Wilde v Anstee

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5095/97 & 4088/97 - GREGORY ALFRED WILDE & ANOR V MATTHEW THOMAS ANSTEE & ANOR

1 HIS HONOUR: This is a vendor and purchaser matter in which I handed down reasons for judgment on 23 June 1999. I decided that the plaintiffs, the vendors, had validly terminated the contract for the sale of their property and that they were entitled to an order that the second defendant (the real estate agent) pay them the deposit which it held together with interest which the deposit had earned. In my opinion the plaintiffs were also entitled to recover damages for breach of contract. I said (at paragraph 70 of my reasons for judgment) that since no evidence was led for the purpose of quantifying the plaintiffs' damages, I proposed to make an order for the assessment of damages by the Master. 2 The first defendant, the purchaser, had a cross-claim in the proceedings in which he sought a declaration that he was entitled to the return of the deposit plus interest, and an order that the real estate agent pay him the deposit and interest. In the alternative, he sought an order under s 55 of the Conveyancing Act for repayment of the deposit, with or without interest. He also claimed damages for breach of contract. It followed from the reasoning which I set out in my written reasons for judgment of 23 June 1999 that in my opinion the first defendant was not contractually entitled to the return of the deposit and interest, nor to an award of damages for breach of contract. In paragraph 70 I said that the cross-claim should be dismissed, thereby implying (though I did not expressly deal with the matter) that the first defendant's alternative claim under s 55 had not succeeded. 3 Now there are three further issues to deal with, namely whether my reasons for judgment contain a 'slip' which should be corrected; the form of the orders which are to be made; and the question of costs.

Correction of a 'slip' in reasons for judgment 4 Shortly after I handed down my reasons for judgment, counsel for the first defendant contacted my associate to say that there is a 'slip' in the judgment. I therefore arranged for the matter to be listed before me in order to deal with this claim. It emerged at a hearing on 27 July 1999 that there appeared to be differences in the recollection of counsel for the parties as to what had occurred at the primary hearing relevantly to the alleged slip, and differences between the recollection of counsel for the first defendant and my own recollection. 5 It is common ground that at the hearing of the case on 19 October 1998 neither party addressed the claim under s 55 in opening the case or in submissions. Counsel for the first defendant said that this was because the hearing on 19 October 1998 was limited to questions concerning the interpretation and effect of the contract for sale and the notices given pursuant to it, and was conducted on the basis that his application for relief under s 55 would be heard subsequently if he were unsuccessful on the contractual questions. He said that my mistake was to purport to deal with the matter which had been reserved for subsequent determination, and that I should correct the mistake by making orders which would keep alive the application for relief under s 55. 6 On the basis that the first defendant had orally moved, in effect, for re-opening of the hearing on the ground of the alleged slip and there was a question of fact to be resolved as to whether an issue had been reserved for separate determination, I directed on 27 July 1999 that the parties put on affidavits with respect to that matter. However, this has not occurred and instead, by a letter to my associate dated 6 August 1999 the first defendant's solicitors have informed the Court that they 'have been instructed to withdraw their client's application pursuant to the Slip Rule'. Even so, it appears to me that I should set out the position as I see it in these reasons for judgment. If there were a mistake in my reasons for judgment of 23 June 1999 I could correct it of my own motion at this stage. Since orders have not yet been made, I could proceed under Part 40 Rule 9 of the Supreme Court Rules rather than being confined to Part 20 Rule 10. I have concluded, however, that there is no proper basis for concluding that any mistake has been made. 7 This case was brought forward for hearing out of the short matters list. Originally there had been two proceedings, as I explained in paragraphs 5 and 6 of my reasons for judgment of 23 June 1999, but they were consolidated in 1997, so that what had been a claim by the first defendant for relief by summons became a cross-claim within consolidated proceedings. The consolidated proceedings were placed in the short matters list and were brought forward out of that list for hearing by me on 19 October 1998. The court's file does not indicate that any arrangement was made, prior to the allocation of the hearing date for the consolidated proceedings, for the proceedings to be split in the manner which the first defendant has subsequently claimed. No application was made at any stage for the determination of a separate question under Part 31. 8 At the hearing on 19 October 1998 counsel for the plaintiffs, Mr Smith, opened and then adduced the plaintiffs' evidence, comprising affidavits and the tender of a bundle of documents. Then counsel for the first defendant, Mr Burchett, opened his client's case, and adduced evidence, which also comprised the reading of affidavits and the tender of documents. There was no oral evidence on either side. The parties then proceeded to submissions, identifying some difficult and unresolved points of law, which are dealt with in my reasons for judgment of 23 June 1999. 9 The transcript of the hearing is uninformative. In accordance with usual practice in this Division, the court reporter did not transcribe the openings and submissions, and so the transcript merely records the adducing of documentary evidence and my rulings on admissibility. 10 According to my notes, during his opening Mr Smith said 'hearing today on liability - no question of quantum'. I inferred from that observation, as my reasons for judgment of 23 June 1999 make plain, that if the plaintiffs were to succeed in establishing an entitlement to damages, as they did, a further hearing would be required for the assessment of damages. According to my notes, when Mr Burchett opened for the first defendant he handed up a chronology and immediately moved into dealing with the facts and issues. My notes show that when he began his submissions, Mr Burchett handed up a written outline, which is in the court file. The written outline makes no reference to the s 55 claim. However, according to my notes Mr Burchett said something at the end of his submissions which I summarised thus: 'relief - declaration as to entitlement to deposit subject to any relief under Conveyancing Act; and declaration as to validity of notice to terminate the agreement'. I did not at the time or subsequently interpret this as anything more than a submission to the effect that my determination of contractual entitlement would be subject to the court's statutory power to deal with entitlement to the deposit under the Conveyancing Act; but no further submission was made as to whether or why I should exercise the statutory power. 11 There is no other indication in my notes that the alternative claim to relief under the Conveyancing Act had been put aside for separate determination after my determination of the contractual entitlement of the parties. I have no independent recollection of being informed of any such arrangement. I believe that I would have made a note of such a matter because it would affect the scope of the issues for determination in my judgment, and I have made no such note. Had any application been made to me for a deferred determination of the s 55 issue, I expect I would have been very reluctant to accede to the application, especially having regard to the comparatively small amount of the deposit and the escalation of legal costs which would have been entailed. In the circumstances, my assumption at all relevant times has been, since there was no submission with respect to s 55 nor any evidence particularly directed towards relief under that section, that it was a claim to relief which the first defendant had decided not to press at the hearing. 12 Since the first defendant has withdrawn his application and no affidavit evidence has been filed pursuant to my earlier directions, there is no obstacle to my proceeding to make orders to give effect to the reasons for judgment of 23 June 1999. The application having been withdrawn, there is no occasion for me to decide whether, in a case where the recollections of the judge and the legal representatives of a party are at variance as to whether a question has been informally reserved for later consideration, the wise course may be to allow a further hearing on that issue.

Form of orders 13 I propose to make declarations that the second notice to complete and the notice of rescission were valid and effective, that the first defendant breached the contract and that the plaintiffs are entitled to the deposit and the proceeds of investment of the deposit. Counsel for the first defendant invited me to use the expression 'proceeds of investment' rather than 'interest' in order to allow for the deduction of any costs of making the investment, and the plaintiffs' solicitor has agreed that this wording is appropriate. I propose to order the second defendant to pay over the deposit and investment proceeds to the plaintiffs, and to make an order that the Master inquire into whether, and if so what recoverable damage or loss has been suffered by the plaintiff, and for the first defendant to pay the plaintiffs' damages, if any, in the amount assessed by the Master. 14 Counsel for the first defendant urged me to qualify the order for payment of damages by limiting it to the amount (if any) of damage or loss which exceeds the value of the deposit and the proceeds of investment of the deposit. The plaintiffs' solicitor submitted that I should not limit the assessment of damages in this way, since his clients wish to contend that in the circumstances of this case, their recovery of damages should not be reduced by the amount of the deposit (and its investment proceeds) which will be forfeited to them. Since it was not practicable to deal with the plaintiffs' contention at the brief hearing of the matter this morning, I decided that the proper course was to leave all aspects of the question whether the plaintiffs have suffered damage or loss, and if so the recoverable amount, to the Master's determination. The Master will be in a position to hear and determine the question whether the plaintiffs' loss is a net figure calculated after making allowance for the deposit and investment proceeds.

Costs 15 I have decided to order that the first defendant pay the plaintiffs' costs of the proceedings to date. The order will not extend to the costs of the hearing before the Master, which must be dealt with separately at the time. Nor will my order affect a costs order which has already been made on an unsuccessful motion by the plaintiffs for summary judgment. However, the order will extend to the plaintiffs' costs of both Supreme Court proceedings before they were consolidated, and also the District Court proceedings before they were transferred to this Court. 16 Counsel for the first defendant submitted that I should not order his client to pay the plaintiffs' costs of the District Court proceedings, because the District Court had no jurisdiction to grant the relief which the plaintiff sought in those proceedings. In their District Court Statement of Claim issued on 14 May 1997, the plaintiffs sought damages, interest and costs, and also an order: 'That the sum of $44,500.00 held by the second defendant representing the five percent deposit paid under the Contract together with all interest thereon be paid to the plaintiffs'. 17 Counsel for the first defendant referred to an exchange of correspondence between the solicitors for the parties, in which the plaintiffs' solicitors said, in their letter dated 7 August 1997 replying to a request for particulars, that their clients' right to such an order arose from the terms of the contract between the parties and the first defendant's failure to complete, and that the source of jurisdiction to make the order was the equitable jurisdiction of the District Court. Counsel for the first defendant says there is no relevant equitable jurisdiction. 18 It is not necessary for me to decide whether the District Court would have had jurisdiction to deal with the proceedings which the plaintiffs instituted in that court, in order to determine whether the order for costs in favour of the plaintiffs should extend to the costs of the District Court proceedings. It is enough for me to conclude that the plaintiffs behaved reasonably commencing proceedings in that court. In my opinion there was at the very least a plausible argument for the view that the District Court had ample jurisdiction to deal with the matter. 19 I have held that in the present case the contract for sale between the plaintiffs and the first defendant was terminated under clause 9.2, which entitles the vendor to recover the deposit and sue for damages. What the plaintiffs sought (apart from damages) was an order for the payment of an amount of money by way of recovery of the deposit consequent upon the valid termination of the contract. It is plausible to say that an order of this kind is in substance an order for the payment of a liquidated amount due and payable under a contract, arising in a personal action at law. On that basis, the District Court had jurisdiction to deal with the proceedings under s 44(1)(a) of the District Court Act 1973 (NSW), which at the time of commencement of the District Court proceedings in May 1997 provided as follows: '44(1) Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions: (a) any personal action at law in which the amount claimed does not exceed $250,000, whether on a balance of account or after an admitted set-off or otherwise.' 20 There being a plausible basis for contending that the District Court had jurisdiction, because the proceedings were a personal action at law, my view is that the plaintiffs were not deprived of their costs simply because their solicitors, in answering a request for particulars, referred in general terms to the equitable jurisdiction of the District Court. 21 The first defendant says that the District Court was deprived of any jurisdiction it might otherwise have had by s 48(2). At the time of commencement of the District Court proceedings, s 48(2) stated, subject to subsection (3), that the District Court did not have jurisdiction in an action in which title to land the value of which was more than $250,000 was in question. The first defendant says that the District Court proceedings raised an issue as to whether the contract of sale of between the plaintiffs and first defendant had been validly terminated. That, in turn, raised an issue about title to land, because the purchaser under a contract for the sale of land has an equitable interest in the land which is extinguished by the valid termination of the contract. Since the value of the land in this case was clearly more than $250,000, the first defendant says that s 48(2) deprived the District Court of jurisdiction. 22 In my opinion, the short answer to this submission is that by the time the District Court proceedings were commenced, the plaintiffs had resold the land to the knowledge of the first defendant and there was no longer any basis upon which the first defendant could claim an equitable interest in the land. But if that were not so, the argument would fail because of s 48(3). Under that provision the District Court has the power to decide a claim where the title to land the value of which is more than $250,000 incidentally comes into question in an action. In this case the action is for the recovery of the deposit and damages, and any question as to the extinguishment of the equitable interest of the purchaser (if such an interest can properly be described as 'title to land' for the purposes of s 48) comes into question incidentally to the action for recovery of the deposit: Ex parte McEvoy (1868) 8 SCR 16; cf Smith v Pattison (1934) 51 WN 137. At the very least, there are plausible grounds for contending that s 48(2) does not apply to the present case. 23 There being plausible ground for doing so, it was reasonable for the plaintiffs to commence proceedings in the District Court rather than the Supreme Court, having regard to the relatively small amount of deposit which was sought to be recovered. The District Court proceedings were transferred to this Court. Those proceedings have been transferred to this Court on the basis of the pleadings in the District Court, and have been continued here and then consolidated with the proceedings commenced by the first defendant. The plaintiffs have succeeded in the consolidated proceedings and in my opinion, since costs should follow the event, it is appropriate that the plaintiffs should recover their costs of the District Court proceedings as well as the Supreme Court proceedings initiated by the first defendant, the Supreme Court proceedings for transfer of the District Court proceedings, and the eventual consolidated proceedings. * * * * * * * * *

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