Secure Parking (WA) Pty Ltd v Wilson [No 2]
[2009] WASCA 78
•7 MAY 2009
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: SECURE PARKING (WA) PTY LTD -v- WILSON [No 2] [2009] WASCA 78
CORAM: MARTIN CJ
BUSS JA
MURRAY AJA
HEARD: ON THE PAPERS
DELIVERED : 7 MAY 2009
FILE NO/S: CACV 141 of 2005
BETWEEN: SECURE PARKING (WA) PTY LTD (ACN 073 500 160)
Appellant
AND
ALFRED KARL WILSON
First RespondentNULLAGINE INVESTMENTS PTY LTD (ACN 008 729 717)
Second RespondentPARKING ASSET MANAGEMENT (WA) PTY LTD (ACN 092 214 278)
Third Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :LE MIERE J
Citation :SECURE PARKING (WA) PTY LTD -v- WILSON & ANOR [2005] WASC 264
File No :CIV 1074 of 2003
Catchwords:
Costs - Orders to be made in relation to costs and other relief - Turns on own facts
Legislation:
Nil
Result:
Orders made in relation to costs and other relief
Category: B
Representation:
Counsel:
Appellant: No appearance (On the papers)
First Respondent : No appearance (On the papers)
Second Respondent : No appearance (On the papers)
Third Respondent : No appearance
Solicitors:
Appellant: Talbot Olivier
First Respondent : Tottle Partners
Second Respondent : Su & Co
Third Respondent : Clayton Utz
Case(s) referred to in judgment(s):
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268
MARTIN CJ: I agree with Buss JA.
BUSS JA: On 19 December 2008, the court delivered judgment in this appeal. By a majority (Martin CJ & Buss JA), the appeal was allowed.
On that date, the court made programming orders for the filing of written submissions concerning the orders as to costs which should be made in relation to the appeal and the proceedings at first instance, and the other orders which should be made in the disposition of the appeal. Counsel who appeared on that date agreed the court should make the relevant orders on the papers.
The first respondent (Mr Wilson) filed written submissions on 16 January 2009, the second respondent (Nullagine) filed written submissions on 12 February 2009, the appellant (Secure Parking) filed written submissions on 27 February 2009, Mr Wilson filed written submissions in reply on 5 March 2009 and Nullagine filed written submissions in reply on 6 March 2009.
The background facts and circumstances are set out in the reasons of the learned trial judge (Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264) and in this court's reasons for decision on the appeal (Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268). I will not recount them except to the extent necessary to explain the orders that should be made.
Secure Parking's case in the primary proceedings
In 2003, Secure Parking, as plaintiff, commenced proceedings in the Supreme Court (CIV 1074 of 2003) against Mr Wilson as first defendant and Nullagine as second defendant. The third respondent (Parking Asset Management) was not a party to the proceedings. Secure Parking alleged that in or about June 1996, Mr Wilson orally agreed with Secure Parking to assign a lease (the Lease) of the Esplanade Car Park to it in consideration of the sum of $150,000 paid to Mr Wilson by the 'Secure Parking Group' (being the name given to a group of shareholders in Secure Parking) on behalf of Secure Parking. It was alleged by Secure Parking that the terms of the oral agreement were confirmed in a letter dated 21 June 1996 from Mr Wilson addressed to the 'Secure Parking Group'.
In the final version of its statement of claim, Secure Parking pleaded, relevantly:
(a)By the oral agreement made in or about June 1996, Mr Wilson agreed to assign the Lease to Secure Parking and 'pending formal arrangement' of the assignment, to grant to Secure Parking all rights to the Lease as if the Lease had been formally assigned (par 5).
(b)By letter dated 20 June 1996 and by a handwritten notation of a director of Nullagine dated 21 June 1996, Nullagine consented to the assignment of the Lease upon certain conditions, including 'the give and take usage of [parking] bays by Hotel Guests/Invitees continued' (par 6). It was alleged that the relevant conditions were fulfilled in or about July 1996 and, in any event, no later than the end of September 1996, and at that time a deed assigning the Lease (the Deed of Assignment) was executed by Secure Parking and Mr Wilson (pars 6 and 7).
(c)Nullagine has failed or refused to execute the Deed of Assignment and has refused to acknowledge to Secure Parking that it has consented to the assignment of the Lease or that Secure Parking has any rights under the Lease or in respect of the Esplanade Car Park (par 8).
(d)Further or alternatively, Nullagine is estopped by its conduct from denying that it has consented to the assignment (par 9).
(e)If, which Secure Parking denies, Nullagine did not expressly consent to the assignment, Nullagine, by its conduct, has given its implied consent to the assignment, alternatively has waived any requirement that its consent to the assignment be obtained (par 10).
(f)Alternatively, by the letter dated 21 June 1996, Mr Wilson granted to Secure Parking all rights to receive all income and revenue from the operation of the Esplanade Car Park as if the Lease had been formally assigned to Secure Parking, Mr Wilson agreed that Secure Parking would be entitled to direct him to manage the car park according to its desires and best interests, and Mr Wilson agreed to comply with such directions. Further, it was an express (alternatively, an implied) term of the agreement embodied in the letter dated 21 June 1996 that Secure Parking would be entitled to direct Mr Wilson (as part of the management of the car park according to the desires and best interests of Secure Parking) to exercise the options to renew the Lease which were available to Mr Wilson and which would have been available to Secure Parking if the Lease had been assigned to it. The term was said to be implied on an ad hoc basis in accordance with the principles enunciated in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337. Further, by notice dated 28 July 2005, Secure Parking directed Mr Wilson to exercise the option to renew the Lease for a further period of five years from 18 [sic: 19] October 2005. In breach of his obligations, Mr Wilson refused to exercise the option, as directed by Secure Parking (par 11).
Secure Parking, in its prayer for relief, claimed:
(a)A declaration that:
(i)the Lease has been assigned by [Mr Wilson] to [Secure Parking];
(ii)[Nullagine] has consented to the assignment;
(iii)[Secure Parking] is entitled without any further consent on the part of [Nullagine] to occupy the Esplanade Car Park for the Term of the Lease (including the second option to renew … ).
(aa)Alternatively, if the declaration referred to in paragraph (a) hereof is refused and pursuant to the plea in paragraph 11 hereof, an order that [Mr Wilson] do execute a document of exercise of the option of renewal of the lease due to be renewed on 18 [sic: 19] October 2005 and upon such terms as the Court may direct and deliver such exercise of the option to [Nullagine], so as to effect the exercise of such option.
(b)Consequential orders that [Mr Wilson and Nullagine] do all things that may be necessary to give effect to the assignment.
(c)Such further or other relief as the Court considers just.
The decision of Le Miere J after the trial of the primary proceedings
The primary proceedings were tried before Le Miere J. On 14 October 2005, his Honour delivered judgment and on 7 December 2005, he published his reasons. Secure Parking's action was dismissed.
In summary, the learned trial judge found:
(a)Nullagine did not consent to an assignment of the Lease to Secure Parking [88].
(b)The condition in Nullagine's letter dated 20 June 1996 to the effect that 'the give and take usage of [parking] bays by Hotel Guests/Invitees continued' was not satisfied [90].
(c)Having regard to the terms of the Deed of Assignment, Mr Wilson did not objectively intend to assign the Lease to Secure Parking unless and until the deed was executed by Nullagine [98].
(d)Mr Wilson did not assign the Lease to Secure Parking [99].
(e)Secure Parking's estoppel case was not made out [115].
(f)Nullagine did not impliedly consent to Mr Wilson assigning the Lease to Secure Parking, and Nullagine did not waive its right to object to an assignment [121].
(g)Secure Parking's right under the letter dated 21 June 1996 to direct Mr Wilson to manage the car park according to its desires and best interests did not include, either as an express or an implied term, the right to direct Mr Wilson to exercise the options of renewal under the Lease [125], [128] ‑ [132].
(h)The rights granted by Mr Wilson under the letter dated 21 June 1996 were confined to rights to receive the income and revenue from the car park's operation [126].
Also, the learned trial judge dealt with three other issues raised by Secure Parking. Two of them were pleaded in its reply. His Honour found that Secure Parking's case, based on these issues, was without merit. It is unnecessary to recount the issues or his Honour's reasoning. None of the issues was the subject of a ground of appeal.
The progress of the appeal before it was heard
On 4 November 2005, Secure Parking filed its appeal notice. On 3 February 2006, Secure Parking filed its appellant's case. Mr Wilson and Nullagine filed a joint respondent's answer on 2 March 2006.
On 21 December 2006, Secure Parking filed its substituted appellant's case. Mr Wilson filed his substituted respondent's answer on 22 March 2007 and Nullagine filed its substituted respondent's answer on 10 April 2007, in each case in response to Secure Parking's substituted appellant's case.
Secure Parking's substituted grounds of appeal
Secure Parking's substituted grounds of appeal were these:
1.The learned Trial Judge erred in law in failing to hold that [Mr Wilson] was obliged to give notice of the exercise of his option to renew the lease of the relevant premises at 18 The Esplanade Perth for a term of 5 years from 19 October 2005.
2.The learned Trial Judge erred in law in failing to hold that [Nullagine] was obliged to give effect to such notice of exercise of option by granting a renewed lease to [Mr Wilson] for a term of 5 years from 19 October 2005.
It will be apparent that Secure Parking's appeal was confined to challenging the learned trial judge's findings and decision in relation to the proper construction of the letter dated 21 June 1996, the alleged obligation of Mr Wilson to give a notice exercising the second option to renew and the alleged obligation of Nullagine to give effect to such a notice. The numerous other issues raised unsuccessfully by Secure Parking at trial were not pursued.
Nullagine's substituted notice of contention
Nullagine's substituted notice of contention reads:
[Nullagine] contends that if the learned judge [should have] found [Mr Wilson] was obliged to give notice of the exercise of the option to renew the subject lease for 5 years from 19 October 2005, the dismissal of the action against [Nullagine] should be affirmed on the grounds that, in those circumstances:
1.1[Secure Parking's] only relief would be against [Mr Wilson] for breach of the management agreement set out in [Mr Wilson's] letter dated 21 June 1996 and no relief was available as against [Nullagine];
1.2alternatively, the grant of any relief requiring notice of the exercise of the said option was futile given the subject lease expired pursuant to its terms on 18 October 2005 and the subject property was subsequently relet to another party and, thereafter, sold to another party;
1.3in any event, damages or an account of profits (as against or from [Mr Wilson]) are the appropriate remedies.
Secure Parking's case against Mr Wilson on the appeal and its outcome
Secure Parking's case that Mr Wilson was obliged, at Secure Parking's direction, to exercise each option to renew, and that he breached the obligation, was put on four alternative bases. First, there was a breach by Mr Wilson of the implied duty of each party to a contract to cooperate in the performance of contractual obligations. It was submitted that the obligation to exercise each option to renew arose from the terms of the first paragraph of the letter dated 21 June 1996 in order to enable Secure Parking to obtain the benefit of the agreement embodied in it. Secondly, there was a grant of 'all rights to receive all income and revenue from the Car Park's Operation as if the Lease had been formally assigned to [Secure Parking]', and the refusal to exercise the second option to renew constituted a derogation from the grant. Thirdly, the $150,000 paid by Secure Parking to Mr Wilson pursuant to the letter dated 21 June 1996 was for the purchase of the business carried on by Mr Wilson under the name, 'Panda Parking', and the principal asset of that business was the Lease. It was submitted that Secure Parking was therefore the beneficial owner of the Lease and, as between Mr Wilson and Secure Parking, Mr Wilson held the benefit of the Lease as a bare trustee. Fourthly, there was a breach by Mr Wilson of an implied term to the effect that he would, at Secure Parking's direction, exercise each option to renew, the implication of the term being necessary to give business efficacy to the agreement embodied in the letter dated 21 June 1996.
The majority of the court held that Secure Parking was entitled to direct, and did direct, Mr Wilson to give notice of exercise of the option to renew the Lease for a term of five years from 19 October 2005. Nullagine was obliged to give effect to a notice of exercise of the second option to renew given by Mr Wilson in accordance with the Lease and the agreement to extend the latest date for exercising the option. By failing or refusing to exercise the second option to renew pursuant to Secure Parking's direction, Mr Wilson breached the agreement embodied in the letter. The majority decided to allow the appeal, set aside the orders of the learned trial judge and make a declaration in terms which reflected the reasons of Buss JA (with whom Martin CJ agreed) on these issues.
The majority also decided that damages would be an adequate remedy for Secure Parking against Mr Wilson. It was neither open nor appropriate to grant Secure Parking any restitutionary remedies in the appeal or on remitter to the learned trial judge or another judge of the General Division.
The majority allowed the appeal on the basis of Secure Parking's submissions concerning the proper construction of the letter dated 21 June 1996 including, in particular, the implied duty of each party to a contract to cooperate in the performance of contractual obligations and the implication of a term to the effect that Mr Wilson would, at Secure Parking's direction, exercise each option to renew.
It was unnecessary, in the circumstances, for the majority to reach a conclusion as to Secure Parking's submissions based on the principle that a grantor must not derogate from his or her grant or the creation of a trust in respect of the lessee's interests under the Lease.
Secure Parking's case against Nullagine on the appeal and its outcome
The learned trial judge delivered judgment on 14 October 2005, which was within time for the exercise of the second option for renewal. His Honour published his reasons on 7 December 2005. Secure Parking contended that if the appeal was allowed, Secure Parking should be restored to the position in which it would have been if, on 14 October 2005, his Honour had ordered Mr Wilson to exercise the option. As at that date, Nullagine would have been obliged to have entered into a renewed lease with Mr Wilson. Secure Parking, which was then in occupation of the car park, could have continued to enjoy the income derived from its operation.
Counsel for Secure Parking acknowledged that 'in a sense' third party rights had intervened in that, by a deed of lease dated 30 January 2006, Nullagine granted a lease of the Esplanade Car Park to Parking Asset Management. However, it was submitted that, consistently with restoring Secure Parking to the position it should have been in on 14 October 2005, this lease could be brought to an end by Nullagine or its successors in title. Counsel referred to item 16.4(a) of the First Schedule to the deed (the 'break clause'), which permitted Nullagine or its successors in title to give notice that had the effect of terminating the lease in the event that 'as a consequence of any Court action between the Lessor and any previous lessee of the Leased Premises, the Lessor was required by the Court to grant a lease of the Leased Premises (or any part) to that lessee or grant that lessee occupation or management rights with respect to the Leased Premises (or any part)'.
Secure Parking sought an order for a renewed lease, and orders that acknowledged its rights to manage the car park during the term of the renewed lease. The orders in question, so it was submitted, should invoke the operation of the 'break clause'.
This court held that Secure Parking was not entitled to any such relief against Nullagine.
Declaratory orders by this court
It is appropriate for this court to make declaratory orders to the following effect:
(a)A declaration that Secure Parking was entitled to direct and did direct Mr Wilson to give notice of the exercise of his option to renew the Lease for a term of five years from 19 October 2005.
(b)A declaration that Nullagine was obliged to give effect to a notice of exercise of the second option to renew given by Mr Wilson in accordance with the Lease and the agreement to extend the latest date for exercising the option.
This declaratory relief is relevant to the determination that must be made as to the damages recoverable by Secure Parking against Mr Wilson.
The costs and other orders made by the learned trial judge
On 14 October 2005, the learned trial judge made these orders:
1.[Secure Parking's] action be dismissed.
2.The motion for judgment otherwise be adjourned to a date to be fixed.
3.The question of costs be reserved.
On 31 March 2006, the learned trial judge made the following orders as to costs:
4.[Secure Parking] pay [Mr Wilson's and Nullagine's] costs of the action, to be taxed as two bills, subject to the following:
a.there be a single allowance for counsel, to be split between [Mr Wilson and Nullagine];
b.the Counsel fee in 4(a) be taxed at the scale rate applicable for Senior Counsel;
c.[Mr Wilson and Nullagine] have no costs for the day 17 August 2005;
d.[Mr Wilson and Nullagine] have no costs caused or occasioned by the amendment made to [Nullagine's] Defence on 17 August 2005;
e.[Mr Wilson and Nullagine] have no costs for the adjournment following the amendment made to [Nullagine's] Defence on 17 August 2005; and
f.[Mr Wilson and Nullagine] have no costs for the extended argument in relation to costs.
5.[Secure Parking] pay [Mr Wilson's] costs of obtaining the transcript of the proceedings.
6.[Nullagine] pay [Secure Parking's] costs thrown away by the amendment to [Nullagine's] defence dated 17 August 2005.
7.[Secure Parking] pay [Mr Wilson's and Nullagine's] costs of attending on judgment on 14 October 2005.
8.There be liberty to apply in relation to costs.
The costs orders made by the learned trial judge have been carried into effect. Each of Mr Wilson and Nullagine filed separate bills of costs. The bills have been taxed and Secure Parking has paid the costs allowed.
The costs orders which this court should make as between Secure Parking and Mr Wilson
Secure Parking made out its substituted grounds of appeal as against Mr Wilson. Secure Parking did not, however, obtain the primary relief it sought. It was confined to damages.
In my opinion, it is appropriate to apply the ordinary rule in relation to the costs of an appeal (namely, that costs follow the event), subject to the following:
(a)Secure Parking should not recover its costs of preparing its original appellant's case (which was superseded by its substituted appellant's case);
(b)Mr Wilson should recover his costs thrown away as a result of Secure Parking having abandoned its original appellant's case; and
(c)the costs orders should take into account Secure Parking's failure to obtain the primary relief it sought against Mr Wilson.
In my opinion, rather than making individual orders in relation to each of the matters I have just mentioned, justice would be done as between Secure Parking and Mr Wilson by ordering Mr Wilson to pay 85% of Secure Parking's taxed costs of the appeal incurred after 21 December 2006 (being the date on which Secure Parking filed its substituted appellant's case), including any costs reserved after that date.
In my opinion, it is not reasonable for Secure Parking to have any of its costs of the primary proceedings. Secure Parking was unsuccessful on a number of issues which were contested at the trial but not challenged in the appeal. These issues were not trivial or insubstantial. They involved significant issues of fact and law. Further, the submissions put by Secure Parking to this court in relation to the basis on which the appeal was successful were, to some extent, different from the submissions put to the learned trial judge. In particular, Secure Parking did not make submissions to his Honour based on the principle that each party to a contract is under an implied duty to cooperate in the performance of contractual obligations or cite the well‑established line of authority in support of that principle. Also, Secure Parking did not put to his Honour its submissions on appeal relating to non‑derogation from a grant or the creation of a trust in respect of the lessee's interests under the Lease. Its submissions below were, relevantly, based solely on the implication of an implied term on an ad hoc basis in accordance with Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 and Codelfa Construction.
I consider that justice would be done as between Secure Parking and Mr Wilson if each were ordered to bear its or his own costs of the primary proceedings.
The costs orders which this court should make as between Secure Parking and Nullagine
Secure Parking failed to obtain any substantive relief against Nullagine on the appeal. See [23] ‑ [25] above. It is true that Nullagine adopted the unsuccessful submissions of Mr Wilson at the hearing of the appeal, but that adoption did not add to the costs of the appeal (or, if it did, the additional cost was trivial).
There is no reason why the ordinary rule as to the costs of an appeal should not be applied. I would order Secure Parking to pay Nullagine's costs of the appeal, including the substituted notice of contention and any reserved costs, to be taxed.
In my opinion, it follows from Secure Parking's failure to obtain any substantive relief against Nullagine on the appeal and from the manner in which Secure Parking ran its case in the primary proceedings (see [7], [10], [11] and [34] above), that the costs orders made by the learned trial judge as between Secure Parking and Nullagine should not be disturbed.
Nullagine argued that Secure Parking should be ordered to pay its costs of the appeal on an indemnity basis. It advanced two grounds in support of this submission. First, it contended that Secure Parking's appeal as against Nullagine was misconceived or groundless and, accordingly, to maintain the appeal was unreasonable or, it can be assumed, must have been for some ulterior motive. Secondly, it contended that even if Secure Parking had grounds to commence the appeal against Nullagine, Secure Parking should, properly advised, have discontinued the appeal when Secure Parking:
(a)was given notice that Nullagine had sold the title to the subject property and settlement had taken place; or
(b)was given notice of further dealings with the subject lease and property, but took no steps to restrain the dealing; or
(c)abandoned its application for any 'orders wanted' which affected Nullagine.
I have read and considered Nullagine's submissions in support of the application for indemnity costs and the affidavits of Brett Raymond Molony sworn 23 January and 12 February 2009 in support of the application. I am not persuaded, however, that Secure Parking's conduct in commencing or proceeding with the appeal against Nullagine should be characterised as 'unreasonable' (in the sense understood in the context of applications for indemnity costs) or that it has behaved improperly (for example, to advance some ulterior purpose). The costs as between Secure Parking and Nullagine should be taxed on a party and party basis.
Remission of the primary proceedings for the assessment of damages
None of the parties submitted that there was any reason why the primary proceedings should not be remitted to the learned trial judge (and not some other judge of the General Division) for the assessment of damages. In the circumstances, the final orders of this court should make
provision for the action to be remitted to his Honour for the purpose of determining damages.
The final orders
Counsel should prepare and submit to this court a minute which gives effect to the majority reasons which allowed the appeal and to these reasons.
MURRAY AJA: I agree with Buss JA.
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