Robert Deutsch v Erwin Deutsch (No 3) - [2014] VSC 494

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2008 05515

ROBERT DEUTSCH & ORS	Plaintiffs
According to the attached schedule
v
ERWIN DEUTSCH & ORS	Defendants

According to the attached schedule

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATES OF HEARING:	28, 29 August, 17 September 2014
DATE OF JUDGMENT:	2 October 2014
CASE MAY BE CITED AS:	Robert Deutsch & Ors v Erwin Deutsch & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2014] VSC 494

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DAMAGES – Breach of terms of settlement – Correct method of assessing loss – Need to avoid double compensation – No double compensation – Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; Haines v Bendall (1991) 172 CLR 60; HTW Valuers (Central Queensland) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640.

INTEREST – Delay by plaintiff in prosecuting case – Delay contributed to by defendant – Whether defendant has had use of the money represented by damages award during period of delay – Whether good cause shown to the contrary to limit period of statutory interest – Supreme Court Act 1986, s 60; Penalty Interest Rates Act 1983, s 2.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Slattery	Holding Redlich
For the Defendants	Mr N Jones	Moama Law

HIS HONOUR:

These reasons for judgment assume familiarity with the Court’s principal reasons for judgment in the proceeding,[1] and the Court’s reasons for judgment concerning costs of the proceeding to and including 8 February 2013.[2]
[1]Robert Deutsch & Ors v Erwin Deutsch & Ors [2012] VSC 227 (‘principal reasons’).
[2]Robert Deutsch & Ors v Erwin Deutsch & Ors (No 2) [2013] VSC 15 (‘costs reasons’).

The position has now been reached where the Court has sufficient information before it to assess Robert’s entitlement to damages for breach of the terms of settlement. On 28 August 2014, I accepted the oral application made by counsel on behalf of the plaintiffs, consistent with paragraph 136 of the principal reasons, that the plaintiffs have leave to make a claim on behalf of Robert Deutsch for damages equal to the proceeds he would have received from the terms of settlement had Erwin Deutsch not breached them.

The parties agree that Robert Deutsch is entitled to damages for breach of the terms of settlement in accordance with the ruling principle, that he should be placed in the same position, so far as money can do it, as he would have been in had Erwin performed his obligations under the terms of settlement.[3] This principle entitles Robert to damages comprising the specific amounts payable to him under the terms of settlement and an amount representing one-half of the remaining net proceeds of sale of the trust assets in accordance with the terms of settlement in 2009, after deducting all necessary costs to bring about those sales and wind-up the trusts.
[3]Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009)…

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: [2014] VSC 494
Decision Date: 2 October 2014

CaseChat Overview and Summary

In Robert Deutsch v Erwin Deutsch (No 3), the plaintiff sought damages for a breach of terms of a settlement agreement. The case was heard in the Supreme Court of Victoria. The plaintiff alleged that the defendant had failed to fulfill certain obligations under the settlement, leading to financial losses.

The primary legal issues before the court were the correct method of assessing the loss to avoid double compensation and the appropriate period for which statutory interest should be applied on the damages award. The court was required to balance the principle of avoiding double compensation with the need to fairly compensate the plaintiff for the losses incurred.

The court held that the damages should be assessed based on the actual loss suffered by the plaintiff, ensuring no double compensation was awarded. This was consistent with established legal principles, as seen in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd, Haines v Bendall, and HTW Valuers (Central Queensland) Pty Ltd v Astonland Pty Ltd. Regarding interest, the court found that while the plaintiff's delay in prosecuting the case contributed to the delay, the defendant had not had the use of the money represented by the damages award during this period. Consequently, the court ruled that the period for which statutory interest should be awarded should be limited to the period after the case was finally determined.

The court ordered that the defendant pay the plaintiff the sum of damages assessed, along with statutory interest calculated from the date of judgment up until the date of payment. The court also noted that the defendant's delay in fulfilling the settlement obligations contributed to the delay in the proceedings, but this did not entitle the defendant to an extended period of interest.

Orders