The defendants' concessions in respect of claims 2, 3 and 4 may need to be read subject to the defendants claim of frustration, in [24.1]."
Three things need to be said about that. The first is that in that judgment at [45] I found the claim of frustration unsubstantiated. The second is that at no stage, up to and including the present, has there been any claim made that $232,000 was not the appropriate figure to represent the value of the lots. Thirdly, and most importantly, it was not until very recently that there was any departure from my stated understanding that the plaintiffs conceded that Alanbert should be credited with the proceeds of those lots upon sale. The passage quoted above from my first judgment, so far as I am concerned, correctly records the basis on which the trial was conducted. No protest was made to me immediately after the judgment was delivered that that statement of my understanding was incorrect, nor was the issue raised in any specific way until recently raised by Mr Lawrence in 2002.
4 Two events of importance to the question of whether or not some defence ought now be allowed to be agitated occurred in the meantime. One was that the defendants ceased to be legally represented. In the latter stages of the matter their representation has been by leave by Mr Lawrence, a director of the defendants. The other, even more important, is that Alan Bernoth, one of the plaintiffs, died. Although Alan Bernoth was a man of advanced years, his death resulted from an unfortunate traffic accident. His brother, Bertram Bernoth, was joined as a party and appointed to represent his estate for the purposes of the proceedings. Although it is now clear that probate of Alan Bernoth's will has been granted to Arvo Pikkat and Ethel Irene Bernoth, they have not sought to take over the conduct of the proceedings and, indeed, in a letter recently tendered in evidence they indicated their express consent to Bertram Bernoth continuing to represent Alan Bernoth's estate for the purposes of the proceedings, and expressed approval of the continued retainer of the plaintiffs' long standing counsel and solicitor to represent all the plaintiffs, including Bernoth Realty Pty Limited, of which Mr Pikkat is a director.
5 The most important consequence of Alan Bernoth's death is that, as is apparent from the various judgments in this matter, the principal and really the sole players in this long running drama were Mr Lawrence on the one hand and Alan Bernoth on the other. If new material is allowed to be raised at this stage the situation will be that the plaintiffs are not in a position effectively to answer that material by reason of the absence of Alan Bernoth. The plaintiffs would be thereby greatly disadvantaged.
6 The only reason that I took the course of even allowing the application to withdraw part of my reasons for judgment to be made was that I had not in this regard understood Mr Lawrence's submission concerning this particular matter when originally made. This was unusual because although, in effect, a litigant in person Mr Lawrence has, in general terms, put fully comprehensible submissions and been of assistance to the Court through his assembly of material and his knowledge of the complicated facts of the case. But this was the situation that was reflected in my sixth judgment at [7] and [8] when I rejected the defence as Mr Lawrence had argued it at that time.
7 I have given him the opportunity to develop the argument further upon an application to have me withdraw the relevant portions of my reasons for judgment lest at the heel of a long hunt the defendants had been done an injustice by the argument being rushed over. He has, in his usual methodical fashion, prepared a written submission incorporated in a bundle of documents that he would seek to tender in the proceedings if I were to withdraw the relevant portion of the reasons for judgment and allow him to agitate further a defence to the whole or part of the $232,000 claim. As a result of the decision that I have come to on that application, I shall not allow the bundle of documents into evidence in the proceedings. Mr Lawrence tendered them on the basis that the tender would carry into evidence not the submissions nor any material already in evidence contained in the bundle, but the portions of the bundle that were not yet in evidence. I deferred ruling upon that tender with the intention of delivering judgment upon it at the same time as I delivered judgment upon his application generally, which I am now doing. I have examined the documents and taken them into account in determining the application. The bundle has been marked for identification mfi 11.
8 There are a number of reasons for refusing Mr Lawrence's application and leaving in place the reasons for judgment that I earlier delivered. The first is the fact that this matter was not agitated at the trial as I have documented above. The second is that, as will appear when I turn in a minute to the nature of the argument put on behalf of the defendants, it would raise factual questions to which Alan Bernoth's evidence would be relevant and, not having been raised at the trial, it is now raised at a time when Alan Bernoth is dead and unable to give evidence. There was ample opportunity to raise it earlier.
9 The argument was somewhat more developed upon the submissions put to me today than it was when earlier put to me by Mr Lawrence and at least he has had the opportunity to make that greater development. The argument is that the obligation of which the defendants bore the burden and of which the plaintiffs had the benefit was to transfer lots 11 and 12 in specie to the plaintiffs. The allegation is that the transfer could have occurred at an earlier time and did not because of lack of cooperation on the plaintiffs' part. The allegation is, in effect, of a refusal by the plaintiffs to take a transfer on the basis that this would have involved them in the payment of stamp duty, either on contracts which are alleged to have existed in respect of the lots, or upon the transfers, if ad valorem duty was not paid on the contracts. From the facts surrounding the failed arrangements for transfer of lots 11 and 12 there is also said to arise an estoppel in circumstances I cannot fully understand. There was a complaint by the defendants that the plaintiffs had not tendered the individual contracts for the lots and were in some way obliged to do so, which submission I rejected. There has been an earlier attempt by Mr Lawrence to tender the contracts, which I rejected, not only upon the ground that they appear to be unstamped, but upon the ground that that question did not really arise, because those contracts were absolutely irrelevant to the proceedings as constituted: see my sixth judgment at [10]. The plaintiffs' claim to the transfer of the lots in specie or the moneys produced by them in lieu was based upon a term of the operative contract ("the March 1994 contract") between the plaintiffs and the defendants which was in evidence and upon which stamp duty had been paid.
10 I note that the whole or portions of the earlier rejected contracts are again contained in the bundle mfi 11 and thus are retendered on the defendants' behalf among the material tendered today. The grounds that I have already given in [8] above would be adequate grounds against allowing the agitation of the material. However, I should add that, whilst the argument is a little better developed today, not only does it involve factual material not traversed or argued in detail previously, but I still find it difficult to understand on a legal basis. Perhaps there could flow out of it an argument under the principle in Mackay v Dick (1881) 6 App Cas 251, on the basis that the plaintiffs are, in reality, claiming a breach of contract but, by themselves declining to do things or provide conditions in which the contract could have been carried out, are now precluded from complaining about the breach. I should say that on the material set out in the submissions that defence, in my view, could not be made out. Nor could any ground of defence proceeding by way of an estoppel be made out. These conclusions add another reason why the matter should not be allowed to be agitated at this time, although the first two reasons are, as I have already said, in my view, adequate.
11 For those reasons I reject the tender of mfi 11 and I refuse the application to withdraw my earlier reasons for judgment.
…oOo…
12 I have now heard argument on the question of costs in these proceedings. The proceedings have been long, convoluted and quite confused. Up to the time of the trial and during the trial the issues were changing in a number of ways. After the trial the outstanding questions, perhaps, ought to have been sent to a Master to be dealt with. But I retained them and have dealt with the remaining issues as to quantification of monetary judgments and set off of various items, as it seemed to me that I had knowledge of the facts of the matter which would have cost the Court time and the parties additional money to have been absorbed by a Master. As Mr Fairbairn, of counsel for the plaintiffs, has said in his submissions today, even the issue of defining the outstanding monetary issues between the parties was one which was quite complex and absorbed a good deal of time. There were many occasions during the conduct of the proceedings, both before and after my first judgment, when one or other or both sides were not in a high state of preparedness for the matter to proceed. Further, there has been a good deal of chopping and changing on both sides as to the issues in the proceedings after, as well as before and during, the trial. This has rendered the proceedings long, complex and confusing. That is the situation I face now when I come to deal with the question of costs.
13 It is also plain, from the various judgments that I have delivered, that the success in the proceedings has been quite divided, the plaintiffs being successful on some issues and the defendants on others. Whilst there is some overlap among the various issues that have been dealt with from time to time, it seems to me that the appropriate touchstone for the costs in this case is the degree of success which the parties have achieved on various issues, particularly the various separate issues that were dealt with at the trial. It may appear that in one sense the plaintiffs have achieved an overall victory. The substantive issues in the case were determined to a large degree by orders I made on 30 June 2000. The further orders finally disposing of the case I shall proceed to make today. It may appear from the fact that the orders today will result in a judgment for more than $300,000 in the plaintiffs' favour that the plaintiffs have achieved substantial success in the proceedings. However, as is apparent from my sixth judgment, until one item, that is the value of lots 11 and 12, is thrown into the balance in the plaintiffs' favour, the parties fought almost to a dead heat on monetary issues, the balance being $3,887 in favour of the defendants. That one item, the value of lots 11 and 12, as I have already made plain, was not the subject of substantial dispute between the parties during the vast bulk of the proceedings: see [3] above. It was conceded for most of the time that the proceedings were on foot that the plaintiffs were entitled to a transfer of those lots, or of their proceeds once they were sold. In the event there was never any dispute that the price obtained on the sale of the lots by the mortgagee represented and could be taken as their value, that is, there was no substantial dispute between the parties as to the value of those lots. There has been some last minute effort by Mr Lawrence, on behalf of the defendants, to resist the result in relation to that one item, to which I shall return at a later point in these reasons for judgment.
14 Leaving aside this virtually uncontested issue, therefore, if one looks at the trial one observes two things. If one looks at my first judgment, one sees that what was principally fought on the plaintiffs' behalf at the trial was the issue of the setting aside of the deed of September 1995 on the ground of duress, on which the plaintiffs failed. The principal claims, on the defendants' side, were claims that the plaintiffs had been guilty of misrepresentation, to be characterised either as misleading conduct under the Trade Practices Act 1974 (Cth), or as negligent misstatement. They also alleged that the contract had been frustrated and, in a sense, the issue of frustration turned on much the same subject matter as the misrepresentation case, that is, the question of whether or not a purpose vital to the contract had been the subdivision of lot 13.
15 The above issues were largely discrete. It would be a long and perhaps impossible task to go through all the proceedings to attempt to divide up the time spent on the individual issues. Certainly, substantial time was spent on issues on which the plaintiffs succeeded and substantial time was spent on issues on which the defendants succeeded, and there was a deal of overlap. As I have said, so far as the monetary result is of importance, the result as to the contested matters was the small balance of $3,887 in favour of the defendants, leaving aside the large single and substantially uncontested claim which resulted in the judgment of some $300,000 in the plaintiffs' favour.
16 Mr Fairbairn has submitted that it would be fairer if there were no order as to costs in relation to the fairly protracted proceedings that have taken place since my first judgment, but says that, during the early part of the proceedings, including the trial that resulted in my first judgment, most of the time was taken up on issues on which the plaintiffs succeeded. He also drew attention to material in the transcript on the fifth day of the trial, when there was a change of direction by the then counsel for the defendants.
17 Mr Lawrence, the director who now appears by leave for the defendants (that is, the first and second defendants), has drawn attention to a number of matters which he says should result in there being at least some order for costs in the defendants' favour. He points to orders made by consent on 6 August 1998, whereby the proceedings were settled between the plaintiffs and the original third defendant to the proceedings, Elliot & Tuthill (Mortgages) Pty Ltd ("Elliot & Tuthill"). The plaintiffs' claim against the third defendant had involved an allegation of fraud impeaching the indefeasibility of a mortgage which the third defendant held. That claim was withdrawn and the plaintiffs agreed to pay the third defendant's costs in the agreed sum of $15,000. Mr Lawrence has submitted that the first and second defendants were put to expense in being involved up to that time in proceedings, the essential subject matter of which was the allegations against Elliot & Tuthill, and suggested that the first and second defendants were involved in those proceedings up to that stage only as being parties to the relevant mortgages. This does not accord with my understanding of the matter. There were always independent claims against the first and second defendants and cross claims by them, including the claims and cross claims referred to in [14] above.
18 Mr Lawrence has also pointed to the fact that, whatever might be said up to the time of my first judgment, the subsequent proceedings have been protracted, if not substantially caused, by the plaintiffs' unsuccessful attempts to have the accounting or set offs done in such a way that something was left to be secured by the mortgage, to which I have found the plaintiffs entitled if there were anything left to be secured under it. He has suggested that these attempts proceeded largely by arguments against there being a set off of payments and entitlements in the defendants' favour against the $225,000 balance of purchase money that the plaintiffs were owed. This was always a hopeless proposition and was not accepted by the Court, as is demonstrated by the Court's adoption in my sixth judgment of the correct position as to set offs being the one put forward by Mr Lawrence, which led to a balance of $3,887 in the defendants' favour, combined with the Court's decision that there was nothing left to be secured under the mortgage.
19 There is some force in this assertion by Mr Lawrence. The fight he has pointed to was central to a part of what has occurred during the proceedings after my first judgment ("the accounting proceedings"). However, first of all, that portion of the proceedings was, in a sense, adjectival to the earlier substantive proceedings. Secondly, there were issues put and fought both ways during the course of the accounting proceedings. For instance, as I have noted earlier, not having contested the plaintiffs' entitlement to the $232,000 and interest arising out of lots 11 and 12 earlier in the proceedings, Mr Lawrence made various efforts, on behalf of the defendants, to mount some sort of defence, complete or partial, to that claim during the latter part of the proceedings. These efforts have been unsuccessful.
20 I have come to the view that honours have been fairly much equal in the proceedings overall, taking together the proceedings at and after the trial, and that the time taken up on the various discrete issues between the parties will be fairly dealt with if treated as, in general terms, roughly equal. If, to some degree, the defendants achieved more success than the plaintiffs in the latter part of the proceedings, this was to a substantial degree overbalanced by their later attempts to contest the item in the plaintiffs' favour relating to lots 11 and 12. I think that all those things will be balanced out and the dictates of justice as to costs in this matter will be met by the order that I indicated to the parties during submissions that I was tentatively minded to make, namely, that as between the plaintiffs and the defendants, there be no order as to the costs of the proceedings. As I say, I made plain that tentative view of mine and invited the parties to address their submissions by reference to it. They have put what submissions they were minded to and I remain of the view that that is the order that should be made in relation to the costs of the proceedings as between the plaintiffs on the one hand and the first and second defendants on the other.
21 A further application has been made to me concerning a stay of proceedings and concerning two caveats that are on the title in favour of one of the plaintiffs. Mr Lawrence has asked that there be an order that those caveats be withdrawn. The first of those caveats is caveat 5199525. The withdrawal of that caveat has already been ordered by me in the orders made on 30 June 2000. If it has not already been withdrawn, it ought to be withdrawn and the defendants can compel its withdrawal by the mechanism of that order already made. The other caveat is caveat 5757521. That caveat refers in terms to condition N of the contract of 5 March 1994, the principal contract the subject of these proceedings. The interest claimed is by reference to the plaintiffs' entitlement to a second mortgage over the property. That mortgage I have now found, in effect, to be non existent by reference to the fact that there is nothing secured by it. On that basis, the caveat ought not be on the title. As will appear shortly, I have offered the plaintiffs an injunction as part of the arrangements for a stay of proceedings, which would protect them, so far as their claim in respect of lot 13 is concerned, while an appeal is brought. On this basis, Mr Fairbairn has indicated that the plaintiffs will consent to an order for the withdrawal of the caveat, since by the time it is withdrawn the injunctive relief will be in place.
22 I shall now deal with the stay of proceedings. Mr Fairbairn has announced that, on the present state of his instructions, there will be an appeal against one aspect and one aspect only of the various judgments I have delivered. That is the portion to the effect that it ought be declared that there are no moneys now secured by the second mortgage to which I have found the plaintiffs entitled. Mr Fairbairn has asked for a stay of proceedings to permit that portion of the judgment to be challenged. I am prepared to stay proceedings upon relevant parts of the orders to give time for that appeal to be instituted. It is my view that, beyond that, a trial Judge ought not deal with the matter and that, if an appeal is instituted, it is not appropriate for the interlocutory regime, during the pendency of the appeal, to be dealt with by the Judge appealed from, or a Judge in the trial Division, rather than by the Court of Appeal itself. The result is that I shall grant an appropriate stay of proceedings until an appeal may be instituted and an application made to the Court of Appeal and I shall grant an injunction in respect of lot 13 for the same period.
23 I have now formulated the orders I propose to make in final disposal of these proceedings. These orders supplement and ought to be read with the orders that I made on 30 June 2002. Both sides have indicated that there are certain respects in which they desire to appeal. The plaintiffs' position will, as I have indicated, be protected by the grant of an injunction for 42 days against the first and second defendants dealing with lot 13. To protect the first and second defendants' position, all that is necessary to be done is to stay the monetary judgment in order 1 which I shall make today.
24 The orders of the Court will be:
1 Judgment for the plaintiffs against the first and second defendants for $312,013.
2 Save for orders already made I order that there be no order as to costs of the proceedings.
3 By consent I order that Alanbert Pty Ltd withdraw caveat 5757521 from certificate of title folio identifier 13/857632 within 14 days.
4 Upon the plaintiffs by their counsel giving to the Court the usual undertaking as to damages I order that the first and second defendants by themselves their servants and agents be restrained up to and including 3 June 2002 from in any way dealing with the land in certificate of title folio identifier 13/857632 otherwise than by allowing Takaran Pty Ltd (formerly Elliot & Tuthill Mortgages Pty Ltd) to register on the said title a mortgage in replacement of its existing mortgage.
5 Judgment in order 1 stayed up to and including 3 June 2002.
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