Mavaddat v Lee
[2007] WASCA 141 (S)
•4 JULY 2007
MAVADDAT -v- LEE [2007] WASCA 141 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASCA 141 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:87/2005 | 21 FEBRUARY 2007 | |
| Coram: | STEYTLER P McLURE JA PULLIN JA | 4/07/07 | |
| 2/04/08 | |||
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Final orders made | ||
| B | |||
| PDF Version |
| Parties: | MICHAEL MOOJAN MAVADDAT KYUNG HEE LEE |
Catchwords: | Fair Trading Act Form of relief Costs No new point of principle |
Legislation: | Fair Trading Act 1987 (WA), s 77 |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MAVADDAT -v- LEE [2007] WASCA 141 (S) CORAM : STEYTLER P
- McLURE JA
PULLIN JA
DECISION : 2 APRIL 2008 FILE NO/S : CACV 87 of 2005 BETWEEN : MICHAEL MOOJAN MAVADDAT
- Appellant
AND
KYUNG HEE LEE
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : ROBERTS-SMITH J
Citation : LEE -v- MAVADDAT [2005] WASC 68
File No : CIV 1862 of 2001, CIV 1824 of 2001
(Page 2)
Catchwords:
Fair Trading Act - Form of relief - Costs - No new point of principle
Legislation:
Fair Trading Act 1987 (WA), s 77
Result:
Final orders made
Category: B
Representation:
Counsel:
Appellant : Mr S Penglis
Respondent : Mr D R Williams QC & Mr S M Davies
Solicitors:
Appellant : Freehills
Respondent : Stables Scott
Case(s) referred to in judgment(s):
Nil
(Page 3)
1 JUDGMENT OF THE COURT: Reasons for decision in the appeal were published on 4 July 2007 with a direction that the parties confer about the form of the orders which should be made. The parties have not been able to agree and each party has brought in a minute of proposed orders.
The indemnity
2 The first issue to be resolved is in relation to the terms of the order that the respondent should be indemnified concerning her liability to St George Bank. To set the scene it is necessary to bear in mind that this court set aside the trial judge's award of damages for an amount said to be owing by the respondent to the St George Bank. This was because it was clear that the respondent's liability to the St George Bank has not yet been established. The respondent has engaged in litigation with the St George Bank, full details of which were not disclosed. However, it seems from submissions made by the parties that if successful in her claim against the bank, the respondent will have no liability to the bank. The parties also informed the court that the St George Bank is counterclaiming for the amount which it claims to be due under the residential loan agreement signed by the respondent.
3 The respondent contends for an order that the appellant indemnify her 'for any indebtedness she may have' to St George Bank. The appellant on the other hand submits that the indemnity be formulated so that it operates only if the respondent pays the St George Bank or is ordered to pay the St George Bank a sum of money pursuant to the loan agreement. It also proposes that the indemnity should record the fact that the appellant has already paid to the respondent $133,000. The respondent conceded through her counsel that this payment had been made and that it would be taken into account when enforcing the indemnity.
4 The appellant proposed an order which was the subject of discussion during the hearing and eventually it proposed an order that read:
The appellant indemnify and pay to the respondent any amount greater than $133,000 which is paid or ordered to be paid by the respondent to St George Bank Ltd pursuant to a residential loan agreement dated 5 January 2000.
5 That order should be made. It has the advantage of avoiding any doubt that a payment has been made. The order also has a precision about it which the respondent's proposed order does not. The order makes it
(Page 4)
- clear that the indemnity only operates when the respondent pays money to the St George Bank or is ordered to pay money to the bank.
The respondent's contention that the appellant should execute a document assuming liability to the St George Bank
6 The order proposed by the respondent is that:
The appellant execute a document under which he assumes liability to St George Bank Ltd in respect of the indebtedness (if any) of the respondent to the bank under that residential loan agreement.
7 The respondent says that this order may be made by the court exercising its powers under s 77 of the Fair Trading Act 1987 (WA)which is the equivalent of s 87 of the Trade Practices Act 1974 (Cth).
8 The background is that the appellant represented to the respondent that both the appellant and the respondent would be jointly liable under the loan agreement with St George Bank. In fact the loan agreement was drawn so that only the respondent was a party. The respondent signed the loan agreement acting on the faith of the appellant's representation that it was a joint loan agreement.
9 The respondent did not bring an action alleging a contract by the appellant in which he promised to sign the bank loan agreement. Instead, the respondent sued (relevantly) under the Fair Trading Act, claiming that the appellant's representations induced her to sign the St George Bank loan agreement. Her case was that if she had known the truth about the document, she would not have signed it at all. To put the respondent in the position she would have been if no representation was made, means that the respondent must be indemnified for any payment she makes to the St George Bank pursuant to the agreement or which she is ordered to make.
10 Even if such an order could be made under s 77 (as to which this court expresses no opinion) it should not be made in the circumstances of this case. The respondent did not formulate the proposed order until after the reasons were published by this court. No relief in terms of the proposed order was claimed in the statement of claim. The terms of the proposed document to be executed by the appellant have not been spelled out. An order of the kind proposed by the appellant would create rights in favour of the St George Bank against the appellant when the bank was not a party to this litigation. The order could give rise to potential disputation between St George Bank and the appellant. Finally there is no significant practical justification for such an order. If the respondent succeeds in her
(Page 5)
- litigation against the bank, then the document she would have the appellant execute would not be of any value to her. If the respondent pays the bank, or is ordered to pay the bank, she has the indemnity ordered by this court. The existence of the proposed document would not prevent the bank collecting the judgment sum from the respondent.
11 As a result, the order sought by the respondent should not be made.
Appellant to indemnify the respondent against costs she incurs or costs she is ordered to pay in her litigation with the St George Bank
12 The respondent seeks orders that:
(a) The appellant indemnify the respondent in respect of her legal costs of prosecuting the action brought by her against St George Bank Ltd … and of defending the counterclaim by the Bank in the Bank action, and of prosecuting or defending any appeal in the Bank action, in each case on an indemnity basis.
(b) The appellant indemnify the respondent, on an indemnity basis, in respect of any legal costs the respondent may be ordered in the Bank action to pay the Bank.
13 There is no basis for this order. It would expose the appellant to liability for any costs incurred by the respondent or for any costs which she might be ordered to pay to the St George Bank, whether the costs were reasonably or unreasonably incurred. In any event, separate litigation with the bank is not something which the appellant is responsible for. The respondent could have joined the bank in the present proceedings, but did not do so. The respondent has chosen to engage in separate litigation with the bank. The costs incurred by the respondent are the result of that choice.
Costs of the appeal
14 The respondent submits that the appellant should pay:
(a) her costs of the appeal to be taxed;
(b) her costs occasioned including costs thrown away by reason of the amendment of the appellant's grounds of appeal.
The first order would disregard the fact that the appellant succeeded in having parts of the judgment set aside. There is justification for seeking the second costs order, but it may be more appropriate to make an overall costs order taking this into account.
(Page 6)
15 The respondent submits that the first order is justified because the bulk of the time in the appeal was spent on grounds on which the appellant failed. That is undoubtedly true. However, the appellant acknowledges that he should pay costs although he proposes that he should pay one-half of the respondents costs of the appeal plus reserved costs, to be taxed. An order of that type has the distinct advantage of simplicity. However the appellant should pay three-quarters of the costs of the respondent's costs of the appeal plus reserved costs, those costs to be taxed. An order in those terms will give proper recognition of all factors including the time spent by the respondent in preparing for grounds of appeal which were unsuccessful or which were abandoned.
The orders of the court
16 The court therefore orders:
1. Paragraphs 1 and 4 of the judgment dated 22 June 2005 are set aside and in lieu thereof it is ordered that:
The appellant indemnify and pay to the respondent any amount greater than $133,000 which is paid or ordered to be paid by the respondent to St George Bank Ltd pursuant to a residential loan agreement dated 5 January 2000, No S61 1 606 7791 00.
2. Paragraph 6 of the judgment is set aside and in lieu thereof it is declared that:
The appellant holds an undivided 46.875 per centum interest in the property at 817 Canning Highway, Applecross, being the land in Certificate of Title, vol 1451, folio 389 on trust for the partnership between the appellant and the respondent.
3. Except as otherwise ordered above, the appeal be dismissed.
4. The respondent do pay the appellant's costs for the appellant's application to amend his ground of appeal and adduce fresh evidence at the hearing of the appeal to be taxed.
5. The appellant pay three-quarters of the respondent's costs of the appeal plus any reserved costs, to be taxed.
6. There be a certificate for senior counsel.
2
2
1