Oxdragon Holdings Pty Ltd as Trustee for Intergrated Investment Fund v Daylesford Place Pty Ltd

[2018] WADC 51

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   OXDRAGON HOLDINGS PTY LTD as Trustee for INTERGRATED INVESTMENT FUND -v- DAYLESFORD PLACE PTY LTD [2018] WADC 51

CORAM:   PRINCIPAL REGISTRAR MELVILLE

HEARD:   13 DECEMBER 2017

DELIVERED          :   26 APRIL 2018

FILE NO/S:   CIV 1535 of 2017

BETWEEN:   OXDRAGON HOLDINGS PTY LTD as Trustee for INTERGRATED INVESTMENT FUND

Plaintiff

AND

DAYLESFORD PLACE PTY LTD

First Defendant

CRAIG SIMPSON TURNBULL

Second Defendant

Catchwords:

Summary judgment - Post judgment interest

Legislation:

Civil Judgments Enforcement Act 2004

Result:

Application for summary judgment successful
Judgment for the principle sum under the agreement with costs recoverable under the agreement to be assessed

Representation:

Counsel:

Plaintiff	:	Mr G Zagari
First Defendant	:	Mr M Mirzai
Second Defendant	:	Mr M Mirzai

Solicitors:

Plaintiff	:	Solomon Brothers
First Defendant	:	Rowe Bristol Lawyers
Second Defendant	:	Rowe Bristol Lawyers

Case(s) referred to in decision(s):

Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 5] [2009] WASC 141

Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 7] [2009] WASC 390

SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138

PRINCIPAL REGISTRAR MELVILLE:

The plaintiff commenced proceedings against the first defendant for breach of a written loan agreement pursuant to which the plaintiff lent the first defendant the sum of $80,000.  The second defendant stood guarantor for the first defendant's obligation under the contract.

The first defendant is alleged to have breached the contract by failing to repay the principle sum of $80,000 plus interest thereon calculated at 20% per annum within seven days of the due date of payment, being 12 months after the date of loan namely by 4 October 2016.

The plaintiff further alleges that the defendants are liable to pay its costs, constituted by fees and disbursements to Grand Legal in the sum of $1,441.55 and fees and disbursements to Solomon Brothers in the amount of $1,690.88.  Finally, the plaintiff alleges that the defendant is now liable to pay interest on these monies at 22% per annum to the date of judgment and post judgment interest at the rate of 22% per annum.

The plaintiff now brings an application for summary judgment on the basis that the defendants have no defence to the claim.  It has been said in SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 at [20]:

The power to order summary judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. It is only the clearest cases where there is a high degree of certainty about the ultimate outcome of the proceeding if it went to trial that summary judgment ought properly be granted.

The plaintiff seeks the following relevant orders:

(1)Judgment in the sum of $96,350.68.

(2)Payment of the plaintiff's costs including all costs, fees and expenses that have been incurred by the plaintiff incidental to arising out of the action or any of the matters in dispute in the action (the Costs).

(3)Liberty to apply in respect of the assessment of the costs.

(4)Interest on the judgment sum at the rate of 22% per annum from the 4 October 2016 to judgment.

(5)Post judgment interest at the rate of 22% per annum.

The defendants wrote to the court advising that they neither consented nor objected to the application.  However, at the hearing the defendants took issue with the amount of the proposed judgment sum, contending:

(a)the judgment sum should be $80,000 upon which interest should run;

(b)the summary judgment application in respect of the claim for Costs should be dismissed on the basis it is not demonstrated the Costs claimed relate to the Costs incurred by the plaintiff arising from the alleged breach or default of the defendant in the payment of monies or in performing its contractual obligations under the agreement; and

(c)that interest should run on the judgment of 6% rather than 22%, if it is to run at all.

The application for summary judgment was supported by the affidavit of Ms Eileen Lim who is the director of the plaintiff and authorised to make the affidavit on the plaintiff's behalf.  In her affidavit she annexed a copy of the loan agreement (the deed) dated 4 October 2015.

By cl 4 of the deed it is provided that the borrower shall repay the monies secured to the lender as per the manner mentioned in the schedule.

By cl 6 to the schedule, the repayment date was 12 months from the date of advance, the advance being defined in cl 3 of the schedule as 4 October 2015.

By cl 4 to the schedule, the interest rate was 20% for interest per annum and the 'default rate of interest, was 22% simple interest per annum'.

'Default interest' was defined in the deed to mean interest payable in the event the borrower is in default of the agreement.

By cl 5 to the schedule, it was provided that the borrower would pay the monies secured by no later than the repayment date and the term 'monies secured' was defined in the deed to be 'the aggregate or any part of the principal sum and interest and of other monies due to, or recoverable by, the lender under the terms of this deed or collateral security'.

In my view, on the proper construction of the deed it is clear that the first defendant was required to repay the sum of $80,000 with interest at 20% per annum, that is a total of $96,000, by 4 October 2016, an obligation that was breached.

Costs

By cl 6.2 of the deed, the first defendant agreed:

(a)to pay to the lender all the costs outgoing fees and expenses of the lender of an incidental to;

(i)the stamping and registration (if required by the lender) of this deed the collateral security and any release satisfaction or discharge;

(ii)any exercise or attempted exercise of the lenders powers; and

(iii)any breach of the borrowers covenants.

(b)to pay interest to the lender at the rate on all outstanding costs outgoings and expenses secured by this deed       and calculated from the date of demand for payment by the lender.

(c)to pay all duties payable under the duties act and all filing and registration fees (if any) in connection with this deed the collateral security any release satisfaction discharge and the moneys secured.

By cl 8.2, the defendant agreed to pay or reimburse the lender on demand all of the lenders costs and expenses in connection with the exercise or enforcement by the lender of any right under this agreement or at law or in equity in the preparation and service of any notice pursuant to this agreement or any Acts including in each case the lenders legal costs and expenses on a full indemnity basis.

At par 14 of her affidavit, Ms Lim deposes to having incurred legal costs in the sum of $1,441.55 with respect to work done by Grand Legal, which she opines, arises out of or in connection with the first and second defendants' breach of their obligations under the deed.  At par 15 she deposes to having incurred legal fees in the sum of $6,191.50 with respect to work done by Solomon Brothers, again work she opines arises out of and connection with the first and second defendants' breach of their obligations under the deed.  She goes on in par 15 to say that she has been informed by Solomon Brothers and believes that the plaintiff incurred a further $2,745.30 of legal costs which are not yet the subject of an invoice.  It is to be noted that these claims exceed the parameters of the claim circumscribed by the writ and statement of claim and accordingly are not recoverable as part of this summary judgement application.

However, in respect of the claims for $1,441.55 and $6,191.50 there needs to be evidence that even these amounts are amounts incurred in respect of the defendant's breach of the deed of which there is no evidence.  Ms Lim's opinion that they are is not conclusive of this fact.  Further, the plaintiff does not by its chambers summons seek this relief but has sought liberty to apply in respect of the assessment of these Costs.

Interest

The contractual provisions relating to interest are found at cl 8.3.  It provides that as follows:

(a)if the borrower fails to pay to the lender any monies payable under this agreement within seven (7) days from the due date for payment the borrower must pay interest on that money at the default rate from when that money was due for payment until paid calculated on daily balances; and

(b)the borrower must pay interest at the default rate upon any judgment the lender may obtain against the borrower from and including the date of judgment until the same is satisfied.

On the evidence before me it is clear that the first defendant has failed to pay the principle and interest at 20% thereon by the due date.  It is also clear that the first defendant has failed to pay that money within the seven days of the due date and accordingly the contractual provisions provide that interest run at 22% on the monies owing to the plaintiff on the due date, namely 4 October 2016 and on any judgment sum awarded.

Whilst I am satisfied the plaintiff has incurred costs and expenses as prescribed in cl 6.2 and cl 8.2, there is insufficient before me at the moment to quantify or assess that amount.  This gives rise to a triable issue and needs to be set down for an assessment of damages.  In this regard it is observed that in ClambakePty Ltd v Tipperary Projects Pty Ltd [No 5] [2009] WASC 141 [16] – [17] the Supreme Court directed the contractual costs part of the claim be referred to a Registrar of the Supreme Court for the purposes of conducting an enquiry and making a report to the court of the amount which it would be proper to allow as the costs chargeable by the plaintiff's solicitors and counsel for their professional services, charges and expenses.

However, the legally qualified Registrars of the District Court have all the powers and authorities of both the Master and the Registrars of the Supreme Court by virtue of District Court of Western Australia Act 1969, s 53.

In those circumstances it is artificial to require one registrar of this court to enquire into and to prepare a report to the court for another registrar of this court to use in the assessment of damages.  The assessment should be done by a registrar of this court.

Further, the plaintiff is entitled to interest to run on those amounts at 22% per annum.  The plaintiff's entitlement to interest at that rate is found in Civil Judgments Enforcement Act 2004, s 8 and Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 7] [2009] WASC 390 [110], where it was said:

Obviously enough, s 8(1)(b) of the Civil Judgments Enforcement Act allows the court to direct that a rate of interest other than the statutory rate (whether higher or lower) should apply to the unpaid amount of a judgment.  However, that does not derogate in any way from the established principle that a contractual right to interest will merge in the judgment unless the contract specifically provides for the different rate of interest to prevail even after the entry of judgment.  In that exceptional case there will be grounds, namely the contractual obligations, to provide for the higher rate of interest, in displacement of the statutory rate, because of the specific agreement of the parties.  In the absence of such an agreement there is no reason why the doctrine of merger should not take effect and so exclude any entitlement other than the statutory rate of interest from then on.

Accordingly, the order should be:

(1)Judgment for the plaintiff against the defendants in the sum of $96,000 with interest thereon at the rate of 22% from 4 October 2016;

(2)Interest to run on the sum of $96,000 from the date of judgment at the rate of 22% per annum.

(3)The defendants pay the plaintiff's cost, outgoing, fees and expenses of and incidental to the first defendant's failure to pay the money secured by 4 October 2016 that have been properly incurred by the plaintiff, to be assessed.

(4)There be liberty to apply in respect to the assessment of the costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

JC
REGISTRAR'S ASSOCIATE

24 APRIL 2018