Lastavec v Effective Security Pty Ltd
[2022] QCA 218
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- Notable Unreported Decision
- Appeal Determined - Special Leave Discontinued (HCA)
- Lastavec v Effective Security Pty Ltd[2022] QCA 218
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Lastavec v Effective Security Pty Ltd[2022] QCA 218
Lastavec v Effective Security Pty Ltd[2022] QCA 218
[2022] QCA 218
COURT OF APPEAL
MORRISON JA
McMURDO JA
BODDICE J
Appeal No 276 of 2022
DC No 13 of 2010
PAUL LASTAVEC First Appellant/First Respondent
MARIA TOPIC Second Appellant/Second Respondent
v
EFFECTIVE SECURITY PTY LTD First Respondent/First Applicant
ACN 079 315 549
STEVEN FRANCIS LASTAVEC Second Respondent/Second Applicant
BRISBANE
THURSDAY, 10 NOVEMBER 2022
JUDGMENT
McMURDO JA: On 6 September 2022, the Court gave its judgment which included an order that the respondents to the appeal pay to the appellants the sum of $428,965.69 together with interest. The respondents to the appeal now apply, pursuant to rule 388 of the Uniform Civil Procedure Rules, or alternatively the inherent jurisdiction of the Court, for an order that the judgment sum be varied to $129,658.51.
The basis for that order was that the payment was necessary to ensure that the parties should share equally the overall profits of the business and the appellants would recover their capital contributions which had not already been returned to them; see paragraphs 43 through 46 of the Court's judgment. The respondents say that the Court miscalculated the amount of the unreturned capital contributions made by the appellants by an amount of $299,307.18. Their contention is correct.
At paragraph 56 of what this Court referred to as the preliminary judgment of the primary judge, her Honour found that the appellants had contributed $299,307.18 to the Treetops projects, and subsequently a further $22,000. Those findings as to the appellants' capital contributions were unchallenged and they were adopted by this Court; see paragraph 46 and footnote 23 of this Court's judgment.
The primary judge described the way in which the sum of $299,307.18 was contributed. At the time of the purchase of the Treetops land, the second appellant had an existing loan with Perpetual Trustees for $54,386.79. The second appellant borrowed a further $299,307.18 on that facility, which was applied in the purchase of the Treetops land: see paragraph 21 of the preliminary judgment.
As the judge found, when the Treetops land was sold the loan from Perpetual was repaid from the proceeds of sale. The judge said that this represented a repayment of the sum invested in Treetops, but also a sum of $54,776.29, which was the surplus of the Perpetual Trustee loan to buy the Treetops land: see paragraph 23 of the preliminary judgment.
The judge made findings as to the necessary adjustments to be made to calculations of Mr Ponsonby. His were calculations of the profits of the partnership and the extent to which those profits had been distributed. It was necessary for the judge to adjust the Ponsonby calculations for that sum of $54,776.29, which was rightly treated by the judge as a distribution of profits, this sum not being the return of money which the appellants had contributed to the partnership.
No such adjustment was made to the Ponsonby calculations for the sum of $299,307.18, which was money which the appellants had contributed to the partnership. That sum was indisputably returned to the appellants by the second appellant's Perpetual debt being repaid from the proceeds of sale of partnership land; this was the return of a capital contribution. It did not matter for the Ponsonby calculations because they were calculations of the profits derived and the distribution of those profits.
In summary, on the unchallenged findings of the primary judge, the amount of $299,307.18 was contributed as capital and returned to the appellants. The error in this Court's judgment was including this amount in its calculation of the amount of unreturned capital. Nevertheless, arguments have been presented now for the appellants to the effect that there was no error in the calculation of the judgment sum. Much of these arguments involves an assertion that the parties litigated upon an agreed premise that this amount had not been returned to the appellants. That cannot be accepted.
It is true that in the District Court, and again in this Court, lengthy submissions were made in support of many possible outcomes, and it may well be that somewhere within those arguments, something was or was not sought to be made about the presently disputed amount. However, it is clear that there was no consensus (against the fact) that this sum had not been returned to the appellants. Indeed, in today's hearing, it was conceded for the appellants that the sum had been returned, and from the proceeds of sale.
There is no basis for the contention that the respondents are estopped from saying that the disputed sum was a return of capital. Counsel for the appellants suggest that his case would have been conducted differently at the trial had some issue been raised about the disputed sum. However, no such issue could have been raised.
One submission now made for the appellants is that:
“The discharge of the loan came from the partnership profits.”
That submission is inconsistent with this Court's findings. This is not an occasion for the appellants to reargue the appeal and to seek findings which were beyond or contrary to those made in this Court's judgment. In any event, to characterise the return of the sum in question as a distribution of profits would make no difference to what should have been the judgment sum. It would mean that the appellants would be paid more than their one-half share of the profits of $433,869.60, and that they would have to account to the respondents for that excess in an amount of $191,648.67. Against that, the appellants would then be entitled to the return of capital of $321,307.18 from the respondents, resulting in a net entitlement of the appellants to the payment of $129,658.51, and that is the amount which the respondents say should be substituted as the judgment sum.
Perhaps after such prolonged litigation between family members, the appellants have come to the view that they should be able to retain the benefit of the judgment as it presently stands, however clear it should be to them that this would provide them with a windfall. However, that could provide no justification for submissions to this Court which are devoid of merit.
There has never been a controversy that this money was repaid to the appellants from the proceeds of sale of the Treetops land. The respondents say that Court's error is outside the scope of rule 388 because “it was never an issue on appeal”. In that respect, they cite Gallagher v Boylan [2013] 1 Qd R 204, at paragraph [20], but that was a case of an attempt to rely upon an argument that had been abandoned at the trial. In the present case, the respondents are not raising a fresh allegation of error on the part of the primary judge. Instead, they are referring to an error by this Court in calculating the amount of unreturned capital in accordance with unchallenged findings made by the primary judge.
Further, it should be noted that this Court's jurisdiction to correct an error of this kind derives not only from rule 388 but from its inherent jurisdiction; see the decision of the New South Wales Court of Appeal in Haig v Minister Administering National Parks and Wildlife Act (1994) 85 LGERA 143, 152‑154 in the judgment of President Kirby.
It was submitted that the jurisdiction to correct an error ought not to be exercised where the proposed amendment of the judgment is controversial, and for that proposition is cited Flint v Richard Busuttil & Co Pty Ltd (2013) 216 FCR 375, at paragraph [26]. The intended passage however seems to be the next paragraph of that judgment and its reference to what was said by Justice Lockhart (Chief Justice Black agreeing) in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 390‑391. Justice Lockhart there said:
“The slip rule applies where the proposed amendment is one upon which no real difference of opinion can exist. It does not apply where the amendment is a matter of controversy; nor does it extend to mistakes that are the consequence of a deliberate decision.”
Similarly, in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446, Justice McHugh said at page 453:
“The rationale of the slip rule requires that an omission or mistake should not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or is a matter upon which a real difference of opinion might exist.”
It is not sufficient for the respondents here to resist correction of the judgment by argument where “no real difference of opinion” could exist as to the fact of an accidental slip or omission and the need to correct it. The judgment must be amended to ensure that the Court's order reflects its intention at the time the order was made or reflects the intention the Court would have had but for the failure which caused the accidental slip or omission.
The public interest in the finality of judgments is not irrelevant, and this is a discretion to be utilised with extreme care. That said, this is a case where the interests of justice compel the correction of the Court's order, and it should be ordered that order 2B of the orders made on 6 September 2022 be varied by substituting for the sum of $428,965.69 the sum of $129,658.51.
MORRISON JA: I agree.
BODDICE J: I agree.
…
MORRISON JA: The orders of the Court are:
- 1.Order 2B of the orders made on 6 September 2022 be varied by substituting for the sum of $428,965.69 the amount of $129,658.51.
- 2.The appellants pay the costs of the application.
Thank you. Adjourn the Court.