Odgers v Bacich Investments Pty Ltd
[2007] WASC 269 (S)
ODGERS -v- BACICH INVESTMENTS PTY LTD [2007] WASC 269 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 269 (S) | |
| Case No: | CIV:1895/2007 | 29, 30 OCTOBER & 2 NOVEMBER 2007 & 23 JULY 2010 | |
| Coram: | EM HEENAN J | 16/11/07 | |
| 11/08/10 | |||
| 6 | Judgment Part: | 1 of 1 | |
| Result: | The first defendant pay the plaintiffs' costs of the claim and the counterclaim, including reserved costs and the costs of this summons to be taxed if not agreed | ||
| B | |||
| PDF Version |
| Parties: | DAVID MATTHEW GLENN ODGERS LINDA MAE WONG BACICH INVESTMENTS PTY LTD REGISTRAR OF TITLES |
Catchwords: | Costs |
Legislation: | Rules of the Supreme Court 1971 (WA), O 66 r 1(3) |
Case References: | McKechnie v Connell (Unreported, WASC, Library No 940023, 20 December 1993) Odgers v Bacich Investments Pty Ltd [2007] WASC 269; (2007) 35 WAR 320 Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION : 11 AUGUST 2010 FILE NO/S : CIV 1895 of 2007 BETWEEN : DAVID MATTHEW GLENN ODGERS
- LINDA MAE WONG
Plaintiffs
AND
BACICH INVESTMENTS PTY LTD
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Costs
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1(3)
(Page 2)
Result:
The first defendant pay the plaintiffs' costs of the claim and the counterclaim, including reserved costs and the costs of this summons to be taxed if not agreed
Category: B
Representation:
Counsel:
Plaintiffs : Mr S V Forbes
First Defendant : Mr P N Poliwka
Second Defendant : No appearance
Solicitors:
Plaintiffs : Corser & Corser
First Defendant : Q Legal
Second Defendant : No appearance
Case(s) referred to in judgment(s):
McKechnie v Connell (Unreported, WASC, Library No 940023, 20 December 1993)
Odgers v Bacich Investments Pty Ltd [2007] WASC 269; (2007) 35 WAR 320
Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569
(Page 3)
1 EM HEENAN J: This action was tried as an urgent matter on 29 and 30 October and 2 November 2007. I gave reasons for decision on 16 November 2007: Odgers v Bacich Investments Pty Ltd [2007] WASC 269; (2007) 35 WAR 320. On that day judgment was entered for the plaintiffs and a series of declarations made which are contained in the judgment of the court of that date.
2 Those orders provided that the plaintiffs have liberty to relist the application for specific performance on notice and, pending that application, that both the plaintiffs and the first defendant have liberty to apply; that the first defendant's counterclaim be dismissed; and that all costs of the claim and the counterclaim be reserved.
3 This was an action brought by the plaintiffs, who were purchasers of certain land at the riverfront at Claremont, from the first defendant as vendor. The contract of sale was conditional upon: certain subdivisional approval being granted for the land so as to provide for a battleaxe subdivision; the land on the riverfront lower down the hill being the land to be subdivided out and sold to the plaintiffs; and access to that land being provided by a narrow laneway running from Victoria Avenue down to the front block.
4 The contract contained a formula for the adjustment of the purchase price in the event that the conditions of subdivision required less aggregate area of land to be available for sale than had been identified in the contract of sale. At the time of the litigation, the position of the subdividing authorities was that the proposed laneway was to be narrower than had been provided for in the contract of sale. The effect of this, applied to the formula in the contract, would have been to reduce the aggregate area sold and, therefore, the selling price. In view of the very high value of the land, the anticipated reduction in the selling price was believed by the first defendant to be so considerable as to justify it withdrawing from the contract of sale. A notice of rescission had been given by the first defendant relying on that ground.
5 The action came to trial on the basis that the plaintiffs sought enforcement of the contract, seeking a declaration that it remained on foot. The first defendant was seeking the dismissal of that claim and advanced a counterclaim for an order that the contract had been validly rescinded because of the anticipated change in the area available for transfer and the corresponding reduction in the purchase price.
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6 At an early stage of the trial, it became apparent that both parties then believed that some reduction in the aggregate area of the land available for sale would be inevitable because of conditions likely to be imposed on the subdivision and that therefore there was also likely to be some reduction in the purchase price. However, the contract contained a term (standard condition 11) that if the reduction in area would otherwise cause a reduction in price of less than 5%, there would be no variation to the contract price and the original price would remain payable.
7 There was some uncertainty as to whether the eventual reduction would be such as to produce more than a 5% reduction in the purchase price. Nevertheless, the position was that at that stage the parties were not disposed to wait and see but, rather, were intent upon vindicating their claims.
8 I adverted to this matter during the first day of the trial and, having pointed out that some reduction in the area of the land to be sold seemed to be regarded then as inevitable, and that, consequently, the contract as agreed was unlikely to be capable of precise performance, I raised with the parties the question of whether or not the plaintiffs were in effect seeking specific performance or other relief on the basis that there should be an abatement of the purchase price to take into account the unstable reduction in the area of land available for sale.
9 On the second day of the trial, the plaintiffs applied for an amendment to the statement of claim to seek relief in that form. The trial proceeded on the original issues but then also included a claim for specific performance with an abatement of purchase price.
10 The ultimate result of the trial was that I declared that the plaintiffs would be entitled to an order for specific performance with an abatement of the purchase price if necessary but, because the actual terms of the proposed subdivision had not then been finalised, and it was not certain that they would produce a reduction in the area available of more than 5%, the question of specific performance with an abatement was stood over until the results of the subdivision application were known.
11 All that happened, as I have already said, in October and November 2007. In the time which has passed from then until now, subdivisional approval has been granted. There has been some minor reduction in the width of the laneway producing some corresponding minor reduction in the area of the land available for sale but that reduction has not been great enough to trigger the provisions of the contract which
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- would result in a reduction pro rata of the purchase price because the reduction was less than 5%.
12 It follows that the contract has been performed according to its terms insofar as price is concerned. The land has been transferred and no further proceedings are necessary, except as to costs.
13 This present application deals with costs. The plaintiffs are seeking an order that the first defendant should pay their costs of the action to be taxed. The first defendant, however, is submitting that the plaintiffs should not have all the costs and that the court should apply the principles to be found in O 66 r 1(3) of the Rules of the Supreme Court 1971 (WA) as considered and applied in McKechnie v Connell (Unreported, WASC, Library No 940023, 20 December 1993) and as further examined by Anderson J in the case of Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569.
14 The effect of O 66 r 1(3) of the Rules of the Supreme Court is that if a successful party nevertheless fails on some discrete or identifiable issue, and it is apparent that that discrete or identifiable issue added to the costs of the proceedings, the successful party should not recover the costs associated with that discrete or identifiable issue and that an appropriate order should be made to take that into account.
15 It has been submitted, and I accept, that such a discrete or separate issue can be an issue of law. So it is that counsel for the first defendant submits in the written submissions and again orally that costs associated with the issue of specific performance with abatement should not be the subject of any costs order for the plaintiffs because, in the end, that issue was not finally determined by the judgment of 16 November 2007 and in the events which have since happened, it has proved unnecessary to make any such abatement in the purchase price. The submission is that the action as originally constituted could have led to a satisfactory and authoritative resolution of the rights of the parties without embarking upon the issue of an entitlement to specific performance with abatement.
16 I do not accept the submission. In my reasons for decision at [40], I expressed the view that it was necessary to deal with the application for specific performance with an abatement of the purchase price in order to determine whether or not the contract would otherwise be enforceable; that is, in the event that the area available for sale became reduced.
17 At common law any reduction in the area of the land to be sold, however trivial, would entitle a party to the contract to rescind. At the
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- time of this trial the parties were proceeding on the assumption, a reasonable one, both at the time and as subsequent events have demonstrated, that there would be some reduction. Therefore, for the plaintiffs to obtain any declaration that the contract was still enforceable or access to remedies such as specific performance, invocation of the equitable remedy was necessary.
18 Furthermore, I considered at the time, and still consider, that invocation and application of these principles was necessary in order to consider the first defendant's counterclaim. The question was what was the impact, if any, of the reduction, or the likely reduction, in the area of the land to be sold upon the purchase price, because the measure of that effect went to the question of whether or not it was reasonable for the vendor to rescind.
19 In short, I am satisfied that it was necessary to deal with the issue of possible abatement of the purchase price and the availability of equitable remedies at the trial. Therefore, the plaintiffs should have the whole of their costs of the proceedings paid by the first defendant to be taxed. In making that observation, I do not overlook the fact that when the amendment was made on the second day of the trial, the usual order in relation to amendments was made directing that the first defendant should be entitled to its costs of the amendment and any costs thrown away by reason of the amendment and that order stands.
20 If the first defendant is in a position to identify any costs associated with the amendment which otherwise would not have been incurred for the proper disposition of the case, then it would be entitled to prepare a bill of costs and seek to have that bill taxed under the provisions of that earlier order. However, that is not a reason for depriving the plaintiffs of their costs of the action. Accordingly, I order that the first defendant pay the plaintiffs' costs of the claim and the counterclaim, including reserved costs and the costs of this summons to be taxed if not agreed.
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