Ostrovsky v Burton

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) ALR 397 Ostrovsky v Burton [2007] NSWSC 1183 CASES CITED : Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 Wentworth v Rogers BC 9907174

Plaintiff: Alex Ostrovsky PARTIES : First Defendant: Lindsay Keith Burton Second Defendant: Construction Industry Advisory Services Pty Ltd

COUNSEL : Plaintiff: Ms N Obrart Defendants: No appearance

SOLICITORS : Plaintiff: Kent Attorneys Defendants: No appearance

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST

4359/98 ALEX OSTROVSKY v LINDSAY KEITH BURTON & CONSTRUCTION INDUSTRY ADVISORY SERVICES PTY LTD JUDGMENT 1 HIS HONOUR: This matter came before me as Duty Judge on Friday 3 July 2009. Ms Obrart appears on behalf of the plaintiff. There was no appearance on behalf of the defendant. Notice of the fact that this proceeding was scheduled for hearing on 3 July 2009 was given to the defendant. Background - Proceedings before Hamilton J

2 The plaintiff moves on a notice of motion filed on 15 December 2008. He seeks judgment against the defendant for a sum of $250,000 plus interest calculated from 1999 to date. He also seeks an award of costs. The plaintiff's motion seeks these orders in the following terms: "1. Judgment for the Plaintiff in the sum of $250, 000.00 being half of the value of the property situate at [address withheld] Kandanga in the State of Queensland being the whole of the land contained in Certificate of Title 121 36074 ('the subject Property'), as at 28 July 1999 plus interest on the sum of $250 000.00 pursuant to s 100 of the Civil Procedure Act from 28 July 1999 to date."

3 The address of this property has been deleted from the motion, in accordance with this Court's policy to reduce the risk of identity theft from materials publicly made available by the court. The address is ascertainable from the court file. The property in question in the proceedings will be referred to in this judgment as "the subject property".

4 The plaintiff's claim is for half the value of the subject property. The plaintiff makes that claim as a former partner of the defendant. Justice Hamilton in Ostrovsky v Burton [2007] NSWSC 1183 made declarations and orders as to the existence of a partnership between the plaintiff and the defendant and the extent of partnership property on 29 August 2007.

5 Hamilton J determined these issues in these proceedings in the absence of the defendant. His Honour was satisfied that adequate notice had been given to the defendant of the hearing and before him. The defendant was represented by solicitors on the Court record who had notice of that hearing.

6 Hamilton J made the following declarations and orders in relation to the partnership and partnership property: "1. It be declared that from 30 November 1990 the Plaintiff Alex Ostrovsky and the Defendant Lindsay Burton carried on in partnership ('the Partnership') the business of owning a property and making the same available to a horse breeding partnership; 2. It be declared that the Partnership was a partnership in equal shares; 3. It be declared that the property situate at [address withheld] Kandanga in the State of Queensland being the whole of the land contained in C/T 121 36074 ('the Property') was an asset of the Partnership; 4. It be declared that the Partnership was dissolved on 28 July 1999; 5. The Partnership be wound up under the direction of this Court; 6. Gary Williams chartered accountant be appointed the receiver and manager ('the Receiver') of the Partnership;". 7 When Mr Garry Williams was appointed as receiver and manager it was necessary to make machinery orders to aid him in winding up the partnership. Orders were made for the delivery to the receiver of all books and records of and relating to the partnership and for the taking of an account by an Associate Justice of the dealings and transactions of the partnership and the partners. The machinery orders contemplated that the receiver would pass his accounts at the termination of the winding up.

8 Two orders were made by Hamilton J on 29 August 2007 for specific kinds of inquiry. The first order was for an inquiry as to the assets of the partnership and the respective partnership interests of the partners. That inquiry, was in addition to declaration (3) that the subject property was a partnership asset. The second inquiry was in the following terms: "An inquiry to be held by an Associate Justice as to the consideration received by the defendant on the transfer by the defendant to Construction Industry Advisory Service Pty Ltd of the [subject] property and whether that consideration was equivalent to the market value of the property."

9 His Honour found that in November 1990 the plaintiff and defendant acquired the subject property in Queensland and made it available for use by a horse breeding partnership among parties associated with the plaintiff and the defendant.

10 His Honour found that there was a partnership relationship between the plaintiff and the defendant in respect of the subject property. This was distinct from their horse breeding partnership. His Honour found that partnership income tax returns were lodged with the Commissioner of Taxation during partnership operations and that partnership financial results were incorporated into the individual partners' taxation returns.

11 Two sets of proceedings were commenced in this Division of this Court, proceedings 3378/1999, and these proceedings, 4359/1998. His Honour found that the partnership was dissolved upon the commencement on 28 July 1999 of proceedings 3378/1999. In that month unilaterally, and unknown to the plaintiff, the defendant negotiated to sell the subject property to Construction Industry Advisory Service Pty Ltd, the second defendant. The subject property was held by the defendant in his name as registered proprietor. None of the proceedings had reached finalisation by July 2003.

12 The plaintiff's evidence before me is that he only became aware of that sale in April 2006, almost three years after it had occurred. The pleading before Hamilton J in the hearing on 29 July 2007 alleged the following against the first defendant that the first defendant effected the transfer of the subject property wrongfully and in breach of trust or fiduciary duty owed to the plaintiff.

13 The plaintiff sought to avoid the transfer under section 37A of the Conveyancing Act. The plaintiff ultimately did not proceed against the second defendant. This pleading background is important in understanding the findings about the subject property made by Justice Hamilton in paragraphs 7 and 8 of his judgment on 29 August 2007: "7 Although the property was acquired as partnership property, title was taken in the name of the defendant only. After the dissolution of the partnership the defendant, without reference to the plaintiff, wrongfully sold the property and received the proceeds of sale to his own use. No accounting was made to the partnership or the plaintiff for those proceeds, although they were obviously, on the findings I have made, partnership property.

8 The property was sold to Construction Industry Advisory Service Pty Ltd and there is evidence from the director of that company that he considers that the property was sold to that company at an undervalue, the price being $295,000 and the real value of the property in his estimation, even allowing for it being in a run down condition, being some $350,000."

14 His Honour's finding that the defendant, "without reference to the plaintiff wrongfully sold the property and received the proceeds of sale to his own use" is a finding of wrongful misapplication of partnership assets to the defendant's own use. This finding is important for matters of interest and costs.

15 On 29 August 2007 counsel for the plaintiff asked Hamilton J to make an order for the payment of 50 percent of the proceeds of sale of the subject property to the plaintiff. His Honour declined to make that order. He nevertheless thought it appropriate to make the orders for inquiry under r 46.3 of the Uniform Civil Procedure Rules 2005. Background - Accounts and Inquiries

16 Various attempts have been made to undertake the inquiries ordered by Hamilton J. There has been no cooperation in that by the defendant. Young CJ in Eq made orders so the receiver could finish his work without the cooperation of the defendant.

17 A more detailed explanation is required of the inquiry process. These proceedings again came before Hamilton J on 15 December 2008. The current motion seeking judgment for $250,000 plus interest was made returnable before him then. On that occasion his Honour directed that service on the defendant be effected as follows: "2 Direct that there be served personally on the defendant the:

(a) the notice of motion; (b) the orders of 29 August 2007; (c) the Court's reasons for judgment of 29 August 2007; and (d) copies of all affidavits to be relied on on the hearing of the motion."

18 Service took place in accordance with the directions of Hamilton J. That included service of numerous documents upon the defendant at the subject property. This proves continuing connection between the defendant and the subject property, more than five and a half years after the sale of the subject property to Construction Industry Advisory Services Pty Ltd.

19 Service took place on Monday 12 January 2009. Service included a letter from Kent Attorneys, solicitors for the plaintiff, dated 15 December 2008 addressed to L Burton, a notice to the defendant under the Service and Execution of Process Act, a sealed copy of the notice of motion now before the court, a sealed copy of the judgment and order of Hamilton J, and the court's reasons for judgment of 29 August 2007. Also served on the defendant at this time were other affidavits of the plaintiff and the receiver: "(a) Affidavit of Alex Ostrovsky Sworn on 21 October 2004 (b) Affidavit of Alex Ostrovsky Sworn on 16 August 2007 (c) Affidavit of Alex Ostrovsky Sworn on 3 December 2008 (d) Affidavit of Gary Williams Sworn on 11 December 2008 (e) Affidavit of Gary Williams Sworn on 13 November 2008 (f) Affidavit of Blair Paterson Fuller Sworn on 20 November 2008 (g) Affidavit of Affidavit of Blair Paterson Fuller Sworn on 12 December 2008 (h) Affidavit of Sophia Paras Sworn on 8 December 2008 (i) Affidavit of Sophia Paras Sworn on 11 December 2008 (j) Affidavit of Sophia Paras Sworn on 11 December 2008 (k) Affidavit of Mark Hickey Sworn on 8 July 2006 (l) Affidavit of Tim Ostrovsky Sworn on 12 December 2008 (m) Affidavit of Tim Ostrovsky Sworn on 21 October 2008 (n) Affidavit of Sophia Paras Sworn on 15 December 2008"

20 The defendant has been made aware of the substance of the matter before the court today. The hearing before the court on 3 July 2009 was notified to the defendant by the solicitor for the plaintiff, Sophia Paras on 15 June 2009. The matter was reserved for judgment today Tuesday 7 July 2009 after argument by Ms Obrart on the day appointed for hearing, Friday 3 July 2009.

21 As recently as February this year the defendant resided at the partnership property. This is to be inferred from the last notice of ceasing to act filed by his solicitors, Richard Anthony Watson of Watson and Watson Solicitors filed on 26 March 2009. This notice gave the subject property as the last known address of the defendant.

22 The plaintiff filed a further motion for the filing of accounts by the defendant. On 11 April 2008 consent orders were made for the filing of accounts by the defendant. These orders directed the defendant to file and serve on the plaintiff a detailed account verified by affidavit of all dealings and transactions of and in respect of the partnership property and all payments and receipts in respect of the subject property. The plaintiff had liberty to examine the defendant on these accounts so filed.

23 On 11 April 2008, the defendant was represented by Kim Gourlie of Watson and Watson. The notice of ceasing to act filed on 2 March also identifies the contact solicitor at Watson and Watson for the defendant as being Kim Gourlie. There was an appearance on that day on behalf of the defendant. When the matter came before Associate Justice Macready on 11 April 2008 the appearances are recorded on the Court file as Ms Obrart for the plaintiff and a "D Gourlio" for the defendant. This would appear to be an error. It is sufficiently close to the correct name of the solicitor for the defendant to infer that Kim Gourlie represented the defendant that day.

24 Representation that day by the defendant is of considerable importance. The failure subsequently to comply with the orders made that day led to further remedial action being taken to overcome the defendant's continuing lack of cooperation. The Work of the Receiver

25 The defendant did not comply with the orders made on 11 April 2008. The defendant did not file any other evidence in the proceedings, notwithstanding appropriately directed inquiries by the receiver, Mr Garry Williams. He wrote to the defendant on 27 August 2008 seeking the defendant's cooperation in his task of winding up the partnership and reporting to the court. The text of his letter is set out below. "As you are aware, I was appointed as the receiver and manager of the partnership you were involved in with Mr Alex Ostrovsky ('the Partnership') by the Supreme Court on 29 August 2007. Pursuant to my appointment I request you provide me with the following within 14 days:- all books and records relating the Partnership including but not limited to all cash receipt books, cash payment books, cheque books, bank deposit books, bank statements of the Partnership; all documents of and concerning the property known as…('Property') including but not limited to council rates notices and other utility notices from 1990 to 1999 in respect of the Property. In addition, would you kindly advise me of all bank accounts, including the relevant BSB and account numbers utilised by the Partnership from 1990 to 1999. I request that the above information be provided within 14 days of this letter. Should you have any queries, please do not hesitate to contact me."

26 Mr Williams' letter was expressed to evoke cooperation from any defendant who wished to facilitate execution of the court's orders and the work of the receiver. Mr Williams received no response to that letter. He followed the matter up with a further letter he sent by registered post on 3 December 2008. In this letter he noted that he had not received a response to his earlier letter of 29 August 2008, which he enclosed. He said: "I once again, request that you forward to my office, as a matter of urgency, all documents concerning the partnership, all council rate notices and other utility notices from 1990 to 1999 together with any evidence of payment and by whom."

27 He did not receive a response to this letter from either the defendant or Watson and Watson, to whom that letter was also sent. Mr Williams' letters were addressed to the defendant at the address of the partnership property, where it could be expected that he could be found.

28 These actions were taken by the plaintiff and Mr Williams to draw the making of the orders of the court to the attention of the defendant. They were sufficient to achieve that result. Financial Evidence of the Partnership

29 The defendant has filed no evidence of any asset or liability of the partnership. The plaintiff does not have any knowledge of any such asset or liability other than the subject property. The plaintiff deposes to this in his affidavit of 3 December 2008 in paragraph 2: "I have no knowledge of any other assets possessed by the partnership as at July 1999, other than the property [address withheld] a Kandanga in the State of Queensland (the Property) and the bank account held at the National Australia Bank (Randwick) in the name of the Partnership being (BSB) 082-360 (Account number 519655150) (' the Partnership Bank Account') ."

30 The plaintiff also deposes to never having received statements for the partnership bank account and having no knowledge of transactions that occurred in respect of the partnership bank account. The plaintiff explains that he was involved in a horse breeding business known as the Coromandel Park Thoroughbred Breeding Partnership Number 1 ("the Horse Breeding Partnership") which leased the property from the partnership from 1990 to 1999 to agist horses on the subject property. He deposes to agistment fees being paid by the Horse Breeding Partnership to the partnership. Beyond that, he is not aware of any other income from the subject property.

31 There is evidence of partnership income between the years 1992 and 1997, attached to the affidavit of Mr Alex Ostrovsky of 21 October 2004. That income appears under the heading "Rent, premiums, et cetera" or an equivalent in each of those years. For example, in the 1993 to 1994 financial year, the income is in an amount of $9,818. 32 The partnership tax returns also show that partnership income appeared to cover partnership expenses. The following is a table of the gross and net income earned by the partnership in the financial years 1992 to 1997, as disclosed by the Partnership Income Tax Returns. Year Pg. Gross Income ($) Expenses ($) Net Income ($) 1992 / 1993 58 11,440.00 7,735.00 3,705.00 1993 / 1994 55 3,500.00 3,500.00 0 1994 / 1995 50 2,940.00 2,940.00 0 1995 / 1996 47 6,508.00 2,020.00 4,508.00 1996 / 1997 43 9,818.00 1,881.00 7,937.00

33 Finally, Young CJ in Eq made orders on 11 February 2009 to give effect to the Hamilton J's orders of 29 August 2007. His Honour's orders gave the receiver a practical way to proceed despite the defendant's lack of co-operation. They were as follows: "1. Direct that the Plaintiff provide to the Receiver and serve on the Defendant an account of moneys owing to it in respect of the partnership the subject of the proceedings by 25 February 2009. 2. The Defendant to file falsifications or surcharges by 25 March 2009. 3. If the Defendant has not filed falsifications or surcharges by 25 March 2009, the Receiver shall be justified in accepting the Plaintiff's account and shall accept that account and shall report to the Court. 4. The Receiver shall report to the Court as to his findings as to the amount owing to the Plaintiff and his fees by 8 April 2009."

These orders allowed the receiver to draw conclusions in his report notwithstanding the non-cooperation of the defendant. All the evidence available to the receiver in the end was provided by the plaintiff.

34 Two matters remain to be dealt with. The first is to examine how the defendant's lack of cooperation affects the inferences that the Court may draw. The second is ascertaining the value of the subject property. Inferences Against Wrongdoers

35 As to the first matter, counsel for the plaintiff has directed the court's attention to statements of the Court of Appeal in Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 at 96: "A court assessing damages is entitled to draw inferences against a party "whose actions have made an accurate determination ... problematic": see L J P Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499, 508 and Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, 59; Murphy v Overton Investments Pty Ltd [2004] HCA 3; (2004) 78 ALJR 324, 337. In those cases the principle was invoked in favour of the plaintiff against the wrongdoer, and the High Court applied the principle where the defendant's wrong itself had made quantification difficult. In my judgment the principle also applies to a plaintiff with the onus of proof whose acts and omissions have made an accurate determination problematic."

36 A court assessing damages is entitled to draw inferences against a party whose actions have made an accurate determination problematic. A Court seeking to make sense of the evidence in an inquiry where the defendant has wholly failed to cooperate to assist in the ascertaining of final partnership accounts, is entitled to draw inferences against the party who makes an accurate determination in the inquiry problematic.

37 The Court faces an evidentiary problem about the assets and liabilities of the partnership. There is no evidence before the Court of the income of the partnership beyond 1997, except in respect of the subject property. There is no evidence of any liabilities of the partnership beyond 1997. There is no evidence from the defendant of what rates or taxes or other expenses were paid in respect of the subject property at any time after 1997. In that unsatisfactory state of affairs the plaintiff asks the court to infer that the expenses of the partnership will be balanced out by partnership income. The plaintiff further submits that as the liabilities of the partnership can be ignored as they have not been identified, and that the subject property should be treated as the single asset of the partnership for the purposes of my findings.

38 Given the analytical work of Mr Williams which could identify no partnership liabilities and given the content of the partnership returns which show partnership income covering partnership expenses for a known period, I have reached the view that this is a course that I should take. The Court will treat the partnership property as the sole asset of a partnership which has no liabilities. In a practical sense no other course is possible, given the conduct of the defendant in denying information to the Court appointed inquiry. Value of the Subject Property

39 It is now necessary to turn to the evidence of the value of the subject property. The plaintiff filed its accounts for the partnership, as is recorded in the plaintiff's affidavit of 10 March 2009. In those accounts the plaintiff claims half the value of the subject property as at 28 July 1999, the date of the partnership dissolution. The plaintiff further claims that the total value of the property at the relevant date is $500,000. Half of the value as at the relevant date is therefore $250,000. The plaintiff also claims interest at Supreme Court rates on the principal sum from 28 July 1999 to 6 March 2009 in the sum of $221,821.90, making a total of $471,821.90.

40 The plaintiff relies upon a report by, Mr Blair Paterson Fuller, a valuer of the subject property as at the date of dissolution. On the assumptions that he makes Mr Fuller values the property as at 28 July 1999 at $500,000. Mr Fuller assumes the subject property is as described in the valuation instructions issued by the client and he makes allowances for the fact the property was not inspected at the date of valuation. 41 The plaintiff's accounts were not met with any falsifications or surcharges by the defendant. On 19 May 2009 Mr Williams filed a report on the winding up based on the valuation evidence of Mr Fuller.

42 The plaintiff has pointed out to me that there is evidence available from the purchaser of the subject property that the defendant had sought to sell it for $450,000 and that he ultimately did so for $295,000 cash plus a right of residence and a weekly payment for him. The plaintiff submitted that this suggests that there is evidence that the defendant's estimation of the value of the property is similar to that reached by Mr Fuller.

43 I do not need to have regard to this evidence. I have no reason to doubt the quality of Mr Fuller's valuation. Nor do I need to have reference to his supplementary valuation of the property as at July 2003, which indicated it had a land value of $550,000. After reciting that he has not been provided with any accounts, falsifications or surcharges or any other information by the defendant, Mr Williams, Mr Fuller finds the following in respect of the partnership accounts: "FINDINGS ON ACCOUNT I accept the Ostrovsky's account and report to the Court accordingly 1. I find the value of the Partnership Property as at 28 July 1999 was $500,000. I allow the sum of $250,000 (the Principal Amount) as the value of the Ostrovsky share of that Partnership Property. 2. I allow interest on the principal amount up to 6 May 2009 in the sum of $255,999.99 as per the attached schedule. 3. My expenses and fees are as follows Payable to Rosenfeld Kant & Co Services of Gary Williams 17.5 hours @ $300 per hour $5,250 Disbursements Faxes, postage etc $12 $5,262 GST $526 TOTAL $5,788

Ostovsky [sic] is entitled to the sum of $481,787.99." 44 I conclude on this accounting that the plaintiff is entitled to half the value of the subject property together with interest thereon from 28 July 1999 to date. Mr Williams' calculation takes the interest calculation up to just before the date of his report, 2 May 2009. Interest and Costs

45 That leaves two remaining matters. The first is the plaintiff's entitlement to interest. The second is costs.

46 The plaintiff claims interest from the date of dissolution of the partnership on the basis that it would be unconscionable for the defendant not to pay interest to the plaintiff. This is an appropriate case for the defendant to pay interest to the plaintiff.

47 The defendant has been in possession of partnership property since the time of dissolution, has not accounted to the plaintiff for that property or any profits from it, and has been found to have wrongly misapplied half the sale proceeds of that property in July 2003.

48 This is a clear case for the award of interest. Interest is claimed at the Supreme Court rate. I will award it at that rate.

49 The plaintiff also makes a claim for indemnity costs. The plaintiff points to the fact that the defendant wrongfully sold the property in 2003 when a hearing of these proceedings was pending and without notice to the plaintiff. He not only misapplied the property through that sale, but he has misapplied the proceeds rather than brought them to account in those proceedings.

50 The defendant consented to the orders made on 11 April 2008 for the filing of accounts. The defendant did not file accounts. The defendant did not admit liability to the plaintiff for half the value of the property at any stage during the proceedings. The defendant did not put on evidence which could support an arguable position that there was no liability to the plaintiff. The plaintiff submits that in those circumstances that this case calls for the application of r 42.5 of the UCPR which provide as follows: "42.5 Indemnity costs

If the court determines that costs are to be paid on an indemnity basis:

(a) in the case of costs payable out of property held or controlled by a person who is a party to the proceedings: (i) in the capacity of trustee, executor, administrator or legal representative of a deceased estate, or (ii) in any other fiduciary capacity,

all costs (other than those that have been incurred in breach of the person's duty in that capacity) are to be allowed, and

(b) in any other case, all costs (other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount) are to be allowed."

51 The plaintiff submits that the conduct of the proceedings by the defendant has caused unreasonable delay and expense. The plaintiff further submits that these circumstances attract application of the principles for the award of indemnity costs: Wentworth v Rogers BC 9907174 at [85]. 52 The plaintiff is entitled to an award of indemnity costs on this basis. It can readily be inferred by the lack of any evidence filed by or any cooperation from the defendant and the absence of any opposition by the defendant today that the defendant has no answer to the plaintiff's claim that is capable of reasonable or persuasive articulation. The lack of an arguable defence to the plaintiff's claim could have been admitted a long time ago. The failure to admit it has caused delay and expense to the plaintiff, who has made multiple appearances before the court and several applications to proceed in the absence of the defendant.

53 The next basis on which the plaintiff says that indemnity costs should be ordered is that there has been an unreasonable delay in the admission of liability for the purposes of gaining a tactical advantage. The plaintiff relies in this regard upon the principles stated in Rouse v Shepherd (No 2) (1994) 35 NSWLR 277. I also find that and award of indemnity costs is justified on this basis. The tactical advantage that a defendant may gain in this case by failing to cooperate is one of hoping that the plaintiff would be exhausted by the expenditure of costs and personal resources that he would longer pursue the matter. That tactic has not actually advantaged the defendant in this case. Despite the many obstacles placed in his way, the plaintiff is here today seeking judgment. Nevertheless, the circumstances bespeak that tactical purpose on the part of the defendant. This is another basis for the court to say that the failure to admit liability has occasioned unreasonable delay, thereby attracting an indemnity costs order.

54 Finally, the plaintiff relies upon the principles stated in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) ALR 397, at 401 that a defendant who has maintained the stance of defending the proceedings when it had no real prospect of doing so may suffer an award of indemnity costs against it. There is no evidence before me which would indicate any explanation for the defendant's failure to account to the plaintiff for the subject property. Nor has the defendant explained the misapplication of the subject property or its proceeds of sale. Nor has he explained the defendant's non-cooperation in the inquiry process.

55 These are all recognised situations in which it is appropriate to order indemnity costs. I am prepared to make that order here. The only question that now arises is what period an indemnity costs order should cover. A related question is what period the interest order should cover, given the orders for payment of interest made by Hamilton J on 29 August 2007.

56 On 27 August 2007 Justice Hamilton made an order for costs of the proceedings up to that date. The order that I make today relates to events from 27 August 2007 today. An application for indemnity costs is made in respect of this period. I order the defendant to pay the plaintiff's costs of these proceedings on an indemnity basis from 27 August 2007 up to today.

57 The plaintiff's counsel has indicated that she will verify to the court her anticipated instructions that the total amount claimed is the amount set out in Mr Williams' report, namely $250,000 plus interest from the date of dissolution of the partnership up to 6 May 2009, making a sub-total of $475,999.99, together with Mr Williams' fees of $5,788, making a total of $481,787.99. Counsel for the plaintiff indicates that although the report only calculates interest up to 6 May, she anticipates receiving instructions that any claim for interest beyond that date will be waived and this would become the figure claimed. I will be prepared to enter judgment for this amount, that is, $481,787.99, subject to confirmation that waiver has occurred. If judgment for a different sum is sought the details of that can be sent to my Associate. 58 I had considered at one stage whether or not I might stay the entry of judgment in these proceedings on the basis that further notice should be given to the defendant before the entry of judgment. However, I am satisfied on all the evidence that the defendant has had adequate notice of today's hearing. It is not necessary for me to stay the entry of the judgment for a period of time to allow service of these reasons upon the defendant.

59 The defendant has been able to retain solicitors in the past to appear in this proceeding when he chose to do so. The defendant has also elected not to cooperate when he chose. The failure of the defendant to file evidence, communicate with the receiver and appear before the court since April last year, all indicate that the defendant was aware of these proceedings, but unwilling to take part in them. The plaintiff, who has been wronged, as Justice Hamilton has found by this defendant's misapplication of partnership property, should not be put to further expense.

60 I am concerned that the receiver appointed by the court in this case is presently unpaid. I will adjourn these proceedings for mention to a date to be arranged with my Associate. In the meantime the Court can be informed whether Mr Williams has been paid and if he is unpaid how he is going to be paid. At the adjourned date it will also be possible to verify the final sum for entry of judgment with the plaintiff, and make an up to date interest calculation.

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