Patterson v Humfrey [No 2]

[2016] WASC 343

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   PATTERSON -v- HUMFREY [No 2] [2016] WASC 343

CORAM:   LE MIERE J

HEARD:   19 OCTOBER 2016

DELIVERED          :   28 OCTOBER 2016

FILE NO/S:   COR 134 of 2013

MATTER                :Skybow Holdings Pty Ltd

Section 232 and 233 of the Corporations Act

BETWEEN:   CRAIG PATTERSON

First Plaintiff

LYNDA PATTERSON
Second Plaintiff

RODALE NOMINEES PTY LTD
Third Plaintiff

AND

BARRY HUMFREY
First Defendant

MARY HUMFREY
Second Defendant

KENESTA PTY LTD
Third Defendant

Catchwords:

Practice and procedure - Liberty to apply - Scope of liberty to apply - Principles relevant to liberty to apply - Whether order sought is within liberty to apply - Order made - Turns on own facts

Equity - Set off - Whether court can order debt owed by plaintiff to defendant can be set off against costs judgment owed by defendant to plaintiff - Appropriateness of order - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Order sought by plaintiffs should be made

Category:    B

Representation:

Counsel:

First Plaintiff                :     Mr M L Bennett & Mr D Banda

Second Plaintiff            :     Mr M L Bennett & Mr D Banda

Third Plaintiff               :     Mr M L Bennett & Mr D Banda

First Defendant             :     Mr C S Williams

Second Defendant         :     Mr C S Williams

Third Defendant           :     Mr C S Williams

Solicitors:

First Plaintiff                :     Bennett + Co

Second Plaintiff            :     Bennett + Co

Third Plaintiff               :     Bennett + Co

First Defendant             :     Solomon Brothers

Second Defendant         :     Solomon Brothers

Third Defendant           :     Solomon Brothers

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

Abigroup Ltd v Abignano [1992] FCA 567; (1992) 39 FCR 74

Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201

Cameron v Renouf [2008] WASC 60

Corbett v Nguyen [No 2] [2012] NSWSC 673

Cristel v Cristel (1951) 2 KB 725

El‑Saeidy v NSW Land & Housing Corporation [No 8] [2014] NSWSC 191

Mainteck Services Pty Ltd v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165

Patterson v Humfrey [2014] WASC 446

Wilden Pty Ltd v Green [2009] WASCA 38 (S)

Wilden Pty Ltd v Green [No 2] [2012] WASCA 34

LE MIERE J: 

Summary

1. On 28 November 2014 I delivered reasons for judgment in which I found that the conduct of the affairs of Skybow Pty Ltd by the first defendant, Mr Humfrey, and the third defendant Kenesta Pty Ltd, was oppressive to, unfairly prejudicial to and unfairly discriminatory against the plaintiffs in their capacity as members of Skybow:  Patterson v Humfrey [2014] WASC 446. I found that the court had power to make an order under Corporations Act 2001 (Cth) and that the appropriate relief was that either the plaintiffs or the defendants buy out the shares held by the other in Skybow. I determined that it was appropriate that the defendants acquire the plaintiffs' shares rather than the plaintiffs acquire the defendants' shares and that if the defendants fail to buy the plaintiffs' shares then the plaintiffs should buy out the defendants. I held that the price of the buy back of the shares should be fixed by the court after an inquiry into their value and making a number of adjustments in respect of loans outstanding from Kenesta to Skybow, amounts relating to the Abrolhos venture and the back beach development which Mr Humfrey caused Skybow to pay and other payments Mr Humfrey caused to be made by Skybow which were not authorised and were not for the purposes of Skybow.

2. On 23 December 2014 I made orders to give effect to my reasons for judgment.  The orders provided that the defendants have an option to purchase the shares issued by Skybow to the plaintiffs and further orders were to apply if the defendants did not purchase the plaintiffs' shares.  The defendants did not give exercise their option to purchase the plaintiffs' shares.  Accordingly, the plaintiffs have an option to purchase the defendants' shares.  The plaintiffs have exercised that option.

3. The settlement of the purchase by the plaintiffs of the defendants' shares is due to take place on 4 November 2016.  The plaintiffs have applied for costs orders in their favour.  The defendants concede that the plaintiffs will be awarded their costs of the proceedings subject to contentions that the defendants will advance as to specific issues and the precise costs orders to be made.

4. The plaintiffs now seek an order that pending assessment of the plaintiffs' costs that part of the purchase price payable by the plaintiffs at settlement of their purchase of the defendants' shares in Skybow as comprises cash be paid by the plaintiffs into an interest bearing escrow account or into court and held pending further order of the court.

5. The defendants oppose the order on three grounds.  First, the defendants say the court does not have power to make the order sought.  The defendants say that the court has made final orders and is functus officio except to the extent that it has reserved the question of costs and granted liberty to apply.  The defendants say that the order sought by the plaintiff does not fall within the reservation of liberty to apply and hence the court is functus officio and does not have power to make the order.  Secondly, the defendants say that the order sought is in effect an order for security for the plaintiffs' costs and the court does not have power, or if it does have power it would not properly exercise the power, to make orders for security for costs in favour of a plaintiff.  Thirdly, the defendants say that if the court does have power to make the order sought it should not do so because it is unnecessary and inappropriate.

6. For the reasons which follow the order sought by the plaintiffs should be made.

Main orders

1. The orders relevant to the plaintiffs purchasing the defendants' shares, costs and liberty to apply made on 23 December 2014 are as follows:

   17If the defendants do not purchase the plaintiffs' shares, the plaintiffs shall have the option to purchase the shares issued by Skybow Holdings Pty Ltd to the defendants within 28 days from the defendants' failure to purchase.

   18The plaintiffs shall be entitled at settlement to set off against the Purchase Price to be paid to the defendants:

   18.1The amounts the Court has determined to be treated as loans together with interest up unit [sic] 28 November 2014 owing by Kenesta Pty Ltd to Skybow Holdings Pty Ltd pursuant to order 6 above; and

   18.250% of the interest accruing at the Interest Rate from 29 November 2014 in respect of the loans that attract interest pursuant to order 6 above until the date of settlement.

   (together 'Set Off Purchase Price')

   If such entitlement is exercised then neither the plaintiff nor Skybow Holdings Pty Ltd shall have any claim against the defendants in respect of those amounts.

   19The purchase of the defendants' shares shall be completed within 28 days of the date the defendants' failure to purchase the plaintiffs' shares.

   20The settlement shall occur at a venue and time to be agreed between the parties.

   21Failing agreement between the parties, settlement shall occur at the offices for the plaintiffs' solicitors at 11am on the 28^th day following the date of the defendants' failure to purchase the plaintiffs' shares.

   22In consideration for payment in cleared funds by the plaintiff of the Set Off Purchase Price, the defendants shall provide to the plaintiffs duly authorised and executed transfers of their shares in Skybow Holdings Pty Ltd free of any encumbrance or charge and a duly executed notice of resignation of Mr Humfrey as a director of Skybow Holdings Pty Ltd.

   Costs

   23The costs of the action be reserved.

   Liberty to Apply

   24The parties have liberty to apply for further or other directions to give the effect to these orders as may be appropriate.

   25Any such application is to be made in Chambers on 2 business days' notice.

Power to make orders pursuant to liberty to apply

1. A court is functus officio where it has discharged all its judicial functions in a case and is precluded from further considering the case.  Once a court has made final orders, its function is discharged and it has no authority to further consider the case.

2. The circumstances or the nature of a judgment or order often render necessary subsequent applications to the court for assistance in working out the rights declared.  Where the need for subsequent application to the court is foreseen it is usual to insert in a final judgment words expressly reserving liberty to any party to apply to the court.  The judgment is not thereby rendered any less final.

3. In Cristel v Cristel (1951) 2 KB 725 Somervell LJ said:

   Prima facie, 'liberty to apply' is expressed very often ‑ and, if it is not expressed, it will be implied - where the order that is drawn up requires working out and the working out involves matters on which it may be necessary to get the decision of the court.  Prima facie, certainly, it does not entitle people to come back and ask that the order itself shall be varied.

   The phrase 'working out the judgment' can be found in many cases.

4. In Abigroup Ltd v Abignano [1992] FCA 567; (1992) 39 FCR 74 Lockhart, Morling and Gummow JJ said:

   The reservation of liberty to all parties to apply to a court is a provision directed essentially to questions of machinery which may arise from the implementation of a court's orders. They include cases where a court may need to supervise the enforcement of orders after they have been made … orders of this kind relate to enforcement and not to statements of the rights of the parties. Historically orders reserving liberty to apply are for limited purposes. They arise, for example, upon a decree for specific performance where the unsuccessful defendant declines to sign all documents and do whatever is necessary to ensure that the contract the subject of the suit is performed. The reservation of liberty to apply ensures that the court may then make orders to secure that the relevant contract is enforced by the defendant by, for example, appointing the appropriate officer of the court to execute the necessary documents of conveyance so as to give title to the successful plaintiff. Historically the reservation by the Court of Chancery of further consideration of a decree was intended to cover the circumstance where following the pronouncement of the decree (a final decree) a further hearing was necessary for the court to deal with some outstanding issue sometimes requiring taking further evidence and making further declarations or orders. But this did not detract from the initial orders as being final orders. Rather it was a mechanism designed by the Court of Chancery to obviate the necessity of a further suit being instituted to deal with matters that were essentially consequential upon the making of the initial final decree. This demonstrates that there is no inconsistency between the making of final decrees, judgments or orders or declarations and subsequent orders of the court. It all depends upon the circumstances of the case and the particular orders or decrees formulated by the court …(88) [55].

5. In Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201 (Australian Hardboards) an order had been made for the specific performance of a deed and for the first defendant to pay to the plaintiff the deposit to the extent it had not yet been paid.  An order was made reserving liberty to apply to the court for the purpose of dealing with a matter involved in or arising in the course of working out the order.  The plaintiff sought further orders purportedly pursuant to the liberty to apply on the basis that none of the deposit had been paid.  The application was opposed on the basis that the orders sought were outside the scope of the liberty to apply and the orders raised new issues not before the trial judge but known to the party at the time of the hearing.  It was contended that the application was an attempt to reopen a matter that had already been finally determined by the court, namely, the existence of the obligation to pay the deposit.  Campbell JA described the power in orthodox terms, that is to say, as enabling further orders to be made for the purpose of working out the order granting the principal relief already pronounced.  But his Honour went on to opine that there was no difficulty in exercising the liberty to apply for the purpose of dealing with facts that have arisen only since the original order was made:

   There is no difficulty about exercising a liberty to apply for the purpose of dealing with facts that have arisen only since the original order was made.  Mahoney JA, in Wentworth v Woollahra Municipal Council (unreported, NSWCA, 31 March 1983) at 5 expressly so recognised, saying:

   'In some cases, orders have been made which alter the effect of an existing order because of facts which were not before the court which made the original order.  It may be that such a supplemental order can be made because of facts which had occurred before the making of the original order but were not brought to the court's attention:  see in Re Scowby; Scowby v Scowby [1897] 1 Ch 741. It has been held that supplemental orders can be made because of facts occurring after the making of the original order: Bailey v Marinoff (1971) 125 CLR 529 at p 540, per Gibbs J; see also Ford-Hunt v Raghbir Singh (1973) 1 WLR 738; Northern Counties Securities Ltd v Jackson & Steeple Ltd (1974) 1 WLR 1133 at 1138; cf Easton v Brown (1981) 3 All ER 278 at 284(e). This jurisdiction has been long recognised in the practice books: Seton on Judgments and Orders (1912) p 126, 816; Daniell's Chancery Practice (8th edition) p 710, 1139. See also the Annual Practice (1982), Notes to Order 20, r 11/5; Halsbury's Laws of England 4th Edition, Volume 37, par 329(n). There has been no finally authoritative examination of the nature of the supplemental orders which can be made.'

   One example is that it is possible for an order for specific performance to be discharged by the court, by reason of events occurring after the order was made:  JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600 at 603‑604 per Hope JA. Melliday v McMahon (para [57] above) provides another example of the principle that events after the original order can be the subject of an application made on liberty to apply.  In accordance with that principle, in a situation where it had been declared that a particular mortgage document ought be rectified to include land other than that stated on its face, and there had been an order for a particular conveyancing procedure to be carried out to enable the mortgagee to obtain rights in accordance with the mortgage as rectified, and it then eventuated that that conveyancing procedure was not able to be carried out, it was held to be within the scope of liberty to apply for the court to order a different means by which the mortgagee can obtain rights in accordance with the mortgage as rectified:  Kyabram Property Investments Pty Ltd v Murray [2006] NSWSC 54. In the extracts from Riltang and Fylas quoted at [53] and [54] above, the various types of remedy that White J and McPherson SPJ listed as being obtainable under liberty to apply would frequently involve, in a way crucial to the availability of the remedy, proof of facts that had arisen since the making of the original order [58] ‑ [59].

   His Honour said that liberty to apply is not confined to 'pure matters of machinery':

   Under the present procedures of the Court, there is no need for applications under liberty to apply to be confined to pure matters of machinery, or to be made in a summary way.  Bonnici & Anor v Ku‑ring‑gai Municipal Council [2001] NSWSC 1124 is an example of an application that occupied 14 hearing days being brought pursuant to liberty to apply. Orders had been made on 11 November 1986, and entered on 6 February 1987, restraining the defendant from, in broad terms, permitting or causing the flow of water from a certain street and footpath onto the plaintiff's land so as to create a nuisance, ordering the defendant to carry out a particular scheme of abatement work, and reserving liberty to apply (para [38], [45]). Although that abatement work was carried out, the plaintiffs asserted that it had not prevented the water nuisance from continuing. The plaintiffs filed an application seeking:

   '… a declaration that there was a continuing nuisance, an order that the defendant cease to cause that nuisance, an order for specified new drainage work to be carried out in the street, a declaration that water flowing in and over the drainage line situated on uphill neighbouring properties was causing a nuisance, an order that the defendant cease to use that line and install a new line directing water on those properties to the rear of the properties, and an order for a retaining wall as specified to be built on the boundary of number 46 and 48. The document also included a claim for special and general damages' [64].

   His Honour went on to refer to the contemporary ambit of liberty to apply and continued:

   Some aspects of the passage from Abigroup v Abignano, quoted at [51] above, require comment in this respect. First, the remarks were made in the context of a dispute about the validity of a bankruptcy notice, where the dispute turned on whether a particular judgment that ordered payment of money, but also reserved liberty to apply, was a final order. Thus, the context did not call for their Honours to give an exhaustive exposition of what was involved in liberty to apply, only to decide that a reservation of liberty to apply could be made in a final order. Second, there is some ambiguity in what is meant by 'questions of machinery which may arise from the implementation of a court’s orders.' Previous decisions about the circumstances in which liberty to apply can be used show that they involve 'machinery' in the sense of choosing the means by which the order is to be carried out, but they are not necessarily restricted to 'machinery' in the sense of implementing a set of ready-made procedures, such as the court's enforcement procedures by execution, garnishee, or orders for substituted performance. Third, the statement that orders granting liberty to apply 'relate to enforcement and not to statements of the rights of the parties' needs to be understood bearing in mind that there is not a dichotomy between enforcing an order, and stating or deciding rights of the parties. Sometimes, enforcement of a specific performance decree will involve determining rights of the parties. It seems to me as though the statement I have just quoted from Abigroup needs to be understood as saying that, if deciding or stating a right of the parties is not part of enforcement of the order, then it cannot be done under liberty to apply [71].

6. In Cameron v Renouf [2008] WASC 60, Newnes J noted that in determining the ambit of a reservation of liberty to apply, it was necessary to have regard to the nature of the final orders made in the action. His Honour quoted from the decision of the Court of Appeal of New South Wales in Australian Hardboards that:

   … what can be done under a reservation of liberty to apply depends on what needs to be done, in the particular case, to work out the particular orders that have been made. If an order is one the working out of which of its nature involves deciding complex questions, or questions that were not specifically raised at the time that the order was made, those questions can be raised and decided in the original suit pursuant to liberty to apply [56].

   Newnes J observed that in Australian Hardboards:

   The Court of Appeal noted ([64]) that applications under a reservation of liberty to apply are not necessarily limited to pure matters of machinery or matters that can be disposed of in a summary way. The court also pointed out that a reservation of liberty to apply must be understood in the context of contemporary practices and procedures of the court and (in NSW) by reference to s 56 of the Civil Procedure Act 2005 (NSW), the latter being to a similar effect to O 1 r 4B of the Rules of the Supreme Court 1971 (WA), namely, that the processes and procedures of the court are to be conducted so as best to ensure the just, efficient and timely determination of litigation at a cost affordable to the parties. In my respectful view, the same approach is to be taken to liberty to apply in this jurisdiction [32].

1. In Cameron v Renouf the trial judge had ordered that the defendant do all acts and things required to cause the property to be registered in the name of the plaintiffs.  The defendant sought an order that the obligation to do all things necessary to cause the property to be registered in the name of the plaintiff did not include payment of the outstanding rates and taxes or procuring the discharge of any encumbrances against the certificate of title in respect of rates and taxes.  Newnes J concluded:

   The essential position is that the order for the principal relief requires Ms Renouf to transfer the Mullaloo property to the Camerons. In practical terms, effect cannot be given to that order while the rates and taxes remain outstanding. It is clear that the rates and taxes will not be paid until the liability for them, as between the parties, has been determined. In order to give effect to the principal relief, it is therefore necessary that that issue of liability be determined. I am satisfied that the determination of it falls within the reservation of liberty to apply, albeit the precise nature of the relief that should be granted upon its determination is a matter that may require further consideration [36].

2. In Wilden Pty Ltd v Green [2009] WASCA 38 (S) the Court of Appeal made certain orders following trial. By orders 5 to 10 the court ordered certain amounts be paid to the respondents for the repurchase of their units and other amounts. Order 11 provided that payment of any amount payable by any of the appellants to any of the respondents be stayed until the appellants' costs of the appeal and of the action had been taxed or agreed and the taxed or agreed costs set off against any amount payable to any respondent so that only the balance (if any) after such set off would be payable. Order 13 was a costs order in favour of the respondents. Order 17 was that there be liberty to apply generally. The respondents, pursuant to their liberty to apply, applied for an order that payment by the respondents of the costs ordered to be paid pursuant to order 13 be stayed until the amounts payable in accordance with orders 5 to 10 were ascertained. In a joint judgment McLure P, Pullin and Newnes JJA held:

   The net sum is payable to the relevant person(s) within 10 days from the date of its determination under order 8 [9].

   The court made the order sought:  Wilden Pty Ltd v Green [No 2] [2012] WASCA 34.

3. Five relevant principles may be discerned from the authorities to which I have referred.  First, liberty to apply is a judicial device which enables the court to supplement the main orders.  Secondly, main orders may be supplemented but not to vary or change the nature or substance of the main orders.  Thirdly, what amounts to a variation or impermissible change depends on the context of the individual case.  What amounts to an order which supplements the main orders can only be appreciated in the context of the individual case.  What appears in form to be a further order to give effect to the original order in one case may appear as a variation in a different context.  Fourthly, the court may determine any unresolved rights that flow from the making of the main orders.  Fifthly, the court may make consequential orders when new facts and circumstances emerge after the making of the main orders.

Order sought is within liberty to apply

1. The orders I made on 23 December 2014 were to give effect to my decision that the defendants should have the option of purchasing the plaintiffs' shares and if they did not exercise the option then the plaintiffs should have the option of purchasing the defendants' shares.  I ordered that the purchase price should be determined after an inquiry and adjustments should be made in accordance with my reasons for judgment.  I reserved the question of costs.  At the time the orders were made neither the court nor the parties knew whether the defendants would exercise their option to purchase the plaintiffs' shares or the plaintiffs would exercise an option to purchase the defendants' shares or neither group of parties would purchase the shares of the other.  It was not known what the value of the shares would be determined to be and what the purchase price, after adjustments, would be.  It was not known whether the defendants would be required to pay the plaintiffs' costs of the action or of the subsequent inquiry.  It was not known, if the plaintiffs exercised an option to purchase the defendants' shares, what if any amount they would be required to pay in cash after the adjustments had been made.

2. It is now known that the plaintiffs will purchase the defendants' shares for $249,726, after the relevant adjustments have been made.  It is now conceded by the defendants that they will be ordered to pay the plaintiffs' costs although the defendants say not all of the plaintiffs' costs.  Whatever costs orders are subsequently made the defendants will be required to pay a substantial amount of costs.  In those circumstances the order now sought by the plaintiffs falls within the reservation of liberty to apply.  The order sought by the plaintiffs supplements the main orders, which relevantly provide, in the circumstances that have transpired, for the plaintiffs to purchase the defendants' shares, for the plaintiffs to pay an amount at settlement and for costs orders, which will involve an order that the defendant pay substantial costs to the plaintiffs, to be made.

3. The defendants submit that the order sought by the plaintiffs is directly inconsistent with and therefore an impermissible variation of the main orders made on 23 December 2014.  In particular, the defendants say that order 22 requires at settlement that the plaintiffs pay to the defendants the Set Off Purchase Price in return for an executed transfer of their shares.  The Set Off Purchase Price is defined to be the Purchase Price, that is 50% of the value of the shares issued by Skybow, less the adjusted amounts in accordance with the court's original reasons.  Order 22 provides that the defendants shall provide executed transfers of their shares 'in consideration for payment in cleared funds by the plaintiff of the Set Off Purchase Price'.  The order does not expressly provide that the plaintiffs are to pay that amount to the defendants nor that the defendants are to be immediately entitled to receive and deal with the Set Off Purchase Price.  The thrust of the order is to provide for the amount that the plaintiffs are to pay for the defendants' shares.  The order sought by the plaintiffs is a supplementary or consequential order, not an impermissible variation of order 22, to provide, in effect, that at settlement the plaintiffs are to pay the purchase price, which has now been ascertained, into an escrow account or into court pending the assessment of costs and the final determination of amounts due by the defendants to the plaintiffs for costs.

Order is not security for costs

1. The defendants say that the order sought by the plaintiffs effectively is for the defendants to provide security for the plaintiffs costs of the proceedings and it is not appropriate for the plaintiffs to obtain security for their costs of the proceedings.  The defendants submit that the plaintiffs chose to sue and in doing so they made the choice which exposed them to the risk of not being able to realise a costs order made in their favour and in those circumstances it is not appropriate for them to be provided with any security for their costs.

2. I do not accept that argument.  The court has power to set off the costs in favour of the plaintiffs against the purchase price payable by the plaintiffs to the defendants for the purchase of the Skybow shares.  In Corbett v Nguyen [No 2] [2012] NSWSC 673 Windeyer AJ said:

   The final claim of the defendants is that the costs judgment should be set off against the judgment in favour of the plaintiff of $24,281.26.  I consider the general equitable principles of set off allow such an order.  The case generally relied upon to support such orders was decided in 1772 namely Thrustout d Barnes v Crafter (1772) 2 Wm Bl 826; 96 ER 487 but the general principle was followed in Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 when in an appeal on a claim for specific performance which succeeded an order was made that the costs of the trial and appeal be set off against the purchase price payable under the contract. I consider the order sought should be made [13].

   Windeyer AJ's statement of principle was affirmed by Sackar J in Mainteck Services Pty Ltd v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165 and applied by Harrison AsJ in El‑Saeidy v NSW Land & Housing Corporation [No 8] [2014] NSWSC 191.

3. The court has power to order that the costs payable by the defendants to the plaintiffs be set off against the part of the purchase price for the defendants' shares payable by the plaintiffs in cash at settlement and to order that pending the assessment of the plaintiffs' costs the purchase price payable in cash by the plaintiffs at settlement be paid into an interest bearing escrow account or into court and held pending further order of the court.

Order is appropriate

1. The plaintiffs were forced to bring proceedings against the defendants because of the oppressive, unfairly prejudicial and unfairly discriminatory conduct of the defendants including misappropriating funds of Skybow by causing Skybow to make payments which were not authorised, were not for the purposes of Skybow and were for the benefit of the defendants.  The plaintiffs have previously agreed to sell their shares to the defendants but the defendants were unable to or failed to complete the transaction.  The defendants submitted at trial that they should have the option to purchase the plaintiffs' shares notwithstanding that they failed to establish that they had the means to do so and subsequently did not exercise the option to purchase the plaintiffs' shares.

2. It would be an injustice to the plaintiffs if they are required to pay $249,726 to the defendants to purchase their shares at settlement and were subsequently forced to take enforcement proceedings to recover from the defendants the costs ordered in the plaintiff's favour in circumstances where the court has power to order that the costs which will be awarded in the plaintiffs' favour be set off against the cash purchase price.  The appropriate order is that pending assessment of the plaintiffs' costs that part of the purchase price payable by the plaintiffs in cash at settlement be paid by the plaintiffs into an interest bearing escrow account or into court and held pending further order of the court.