Re Adaz Nominees Pty Ltd (No 4) - [2017] VSC 755

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2015 00385

IN THE MATTER of ADAZ NOMINEES PTY LTD

ADAZ NOMINEES PTY LTD (ACN 006 228 119) as trustee for The Rado No 2 Trust	Plaintiffs
v
CASTLEWAY PTY LTD (ACN 131870 481) as trustee for The Castleway Trust	Defendants

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 December 2017
DATE OF JUDGMENT:	11 December 2017
CASE MAY BE CITED AS:	Re Adaz Nominees Pty Ltd (No 4)
MEDIUM NEUTRAL CITATION:	[2017] VSC 755

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PRACTICE AND PROCEDURE – Appointment of a special referee – Whether any issues remaining for determination after the substantive hearing are appropriate to be referred to a special referee for an opinion – Further reasons for guidance of the special referee – Whether matters have already been determined.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R M Garratt QC	Maddocks
For the Defendants	Mr S Horgan QC with Mr B Mason	Kyriacou Lawyers

HIS HONOUR:

On 5 October 2017, I delivered judgment in this matter on issues of liability.[1] The dispute between the parties resolved around the entitlements of the first defendant, Castleway under the property development services agreement (PDSA). In my judgment I characterised the agreement as a profit sharing agreement between the defendants and the plaintiffs, in the conduct of the plaintiffs’ property development business.
[1]Re Adaz Nominees Pty Ltd (No 2) [2017] VSC 578 (5 October 2017) (my judgment).

The parties initially asked me to resolve certain questions of construction of the PDSA. It was said by both parties that if I did so they were confident that they would be able to resolve the outstanding issues between them and if they could not agree, the matters would be referred out to a special referee for quantification.

The parties agree that at this stage of the proceeding the matter should go to a special referee, an accountant, who would give an opinion on accounting issues of quantum. The parties have agreed on Mr Greg Meredith of Ferrier Hodgson as the special referee. The proposed order dated 7 December 2017, prepared by the defendants, provides for Mr Meredith to indicate his acceptance of his nomination within seven days of the order being made.

Essentially, the matter for the opinion of the special referee would be whether certain expenses incurred by the plaintiffs, were incurred in the normal course of business, and thus should be taken into account in calculating the defendant’s service fee under the PDSA.

At my direction, the defendants prepared a ‘Scott schedule’, which they provided to the plaintiffs for their response, identifying the different positions of the parties on the issues to be referred to the special referee. The schedule is proposed to be an annexure to the order referring the matter to the special referee.

The Scott schedule identifies 13 categories of expense that the accountant will be called on to address. The defendants submit that it…

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.

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Details

Case: [2017] VSC 755
Decision Date: 11 December 2017

CaseChat Overview and Summary

The case of Re Adaz Nominees Pty Ltd (No 4) involved a dispute that was heard by the Supreme Court of New South Wales. The matter pertained to the appointment of a special referee to provide an opinion on certain issues remaining after the substantive hearing in a complex case involving Adaz Nominees Pty Ltd. The court was asked to determine whether it was appropriate to refer any unresolved issues to a special referee and, if so, what matters should be included in the terms of reference for the referee.

The primary legal issue before the court was whether any issues remained that could be appropriately referred to a special referee for an opinion, given that the substantive hearing had already been conducted. Additionally, the court needed to decide if providing further reasons to guide the special referee was necessary and whether certain matters had already been conclusively determined by the court.

In its judgment, the court held that while the substantive hearing had resolved many of the issues in the case, there were still some matters that could benefit from the expertise of a special referee. The court reasoned that these unresolved issues, particularly those requiring detailed factual or expert analysis, were suitable for referral. The court also determined that providing further reasons to guide the referee was appropriate to ensure clarity and precision in the referee's task. Furthermore, the court clarified that certain matters had indeed been decided in the substantive hearing and should not be reconsidered by the referee.

As a result, the court ordered that a special referee be appointed to address the remaining issues. The court provided detailed terms of reference for the referee, outlining the specific issues to be examined and the scope of the inquiry. These orders aimed to ensure that the referee's opinion would be focused and directed towards resolving the outstanding matters in the case.

Orders