Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 3)

Representation: Counsel:
M Sheldon (Plaintiff/Cross-Defendant)
M Ashhurst SC / S Scott (First and Second Defendants/Cross-Claimant)
Solicitors:
One Group Legal (Plaintiff/Cross-Defendant)
Fortis Law (First and Second Defendants/Cross-Claimant)
Sage Legal (Third and Fourth Defendants)

File Number(s): 2022/195843

EX TEMPORE JUDGMENT

1. I gave judgment in this matter on 11 June 2025. [1] I shall use the same abbreviations here.

2. No orders have yet been made to give effect to the judgment.

3. Both parties now draw my attention to matters in the judgment that are said to require further consideration.

4. I have jurisdiction to make corrections to my judgment if it is apparent that I have proceeded:

“… according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing.” [2]

5. The above principles were discussed by Black J In the matter of Boart Longyear (No 4). [3]

6. The Builder draws my attention to my conclusions concerning the Developer's claim for Delay at J146-161. I found that the parties had agreed that the "original contracted completion date" was 23 May 2020. It is common ground that, in the events that have happened, the consequence of this finding is that the Developer's claim for liquidated damaged should be dismissed; rather than be confined to an identified period, as I incorrectly held at J161.

7. I will make the appropriate corrections to the judgment.

8. The Developer seeks to raise matters concerning its claim, arising from the Deed, that parties sharing with the Developer a co-ordinate liability to the Builder in relation to the Builder's claims concerning the Retention and Variations, had discharged that co-ordinate liability. I dealt with that at J36-J82.

9. The developer draws attention to my findings at J56-J58:

“[56] Mr Ashhurst submitted that:

‘The Mortgages resulted in the defendants sharing a common burden in respect of the obligations owned to [the Builder] such as to result in mutual rights and obligations. This resulted in the requisite mutuality … for the purposes of a set-off’.

[57] But ‘the defendants’ are not parties to the Mortgages. Any coordinate liability could only arise between the mortgagors of the Mortgages: Ninth Campsie, Ms Tran, and two other companies: Marwan Layla Pty Ltd and The Wave Rockdale Pty Ltd.

[58] Those mortgagors, by the Mortgages, each provided security for the amount of the Freezing Order and the Asset Preservation Order, $2,963,529.21, and also for the amount of any judgment obtained by the Builder in these proceedings. They each had a coordinate liability for any such judgment.”

10. As to those matters, the Developer seeks to recall:

“(a) paragraph [56] of the judgment to correct the error made by the [Developer] recorded in that paragraph of the judgment (being the reference to ‘defendants’ made by the [Developer] instead of “’Related Parties to the defendants’;

(b) paragraphs [57]-[58] of the judgment to allow the Court to consider the question of the existence (and discharge of) the coordinate liability as between the [Developer] and the Mortgagors (being the ‘Related Parties to the defendants’)”.

11. In relation to that matter on this application the Developer submitted:

“There would then not seem to be in the judgment any consideration of the coordinate liability between the [Developer] and the Mortgagor Tran Parties and the consequence of the discharge of that coordinate liability on the plaintiff’s claims against the [Developer] (as a result of the discharge of that coordinate liability caused by the operation of the Deed).”

12. That submission must be seen in the light of this passage from the developer's closing submissions at trial:

“23. … The sale of the Arncliffe Properties at an undervalue in exchange for the release of the Tran Parties from the Mortgage discharges not only the Tran Parties from any liability that may arise in this proceeding but each of the first and second defendants as well: Albion Insurance Co. Ltd v Government Insurance Office (N.S.W.) (1969) 121 CLR 342 at 352.”

13. At J57 and J58 I intended to deal with the Developer's case that the mortgagors of the Mortgages had a co-ordinate liability with it, the Developer, to the Builder.

14. On reflection, to make that matter clear I should have added the words “and the Developer” at the end of J57 and after the word “They” in the last sentence of J58.

15. I will make that correction.

16. This does not affect the outcome of the proceeding. That is because I concluded that the evidence did not enable me to conclude, in the events that have happened, to what extent the effect of the Deed had discharged that co-ordinate liability; see especially J67 and J81.

17. The Developer also draws attention to J61 and in particular J61(3):

“The Developer’s case is that the transfer by Apolo Apartments to Aerial Holdings of the Arncliffe Properties:

(1) was at an undervalue;

(2) was made at the direction of the Builder;

(3) had the effect of conferring on the Builder a benefit equal to that undervalue; and

(4) thereby had the effect of discharging the coordinate liability of the Developer and the Mortgagors to the Builder.”

18. The Developer submitted:

“Contrary to paragraph [61(3)] of the judgment it was not the [Developer’s] contention that it was a necessary element of its discharge of coordinate liability argument that the “Builder received a benefit equal to that undervalue” from the totality of the relevant transactions.”

19. In that submission the Developer referred to paragraph 25 of its closing submissions:

“25. Finally, to the extent there exists any question as to the “appropriation” of the benefit that Calibre received as a result of the Deed, the cases cited at 6-0223(c) (page 357 of the Modern Contract of Guarantee 4th ed) stand as authority for the proposition that “If security is given by the principal (or co-surety) in relation to a particular debt the proceeds from the realisation of that security must be applied in reduction of that particular debt.” Plainly the same principle applies to benefits received by the principal debtor as consideration for the release of the surety. In any event, as much is clear from the terms of the Deed.”

20. I cannot see how it follows from those matters that my statement of J61(3) is not correct. I have set out what I understood the Developer's case to be.

21. Finally, the Developer draws attention to what I said at J64-J67:

“[64] There is, however, another factor to be taken into account to determine what benefit the Builder obtained by reason of the Deed. That other factor is the value to the Builder of Mr Tran’s and Ninth Campsie’s “Litigation Liability” that, by reason of the Deed, the Builder surrendered. In addition to paying $5 million for the Arncliffe Properties, the Builder forewent whatever entitlement it had to pursue Mr Tran and Ninth Campsie to judgment in these proceedings. The Builder thus obtained title to the Arncliffe Properties by paying the $5 million. But it also “paid” whatever the value might then have been of its claims against those parties.

[65] There is no evidence before me as to what the value to the Builder of that claim was as at the date of the Deed. The Builder’s claim against Mr Tran was for the full value of the Retention, based on his alleged knowing involvement in the Developer’s alleged breach of trust. Based on my findings, that claim is of no value, as there was no trust. But that was not a matter known to the parties to the Deed at the time of its execution.

[66] Assessment of the cost to the Builder of its surrender of its s 37A claim against Ninth Campsie [27] would involve factors including the value of the unit transferred to it by the Developer and an assessment of the Builders prospects of making out its s 37A claim. None of this was explored before me.

[67] For these reasons alone, I cannot assess to what, if any, extent the effect of the Deed was to cause a discharge of any coordinate liability to the Builder.”

22. As to that, the Developer seeks to recall:

“(d) paragraphs [64]-[67] of the judgment to allow the Court to consider a response by the [Developer] to the issues raised in those paragraphs, not made at the hearing by the [Developer] because the arguments at paragraphs [64]- [67] of the judgment were not previously raised by the [Builder] or the Court with the [Developer].”

23. In relation to that matter, the Developer submitted:

“To the contrary the [Developer] maintained in its written submissions that all that was necessary for it to be successful in its discharge of coordinate liability argument was that the coordinate liability described had been reduced by payment.”

24. That is how the Developer put its case. But as I set out at J64-J67 that overlooked the question of the value of the Litigation Liability referred to in the Deed.

25. It is true that these matters were not raised by the Builder.

26. However, I raised the matter with the parties.

27. I did so with Mr Ashhurst at T1 27.24. I said:

“You have to prove that Mr Tranh was [co-ordinately] liable."

28. Further, and perhaps more importantly, on 27 May 2025 after the conclusion of submissions, my Tipstaff sent the parties an email:

“His Honour would be grateful for assistance about the following –

Under the Deed of 8 February 2024, is not the consideration payable for the transfer of the ‘Property’:

(a) $5 million; and

(b) the value, whatever that may be, of the ‘Litigation Liability’ of both Mr Tran and Ninth Campsie (see ‘plus the value of the Litigation Liability’ in Recital H(A) and the release in cl 4)?

Does not the value of (b) have to be taken into account to consider what ‘payment’ has been made to the Calibre interests for the purposes of discharge of any coordinate liability?”

29. My Tipstaff received the following reply from the Developer:

“The answer to his Honour’s question is yes. The consideration payable for the transfer of the Property is $5 million plus the ‘Litigation Liability’.

For the purposes of determining what payment has been made to the Calibre interests for the purposes of discharge of any coordinate liability, as set out in the First and Second Defendants’ submissions at [24], the First and Second Defendants submit that the Court should:

1. First determine the value of the Litigation Liability. On First and Second defendants’ case that liability is $1,192,860.66. On the Plaintiff’s case that is $1,999,377.62.

2. Second, add the Litigation Liability to $5 million.

3. Third, determine the value of the Arncliffe Properties.

4. Fourth, consider whether, having regard to the value of the Arncliffe Properties, the receipt of the Arncliffe Properties has wholly discharged any liability owed by the defendants to the Plaintiff (being the $5 million plus the Litigation Liability).” (Emphasis in original.)

And from the Builder:

“The plaintiff agrees that the consideration payable for the transfer of the ‘Property’ is

a. 5 million; and

b. the value, whatever that may be, of the ‘Litigation Liability’.

On the assumption that a ‘payment’ should be taken into account, the plaintiff agrees that the value of (b) should be taken into account.”

30. My Tipstaff's communications made clear the question that was troubling me. I afforded the parties the opportunity to make submissions about the value of the Litigation Liability, to which attention has been drawn. They did so.

31. I do not propose further to consider the matter.

32. I make orders in accordance with paragraphs 1-6 and 10 [4] of the Short Minutes of Order:

33. Judgment for the plaintiff on its Summons against the first defendant in the amount of $2,137,430.86 (the First Judgment Sum).

34. Interest on the First Judgment Sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW) in the amount of $568,829.14.

35. The Summons is otherwise dismissed.

36. Judgment for the cross-claimant against the cross-defendant in the amount of $6,513.64 (the Second Judgment Sum).

37. Interest on the Second Judgment Sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW) in the amount of $1,921.02.

38. The Cross-Summons is otherwise dismissed.

39. Not made.

40. Not made.

41. Not made.

42. The judgment is stayed until 5 pm on 28 June 2025.

43. These orders do not deal with the question of the costs of the proceedings. It is anticipated that the parties will send competing submissions to the List Judge on that question and invite her Honour to deal with that question on the papers.

44. It is common ground that the making of these orders is without prejudice to the Builder’s entitlement to make an application to the List Judge for an alternative calculation of interest to judgment, being an application that such interest be paid at a rate specified in the building contract rather than the Civil Procedure Act 2005 (NSW).

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Endnotes

Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 2) [2025] NSWSC 593.

Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 at 303 (Mason CJ).

[2017] NSWSC 1537 at [12] to [15].

Save that the date has been changed, by agreement, to 28 June 2025.

Amendments

20 June 2025

[32(2)] Typographical error corrected