Stekovic v Radovanovic (No 2)

[2023] NSWSC 1602

Supreme Court

New South Wales

Medium Neutral Citation:

Stekovic v Radovanovic (No 2) [2023] NSWSC 1602

Hearing dates:

On the papers

Date of orders:

15 December 2023

Decision date:

15 December 2023

Jurisdiction:

Equity

Before:

McGrath J

Decision:

See [34]

Catchwords:

PRACTICE AND PROCEDURE — form of declaration and orders to give effect to previous judgment — no issue of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bloch v Bloch (1981) 180 CLR 390

Roberts v Goodwin Street Developments Pty Ltd [2022] NSWCA 103

Stekovic v Radovanovic [2023] NSWSC 1471

Tyro Payments Ltd v Kounta Pty Ltd(No 2) [2023] NSWSC 1402

Category:

Principal judgment

Parties:

Milivoj Stekovic (First Plaintiff)
Jovanka Stekovic (Second Plaintiff)
Goran Radovanovic (Defendant)

Representation:

Counsel:
A Davis (Plaintiffs)
L Collaris (Defendant)

Solicitors:
Chamberlains Law Firm (Plaintiffs)
Warlows Legal (Defendants)

File Number(s):

2022/00385224

Publication restriction:

Nil

JUDGMENT

INTRODUCTION

1. On 29 November 2023, I determined these proceedings in favour of the plaintiffs, Milivoj and Jovanka Stekovic, against the defendant, Goran Radovanovic: Stekovic v Radovanovic [2023] NSWSC 1471. These reasons assume a familiarity with the facts and issues raised in Stekovic.

2. I determined that Milivoj and Jovanka are entitled to a declaration that an immediately binding settlement agreement arose between them on 3 June 2022 with the acceptance of the terms of the counter offer made on 2 June 2022: Stekovic at [64]. In Stekovic at [65] I stated:

The parties are to consult and attempt to agree short minutes reflecting these reasons, including any claim for specific performance of the agreement, any claim to interest to the date of judgment, and costs and provide them to my Associate by email within 7 days. If the parties are unable to agree on the proposed orders by that time, I will determine those orders on the papers after allowing the parties a short period of time to provide me with any further evidence and submissions (of no more than 2 pages, 1.5 spacing, 12 font).

3. The parties have been unable to reach any agreement on the orders to be made reflecting my reasons in Stekovic. I have received submissions from each of them, together with the proposed form of orders that they each propound.

4. Having considered all of the matters raised by the parties in their respective submissions, set out below are the orders I propose to make, together with my reasons for making them.

DECLARATION

5. Milivoj and Jovanka propose a declaration in the following terms:

A declaration that an immediately binding settlement agreement arose between the Plaintiffs, and the Defendant, on 3 June 2022, with the acceptance of the terms of the counter offer made on 2 June 2022.

6. Goran proposes a declaration in the following terms:

A declaration that the following documents constitute a binding and enforceable agreement between the parties:

a.   Letter from North Herring Lawyers to Chamberlains Law Firm dated 2 June 2022 sent by email on 3 June 2022 at 10:53am; and

b.   email from Chamberlains Law Firm to North Herring Lawyers sent 3 June 2022 at 11:44am.

7. In my view, the form of declaration that should be made is one which reflects the fact that the agreement was immediately binding and enforceable and arose by virtue of the particular documents which conveyed the offer and the acceptance of it. For those reasons, the form of declaration I will make is in the following form:

A declaration that an immediately binding and enforceable agreement was made on 3 June 2022 between the plaintiffs and the defendant as evidenced by the letter dated 2 June 2022 from the defendant’s solicitors to the plaintiffs’ solicitors and the email dated 3 June 2022 from the plaintiffs’ solicitors to the defendant’s solicitors.

SPECIFIC PERFORMANCE, INCLUDING PAYMENT

8. Milivoj and Jovanka propose a set of orders they contend provide the specific performance of the agreement which is the subject of the declaration. These are:

3.   That in furtherance of the binding settlement agreement referred to in paragraph 1 above, the defendant is to execute the Deed of Settlement and Release in the form of Annexure A to these orders by no later than 19 December 2023.

4.   The plaintiffs and defendant are to exchange counterparts of the Deed of Settlement and Release referred to in order 4 [sic] by no later than 4pm 19 December 2023.

5.   In default of the defendant complying with order 3 and/or 4 herein, and upon referral by the plaintiffs to the Equity Registrar of the notification of default in the form of an affidavit as set out at Annexure B to these orders:

a.   an order appointing the Registrar in Equity to act in accordance with these orders; and

b.   an order that the Deed of Settlement and Release referred to in order 2 [sic] is to be referred to, and executed by the Registrar in Equity of the Court in lieu of the defendant with such effect as to bind the parties.

c.   an order that the Registrar in Equity be permitted to take such steps as may be required by them to effect exchange of the Deed of Release[sic] with the plaintiffs and to provide to the defendant a copy of the executed Deed of Release [sic].

6.   Upon the exchange of the Executed Deed of Settlement and Release, a copy of the executed document is to be provided to Messrs Baker Deane & Nutt, accompanied by a copy of these orders, such that they be permitted to disburse the funds held in trust in accordance with these orders and the Deed.

9. Goran contends that there should be no such elaborate orders, instead proposing a simple order concerning a direction to pay, as follows:

2.   The parties are ordered to direct Baker Deane & Nutt Lawyers (BDN) to:

a.   pay to the plaintiffs the sum of $225,000 from the funds held on trust by BDN in respect of the sale of 8 Donald Road, Queanbeyan, New South Wales; and

b.   pay to the defendant the sum of $321,409.17 from the funds held on trust by BDN in respect of the sale of 8 Donald Road, Queanbeyan, New South Wales.

10. In my view, the elaborate set of orders sought by Milivoj and Jovanka are not necessary in this case. There is an immediately binding and enforceable agreement which is the subject of the declaration. Fashioning orders requiring Goran to execute a proposed Deed of Settlement and Release is unnecessary and will no doubt lead to further disputation about the particular provisions contained in it. I think that a simple approach should be taken.

11. The order which will give effect to the declaration is one in terms of paragraph 1 in the offer made in the letter of 2 June 2023 from North Herring to Chamberlains which stated:

My client will authorise Baker Deane & Nutt to pay to your clients from the funds held an amount of $225,000.00

12. An order that requires Goran to give that authority to Baker Deane & Nutt is the step required to specifically perform the agreement. It is not necessary for Milivoj and Jovanka to give that authority as the amount is being held by Baker Deane & Nutt on trust at the direction of Goran.

13. I am not, however, persuaded that I should make any orders which deal with the balance of the moneys left in the trust account of Baker Deane & Nutt after the payment of $225,000 is made to Milivoj and Jovanka. The claims of Goran or any other party to that balance were not before me for adjudication.

14. I consider that the form of order I should make is as follows:

Order the defendant to authorise and direct Baker Deane & Nutt to pay the plaintiffs the amount of $225,000 from the funds held on trust by Baker Deane & Nutt from the sale of 8 Donald Road, Queanbeyan, New South Wales.

CROSS-SUMMONS

15. The cross-summons filed 13 June 2023 by Goran sought the following orders:

1.   A declaration that the cross-claimant is entitled to the net proceeds of the sale of the property situated at Lot 1 in Deposited Plan 207195 and known as 8 Donald Road, Queanbeyan (the Property) which settled on 13 November 2020 which proceeds are held on trust by Baker Deane & Nutt Lawyers.

2.   Each of the cross-defendants be required to deliver to Baker Deane & Nutt Lawyers 3 business days an authority to release the net sale proceeds of the Property held on trust by Baker Deane & Nutt, plus any interest earned thereon, to the cross-claimant.

3.   Damages, alternatively equitable compensation.

4.   An order that the cross-defendant pay the cross-claimant’s costs of this application.

5.   Any further orders the court considers appropriate.

16. Milivoj and Jovanka propose an order in relation to the disposal of the cross-summons in the following form:

The cross-summons filed 13 June 2023 be dismissed.

17. Goran proposes an order in relation to the disposal of the cross-summons in the following form:

The cross-summons filed 13 June 2023 is dismissed without adjudication on its merits and with no order as to costs.

18. In light of the findings I made in Stekovic in relation to the summons, none of the orders sought in the cross-summons could possibly be made. There has been an adjudication on the issues raised by the cross-summons, with Goran failing on all of those issues. For these reasons, I propose to order the following:

Order the cross-summons filed 13 June 2023 be dismissed.

INTEREST

19. Milivoj and Jovanka seek interest on the amount of $225,000 that Goran must pay. They seek an order in the following terms:

The Defendant is to pay interest upon the sum of $225,000:

a. For the period from 10 June 2022 to 18 December 2023 (the due payment date) in accordance with section 100 of the Civil Procedure Act 2005 totalling $22,491.99 (“the Interest Payment”)

b. For any period after 18 December 2023, in accordance with section 101 of the Civil Procedure Act 2005 at the rate of $62.26 per day or part thereof.

20. Section 100(1) of the Civil Procedure Act 2005 (NSW) (CPA) states:

In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit:

(a)   on the whole or any part of the money, and

(b)   for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect.

21. Goran says that the proceedings were not “for the recovery of money including any debt or damages or the value of any goods” but were for a declaration and specific performance. Milivoj and Jovanka rely on the reasoning of the High Court in Bloch v Bloch (1981) 180 CLR 390, Wilson J (with whom Gibbs CJ, Murphy, Aickin and Brennan JJ agreed) at 398 stating:

The third submission for the appellant attacks the award of interest pursuant to s 72 of the Act. Counsel argues that the action is one for a declaration and hence does not fall within the description of proceedings for the recovery of money. I think this contention must fail. The claim is for a declaration that the plaintiffs are entitled to a one-third share of the “proceeds of sale” of the property and, inter alia, for “further or other relief”. The writ was issued on 5 July 1976, the sale of the property was finalized on 9 July 1976, and on that day, by arrangement between the parties, the sum of $20,000 being part of the proceeds of sale was paid into court. In addition to making a declaration of the one-third entitlement of the respondents his Honour also ordered that the judgment be satisfied by payment out of the moneys in court. In my opinion, the proceedings clearly come within the description of proceedings in respect of a cause of action for the recovery of money (cf In Shoppe Pty Ltd v Smith (1976) 6 ATR 242 at 247–8 ).

22. In my opinion, s 100(1) needs to be interpreted in a substantive and not formulistic way. In the proceedings, Milivoj and Jovanka were seeking to recover the money in the amount of $225,000 that Goran was obliged to pay them under the immediately binding agreement that was reached on 3 June 2022. In my opinion, these are proceedings for the recovery of money within s 100(1) of the CPA and as a result Milivoj and Jovanka are entitled to an award of interest.

23. Section 101(1)-(3) of the CPA is in the following terms:

(1)   Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid.

(2)   Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from:

(a)   the date on which the judgment takes effect, or

(b)   such later date as the court may order.

(3)   Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary.

24. I do not think that I need to make any order about post-judgment interest of the sort contained in sub-paragraph (b) by Milivoj and Jovanka in the present case as s 101 of the CPA will apply in accordance with its terms until the full amount of the judgment is paid.

25. As a result, the order I propose to make with respect to the payment of interest is:

Order the defendant to pay interest upon the sum of $225,000 for the period from 10 June 2022 to 18 December 2023 (the due payment date) pursuant to section 100 of the Civil Procedure Act 2005 (NSW) totalling $22,491.99.

COSTS

26. Milivoj and Jovanka propose an order for costs in the following form:

The defendant is to pay the plaintiffs’ costs of the proceedings (including the costs of the Cross-Claim) as agreed or assessed.

27. Goran proposes an order for costs in the following form:

The defendant is to pay the plaintiffs’ costs of the summons filed 21 December 2022 as agreed or assessed to 29 November 2023.

28. For the reasons that I have given above, it is appropriate for the cross-summons to be dismissed. The exercise of my discretion with respect to costs pursuant to s 98(1)(b) of the CPA in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) is that costs follow the event. Milivoj and Jovanka have achieved comprehensive success in the proceedings, both in relation to the summons and the cross-summons. For that reason, they are entitled to their costs of the whole of the proceedings, not just limited to the summons. For these reasons, I propose to make the following order:

Order the defendant to pay the plaintiffs’ costs of the proceedings, as agreed or assessed.

STAY OF ORDERS

29. Goran seeks a stay of the orders so that he may file an appeal and then, once the appeal is on foot, seek a further stay in the appeal proceedings. Goran submits that a stay is warranted in this case because once the trust monies are dispersed by Baker Deane & Nutt there can be no certainty of recovery by either party in the event that the appeal is successful. It is contended that I should preserve the status quo pending the outcome of the appeal. Accordingly, Goran proposes the following order:

Pursuant to section 67 of the Civil Procedure Act 2005, orders 2 to 4 above are stayed until 1 February 2024.

30. Milivoj and Jovanka oppose the granting of a stay, submitting that no basis has been advanced to justify a stay of the orders and if that basis is an appeal, the prospects of such appeal must be weak at best, with no draft appeal having been provided.

31. The relevant principles are conveniently described in Tyro Payments Ltd v Kounta Pty Ltd(No 2) [2023] NSWSC 1402, Rees J at [5]-[8] as follows:

5   The Supreme Court has inherent power to stay execution of a judgment or order “in any situation where the requirement of justice demands it”: Tringali v Stewardson Stubbs & Collett Pty Ltd [1966] 1 NSWR 354 at 360. Section 67 of the Civil Procedure Act 2005 (NSW) also confers a general power on the Court, subject to the Uniform Civil Procedure Rules 2005 (NSW), to stay proceedings.

6   The onus is upon an applicant to demonstrate a proper basis for a stay that will be fair to all parties: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694–695. The applicant must identify the circumstances that warrant a departure from the general rule that the judgment below should be presumed to be correct and is appropriate to be enforced: Hickie v Land and Enviro Corp Pty Ltd [2014] NSWSC 472 at [17]. A party is entitled to the fruits of its victory unless the unsuccessful party can demonstrate that sufficient reasons exist for the granting of a stay: UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd (No 2) [2015] NSWSC 23 at [10]. However, there is no need for the applicant to demonstrate any special or exceptional circumstances: Yolarno Pty Ltd v Shandong Delisi Food Co Ltd [2022] NSWCA 30 at [4] (per Macfarlan JA).

7   The question for the court is to ask what the interests of justice require. As McColl JA explained in Kalafair Pty Ltd v Digi-Tech (Aust) Pty Ltd [2002] NSWSCA 383; (2002) 55 NSWLR 737 at [18]:

Thus the relevant principles are analogous to those which govern the grant of interlocutory relief before trial to protect the status quo. The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted which will be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience.

8   A stay may be granted on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties: Alexander v Cambridge at 697. As Campbell AJA summarised the position in Penson v Titan (No 2) [2015] NSWCA 403 at [45]–[46]:

When a stay is granted the court should endeavour to preserve the status quo by protecting the judgment creditor from the risk of loss by framing orders, which, as far as practical, ensure that the existing value of the judgment appealed against will still be available to the judgment creditors if the appeal fails: Kalifair v Digi-Tech at [28].

One way in which this might be done is by requiring security as a condition of a stay; another is requiring an undertaking in the nature of a Mareva order: Kalifair at [28]–[32].

See also Mao v AMP Superannuation Ltd [2017] NSWCA 296 at [7] (per White JA).

32. The principal basis put forward by Goran is an intention to appeal. But that of itself is not enough. In Roberts v Goodwin Street Developments Pty Ltd [2022] NSWCA 103, Gleeson JA at [10] said:

The mere filing of the appeal is insufficient, of itself, to demonstrate such a case. Usually, it is demonstrated by showing that there are arguable grounds of appeal and that there is a significant risk that if money is paid it will be unable to be recovered if the appeal succeeds or by demonstrating that unless a stay is granted the appeal will be rendered nugatory: TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381; [1999] NSWCA 104 at [15].

33. In the present case, Goran has not endeavoured to mount anything like the task required of him to justify a stay of the orders to be made by me. For example, there is no evidence of the financial circumstances of either Milivoj or Jovanka on which to base any finding that there would likely be no recovery from them if an appeal was successful. I refuse to order a stay.

CONCLUSION

34. The orders I make are:

1. A declaration that an immediately binding and enforceable agreement was made on 3 June 2022 between the plaintiffs and the defendant as evidenced by the letter dated 2 June 2022 from the defendant’s solicitors to the plaintiffs’ solicitors and the email dated 3 June 2022 from the plaintiffs’ solicitors to the defendant’s solicitors.

2. Order the defendant to authorise and direct Baker Deane & Nutt to pay the plaintiffs the amount of $225,000 from the funds held on trust by Baker Deane & Nutt from the sale of 8 Donald Road, Queanbeyan, New South Wales.

1. Order the defendant to pay interest upon the sum of $225,000 for the period from 10 June 2022 to 18 December 2023 (the due payment date) pursuant to section 100 of the Civil Procedure Act 2005 (NSW) totalling $22,491.99.

2. Order the cross-summons filed 13 June 2023 be dismissed.

3. Order the defendant to pay the plaintiffs’ costs of the proceedings, as agreed or assessed.

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Decision last updated: 15 December 2023