Gusdote Pty Limited v North Queensland Land Development Pty Limited

REASONS FOR JUDGMENT 1 On 3 March 2011, I gave leave to the plaintiff in this proceeding (Gusdote) to file a statement of claim, and listed the proceeding for further directions on 8 April 2011. My reasons for making those orders (see Gusdote Pty Limited v North Queensland Land Development Pty Limited [2011] FCA 202) contained some provisional findings concerning the nature of the proceeding and the circumstances in which the proceeding arose. In these reasons, the terms used have the same meaning as defined in my earlier reasons. Following the filing of a statement of claim and a defence, the matter was fixed for further hearing today. 2 In the course of argument today, it emerged that there may have been some misunderstanding, arising from lack of communication between the parties, as to the precise relief now claimed by Gusdote, and the extent to which that relief is opposed by the defendant (North Queensland). North Queensland accepts that it is not entitled to benefit from the transfer of the Disputed Parcel. North Queensland's concern, however, is that there is evidence to indicate that the deposit of $200,000 was in fact paid to Gusdote, shortly after the contract for sale of 17 May 2007. In those circumstances, if legal title to the Disputed Parcel is to be transferred back to Gusdote by North Queensland, the sum should be reimbursed to North Queensland by Gusdote or credit should be given for that sum. 3 It is not clear whether the holding of the Disputed Parcel by North Queensland has resulted in a net benefit or a net loss to North Queensland. To the extent that there has been a loss occasioned by the holding of the Disputed Parcel, it is common ground that Gusdote should reimburse North Queensland in respect of outgoings properly incurred in maintaining the Disputed Parcel. On the other hand, to the extent that North Queensland has derived a profit from the holding of the Disputed Parcel, there should be an account of that profit to Gusdote. However, there may be a question as to whether or not the Liquidators contend that any such profit should be treated as an unsecured claim by Gusdote in the winding up of North Queensland. That question has not been argued and, at present, it is by no means clear whether or not it is purely hypothetical. 4 Ultimately, however, the Liquidators do not dispute that, subject to the proper taking of accounts, legal title should be transferred to Gusdote. In the circumstances, I consider that the appropriate course is to direct that an account be taken as soon as practicable of all benefits received by North Queensland, and all outgoings and expenses, including any purchase price, incurred or paid by North Queensland, since 17 May 2007, in connection with the acquisition and holding of the Disputed Parcel. Once the account has been taken, and it is determined whether Gusdote should pay money to North Queensland, or vice versa, a transfer may then be effected upon the payment of the excess either way, as the case requires. If, in the course of the taking of accounts, questions arise, they may be referred by the Registrar to the Court, on the application of either party. 5 That leaves open the question of the costs of the proceeding. In its application, Gusdote sought an order for transfer of the Disputed Parcel, without providing for any allowance in connection with payment of the purchase price or expenses incurred by North Queensland or the Liquidators. On the other hand, in early communications between the parties, the Liquidators, or their solicitors, asserted that the only course open to Gusdote was to prove in the winding up of North Queensland. In the result, neither of those views has prevailed. In the circumstances, I consider that the appropriate course is to await the outcome of the account, in order to see what money is owing as between the parties. That, in my view, will have a considerable bearing on the question of costs. It may be that neither party is entitled to all of its costs. That will depend upon the outcome of the account. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.