Maher v Millennium Markets [2004] VSC 195

Maher v Millennium Markets [2004] VSC 195 - VSC 2004 case summary — Zoe

[23]

"I accept that the word 'creditor' is flexible in its meaning and varies according to its context. However, the cases show that in the ordinary acceptation of the term a beneficiary is not a creditor of his or her trustee: Ex parte Taylor; In re Goldsmid (1886) 18 Q.B.D. 295 at 301 per Lindley LJ and 302 per Lopes LJ and Burns & Geroff v. Leda Holdings Pty. Ltd. [1988] 1 Qd R 214 at 229-233[5]. Gibb v. Lombank Scotland Ltd. was, if I may say so, an unsurprising decision in which no unduly wide or generous meaning was attributed to the word 'creditor'. The missives for the sale of a company had included the following provision, 'The company will be in the following form ... with no creditors outstanding.' It was admitted by the seller that certain accountants' fees and minor sums for agents' commission as well as an intimated claim followed by an action in court for £4,400 for alleged fraudulent preferences obtained by the selling company on the sequestration of a particular motor trading firm were outstanding. The seller maintained, however, that 'creditors' meant those who had liquid claims for debt. It was held by Lord Cameron in the Outer House that the purchasers were entitled to found upon the admitted outstanding claims in seeking reduction of the contract of sale on the ground of breach of the clause stipulating 'no creditors outstanding'. Counsel for Mr Willetts contended that the word 'creditor' should be given a broad meaning in the context of s.58 and was simply a shorthand method for denoting a successful plaintiff or someone who recovers a sum certain.[6] If that be so, one may ask why the word 'plaintiff' or 'claimant' was not used instead of the somewhat more specific word 'creditor'. The use of the word 'plaintiff' in the passage cited from Clarke v. Foodland Stores Pty. Ltd. did not, and could not, mean that every plaintiff was within s.58(1): the court was of course speaking in general terms, without reference to the present point. Further, if there is a creditor there must, it seems incontrovertible, be a debtor[7]. On one view, supported by the source of the moneys in question, the debtors were Mr and Mrs Konstantellos, the holding of the money on trust simply being a temporary mechanism while the rival claims to the proceeds of sale of the mortgaged property were determined. If one concentrates, however, on the trust mechanism employed, the person liable to make payment to Mr Willetts was the trustee of the fund, namely, Mr Willetts himself. But it was against Mr Dimos that his Honour made the award of interest. If the moneys had been held by a third party, could that person, it may be asked rhetorically, have been ordered to pay interest? If not, on what basis could Mr Dimos in that case have been so ordered? Again, a person entitled to a debt or sum certain is able to sue the person liable to pay the debt or sum certain, the debtor or obligor. But Mr Willetts could not and did not sue Mr Dimos for the sum, which he already held. To the foregoing must be added the fact that ordinarily at the very least a beneficiary is not a creditor of his trustee. No case was cited, and I have found none, applying 'creditor' to the present facts. It is true that the expression 'the creditor' must here have a meaning apt to 'sum certain' as well as to 'debt', but the whole context of the section points to amounts which defendants are liable to pay (and, as I will shortly show, liable from at least the commencement of the proceeding)."

[51]

"I note the Court of Appeal's recent statement that an indemnity basis should not be elevated to the usual basis for a costs order and that bona fide plaintiffs should in general not be penalised for pursuing their claims. The Court of Appeal's caveat against an overly-rigid reliance on precedent in the exercise of this discretionary power is also clear. If Calderbank letters offering settlement on the basis that each party bear its own costs without any further particularity than that contained in the pleadings were served early in a proceeding, and routinely given full effect, indemnity costs could, by a de facto process, displace party-party as the usual basis of a costs order. In the light of the Court of Appeal's recent reaffirmation that the problems associated with the growing gap between party and party costs and costs actually payable to a party's solicitor should not lead to a departure from the usual party and party basis for costs, and its caveat that reference to other decisions should not constrict the discretionary nature of an award of costs, it may be that a Calderbank offer, taken in isolation, should not create any predisposition to award indemnity costs, although it should be a factor in favour of such an order. This may ultimately be a matter of semantics, with variations in expression obscuring a fundamentally similar judicial approach. Conclusion I consider that a Calderbank letter is but one factor relevant to the discretionary determination of costs. A Calderbank offer is a significant factor in favour of indemnity costs but does not dictate them or require an order for indemnity costs as a matter of routine. The reasonableness of the offeree in rejecting a Calderbank offer is one important factor in determining the weight to be attributed to it. The degree of specificity of reasoning expressed in the letter, the stage at which the letter is received, and the content of and response to the offer, may all be relevant to reasonableness."

[60]

(1) There be judgment for the plaintiff against the fourth defendant in the sum of $150,000 together with $42,290 interest.

(2) The plaintiffs pay the fourth defendants' costs with respect to the discontinued claim in respect of economic loss suffered due to an inability to purchase and operate a quarry and related transport operations. Such costs be paid on a solicitor own client basis from 3 October 2003.

(3) The plaintiffs' costs of the proceeding otherwise be taxed and when taxed the fourth defendant pay 35 percent of such costs to the plaintiffs.

(4) The claim made by the plaintiffs against the first, second and third defendants be dismissed.

(5) The fourth plaintiff be ordered pursuant to s.90(3) of the Transfer of Land Act 1958 to remove caveat No. X637785E ("the caveat") lodged in the Office of Titles in relation to the whole of the property contained in Certificate of Title volume 9537 folio 517, volume 9537 folio 544 and volume 9537 folio 545 and known as Unit 20 and accessory Units 47 and 48, 50 Bourke Street, Melbourne ("the property").

(6) The Registrar of Titles be directed to amend the Register by cancelling the caveat or by otherwise doing any act or making any recordings necessary pursuant to s.103(1) of the Transfer of Land Act 1958 to effect the removal of such caveat.

(7) The first defendant recover possession of the property from the first and second plaintiffs.

(8) The first plaintiff pay damages to the first defendant in the sum of $10,260 and thereafter in the sum of $60 per day to the date of delivery by the first and second plaintiffs of possession of the property.

(9) The first plaintiff pay interest of $264 to the first defendant.

(10) The plaintiffs pay the first, second and third defendants' costs of the proceeding and the costs of the first defendant's counterclaim including all reserved costs.

(11) Direct that the first, second and third defendants serve a copy of this order when authenticated on the Registrar of Titles.

(12) Liberty be reserved to the first defendant and to the Registrar of Titles to apply in respect of orders (5) and (6).

(13) Execution of the above orders be stayed for 28 days.

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At a glance

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Judgment (67 paragraphs)

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Legislation Cited (24)

Cases Cited (2)