Lan v Kaymet Corporation Pty Ltd - [2017] NSWCA 52

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Lan v Kaymet Corporation Pty Ltd [2017] NSWCA 52
Hearing dates: 9 March 2017
Decision date: 28 March 2017
Before: McColl JA at [1]
Leeming JA at [2]
Sackville AJA at [3]
Decision:
1. Appeal be dismissed.
2. The appellants pay the respondents’ costs of the appeal.

Catchwords: EQUITY – usual undertaking as to damages – where, but for an injunction obtained by the appellants, the respondents would have earned rental from leasing out strata units – where unrealised capital value of the strata units increased during the period of the injunction by more than the lost rent – whether respondents’ compensation falls to be reduced by the unrealised capital gain
Legislation Cited:
Civil Procedure Act 2005 (NSW), s 56
Supreme Court Act 1970 (NSW), s 101(2)(r)
Uniform Civil Procedure Rules 2005 (NSW), r 25.8
Cases Cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249; [1981] HCA 75
Chen v State of New South Wales [2016] NSWCA 177
Churnin v Pilot Developments Pty Ltd [2007] NSWSC 1459
Churnin v Pilot Developments Pty Ltd [2008] NSWSC 831
European Bank Ltd v Evans (2010) 240 CLR 432; [2010] HCA 6
Griffith v Blake (1884) 27 Ch D 474
Hall v van der Poel [2009] NSWCA 436
Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486; [2006] HCA 38
NSW Arabian Horse Association Inc v Olympic Co-ordination Authority [2005] NSWCA 210
Qi Wang v Kaymet Corporation Pty Ltd [2016] NSWSC 742
Victorian Onion and Potato Growers’ Association Ltd v Finnigan (No 2) [1922] VLR 819; 28 ALR 413
Wang v Kaymet Corporation Pty Ltd [2015] NSWSC 1459
Category: Principal judgment
Parties:
Qian Lan (Appellant 1)
Jie Ma (Appellant 2)
Xiaoyan Xi (Appellant 3)
Bin Wang (Appellant 4)
Xiaozheng Lao (Appellant 5)
Siping Xia (Appellant 6)
Jia Jia Ye (Appellant 7)
Yanchong Wei (Appellant 8)
Hai Xu (Appellant 9)
Chao Lu Ye (Appellant 10)
Liang Qiao (Appellant 11)
Liu Qing Xu (Appellant 12)
Junfeng Wang (Appellant 13)
Lili Gu (Appellant 14)
Weidong Li (Appellant 15)
Wei Huang (Appellant 16)
Can Zhao (Appellant 17)
Helen Hoi Peng Fong (Appellant 18)
Huey Ling Liew (Appellant 19)
Jian Zhong Wu (Appellant 20)
Yijie Wang (Appellant 21)
Yu Di Xi (Appellant 22)
Qian Li Yan (Appellant 23)
Wen Shi (Appellant 24)
Kaymet Corporation Pty Limited (First Respondent)
Toufic Kayrouz (Second Respondent)
Lichah Kayrouz (Third Respondent)
William Metlej (Fourth Respondent)
Representation:
Counsel:
Mr JE Sexton SC / Mr JC Lee (Appellants)
Mr F Corsaro SC / Mr M Auld (Respondents)
Solicitors:
SHL & Associates Lawyers (Appellants)
Alphonse & Associates (Respondents)

File Number(s): 2016/195054
Decision under appeal

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

[2016] NSWSC 742

Date of Decision:

30 May 2016

Before:

Hammerschlag J

File Number(s):

2013/196153

Judgment

McCOLL JA: I agree with Sackville AJA’s reasons and the orders his Honour proposes.
LEEMING JA: It is unnecessary to…

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: [2017] NSWCA 52
Decision Date: 28 March 2017

CaseChat Overview and Summary

The appellants, Lan and others, sought to appeal a decision of the primary judge concerning an undertaking as to damages given in support of an interlocutory injunction. The respondents, Kaymet Corporation Pty Ltd and others, had obtained an injunction preventing the appellants from proceeding with certain development works. But for this injunction, the respondents would have leased out strata units and earned rental income. During the period the injunction was in force, the unrealised capital value of these strata units increased by an amount exceeding the lost rental income. The dispute centred on whether the compensation payable by the respondents under their undertaking should be reduced by this unrealised capital gain.

The central legal issue before the Court of Appeal was whether the respondents' liability under the undertaking as to damages should be reduced by the unrealised capital gain in the value of the strata units that occurred during the period the injunction was operative. This required the court to consider the principles governing the assessment of damages under an undertaking as to damages, particularly in circumstances where the party restrained by the injunction has experienced a benefit that is not a direct financial gain but rather an increase in the capital value of their property.

The Court of Appeal, comprising McColl and Leeming JJA and Sackville AJA, dismissed the appeal. The court reasoned that the undertaking as to damages is intended to compensate the party restrained for the loss they have suffered as a result of the injunction. It was held that an unrealised capital gain, which is speculative and not a realised profit, does not ordinarily fall to be considered as a reduction of loss in this context. The court affirmed that the loss suffered by the respondents was the lost rental income, and the increase in capital value, while a benefit, was not a direct consequence of the injunction in a way that would offset the loss of rent under the undertaking.

Consequently, the appeal was dismissed, and the appellants were ordered to pay the respondents’ costs of the appeal.

Orders

Orders of the court

1. Appeal be dismissed.

2. The appellants pay the respondents’ costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Lan v Kaymet Corporation Pty Ltd [2017] NSWCA 52
Hearing dates:	9 March 2017
Decision date:	28 March 2017
Before:	McColl JA at [1] Leeming JA at [2] Sackville AJA at [3]
Decision:	1. Appeal be dismissed. 2. The appellants pay the respondents’ costs of the appeal.
Catchwords:	EQUITY – usual undertaking as to damages – where, but for an injunction obtained by the appellants, the respondents would have earned rental from leasing out strata units – where unrealised capital value of the strata units increased during the period of the injunction by more than the lost rent – whether respondents’ compensation falls to be reduced by the unrealised capital gain
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Supreme Court Act 1970 (NSW), s 101(2)(r) Uniform Civil Procedure Rules 2005 (NSW), r 25.8
Cases Cited:	Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249; [1981] HCA 75 Chen v State of New South Wales [2016] NSWCA 177 Churnin v Pilot Developments Pty Ltd [2007] NSWSC 1459 Churnin v Pilot Developments Pty Ltd [2008] NSWSC 831 European Bank Ltd v Evans (2010) 240 CLR 432; [2010] HCA 6 Griffith v Blake (1884) 27 Ch D 474 Hall v van der Poel [2009] NSWCA 436 Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486; [2006] HCA 38 NSW Arabian Horse Association Inc v Olympic Co-ordination Authority [2005] NSWCA 210 Qi Wang v Kaymet Corporation Pty Ltd [2016] NSWSC 742 Victorian Onion and Potato Growers’ Association Ltd v Finnigan (No 2) [1922] VLR 819; 28 ALR 413 Wang v Kaymet Corporation Pty Ltd [2015] NSWSC 1459
Category:	Principal judgment
Parties:	Qian Lan (Appellant 1) Jie Ma (Appellant 2) Xiaoyan Xi (Appellant 3) Bin Wang (Appellant 4) Xiaozheng Lao (Appellant 5) Siping Xia (Appellant 6) Jia Jia Ye (Appellant 7) Yanchong Wei (Appellant 8) Hai Xu (Appellant 9) Chao Lu Ye (Appellant 10) Liang Qiao (Appellant 11) Liu Qing Xu (Appellant 12) Junfeng Wang (Appellant 13) Lili Gu (Appellant 14) Weidong Li (Appellant 15) Wei Huang (Appellant 16) Can Zhao (Appellant 17) Helen Hoi Peng Fong (Appellant 18) Huey Ling Liew (Appellant 19) Jian Zhong Wu (Appellant 20) Yijie Wang (Appellant 21) Yu Di Xi (Appellant 22) Qian Li Yan (Appellant 23) Wen Shi (Appellant 24) Kaymet Corporation Pty Limited (First Respondent) Toufic Kayrouz (Second Respondent) Lichah Kayrouz (Third Respondent) William Metlej (Fourth Respondent)
Representation:	Counsel: Mr JE Sexton SC / Mr JC Lee (Appellants) Mr F Corsaro SC / Mr M Auld (Respondents) Solicitors: SHL & Associates Lawyers (Appellants) Alphonse & Associates (Respondents)
File Number(s):	2016/195054
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2016] NSWSC 742 Date of Decision: 30 May 2016 Before: Hammerschlag J File Number(s): 2013/196153