Bechara v Campbell-Williams

Judgment 1BATHURST CJ: This is an appeal from the judgment of Acting Justice Windeyer wherein he refused an application that the respondent be ordered pursuant to the provisions of s 99(2)(c) of the Civil Procedure Act 2005 to pay the appellants' costs of proceedings brought against them by Mr Maurice Tarabay, which were incurred between 9 August 2006 to 8 November 2006. 2The proceedings giving rise to the claim for the costs order arose in the following manner. Mr Tarabay carried out certain building work for a company associated with the appellants, Fifty Property Investments Pty Limited ("the proprietor"), in respect to which Mr Tarabay claimed the proprietor owed $1,103,314. Mr Tarabay brought proceedings in the Supreme Court to recover this amount. The proprietor denied that it contracted with Mr Tarabay but claimed the contract to carry out the building work was entered into between it and a company, M&L Tarabay Pty Limited, which was deregistered in 2003. 3The respondent, a legal practitioner, was retained by Mr Tarabay between 9 August and 8 November 2006 in connection with the proceedings. 4In July 2006 Mr Tarabay discovered that the proprietor was disposing of 21 townhouses owned by it at Ashfield to another company associated with the appellants at a price which Mr Tarabay believed was substantially below the value of the townhouses. 5As a consequence, Mr Tarabay first sought interlocutory relief against the proprietor and the purchaser company, Herberton Enterprises Pty Limited, seeking to restrain each of those companies for dealing any further in the units. The basis on which the relief was claimed was that the transactions were in contravention of s 37A of the Conveyancing Act 1919. 6On 18 August 2006 Bergin CJ in Eq granted an interlocutory injunction restraining both the proprietor and Herberton from dealing with the units without giving 21 days' notice to Mr Tarabay. In granting the interlocutory injunction her Honour held that there was a serious question to be tried as to whether the transactions contravened s 37A of the Conveyancing Act 1919. 7On 22 September 2006 leave was granted to discontinue the proceedings against the proprietor but to add the appellants as defendants and make claims against them for contravention of s 51AA of the Trade Practices Act 1974 (Cth). 8The basis of the claim against the appellants was that the conduct of the proprietor in denying the building contract and in seeking to sell the units to Herberton Enterprises Pty Limited was unconscionable conduct in contravention of s 51AA of the Trade Practices Act 1974 (Cth). The amended summons pleaded the manner in which that conduct was alleged to have caused loss and damage as follows: "39. As a result of the breaches referred to in para 38 above, Fifty Property Investments Pty Ltd was left with no ability to pay the Plaintiff and thereby the Plaintiff suffered loss and damage. The Plaintiff repeats and relies upon the particulars to para 27 above. 40. Alternatively, the Plaintiff lost the chance to recover $1,745,946 due to him by Fifty Property Investments Pty Ltd pursuant to the contract and thereby suffered loss and damage." 9Hammerschlag J ultimately dismissed the proceedings against the appellants and made an order that Mr Tarabay pay the appellants' costs, such payment to be on an indemnity basis (subject to a limited exception) from 15 April 2009. 10Following that judgment the appellants made an application that various solicitors and counsel who had acted for Mr Tarabay during the course of the proceedings be ordered pursuant to s 99(2)(c) of the Civil Procedure Act 2005 to pay their costs of the proceeding. The application was settled against all the legal practitioners with the exception of Mr Campbell-Williams. 11The claim against Mr Campbell-Williams was made on the basis that the action brought against the appellants in reliance of s 51AA of the Trade Practices Act 1974 (Cth) was inevitably doomed to failure because no causal link could be established between the alleged unconscionable conduct, which was the contravention of s 51AA Trade Practices Act 1974 (Cth), and any loss and damage. The appellants argued that the bringing of this claim was without reasonable cause, in contravention of s 99(1)(b) of the Civil Procedure Act 2005. 12Windeyer AJ rejected the claim. He noted that Mr Campbell-Williams believed that the causal link could be established because the denial of liability caused delay in Mr Tarabay being able to obtain monies due to him and enabled the proprietor to dispose of its assets at an undervalue and thereby frustrate the claim. Whilst Windeyer AJ expressed the view that in hindsight it may have been clear that the claim was unlikely to succeed, he did not find that it was not reasonably arguable at the time it was brought. 13In the appeal, counsel for the appellants sought to contend that there was no basis for such a claim because, as he put it, the loss and damage that was the subject of the claim had already been incurred. He identified that loss and damage as the money expended on certain building work carried out by the respondent's client for a company associated with the appellant and said that as that work had already been carried out the damage had been incurred and that there was therefore no causal link between that loss and the alleged unconscionable conduct. 14With respect, that seems to me to ignore what in fact was claimed. The essence of the pleading as contained in the amended summons was that by denying liability and taking steps to divest itself of its assets the proprietor, Fifty Property Investments Pty Limited, denuded itself of its assets, that conduct was unconscionable, and that the present appellants were parties to that conduct within the meaning of s 75B of the Trade Practices Act 1974 (Cth). The loss and damage claimed was not the amount payable for the work whether pursuant to contact or quantum meruit but damages suffered by reason of a loss of a chance of recovery out of the assets of the proprietor. 15It seems to me that arguably such damages could be said to be caused by the breach and thus recoverable by virtue of s 82 of the Trade Practices Act 1974 (Cth) assuming, as was conceded below, the unconscionability provisions in s 51AA of the Trade Practices Act 1974 (Cth), as they then stood, could apply in respect of the alleged claim: see for example Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332. 16In these circumstances it is my opinion that the learned trial judge in the exercise of his discretion did not fall into any error and the appeal should be dismissed with costs. 17It should be noted that the appellants sought leave to appeal. However, having regard to the decision of this Court in Arena Management Pty Ltd (Receiver & Manager Appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128 at [44] ff, leave was not required. 18The orders I would make are these: (1) Order that the appellants file a notice of appeal in the form of the draft notice of appeal initialled by Bathurst CJ and placed with the papers within fourteen days; (2) Dismiss the appeal; (3) Order that the appellants pay the respondent's costs. 19MACFARLAN JA: I agree. 20HANDLEY AJA: I agree. 21BATHURST CJ: The orders of the Court are as I have pronounced them.