Roberts v Eckert
[2020] SASC 27
•26 February 2020
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ROBERTS v ECKERT
[2020] SASC 27
Judgment of The Honourable Justice Nicholson
26 February 2020
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - JUDGMENTS AND ORDERS
PROCEDURE - JUDGMENTS AND ORDERS - ENFORCEMENT OF JUDGMENTS AND ORDERS
This Court dismissed an appeal by Mr Eckert, the defendant, from a trial judgment by a single judge of this Court delivered in favour of Mr Roberts, the plaintiff. A fundamental matter in issue between the parties was the question of the equitable ownership of certain farming land, which was determined at trial and on appeal in favour of the plaintiff.
The plaintiff and defendant have each made an interlocutory application to this Court following delivery of the appeal judgment. The defendant’s application seeks orders designed to address the consequences arising as a result of the defendant’s continued occupation of the plaintiff’s land between the date from which he was found by the trial judge to be a trespasser and the date on which he finally vacated the land. The plaintiff’s application, seeks, in effect, to enjoin the defendant from taking any further steps in the proceedings. The matter was argued on the basis that the defendant’s application should be determined first.
Held:
1. The defendant’s interlocutory application (FDN 76) is dismissed.
2. The parties will be heard as to the final disposition of the plaintiff’s application (FDN 83); the existing stay against the plaintiff enforcing his costs allocator; and the costs of the argument.
Supreme Court Civil Rules 2006 (SA) r 242, r 243, r 251, referred to.
Clarke & Ors v Edwards [2012] SASC 213, discussed.
Eckert v Roberts [2017] SASCFC 176; Roberts v Eckert [2016] SASC 197; Eckert v Roberts [2018] SASCFC 21; Hancock v Rinehart [2015] NSWSC 646; Penrice v Williams (1883) 23 ChD 353; Abigroup Ltd v Abignano (1992) 39 FCR 74; CSIRO v Perry (No 2) (1988) 53 SASR 538; Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201, considered.
ROBERTS v ECKERT
[2020] SASC 27Civil: Application
NICHOLSON J.
Introduction
On 22 December 2017, this Court dismissed an appeal by Mr Eckert, the defendant,[1] from a trial judgment by Hinton J of this Court[2] delivered on 20 December 2016[3] in favour of Mr Roberts, the plaintiff. A fundamental matter in issue between the parties was the question of the equitable ownership of certain farming land (“the Land”) which the defendant had occupied from about 1984, first as owner but in later years as the plaintiff’s tenant. The question of ownership was determined at trial and on appeal in favour of the plaintiff.
[1] Eckert v Roberts [2017] SASCFC 176.
[2] Roberts v Eckert [2016] SASC 197.
[3] Hinton J delivered reasons for judgment on 20 December 2016 and entered formal orders on 3 February 2017.
These reasons concern two applications, one by the defendant to the original proceedings and one by the plaintiff. A better appreciation of the background to the two applications can be obtained from the trial Judge’s reasons upholding the plaintiff’s claim and the reasons for judgment dismissing the defendant’s appeal. The defendant’s application seeks orders designed to address the consequences arising as a result of the defendant’s continued occupation of the Land between the date from which he was found by the trial Judge to be a trespasser (5 September 2015) and the date on which he finally vacated the Land (18 April 2018). The plaintiff by his application, seeks, in effect, to enjoin the defendant from taking further steps in the proceedings. The matter was argued on the basis that the defendant’s application should be determined first.
During the period in which the defendant occupied the Land as a trespasser, he continued to work the Land, and in particular the grape vines, whilst continuing to assert that he had an entitlement to some form of equitable ownership of the Land.[4] Notwithstanding that the defendant failed with this primary claim, he has continued to maintain that he is entitled to be compensated for work done and money expended by him during the period he was wrongfully in occupation of the Land.
[4] The precise basis for the defendant’s claim to ownership as argued by the defendant was obscure, as explained more fully in the trial Judge’s and Full Court’s reasons.
The period of the defendant’s occupation after the date upon which he became a trespasser can be broken into the following potentially relevant subperiods:
(i)the period, commencing 5 September 2015, during which the defendant remained in occupation whilst defending the plaintiff’s claim to the Land and including during the trial of the dispute;
(ii)the period between 20 December 2016, being the date the judgment declaring the defendant to have been a trespasser from 5 September 2015 was delivered, until 22 December 2017 when the Full Court delivered judgment dismissing the appeal; and
(iii)the period between 22 December 2017, the date of the Full Court’s judgment, until possession was given on 18 April 2018, during the early part of which period an unsuccessful application for a stay of the orders requiring vacant possession was prosecuted.[5]
[5] An application for special leave to appeal to the High Court was dismissed on 8 August 2018, [2018] HCASL 200.
During the period of the defendant’s occupation of the Land as a trespasser, financial benefits were obtained by both parties and labour and costs expended by the defendant. At issue between the parties now is the extent to which, if at all, the defendant is entitled to recover from the plaintiff a so called “just allowance” for work performed and money expended by the defendant and, if so, the process by which any such claim is to be pursued.
During the period the defendant occupied and worked on the Land as a trespasser, the following financial benefits are said to have been acquired by one or other party.[6]
(i)The defendant paid to the plaintiff, in five tranches (two of $45,000 and three of $40,000) the sum of $210,000, agreed to be referable in some way to the defendant’s occupation of the Land.
(ii)In or about March 2016, the defendant harvested the 2016 grape vintage and later received (and has retained) the gross proceeds of sale which, according to the defendant’s evidence on affidavit, amounted to $261,725.42.
(iii)In or about March 2017, the defendant harvested the 2017 grape vintage which was made into wine and stored with Riverland Vintners Pty Ltd. On 24 October 2018, Stanley J made an order that, in effect, permitted the plaintiff to retain the gross proceeds of sale of this 2017 vintage wine. On the defendant’s analysis of the plaintiff’s affidavit evidence, this should amount to approximately $323,459.28.
(iv)In or about March 2018, the plaintiff harvested the 2018 grape vintage (and notwithstanding that the defendant was still in occupation of the Land). The plaintiff received and has retained the gross proceeds of sale which, according to the plaintiff’s evidence on affidavit, amounted to $208,812.03.
[6] It is not necessary for me to form a final conclusion as to the precise amounts of the gross receipts for each of the 2016, 2017 and 2018 vintages referred to below.
The trial Judge’s orders
The formal orders entered by the trial Judge on 3 February 2017, some six weeks after his delivery of judgment (“Judge’s orders”) were as follows.
1. The counterclaim of the defendant Christopher Mark Eckert be dismissed.
2.The plaintiff is entitled to possession from the defendant of the land comprised and described in Certificates of Title:
(a) Register Book Volume 6065 Folio 205;
(b) Register Book Volume 6065 Folio 207;
(c) Register Book Volume 6065 Folio 208;
(d) Register Book Volume 6065 Folio 209;
(e) Register Book Volume 6065 Folio 210; and
(f) Register Book Volume 6088 Folio 676
(“the Land”).
3.The parties have liberty to apply upon the question of the time within which the defendant must give possession of the Land to the plaintiff.
4.The lease of the Land by the plaintiff as lessor to the defendant as lessee pursuant to memorandum of lease commencing on 31 August 2010 (“the Lease”) was validly terminated by the plaintiff one month from the date of service upon the defendant of the statement of claim of the plaintiff filed on 5 August 2015 in this action.
5.The plaintiff is entitled to recover from the defendant damages for trespass to the Land as from the date of termination of the Lease being one month from the date of service upon the defendant of the statement of claim of the plaintiff filed on 5 August 2015 in this action.
6.The plaintiff is entitled to recover from the defendant damages for any conversion of the grapes grown on the vines on the Land after the date of termination of the Lease being one month from the date of service upon the defendant of the statement of claim of the plaintiff filed on 5 August 2015 in this action.
7.The assessment of the damages payable by the defendant to the plaintiff be conducted by a Master of this Court, and that the trial of all remaining questions in the action as to the assessment of the damages payable by the defendant to the plaintiff be remitted to a Master of this Court.
8.The defendant pay the costs of the plaintiff of the action and the counterclaim to be adjudicated as between party and party or agreed.
The formal orders were in a form consented to by the parties and were made in chambers on 3 February 2017 (FDN 38) but it is common ground that orders 1 to 8 were intended to reflect the orders orally pronounced by his Honour at the time he delivered judgment on 20 December 2016.
Orders 4, 5 and 6 pronounced on 20 December 2016 and as recorded in his Honour’s reasons for judgment are analogous to Judge’s order 5, 6 and 7 respectively and were in these terms.
4.The defendant is liable for damages for trespass to the land as from [5 September 2015].
5.The defendant is liable for damages for any conversion of the grapes … on the land after [5 September 2015].
6.I remit all questions relating to the quantum of damages to a Master of this Court.
In addition, at the time the formal orders were entered, the defendant gave six quite detailed undertakings to the Court (numbered 9 to 14, FDN 37), consented to by the plaintiff. These were intended to protect the parties’ respective positions whilst the Judge deferred making an order for a date on which possession of the Land was to be given, pending the prosecution of the appeal.
The undertakings included the following.
9.The [defendant] will prosecute the appeal herein expeditiously.
10.The [defendant] will pay to the respondent the sum of $40,000 by 31 March 2017 and the further sum of $40,000 by 30 September 2017 (should the appeal herein not be heard and determined by 1 September 2017) such payments being characterised by the [defendant] as being made pursuant to and in respect of the Agreement alleged by the [defendant] as set out in the Fourth Defence and Counterclaim in the proceedings, and without prejudice to the right of the [plaintiff] to challenge the characterisation of such payments.
On the basis of the undertakings, further orders, numbered 1 to 5, (FDN 37) were made designed to facilitate an expeditious disposition of the appeal. The additional orders included the following.
4.The appellant is to set down the appeal for hearing and comply with the requirements of Supplementary Rule 242 by Friday 17 February 2017.
5.The requirements of the Rules or the Supplementary Rules are dispensed with to the extent that such requirements may prevent the listing of the appeal for hearing by the Full Court in the March 2017 sittings of the Full Court.
It can be inferred that it was anticipated by the parties that the appeal would be heard in March 2017 with a judgment, hopefully, before the harvesting of the March 2018 vintage. As matters transpired, the appeal was heard in June 2017 and finalised on 22 December 2017. However, the defendant then applied for a stay pending the determination of an application for special leave to appeal to the High Court. A stay in these terms was refused on 6 April 2018[7] although a short interim stay was given to facilitate the bringing of an application for a stay in the High Court. No such application was pursued and the defendant vacated the Land on 18 April 2018.
[7] Eckert v Roberts [2018] SASCFC 21.
The two interlocutory applications
The defendant, by his interlocutory application (FDN 76), seeks the following orders.
1.This application be made specially returnable before the 31st of January 2019.
2.Ancillary directions as to how the inquiry directed to be held by paragraph 7 of the Orders of 3 February 2017 (FDN 38) is to be conducted.
3.In the event that, in making such directions, it is determined the inquiry directed to be held by paragraph 7 of the Orders of 3 February 2017:
3.1 does not include, in respect of the defendant’s possession of the Land, any claim by the defendant for monies paid by the defendant to the plaintiff in relation to the defendant’s possession of the Land for the period of the trespass from the 5th of September 2015 to the 18th of April 2018;
3.2 does not include, in respect of the grapes grown on the vines on the Land, any claim by the defendant for:
3.2.1remuneration for his labour in growing those grapes;
3.2.2reimbursement of his expenses in growing those grapes; or
3.3 does not permit a “negative” balance, such that the amount determined is due and payable by the plaintiff to the defendant,
then an order that:
3.4 An inquiry and account be made and taken as to:
3.4.1the assessment of damages payable by the defendant to the plaintiff under paragraphs 5 and 6 of the Orders of 3 February 2017 (FDN 38);
3.4.2the monies paid by the defendant to the plaintiff in relation to the defendant’s possession of the Land for the period of the trespass from 5th September 2015 to the 18th of April 2018, including the amounts paid pursuant to paragraph 10 of the Orders of 3 February 2017 (FDN 37);
3.4.3the remuneration payable to the defendant in respect of his labour in the grapes grown on the vines on the Land after 5th September 2015;
3.4.4the expenses incurred by the defendant in growing those grapes,
such that there be determined a balance that is due and payable as between them.
4.An order that any allocatur issued or to be issued in respect of the liability of the defendant for the costs of this action be stayed pursuant to s. 17 of the Enforcement of Judgments Act 1991 (SA) pending the determination of the balance due and payable as between the plaintiff and the defendant during the period of trespass the subject of this action.
5.The costs of the application be costs in the inquiry.
6.Such further or other orders as this Honourable Court deems fit.
The plaintiff, by his interlocutory application (FDN 83), seeks the following orders.
1.That this application be made returnable before the Honourable Justice Nicholson on Thursday 28 February 2019 at 9.30 a.m.
2.That all further steps by the defendant in this action, including each of the steps sought by the defendant by interlocutory application of the defendant filed 23 January 2019 [FDN 74], (apart from the defendant’s steps in the adjudication of costs orders obtained by the plaintiff against the defendant) be stayed until the defendant pays in the Suitors Fund the sum of $100,000, or such other sum as the Court things fit.
3.That the defendant pay the plaintiff’s costs of and incidental to this application.
Notwithstanding that I was a member of the Full Court that dismissed the defendant’s appeal, the parties have not objected to me hearing and determining these applications in my capacity as a first instance Judge of this Court.
At the hearing of the applications, the defendant read the third, sixth, ninth, eleventh and twelfth affidavits of the defendant[8] and the seventh and eighth affidavits of the defendant’s solicitor, Kevin McKinley.[9] The plaintiff read the tenth affidavit of the defendant[10] and the fourth, sixth and seventh affidavits of the plaintiff.[11]
[8] Filed 25 January 2018 (FDN 44), 5 April 2018 (FDN 56), 10 October 2018 (FDN 67), 23 January 2019 (FDN 77) and 22 February 2019 (FDN 85) respectively.
[9] Filed 23 January 2019 (FDN 78) and 30 January 2019 (FDN 81) respectively.
[10] Filed 18 December 2018 (FDN 74).
[11] Filed 4 April 2018 (FDN 55), 22 October 2018 (FDN 68) and 20 February 2019 (FDN 84) respectively.
Chronology
Whilst a number of the critical events have already been identified, it will be of assistance to set out a more detailed chronology of the background and procedural history. In doing so, I have drawn on, with some alterations, the chronology helpfully provided by the defendant in his written outline of submissions.
(i)On 28 May 2015, the proceedings were instituted.
(ii)On 21 September 2015, the defendant paid the plaintiff the sum of $45,000.
(iii)In or about March 2016, the defendant harvested the grapes on the Land (the 2016 Vintage). The defendant received gross proceeds of sale for the 2016 Vintage said to be in the amount of $261,725.42.
(iv)At or about the same time (29 March 2016), the defendant paid the plaintiff the sum of $45,000.
(v)On 25 October 2016, the defendant paid the plaintiff the sum of $40,000.
(vi)On 3 February 2017, the trial judge made substantive orders (FDN 38). At the same time, his Honour made orders relating to the prosecution of an appeal, which noted certain undertakings of the defendant (FDN 37).
(vii)Judge’s orders 5 and 6 declared that the plaintiff was entitled to damages for trespass to land, and damages for conversion of the grapes, for the period from 5 September 2015 onwards. Judge’s order 7 directed that an assessment of the damages payable by the defendant to the plaintiff be conducted by a Master of the Court.[12]
[12] The defendant in his chronology has used the language, “there be an account and inquiry as to damages before a Master of the Court”. The language of the order itself is to be preferred; whether or not the defendant is entitled to pursue an account and inquiry is a matter in dispute.
(viii)The undertaking in paragraph 10 of the orders of 3 February 2017 required the defendant to make certain payments to the plaintiff during the currency of the appeal.
(ix)There was no express grant of liberty to apply in the orders of 3 February 2017, other than in respect of the time of possession.
(x)In or about March 2017, the defendant harvested the grapes on the Land (the 2017 Vintage). The grapes were made into wine and stored with Riverland Vintners Pty Ltd.
(xi)At or about the same time (30 March 2017), in compliance with the undertaking in paragraph 10 of the orders of 3 February 2017, the defendant paid the plaintiff the sum of $40,000.
(xii)On 5 October 2017, in compliance with the undertaking in paragraph 10 of the orders of 3 February 2017, the defendant paid the plaintiff the sum of $40,000.
(xiii)An appeal to the Full Court from the judgment and the orders of 3 February 2017 was dismissed on 22 December 2017.
(xiv)On 2 February 2018, Nicholson J made further substantive orders (FDN 49) (the orders of 2 February 2018). These orders included orders relating to the disposition of the proceeds of sale for the 2017 Vintage. His Honour granted liberty to apply.
(xv)The orders of 2 February 2018 empowered the plaintiff to conduct the harvest for the 2018, despite the fact that the defendant remained in possession of the Land. In or about March 2018, he did so (the 2018 Vintage). In respect of the 2018 Vintage, the plaintiff has received gross proceeds of sale said to be in the amount of $208,812.03.
(xvi)On 18 April 2018, the defendant vacated the Land.
(xvii)On 8 August 2018, an application for special leave to appeal from the judgment of the Full Court was dismissed.
(xviii)On 24 October 2018, Stanley J made further substantive orders, amending the orders of 2 February 2018, which have not yet been sealed. His Honour made an order that effectively permitted the plaintiff to retain the gross proceeds of sale for the 2017 Vintage said to be in the amount of $323,459.28.
The essence of the defendant’s monetary claims
The defendant acknowledges that the plaintiff is entitled to damages for trespass to the Land during the period 5 September 2015 to 18 April 2018 (Judge’s order 5). However, the defendant has paid $210,000 on account of his occupation of the Land during this period which he contends is significantly more than any damages for trespass to which the plaintiff would be found entitled. The defendant seeks to recover any overpayment and characterises this aspect of his claim as restitutionary.
With respect to the three grape vintages, the defendant maintains that he is entitled to a just allowance for work done and expenses incurred. As far as any act or acts of conversion are concerned, each vintage is to be treated separately. Any improper dealings by the defendant with the plaintiff’s 2016 grape vintage, with the plaintiff’s 2017 grape vintage and with the plaintiff’s 2018 grape vintage would comprise separate acts of conversion.
It is common ground that the defendant converted the 2016 grape vintage and has retained the gross proceeds of sale. On the defendant’s case, the plaintiff’s prima facie measure of loss, should an assessment of damages take place in accordance with Judge’s order 6, will be the amount of these gross proceeds less a just allowance for the defendant’s work done and expenses incurred in respect of producing this vintage. Any such just allowance would relate to a period prior to delivery of the trial judgment.
It is common ground that, whilst the defendant converted the 2017 vintage, the plaintiff obtained and retains the gross proceeds of sale. Where a plaintiff takes steps as a direct consequence of the wrong which reduces the amount of the plaintiff’s loss, damages will be reduced to the extent the loss has in fact been avoided. Accordingly, it is likely that any loss with respect to this act of conversion has been completely mitigated such that the plaintiff now has no extant entitlement to damages. If so, there will be no occasion for the plaintiff’s damages to be reduced by or offset by any just allowance otherwise available to the defendant. Nevertheless, the defendant maintains that he is entitled to recover from the plaintiff a just allowance with respect to the 2017 grape vintage. Any such just allowance would relate to a period prior to and after delivery of the trial judgment but before delivery of the judgment on appeal.
In my view, the defendant’s claim with respect to the 2017 grape vintage, is to be seen as a purely restitutionary claim and notwithstanding that, initially, there was an act of conversion giving rise to a right to damages in the plaintiff. The plaintiff’s loss has been completely mitigated. As such, he has suffered no loss capable of assessment and against which any just allowance can be set off.
It is common ground that there was no conversion of the 2018 grape vintage. The plaintiff himself conducted the harvest, sold the grapes and has had the benefit of the full proceeds of sale. Nevertheless, the defendant tended the vineyard prior to harvest and maintains that he is entitled to a just allowance. There having been no conversion, the plaintiff has no claim for damages and the trial Judge’s orders 6 and 7 can have no work to do. The defendant’s claim for a just allowance, again, is in truth some form of restitutionary claim for work done and money expended to the plaintiff’s benefit. Any such claim relates to a period wholly after the delivery of the trial judgment.
The defendant also contends that he paid rates and taxes during his occupancy and incurred expenses to third parties, relating to harvests, that remain unpaid but for which he remains liable in the amount of $81,826.25. The defendant claims that these amounts fall within the just allowances to which he says he is entitled.
The plaintiff’s essential claims and decision to abandon
In addition to his entitlement to have an assessment of damages for trespass to the Land and damages for conversion of the 2016 grape vintage, in accordance with Judge’s orders 5, 6 and 7, the plaintiff also has various costs entitlements. The adjudication of the plaintiff’s costs relating to the trial and the Full Court appeal has been completed. By a final allocatur issued 17 April 2019, the plaintiff is entitled to recover $132,017.67 together with post-judgment interest on costs. The plaintiff has not sought to enforce this costs entitlement.[13]
[13] And is presently not entitled to do so because of a stay ordered pending the determination of the defendant’s interlocutory application presently under consideration.
In addition, the plaintiff has three further sets of costs orders against the defendant which have not yet been adjudicated. These further costs (unadjudicated) are said to amount to $95,574.45 as at 7 November 2018.
The plaintiff is firmly of the view that the defendant is insolvent[14] and that there is no prospect of the plaintiff recovering from the defendant any of the outstanding costs or any damages should such ultimately be awarded in his favour. Accordingly, the plaintiff is anxious to bring his dispute with the defendant to an end as soon as practicable and to incur as little further expense in doing so as possible. The plaintiff, no doubt, does not wish to run the risk that an overall accounting between the parties might result in a positive balance in favour of the defendant. In these circumstances, he has nothing to gain but risks something to lose if the proceedings were to continue.
[14] Whilst the plaintiff made submissions in support of this contention, I was not asked to decide in these proceedings whether or not the defendant is insolvent.
For these reasons, the plaintiff indicated during the first day of the hearing before me that he abandoned his entitlement to damages for trespass to the land, for conversion of any of the grape vintages and for any assessment thereof to take place in accordance with Judge’s orders 5, 6 and 7. When submissions resumed, having been adjourned part heard, this act or notice of abandonment was identified with more precision in the plaintiff’s supplementary outline of submissions as follows:
8.The plaintiff has submitted that he is entitled to abandon or waive his entitlement to seek an assessment of the damages payable to him by the defendant, and that this is a right which exists only in the plaintiff.
9.If the plaintiff is right in this contention that the right to waive or abandon exists only in him and not the defendant, then he makes that election.
10.If the Court was to determine that the plaintiff’s submission was wrong as a matter of law or procedure or construction of the orders made by Hinton J, and that the defendant was entitled to proceed to the assessment of damages and to raise positive claims against the plaintiff on the assessment of damages, then the plaintiff would not so elect.
(Footnotes omitted)
Issues to be determined
Having provided this rather lengthy introduction, the primary issues to consider can be distilled to the following.
(i)Is the plaintiff entitled to elect to unilaterally waive or abandon his rights to an assessment of damages under Judge’s orders 5, 6 and 7.
(ii)If so, can the defendant, nevertheless, himself pursue the assessments envisaged by Judge’s orders 5, 6 and 7 with a view to obtaining a determination of his positive monetary claims against the defendant, as earlier identified.
(iii)In the alternative, does the Court have the power and should it exercise it to make further orders permitting the defendant’s claims to be assessed in these proceedings notwithstanding the plaintiff’s abandonment.
(iv)If either the plaintiff cannot unilaterally abandon or the defendant is, nevertheless, entitled to pursue the assessment envisaged by Judge’s orders 5, 6 and 7, to what extent would the defendant be entitled to agitate any or all of his positive claims, earlier identified, within the assessment proceedings before a Master.
Has the plaintiff abandoned and, if so, can the defendant pursue his claims in any event?
The Judge’s orders were made on 3 February 2017 by way of formalising orders intimated when reasons for judgment were delivered on 20 December 2016. Judge’s orders 1, 2, 4, 5, 6 and 8 finally disposed of the issues between the parties referred to therein, subject to any successful appeal.
Judge’s order 2 was to the effect of a declaration that the plaintiff was entitled to possession of the Land. The date for giving of possession was left to be determined (Judge’s order 3). Judge’s order 4 was to the effect of a declaration that the defendant’s lease of the Land had been validly terminated as at 5 September 2015. Judge’s orders 5 and 6 were to the effect of declarations that the plaintiff was entitled to recover damages for trespass to the Land and “any conversion of the grapes grown … on the Land” after 5 September 2015. Judge’s order 8 resolved the issue of the costs of the trial. Finally, and of potential importance, by Judge’s order 1, the defendant’s counterclaim was dismissed.
The defendant has exhausted his rights of appeal without success. The Judge’s orders are final. The only issues between the parties that remained unresolved at the time the Judge’s orders were made were: the date for possession (Judge’s order 3, now finalised), any required adjudication of the plaintiff’s costs (Judge’s order 8, now finalised) and the assessment of the plaintiff’s damages for trespass and conversion (Judge’s order 7).
The resolution of the question whether the plaintiff is entitled to unilaterally abandon his right to an assessment of damages (Judge’s orders 5, 6 and 7) will turn on a proper understanding of the meaning and reach to be given to the Judge’s orders 5 and 6. On their face, they confer an entitlement only on the plaintiff. On its face, Judge’s order 7 is simply a procedural order to enable an assessment of the damages identified in Judge’s orders 5 and 6 to be effected. Judge’s orders 5 and 6 are also consistent with paragraphs 3 and 4 of the prayers for relief in the plaintiff’s statement of claim pursuant to which the plaintiff sought:
3.Damages for trespass to the land by the Defendant.
4.Damages for conversion by the Defendant of the wine grape crop on the land.
In paragraph 5 of his prayers for relief, the plaintiff sought:
Orders for accounts and enquiries in relation to the conversion by the Defendant of the wine grape crop upon the land.
However, this was an order sought by the plaintiff. Insofar as any such order might differ from the procedural order in Judge’s order 7, the plaintiff’s prayer for relief in paragraph 5 was not granted by the Judge. Furthermore, the defendant in his fourth defence and counterclaim did not seek any relief of this nature[15] and was granted no relief of any nature by the Judge. To the contrary, his counterclaim was dismissed.
[15] The defendant in his prayers for relief sought a declaration that the plaintiff held the Land in trust and an order restraining the plaintiff from taking steps to take possession of the Land.
The defendant contends that the Judge’s orders properly construed confer on the defendant an entitlement to some form of account and enquiry which he is entitled to agitate independently of the plaintiff. The plaintiff contends that the Judge’s orders do no more than finally state the rights of the plaintiff against the defendant in relation to the plaintiff’s entitlement to damages. The plaintiff alone has the right to pursue any assessment of damages and has an absolute entitlement to abandon that right.
Neither party directed me to any authority dealing with the entitlement of a plaintiff to abandon such a right in these circumstances. As a matter of principle, I think the plaintiff must be entitled to unilaterally abandon any rights under the judgment that rest only with him. As a practical matter, the plaintiff cannot be compelled to pursue the damages assessment before the Master. Any continuing failure to do so could only lead to an order that the plaintiff’s claim for damages be struck out for want of prosecution. Whether or not the plaintiff’s abandonment of his right to pursue his pleaded damages claim might have costs implications is not a matter before me at this stage.
I do not understand the defendant to disagree with this starting position. Rather, the defendant maintains that Judge’s orders 5, 6 and 7 were intended to and did enure to his benefit as well.
Rules 243 and 251 of the Supreme Court Civil Rules 2006 (SA) confer on a trial court a broad power to make orders necessary to give effect to a judgment.
243—Orders ancillary to judgment
(1)The Court may, on application by a party, make any order necessary to give effect to a judgment.
(2)For example—
(a) the Court may order that accounts be taken or an inquiry conducted and give ancillary directions about how the proceeding is to be conducted and the evidence to be taken;
(b) if a judgment requires the making of an instrument, the Court may give directions for—
(i)the preparation and delivery of a draft instrument; and
(ii)the preparation and delivery of a statement of objections to the draft; and
(iii)the settling of the draft; and
(iv)the execution of the instrument;
(c) the Court may direct the publication of an advertisement to ascertain creditors, next of kin, or any other unascertained class;
(d) the Court may direct an inquiry into the claim or interest of any persons who respond to an advertisement under paragraph (c);
(e) if a judgment debtor is a member of a partnership—the Court may make an order charging the judgment debtor's interest in the property or profits of the partnership with the judgment debt (see section 23 of the Partnership Act 1891).
(3)Notice of an application for an order under subrule (2)(e) must be given to all other partners.
.. . .
251—Orders for accounts or report
(1)The Court may, on its own initiative or on application by a party, order that accounts or a report relevant to a question in issue in an action be prepared and filed in the Court.
(2)The order may provide for preparation of the accounts or report by a party, an independent expert or other person.
(3)The Court may, in the same or a later order, give directions about the nature and extent of the inquiry to be carried out for the preparation of the accounts or report.
Example—
The Court might (for example) give directions about the extent to which the person preparing the accounts or report is required to inquire into the adequacy of existing accounts or records.
(4)The Court may order the examination of a party or other person on accounts or a report filed under this rule.
(5)The Court may order that, on the filing of accounts under this rule, a party is to pay to another an amount certified by the person preparing the accounts, to be owing from that party to another party.
As best I understand the defendant’s argument, it is put on two bases. First, he contends that the Judge, when making Judge’s order 7, and notwithstanding the language used in Judge’s orders 5, 6 and 7 apparently limiting their subject matter to an assessment of damages, in fact intended to and did order an account and inquiry pursuant to the rule 243 power and to the benefit of both parties. Second, he contends that, if the Judge’s order 7 is limited to an assessment of common law damages in favour of the plaintiff only, the trial Judge or another Judge of coordinate jurisdiction (myself) has and should exercise the power under the “working out” jurisdiction, to make orders for an account and inquiry in order to give proper effect to Judge’s order 7, given the events that have transpired after the making of the Judge’s orders.
In support of the first contention, the defendant took the Court in some detail to a number of this Court’s earlier, now repealed, rules of Court and a number of old English rules and earlier authorities dealing with those rules, with a view to demonstrating the true nature of an order for an account and the relatively broad circumstances in which it can be available. I have not found this material or the argument by analogy with the present case particularly helpful.
I agree with the plaintiff’s submission that the causes of action he relied on were the common law torts of trespass to land and conversion which sound only in common law damages. This is what the Judge found to have been established and common law damages (and its means of assessment) is what his Honour ordered.
The notions of an account and an inquiry as referred to in the rules of Court, were explained by his Honour Judge Lunn in Clarke & Ors v Edwards[16] in these terms.
I do not agree. 6R 251 is the successor to O15 and 33 of the Supreme Court Rules 1947 and 87R 85.02, and many earlier rules which dealt with, inter alia, inquiries ordered by the Court. Accounts and inquiries was a composite expression used to describe a special procedure to deal with ancillary issues in an action which were not suited to being resolved by a formal trial. I can find no exposition of precisely what was meant by “accounts” and what by “inquiries”. In general, the practice seems to have been to have designated as accounts issues which were expressed in monetary terms and as inquiries any non-monetary issues. Thus traditionally the term “inquiry” was used for the ascertainment of factual issues such as who are the next of kin or creditors, who are the beneficiaries of a trust, what damage resulted from a particular cause or the like. In my view “report” in sub-r 251(1) and (3) means a report on inquiries as traditionally understood.
Historically, it seems accounts and inquiries were directed to be taken by a judgment after a trial which resolved the major issues in the action. However, the practice developed of allowing them to be ordered before trial (eg O15 of the Supreme Court Rules 1947) where it was clear they would be ordered and it was expedient to take them before trial.
(Footnotes omitted)
[16] [2012] SASC 213 at [19]-[20].
In order for the defendant to have become entitled to an order for an account he would have had to prove at trial (and obtain a finding) that the plaintiff was an accounting party.[17] An order to account is not a mere direction to enquire into a situation in order to see if any money is due. It proceeds upon a finding that there is an entitlement and that an enquiry is necessary in order to work out the amount to which the moving party is entitled.[18]
[17] Hancock v Rinehart [2015] NSWSC 646 at [338] (Brereton J).
[18] See P Young, C Croft and M Smith, On Equity (Lawbook Co, 2009) at [16.1300] and [16.1320].
The events giving rise to the defendant’s monetary claims were not pleaded nor dealt with at the trial. The defendant did not demonstrate that the plaintiff was an accounting party. As earlier indicated, the defendant did not seek at trial any relief of this nature. As such, it was not open to the Judge to order an account pursuant to the power conferred by rules 243 and 251.
In these circumstances, a contention that, by Judge’s orders 5, 6 and 7, an accounting between the parties was impliedly ordered or expected to occur or that the orders should be construed inconsistently with their express terms as having this effect, is not tenable.
The Judge’s orders 5, 6 and 7 are very clear on their face. His Honour did not order that the plaintiff and the defendant were accounting parties and that accounts between them be taken. At no time was such an order sought by the defendant and, whilst the plaintiff included a prayer for relief to this effect, it was not pressed by the plaintiff at the conclusion of the trial and the Judge gave no consideration to it. The plaintiff having wholly succeeded at trial, the Judge made a conventional order that his common law damages were to be assessed.
It follows, in accordance with the plaintiff’s submission which I accept, that Judge’s orders 5, 6 and 7 conferred on the plaintiff, alone, a right to have his common law damages, if any, assessed by a Master. It further follows that the plaintiff is entitled to unilaterally abandon that right.
Leaving aside the plaintiff’s continuing entitlement to enforce his order for the costs of the trial, Judge’s order 7 was the only matter of substance between the parties in these proceedings still to be finalised. The plaintiff has elected in open court to abandon his right to an assessment of damages. Judge’s order 7 thus has no work to do and, subject to the issue of this Court’s power to supplement the Judge’s orders, to be discussed shortly, the substantive dispute between the parties and brought to trial has been finalised.
In this respect, I make this further observation. In the event that the defendant were to be entitled to an order for the plaintiff to account or for a general accounting between the parties, the defendant would be entitled to be paid any positive balance found due to him. However, if restricted to an entitlement to a just allowance, as part of the plaintiff’s assessment of damages, this could only operate as a defence by way of set off. It is hardly to be countenanced that the plaintiff would pay a positive balance to the defendant resulting from an assessment of his damages on account of the defendant’s wrongful (tortious) conduct.
In these circumstances, the proved just allowance would operate to mitigate the plaintiff’s actual loss. In practical terms, now that the plaintiff has abandoned his right to have his damages assessed, the defendant has obtained the full benefit which any proved just allowance would have given him as part of the assessment process.
For the defendant to be entitled to receive a positive balance in his favour, and in the absence of an accounting relationship, he would have to have counterclaimed relying on some form of cause of action in restitution that would survive his conduct as a trespasser.
From time to time, the possibility of the defendant amending his counterclaim has been raised. On 8 October 2018, I made the following order by consent (FDN 65).
1.The defendant is to file and serve any application to amend the counterclaim … at or before close of business on 10 October 2018.
No application has been forthcoming. In my view, it is now too late to bring such an application. The substantive proceedings between the parties have now been finalised. Furthermore, the defendant’s counterclaim was dismissed by Judge’s order 1 on 3 February 2017. There having been no successful appeal, all issues raised by the counterclaim were finally determined as of then, some three years ago. There is nothing left to amend.
Is there power to supplement the Judge’s orders to enable the defendant to pursue his claims in any event?
The defendant contends that I, as a Judge of coordinate jurisdiction with the trial Judge, have and should exercise the power to order an accounting between the parties as part of the “working out” jurisdiction.
The defendant’s claim to recover part or all of the $210,000 paid to the plaintiff with reference to the defendant’s occupation of the Land whilst a trespasser stands apart from any assessment of the plaintiff’s damages for trespass to the Land. Had that assessment proceeded, the plaintiff’s damages, if less than $210,000, might be assessed as nominal following a set off. However, in order to recover any balance the defendant would need to plead an independent claim based on a cause of action in restitution. If so, the plaintiff would be entitled to raise such defences as may be open to him.
Similarly, the defendant’s claims for a just allowance with respect to the 2017 vintage with respect to which the plaintiff has suffered no loss and the 2018 vintage with respect to which there has been no conversion of the plaintiff’s grapes would also fall outside any assessment of damages with respect to Judge’s order 6. As far as the 2016 vintage is concerned, the defendant will retain the proceeds now that the plaintiff has abandoned any claim for damages. There is nothing against which the defendant might set off any just allowance to which he might otherwise be entitled.
The question arises whether the defendant’s claims to the extent they give rise to a positive balance in his favour, might still be pursued in the present proceedings upon the Court making further orders in its working out jurisdiction.
Subrule 243(1) provides as follows.
The Court may, on application by a party, make any order necessary to give effect to a judgment.
The power conferred is analogous to the common law working out jurisdiction consequent on liberty to apply where expressly given or where to be implied.
At common law when exercising liberty to apply, any party is at liberty to approach the Court to deal with matters that arise in the working out of an order.[19] The notion is directed to the enforcement of an order not to a determination or statement of a party’s rights. The availability of liberty to apply does not mean that a judgment is not final.[20] Neither liberty to apply nor subrule 243(1) gives a right to apply to vary or discharge the order in question[21] and do not enable the giving of substantive relief not sought in any originating process. The metes and bounds of the working out jurisdiction have been canvassed at length by Campbell JA (with whose reasons Tobias JA agreed) in Australian Hardboards Ltd v Hudson Investment Group Ltd.[22]
[19] Penrice v Williams (1883) 23 ChD 353.
[20] Abigroup Ltd v Abignano (1992) 39 FCR 74 at 88.
[21] CSIRO v Perry (No 2) (1988) 53 SASR 538 at 557.
[22] [2007] NSWCA 104; (2007) 70 NSWLR 201 at [50]-[71].
The defendant contends that this Court can make further orders pursuant to subrule 243(1) along the lines of those sought in the defendant’s interlocutory application (FDN 76) by exercising its working out jurisdiction. The short answer to this arises from my findings that Judge’s order 5, 6 and 7 conferred no right of enforcement on the defendant,[23] were amenable to unilateral abandonment by the plaintiff, and have been abandoned. As such, nothing now remains with respect to which liberty to apply might be exercised.
[23] To be distinguished from an entitlement to defend (by set off or otherwise) any assessment pursued by the plaintiff.
If I am wrong in this respect, to the extent that the defendant seeks to maintain and enforce claims against the defendant with a view to recovering a positive balance, such would comprise substantive relief and be tantamount to seeking a variation of Judge’s orders 5, 6 and 7 or new orders aimed at determining the parties’ substantive rights inter se, additional thereto. The directions sought by the defendant in FDN 76 fall outside the power available to the Court pursuant to either subrule 243(1) or any liberty to apply. I agree with the submissions of the plaintiff that nothing in Campbell JA’s analysis of and application of the working out jurisdiction in Australian Hardboards lends any support to the defendant’s argument on the facts of the present case.
To what extent would the defendant be entitled to pursue a just allowance in any event?
In the event that the defendant were to be entitled to pursue his positive claims against the plaintiff in these proceedings, the parties also disagree on a matter of principle, that is, whether the defendant, as a trespasser, would be entitled to pursue a just allowance in any event. Given my decision and reasons to this point it, strictly, is not necessary for me to resolve this issue. I have also arrived at the view that it would not be prudent to do so.
As far as the $210,000 paid by the defendant to the plaintiff whilst in occupation of the Land as a trespasser is concerned, the plaintiff conceded that the $210,000 paid by the defendant would be taken into account but only to the extent of any damages for trespass otherwise to be awarded. However, the plaintiff asserts that any assessment of damages for trespass would include not just the market rent for the period of the trespass but also damages on a restitutionary basis by having regard to benefits which the defendant derived from his wrongful use of the Land such as: being able to live in the house on the Land; and the grazing of animals and dry land cropping undertaken by the defendant. The proper scope of the plaintiff’s claim for damages for trespass were it to be assessed has not been fully agreed by the parties.
As far as the assessment of damages for conversion of the 2016 and 2017 vintages are concerned,[24] the parties disagree as to the proper scope of, what have been described in the authorities as, the “milder” rule and the “severer” rule and their application to the situation of the defendant, as a trespasser, seeking a just allowance for work done and expenses incurred.
[24] There was no conversion of the 2018 vintage.
The issue that divides the parties here has been summarised by the defendant in his written submissions and sufficiently for present purposes, as follows.
36.However, in respect of all three vintages, the measure of damages depends upon whether the wrongdoing was “wilful” or “bona fide” (within the meaning of the authorities).
37.The principle was worked out in a series of cases described as “the Coal cases”. It has been applied to the tortious severance of other valuable parts of the land, and there is no reason in principle why it should not apply to conversion of grapes.
38.In summary, where the conversion was wilful, the measure of damages should be the gross value of the grapes. This is sometimes described as the “severer” rule. In other cases, a deduction or allowance (described as “all just allowances”) is allowed for the cost and expense of producing the grapes. This is described as the “milder” rule.
(Footnotes omitted)
The defendant contends that, in the circumstances of the present case, the “milder” rule should apply. The plaintiff contends that the severer rule should apply, and particularly so for the period after delivery of the trial judgment on 20 December 2016, at which time the defendant was on notice that he had been a trespasser since 5 September 2015.
The parties asked me to make relevant findings of fact in accordance with the affidavit evidence before me and to decide this question as a preliminary issue. They provided comprehensive submissions. However, the issue first arose at a time when the plaintiff had not abandoned his right to an assessment of damages and both parties were of the view that an assessment was to take place before a Master. That is no longer the position and the question has become hypothetical. Ordinarily, this Court as a matter of discretion, will decline to answer a hypothetical question or provide an advisory opinion. In my view, not only is it unnecessary that I determine this issue but to do so now might, depending on future events, give rise to an unfairness.
If the defendant were to pursue his restitutionary claims, he would need to do so in separate proceedings and meet any defences that may be raised by the plaintiff. Some form of issue estoppel based on my determination of the preliminary issue might be raised by one or other party during the new proceedings. To forestall this risk, one or other of the parties might feel obliged to appeal my decision on this point (provided it would be amenable to appeal)[25] in circumstances where that party might not wish or otherwise not need to do so.
[25] Given my conclusions on the abandonment issue, any determination of the preliminary issue would not be seen as dispositive of these interlocutory proceedings.
I appreciate that by not deciding the issue, the argument may need to be conducted again. However, this would entail relatively minor additional expense. In the circumstances, I am satisfied that if, in the future, the preliminary point does need to be determined, it should be done so in the context of the cause or causes of action ultimately (and if) brought by the defendant. The usual appeal rights would then follow.
Conclusion
The defendant’s interlocutory application, FDN 76, is dismissed. As such, there would appear to be no utility in the plaintiff’s interlocutory application, FDN 83. I will hear the parties as to: the final disposition of FDN 83; the existing stay against the plaintiff enforcing his costs allocatur; and the costs of this argument.
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