Vanmeld P/L v Cussen, R.E

[1994] FCA 315

315 9

JUDGMENT No. . . . . . . $

CATCHWORDS

CONTRACT - specific performance - order granted in respect of

two properties - whether to grant stay of either order to allow

appeal

APPEALS - expedition

- security - application met with proposal to fund costs from sale of property of which specific performance stayed

EImELD J
SYDNEY
21 APRIL 1994

LIMITED 6 ORS V RONALD EDWARD CUSSEN 6 0-

No. NG 853 of 1992

VANm-

Applicants

And :  N h O a

Respondents

1. Grant motion for a stay of the judgment and orders until the hearing of the appeal in the case of the Noosa Head Unit 207.

2. Refuse motion for a stay of the judgment and orders in the case of the Lansvale land-

3 .    Dismiss application for expedition of the appeal.

4.    Adjourn motion for security for costs, if desired, to the Full Court on 16 May or such other date as the Full Court determines or to a date to be fixed before me or another Judge by arrangement with the Registry.

5 .    The parties to pay their own costs on these motions.

&%S:	Settlement and entry of orders are dealt with in accordance with Order 36 of the Federal Court Rules.
EINPELD J
SYDNEY

21 APRIL 1994

1	1	No. NG 853 of 1992
-	1

Between:  MITED 6 QBS
Applicants

And :

Respondents

ExEmILJ SYDNEY -

Judgment was given in this matter on 18 March 1994 when specific

performance was ordered of agreements in respect of the sale of -

land at Lansvale, a suburb of Sydney, and a home unit at Noosa Heads. On 25 March 1994 all the relevant orders were made as submitted by the parties other than interest on moneys agreed to be due to the applicants. This morning I gave further judgment that interest was payable by the respondents on the agreed figure of adjustment between the parties.

There are before the Court today motions by both sets of parties

to these proceedings. For the purposes of identification I shall again describe the parties as Vanmeld and Cussen as I did previously. The first motion before the Court today is that the judgment of 18 March and the consequent orders made by consent, together no doubt with the order for the payment of interest made today, be stayed until the hearing of the appeal which Cussen has filed.

The notice of appeal seeks to challenge a number of findings made in the judgment of 18 March (the principal judgment). It is possible that after the opportunity has been taken to read the judgment of today (the interest judgment), Cussen may wish to amend the notice of appeal to raise additional matters. I proceed upon the assumption that the appeal is arguable. There has been a brief outline of the matters which Cussen wishes to raise on appeal and although I have of course not gone into the matter at all, I accept for the purposes of dealing with the motions that Cussen may succeed on all or some of the grounds to be advanced.

The grounds upon which the stay is sought is effectively twofold:

1.   The appeal is arguable. Indeed, Cussen is confident of

succeeding in the appeal.

1. If a stay in respect of the conveyance of both of the

   properties in dispute is not granted, there will need to be

   a payment by the respective vendors of stamp duty first

upon the conveyance in accordance with the principal judgment and, second, on the reconveyance in the event that the Full Court upholds the appeal. In total the amount is

said to be a little over $43,000. In addition, legal costs would be payable on the conveyance and the reconveyance which, so far as I understand the evidence, would be something in excess of $3000, perhaps closer to $4000. This would all be wasted if the appeal succeeds.

Vanmeld has moved for security of costs of the appeal which it claims to be of the order of $35,000. It seeks an expedited

hearing and opposes the stay sought by Cussen, mainly on the ground that the Lansvale land is subject to a development approval by the local council which contains, as the principal judgment noted, a condition 33 in respect of the land involved in these proceedings. That condition provided that the land concerned

shall be purchased and utilised for carparking purposes within 12 months of the date of this consent.

The condition also provided for the consolidation of the land with the remainder of the development site. Under the deed of agreement between these parties, Vanmeld was able to go into possession of this land more or less from the outset. In fact

Vanmeld has been in possession of and using the land for -

carparking purposes in support of the use of the main property, as required by the council, more or less from the outset of the parties' agreement referred to in the principal judgment.

There is no immediate likelihood or, as far as I can see, possibility that that use of the land for those purposes will be

or could be interfered with. obtaining successive extensions of time from the council for its On the other hand, Vanmeld has been

compliance with condition 33 that the land must be purchased.

The evidence filed on the motion today shows that an extension has been granted until some date in May this year. However, the aff idavit filed by Mr Jeans, who is the principal operator of Vanmeld, says that he does "not anticipate that the council will be prepared to further extend the time for compliance with" that condition. I am not quite sure what I should make of that statement. As was correctly pointed out on behalf of Cussen, that is not even hearsay evidence but some form of assessment by

Mr Jeans of the position.

For my part it seems unlikely that the council, having achieved the principal purpose of condition 33, namely, the availability of the land for carparking purposes to support the development approval, would be likely to refuse an extension of time for the purchase and consolidation whilst legal proceedings were persisting. If the council did refuse, I should not have thought that the Land and Environment Court would have much difficulty in reminding the council of its obligations to be sensible. However, the matter remains attended by an element of urgency as a collision with the council and proceedings in the Land and Environment Court would be quite troublesome and costly even if successful.

This situation raises a question of balance between the detriments that will occur to both parties. As the purchaser of the Lansvale property, Vanmeld will have the obligation of paying the stamp duty. On the other hand it does not claim that this is a burden it does not wish to carry. In fact it is in

condition 33 of the development approval.	substance anxious to carry it if only to permit it to carry out
Withdrawing therefore the whole question of stamp duty from the grounds given by Cussen, not a great deal is left except its conveyancing costs as vendor and the idea that the status quo should be maintained in ordinary circumstances where detrimental effects will otherwise happen which will be substantially or actually irreversible. I cannot see any or many interests detrimental to Cussen if the conveyance of the Lansvale land goes ahead. The Vanmeld interests have been in possession of the land for some years and have been taking the rents and profits and using the land, as required by the council, to support their adjoining development. In the event that the order for specific performance is not stayed, the worst thing that a successful appeal could do would be to require the re-conveyance of the property. This result could not be regarded as on the high side of likely but assuming it occurred, the only loss could be one lot of stamp duty. In this connection, it must be pointed out that stamp duty should have been paid on the agreement in respect of these properties when the agreement was executed. Thus there will no doubt be a penalty plus the duty payable by the purchaser on the agreement whatever happens to the actual ownership of the property at the end of the day. If a re-conveyance is ordered, it must be at least doubtful that stamp duty would in fact be required twice by the Stamp Duties Office.
Delay by Vanmeld was advanced as a reason for granting this stay but as both the principal judgment and the interest judgment make clear, there has been delay on the part of both parties. On a balancing between the two, the delays are not easily
distinguishable. The application for the stay is a discretionary application brought by Cussen. To my mind its evidence
established no case for the exercise of the discretion in its favour in relation to the Lansvale land. At this time the application for the stay of the order of specific performance in respect of the Lansvale property should be refused but I will reserve to Cussen the right to make a further application to a Full Court at the commencement of the sitting8 on 16 May in the event that additional material is available to support the grant of a stay at that time.
The situation concerning the stay is somewhat different in the
case of Unit 207 at Noosa Heads. There seems to be no urgency
for the order of specific performance to take effect in relation
to that property although here the parties seem to be in exactly
the reverse position to their positions in relation to the
Lansvale land. The evidence shows that Cussen is busily trying
to sell Unit 207 and has in fact used the prospect of its sale B
as a way of meeting the application for security of costs by suggesting that the proceeds of the sale would form part or all
of that security. From Vanmeld' s point of view no real argument
has been put before the Court as to why the stay in relation to Unit 207 should not be granted and I think that that stay should be granted.
So far as concerns the Vanmelcf's application for security of costs, notice was only provided to the Court and Cussen this morning, and in support of the motion is merely an affidavit by the solicitor dealing with the matter that the costs will amount to $35,000. In response I have been provided with a letter from Cussen's solicitors which explains how their client will be able to fund these costs in the event that the appeal is unsuccessful.
application for security at such short notice. In any event it It is not appropriate that I force Cussen into a hearing of an
seems to me that sensible negotiations between the parties, a concept which I must say appears to have thus far escaped these parties throughout this litigation, could resolve the issue in a way which ensured that if the appeal was unsuccessful and Cussen was otherwise unable to fund Vanmeld's costs, Vanmeld's
interests would be protected. Finally, I have to deal with the issue of the expedition of the appeal. AB I have pointed out more than once and as was made clear in the previous judgments, this matter originally goes back to 1987, and the deed of agreement between the parties was dated 29 September 1989, although there was a later agreement to delay the settlement in respect of the properties involved here to 31 January 1990. The fact that the matter is still being argued in April 1994 will itself indicate, as the details of the principal judgment do more fully, that the parties have had little sense of urgency to dispose of the dispute between them. Indeed as the principal judgment indicates, proceedings were commenced in the Supreme Court as well as in this Court and it was only the facility of the cross-vesting legislationthat ensured that there was only one case and not two.
In relation to Unit 207, Cussen says that although it is trying to sell the property at the moment it really does not wish to do so and would prefer to be rid of the property altogether. Thus there seems no reason why an appeal in that connection would be expedited at all. The refusal of a stay in relation to the Lansvale property would seem to me to be sufficient to dispose
of any urgency on Vanmeldls part, and it is Vanmeld which applied for expedition. In those circumstances and having regard to all
the facts of the matter, I do not see that there is any ground for expediting this appeal so that it would take priority over other cases also waiting for hearing. If the parties wish to make another application to the Full Court for the expedition of the appeal, it may be taken that my refusal to grant expedition now should not prejudice any such application. Such an application may also be made on the first day of the sitting6 of the Court on 16 May or at such other time as the Full Court determines.
The result therefore is that Cussen's motion for a stay until the
hearing of the appeal will be granted in the case of Unit 207,
but refused in the case of the Lansvale land. The application
brought by Vanmeld for the expedition of the appeal will be I
refused and its motion for security of costs will be adjourned, if desired, to the Full Court on 16 May or such other date as the Full Court determines or by requesting a listing of the matter before me or another Judge when it is ready to proceed.
RECORDED : NOT TRANSCRIBED
I order that the parties pay- their own costs of these two motions.

I certify that th~s and the > f d f d

Preceding pages are a true copy of the

Reasons for Judgm

. Just~ce E~nfeld

Dated: (3 S \gq

L!,.;w
J

Counsel and solicitor for	E. Strasser instructed
the applicants	by Jennifer Darin
Counsel and solicitors for	M.A. Ashurst
the respondents	instructed by Brown & Rouch
Date of Hearing	21 April 1994
Date of judgment	21 April 1994