Australia and New Zealand Banking Group Limited v Adventure Quest Paintball-Skirmish Pty Limited; Woollard v Hodgson; Hodgson v Woollard

Supreme Court of NSW|2016-05-20|Before: Adams J

New Zealand Banking Group Limited (plaintiff/ second cross-defendant to first cross claim/ second cross-defendant to second cross claim) Adventure Quest Paintball-Skirmish Pty Limited (first defendant) Andrew Mark Hodgson (second defendant/ first cross defendant to first cross claim/ cross claimant to second cross claim) Kim Garnet Woollard (third defendant/ cross claimant to first cross claim/ first cross defendant to second cross-claim) Representation: Counsel: C E Bannan (Australia and New Zealand Banking Group Limited) T T Bors (Andrew Mark Hodgson) T C Holmes (Kim Garnet Woollard)

Solicitors: Kemp Strang (Australia and New Zealand Banking Group Limited) Bricknell Legal (Andrew Mark Hodgson) Herbert Weller Solicitor (Kim Garnet Woollard) File Number(s): 2014/65969

The orders proposed by the bank

These are as follows - 1. Judgment for possession of the whole of the land contained in Certificate of Title Folio Identifier 139/751656 known as 12 Singleton Road, East Kurrajong (also known as 1200 Putty Road, Blaxlands Ridge) in the State of New South Wales. 2. The plaintiff has leave to issue forthwith a writ for the possession of the land contained in Certificate of Title Folio Identifier 139/751656 known as 12 Singleton Road, East Kurrajong (also known as 1200 Putty Road, Blaxlands Ridge) in the State of New South Wales. 3. Judgment for the plaintiff against the third defendant in the sum of $81,957.80 plus interest in the amount of $23,345.22 pursuant to section 100 of the Civil Procedure Act 2005 (NSW) between 21 February 2014 and 22 March 2016 and continuing to increase at the rate of $13.43 per day. 4. The first cross claim is dismissed. 5. The third defendant pay the plaintiff's costs of the proceedings (including any costs incurred by the plaintiff with respect to the statement of claim, first cross claim and second cross claim) on an indemnity basis. (No orders are sought against the second defendant against whom judgment by default was entered on 28 May 2014).

The bank's submissions

The bank points out that proposed orders 1 to 3 are consistent with orders 1 and 2 made in the primary judgment, which gave judgment for the bank for possession and leave to issue a writ of possession. The only substantive difference is that proposed order 3 quantifies the extent of the liability of Mr Woollard to 22 March 2016, and provides for a daily rate of interest thereafter. There is no dispute in relation to that quantification. It is submitted that proposed order 4 is consistent also with orders 1 and 2 made in the primary judgment providing for the dismissal of the cross claim brought by Mr Woollard.
Proposed order 5 provides for Mr Wollard to pay the bank's costs on an indemnity basis. The bank seeks costs on the basis that costs should follow the event in the usual way and should comprehend those entailed by the proceedings relating to the statement of claim, the first cross claim and the second cross claim. As to the extent of the order, the bank seeks costs on an indemnity basis. The principal submission in that regard is that the bank is entitled to indemnity costs by reason of the contractual indemnity provided by Mr Woollard in favour of the bank, in particular, clause 28 in the mortgage granted by Mr Woollard in favour of the plaintiff, which provides that he shall pay - "all costs, charges, expenses and outgoings which may be incurred by the Bank … in consequence of any default … (including costs incidental to any proceedings in any Court), shall be computed as between solicitor and own client"; Furthermore, Mr Woollard's guarantee, in clause 9.1 - [Mr Woollard] agree[s] to pay ANZ, on a full indemnity basis, for all expenses: (a) that are not included in the definition of guaranteed money, but which ANZ incurs as a result of taking action to recover money owing by the customer; and (b) that ANZ incurs in connection with this guarantee, including an expenses ANZ incurs in enforcing it against me; and (c) that ANZ incurs as a result of court proceedings in which a claim is made that some payment, transaction or arrangement concerning the guarantee is void, voidable or a preference.
Although it is conceded the Court always retains a discretion with respect to costs, it is submitted that the Court should, in the absence of good reason for doing otherwise, give effect to an agreement providing such an indemnity when making an order for the costs of proceedings to enforce such an agreement: Macquarie International Health Clinic Pty Ltd v Sydney South-West Area Health Service (No 3) [2010] NSWSC 1139 per Nicholas J at [22] and [39] and Westpac Banking Corporation v Mason [2011] NSWSC 1241 at [38] per McCallum J; Secure Funding Pty Ltd v Stark Secure Funding Pty Ltd v Conway [2013] NSWSC 1536 at [6] per Black J.
If the Court is not prepared to order indemnity costs based upon the contractual indemnity, it is submitted that the bank should have its costs of the whole of the proceedings on an indemnity basis on the ground that an offer made prior to the commencement of proceedings was not accepted. On 2 December 2013 - three months before the commencement of the proceedings - the bank offered to accept $152,150.63 in full and final settlement of the debt owed by Mr Woollard. This represented a discount of $50,000 on the amount then owed to the bank. In other words, the offer agreed to accept payment only in respect of the amounts owing pursuant to the 2004 Letter of Offer, which had never been the subject of any dispute (see paragraph [9] of the primary judgment). It was an offer, in effect, to compromise the whole of the amount that was actually in dispute in the proceedings. A copy of this offer was produced with the submissions.
Since the bank has been successful, in addition to the amounts owing under the 2004 Letter of Offer, in respect of $49,560.89 owing under the 2009 Letter of Offer, it submits that it should be awarded indemnity costs based on the principles in Calderbank v Calderbank [1975] All ER 333.
The bank does not wish to be heard in relation to the orders to be made as between Mr Hodgson and Mr Woollard except to submit that no order should be made which interferes with the joint and several liability of each of them (consistent with the principles referred to in the primary judgment at [61]). The bank, having seen the orders proposed by Mr Hodgson, concedes they do not interfere with this position.

The orders proposed by Mr Hodgson

The Court: 1. declares that the cross claimant on the Second Cross Claim ("Mr Hodgson") is entitled to contribution from the first cross defendant on the Second Cross Claim ("Mr Woollard") to the extent of 50% of: 1. $219,924.56, being the amount of the judgment obtained by the plaintiff herein against Mr Hodgson on 28 May 2014, and 2. any interest accrued pursuant to section 101 of the Civil Procedure Act 2005 in respect of such judgment amount after 15 September 2014; 1. orders Mr Woollard pay to Mr Hodgson the amount of $14,634.64; 2. orders that Mr Wollard pay to Mr Hodgson interest on the amount of $14,634.64 calculated pursuant to section 100 of the Civil Procedure Act 2005, from 15 September 2014 to date; 3. otherwise orders that Mr Woollard indemnify Mr Hodgson in terms of 1 above; 4. further declares that Mr Hodgson is entitled to contribution and indemnity from Mr Woollard to the extent of 100% in respect of: 1. any entitlement of the plaintiff to interest accruing after 15 September 2014 (whether such entitlement arises from contract or by statute), subject only to 1 above; and 2. any entitlement of the plaintiff to its costs of these proceedings incurred after 15 September 2014 (whether such entitlement arises from contract or by order of this Court) 1. orders Mr Woollard to indemnify Mr Hodgson in terms of 5 above; 2. orders Mr Woollard to pay Mr Hodgson's costs of the Second Cross Claim, assessed on the ordinary basis; 3. otherwise dismisses the Second Cross Claim. 4. orders Mr Woollard to pay Mr Hodgson's costs of the First Cross Claim, assessed on the ordinary basis; 5. otherwise dismisses the First Cross Claim.

Mr Hodgson's submissions

It is submitted that the proposed orders carry into effect the Court's determination as to the competing cross claims, taking into account the fact and consequences of the different responses to the plaintiff's suit taken by the defendants. In that regard, the proposed orders proceed in view of the uncontroversial facts that - 1. Mr Hodgson did not defend the plaintiff's primary suit; 2. the plaintiff obtained judgment against Mr Hodgson on 28 May 2014 in the amount of $219,924.56 inclusive of costs and interest ("the May Judgment"); 3. Mr Hodgson paid $124,596.92 to the plaintiff in partial discharge of the May Judgment on 14 September 2014, that judgment being otherwise stayed as against Mr Hodgson until the final determination of the proceedings; and 4. Mr Woollard contested the plaintiff's suit on grounds not ultimately made out, thereby occasioning further costs to the plaintiff and the accrual of further interest during the currency of the proceedings.
It is accordingly submitted that: proposed order 1 represents the relief sought by Mr Hodgson on the second cross claim, taking into account the fact of Mr Hodgson's payment on 14 September 2014; proposed orders 2 and 3 reflect the fact that Mr Hodgson had paid somewhat more than 50% of the May Judgment, and succeeded on the second cross claim (see the primary judgment at [61]); proposed order 4 otherwise carries into effect the declaration at proposed order 1; proposed orders 5 and 6 address liabilities arising after Mr Hodgson's payment on 14 September 2014, and reflect the differential liability of the defendants in that regard (the primary judgment at [62]); and proposed orders 7 to 10 address the question of costs on each of the first and second cross claims in, it is submitted, an uncontroversial manner, and otherwise dispose of the balance of those actions.
Mr Hodgson points out that Mr Woollard has not suggested any alternative orders, nor indicated any specific objection to those proposed.

Conclusion

The submissions made by the bank and Mr Hodgson should be accepted. They plainly effect the primary judgment and raise no issue capable of controversy. Accordingly I make the following orders - 1. Judgment for possession of the whole of the land contained in Certificate of Title Folio Identifier 139/751656 known as 12 Singleton Road, East Kurrajong (also known as 1200 Putty Road, Blaxlands Ridge) in the State of New South Wales. 2. The plaintiff has leave to issue forthwith a writ for the possession of the land contained in Certificate of Title Folio Identifier 139/751656 known as 12 Singleton Road, East Kurrajong (also known as 1200 Putty Road, Blaxlands Ridge) in the State of New South Wales. 3. Judgment for the plaintiff against the third defendant in the sum of $81,957.80 plus interest in the amount of $23,345.22 pursuant to section 100 of the Civil Procedure Act 2005 (NSW) between 21 February 2014 and 22 March 2016 and continuing to increase at the rate of $13.43 per day. 4. The first cross claim is dismissed. 5. The third defendant is to pay the plaintiff's costs of the proceedings (including any costs incurred by the plaintiff with respect to the statement of claim, first cross claim and second cross claim) on an indemnity basis. 6. Declares that the cross claimant on the second cross claim ("Mr Hodgson") is entitled to contribution from the first cross defendant on the second cross claim ("Mr Woollard") to the extent of 50% of: 1. $219,924.56, being the amount of the judgment obtained by the plaintiff herein against Mr Hodgson on 28 May 2014, and 2. any interest accrued pursuant to section 101 of the Civil Procedure Act 2005 in respect of such judgment amount after 15 September 2014. 1. Mr Woollard is to pay to Mr Hodgson the amount of $14,634.64. 2. Mr Wollard is to pay to Mr Hodgson interest on the amount of $14,634.64 calculated pursuant to section 100 of the Civil Procedure Act 2005, from 15 September 2014 to date. 3. Otherwise orders that Mr Woollard is to indemnify Mr Hodgson in terms of 6 above. 4. Declares that Mr Hodgson is entitled to contribution and indemnity from Mr Woollard to the extent of 100% in respect of: 1. any entitlement of the plaintiff to interest accruing after 15 September 2014 (whether such entitlement arises from contract or by statute), subject only to 6 above; and 2. any entitlement of the plaintiff to its costs of these proceedings incurred after 15 September 2014. 1. Mr Woollard is to indemnify Mr Hodgson in terms of 10 above. 2. Mr Woollard is to pay Mr Hodgson's costs of the second cross claim, assessed on the ordinary basis. 3. Otherwise dismisses the second cross claim. 4. Mr Woollard is to pay Mr Hodgson's costs of the first cross claim, assessed on the ordinary basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 June 2016

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Judgment (9 paragraphs)

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