Rupchev v Callow

Svjatoslav Rupchev (Plaintiff) PARTIES : Beverley Callow (1st Defendant) Vladimir Rupchev (2nd Defendant)

COUNSEL : In Person (1st Defendant) R I Bellamy (2nd Defendant)

SOLICITORS : In Person (1st Defendant) Plowman Legal (2nd Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 BELL J: On 4 October 2007 I gave judgment determining the amended second cross-claim: Rupchev v Callow [2007] NSWSC 1097. I directed the parties to bring in short minutes with respect to the manner in which the balance of the proceeds of sale are to be distributed, making provision for the proceedings to be re-listed in the event that agreement was not reached with respect to the distribution or with respect to interest and costs.

2 The matter was re-listed on the cross-claimant, Mr Rupchev's, application on 9 November 2007. 3 By notice dated 31 October 2007 the solicitors acting for the cross-defendant, Ms Callow, gave notice that they no longer act for her. 4 Ms Callow appeared in person on 9 November and applied to have the matter adjourned for a period of three months. The application was refused. 5 The claim for interest was pleaded in the amended second cross-claim. Mr Rupchev sought declarations that Ms Callow was liable to make contribution both with respect to the acquisition expenses and the loan repayments. The power to make an order for interest is conferred by s 100 of the Civil Procedure Act 2005. The proceedings are properly characterised as proceedings for the recovery of money for the purposes of the provisions of s 100: Bloch v Bloch (1981) 180 CLR 390. 6 Ms Callow submitted that no order for interest should be made, since during the period when Mr Rupchev was making the mortgage repayments he was in occupation of the Normanhurst property whereas she was required to pay rent for the premises in which she was residing. This was a matter that was advanced as a reason why in the exercise of discretion I should decline to grant Mr Rupchev the relief that he claimed. It is not a consideration which is relevant to Mr Rupchev's claim for interest. The purpose of an order for interest is to allow the successful party to be properly compensated for the loss that he has suffered by being kept out of his money. The principles that are to be applied in determining a claim for interest are collected in the judgments of Handley JA and Tobias JA in Screenco Pty Ltd v R L Dew Pty Ltd [2003] NSWCA 319; 58 NSWLR 720. Mr Rupchev has suffered a real and practical loss by paying the whole of the loan repayments over the period and in my opinion has made good his claim for an order for interest.

7 Mr Plowman, the solicitor acting for Mr Rupchev, wrote to Nash Allen Williams & Wotton, the solicitors then acting for Ms Callow, on 24 October 2007 enclosing a spreadsheet detailing interest calculated in accordance with the rates that are set out in Sch 5 of the Uniform Civil Procedure Rules 2005. The letter also set out the calculation of interest to be credited to Ms Callow on the sum of $4,800.00, being her entitlement to one half of the rent receipts for the Normanhurst property (which is dealt with in the judgment at paragraph [46]). Nash Allen Williams & Wotton did not respond to Mr Plowman's letter. 8 No issue was taken with the method or accuracy of the interest calculations contained in the spreadsheet (part of Ex "B"). I propose to order that Ms Callow pay interest on the monies the subject of the claim in the amount claimed.

9 Mr Rupchev claims an order that Ms Callow pay his costs of the proceedings as agreed or assessed. 10 Mr Rupchev has been wholly successful and costs should follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Part 42 r 42.1 of the Uniform Civil Procedure Rules 2005. 11 An issue arises with respect to the costs occasioned by reason of the adjournment of the proceedings on 1 August 2007. The second cross-claim was fixed for hearing on that day. At the commencement of the hearing an amended second cross-claim was filed in Court over objection. Mr Quickenden, who was then appearing for Ms Callow, submitted that he was not able to meet the claim contained in the amended pleading. He also complained of the late service of Mr Rupchev's affidavit. The affidavit was sworn and served on 31 July, the day before the hearing.

12 It is relevant to set out the history of the proceedings before returning to the submissions that were made on 1 August and which resulted in the adjournment of the hearing. 13 The proceedings first came on for hearing before Simpson J on 29 May 2006. On that occasion Mr Bellamy informed her Honour that Mr Rupchev did not press the claim that Ms Callow held her interest in the Normanhurst property on trust for Mr Rupchev. He said this (T 18.37-42): We are content to proceed upon the basis that Ms Callow's interest is subject to the extent that she must make good to us contributions which we say we have made in terms of mortgage payments, improvements to the property, acquisition expenses and the like. 14 The proceedings were stood over to the following day. Mr Quickenden submitted that the pleading of the second-claim was defective in a number of respects. Paragraphs 1 and 2 were those which asserted that Ms Callow held her interest on trust for Mr Rupchev. These had been abandoned on 29 May. Paragraph 3 of the cross-claim pleaded that Mr Rupchev was entitled to an equitable lien over the Normanhurst property to secure payment to him of an amount equivalent to such share or interest of Ms Callow in the property as was found by the Court to be just. It is to be noted that the particulars of Mr Rupchev's claim recited that since the acquisition of the property the loan repayments had been made solely by Mr Rupchev and that he claimed contribution from Ms Callow for each such payment (paragraph 7). 15 On 30 May Simpson J observed (T 32.20-27): But isn't it simply this; that the issue between the parties is simply what each is entitled to out to any surplus? And it doesn't matter, equitable lien may very well be an inappropriate way to express what is sought, but if it's properly characterised as to what each is entitled to by reason of what each contributed, then that is a task for an associate judge or even the registrar to look at the detail of the evidence. 16 In the course of the submissions made before Simpson J on 30 May, Mr Quickenden stated (at T 36.33-41): We concede he's made mortgage payments up until January 2004, we think that amount that he's alleged is correct, but if it is not, it's only a few dollars, the solicitors will work that out. Similarly, the acquisition costs. Our position is we say that means nothing with him having exclusive occupancy of the property and not getting our consent to do anything to it. They are simple issues that will be decided on the legal points, nothing else. 17 Her Honour made an order under s 26 of the Uniform Civil Procedure Act referring the proceedings for mediation. 18 By letter dated 15 November 2006 the solicitors acting for Mr Rupchev served an offer of compromise (exhibit B). 19 By the time the proceedings came on for hearing before me the Normanhurst property had been sold and the balance of the proceeds of sale were being held to the account of the parties by Goldrick Farrell Mullan, solicitors, in a controlled money account. This circumstance alone made it necessary for Mr Rupchev to amend his cross-claim. The amended second cross-claim was served late, however it is to be noted that it articulated Mr Rupchev's claim in the way that it had been squarely put in the oral submissions before Simpson J save that it was more confined. Mr Rupchev no longer made any claim for contribution in relation to the costs of renovations carried out by him on the Normanhurst property.

20 Mr Quickenden submitted that he was not in a position to meet the new pleading. In light of the history that I have set out above, it was not apparent why that was so. Nonetheless Mr Rupchev's affidavit, which set out details of the acquisition expenses and loan repayments had been served late. Mr Quickenden's position was that time was needed to investigate the matters raised in it and to obtain particulars of the new pleading. It was in these circumstances that I adjourned the hearing and reserved the costs occasioned thereby.

21 On the hearing Ms Callow adduced evidence in support of a claim that she had been ousted from the Normanhurst property and excluded from resuming occupation thereafter. There was no issue as to the fact that Ms Callow had not made any payments towards the mortgage or with respect to the acquisition expenses, which were the subject of the claim. Ms Callow's case was a new one, which it is apparent she did not come ready to make on 1 August notwithstanding that the claim that was being made was the one of which she had been on notice since 29 May 2006. Against this background, and taking into account the offer of compromise, I have concluded that Mr Rupchev is entitled to the costs order that he seeks and that there should be no other order made with respect to the costs occasioned by the adjournment of the proceedings on 1 August. 22 Finally, an order is sought that after payment to Mr Rupchev from the controlled money account of both one half of the net proceeds of sale and the contributions that are the subject of the orders made in these proceedings, the balance be held pending service of a certificate of assessment of costs payable by Ms Callow to Mr Rupchev. Ms Callow did not make any submissions with respect to this order. In light of the orders earlier made, it is not clear that any sum would remain to the account of Ms Callow. However, given the history of the proceedings, I consider it is appropriate to make the order sought in paragraph 6 of annexure A to the short minutes. 23 For these reasons I make orders in the terms of the draft in annexure A to the short minutes of order filed for Mr Rupchev in Court on 9 November 2007, being paragraphs 1, 2, 3, 4, 4.1, 5 and 6 (6.1 - 6.4) and 7

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