Secure Parking (WA) Pty Ltd v Wilson [No 2]
[2014] WASC 366
•1 OCTOBER 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SECURE PARKING (WA) PTY LTD -v- WILSON [No 2] [2014] WASC 366
CORAM: BEECH J
HEARD: 24 SEPTEMBER 2014
DELIVERED : 24 SEPTEMBER 2014
PUBLISHED : 1 OCTOBER 2014
FILE NO/S: CIV 2192 of 2002
BETWEEN: SECURE PARKING (WA) PTY LTD
Plaintiff
AND
ALFRED KARL WILSON
First DefendantPARKING ASSET MANAGEMENT PTY LTD
Second DefendantJOAN OLIVE WILSON
Third DefendantLAWRENCE LESLIE WILSON
Fourth DefendantPARKING ASSET MANAGEMENT (WA) PTY LTD
Fifth Defendant
FILE NO/S :CIV 2363 of 2010
BETWEEN :SECURE PARKING (WA) PTY LTD
Plaintiff
ALFRED KARL WILSON
First DefendantPARKING ASSET MANAGEMENT PTY LTD
Second DefendantJOAN OLIVE WILSON
Third DefendantLAWRENCE LESLIE WILSON
Fourth DefendantPARKING ASSET MANAGEMENT (WA) PTY LTD
Fifth Defendant
FILE NO/S :CIV 1074 of 2003
BETWEEN :SECURE PARKING (WA) PTY LTD
Plaintiff
AND
ALFRED KARL WILSON
First DefendantNULLAGINE INVESTMENTS PTY LTD
Second Defendant
Catchwords:
Practice and procedure - Whether two actions should be heard together - Turns on own facts
Legislation:
Nil
Result:
Actions ordered to be heard together
Category: B
Representation:
CIV 2192 of 2002
Counsel:
Plaintiff: Mr B W Rayment QC
First Defendant : Mr J A Thomson SC
Second Defendant : Mr J A Thomson SC
Third Defendant : Mr J A Thomson SC
Fourth Defendant : Mr J A Thomson SC
Fifth Defendant : Mr J A Thomson SC
Solicitors:
Plaintiff: Talbot & Olivier
First Defendant : Tottle Partners
Second Defendant : Tottle Partners
Third Defendant : Tottle Partners
Fourth Defendant : Tottle Partners
Fifth Defendant : Tottle Partners
CIV 2363 of 2010
Counsel:
Plaintiff: Mr B W Rayment QC
First Defendant : Mr J A Thomson SC
Second Defendant : Mr J A Thomson SC
Third Defendant : Mr J A Thomson SC
Fourth Defendant : Mr J A Thomson SC
Fifth Defendant : Mr J A Thomson SC
Solicitors:
Plaintiff: Talbot & Olivier
First Defendant : Tottle Partners
Second Defendant : Tottle Partners
Third Defendant : Tottle Partners
Fourth Defendant : Tottle Partners
Fifth Defendant : Tottle Partners
CIV 1074 of 2003
Counsel:
Plaintiff: Mr B W Rayment QC
First Defendant : Mr J A Thomson SC
Second Defendant : Mr J A Thomson SC
Solicitors:
Plaintiff: Talbot Olivier
First Defendant : Tottle Partners
Second Defendant : Tottle Partners
Case(s) referred to in judgment(s):
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268
Secure Parking (WA) Pty Ltd v Wilson [2012] WASCA 230
BEECH J:
(These reasons were delivered orally and have been edited from the transcript)
Introduction
There are two actions before me. One of them is the consolidation of actions which were commenced in 2002 and 2010. I refer to this as the Equitable Action. The other is the action commenced in 2003, tried in 2005 and the subject of an appeal in 2008. I refer to this as the Contract Action. The question before me is whether the two actions should be heard together, as the plaintiff (Secure Parking) submits, or whether what remains of the Contract Action should be heard first, as the defendants submit.
Background
The actions have a long history. I will give no more than a very broad overview.
In 1995, car parking premises at the Esplanade was owned by Nullagine Investments Pty Ltd (Nullagine). On 19 October 1995, Nullagine leased the car park to the first defendant in each action, Mr Alfred Wilson. The lease was for a term of five years with two five year options. The lease contained a term requiring consent to any assignment.
By letter of 21 June 1996, Mr Wilson entered in agreement with Secure Parking. By that letter agreement, Mr Wilson agreed that until the assignment of the lease was consented to by the lessor, Mr Wilson granted Secure Parking the right to receive all income from the car park's operation as if the lease had been formally assigned to Secure Parking.
In the Contract Action Secure Parking made a number of claims. One claim was that the lease had been assigned to it. That claim was unsuccessful. Secure Parking also claimed that Mr Wilson was contractually obliged to exercise the option in October 2005 to extend the lease for a further five years. That claim failed at trial but succeeded on appeal. The Court of Appeal found that by failing or refusing to give effect to Secure Parking's direction that he exercise the option, Mr Wilson breached the agreement that had been made by letter on 21 June 1996. The Court of Appeal entered judgment for Secure Parking for damages to be assessed.[1]
[1] Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268.
In October 2005, Mr Wilson's lease of the premises had come to an end by effluxion of time, given that the option had not been exercised.
On 30 January 2006, Nullagine granted a lease of the car park premises to the fifth defendant in the Equitable Action (PAM (WA)). On 13 October 2006, there became a new owner of the leased premises, who I will refer to as Benbally. On 23 October 2006, Benbally terminated the lease held by PAM (WA), but permitted it to remain as a monthly tenant.
In the Equitable Action, Secure Parking pleads conduct on the part of Mr Wilson in July and August 2002. That conduct includes an agreement said to have been made between various defendants that Mr Wilson would not exercise the option in relation to the Wilson lease and that a new company would take up a new lease. Secure Parking also pleads negotiations between Mr Wilson and a representative of Nullagine, and Mr Wilson's resignation as General Manager of Secure Parking and as a Director.
Secure Parking also pleads that Mr Wilson did not renew the lease in October 2005 and subsequently operated the car park for his own benefit or for the benefit of the other defendants from October 2005 onwards, including the obtaining of a lease to PAM (WA) in January 2006.
Le Miere J stayed the Equitable Action. An appeal against that decision was upheld.[2] Paragraphs [77] ‑ [79] of the Court of Appeal reasons are as follows:
As a result of the Court of Appeal's orders, Secure Parking would be seeking to recover damages at law against Mr Wilson for breach of contract on 19 October 2005, in the assessment of which the terms of the original lease will be relevant. On the other hand, in the further litigation, Secure Parking would seek an account of profits or equitable compensation from him in relation to another transaction, involving a different lease, the terms of which, the Court of Appeal found, were materially different from the original lease. Orders would also be sought in the further litigation against the other respondents, in relation to whom Secure Parking has no claim for damages at all for breach of contract. Orders for equitable relief may be moulded to prevent double recovery. For example, the court may direct that any sum recovered by way of damages is to be deducted from the sum awarded in respect of account of profits, in order to avoid any double recovery: House of Spring Gardens v Point Blank [1985] FSR 327, 346 and see also the discussion of that case in Meagher, Gummow & Lehane's Equity, Doctrines and Remedies [25 ‑ 020]
It cannot be said in these circumstances that the claims for equitable relief will likely produce judgments inconsistent with the Court of Appeal's orders, particularly if consolidation is ordered (as Secure Parking has previously proposed).
The appeals should be allowed. The further litigation, and the assessment of damages, mark a new stage in the parties' disputes. The matters should proceed afresh in a different CMC List with any current orders concerning remitter to the primary judge to be varied accordingly. The parties should be given an opportunity to consider these reasons and be heard on the precise form of final orders and on the question of costs.
[2] Secure Parking (WA) Pty Ltd v Wilson [2012] WASCA 230.
If and to the extent that Secure Parking submits that the Court of Appeal contemplated or proposed that the Equitable Action would be consolidated with or heard together with the assessment of damages in the Contract Action, I do not accept that submission. The Court of Appeal ordered that the two actions be case managed together. In the course of case managing the actions, it is for the case manager to assess whether the actions are more conveniently heard together or separately, and if separately, in what order.
The Court of Appeal was mindful of the need to ensure that equitable relief be moulded to avoid any double recovery. That object can be achieved equally by either parties' proposed course of action. If damages are assessed first, equitable compensation can be moulded to avoid double recovery.
Previous directions hearing
These actions came before the court for directions on 28 August 2014.
By then, both parties had filed a minute of consent orders proposing the filing of witness statements and the preparation of trial bundles for the Equitable Action. Inquiries from the court in the course of the directions hearing on 28 August about the relationship between the claim for damages in the Contract Action and the claim for compensation in the Equitable Action gave rise to a submission on the part of the defendants that assessment of damages in the Contract Action should occur first. At that stage, the legal representative then appearing on behalf of Secure Parking was unable to assist with any submissions.
The matter was adjourned to 24 September 2014. It was contemplated that, in the meantime, particulars of loss and damage and of compensation would be provided, and that thereafter the parties would confer further.
Should the actions be heard together?
Regrettably, Secure Parking has not provided the particulars that were requested on 28 August 2014. However, the relationship between what is claimed by Secure Parking in the two actions has been made sufficiently clear in oral submissions before me today.
In those submissions, senior counsel for Secure Parking outlined the substance of the claim for damages and the claim for equitable compensation. In essence, the claim for contract damages is for five years of profit that Secure Parking says it would have earned under the renewed Wilson lease. The claim for equitable compensation seeks six years of profits from October 2005 until October 2011. October 2011 is when PAM (WA) in fact ceased to be in possession of the car park premises. Secure Parking's case is that it would have had the benefit of the Wilson lease in the absence of the breaches of fiduciary duty, and would then have been permitted to hold over in the same way as PAM (WA) was permitted until October 2011.
It can be seen therefore that there is a substantial overlap in what is claimed in the two actions. It is obvious, and Secure Parking accepts, that it cannot recover twice for the profits of the first five years after October 2005. Thus, if Secure Parking obtains judgment in the contract damages assessment in the sum it seeks, representing five years profit and, if that judgment if satisfied, only one year's profit would be left as the subject matter of the Equitable Action.
Assuming confidence on the part of Secure Parking in its damages claim in the Contract Action, one might have expected that that might lead Secure Parking to favour resolution of the damages assessment in the Contract Action first. However, that is not its position.
From Secure Parking's perspective, doubts as to the recovery of any damages awarded against the first defendant, Mr Wilson, mean, in its submission, that it cannot be assumed that success by Secure Parking on the damages assessment would leave only one year of profits as the subject matter of the Equitable Action.
In the Contract Action, the defendants' case on damages includes that:
(a)if the Wilson lease had been renewed, the new owner of the premises, Benbally, would have terminated that lease by no later than April 2007;
(b)although PAM (WA) remained in possession of the car park until October 2011 after its lease was terminated, that occurred for reasons personal to PAM (WA), and the same would not have occurred if the Wilson lease had been renewed in the car park and therefore been under Secure Parking management; and
(c)consequently, damages are limited to the profit that Secure Parking would have made in the 18 months from October 2005 to April 2007.
The defendants submit that it is in the interests of justice and conducive to efficiency for the damages assessment to occur first because:
(a)the damages assessment is likely to only take two days, whereas the trial of the Equitable Action may take up to two weeks;
(b)hearing and determining the damages assessment may avoid the need for a second longer trial;
(c)in any case, determination of the damages assessment is likely to assist the Equitable Action by resolving an important factual issue about whether a renewed Wilson lease would have been terminated by the new owner; and
(d)if the factual issue is resolved in favour of the defendants, that will mean that equitable compensation is limited to 18 months of profits.
Mr Thomson submits that the parties to the Equitable Action will be bound by the findings in the assessment of damages in the Contract Action. Apart from Mr Wilson, many of the other defendants in the Equitable Action are not parties to the Contract Action. Mr Thomson undertakes that the other defendants in the Equitable Action agree to be bound by the findings of fact in the contract damages assessment. However, Secure Parking will only be bound as against the first defendant; it will not be bound against other defendants. That gives rise to a risk of re‑litigation of any finding as to whether a renewed Wilson lease would have been terminated by the new owner. That would be inefficient, and would be capable of giving rise to conflicting judgments.
Further, given the different tests for causation in equity and in contract, it is not at this stage clear beyond doubt that findings in favour of the defendant in the damages assessment would necessarily mean that equitable compensation is capped at 18 months of profits.
Another undesirable consequence of hearing the damages assessment first is the potential that a different judge may have to hear the trial of the Equitable Action. The damages assessment will involve, at least, evidence from a director of Benbally, the new owner of the car park premises, and competing expert evidence about the profits that Secure Parking would have made had the Wilson lease been renewed. At this stage, the range of possible reasons for factual findings that might be made respecting this evidence cannot confidently be limited. Depending upon the reasons given for factual findings, there may be an apprehension of bias difficulty with the same judge going on to hear the Equitable Action. It would be undesirable for a new judge to be required to hear the Equitable Action because that would give rise to an element of double handling, and the benefit of the accumulated knowledge of the case manager would be lost.
For these reasons, I do not accept the defendants' submission that because the findings in a damages assessment would be binding on the parties in the Equitable Action any overlap between the damages assessment and the Equitable Action would not give rise to any inefficiency . Rather, in my view, the fact of that overlap is a ground which distinctly militates in favour of hearing the two actions together.
The defendants point out, correctly, that the Contract Action has been on foot for more than 10 years and that the Court of Appeal entered judgment for damages to be assessed more than five years ago. They submit that, in that light, case management considerations favour an early hearing of the damages assessment. In general terms, I accept that that is so, however the Equitable Action has also been on foot for a long time. Moreover, the two actions can be progressed to trial together. While that will involve some delay in the resolution of the damages assessment, in the context of the history of these actions, any such delay will not be substantial.
Further, hearing the two actions separately is liable to add further complications in that there may well be room for substantial argument about what the result of the damages assessment means in and for the Equitable Action.
For these reasons, in my view, the interests of justice and the efficient and just management and resolution of the actions are better advanced by hearing the two actions together. Consequently, I would make orders to the effect proposed by Secure Parking.
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