Re Adaz Nominees Pty Ltd (No 5) - [2018] VSC 624

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 and others	Plaintiffs
v
CASTLEWAY PTY LTD (ACN 131 870 481) as trustee for The Castleway Trust and another	Defendants

--

JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 July, 27–8 August 2018
DATE OF JUDGMENT:	22 October 2018
CASE MAY BE CITED AS:	Re Adaz Nominees Pty Ltd (No 5)
MEDIUM NEUTRAL CITATION:	[2018] VSC 624

---

CONTRACT – Construction of a contract – Clause providing for disputes to be resolved by an independent expert appointed by the Institute of Chartered Accountants (Australian Division) – Institute declined to appoint an independent expert – Waiver of clause by parties to permit the Court to resolve dispute – Issues as to the degree the contract continued to apply to the dispute – Entitlement to interest under s 60 of the Supreme Court Act1986 considered.

SPECIAL REFEREE – Whether or not the Court should accept the referee’s report – Consideration of interests of justice – Whether referee considered questions of law in construing a contract.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	R M Garratt QC, with F R Cameron	Maddocks
For the Defendants	G H Golvan QC, with B G Mason	Kyriacou Lawyers

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
The outstanding issues....................................................................................................... 3
The special referee’s report................................................................................................ 4
B1 Accounting and legal expenses incurred in connection with this proceeding..... 5
B2 Negotiating proposed variations to the PDSA........................................................ 10
B3 Directors’ fees paid to Mr Lee in the 2014–15 and 2015–16 financial years........ 13
The TPC Group’s response to Mr Lee’s fees................................................................. 17
The special referee’s findings with respect to Mr Lee................................................. 19
Resolution of Mr Lee’s directors’ fees............................................................................ 20
B4 Excluded Entities......................................................................................................... 22
Resolution of Excluded Entities...................................................................................... 24
B5 $82,000 allocated to Mrs Rado’s loan account for the 2013–14 financial year..... 24
Introduced Projects........................................................................................................... 26
Declaration or judgment................................................................................................... 27
Defence and counterclaim of 12 February 2016............................................................ 28
Amended statement of claim of 3 March 2016.............................................................. 29
Amended defence and counterclaim of 18 April 2016................................................. 29
Further amended statement of claim of 27 May 2016.................................................. 29
Further amended defence and counterclaim of 10 June 2016..................................... 30
Reply and defence to further amended counterclaim of 17 June 2016...................... 30
Second further amended defence and counterclaim of 19 July 2017......................... 31
Amended reply and amended defence to second further amended counterclaim of 31 July 2017.................................................................................................................................. 31
Resolution of claim for judgment and damages.......................................................... 32
Orders.................................................................................................................................. 34

HIS HONOUR:

Introduction

I will refer to the plaintiff companies collectively as ‘the TPC Group’. Mrs Rado controls the TPC Group. There are two defendants: Mr Keeghan; and his company, Castleway Pty Ltd. For convenience, I will refer to the defendants as ‘Castleway’, unless it is necessary to identify Mr Keeghan personally. On 7 December 2010, the TPC Group, Castleway Pty Ltd, and Mr…

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.

Keep reading for free

Create a free CaseChat account to read Re Adaz Nominees Pty Ltd (No 5) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] VSC 624
Decision Date: 22 October 2018

CaseChat Overview and Summary

In the matter of Adaz Nominees Pty Ltd, the respondent sought to resolve a dispute with the appellants under a written agreement. The contract contained a clause that mandated resolution of any disputes through an independent expert appointed by the Institute of Chartered Accountants (Australian Division). When the Institute declined to appoint such an expert, the parties agreed to waive the clause and allow the Court to resolve the dispute. The central issue before the court was whether the contract continued to apply to the dispute following the waiver, and if so, to what extent. Additionally, the court had to consider the entitlement to interest under section 60 of the Supreme Court Act 1986.

The court examined whether the parties' waiver of the expert determination clause effectively nullified the contract or if it merely altered the means of dispute resolution. The court found that the contract remained applicable to the extent that it did not conflict with the new dispute resolution process agreed upon by the parties. Furthermore, the court assessed whether the referee's report should be accepted, taking into account the interests of justice and whether the referee had considered questions of law in construing the contract. The court concluded that the referee's report should not be accepted because it had not properly considered the legal implications of the contract.

The court ruled that the contract remained applicable to the dispute to the extent that it did not conflict with the new resolution process. The court also held that the respondent was entitled to interest under section 60 of the Supreme Court Act 1986 from the date the referee's report was made available to the parties, until the date of the court's decision. The court did not accept the referee's report due to the failure to properly consider questions of law. The final orders included the enforcement of the contract terms, the entitlement to interest, and the rejection of the referee's report.

Orders