was ineligible for a concessional stamp duty benefit. It is also apparent that the Court accepted the plaintiff’s submission on this contested issue, as that submission was fleshed out in the exchange in argument referred to earlier.

The defendants’ arguments on heads of loss on the application to reopen

The second defendant’s arguments

49. On the ‘loss of value’ head of loss, the second defendant argues that the Court should not only have taken into account, and credited the defendants, with the rent that the plaintiff obtained from the occupation of the granny flat, but should also have credited them with the rent she received from the occupation of the main house. This, the second defendant indicated, was apparent from “unchallenged” evidence of Ms Singh (of the first defendant), which identified, as the total rent (ie from the main house and the granny flat) as being $59,412.86.

50. On the ‘stamp duty’ head of loss, the second defendant firstly points out an arithmetic error. The duty which would have been paid on $720,000 without the concessional benefit should have been $27,890, not the figure of $27,990 referred to in [241]. Secondly, the defendants do not quibble with the relevant comparison, in principle: it is the duty that would have been payable without the benefit on the sum of $720,000 and the duty that would have been payable, again without the benefit, on the sum of $620,000. The second defendant identified that the evidence of the duty on property valued at $620,000, without the benefit, was $23,390. In dollar terms the difference was between $27,890 and $23,390, being $4,500.

The first defendant’s arguments

51. The first defendant agreed with both arguments advanced by the second defendant.

Parties’ submissions

52. The plaintiff, in her initial submissions on dispositive orders (7 September 2021), which (at that point) were only responsive to the second defendant’s submissions ^[4] , argued that it is an extraordinary step to allow the defendants to advance further submissions or argument after judgment has been delivered, but before orders are entered, and argues that this could only be justified if there was some matter calling for review.

    4. Although both were prepared on 7 September 2021, the first defendant’s written submissions on dispositive orders were prepared after the plaintiff’s written submissions

53. The plaintiff went on, with reference to both disputed items of loss, to argue that not only was the Court correct in its findings (a matter potentially to be considered if it becomes appropriate to consider the merits of the defendants’ criticisms), but the arguments raised by the second defendant relating to each item of loss (which was substantially adopted by the first defendant) was not advanced by the defendants during the trial.

54. The plaintiff argued that to permit the defendants to advance further arguments, or points, during the trial after delivery of the judgment would circumvent the trial judge’s role in interpreting the evidence and taking into account submissions advanced, at the trial, at the conclusion of the evidence.

55. After the parties forwarded their (respective) initial submissions on dispositive orders, I arranged for my Associate to email the parties, inviting Counsel to furnish the Court with supplementary submissions as to how the Court may exercise its discretion; on the hypothesis that the defendants were applying to re-open argument.

56. In their supplementary submissions on dispositive orders (10 September 2021), other than to identify what they contended was the source of the Court’s power to make the corrections they applied for, and to reprise their criticisms of the reasons, neither Counsel for the defendant made submissions why the Court would, in its discretion, permit reopening for the purpose of advancing arguments in relation to the disputed heads of loss. No reference was made, for example, to any of the matters referred to in ss 56-60 of the Civil Procedure Act.

57. The plaintiff (13 September 2021), in reply, countered by arguing that the defendants’ complaints were contrary to what they had advanced at trial. Again, little if any reference was made to matters relevant to the exercise of the Court’s discretion.

Consideration

The loss of value head of loss

58. In my view, the defendants should not be entitled to re-agitate argument on the ‘loss of value’ head of loss. It is clear that the Court accepted, in principle, the approach which the defendants commonly advocated: that credit should be given in relation to rent earned on the granny flat. That was made explicit by Counsel for the second defendant in both his written and verbal closing submissions. It was confirmed when Counsel for the first defendant, when supplying MFI 3, indicated that this was calculated by reference to the net rent only in respect to the granny flat. Neither Counsel for the defendants referred the Court to Ms Singh’s ‘unchallenged’ evidence in their closing argument (written or verbal) which might have assisted the Court to understand the combined rent on both the main house and the granny flat had it been argued that rent from both house and granny flat should be taken into account. For completeness, I am not even sure it is right to say that Ms Singh’s evidence was ‘unchallenged’ in any event, noting that MFI 3 appeared to be contrary to it (at least in relation to the rent on the granny flat). (Counsel for the second defendant did not avail himself of the opportunity presumably given to him to comment on MFI 3 after it had been explained by Counsel for the first defendant in his absence ^[5] ).

    5. 5/8/21, T 277.26

59. The application to reopen should be declined in circumstances where the defendants now seek to run arguments contrary to those they raised at the hearing: Metwally. At hearing, their positions were that the rent that should be credited was the rent on the granny flat. Alternatively, if the Court was mistaken in not taking into account Ms Singh’s unchallenged evidence, then it was led to do so by the combined submissions of Counsel for the defendants. Put another way, if the Court misapprehended facts, the misapprehension was solely attributable to fault on the part of the defendants, comprising both statements (in submitting only as to the rent on the granny flat) and an omission (failing to refer to evidence in submissions). The exceptional jurisdiction to permit reopening has not been enlivened to that extent, and it is unnecessary to consider discretionary considerations relating to reopening insofar as it concerns this head of loss.

The stamp duty head of loss

60. In relation to this head of loss, as indicated, the first defendant adopted the second defendant’s submissions. Counsel for the second defendant submitted that the plaintiff was not entitled to the concessional benefit. That submission was not contentious. His second submission, in substance, was that it was not possible to divine from Exhibit C any amount for damages. That is to say, the defendants’ joint position advanced at the hearing was that nothing should have been awarded to the plaintiff for stamp duty. The plaintiff argued that allowance should be made and the Court accepted that argument. In so doing, the Court reasoned that the relevant comparison, for the purpose of identifying the loss for this head, was stamp duty on the $720,000 (the purchase price) and stamp duty on the $620,000 (the value), in both cases, without the concessional benefit.

61. The defendants do not suggest that this approach was erroneous as a matter of law. They are not raising any new argument about the correct approach to apply. They presently complain only about the calculations to be performed in applying that approach; albeit in circumstances where they did not supply assistance to the Court at the hearing as to what the appropriate calculations were. They now say that the error was the Court’s misconstruction of Exhibit C, in identifying what was the amount of the duty (on the stated premise, that there was no concessional benefit) on $620,000.

62. The circumstance that the defendants complain about calculations on an approach which they did not advocate, without assisting the Court to identify the correct calculations at the hearing, may tell against a grant of leave to reopen. Nevertheless, since the Court’s suggested mistake, about which the defendants complain, is apparent from the exchange with the plaintiff’s counsel that I earlier highlighted, means that it could not be said that any misapprehension of fact was solely attributable to the defendants. I consider that, in those circumstances, the jurisdiction to permit reopening is enlivened.

63. As to the discretionary considerations, the difference ($23,490) between the head of loss for stamp duty actually awarded by the Court ($27,990) and that which would follow if the defendants are right ($4,500) is not insubstantial as a proportion of the award for damages made before the deduction for contributory negligence ($119,566.14), being about 20% of the award. As indicated, the parties’ respective arguments centre upon the construction to be given to a single document, Exhibit C. There is, in other words, no extensive factual reconsideration. This is obviously not a case where the defendants seek to rely upon new evidence which could, with reasonable diligence, have been adduced during the hearing.

64. It is no convincing answer to say that the defendants have recourse to rights of appeal. The relevant dispute on this head of loss, in quantum, falls considerably short of the $100,000 threshold permitting appeals as of right, to the Court of Appeal, on damages^[6] . Whether the Court of Appeal would grant leave would be influenced by the kinds of considerations which can now be considered. Further, with reference to what Brennan J said in Autodesk, the defendants have moved promptly to seek correction, by seeking the Court’s intervention now, before orders are perfected; rather than applying to have them varied or set aside within the 14 day window provided by r 36.16. These considerations favour the grant of reopening.

    6. Supreme Court Act 1970 (NSW), s 101(2)(r)

65. Further, to allow the award to remain uncorrected would result in a windfall for the plaintiff. That is particularly unwarranted, in the circumstances, where the problem emerged in the first place from the plaintiff’s unjustified receipt of the concessional benefit. To permit the reopening has not resulted in undue delay or excessive cost, proportionate to the sum at stake. In the interests of justice, the Court accedes to the application to reopen in its discretion on the calculation of the loss relating to stamp duty.

Reconsidering the stamp duty head of loss

66. As I have indicated, upon review of Exhibit C, and with the benefit of argument from both parties, I agree with the defendants’ construction of it. Affirming, as I do, the approach I adopted in my reasons, of comparing the duty on one land value with the duty on another land value, both on the basis of no concessional benefit, I accept the defendants’ submission.

Revised assessment of damages

67. Accordingly, substituting the corrected award for stamp duty ($4,500) for the figure in my earlier reasons, the award for damages, prior to deduction for contributory negligence, is $96,076.14. Once the deduction for contributory negligence is made, the plaintiff’s damages are $81,664.72.

68. Following apportionment, the first defendant’s responsibility for that sum is $20,416.18; and the second defendant’s responsibility is $61,248.54.

INTEREST CALCULATIONS

69. The parties agree on the plaintiff’s entitlement to receive interest and the applicable rates. They also agree that the defendants are liable for interest as reflects their respective proportionate responsibility for damages. There are two issues in dispute.

69. The plaintiff submits interest calculations should be awarded on the global award for damages. Both defendants submit that interest calculations have to be calculated by reference to each individual head of loss. I consider that the defendants’ approach is sound in principle. Interest accrues in respect to actual losses; not future losses. As the plaintiff’s schedule of damages revealed, there was a combination of actual and future losses.

70. The second point of difference between the parties concerns one item of loss, being the ‘loss in value’, the defendants also argue that interest should only run from the date of settlement of the purchase of the property (1 July 2019) and not from the date when the cooling off period expired (being 4 June 2019), from the time that the contract became unconditional so that she should not be permitted to obtain interest in the period from 4 June 2019 to 30 June 2019. I also agree with the defendants that interest for this head of loss should only run from the date of settlement, being the date when the plaintiff acquired legal ownership of an asset whose value was diminished.

71. The remaining figures for interest will depend upon the parties’ revised calculations referable to the individual heads of loss on damages.

ORDERS

73. With these findings on contentious matters being made, I grant the parties the further opportunity to agree on short minutes to give effect to these reasons. The plaintiff should bring in short minutes within 3 business days. As before, if there is any remaining dispute, it will be determined on the papers.

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Endnotes

Decision last updated: 13 September 2021