Morton v Kim - [2019] NSWCA 273

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Morton v Kim [2019] NSWCA 273
Hearing dates: On the papers
Date of orders: 08 November 2019
Decision date: 08 November 2019
Before: Basten JA; Payne JA
Decision:
(1) Dismiss the summons seeking leave to appeal from the judgment of Kunc J in the Equity Division dismissing the applicant’s cross-claim.
(2) Order that the applicant pay the costs of the first respondent (Ms Kim) on the usual basis and one set of costs with respect to the second and third respondents (Mr Hu and Ms Yao) on a submitting basis.
Catchwords:
APPEAL AND REVIEW – application for leave to appeal – amount in issue below threshold – whether alleged error more than merely arguable – whether issue of principle or public importance – likely disproportion between the costs of an appeal and amount in issue
GUARANTEE AND INDEMNITY — novation of uncompleted contract for sale of part of land when whole land sold to third party – third party required to indemnify vendor for claims arising “as a result” of the first contract – legal costs incurred by vendor because of his failure to execute deed of novation – whether indemnity covered vendor’s legal costs
Legislation Cited: Civil Procedure Act 2005 (NSW), s 60
Supreme Court Act 1970 (NSW), s 101
Cases Cited: Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28
Be Financial Pty Ltd (atf Be Financial Operations Trust) v Das [2012] NSWCA 164
Joo v Yoo [2016] NSWCA 172
Category: Principal judgment
Parties: Stephen James Morton (Applicant)
Jonghee Kim (First Respondent)
Jing Hu (Second Respondent)
Linda Yao (Third Respondent)
Representation:
Counsel:
M J Davis (Applicant)
J R Young (First Respondent)
Submitting Appearances (Second and Third Respondents)
Solicitors:
SMB Law (Applicant)
Kim Lawyers (First Respondent)
Juris Cor Legal (Second and Third Respondents)

File Number(s): 2019/158356
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Equity – Real Property List

Citation:

[2019] NSWSC 448

Date of Decision:

23 April 2019

Before:

Kunc J

File Number(s):

2017/314005

Judgment

THE COURT: On 23 July 2019 the applicant, Stephen James Morton, filed a summons seeking leave to appeal from one aspect of a judgment delivered by Kunc J in the Equity Division, Real Property List, dismissing a cross-claim commenced by Mr Morton.
The principal proceedings, to which reference will be made below, were settled by the parties, leaving outstanding a question as to costs and Mr Morton’s cross-claim seeking to be indemnified for his costs by the present respondent, Jonghee Kim. The present application relates to Kunc J’s order rejecting Mr Morton’s claim for indemnity from Ms Kim. [1] The papers do not indicate the amount of the claim, but it must be a small proportion of the amount of $100,000 prescribed by s 101(2)(r) of the Supreme Court Act 1970 (NSW), under which leave to appeal is required. The parties accept that leave is required. The application for leave is being dealt with…

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.

Continue reading Morton v Kim

Details

AGLC: Morton v Kim [2019] NSWCA 273
Case: [2019] NSWCA 273
Decision Date: 08 November 2019

CaseChat Overview and Summary

The appeal concerned a dispute between the applicant, Morton, and the respondents, Kim, Hu, and Yao. Morton sought leave to appeal a decision of Kunc J in the Equity Division that dismissed Morton's cross-claim. The central issue revolved around an indemnity provided by a third party to Morton in relation to a contract for the sale of land.

The primary legal questions before the court were whether the alleged errors in the primary judge's decision were more than merely arguable, and whether the appeal raised an issue of principle or public importance, particularly given the likely disproportion between the costs of an appeal and the amount in issue. Furthermore, the court had to determine whether an indemnity clause, which required the third party to indemnify Morton for claims arising "as a result" of a first contract, covered legal costs incurred by Morton due to his failure to execute a deed of novation.

The court considered the threshold for granting leave to appeal when the amount in issue is below a certain threshold, requiring the alleged error to be more than merely arguable and the issue to be of principle or public importance. Regarding the indemnity, the court reasoned that the legal costs incurred by Morton were not a direct consequence of the first contract itself, but rather a result of Morton's own actions or omissions in failing to execute the deed of novation. Therefore, these costs did not fall within the scope of the indemnity.

Consequently, the summons seeking leave to appeal was dismissed. Morton was ordered to pay the costs of the first respondent, Ms Kim, on the usual basis, and one set of costs with respect to the second and third respondents, Mr Hu and Ms Yao, on a submitting basis.

Orders

Orders of the court

(1) Dismiss the summons seeking leave to appeal from the judgment of Kunc J in the Equity Division dismissing the applicant’s cross-claim.

(2) Order that the applicant pay the costs of the first respondent (Ms Kim) on the usual basis and one set of costs with respect to the second and third respondents (Mr Hu and Ms Yao) on a submitting basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Morton v Kim [2019] NSWCA 273
Hearing dates:	On the papers
Date of orders:	08 November 2019
Decision date:	08 November 2019
Before:	Basten JA; Payne JA
Decision:	(1) Dismiss the summons seeking leave to appeal from the judgment of Kunc J in the Equity Division dismissing the applicant’s cross-claim. (2) Order that the applicant pay the costs of the first respondent (Ms Kim) on the usual basis and one set of costs with respect to the second and third respondents (Mr Hu and Ms Yao) on a submitting basis.
Catchwords:	APPEAL AND REVIEW – application for leave to appeal – amount in issue below threshold – whether alleged error more than merely arguable – whether issue of principle or public importance – likely disproportion between the costs of an appeal and amount in issue GUARANTEE AND INDEMNITY — novation of uncompleted contract for sale of part of land when whole land sold to third party – third party required to indemnify vendor for claims arising “as a result” of the first contract – legal costs incurred by vendor because of his failure to execute deed of novation – whether indemnity covered vendor’s legal costs
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 60 Supreme Court Act 1970 (NSW), s 101
Cases Cited:	Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28 Be Financial Pty Ltd (atf Be Financial Operations Trust) v Das [2012] NSWCA 164 Joo v Yoo [2016] NSWCA 172
Category:	Principal judgment
Parties:	Stephen James Morton (Applicant) Jonghee Kim (First Respondent) Jing Hu (Second Respondent) Linda Yao (Third Respondent)
Representation:	Counsel: M J Davis (Applicant) J R Young (First Respondent) Submitting Appearances (Second and Third Respondents) Solicitors: SMB Law (Applicant) Kim Lawyers (First Respondent) Juris Cor Legal (Second and Third Respondents)
File Number(s):	2019/158356
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Equity – Real Property List Citation: [2019] NSWSC 448 Date of Decision: 23 April 2019 Before: Kunc J File Number(s): 2017/314005