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Vicini v GM Investment Property Pty Ltd (in liq)[2021] QSC 83

Vicini v GM Investment Property Pty Ltd (in liq)[2021] QSC 83

SUPREME COURT OF QUEENSLAND

CITATION:

Vicini v GM Investment Property Pty Ltd (in liq) & Anor [2021] QSC 83

PARTIES:

DAVID GEORGE VICINI

(Plaintiff)

v

GM INVESTMENT PROPERTY PTY LTD (ACN 603 263 627) (IN LIQUIDATION) ATF THE 2 KINGS GYMPIE TRUST

(First Defendant)

AND

GLEN TAYLOR

(Second Defendant)

FILE NO/S:

BS 11845 of 2018

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

23 April 2021

DELIVERED AT:

Brisbane

HEARING DATE:

19 April 2021

JUDGE:

Jackson J

ORDER:

The judgment of the Court is that:

  1. The defendants pay the plaintiff and each group member identified in Annexure A to the second further amended claim the sum of $35,495 together with interest in the sum of $5,022.
  2. The defendants pay the plaintiff’s costs of the proceeding, but as against the first defendant not including the costs of and from the hearing on 19 April 2021.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – OTHER MATTERS – where the first defendant entered into a contract to purchase land for a proposed residential subdivision – where the plaintiff as grantee entered into a call option agreement with the first defendant as grantor and the second defendant as guarantor for “Property” described as “Proposed Lot 602” in the subdivision – where the other group members entered into call option agreements identical to that of the plaintiff except for the different proposed lot – where cl 6.3(a)(i) of the call option agreement provided, inter alia, that the grantor would not create any mortgage over the Property without the grantee’s consent – whether the grant of a mortgage over the land by the first defendant without the consent of the plaintiff or any of the group members was a breach of contract.

INTERPRETATION – GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS – COMMERCIAL AND BUSINESS TRANSACTIONS – PARTICULAR TRANSACTIONS – where the ordinary meaning of the text of the definition of “Property” was proposed Lot 602 – where the defined word “Property” was not used consistently throughout the call option agreement – whether, on the proper construction of cl 6.3(a)(i), “Property” meant proposed Lot 602 or whether it included the land prior to the creation of the proposed lot.

Civil Proceedings Act 2011 (Qld), s 15, s 58, s 103V

Uniform Civil Procedure Rules 1999 (Qld), r 681, r 702, r 703

Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd (2019) 1 Qd R 392, cited

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, cited

Byrnes v Kendle (2011) 243 CLR 253, cited

Chen and Xu v Kevin McNamara & Son Pty Ltd [2012] VSCA 229, cited

Clarence Property Corporation Limited v Sentinel Robina Office Pty Ltd [2019] QSC 13, cited

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, cited

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544, cited

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, cited

International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151, cited

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, applied

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, cited

Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229, cited

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, cited

COUNSEL:

P O’Brien for the Plaintiff

N Cooke for the Second Defendant

M Maskell, Solicitor for the First Defendant

SOLICITORS:

Clinch Long Woodbridge Lawyers for the Plaintiff

Redmond + Redmond for the Second Defendant

Thynne & Macartney for the First Defendant

  1. [1]
    This proceeding was the trial of a claim started and conducted as a representative proceeding under Part 13A of the Civil Proceedings Act 2011 (Qld), commonly known as a class action.
  2. [2]
    The claim against both defendants is for damages for breach of contract or in debt under contractual indemnities for $35,495 plus interest under s 58 of the Civil Proceedings Act 2011 (Qld) and costs.  There are 100 other group members whose claims would be the same in substance to that of the plaintiff.
  3. [3]
    On 13 October 2017, the first defendant entered into a contract to purchase the land described as Lot 999 on SP 291851, situated at Lot 999, Sorensen Road, Southside, for the sum of $2,750,000 (“Lot 999”).  Lot 999 was a development site for a proposed residential subdivision. 
  4. [4]
    Between October and December 2017, an organisation known as Lifecorp Group marketed the proposed residential subdivision to investors.  Interested investors paid a deposit, generally $1,000 each, to show their commitment to the proposal. 
  5. [5]
    On 7 March 2018, the plaintiff as “Grantee” entered into a call option agreement with the first defendant as “Grantor” and the second defendant as “Guarantor”.  The subject of the call option was the “Property”, as defined, and thereby described as “[p]roposed Lot 602 Crest Estate Development” as shown on a concept plan (described as a “[p]roposed unregistered Survey Plan” and a “draft subdivision plan”) attached to a draft contract for sale of land that comprised Schedule 3 to the call option agreement.  The draft contract was to become the “Contract” for purchase of the “Property” by the plaintiff from the first defendant on exercise of the “Call Option”.
  6. [6]
    Each of the 100 other group members identified in Annexure A to the second further amended claim (“Annexure A”) entered into a call option agreement with the defendants in identical terms to that of the plaintiff, save for the different proposed lot in the subdivision.
  7. [7]
    The plaintiff and each of the group members paid $35,000 as the “Call Option Fee” under the call option agreement as consideration for the grant of the option to purchase the Property.
  8. [8]
    The payment was made to the trust account of solicitors acting for the Grantee, being Clinch Long Woodbridge Lawyers, that was described in the call option agreement as the “Grantee’s Solicitors Trust Account”.  Clinch Long Woodbridge Lawyers were also nominated in the draft contract as the buyer’s solicitor, in the event of the Contract coming into existence. 
  9. [9]
    The call option agreement provided for release of the Call Option Fee in some circumstances “so as to progress the Development”.  Under that provision, Clinch Long Woodbridge Lawyers made payments by way of release of the Call Option Fee paid by the plaintiff and the similar fees paid by the other group members, as follows:
    1. (a)
      on 31 January 2018, $618,750 to the solicitors for the seller of Lot 999 for the first instalment of the purchase price payable by the first defendant for Lot 999;
    2. (b)
      on 28 March 2018, $1,958,019.84 for the balance of the purchase price payable for Lot 999;
    3. (c)
      on 28 March 2018, $145,283 for stamp and transfer duties on the purchase of Lot 999 by the first defendant.
  10. [10]
    That is to say, $2,722,052.84 of the purchase price of Lot 999 was paid from the amounts paid by the plaintiff and the other group members for the Call Option Fees, that totalled $3,535,000.
  11. [11]
    Although other payments were not precisely identified, the balance of the amount of $3,535,000 was also paid from the Grantee’s Solicitors Trust Account at the direction of Smart Property Research Pty Ltd, in payment of invoices directed to the first defendant.
  12. [12]
    On 11 June 2018, after settlement of the purchase contract, the first defendant became the registered owner of Lot 999.
  13. [13]
    On 6 June 2018, (apparently in anticipation of the settlement of the purchase of Lot 999) the first defendant as borrower and mortgagor entered into a written loan agreement and mortgage transaction with seven lenders who were not parties to the call option agreements.  The amount borrowed was $1,500,000.  The term of the loan was 6 months.  The interest rate was the higher rate of 48 percent reducing to 30 percent in the event of compliance with the terms of the loan agreement and mortgage.
  14. [14]
    The security for the loan was a first mortgage in registrable form granted over Lot 999 by the first defendant as mortgagor to the lenders as mortgagees.
  15. [15]
    On 12 June 2018, the mortgage was registered.
  16. [16]
    The mortgage was granted without any consent of the plaintiff or any of the group members.
  17. [17]
    On 12 August 2018, the solicitor for the plaintiff and the other group members became aware of the mortgage.
  18. [18]
    On 3 September 2018, the plaintiff and each of the other group members lodged a caveat over Lot 999.  In each case, the lodgement fees were $495.
  19. [19]
    The loan was not repaid by the due date in December 2018.
  20. [20]
    On 18 December 2018, a transfer of the mortgage by the mortgagees to Phil Anderson Investments Pty Ltd was registered.
  21. [21]
    On 25 February 2020, Phil Anderson Investments Pty Ltd appointed a receiver and manager of Lot 999 under the mortgage.
  22. [22]
    On 23 October 2020, the plaintiff and each other group member sent a notice to the first defendant terminating the call option agreement.
  23. [23]
    On 24 November 2020, the receiver sold Lot 999.  On settlement of the sale there was a deficiency.
  24. [24]
    On 13 April 2021, the first defendant went into a creditors’ voluntary winding up.
  25. [25]
    On 19 April 2021, leave to proceed in this proceeding was granted against the first defendant.
  26. [26]
    The plaintiff and each of the other group members has lost the whole of the amount of the Call Option Fee of $35,000 and the expense of the lodgement fees of $495. 

Alleged breach of contract by the first defendant

  1. [27]
    Clause 6.3(a)(i) of the call option agreement provided:

“(a) The Grantor will not:

  1. (i)
    after the date of this Agreement and before its expiry create any mortgage, charge, lien, lease, licence, option, encumbrance or any adverse claim or interest concerning the Property without the Grantee’s prior express written consent;”
  1. [28]
    The plaintiff alleges that the grant of the mortgage over Lot 999 by the first defendant in June 2018 was a breach of cl 6.3(a)(i), a breach of contract by both of the defendants at common law and an “event of default” under the call option agreement.
  2. [29]
    The defendants deny the alleged breach and event of default on the ground that Lot 999 was not the “Property” within the meaning of cl 6.3(a)(i).

Provisions of the call option agreement

  1. [30]
    By cl 1.1 of the call option agreement, the “Call Option” was defined to mean the option granted under cl 2.  Clause 2.1 provided that, in consideration of the Grantee paying the Call Option Fee to the Grantor, the Grantor granted to the Grantee an option to purchase the “Property” on the terms set out in the “Contract”.  The “Call Option Fee” was defined as $35,000. 
  2. [31]
    Also by cl 1.1, the “Property” was defined to mean the property described in the “Contract”.  The “Contract” was defined to mean the contract for sale of land in sch 3.  Schedule 3 provided that the Property was described as “[p]roposed Lot 602 Crest Estate Development” on the “[p]roposed unregistered Survey Plan”, being the concept plan. 
  3. [32]
    If the Call Option was exercised, under cl 2.5(a) the Call Option Fee was to become the deposit under the Contract.  The “Purchase Price” under the Contract was $141,000.  The draft contract identified Clinch Long Woodbridge as the deposit holder and Clinch Long Woodbridge Trust Account as the deposit holder’s trust account. 
  4. [33]
    Clause 2.3 provided that the Grantee may exercise the Call Option by serving a “Notice of Exercise of Call Option” and the Contract duly executed and dated on the Grantor during the “Call Option Exercise Period”.  The Call Option Exercise Period was defined to mean anytime between the date that a “Notice of Equity Uplift” was served and 5pm on the “Call Option Expiry Date”.
  5. [34]
    Clause 3.3 provided for an “Equity Uplift Notice”.  Clause 3.3(b) provided that if, at any time before the “Sunset Date”, a nominated person held data that in its discretion evidenced similar blocks selling consistently for a price $35,000 above the Purchase Price, the nominated party was at liberty to serve an Equity Uplift Notice which would start the Call Option Exercise Period. 
  6. [35]
    The nominated person with that power was “SPR”.  That expression was defined to mean Smart Property Research Pty Ltd.  Clause 3.1 further provided that SPR was also to act as a facilitator concerning the “Development” and to be an independent party to assist in the progression of the Development, the handling of the Call Option Fee and the regulating of the Grantor meeting its obligations under the call option agreement.  Clause 1.1 defined the Development to mean the proposed residential redevelopment of the “Property” by the grantor as set out in cl 5.
  7. [36]
    Clause 3.1 also provided for the appointment of the “Buyer’s Agent”.  That term was defined to mean Paul Loughland.  By cl 3.1(c), the Grantee appointed the Buyer’s Agent as its nominated agent to liaise with the Grantor and/or SPR in relation to all matters concerning the call option agreement, the Contract and the Property.  By cl 3.1(a), the Grantee acknowledged that it must use the Buyer’s Agent to assist in facilitating the transaction under the call option agreement and the Contract.
  8. [37]
    Clause 3.2 provided for the release of the Call Option Fee.  It obliged SPR to engage in discussions with the Grantor regarding the progress of the Development.  It provided that the parties acknowledged and agreed that, at certain periods of time and stages of the Development, the Grantor may require access to some or all of the Call Option Fee so as to progress the Development.  It further provided that SPR was authorised to serve a release notice to the Grantee’s Solicitor, following which the solicitor was at liberty to release the amount of the Call Option Fee from the Grantee’s Solicitors Trust Account as requested by SPR.
  9. [38]
    Clause 5.1 provided for the Grantor to make application for “Development Approval” for the Development at its own expense and cl 5.3 provided that, should the Grantor not receive Development Approval by a specified “Development Approval Deadline”, the Grantee would be at liberty to rescind the call option agreement.  By cl 5.4, on rescission, the Grantor was obliged to refund the Call Option Fee.  By cl 5.5, the Grantor was obliged to keep the Grantee updated as to the process of the Development by providing, inter alia, updates on a monthly basis to SPR.
  10. [39]
    Clause 6 of the call option agreement provided for representations and warranties by the parties.  Clause 6.1(f) provided, in part, that each party warranted that:

“…neither its execution of, nor its exercise of its rights or performance of its obligations under, this Agreement does or will:

  1. (i)
    contravene any applicable law to which it or any of its Property is subject;
  1. (ii)
  1. (iii)
    contravene any undertaking or instrument binding on it or any of its Property…”Clause 6.2 provided:

“The Grantor will from the date of this Agreement until the date of entry into the Contract or the Call Option Expiry Date, whichever first occurs:

  1. (a)
    maintain the Property subject to fair wear and tear; and
  1. (b)
    insure the Property for its full insurable value.”
  1. [40]
    Clause 6.3 provided:

“(a) The Grantor will not:

  1. (i)
    after the date of this Agreement and before its expiry create any mortgage, charge, lien, lease, licence, option, encumbrance or any adverse claim or interest concerning the Property without the Grantee’s prior express written consent;
  1. (ii)
    increase the encumbrance of the Property with a mortgagee under a mortgage or any further charge by the mortgagee;
  1. (iii)
    deal with the Property in any manner inconsistent with the Grantee’s rights under this Agreement including, without limiting the generality of the foregoing, sell or otherwise dispose of the Property without the Grantee’s written consent;
  1. (iv)
    remove or destroy, or allow to fall into dilapidation, any fixtures, fittings, chattels and inclusions on the Property that form part of the Contract; or
  1. (v)
    object to, and not cause or allow any person or entity related to or associated with the Grantor to object, to any application by the Grantee for the development of the Properties.
  1. (b)
    The Grantor agrees that the Grantee may register a caveat on the title to the Property to give notice of its rights pursuant to this Agreement, provided that the Grantee:
  1. (i)
    may not prevent or delay registration of any dealing affecting the Property not inconsistent with the rights of the Grantee under this option; and
  1. (ii)
    will withdraw the caveat upon the Agreement coming to an end.”

The constructional question

  1. [41]
    The question to be decided is whether, on the proper construction of cl 6.3(a)(i), “Property” meant proposed Lot 602 or whether it included Lot 999 prior to the creation of the proposed lot.  According to the ordinary meaning of the text of the definitions of “Property” and “Contract” in cl 1.1, “Property” meant proposed Lot 602. 
  2. [42]
    The defendants submit, accordingly, that there was no restriction under cl 6.3(a)(i) that prohibited the first defendant from granting the mortgage. 
  3. [43]
    The plaintiff submits that, properly construed, “Property” included Lot 999 prior to the creation of proposed Lot 602. 
  4. [44]
    The modern approach to the constructional task of ascertaining the rights and liabilities of parties under a provision of a commercial contract is summarised as follows:

“The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean.  That inquiry will require consideration of the language used by the parties in the contract, circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.”[1]

  1. [45]
    When attention is given to the other provisions of the call option agreement, as summarised above, it becomes apparent that the defined word “Property” was not used consistently, as follows. 
  2. [46]
    Recital A provided that the Grantor is, or intends to be, the registered proprietor of the “Land”.  In context, the recital referred to Lot 999.  However, “Land” was not defined or further identified or used in the call option agreement.
  3. [47]
    “Development” was defined in cl 1.1 as the “proposed residential redevelopment of the Property” by the Grantor as set out in cl 5.  In that context, “Property” referred to Lot 999.
  4. [48]
    Clause 5.1 referred to the process of the Grantor making application for Development Approval “to use, develop, redevelop or carry out building work on the Property in relation to the Development”.  In that context, “Property” referred to Lot 999.
  5. [49]
    Clause 6.1(f) provided that the performance of obligations under the call option agreement would not contravene any applicable law to which a party or any of its “Property” was subject, or any undertaking or instrument binding on it or any of its “Property”.  In context, “Property” referred to the parties’ existing property, not proposed Lot 602. 
  6. [50]
    Clause 6.2 provided that from the date of the call option agreement the Grantor would maintain and insure the Property.  In that context, “Property” referred to Lot 999.
  7. [51]
    Clause 6.3(b) provided that the Grantee may register a caveat on the title to the “Property to give notice of its rights pursuant to this Agreement”.  In context, that referred to Lot 999, not proposed Lot 602.  Once the proposed Lot 602 was created and the Contract came into existence on exercise of the Call Option, the interest of the Grantee as buyer under the Contract would have been an interest in the land comprised in Lot 602.  As buyer under the Contract, the former Grantee would not then require the Grantor’s agreement to lodge a caveat over Lot 602.
  8. [52]
    Accordingly, it can be seen that outside cl 6.3(a)(i), the capitalised expression “Property” is used on a number of occasions to refer to either Lot 999 or a party’s property and not to proposed Lot 602, inconsistently with the defined meaning of “Property”. 
  9. [53]
    Clauses 3.2(b) and (c) envisaged that the Grantor may require access to the Call Option Fee to progress the Development and that the Call Option Fee would be released from the Grantee’s Solicitors Trust Account at the request or direction of SPR.  In that event, the only protection that the Grantee had for the money paid as the Call Option Fee and which was to become the deposit under the Contract if the Call Option were exercised was the interest that the Grantee held under the call option agreement.  That interest did not constitute an interest in the land that would support a caveat over Lot 999 before proposed Lot 602 was created and the Contract for sale of proposed Lot 602 came into effect. 
  10. [54]
    The plaintiff submits that it would make no sense that cl 6.3(a)(i) (or (iii)) only operated once the Development had been completed by the proposed subdivision being carried into effect and separate titles to the individual lots were created, because the plaintiff was exposed to the risk of the first defendant dealing with the whole of the unencumbered Lot 999 before that time.
  11. [55]
    A well-known statement of the relevant principles where something may have gone wrong with the text of a contractual provision is as follows:

“It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’… Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument.”[2]

  1. [56]
    I also venture to rely upon what I said on the subject of the proper construction of a contract where something may have gone wrong with the language in a recent case, without repeating it.[3]
  2. [57]
    In the present case, in my view, the degree of inconsistency in the use throughout the call option agreement of the defined term “Property” is such that the meaning to be given to it in cl 6.3(a)(i) should be approached in a business-like manner having regard to the object of the call option agreement and the protective purpose which the subparagraph was designed to effect. 
  3. [58]
    A possible contrary argument that was not advanced by the defendants is that the Grantor’s inability to mortgage Lot 999 without the consent of the Grantee would prevent the use of Lot 999 as security for finance to carry out the Development without the prior consent of each of the 101 group members.  Against that, cl 5.1(a) expressly provided that obtaining Development Approval was at the Grantor’s own expense.  And by cls 3.1(a) and (c) the Buyer’s Agent had authority to give the consent that may have been required under cl 6.3(a)(i).
  4. [59]
    The better conclusion, in my view, is that the word “Property” in cl 6.3(a)(i) included Lot 999 prior to the creation of Lot 602.

Conclusions on the plaintiff’s claim

  1. [60]
    It follows that the grant of the mortgage by the first defendant was a breach of cl 6.3(a)(i), a breach of contract at common law and an event of default under cl 8.1.
  2. [61]
    At no stage did the Development ever progress.  It is not suggested that the first defendant carried out any work to do so.  From the day after the first defendant become the registered owner of Lot 999 it had mortgaged that land for $1.5 million for purposes that were not suggested to be related to the Development.  The overall project of the Development was dead in the water from that time, so far as the evidence showed.
  3. [62]
    The plaintiff’s and group members’ alleged losses are the amounts of their wasted expenditures under the call option agreements.  There is highest authority for the proposition that, where it is not possible for a plaintiff to demonstrate whether and to what extent the performance of a contract would have resulted in a profit, the plaintiff can seek to recover expenses reasonably incurred.[4]
  4. [63]
    It was not suggested or pleaded that, had the call option agreement been performed, the plaintiff would not have fully recovered the amount of the expenses claimed. 
  5. [64]
    It was also not suggested or pleaded that the plaintiff’s loss was limited to the value of a loss of a valuable opportunity to make a profit under the call option agreement.
  6. [65]
    In my view, the amounts of $35,000 and $495 paid by each of the plaintiff and the other group members were expenses reasonably incurred.
  7. [66]
    It follows that judgment should be given for the plaintiff in the amounts claimed as damages at common law for breach of contract.  It is unnecessary to consider the alternative claim made under the contractual indemnity in cl 8.5 of the call option agreement.
  8. [67]
    Clause 9.1(a) of the call option agreement provided that the second defendant as Guarantor guaranteed the first defendant as Grantor’s performance of its obligations contained in the call option agreement.  The Grantor’s promise not to mortgage the Property under cl 6.3(a)(i) without the Grantee’s prior express written consent was such an obligation.
  9. [68]
    It follows that the breach of cl 6.3(a)(i) by the first defendant was also a breach of the second defendant’s promise under cl 9.1(a) and that the plaintiff’s and group members’ losses are recoverable from the second defendant as damages for breach of contract.  It is again unnecessary to consider the alternative claim made under the contractual indemnity in cl 9.1(b) of the call option agreement.

Conclusions on the award of damages for group members

  1. [69]
    Under s 103V(1)(e) of the Civil Proceedings Act 2011 (Qld), the Court may make an award of damages for individual group members consisting of stated amounts worked out in a stated way.
  2. [70]
    It follows from the findings made as to the losses suffered by each group member that the judgment in the proceeding should be that the defendants pay the plaintiff and each group member the amount of that loss.

Costs

  1. [71]
    The plaintiff applies for an order that the defendants pay the plaintiff’s costs of the proceeding to be assessed on the indemnity basis, but as against the first defendant not including the costs of and from the hearing on 19 April 2021.
  2. [72]
    The Court’s power to award costs under s 15 of the Civil Proceedings Act 2011 (Qld) and Chapter 17A of the Uniform Civil Procedure Rules 1999 (Qld) includes the power to order that the costs be assessed on the indemnity basis[5] and that power may be engaged where the party ordered to pay costs has agreed to it.[6]
  3. [73]
    In the present case the plaintiff relies on the indemnity provisions of the call option agreement as such agreements.  As against the first defendant, cl 8.5 provided:

“The defaulting party indemnifies the innocent party against any or all losses, claims, debts, allegations, suits, actions, demands, causes of action, claims for account and proceedings including damages or other monetary sums or any other form of compensation in connection with tort, contract, quasi contract, quantum meruit, unjust enrichment, restitution, misrepresentation, breach of trust or of a fiduciary or other duty or obligation or under any statutory provisions, including financial or consequential loss, to extent that it arises from or is connected with any breach of any warranty or any other term of this Agreement.”

  1. [74]
    As against the second defendant, cl 9.1(b) provided:

“In consideration of the Grantor receiving the Call Option from the Grantee, each Guarantor separately guarantees to the Grantee:… each Guarantor separately indemnifies the Grantee against all liability or loss arising from and any cost incurred in connection with a breach by the Grantor or any other Guarantor of this Deed or the Vendor or any Guarantor under the Contract if the Call Option is exercised.”

  1. [75]
    In my view, neither clause provided for the relevant defendant to pay legal costs to be assessed on the indemnity basis “plainly and unambiguously”.[7]  As well, the plaintiff did not give notice of the application for indemnity costs or its basis in the pleadings or otherwise prove such notice had been given.[8]
  2. [76]
    Accordingly, the appropriate order for costs is that they should follow the event, as provided in the rules,[9] and be assessed on the standard basis, which applies unless the rules or an order of the Court otherwise provides.[10]

 

Footnotes

[1] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 116 [46]-[47].  See also Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544, 551 [16]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 131–132 [108], 134 [118]-[120]; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, 656–657 [35]; Byrnes v Kendle (2011) 243 CLR 253, 284 [98]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151, 160 [8], 174 [53]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 461–462 [22].

[2] Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109.

[3] Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd (2019) 1 Qd R 392, 423-427 [100]-[114].

[4] Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64.

[5] Uniform Civil Procedure Rules 1999 (Qld), r 703.

[6] Clarence Property Corporation Limited v Sentinel Robina Office Pty Ltd [2019] QSC 13, [8].

[7] Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229, [6]; Chen and Xu v Kevin McNamara & Son Pty Ltd [2012] VSCA 229, [8].

[8] Clarence Property Corporation Limited v Sentinel Robina Office Pty Ltd [2019] QSC 13, [11].

[9] Uniform Civil Procedure Rules 1999 (Qld), r 681(1).

[10] Uniform Civil Procedure Rules 1999 (Qld), r 702(1).

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Editorial Notes

  • Published Case Name:

    Vicini v GM Investment Property Pty Ltd (in liq) & Anor

  • Shortened Case Name:

    Vicini v GM Investment Property Pty Ltd (in liq)

  • MNC:

    [2021] QSC 83

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    23 Apr 2021

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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