Seachange Management Pty Ltd & Anor v Pital Business Pty Ltd [2009] VSCA 139

Court of Appeal (Vic)|2009-06-18|Before: MAXWELL P and NETTLE JA

PRACTICE AND PROCEDURE - Compromise of proceeding - Enforcement of terms - By application in proceeding - Discretion of court - Whether summary enforcement of terms 'clearly just' - Whether exercise of discretion vitiated by appellable error - Change of case by second appellant - Whether material - Roberts v Gippsland Agricultural and Earthmoving Contracting Co Pty Ltd [1956] VicLawRp 86; , considered.

1 This is an appeal from a judgment given in the Commercial List on 21 January 2009. The appellants (collectively, 'SCM') were ordered to pay the respondent ('Pital') $4,300,000 plus interest of $268,720.55 and costs.

2 On 30 January 2009, SCM applied to the trial judge, unsuccessfully, for a stay of execution on the judgment pending appeal. Later that day, the stay application was renewed before this Court. An interim stay was granted, as the Court was unable to hear argument that day, and the matter came on again on 11 February 2009 before Maxwell P and Redlich JA.

3 Before argument began, the Court indicated that an expedited hearing of the appeal might be possible if the parties could resolve the stay issue themselves and would consent to the appeal being heard by two judges of appeal.[1] The parties did subsequently reach agreement on both issues, and the appeal was able to be heard on 3 April 2009.

4 The appeal did not concern SCM's liability to Pital, nor the quantum of the judgment. Instead, it concerned the nature of the jurisdiction exercised by the judge when he gave judgment for Pital.

5 As will appear, Pital was suing on a term of a settlement agreement ('the Deed') under which SCM had agreed - unconditionally - to pay Pital the sum of $4.3 million. The Deed compromised a proceeding which had been commenced in the Commercial List in September 2007 ('the original proceeding'). It also compromised certain other claims. When SCM defaulted in payment of the settlement sum, Pital elected not to commence a fresh proceeding for specific performance of the Deed but instead issued a summons in the original proceeding, seeking summary enforcement of SCM's promise to pay.

6 Pital thereby invoked the summary jurisdiction most commonly identified - in this State - with the 1956 decision of this Court in Roberts v Gippsland Agricultural and Earthmoving Contracting Co Pty Ltd[2] ('the Roberts jurisdiction'). The argument for SCM on the appeal was that the Roberts jurisdiction either was unavailable altogether or should not as a matter of discretion have been exercised.

7 As will appear, when argument concluded on 3 April 2009 we were not persuaded that any error had been identified in the judgment below. Before judgment could be delivered, however, the second appellant, Mr De Simone, sought leave to advance further argument on his own behalf and on behalf of the first appellant, Seachange Management Pty Ltd ('Seachange'). He was granted leave to make further submissions on his own behalf only. (Both counsel and solicitors who had appeared for SCM on 3 April 2009 had had their instructions withdrawn in the meantime.) It was pointed out by the Court that no submissions could be made on behalf of Seachange unless it appointed a new solicitor. That did not occur.

8 The effect of Mr De Simone's submissions was to place in a materially different light the position of SCM on the appeal. (It was also Mr De Simone's submission that, had his instructions been followed at first instance, a different case would have been presented to the trial judge on SCM's behalf.) Counsel for Pital did not oppose the Court deciding the appeal on the basis of the revised position of SCM.

9 Approached on that new basis, the appeal must in our view be allowed. For reasons which follow, we consider that if SCM's position had been presented to the judge as it was ultimately presented to this Court, judgment should not have been entered in exercise of the Roberts jurisdiction. We emphasise, however, that we have reached this conclusion only because, following Mr De Simone's intervention, the key argument for SCM on the appeal was presented quite differently from the way it had been presented in the earlier hearing of the appeal - and from the way it had been presented before the judge.

10 Seachange is the registered owner of land at Ocean Grove ('the land'). A development is taking place on the land. Seachange owns the land as nominee for the Seachange Development Partnership ('the Head Partnership'). From May 2007, there were two members of the Head Partnership: De Simone Nominees Pty Ltd ('DSN'), a company controlled by Mr De Simone, and Interesting Developments Pty Ltd ('Interesting Developments' or 'ID'). Each of them held fractional entitlements (sometimes called 'units of entitlements') in the Head Partnership. Interesting Developments held its entitlements in the Head Partnership as nominee for the Interesting Developments Partnership ('the Sub-Partnership'). In May 2007, there were three members of the Sub-Partnership: DSN; Darkstar Pty Ltd ('Jurblum'); and Pital. Each of them held fractional entitlements in the Sub-Partnership.

11 In June 2007, a dispute arose between various participants in the venture. On 7 September 2007 DSN commenced the original proceeding against Pital and others. Pital in turn counterclaimed and added several defendants to counterclaim. By its statement of claim, DSN alleged that Pital had failed to perform an equalisation agreement, essentially by failing to make partnership contributions alleged to be due; had committed breaches of fiduciary duty; and was guilty of misleading conduct. By their counterclaim, Pital and Alan Griffiths (who was added as a plaintiff to counterclaim) sought the appointment of a receiver to the three partnerships, the taking of accounts and the repayment of moneys found to be due. Seven parties were added as defendants to the counterclaim.

12 On 4 April 2008, the parties to the proceeding, together with three other parties not party to the proceeding, entered into the Deed. Under the Deed, Seachange was required to pay $4.3 million to Pital. Mr De Simone guaranteed the payment. In return, Pital agreed to surrender its interests in the Head Partnership, the Sub-Partnership and an associated partnership called the Galambos Partnership; and Pital and others gave several warranties.

13 Pital gave a warranty of title in respect of its interest in the partnerships and their respective assets. The critical warranty was in these terms:

Subject only to any claim made by the Remaining Parties ... Pital had prior to the execution of this Deed the full legal and beneficial rights to the Vendor Assets ...

In clause 15(d), Pital warranted that it had 'full beneficial and legal rights to the ... Partnership Assets'. It has been common ground in this proceeding that these warranties covered Pital's respective interests in the Head Partnership, the Sub-Partnership and the Galambos Partnership.

14 The Deed contained the following default clause:

If the Settlement Sum, or any part thereof, is not paid to Pital on or before 4.00 pm on 7 October 2008, then:

Pital shall be at liberty to institute proceedings and to enter judgment against Seachange Management and Giuseppe [De Simone] in respect of such of the Settlement Sum[3] which remains unpaid, as at 7 October 2008, together with such interest as may then be due as provided in paragraph 4 of this Deed together with the costs of entering judgment;
Seachange Management and Giuseppe [De Simone] undertake not to oppose judgment being entered against each of them for the amount referred to in this paragraph.

15 Seachange did not pay any part of the $4.3 million by the due date. By summons dated 13 October 2008, Pital sought summary judgment in the original proceeding. It sought an order that Seachange pay the $4.3 million and interest and costs.

16 Before the judge, SCM resisted the application on two bases. First, they contended that the Deed was of such complexity, and provided for matters so extraneous to the original proceeding, as to put the application beyond the ambit of the Roberts jurisdiction. In the alternative, SCM argued that it had - or might have - defences of set-off, equitable set-off and relief pursuant to ss 82 and 87 of the Trade Practices Act 1974 (Cth), arising out of an alleged breach by Pital of its warranties of title.

17 All of these defences were said to rest on a demonstrable - or, at worst for SCM, reasonably arguable - defect in Pital's title. That defect was said to have arisen in the following way. Pital had acquired its interests in the partnerships as a result of a complicated series of transactions, one of which was the transfer by Lynpland Pty Ltd ('Lynpland') to DSN and ZMB Australia Pty Ltd ('ZMB') of partnership interests then held by Lynpland. ZMB had in turn onsold to Pital the interests which it acquired from Lynpland. Crucially, Lynpland had subsequently commenced proceedings in the Supreme Court of New South Wales ('the NSW proceeding'), alleging that DSN and ZMB had failed to pay the agreed acquisition price and had thereby repudiated the acquisition agreement (referred to as the Lynpland Transfer Agreement). That being so, SCM argued, Pital had not acquired - could not have acquired - the partnership interests from ZMB. Pital was therefore in breach of its warranties to SCM.

18 The judge rejected both of SCM's contentions. Dealing first with the possibility of a claim for breach of the warranties of title, his Honour said:

Turning to the facts of this case, as in Rawson v Samuel,[4] it is uncertain whether or not [SCM] will be able to mount a claim for damages for breach of warranty. Whether or not they may be able to make a claim depends on the success of claims in the Supreme Court of New South Wales which they dispute. In Rawson v Samuel, it was uncertain whether, on the taking of accounts between the plaintiff at law and the defendant at law, any moneys would be found owing by the plaintiff at law to the defendant at law. Similarly to the question raised by the Lord Chancellor, why should Pital be delayed in receipt of the moneys due under the Deed of Settlement while it is ascertained whether a claim may or might not be made. Using the language of Woodward J,[5] it is, in my opinion, not positively unjust that there should be recovery by Pital of the sale price without deduction or delay by reason of the possible claim for breach of warranty.

In summary, in the sense the term is used in equity, the purported set-off does not impeach Pital's claim. The purported set-off provides no defence or answer to Pital's claim for judgment.[6]

We pause to emphasise that his Honour here described SCM's position as being one of opposition to Lynpland's claims in the NSW proceeding. As will appear, that was also the position adopted by SCM on the first day of hearing of this appeal.

19 His Honour then addressed the question of whether the court could be satisfied that justice would be done if Pital were permitted summarily to enforce the payment obligation. His Honour held that it would, saying:

The matter did not require oral evidence to be heard. The issues were legal and suitable to be dealt with in a summary way. In my opinion, the application falls within the procedure approved in Roberts v Gippsland Agricultural and Earthmoving Contracting Co Pty Ltd.[7] In that case, Smith J said as follows:

In relation to the former class of actions the resulting position would appear to be as follows:

The Court will now enforce the agreement of compromise upon motion in the action whenever the circumstances are such that it would have been enforced in a corresponding manner in the old Court of Chancery.
In addition, the agreement may be so enforced notwithstanding the fact that it involves matters extraneous to the action, and notwithstanding that there is a substantial question raised as to the terms or validity or enforceability of the agreement, provided that the Court is clearly satisfied that justice can be done under the summary procedure. At least this is so where all that the Court needs to order for the purpose of enforcing performance upon just terms is a stay of proceedings or a dismissal of the action or some relief claimed in the action.
In deciding whether justice can be done under the summary procedure the Court, of course, needs to consider a variety of matters involving questions of degree. These, I think, must include the extent to which extraneous matters are involved, how substantial are the questions to be determined, to what extent questions of credibility are likely to arise, and whether pleadings and discovery may be desirable.[8]

I am satisfied that justice can be done under the summary procedure. In my opinion, justice has not been compromised by the absence of pleadings or the failure to provide further discovery. The issues raised, as indicated above, were questions of law capable of being properly dealt with under a summary proceeding. I therefore dismiss the second ground of objection to the plaintiff's motion for judgment.[9]

20 In their written outline of argument, SCM submitted that the judge had 'misconceived' the way in which they had put their case below. Erroneously, so it was said, the judge had taken SCM's position to be that Lynpland's claims in the New South Wales proceeding were false and that DSN would so contend in its defence of that proceeding. This misapprehension had led his Honour to conclude - erroneously - that SCM's putative defence of breach of warranty of title was therefore contingent on Lynpland succeeding, over DSN's opposition, in the New South Wales proceeding.

21 According to the appeal outline, SCM's position was in truth the opposite - and had been so before the judge. SCM's position was that Lynpland's allegations were correct; that Pital did not therefore have full beneficial and legal right in and to the Partnership Assets; and that SCM therefore had an extant defence of breach of warranty of title. The outline of argument was in these terms:

[P]ursuant to a purported agreement made 17 March 2006 ("the Lynpland Transfer Agreement"), Lynpland purported to transfer all its interest, (which interest became part of what came to be known as "Partnership Assets") to DSN and ZMB. It was a term of that agreement that property was to pass on the payment of the deposit. After the acquisition of the interest of Lynpland, DSN and ZMB formally constituted the Head Partnership. They admitted ID to membership. As partners, they jointly held the beneficial interest in what became the "Partnership Assets". However, Lynpland had been paid nothing.[10] Lynpland, therefore, retains ownership of its beneficial interest in what became part of the "Partnership Assets". Insofar as Pital derives any interest it has in the Partnership Assets through ID, it therefore does not have full beneficial and legal rights in the Partnership Assets. It did not own what it purported to surrender and for which it was to be paid $4.3 million.

...

With respect, [the judge] misconceived the significance of the proceedings in NSW. Allegations in those proceedings reveal the falsity of the Warranty. The claim that the Warranty is false is to be made as a defence to proceedings brought in Victoria to enforce the compromise.[11] Second, [the judge] gave no consideration to a claim under s 87. Third, the holding by [the judge] (with respect to equitable set-off) that the putative cross-claim did not impeach the title of Pital is against the evidence. The Appellants agreed to pay $4.3 million to secure Pital's surrender of its interests in the Seachange venture. The promise to pay made no sense unless Pital held the beneficial interest in what was being surrendered. It is difficult to imagine a cross-claim more closely related to the claim. The use of the summary procedure in such circumstances is unjust.[12]

22 As already noted, the trial judge in his reasons had said that SCM (meaning the De Simone interests) were disputing Lynpland's claims in the NSW proceeding. Early in the appeal hearing, therefore, the Court asked senior counsel for SCM to clarify their position. The following exchange took place:

THE COURT: Can I just ask you at this point, does your client continue to dispute the Lynpland claim or does he now embrace it and agree with it?

COUNSEL: He is defending the Lynpland claim.

THE COURT: So he claims that it is without substance. It remains his position?

COUNSEL: It does remain in his position [sic], and that's the point that was also used against us. But he's not in a position himself to determine the Lynpland claim - - -

23 The same question was raised again later, and drew the same response:

THE COURT: Just before you do, I noticed in your submission [scil. outline of argument] an assertion - let me find the reference. At paragraph 10 of p. 6 there is a line beginning "[The judge] misconceived the significance..."[13]

COUNSEL: Yes.

THE COURT: The next sentence: "Allegations in those proceedings reveal the falsity of the warranty..."

COUNSEL: Yes.

THE COURT: That can't literally be right, can it? They don't reveal anything. They are the allegations.

COUNSEL: Yes, That is right. They are allegations.

THE COURT: Which you say are false?

COUNSEL: Which we say are false.

THE COURT: But if established over your opposition they would establish the falsity of the warranty?

COUNSEL: The title, yes, thank you ...

THE COURT: Your breach of warranty/misleading conduct claim is contingent upon somebody else establishing a fact in a proceeding that you are seeking to defeat?

COUNSEL: Yes, that is true.

25 Senior counsel for SCM thus confirmed - on three separate occasions - that the judge had been correct in understanding that the claim of a defect in Pital's title would only be made good if the Lynpland claims in the NSW proceeding were upheld over the opposition of DSN. Accordingly, it was our understanding that the only misconception of which the judge was alleged to have been guilty was, as counsel put it, that his Honour

had the impression - and it emerges very clearly from those parts of his judgment which we extract - that in fact what we were saying was that the New South Wales proceedings should run their course and then see what happened as a result of them and delay Pital until they have run their course, and what I've been urging before you is that it's not going to proceed. We said that everything had to be brought into the one proceeding and determined at one time.

26 After the luncheon adjournment, senior counsel for SCM added this:

In a sense, the way I put it before lunch may not have been fair to my client.

Lynpland has said that it has not been paid under the Lynpland [Transfer] Agreement and De Simone Nominees is saying - well, it says that that agreement was unexecuted and it had no obligations under it. It says it believed there was another agreement, but that agreement in fact is denied by Lynpland.

This statement did not appear to us to alter the position of SCM as clearly and repeatedly stated in the exchanges set out above. The submission still appeared to be that title had passed from Lynpland to ZMB and from ZMB to Pital and, therefore, that SCM would only have a defence of breach of warranty of title in this proceeding if Lynpland succeeded in establishing the contrary. That impression was reinforced by this further exchange with senior counsel for SCM:

THE COURT: You should really apply in the New South Wales proceeding to be joined as a defendant shouldn't you? To dispute the claim which is made by [Lynpland] that it has still got title and you would then make a third-party claim, or cross-claim I think they call it up there, as against [Pital] saying that: "I deny - your title is no good, but if it is then I will say against you that I do not owe you the $4.3 [million]".

COUNSEL: That is right, your Honour. I think that is right.

27 Ultimately, however, when counsel for SCM were in reply, there was what may now be seen to have been an attempt to change course:

THE COURT: Just pausing there; the best you can say surely, is that the warranty may be proved to have been false?

COUNSEL: No, we say it is false. We say it is false.

THE COURT: But you don't, do you, because your evidence, the evidence on which you rely in this proceeding establishes its truth, doesn't it?

COUNSEL: The affidavit of Mr De Simone makes several points, the point he makes is that these were agreements that Brereton was conducting for him. The second point he makes above, the Lynpland Transfer Agreement is that it is unexecuted and he doesn't have an [executed] copy of it.

There is a reference that your Honours fixed on this afternoon in his affidavit, about the payment of the deposit. Now that has got to be read closely. He says about that: "The alleged Lynpland Transfer Agreement is unexecuted, it does not represent what I believed was the agreement entered between Lynpland, DSN and ZMB in March 2006." So he is saying I did not believe I was ever a party to that agreement.

He does say there, "the obligation to pay the deposit" - he constructs - he refers to another agreement and it does say there, "The obligation to pay the deposit." I see those words and they are against me.

THE COURT: We ..., it is a bit more significant than that, I mean let's not be too semantic about it. Your individual client has affirmed that the clause said by Lynpland to have been breached was complied with, doesn't he?

COUNSEL: No, with respect, I don't see that. What is said in [44] and [45] is another agreement being erected and an agreement which Lynpland denies has ever been entered into and explanations for payments and transactions under that agreement.

...

And insofar as the Lynpland Transfer Agreement, completion was never achieved because the deposit wasn't paid. We say the property, although there is no property claimed, the property in fact was not transferred. And our defence to that matter is in Vol 3 of 3, B437 to 442 and Your Honour will see that we deny straight out that the Lynpland agreement was ever an agreement which became legally enforceable.

It is sufficient for present purposes to say that, in the light of the repeated, unequivocal, statements referred to earlier, we did not understand the position of SCM to have changed.

28 As noted earlier, after we had reserved our decision Mr De Simone sought and was granted leave to file a further affidavit. He said he was concerned that SCM's position had been misstated by counsel and, as a result, had been misunderstood by the court. He deposed as follows:

In my affidavit of 19 December 2008 at exhibit GDS 8-40, I provided details of the Lynpland statement of claim made on 27 June 2008 [in the NSW proceeding.] ...

...

The position of [DSN] as set out in the defence to the amended statement of claim at paragraphs 5 to 6B inclusive is that the alleged agreement of 17 March 2006 is not executed and there is no agreement between Lynpland and anyone else for the sale of Lynpland's interest. Therefore, DSN denies any liability to Lynpland ...

I believe that DSN's pleading given on my instructions and issued with my affirmation on oath means that there was no transfer of Lynpland's interest in the joint venture to ZMB or to DSN. I only discovered the failure of ZMB or Brereton to execute the agreement after the statement of claim was served and the executed agreement could not be produced by Lynpland or Brereton or Seachange's accountant, Paul Marc & Co, who only had a copy signed by Lynpland.

As I believe the transfer to ZMB from Lynpland is required for ZMB to transfer that interest to Pital under the Purchase Deed of 28 May 2008, I believe the warranty in relation to the Vendor Assets made in clause 15(b) of the Deed of Settlement of 4 April 2008 by the respondent and its directors is false.

I do not believe that the falsity of the warranty requires the Lynpland proceedings to be concluded. I believe the falsity arises whether Lynpland is correct (the agreement has been terminated with no transfer of title occurring due to failure to pay the deposit) or DSN is correct (there was no agreement hence no transfer of title).

29 Mr De Simone also filed a summons seeking orders against counsel who had previously appeared for him and for Seachange. He sought orders that they pay costs thrown away by what he alleged was their failure to make clear - at trial and on appeal - that his position regarding Pital's title was unequivocal, that is, that title had not passed from Lynpland to ZMB and so could not have passed from ZMB to Pital, and thus that Pital had breached the warranties of title.

30 As noted earlier, Mr De Simone represented himself at the further hearing on 24 April 2009. Counsel who had previously appeared for Mr De Simone and Seachange were separately represented to answer the summons. Senior counsel for Pital did not oppose Mr De Simone contending that his appeal should be decided on the basis that his position on Pital's title was thus unequivocal. She argued, however, that Mr De Simone should be confined to the evidence which was before the judge below and that, on that evidence, the suggested defence of breach of warranty was plainly bound to fail.

31 In these somewhat unusual and unsatisfactory circumstances, we think that we should deal first with the question of whether the judge erred in rejecting the arguments which SCM advanced below, and then explain why the change in SCM's position leads to a different result.

32 SCM contended that the judge erred in rejecting their arguments advanced below by failing to appreciate the limited scope of the Roberts jurisdiction, or by failing to take into account considerations critical to its exercise, and thereby exceeding the jurisdiction. They also said that the judge misconceived their entitlement to set-off, equitable set-off and relief pursuant to the Trade Practices Act 1974 (Cth), and that his Honour was wrong in treating their defences as so inchoate or otherwise uncertain that they should be subjugated to summary enforcement of the payment obligation. In the result, in their submission, the judge had acted beyond the scope of the Roberts jurisdiction or had exercised it in a manner inconsistent with the interests of justice.

33 We start with the scope of the Roberts jurisdiction. As Smith J explained in Roberts,[14] the jurisdiction summarily to enforce the compromise of a proceeding originated in Chancery. According to the practice which there obtained, the court would ordinarily leave a party to proceed by separate bill if the agreement sought to be enforced involved matters extraneous to the original suit. Generally speaking, that was considered to be the case if the agreement dealt with property as to which no question was raised in the suit, or if the agreement provided for things to be done which were beyond the range of what the court could order in the suit.

34 With the passage of the Judicature Acts, courts exercising both legal and equitable jurisdiction were enabled to deploy the summary jurisdiction more freely, with the result that it ceased to be fatal to the summary enforcement of a compromise that it may have involved some matters extraneous to the proceeding or some parties who were not parties to the proceeding. Consequently, it is no longer necessarily inimical to summary enforcement of a compromise that the original cause of action has been superseded by a new and different agreement, or that the applicant for judgment is seeking to enforce obligations that are new or different from those in issue in the proceeding.

35 But there are still limits to the extent to which obligations provided for in a compromise agreement may differ from those in issue in the proceeding and yet be summarily enforced. There are also limits to the extent to which an agreement providing for extraneous obligations may summarily be enforced, unless the extraneous obligations are in nature self-executing or have already been discharged.[15] Importantly, it is implicit in the following passages of Smith J's judgment in Roberts that it is not possible - or at least it may be inappropriate - summarily to enforce an obligation which is mutually dependent upon or otherwise affected by another executory obligation:

Upon that view the agreement of compromise clearly included obligations extraneous to the action; but except for the undertakings of the parties to bear their own costs, and the appellant's undertaking relating to her counterclaims in the other two actions, those extraneous obligations had all been discharged by performance; and in my view the inclusion of those which had not been so discharged did not afford an answer, under the Judicature Act system, to the claim for summary enforcement. They were obligations of such a nature that they might properly be regarded as being in substance self-executing; and the existence of the clause in the said instrument whereby the appellant undertook to consent to judgment supported the view that to enforce separately the obligation to pay money would be in accordance with justice.

...

... Efron and McLeod were parties to such written agreement. But even if they were, their obligations under it, other than their obligation to bear their own costs, had been discharged by performance, and they had no rights outstanding under it beyond a right to require that the appellant should bear her own costs of the various proceedings and should not take any proceedings in respect of the subject matter of her counterclaims ... [16]

36 The same sort of restriction is evident in the observations of Tadgell J in Koutsouradis v Koutsouradis:[17]

As Smith J said:[18] "In deciding whether justice can be done under the summary procedure the Court, of course, needs to consider a variety of matters involving questions of degree. These, I think, must include the extent to which extraneous matters are involved, how substantial are the questions to be determined, to what extent questions of credibility are likely to arise, and whether pleadings and discovery may be desirable."

The fact that in the present case the agreement of compromise provided for possible action to be taken by the plaintiff's former solicitor pursuant to an undertaking by him is no doubt to be considered in deciding whether the agreement should be summarily enforced in the action. Having taken it into account, I am of opinion that it is a matter of no consequence in this case. It is first to be noticed that the present motion does not seek to enforce anything against the plaintiff's former solicitor. That would not necessarily mean that the rest of the agreement should be summarily enforced_. If, being material to the agreement as a whole, the undertaking might be the subject of some future attempt to enforce it against the solicitor, the expedient course could well be not to enforce part only of the agreement now._ But that is far from the case. Counsel for the defendants indicated in argument that they waived any right ever to enforce anything against the plaintiff's former solicitor. Even apart from any such concession, and assuming without deciding that there was an enforceable undertaking by the plaintiff's former solicitor, I should think it clear that nothing could now or hereafter be enforced against him by the defendants. They tendered payment of the whole of the settlement moneys to the plaintiff's new solicitors and (as I would assume) are still willing and anxious to pay them to those solicitors pursuant to the judgment now sought. In the light of that I do not see how the defendants could possibly claim to enforce any undertaking by the plaintiff's former solicitor to deal with any part of the settlement moneys in accordance with the undertaking. Any such undertaking has, in order words, become a dead letter. Being a practical irrelevancy to the compromise, it should not in my opinion stand in the way of its enforcement. The plaintiff's second alternative submission therefore fails.[19]

37 In General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd,[20] McPherson J referred to difficulties in the way of summary enforcement of an agreement involving extraneous matters. He noted that, although some such agreements may be summarily enforced, the court will reject an application for summary enforcement unless clearly satisfied that justice can be done. His Honour adopted the view expressed in Roberts that it is a question of degree requiring consideration of the extent to which extraneous matters are involved, how substantial are the questions of credibility likely to arise and whether pleadings and discovery may become desirable.

38 So too in Phillips v Walsh,[21] McLelland J concluded that summary enforcement is not appropriate in cases involving substantial matters beyond the ambit of the proceedings as originally constituted:

I have considered whether any justification for the plaintiff's application

can be found in the authorities which deal with the power of the court to

enforce on motion in existing proceedings an agreement compromising those

proceedings: see Green v Rozen;[22] Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd;[23] McCallum v Country Residences Ltd;[24] E F Phillips and Sons Ltd v Clarke;[25] McLaren v Schuit;[26] General Credits (Finance) Pty

Ltd v Fenton Lake Pty Ltd[27] and Darling Downs Investments Pty Ltd v Ellwood.[28]

These authorities present a confusing picture and since the matter was not

dealt with in an argument before me, I do not propose to attempt any

extended analysis of them. It is sufficient for present purposes to say that,

although there is some arguable support for the proposition (although it is

far from clear) that the Court might on motion in the present proceedings

enforce a particular term of the agreement between the parties noted in the

order of 16 June 1989 which came within the ambit of the proceedings as

originally constituted, it would not be proper to do so where substantial

matters are involved beyond the ambit of the proceedings as originally

constituted, or where, in the interests of justice, disposition of the matter on

summary application is inappropriate.[29]

39 Counsel for the appellants also referred to the decision of Allsop J in Macteldir Pty Ltd v Dimovski,[30] which was principally concerned with the scope of federal jurisdiction. Its relevance for present purposes is that it followed after a decision of the Full Court of the Federal Court that undertakings to desist from infringement of copyright, given to the court pursuant to an agreement for the compromise of a proceeding for infringement of copyright, fell within the categories of cases said by Smith J in Roberts to require a separate proceeding for their enforcement.

40 In summary, therefore, the net effect of the authorities to this point seems to be that, although the power summarily to enforce a compromise is discretionary and is wider now than once was the case, it is not to be invoked unless the court is 'clearly satisfied that justice can be done'; and whether justice can be done is a question of degree. Consistently with the equitable origins of the power, one must weigh among other competing considerations the extent to which enforcement would involve extraneous matters, how substantial the questions to be determined as a precursor to enforcement may be, and procedural considerations like the desirability of pleadings and discovery and substantial cross-examination.

(ii) Failure to take relevant considerations into account

41 We turn next to the matters which it was alleged the judge failed to take into account. Counsel for the appellants identified them as follows:

(1) There are three parties to the Deed (Erin Peter Harte, Serafino De Simone and Paul Marc Nominees Pty Ltd) who were not party to the original proceeding, and the Deed confers substantive rights on them and subjects them to substantive obligations.

(2) The issues and relief sought in the original proceeding were different from the rights and obligations provided for in the Deed. In substance, the original proceeding was about the ascertainment and enforcement of payment of amounts found to be due on partnership account. Contrastingly, the Deed provides for Pital to retire as a partner and surrender its interest in favour of the remaining partners in return for a payment of $4.3 million. It also provides for a spate of ancillary and other obligations, including the creation of documentation for the cancellation of Pital's interest in the partnership. Most significantly, the Deed subjects the appellants to an obligation to pay $4.3 million in circumstances where no relief was sought against them in the proceeding.

(3) The appellants' obligation to pay the $4.3 million is mutually dependent upon Pital's warranty of title, or at least likely to be affected by a significant breach of that warranty, and there are in existence circumstances which suggest that the warranty may have been breached notwithstanding that the appellants deny that title is affected.

42 In counsel's submission, it was apparent from his Honour's reasons that he did not take those factors into account, and thereby committed an error of law which vitiated his exercise of discretion. Alternatively, if his Honour did take them into account, his conclusion that it was appropriate to award summary judgment was one to which, in light of those factors, a judge acting reasonably could not properly have come.

43 Initially, we were inclined to accept that submission. As appears from his Honour's reasons, the basis of his decision was what he perceived to be the inchoate or otherwise uncertain nature of the appellants' alleged equitable set-off and Trade Practices Act 1974 (Cth) defences. He did not refer in terms to the fact that there were parties to the Deed who were not parties to the proceeding, or to the consideration that an order could not have been made in the proceeding to compel the appellants to purchase Pital's interest, or to the mutual dependency - or at least interconnection - between the appellants' obligation to pay the $4.3 million and Pital's warranty of title. Ex facie, the judge decided only that, because there had not yet been a determination that the warranty of title had been breached, and because it was not possible to say when and if there would be such a determination, the decision in Rawson v Samuel[31] dictated that Pital should no longer be kept out of its money.

44 Counsel for Pital submitted, however, that despite the form of his Honour's reasons, it was clear that there was no error in the reasoning process. Taking each of the three considerations identified by the appellants in turn, she submitted that:

first, it was of no significance that there were parties to the Deed who were not parties to the proceeding, because no relief was sought against them in the application for summary judgment and because they would not be affected by the relief which was sought against the appellants.
secondly, it was common ground that, although the Deed provided for a range of extraneous obligations in addition to the appellants' obligation to pay Pital $4.3 million, all of those other obligations had been executed or were self-executing. Thus, to adopt and adapt Tadgell J's reasoning in Koutsoradis,[32] they had become a dead letter and a practical irrelevancy to the compromise, and should not stand in the way of its enforcement.
thirdly, the judge was right to hold that the appellants had no defence or counterclaim of the kind for which they contended, because: (1) they denied Lynpland's claim in the New South Wales proceeding; (2) it was apparent from the pleadings in the New South Wales proceeding that Lynpland was not seeking proprietary relief, only payment of an amount which it alleged to be due to it from ZMB under the Lynpland Transfer Agreement; (3) a caveat which Lynpland once lodged on title has lapsed. Alternatively, even if the appellants had a defence of the kind for which they contended, Rawson v Samuel[33] and Hill v Ziymack[34] were authority that it would not be a sufficient reason to refuse summary enforcement of the payment obligation.

45 In our view, the first and second of these submissions should be accepted. In the end, counsel for the appellants frankly conceded that there was nothing remaining for the additional parties to do under the Deed or which remained to be done for their benefit, and he did not suggest that they might otherwise be affected by enforcement of the appellants' payment obligation. Ultimately, he also accepted that, apart from the warranty of title and the appellants' payment obligation, all of the obligations provided for in the Deed had either been executed or were self- executing and therefore were immaterial for present purposes.

46 The third submission, however, is more problematic since, in our view, it would not necessarily be an answer to the appellants' contentions that they continued to deny Lynpland's claim. It is true that, as matters stood before the judge below, Mr De Simone appeared to be of the view that the amount due to Lynpland under the Lynpland Transfer Agreement had been satisfied by means of a subsequent alternative arrangement. The judge was entitled to proceed on the basis that Mr De Simone really believed what was said about that. But the fact was that Lynpland alleged that it had not been paid and had instituted the New South Wales proceeding apparently to have its position vindicated. Until and unless Lynpland's claim were determined or abandoned, it was possible that the appellants were wrong.

47 It also seemed to us that it was not necessarily an answer to the appellants' contentions that the only relief sought by Lynpland was for payment of the sum of money which it said was due. For although Lynpland does not seek proprietary relief as such, it pleads that its entitlement to be paid arises under the Lynpland Transfer Agreement; that it was an express term of that agreement (Clause 2.1) that title to Lynpland's interest in the partnership would pass to ZMB on and from 'Completion'; that 'Completion' was defined in clause 1.1 of the agreement as occurring on payment of the Deposit; and that the Deposit was not paid. Consequently, it is at least possible that title may not yet have passed under the agreement. Lynpland also pleads that, by ZMB's failure to pay what was due, ZMB repudiated the agreement and Lynpland thereafter accepted the repudiation and thereby terminated the agreement as it was entitled to do.[35] So, if all of that were established, it might well be that ZMB and thus Pital did not acquire the interest in the Sub-Partnership for which the appellants agreed to pay Pital.[36] And in that event, it seems to us that the breach of warranty could well be something which the appellants would be entitled to set up as a defence of defect in title constituting a failure of consideration, or as a set-off at law[37] or in equity,[38] or pursuant to ss 82 and 87 of the Trade Practices Act 1974 (Cth), in extinguishment or reduction of their obligation to pay the $4.3 million.

48 Finally, on this aspect of the matter, it does not appear to us that Rawson v Samuel or Hill v Ziymack was necessarily determinative of the issue of whether an equitable set-off claimed in respect of an amount yet to be ascertained is an insufficient basis to refuse relief in the exercise of the summary jurisdiction for the enforcement of a compromise. Neither case was concerned with the jurisdiction as such but rather, in Rawson v Samuel, with whether injunction should go in equity to restrain enforcement at law and, in Hill v Ziymack, with equitable execution in aid of a final judgment following trial. Each case held no more than that the court will not interfere with execution

on the ground of equitable set-off, to prevent a party from recovering a sum awarded to him by a jury as damages for a breach of contract, merely because there is an unsettled account pending between him and the party against whom the action is brought, although the subject matter of the account consist of dealings and transactions arising out of the contract, the breach of which is the subject of the action.[39]

49 In the result, in the way in which the matter stood before the judge below, the appellants may have been entitled - even though they could not then say whether they were entitled - to a defence of breach of warranty of title which could relieve them to some extent of their obligation to pay the $4.3 million. There was also the possibility of damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) which might be set off in extinguishment or reduction of the claim,[40] and relief pursuant to s 87 of the Trade Practices Act 1974 (Cth), perhaps including an order to rescind the Deed ab initio or on some other basis. If their obligation to pay the $4.3 million were summarily enforced, however, the appellants would have been deprived of their ability to set up any defect in title in extinguishment or reduction of their liability in that fashion; and while it would have been open to them later to bring an action for damages against Pital for breach of warranty of title, any determination as to title made in the New South Wales proceeding would not have been binding on Pital unless Pital and the appellants were joined as parties to that proceeding and the issue of Pital's title were resolved in that proceeding.[41] Thus, summary enforcement of the payment obligation was unlikely to put an end to the issues between Pital and the appellants.[42]

50 That said, however, the judge considered all those issues. He referred to them in his reasons for judgment. This was not a case of failing to take relevant considerations into account. In the end, the question was whether, having taken them into account, his Honour acted unreasonably in ordering summary enforcement.

51 Senior counsel for Pital expressed considerable scepticism as to the bona fides of the appellants' claims regarding Pital's warranty of title. She pointed with effect to the fact that to date Mr De Simone had not sought to be joined, and the appellants had not sought to have Pital joined, as a party to the New South Wales proceeding; and that, although the New South Wales proceeding was instituted more than nine months ago, there had still been no determination as to whether it should be cross-vested to this court pursuant to the Jurisdiction of Courts (Cross Vesting) Act 1986, or vice versa.[43] In counsel's submission, there was good reason to conclude that the supposed defence of breach of warranty of title was what she described as 'smoke and mirrors'; a contrivance calculated to delay performance of the $4.3 million payment obligation.

52 Perhaps there is something in that. One might have expected that Mr De Simone would by now have applied to be joined to the New South Wales proceeding and that the appellants would have cross-claimed in that proceeding against Pital for breach of warranty of title. The apparent insouciance with which they have approached the defence of Lynpland's claim, and the prosecution of any claim which they may have against Pital for breach of warranty of title, suggests that they are in no hurry to have the issues determined. But as matters stand, we are not prepared to conclude that the appellants are acting other than bona fide. Indeed, without having heard Mr De Simone cross-examined on his affidavits and full argument as to what is involved, we are not really in a position to make any sort of findings about the strength of Lynpland's claim or the appellants' concern as to its effect on their title. All we can say - and indeed all that the judge could have said - is that Pital's title may be at risk and, to that extent, that the appellants' obligation to pay the $4.3 million could possibly be affected.

53 We return to the question of whether in those circumstances the judge acted unreasonably in determining to enforce the payment obligation summarily. More precisely in view of the authorities to which we earlier referred, was the judge in error in concluding that he was 'clearly satisfied that justice could be done' notwithstanding that summary enforcement of the payment obligation would deprive the appellants of the opportunity to have questions concerning Pital's title resolved in the same proceedings as Pital's claim for payment?

54 On balance, we are not satisfied that his Honour erred in so concluding. We recognise that it would be inconvenient for the appellants to have to deal with the $4.3 million payment obligation in isolation from the question of title. But it was not suggested that they would not be able to recover damages for any breach of warranty of title later established in the New South Wales proceeding.[44] We also recognise that the question of title would remain an issue. But there is no risk of inconsistent decisions in different courts: title as such is not in issue in this proceeding and there is no reason to suppose that the appellants would be refused leave to join Pital as a third party to the New South Wales proceeding. We do not overlook that the question of Pital's title relates to an interest or interests in land. But it is plain that it is commercial development land, and it was not suggested to have any value to the appellants beyond its monetary worth. Additionally, while we are not here concerned with injunctive relief or equitable execution of the kind in issue in Rawson v Samuel and Hill v Ziymack, we think that it is not without significance that the appellants appear to have delayed.

55 We allow that another judge or judges might have taken a different view. Minds could reasonably differ as to whether such inconvenience as Pital would suffer as a result of being delayed was not outweighed by the inconvenience to the appellants in being required to pay now for something which might later be found defective. It may also be observed that we were not referred to any decided case in which an obligation sought to be enforced in the summary jurisdiction diverged so significantly from any relief sought in the proceeding against the party the object of enforcement.

56 One possible conception of the present application is that it is too different in that sense from those allowed before. But, recognising that the criterion of the summary enforcement jurisdiction is what is 'clearly just', it does not seem to us that the fact that this application may have gone incrementally further than others before means that it should be regarded as unjust. And plainly, the mere fact that we or some other judges might take a different view from that of the judge below is not sufficient basis for appellate intervention.[45]

57 Late in the first day of the hearing of the appeal, senior counsel for the appellants sought and was granted leave to file an amended notice of appeal to accommodate the full amplitude of his submissions. In brief substance it added the following as matters which the judge was alleged to have failed to take into account, or to have given too little weight to, namely that:

the defences based on defective title need not necessarily be dependent upon the outcome of the New South Wales proceeding;
there was a serious question to be tried as to whether the warranties of title were false;
to allow summary enforcement would not resolve as far as possible all matters in dispute between the parties;
the questions surrounding title should be determined at trial before summary judgment is ordered; and
the appellants alone among the parties to the Deed covenanted that the $4.3 million payment obligation could be summarily enforced.

58 It should be apparent from what we have said already, however, that nothing expressed in the amendments to the Notice of Appeal alters our view that it has not been shown that the judge erred in deciding as he did.

59 There was also a suggestion before the judge below that, as well as the possibility of Pital's title in respect of its interest in the Sub-Partnership being suspect, there was a possibility that Pital had not acquired good title to the interest in the Galambos Partnership which it purchased from ZMB under the Purchase Deed. It was thus possible that there had been a breach of warranty of title in respect of so much of the 'Partnership Assets' as was comprised of Pital's interest in the Galambos Partnership. But the point was not developed in submission other than in the form of a cryptic reference to the Purchase Deed in the written outline of argument. All substantive submissions advanced below, oral and in writing, were confined to the defect in title said to flow from the alleged failure of ZMB to pay Lynpland under the Lynpland Transfer Agreement.[46]

60 During the course of argument on the appeal, however, counsel for the appellants stated that they did wish to rely upon the defect in title concerning the Galambos Partnership, as well as the defect alleged to arise under the Lynpland Transfer Agreement, and submitted that, whereas the appellants were not then in a position to plead the alleged Lynpland Transfer Agreement defect as an unconditional defence,[47] it was open to them positively to aver the defect in title relating to the Galambos Partnership and, on that basis, to present an unqualified defence to Pital's claim for payment.

61 Counsel for Pital countered that that was not the way in which the matter had been argued below and that the appellants should not now be permitted to argue it on appeal; and that, in any event, there was not a scrap of evidence to support the contention.

62 It is unnecessary for us to resolve the question of whether the appellants should have been allowed to take the point for the first time on appeal. It raises nice points of the kind considered by the High Court in Coulton v Holcombe[48] and distinguished by the Appeal Division in Doherty v Murphy.[49] For the sake of brevity, we shall assume that those points would have been resolved in favour of the appellants. In other words, if there were any evidence in support of the Galambos Partnership point, we would have been disposed to consider it. As it is, however, we agree with counsel for Pital that there is simply no evidence to support it.

63 All of the affidavit evidence apparently designed to support it was withdrawn when the matter was before the judge below. In contradistinction to Mr De Simone's belated deposition of belief as to the efficacy of the Lynpland claim, he has not pledged his oath to a belief in the verity of the Galambos defect. On the evidence before us, the Galambos Partnership point is in effect just as speculative as the Lynpland Transfer Agreement point was when the matter was before the judge below. In those circumstances, we are not persuaded that it would have been unjust for it to have been dealt with in the same manner.

The way in which Mr De Simone now puts his case

64 We turn to the way in which Mr De Simone now puts his case. In our view, it materially changes the position. We earlier summarised[50] what he now says on oath as to his belief that the Lynpland claim is well-founded and, therefore, as to the appellants' having an unconditional defence of breach of warranty of title. In those circumstances, there is considerably more reason for Pital's claim for payment and the appellants' claim for breach of warranty of title to be tried at the same time before the same judge.

65 Senior counsel for Pital submitted that it was apparent from the evidence that Mr De Simone knew of the alleged defects in title before SCM entered into the Deed. For that reason, she argued, the appellants' claim for breach of warranty of title was bound to fail. She referred in particular to an email of 4 May 2007 from Mr De Simone to Peter Vlahos, an email of 20 July 2007 from Lyn Lander to Mr De Simone and an email of 30 July 2007 from Mr De Simone to Alan Griffiths, as demonstrative of Mr De Simone's knowledge of concerns about the state of the Pital's title more than a year before his entry into the Deed. According to the submission, the contents of those communications demonstrated that Mr De Simone did not rely on the warranty of title. It followed, she submitted, that relief for breach of the warranty would necessarily be refused.

66 We do not accept that submission, for two reasons. First, without the benefit of cross-examination and detailed argument on the significance of the emails, we are not prepared to conclude that that Mr De Simone believed at the time of entry into the Deed that Pital's title remained subject to the concerns canvassed in the emails. As at present advised, we think there is something to be said for the view, which Mr De Simone advanced in oral submissions, that because of his doubts about the title, he insisted on the warranty of title as protection against the risk.

67 Secondly, even if Mr De Simone did know at the time of entry into the Deed that Pital's title was defective, it does not necessarily follow that he did not place any reliance upon the warranty. For all that can be said on the present state of the evidence, he may have expected Pital to perfect its title by the time for payment of the settlement sum in accordance with clause 3 of the Deed.[51] After all, it is commonplace for parties to enter into an agreement for the sale of land or goods at a time when it is known that the vendor may have no title, or only defective title, but upon the basis that the vendor will have acquired good title by the time of completion. In such cases - be they for the sale of land[52] or goods[53] - the obligation to pay the purchase price and the obligation to make good title are usually mutually dependent and concurrent obligations, to be performed in exchange for each other. It is not immediately apparent why the same should not apply here. Of course, we do not suggest that the Deed provided for a sale of land or goods. According to high authority, the interest of a partner in a partnership is either an equitable interest sui generis[54] or an equitable interest in the nature of a chose in action,[55] and the proprietary ramifications of such an interest remain to be authoritatively determined.[56] But inasmuch as the parties to the Deed are likely to have contemplated that they were dealing in effect with interests in the partnership assets, one may suppose that they would have intended ordinary principles to apply. And the inclusion of the express warranty of title rather suggests that they did.

68 Counsel for Pital argued that, even if a defence of breach of warranty of title would be a reason to refuse summary enforcement, there was no evidence here to support the existence of the defence - simply Lynpland's allegations in the New South Wales proceeding and Mr De Simone's expression of belief that they gave rise to a defence.

69 We do not accept that submission either. There is evidence on oath of the existence of Lynpland's claim and of Mr De Simone's belief that the claim is valid (or at least valid to the extent that Lynpland remains seized of the interest in the Sub-Partnership the subject of the Lynpland Transfer Agreement). If this were an application for summary judgment, that would be sufficient to warrant the grant of leave to defend or, more accurately these days, to refuse the application. A fortiori in the case of an application for the summary enforcement of a compromise.

70 Finally, on this point, counsel for Pital argued that, even if the defence were made out, it only affected part of the Partnership Assets which Pital purported to transfer to the appellants under the Deed - apparently $1.4 million worth out of the total at issue of $4.3 million - and that there should be an order for summary enforcement pro tanto with in effect leave to defend for the balance.

71 We reject that contention too. Although the interest which Pital acquired from ZMB was only part of what it purported to release in favour of the appellants under the Deed, we are not in a position to quantify its significance, still less to say that such defects as there may be in the title relating to it could not have prejudiced the worth of the balance.

72 In the result, in the way in which Mr De Simone now puts his case, we are not clearly satisfied that justice could be done if Pital were permitted summarily to enforce the appellants' obligation to pay $4.3 million under the Deed. It follows from the way in which Mr De Simone now puts his case that the application for summary enforcement should be refused. The appeal must therefore be allowed.

The claim for costs against the appellants' legal practitioners

73 The application for an order that counsel pay costs personally was made by Mr De Simone on his own behalf and also purportedly on behalf of Seachange. Insofar as it purported to be made on behalf of Seachange it was incompetent[57] and, therefore, will be dismissed.

74 Insofar as the application was made by Mr De Simone on his own behalf, it may or may not be competent - for the present it is unnecessary to decide - but, as matters stand, it is incapable of determination. As at present advised, we have no way of ascertaining whether counsel did other than exactly as they were instructed. In order to reach a view about that it would be necessary to conduct a hearing, with the opportunity for all parties concerned to adduce evidence and cross-examine and make submissions. It is, however, impracticable and inappropriate for this court to undertake that task.

75 One way of dealing with the matter would be to refer the application to an associate justice for inquiry and report pursuant to r 63.23(4). But we are not disposed to adopt that course. Directions were given in advance of the last day of hearing that Mr De Simone file and serve in advance any affidavit on which he relied in support of the application that counsel pay costs thrown away, and that it be in a form which could be viewed by all concerned. Despite that warning, the only material filed in support of the application was what Mr De Simone called a 'confidential exhibit', comprised of emails said to contain instructions and observations made to counsel in the period from 18 January 2009 to 3 April 2009. Mr De Simone requested that this exhibit not be made available to the respondent or anyone else concerned. Since the confidential exhibit was capable of bearing on the matters which we have had to determine in the appeal, we have had to exclude it from consideration, and it has not been disclosed to the respondent or to anyone else. Consequently, we have no means of determining whether there is anything in the costs application which warrants investigation. That renders it unnecessary to express a view on arguments advanced on behalf of counsel as to their immunity from suit under the principles essayed in D'orta-Ekenaike v Victoria Legal Aid.[58]

76 All things considered, we have concluded that the appropriate course is to dismiss the application made by Mr De Simone on his own behalf, albeit without an adjudication upon the merits, and to leave it to him to make such - if any - further application of that kind as he may be advised.

77 For the reasons we have given, the appeal will be allowed. The judgment below will be set aside and it will be ordered that, in lieu thereof, the respondent's application for summary enforcement of the Deed shall be dismissed.

78 As to the costs of the application and of the appeal, we consider that, because it has not been demonstrated that the judge was in error in deciding the application, the appellants should pay the respondent's costs of the application below. With the exception of the directions hearing held on 16 April 2009 and the second day of hearing of the appeal on 24 April 2009, there should be no order as to the costs of the appeal.

79 Since the need for the directions hearing was caused solely by the way in which Mr De Simone changed his case, Mr De Simone should pay the respondent's costs of the directions hearing. But, inasmuch as Mr De Simone has succeeded in the way he put his case on 24 April 2009, the respondent should pay his costs of that day.

80 The application for an order that David Gilbertson of counsel pay costs incurred by the appellants will be dismissed as incompetent and Mr De Simone will be ordered to pay Mr Gilbertson's costs of that application.

81 The application for an order that Joseph Santamaria of Her Majesty's Counsel pay costs incurred by the appellants will be dismissed, albeit without an adjudication on the merits, and Mr De Simone will be ordered to pay Mr Santamaria's costs of that application.

82 The Court will grant to the respondent an indemnity certificate pursuant to s 4 of the Appeal Costs Act 1998.

83 The copies of the confidential exhibit provided to the Court will be destroyed.

[5] In D Galambos & Sons Pty Ltd v McIntyre (1974) 5 ACTR 10, 18.

[6] Re Interesting Developments Pty Ltd [2009] VSC 12, [34] and [35] (emphasis added, citations adapted).

[9] Re Interesting Developments Pty Ltd [2009] VSC 12, [41]-[42].

[10] The footnote to the outline stated: 'In its amended statement of claim (4 November 2008) in proceeding 13218/2008 (commenced 27 June 2008) in the Supreme Court (NSW), Lynpland has alleged that it proposed to transfer its interest in the Seachange Development by a 'Transfer' agreement dated 17 March 2006, with a 'Purchase' agreement of the same date purporting to provide substituted consideration under the 'Transfer' agreement payable on 31 December 2008. Lynpland alleges that neither agreement was performed, and that each has been terminated. In its defence to the amended statement of claim (28 November 2008), the defendants (other than ZMB, which has not defended the proceeding) have denied the existence of both agreements, and have pleaded continued ownership of what was to be provided as the substituted consideration.

[11] The footnote to the outline stated: 'The same issue remains current in the NSW proceedings. [The judge] was informed that application had been made to transfer that proceeding to Victoria.'

[13] This was a reference to that part of the outline extracted in [21] above.

[19] Citations adapted; emphasis added.

[29] (1990) 20 NSWLR 206, 210 (citations added as footnotes).

[36] Assuming that title had not passed before rescission.

[37] Pursuant to r 13.14 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

[38] D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10; Murphy v Zamonex Pty Ltd (1993) 31 NSWLR 439.

[39] Hill v Ziymack [1908] HCA 13; (1908) 7 CLR 352, 360.

[40] Not necessarily in equity, but certainly at law pursuant to r 13.14 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

[41] Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5, 8.

[42] Cf Phillips v Walsh (1990) 20 NSWLR 206, 210.

[43] In the sense of cross-vesting this proceeding to New South Wales to be heard by the same judge and at the same time as the Lynpland proceeding.

[44] As has been observed, that could be done by the appellants applying to be joined as defendants to that proceeding and cross-claiming in the proceeding against Pital for breach of warranty of title.

[45] House v The King [1936] HCA 40; (1936) 55 CLR 499, 504; Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513, 518.

[47] Until the New South Wales proceedings are heard and determined.

[49] [1996] VicRp 86; [1996] 2 VR 553, 555 (Tadgell J) and 562-3 (Hansen J).

[51] Which is to say, on 4 July 2008, three months after execution of the Deed.

[52] Palmer v Lark [1945] Ch 182, 184-5; Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 417 (Brennan J).

[53] Goods Act 1958 (Vic) s 17(a); Rowland v Divall [1923] 2 KB 500; McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377, 410.

[54] Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321, 327-8.

[55] Re Bainbridge (1878) 8 Ch D 218, 223; Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440, 446-7.

[56] Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352; cf Chettle v Brown [1993] 2 Qd R 604, and see Fletcher, The Law of Partnership in Australia , 9th Ed, [5.40].

[57] Rule 1.17 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (as Mr De Simone was warned at the directions hearing would be the case).

Jurisdiction of Courts (Cross Vesting) Act 1986

Court (General Civil Procedure) Rules 2005

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