Alanbert Pty Ltd v Bulevi Pty Ltd

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4528/97 ALANBERT PTY LIMITED & ORS v BULEVI PTY LIMITED & ANOR JUDGMENT 1 HIS HONOUR: There are four matters sought to be dealt with in a notice of motion filed by the defendants on 18 June 2002 which are before me for determination today. The proceedings have a long and complex history and I have delivered a number of judgments in them. A list of my judgments to that time is in my eighth judgment: Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 338 at [1]. Those relevant to the matters in hand are as follows. I delivered my substantive judgment in this matter on 6 April 2000: Alanbert Pty Ltd v Bulevi Pty Ltd [2000] NSWSC 261 ("my first judgment"). By a judgment delivered on 30 August 2001 I defined the issues as to monetary claims which remained to be determined between the parties: Alanbert Pty Ltd v Bulevi Pty Ltd [2001] NSWSC 785 ("my fourth judgment"). On 8 April 2002 I delivered a judgment which essentially determined the last disputed items between the parties other than accounting items: Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 288 ("my fifth judgment"). The following day I delivered a judgment which determined the basis of calculation of the monetary judgment: Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 289 ("my sixth judgment"). On 11 April 2002 I delivered a judgment in which I decided that I should allow Mr Lawrence to make a last attempt to raise a defence to the $232,000 claim concerning the proceeds of sale of lot 11 and lot 12 in the form of an application for me to withdraw my reasons for judgment in relation to the $232,000 and permit him to agitate that defence further: Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 296 ("my seventh judgment"). On 22 April 2002 by my eighth judgment (see above) I refused that application, dealt with the costs of the proceedings and made final orders. On 31 May 2002 I delivered a judgment granting leave to bring the present application before me: Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 479 ("my ninth judgment"). 2 The first two matters before me today are in effect applications to set aside final orders made at the time of my eighth judgment. One of those orders was judgment in favour of the plaintiffs for some $312,000. That sum was made up as follows. From the $232,000 mentioned above there was to be deducted $3,386, which I found to be owing by the plaintiffs to the defendants in relation to a series of complicated setoffs between them. On the difference between those two sums I allowed interest under s 94 of the Supreme Court Act 1970 from the time that the $232,000 had been received by the defendants until the date of judgment. I made that order for interest as doing substantial justice between the parties as far as interest was concerned, bearing in mind the considerations then before me: see my sixth judgment at [9]. 3 The two applications to set aside those orders relate to two separate items which the defendants say they ought be allowed to contest further. The first in effect relates to the $80,000 odd interest which I have just mentioned. It is suggested that the reason the interest should not have been allowed was because the delay in payment arose from the protracted accounting or setoff procedures I have referred to, at the end of which the plaintiffs were found to be indebted to the defendants in respect of the items dealt with in that process (other than the proceeds of lots 11 and 12). However, as I have said, that was the factual situation at the time that I previously dealt with the matter and was among the circumstances considered then, and there is no reason why, after final judgment, it should be reconsidered now. There is no basis shown in relation to that item why the judgment should be set aside. It is simply an attempt to relitigate a matter already litigated and decided. 4 The second item relates to a claim that there was omitted from the process of accounting or setoffs the sum of $198,000 said to be owed by the plaintiffs to the defendants for the doing of certain road work. When this application was first mooted it was suggested that this had been left out of the process simply by inadvertence and that the defendants, who are not now legally represented but are represented by leave by Mr W J Lawrence, a director, were disadvantaged in a large sum by their inadvertence in not bringing forward this item. 5 This application is made after final orders, so that the defendants would face all the difficulties that arise in such a situation in setting aside orders: De L v Director-General New South Wales Department of Community Services No 2 (1997) 190 CLR 207 especially per Toohey, Gaudron, McHugh, Gummow and Kirby JJ at 215. But if there had been some inadvertent omission of an item there would at least have been a case for there to be weighed up carefully the injustice that would be done by inadvertent omission of a large item against the public interest, and indeed the plaintiffs' interest, in there being finality to litigation. 6 However, when the matter is examined today, with the aid of detailed and helpful written submissions by Mr Fairbairn, of counsel for the plaintiffs, it appears that it is quite impossible for the defendants to make out that this is a case of inadvertent omission for four reasons. There is a pleading reason, a reason relating to the findings made, an evidentiary reason and a reason or reasons relating to the defendants' conduct of the proceedings. I shall in a moment turn to these four areas separately, but I should first say a little more about the basis on which the claim of inadvertent omission is made. 7 The main thrust of the claim appears to be that there was a special condition in the 1994 contracts, as they are referred to in my earlier judgments, under which the plaintiffs were to be liable to the defendants for the costs of subdivision of lots 15 and 16 (as they were then called), which it is said included road works, the cost of which was some $198,000. As will appear shortly, there are various versions at large of the alleged special condition, but the general thrust of them can be illustrated by one example as follows: "Q. The Vendors agree to pay for the cost of subdivision of lot 16 from lot 15." 8 The first area of difficulty that the defendants have with this claim is on the pleadings. True it is that there is some adversion to this claim in their amended cross claim. That adversion appears in paragraph 33 in the following form: "33 In or about July 1995 Bernoth approached Lawrence requesting a 175 metre extension that [sic] the road subsequently known as Ethel Place to allow for improved access to lot 12 of the subdivision. Lawrence advised Bernoth that the cost of extending the road would be $102,005.00. Bernoth persuaded Lawrence that that expenditure would provide a valuable return in that it would allow greater access to the existing subdivision and increase the value of the subdivision by in excess of $100,000.00. On or about 7 November 1995 Lawrence agreed to extend the road and did so."

By paragraph 26 of the defence to amended cross claim the plaintiffs denied the allegations in paragraph 33. 9 These allegations as pleaded have a number of difficulties. First, on the face of it, they seem to plead a contract or transaction quite separate from and subsequent to the March 1994 contracts, although the case now sought to be made out is of a special condition of the March 1994 contracts which is said to be breached. Secondly, the transaction referred to is pleaded in a quite unsatisfactory fashion. In the end, it is unclear whether what is alleged in the pleading is a separate contract between the parties to the effect alleged, or an allegation of addition to or variation of the March 1994 contracts, or the constitution of the work as some form of extra under the terms of the March 1994 contracts. It is very difficult to tell what the legal effect of paragraph 33 is intended to be and, as I have said, it does not appear to me apt to plead the breach of an obligation said to arise under the terms of the March 1994 contracts. 10 It is fair to say that the next problem (or series of problems) arises in relation to the findings that were made in my earlier judgments relating to the contractual arrangements between the parties. Certainly no finding was made, and there was no evidence which could have supported such a finding, that there was any contractual arrangement made in 1995 along the lines alleged in paragraph 33. Insofar as there is an attempt to rely upon a special condition Q, as set out above, or some other special condition, or term of the 1994 contracts however designated, to the same general effect, when I made my determination as to the contractual arrangements between the parties, there was no finding that there was any such special condition in the 1994 contracts. 11 As is apparent from my first judgment, it was very difficult to determine what were the terms of the contractual arrangements between the parties under the 1994 contracts. I have already adverted to the fact that Mr Alan Bernoth and Mr Lawrence engaged in wordy and almost interminable exchanges, oral and in writing, as to what the deal was. Debates about what the special conditions of the contracts were went on long after the contracts were exchanged in March 1994. In the end I did not make any exhaustive finding as to what all the terms of the March 1994 contracts were, but I only made such findings as were necessary to determine the disputes before me. In relation to the special conditions, I did not make a finding as to the form of the special conditions in general, since most of them were not relevant to the decisions that needed to be made. I did find that special condition E(b) was incorporated in the March 1994 contracts, because the parties were agreed that that special condition in the form in which it was set out in my judgment was a part of the contracts. But I did not make a finding that special condition Q, or any term to that effect, was part of the 1994 contracts or otherwise in contractual force between the parties. 12 Turning to the evidentiary reasons, the evidence as laid before me now illustrates why I made no such finding. In the affidavit on which he relies on this application Mr Lawrence gathers together four versions of the special conditions, all different. He says that I should accept the first of those versions, which contains special condition Q as I have set it out above, as included in the contractual arrangements between the parties, because on each of the two pages of that version Alan Bernoth's signature appears at the foot. The defendants have also tendered on this application a form of one of the 1994 contracts in which the special conditions appear in that version with Alan Bernoth's signature at the foot. But there is no evidence that a contract was ever exchanged in that form. What evidence there was at the trial, and on the basis of which judgment was delivered, was the 1994 contracts in the form of Exhibits 7 and 8. These were given some imprimatur by the fact that they bore evidence that stamp duty had been paid on them. However, the difficulty with them is that the special conditions in each of the two of them are in quite different form, although they are said to have been exchanged on the same day to effect the same transaction in respect of adjoining pieces of land. Special condition E(b), to which I have referred, is contained in one of them, but not in the other (although, as I have said, it was agreed by the parties that that special condition was in force). In those contracts, special condition Q, now put forward, is contained in a different form as special condition O in Exhibit 8, but is not contained at all in Exhibit 7. As I have said, I made no finding that special condition Q, or special condition O, or any other term to that effect, was in force between the parties. This demonstrates the evidentiary difficulties in the path of the suggestion that there should be any finding that special condition Q, or anything like it, was incorporated in the contractual arrangements. 13 The fourth class of matter that offers difficulties is the conduct of the defendants during the course of the proceedings. Mr Fairbairn has drawn to my attention that Mr Weaver, who was then appearing as counsel for the defendants, at a directions hearing on 25 May 1999 (during an adjournment of the trial) abandoned the claim for $198,000 for the road works and limited the defendants' claim for work to $14,800 for some other work. The $14,800 was taken into account in the disposal of the proceedings. Indeed, the plaintiffs at some stage conceded that they owed that money and interest on it and it was brought into account in calculating what was owing between the parties. As to the $198,000, Mr Weaver on 25 May 1999 said, "The $198,000 has been taken out." This was by reference to a calculation of moneys owing as between the parties that had been prepared by a Mr Ron Smith, accountant. 14 Once that is remembered, it becomes quite clear why I did not deal with this matter at all in my judgments. Before my first judgment was delivered, determining what were the terms of the contract so far as relevant, the item of $198,000 for road works had been taken out of contention. The incorporation in the contractual arrangements of special condition Q or its ilk had become immaterial. What is more, as Mr Fairbairn submits, and this accords with my recollection, in the long course thereafter of debate as to the various monetary items which were in play between the parties after the basic substantive questions had been determined by my first judgment, no mention was made of the $198,000 arising out of the road works: see, eg, my fourth judgment and my fifth judgment. Indeed, no further mention was ever made of it until it was raised recently by Mr Lawrence. 15 The situation, therefore, is that, at the material times, the matter was not litigated and, indeed, appears to have been expressly abandoned. The questions raised of what were the contractual terms were litigated and brought to finality. That finality did not include a finding that special condition Q or anything like it was a term of the contract and, indeed, that was not pressed on me at the time of the final submissions which led to that judgment. Furthermore, and more basically, there is no pleading allegation that would support the claim as it is now put forward, and there was no evidence before me at the trial, which would have permitted a finding to be made in terms of paragraph 33 of the amended claim, always assuming that proof of the facts alleged in paragraph 33 would amount to the establishment of a cause of action which could be relied on. There is no such evidence before me even on this motion. 16 For all those reasons, in my view there is no case that there has been some inadvertent omission of the item of $198,000 for road work from the accounting stage of the proceedings which would give rise to an injustice if the omission were now allowed to persist. As I have already said, bearing in mind that final judgment has been delivered, there would have to be a compelling case of injustice for there to be any question of setting it aside, and no such compelling case of injustice exists. For those reasons, the result of the application to set aside judgment will be that I refuse to set aside any part of the orders that I have made in the determination of these proceedings. 17 Two other matters arise which have some interrelation. Whilst, as I have indicated, it is clear that the plaintiffs should be successful on the motion to set aside the judgment, the plaintiffs are, I am afraid, in a most unhappy situation so far as compliance with the orders of the Court for the withdrawal of caveats is concerned. Mr Lawrence has raised and re-raised this issue with the Court. Mr Fairbairn, no doubt doing no more than conveying to the Court what instructions he has, has temporised and temporised about the withdrawal of these caveats. They are still not withdrawn. This situation cannot be allowed to continue. I propose to stand this matter over until 9.30 am on Tuesday, 8 October 2002. I direct that at that time the plaintiffs' present solicitor appear in this Court in person with either withdrawals of the caveats to hand over or with an explanation as to why this has not occurred, to be given by affidavit or on oath in the witness box. The explanation had better be a good one if the withdrawals are not here. This Court will simply not tolerate its orders being ignored in the way in which it appears at the moment that they have been ignored in this regard. 18 The plaintiffs desire an extension of injunctions which restrain any dealings with lot 13 pending the determination of these proceedings on appeal. I have granted injunctions up to today, indicating that, when the matter was concluded before me, I should only grant such further injunction as would permit the matter to come before a Judge of Appeal to determine the interlocutory regime pending the appeal. At the moment, because of the pendency of the motion that I am now dealing with, time for the filing of appeals in final form has been extended at least up to 21 October 2002. I am no longer prepared to go on giving injunctive relief to plaintiffs who are in default of obedience to orders relating to caveats. Upon Mr Fairbairn giving to the Court the usual undertaking as to damages, I shall extend the injunctions up to and including Tuesday next, 8 October 2002, but indicate that I shall continue the injunctions no further if there is not a satisfactory resolution on that day in relation to the caveats. I do not, between now and Tuesday, formally put in place a stay of the monetary judgment against the defendants, on the basis that Mr Fairbairn assures me there will be no step to enforce those judgments between now and Tuesday. The question of what further interlocutory relief there should be can be dealt with on Tuesday morning. As I have said, I trust that by that time the question of the withdrawals of caveat will have been dealt with, whereupon I shall probably return to willingness to make all orders necessary to hold the status quo until late October, when the Court of Appeal will be properly seized of the matter. I shall also deal on Tuesday with questions of the costs of the motion. 19 Upon the plaintiffs by their counsel giving to the Court the usual undertaking as to damages I continue the existing injunctions up to and including Tuesday, 8 October 2002. The notice of motion is stood over to 8 October 2002 at 9.30 am before me.

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