Brown v The Stables Perisher Management Pty Ltd

Supreme Court of NSW|2024-06-14|Before: Bell CJ

Judgment

BELL CJ: By judgment delivered on 21 December 2021 (Brown v The Stables Perisher Management Pty Ltd [2021] NSWSC 1688; referred to subsequently as the principal judgment), various declarations were made in favour of the Plaintiffs together with an order that the Defendant was bound to account to the Plaintiffs for their respective incomes and expenses in relation to Apartments 9-1 and 26 in The Stables resort complex in the Perisher Valley.
The parties were also ordered to file and serve written submissions with respect to the costs of the proceedings.
The proceedings concerned the legal validity and, to the extent that the question of relief against forfeiture arose, the propriety, in the eyes of equity, of The Stables Perisher Management Pty Ltd's (SPM or the Defendant) purported termination in July 2020 of two valuable long-term subleases of apartments held by the Plaintiffs.
These reasons presuppose familiarity with the principal judgment.
The Defendant purported to satisfy the order with respect to the account by the provision of various accounting records to the Plaintiffs on 21 February 2022. The Plaintiffs subsequently took issue with the adequacy of the purported account, setting out in detailed written submissions asserted deficiencies in the Accounting Records that had been furnished by the Defendant. A number of those matters were addressed in a judgment given in respect of costs of the proceedings delivered on 6 July 2022: Brown v The Stables Perisher Management Pty Ltd (No 2) [2022] NSWSC 902 (the costs judgment). Parenthetically, costs in the sum of $200,000 were ordered and have subsequently been paid.

Apartment 26

On or about 20 May 2022, prior to the costs judgment (although unknown to the Court), the assignment of Apartment 26 from the First Plaintiff to Myriad Capital Pty Limited was completed.
That assignment had been the subject of a contract for the sale and purchase of land executed on 27 September 2019, as recorded in the principal judgment at [102]. Its completion was frustrated by the actions of the Defendant, as fully detailed in the principal judgment. As noted in [2] of the principal judgment, "[i]ndirectly, the proceedings also concern[ed] the conduct of [the Defendant] in withholding its consent during 2019-2020 to the transfer of one of the apartments (Apartment 26) of which the first Plaintiff … is the sublessee."
For a transfer of the sub-lease to be effective, the consent of the Defendant was required. The Defendant had declined to give that consent in 2019 until various asserted expenses had been paid. As noted in [206] of the principal judgment, on 6 August 2020, by letter from Ms Kendall Fairley (of Brock Partners), the following conditions of SPM's consent to any assignment of the sublease of Apartment 26 were set out: "1. Karen Brown procures from the purchaser the Deed of Guarantee and Acknowledgement to the terms of the Management Agreement and an agreement to pay the Bond payable; 2. Confirmation from NPWS about the terms of occupation of Apartment 26 and Apartment 9-1 by a Sublessee; 3. Any amount to be set aside to provide for the claims in respect of Apartment 26 and Apartment 9-1 and potential legal costs; 4. Karen Brown's undertaking to pay for the lease of the car and related legal costs of approximately $31,000 to be paid at settlement or authorised to be deducted from the deposit; 5. The sales agent's commission to be deducted from the deposit." (Emphasis added.)
It was also noted at [313] of the principal judgment that "the withholding of consent occurred in a context where Mr Anstee had made it plain that his consent was conditional upon an unconditional undertaking by both Karen and Shane Brown that the proceeds of the transfer be directed to him."
It was held in the principal judgment that "[t]o the extent that the termination of the subleases was founded on non-payment of amounts said to be owing, the termination was invalid and of no effect": [346]. At [357] it was concluded that "the Notices of Termination were issued for an improper purpose and were of no effect for that reason. The same reasoning informs the alternative conclusion that, even if the Notices had been valid, this was a case where it would be appropriate to grant relief against forfeiture." At [369]-[370], it was held that: "A number of the charges purportedly levied were farcical, especially those which had no relationship at all with Apartment 26 and which on no conceivable view could have been said to be owing under the sublease for that apartment or pursuant to the Management Agreement. These included the entirely undocumented claim in relation to commission for the sale of Apartment 28. The context of the issuing of the two invoices was also of great significance. The immediate context was Mrs Brown's attempt to sell Apartment 26 and Mr Anstee's almost immediate insistence that his consent to the sale was contingent upon Mr and Mrs Brown agreeing to direct sale proceeds to him. When this was resisted, Mr Anstee started to make assertions that Mrs Brown was in default of payments under her sublease but took almost six months to raise Invoice 735. I have found that, but for a small number of items which Mrs Brown had never resisted paying and which were conventionally debited from a running account, being netted off against income from forward bookings, none of the items on this invoice was legitimately charged."
The non-payment of the "claims in respect of Apartment 26" were in turn relied upon as the basis for the issue of Notices of Default, failure to comply with which had led to the Defendant purporting to terminate the sublease in respect of Apartment 26. At [381]-[382], it was concluded that no legally effective Notices of Default were issued, that the respective Notices of Termination were invalid, and the purported terminations of the subleases pursuant to those Notices were invalid and of no effect. Earlier, the Defendant's conduct (and that of Mr Anstee, effectively the Defendant's alter ego) was described as "deliberate, calculated to apply pressure to capitulate or to force capitulation, and utterly unconscionable": at [378]. At [379], I observed that: "This conclusion was only reinforced by [the Defendant's] continued withholding of consent to a transfer of Apartment 26 even after Marsdens, on behalf of Karen Brown, had offered to quarantine $210,053.04 from the proceeds of sale of Apartment 26 pending determination of [the Defendant's] claimed entitlement to any part of this amount: see [204] above. This suggested that [the Defendant's] ultimate aim was to secure the forfeiture of both apartments in order to apply maximum leverage on Mrs Brown and her two sons."
Against that background, it is necessary to return to the completion of the assignment of Mrs Brown's interest in Apartment 26 which it appears occurred on 20 May 2022.
On the day prior to settlement, the solicitors for the Defendant had written to Ms Brown's solicitors as follows (with their subsequent responses interleaved in bold): "Our client requires the following at settlement: - Order on agent; Acknowledged and agreed - Payment by your client of the sum of $21889.37 being outstanding monies due to our client; Please provide us with details on where to pay this on Settlement - Confirmation that the Deed of Consent is to be dated by our client 27th November 2019; Confirmed - In the email from Karen Field of the 11th May 2022 a copy of which you have NPWS requested information regarding whether the purchase will require a mortgage or is self funded. Please advise." The purchaser does not require a mortgage and it will be self-funded." (Emphasis in original.)
In both correspondence and written submissions, the Defendant invoked cl 2.1 of the Deed as a complete answer to its obligation to account to Mrs Brown, as the Court had ordered on 21 December 2021. Thus, by letter dated 27 June 2022, the Defendant's solicitors wrote: "The sale of Unit 26 The Stables Perisher was completed on 20 May 2022 with your firm acting for Karen Brown in arranging and completing the settlement on 20 May 2022. The following was agreed between the parties by email at 10.09am on 19 May 2021 from Caitlin Whalan of your office. 1. The Deed of Consent between Karen Brown and TSPM was confirmed on 19 May 2022 as binding on the parties and confirmed that it would be dated 27 November 2019. 2. Payment by Karen Brown of $21,889.37 of outstanding monies due to our client which was subject to submissions on costs. Our client relies on the Deed of Consent and in particular Clause 2.1 as set out in paragraph 5 of your letter and payment of our client's monetary claims."
The Recitals to the Deed were as follows: "A. By the Subleases described in Item 4 of the Reference Schedule as varied from time to time (Sublease) the Company subleased the premises described in Item 5 of the Reference Schedule (Premises). B. The Sublease provides, amongst other things, that the lessee under the Sublease must not assign or transfer the Sublease without the prior written consent of the Company and the Director General of the Office of the Environment and Heritage (Director). C. The Transferor and the Transferee desire to have the Sublease transferred to the Transferee (Transfer) and the Company consents to the Transfer subject to the terms and conditions herein contained." (Emphasis in original.) It is evident that the Defendant was executing the Deed in its capacity as Sublessor of the sublease to Apartment 26.
Clause 2.1 of the Deed provided that: "The Transferor [Mrs Brown] now and forever releases and holds harmless the Company [the Defendant] from and against all claims whatsoever which the Transferor might now or hereafter maintain against the Company in respect of or in any way arising from the sublease."
In correspondence in 2022, and written submissions in 2024, Mrs Brown disputed that the release, on its proper construction, was intended to absolve the Defendant from its obligation to account which, by the time of the Deed's execution, was the subject of Court orders. Mrs Brown made the following observation in inter-partes correspondence: "The general words of a release are always limited to those things which were specifically in contemplation of the parties at the time the release was given: see London & South Western Railway Co v Blackmore (1870) LR 4 HL 610 at [623]. The word 'claim' is not defined in the Deed. Having regard to the Recitals in the Deed, there is nothing which contemplates the invoices, the Proceedings, or any costs arising from the Proceedings. We are confident that the release clause will be read down to conform to the contemplation of the parties at the time the release was executed."
In written submissions filed earlier this year, Mr DeBuse, counsel for the Plaintiffs, made a number of points including the following:

"[T]he Defendant remains liable to account to the First Plaintiff for the period that the Defendant was in occupation of Apartment 26 and that a deed entered into prior to that conduct does not result in a contractual satisfaction of the obligation which was neither contemplated or known at the time";
"The limitation on liability was not raised in any defence, at the hearing in September 2021 or at the time of the transfer of the sublease in respect of Apartment 26 in May 2022 and the First Plaintiff thereby lost the opportunity to raise by way of reply those matters such as unconscionable reliance or other statutory limitations on the term sought to be relied upon by the Defendant."
As a matter of construction, the release clause "cannot sensibly be given an untrammelled operation. It must still be construed by reference to the commercial purpose and objectives of the parties, which at that time could not have included the events that subsequently occurred and in the manner that they occurred."
The obligation for the Defendant to give the further account was not a claim which was covered by clause 2.1 as it had not accrued as at 27 November 2019 (the date of the Deed of Consent - although not the date it was executed) as the Defendant had not at that stage engaged in the conduct giving rise to the obligation to account so there could not have been the intention to release the Defendant from those claims at that time;
The obligation to account does not arise from the Sublease but arises as a consequence of (1) the proceedings and the principal judgment and (2) the Defendant's unlawful occupation.

Consideration - did cl 2.1 release the Defendant from obligation to account?

The Defendant's reliance on cl 2.1 of the Deed raises questions of construction, especially in the context of a release. In that context, the starting point for the analysis is invariably the decision of the High Court in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112; [1954] HCA 23 (Grant), a decision which drew upon London & South Western Railway Co. v. Blackmore (1870) LR 4 HL 610 cited by the First Plaintiff: se e[19] above.
The following passages in John Grant are relevant. At 123, the plurality said that: "the general words of a release should be restrained by the particular occasion … Thus the general words of a release are to be restrained by the particular recital." It was then held at 129-130 that: "[A] releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor."
In Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26. Gleeson CJ and Handley JA held (at 28) that: "…the general words of a release will, in an appropriate case, be read down to conform to the contemplation of the parties at the time the release was executed."
Ward JA in Crossman v Sheahan [2016] NSWCA 2000 held that, as noted in John Grant, "the question whether a general release is constrained by the particular recitals in a deed is a matter of construction and, to the extent that reliance is placed on equity's intervention, the true purpose of the transaction is to be ascertained from the nature of the instrument and the surrounding circumstances": at [235].
In Reid v Commonwealth Bank of Australia (2022) 109 NSWLR 149; [2022] NSWCA 134 at [3], in agreement with the orders proposed by White JA, I observed that: "consistently with the guidance supplied by the seminal decision in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112; [1954] HCA 23, as the judgments of Leeming JA and White JA in this case both demonstrate, consistent with the recent decision of the Victorian Court of Appeal in Burness v Hill [2019] VSCA 94, this is one area in which evidence of the subjective intentions of the parties to a deed of (or contractual) release may legitimately inform the analysis of the operation and efficacy of any release."
Leeming JA, who also agreed with the orders proposed by White JA, went on to offer an in-depth analysis of the decision in John Grant at [15]-[45]. Of particular note is the analysis at [38]-[45] in which His Honour considers the question (set out at [37]) whether "equity would construe a release differently and more narrowly than the same words would be construed at law" (emphasis in original). His Honour went on to say that: "The joint judgment of Dixon CJ, Fullagar, Kitto and Taylor JJ did not doubt the reasoning in Lyall v Edwards reproduced above. It also endorsed statements in the authorities to the effect that what equity did was to construe the release, doing so by reference to the parties' subjective intentions. The joint judgment endorsed what had been said by Malins VC in Turner v Turner; Hall v Turner (1880) 14 Ch D 829 at 834 that the general words of a release did not extend to a matter not known when it was executed: 'In a case of this kind it is the duty of the Court to construe the instrument according to the knowledge of the parties at the time, and according to what they intended, and not to extend it to property which was not intended to be comprised within it. … [I]t has always been the rule of this Court to construe releases and documents of that kind with regard to the intention of the parties, and to refer in such cases to the state of the property which was known at the time.' (emphasis added) The joint judgment also endorsed and reproduced what was said by Farwell LJ in Cloutte v Storey [1911] 1 Ch 18 at 34: 'It is not in accordance with principle or authority to construe deeds of compromise of ascertained specific questions so as to deprive any party thereto of any right not then in dispute and not in contemplation by any of the parties to such deed.' (emphasis added) The statements by Malins VC and Farwell LJ are difficult to read other than as statements of how a deed of release is construed. The statement by Wilde B from Lyall v Edwards reproduced above is to the same effect. On the other hand, the passage in Martin B's reasons in Lyall v Edwards is differently framed: to "interfere and confine" a broadly worded release is suggestive of preventing the unconscientious exercise of a legal right. Pollock CB's formulation of principle is ambiguous on this point. The passage in the joint judgment in Grant concludes with a reference to 'the equity to have the general words of a release confined to the true purpose of the transaction ascertained from the scope of the instrument and the external circumstances'. The judgment concludes with the statement, 'It is under that principle that the facts alleged in the third replication bring the case': at 130.8. One view of the position is that the High Court's careful language accommodates both ways of formulating equity's approach to a release. One leading text says of this doctrine that 'Although sometimes regarded as a principle of construction, it is not': P Herzfeld and T Prince, Interpretation (2nd ed, Lawbook Co, 2020), p 632. The authors say that a plaintiff, against whom a release is pleaded by way of defence, has an equity to restrain a defendant's unconscientious reliance on general words in a release, picking up what the joint judgment stated at 129-130: 'equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.' There is an attraction to the idea that the equitable aspect of Grant was confined to the unconscientious exercise of legal rights, which could be informed by the subjective intentions of the parties, and that the approach to construction of the document is the same at law and in equity. That accords with the emphatic endorsement of the objective theory of contract in decisions such as Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52. The same point was made by Lord Nicholls, when dealing with releases, in Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251; [2001] UKHL 8 at [25]: 'Today there is no question of a document having a legal interpretation as distinct from an equitable interpretation'. See also at [17] (Lord Bingham) and [79] (Lord Clyde). Doubtless it seems to twenty-first century eyes a strong thing to conclude that the same document would be construed differently, according to different rules and by reference to different evidence, by a common law court and an equitable court. Of course, that is a modern development. For example, bills and assignments were recognised by courts administering the law merchant but were ignored by common law courts, or else regard could only be taken of the document in a common law court if the defendant were recognised as a 'trader' (see for example Witherley v Sarsfield (1689) Holt KB 112; 90 ER 960). Another example may be seen in the case of wills. Professor Polden wrote, speaking of around 1830 prior to the establishment of the Court of Probate, of the 'widespread criticism of the inconvenience arising from the need for the validity of a will dealing with both personal and real property to be determined by different courts under different rules, occasionally leading to different conclusions': Oxford History of the Laws of England (Oxford University Press, 2010), Vol XI, pp 703-704. Thirdly, prior to the Judicature legislation, equity treated releases and agreements to release very differently from common law, as is clear from Dixon J's judgment in McDermott v Black (1940) 63 CLR 161 at 187-189; [1940] HCA 4 and as summarised in Scaffidi v Perpetual Trustees Victoria Ltd (2011) 42 WAR 59; [2011] WASCA 159 at [14]-[21]. Such differences may be one reason why Wilde B and Malin VC and Farwell LJ expressed themselves as they did. One way of reading Grant v John Grant & Sons Pty Ltd is that the High Court was carefully and cautiously, and no doubt conscious of the possibility of further appeal to the Privy Council between family members who had a demonstrated appetite for litigation, seeking to reconcile the divergent strands of authority, at a time when the judicature system had been in place for decades in all jurisdictions save for New South Wales. That way of reading the decision favours the views expressed in the second edition of Interpretation, as well as aligning with the result reached in Bank of Credit and Commerce International SA v Ali. However, the approach favoured in the second edition of Interpretation appears to be inconsistent with other appellate authority. In Torrens Aloha Pty Ltd v Citibank NA (1997) 72 FCR 581 at 600 a Full Court referred to a statement by Sir Frederick Pollock which had also been endorsed in Grant, namely, that 'in equity "a release shall not be construed as applying to something of which the party executing it was ignorant"'. It is also inconsistent with the approach taken in Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 at 44 and with what was said in Butler v St John of God Health Care Inc [2008] WASCA 174 at [3]-[4]. It also appears to be inconsistent with aspects of the most recent appellate consideration of the equitable principles in Grant in circumstances where a cause of action was not known when the release was executed. That is the unanimous decision of the Victorian Court of Appeal in Burness v Hill [2019] VSCA 94. Unfortunately, this was not addressed in the second edition of Interpretation, nor was the primary judge referred to it."
At [48], Leeming JA held that the Victorian Court of Appeal in Burness v Hill [2019] VSCA 94 "read [John] Grant as permitting a party's subjective intention to inform the construction of the release". White JA also considered John Grant in some detail at [119]-[126].
In Protheroe v Protheroe [2023] NSWCA 328, Meagher JA at [54] held that: "…Grant v John Grant contains often-cited statements as to the principles applicable to the proper interpretation at law of a general release. The first is that the general words of the release are to be read subject to the particular matters that are shown by the recitals to be the 'occasion of the instrument' (at 131). The second and related principle is that the words of release should be construed with regard to the tenor of the deed, a reference to 'indications … in the provisions of the deed' as to whether or not a general release was intended to go beyond the immediate area of disputation between the parties (at 131-132). In other words, the general release provision must be construed in its commercial context and also its broader textual context."
See, also, Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95 at [138] and Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 at [174] cited by Leeming JA in Benson v Rational Entertainment Enterprises Ltd (2018) 97 NSWLR 798; [2018] NSWCA 111 at [56].
Guided by these authorities and for the following reasons, I do not consider that cl 2.1 of the Deed provided a release of the Defendant's obligation to account.
Both parties agreed that the Deed of Consent was to be dated 27 November 2019: see [15] above. That is to say, although in fact executed in May 2022, the parties' intention was that the Deed (and thus the release) was to take effect, and to be understood as taking effect, as and from the date it bore. Promises or undertakings or releases made in it were thus to be understood in that temporal context, subject to the language of the Deed providing to the contrary.
Clause 2.1 of the Deed did not define the term "claims" but did refer to "all claims whatsoever which the Transferor might now or hereafter maintain" (emphasis added). In my view, this must refer to claims which existed at the date of the Deed, whether being "maintained" as at the date of the Deed by the Transferor, or not.
Such "claims" must also be understood as being claims known to the Transferor, or at least based on facts which had occurred and which would sustain the making of a claim, as at the date of the Deed. One could not have a "claim" to release if the facts which gave rise to it had not yet occurred.
One would not lightly attribute to a party to a Deed an intention to release claims the existence of which he or she was not aware unless the language of the release supported the existence of such an intention. One does not find in cl 2.1, for example, a definition of claims which refers to "current and future claims, whether known to the Transferor or not". The language "might now or hereafter maintain" in cl 2.1 is far narrower. The phrase "hereafter maintain" is consistent with the Transferor having a claim but not presently "maintaining it".
Invoice 735 asserting that Mrs Brown owed over $200,000 in respect of Apartment 26 which was, in practical terms, the starting point of the sequence of events that led to the ultimate obligation on the Defendant to account for its unwarranted occupation of Apartment 26 was not raised until about 30 April 2020, and details as to the alleged basis for the charges on this invoice were not supplied (to the extent that they were ever adequately supplied) until later in time.
The release given in cl 2.1 of the Deed dated 27 November 2019 did not release any claims whose underlying basis was not known to Mrs Brown as at 27 November 2019. Moreover, and more particularly, the duty to account was in respect of the Defendant's unlawful occupation of Apartment 26 from July 2020 when the sublease was terminated. Any entitlement to make a claim in respect of that unlawful occupation could not have been known, and the claim could not have existed, until that time at the earliest. It follows inexorably that cl 2.1 did not release that claim.
This is sufficient to meet the Defendant's reliance on cl 2.1 but I would also reject that reliance for additional reasons.
The claims the subject of cl 2.1 are claims which are "in respect of or in any way arising from the sublease" (emphasis added). Such phrases are ambulatory and their meaning will invariably be context dependent, and involve questions of degree: see R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 at [31]; O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 376; [1990] HCA 16. It is thus necessary to focus on whether the obligation to account which the Defendant claims to have been released by cl 2.1 of the Deed can be characterised as being in respect of or in any way arising from the sublease. In my view, it cannot.
The obligation to account was not in respect of the sublease. No payment is owing or claimed to be owing to Mrs Brown by the Defendant in its capacity as Sublessor. The sublease imposed no obligation on the Defendant in relation to the rental of the Apartment. As pointed out in [4] of the principal judgment, the Defendant was not only the Sublessor of Apartment 26 but managed it pursuant to a separate Management Agreement with Mrs Brown.
The obligation to account arose from the assessment in the principal judgment of the Defendant's conduct and its unlawful occupation of the premises following the raising of unwarranted charges in respect of the Management Agreement.
Next, focussing on the timing of the execution of the Deed, namely 20 May 2022 (as opposed to 19 November 2019), as at 20 May 2022, Mrs Brown had the benefit of this Court's orders that the Defendant account to her for income received during its unlawful possession of Apartment 26, and had filed submissions seeking the award of significant sums by way of account a short time before the date of execution of the Deed. The principal purpose of that Deed of Consent which contained cl 2.1 was for the Defendant to consent to the transfer of Apartment 26. Having fought the litigation so hard, and achieved very considerable success and vindication, including having secured the benefit of orders in her favour that the Defendant account to her, it would be fanciful to infer that Mrs Brown subjectively intended to release the Defendant from that claim. As the authorities referred to above demonstrate, it is appropriate when construing a release to take into account matters of subjective intent.
For all the above reasons, the Defendant's reliance on cl 2.1 of the Deed is rejected. This means that it is necessary to consider the balance of the evidence filed and submitted on behalf of Defendant by way of meeting its obligation to account in relation both to Apartment 26 and Apartment 9-1, recalling that it was held in the costs judgment that the Defendant's purported account given prior to that judgment was unsatisfactory, resulting in the direction that Mr Anstee file a further affidavit.
It is necessary to deal with each of the Apartments separately.

Apartment 26

On settlement of Apartment 26 in May 2022, all monies owing to the Defendant were paid: see [15] above. The accounting exercise does not therefore involve any need to net expenses off against income other than in respect of a management fee of $25% to which the Defendant would have been entitled.
The period of income for which an account is required in respect of Apartment 26 is from 23 July 2020 when the Defendant wrongfully took possession of the apartment (including any unaccounted income at that point in time) until May 2022.
A summary sheet referred to in the parties' submissions as Annexure A and which was provided to the Plaintiffs by the Defendant and annexed, for example, to written submissions of the Defendant of 7 March 2022 recorded gross income (ie inclusive of GST) in the sum of $89,360.59 received as between 19 July 2020 and 8 August 2021 in respect of Apartment 26. The summary sheet purported to record all income up until 21 February 2022.
A complication arose, with which the Plaintiffs took issue, on account of a Bookings sheet sent to Mrs Brown on 3 August 2021 which relevantly provided: "Dear Karen We would like to take this opportunity to thank you for your continued support during what is turning out to be another really tough year. There have been some unforeseen challenges due to Covid with areas of lock down and border closures, it is putting huge restriction on who is able to travel to Perisher. Due to the cancellations, your rental income may not cover your expenses. If we are not able to hold any or enough income, you will be invoiced when these come due and prompt payment will be required. Should you require any assistance on how to access or understand the owner portal in Homhero, please do not hesitate to contact me on the number below. As a group, our total booking revenue was a record $2,000,000 for the season, however we stand to complete over $1,000,000 in total cancellations. Although this is a testing situation, we believe that we handled our cancellation and transfer policy, extremely well in these unprecedented times and we feel confident that we will see return business to your property. We have already had some positive feedback and comments advising our guests will return 2022. For your information I have attached a breakdown of your apartment bookings and cancellations from this season & forecast for August cancellations." The breakdown referred to fell into four categories:

"Confirmed bookings";
"Cancelled Bookings";
"Bookings we forecast to cancel due to postcode lockdown"; and
"Forward bookings".

Under "Confirmed bookings" were five bookings for dates in the period 11 June - 21 July 2021 which coincided with rental income for the named persons for those periods on Annexure A. There was also recorded on the breakdown an entry for Matthew Anstee as having arrived on 16 June 2021 and departed on 20 June 2021, as well as an entry for the Defendant as having arrived on 28 July 2021 with a confirmed booking to 1 August 2021. No tariff was recorded for these stays and no rental income was reflected on Annexure A. It is important to emphasise that these two entries were under "Confirmed Bookings" in contrast to "Cancelled Bookings."
By paragraph 5 of his Affidavit of 14 July 2022, Mr Anstee made reference to these two entries and asserted that "the booking for Matthew Anstee and the booking for Perisher the Stables were both cancelled and no cancellation fees were payable." A real difficulty with this conclusory evidence is that it is inconsistent with a business record which the Defendant sent Mrs Brown on 3 August 2021 which recorded that Mr Anstee had "departed" on 20 June 2021 and that the Defendant had "arrived" on 28 July 2021. Faced with inconsistent oral evidence, after the event, and relatively contemporaneous documentary evidence, I favour the former and find that Mr Anstee and the Defendant occupied Apartment 26 between 16 and 20 June 2021, and 28 July and 1 August 2021 respectively and were bound to pay rent for that occupation. The rent charged to other tenants in that broad period for four nights was $5,900 (the amount charged to Linda Yao) and $4,200 for three nights (the amount charged to Belinda Armstrong). This sum of $10,300 should be added to the amount of $89,360.59 referred to above.
Of the category "Bookings we forecast to cancel due to postcode lockdown", there were two bookings for the periods 4-6 August 2021 and 6-8 August 2021. Although these two bookings may well have been cancelled, Annexure A discloses that Apartment 26 was rented out and generated income between these two dates. In other words, it is already included in the sum of $89,360.59.
The remaining bookings under that category and the category "Forward Bookings" all fell within the period when there were postcode lockdowns and travel restrictions in New South Wales because of the Covid-19 pandemic. I am prepared to accept that these bookings were bona fide cancelled and that no cancellation fee was charged with regard to these bookings. Although Mrs Brown placed some reliance on certain evidence Mr Anstee had given about cancellations during the course of the trial, that evidence was, in my opinion, equivocal and it is unlikely that charges were made for Covid related cancellations. Mr Anstee's affidavit evidence was to the effect that no fees were charged with regard to these cancellations.
I also note from Annexure A that income of $18,121.01 was earned for the rental of Apartment 26 between 5 and 10 July 2020 and 10 and 17 July 2020. It is not clear, but I would infer from the fact that the parties were in dispute in this period and the Defendant had taken possession of the apartment, that this amount has also not been accounted for to Mrs Brown. It follows that it should be added to the amounts of $10,300 and $89,360.59 referred to above, leading to a total amount payable of $117,781.60, subject to a management fee of 25%. This results in an amount of $88,336.20. To this total there should be added interest at Court rates from the date of the latest income receipt, 6 August 2021.

Apartment 9-1

In his Affidavit of 29 April 2024, Mr Anstee stated that: "The Second Plaintiff and the Third Plaintiff have entered in a new Management Agreement in respect to apartment 9-1 with effect from1 June 2022. … The Second Plaintiff and Third Plaintiff have resolved all monetary disputes with the Defendant as set out in the attached statements. The Defendant rejects any assertion that there is any money owing between the Second Plaintiff and Third Plaintiff and the Defendant other than is set out in the attached statements."
The "attached statements" were Statements/Tax Invoices in respect of Apartment 9-1 until 2024, in essence demonstrating a running account, netting off annual expenses (including management fees) against income received.
Those statements record rental income from various people staying at Apartment 9-1 throughout the relevant period.
As with Apartment 26, the Second and Third Plaintiffs have pointed out that there were a number of bookings originally shown for the latter half of the 2021 ski season that were cancelled, or which were anticipated to be cancelled on account of Covid travel restrictions. These periods coincide with a period where there were harsh travel restrictions, confining travel to a 5 km zone, subject to limited exceptions.
I accept Mr Anstee's evidence that certain bookings for Apartment 9-1 were cancelled and no fee was charged with regard to these cancellations.
As with Apartment 26, there was one booking prior to travel restrictions where Mr Anstee was said to be in residence between 13 and 20 June 2021 but does not appear to have paid any tariff for the occupation. By references to other tariffs which were charged for Apartment 9-1 at this period, this stay should have attracted a fee of $5,875.8, less 25% management fee, translating to $4,406.85. Mr Anstee should account to the Second and Third Plaintiffs for this amount plus interest at Court rates from 20 June 2021.
I am not satisfied that any further sum is owing. The running account statements do not suggest that there is any outstanding amount owing to the Second and Third Plaintiffs, and show various payments having been made to them in recent years.
I note for completeness that the Defendant served a further Affidavit of Mr Anstee dated 11 June 2024. No leave to file further evidence (as opposed to submissions) had been granted, and the solicitors for the Plaintiffs unsurprisingly took objection to any further evidence being filed. I uphold that objection.

Orders

For the above reasons, I order that the Defendant: 1. pay to the First Plaintiff by way of account the sum of $88,336.20 with interest at Court rates from 6 August 2021, and 2. pay to the Second and Third Plaintiffs by way of account the sum of $4,406.85 plus interest at Court rates from 20 June 2021. 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: 14 June 2024

(2022) 109 NSWLR 149

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