Pedashenko v Blacktown City Council
[2000] NSWSC 152
•3 March 2000
CITATION: Pedashenko v Blacktown City Council [2000] NSWSC 152 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 5466 of 1992 HEARING DATE(S): 3 March 2000 JUDGMENT DATE: 3 March 2000 PARTIES :
Dimitry Pedashenko (First Plaintiff)
Margaret Veronica Pedashenko (Second Plaintiff)
Zinaida Pedashenko (Third Plaintiff)
Blacktown City Council (Defendant)JUDGMENT OF: Windeyer J at 1
LOWER COURT
JURISDICTION :Supreme Court (Master) LOWER COURT
FILE NUMBER(S) :LOWER COURT
JUDICIAL OFFICER :Acting Master Berecry
COUNSEL : Mr. B Coles, QC (Plaintiffs/Respondents)
Mr G. Sirtes (Defendant/Appellant)SOLICITORS: Pike Pike & Fenwick (Plaintiffs/Respondents)
Taylor Kelso (Defendant/AppellantCATCHWORDS: APPEAL FROM MASTER - inquiry to determine adjustments necessary after re-transfer of land so as to put parties so far as possible in position before transfer - failure to allow interest on purchase price paid - adjustment required for this but counter adjustment ordered for interest on rents received prior to transfer CASES CITED: Maguire v Makaronis (1997) 144 ALR 729 DECISION: See paragraph 6
4IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISIONWINDEYER J
FRIDAY 3 MARCH 2000
5466/92 DIMITRY PEDASHENKO & ORS v BLACKTOWN CITY COUNCIL
JUDGMENT
1 HIS HONOUR: This matter comes to me by way of appeal from a certificate of Acting Master Berecry pursuant to an enquiry ordered to be made by Hodgson J on 3 March 1996, the intention of the enquiry being, by way of re-transfer of land and money adjustments between the parties, to put them back so far as possible in the position in which they would have been had the land, the subject of the proceedings, not been sold by the plaintiff to the defendant, Blacktown City Council.
2 The Master issued his certificate on 22 October 1999 showing adjustment between the parties which would require an amount of $108,133.14 to be paid by the defendant Council to the plaintiffs.
3 The appeal is against the failure of the Master to allow interest on the sale price of $95,000 paid by the Council to the plaintiffs/vendors in 1986.
4 The Master gave reasons for his rejection of that claim in paragraphs 23 and 24 of his judgment. Shortly put, he said that the Court rate of interest was not appropriate; there was no agreed rate and that a defaulting fiduciary should not profit from that relationship by misusing the position.
5 In my view, this decision amounted to an error of law because what the Court was required to do was to put the parties back so far as was possible in the position in which they would have been had the impugned transaction not taken place. In general terms therefore the vendor, who receives a purchase price for land which by order is reconveyed to that vendor, should pay interest on the moneys which he has had from the time of the original transfer until the time of re-conveyance. That accords with the principle determined by the High Court in Maguire v Makaronis (1997) 144 ALR 729.
6 It follows that the appeal should be allowed and that an order should be made that the defendant be credited interest on the sum of $95,000 from the time it was paid either to the date of Master's certificate or to the present time, a matter which can be determined in a few minutes.
7 While that disposes of the appeal, it does not in my view dispose of all matters which are required to be disposed of before judgment can be entered on the Master's certificate. The reason for that is that the defendant Council received rent from certain improvements erected on the subject land, the amount of that rent being shown in items 9 and 11 of the Master's certificate. The reasons for not granting interest on items 10 and 12 have been referred to in the Master's judgment. However, there is no basis for not allowing interest on items 9 and 11. Thus, as against that claim for interest on rents there should be an allowance to the Council for interest on the amounts of rates and other outgoings paid on those two properties for the relevant period, those being shown in the Master's certificate as items 2 and 3 in the sums due to the defendant. Item 2 can conveniently be deducted from item 9 and item 3 can conveniently be deducted from item 11 which would bring about a net figure on which interest ought to be calculated.
8 It is not appropriate that Court rates of interest should be applied. I consider that a rate of eight percent is an appropriate rate to be applied to all the amounts which are the subject of this adjustment and nothing has been put to me against that figure.
ORDERS
9 HIS HONOUR: As a result of my decision and agreements between the parties, the following orders should be made:
10 Order that the certificate of the Master be varied as follows:
1. By making an allowance for interest on the rent received by the defendant calculated on the basis of one half of the net rent for 13 years at 8%, $34,000.2. By increasing the sum allowed for legal costs to $1,561 bringing about an increase of $850.
3. By allowing interest on the sale price of $95,000 at 8% for 13 years, $98,800.
11 The adjustment in favour of the plaintiff, leaving aside the item of $850 for costs, amounts to $285,933.40.
12 The adjustment in favour of the defendant amounts to $242,600.
13 The balance in favour of the plaintiffs without the increase in the costs figure amounts to $43,333.
14 It is agreed that interest on that amount should be allowed at 10% for four months being $1,444 brining the adjusted amount to $44,777. To that amount should be added the figure for costs but as that is something which arose from today's proceedings I do not think any interest should be allowed for that figure and therefore the amount for which judgment ought to be entered in favour of the plaintiffs against the defendant is $45,627.
15 I order judgment for the plaintiffs against the defendant for $45,627 on the certificate as amended.
DISCUSSION AS TO COSTS
16 HIS HONOUR: So far as costs are concerned, treating this matter as an appeal, the appellant has succeeded on the one issue raised on the notice of appeal and would therefore, in normal circumstances, be entitled to costs.
17 The plaintiffs/respondents have obtained some benefits as a result of the matter being treated in the way in which the parties agreed it should be treated but really to some extent that is an indulgence they have obtained as there was no notice of contention or any suggestion of cross-appeal.
18 In those circumstances it seems to me that it is appropriate that the appellant obtain the costs of the appeal but that the defendant be granted a certificate under the Suitors' Fund Act if eligible.
19 Order the appeal be upheld.
20 Order the plaintiff respondents to pay appellant's costs of the appeal.
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