FEDERAL COURT OF AUSTRALIA Gusdote Pty Limited v North Queensland Land Development Pty Limited (No 2) [2011] FCA 608 Citation: Gusdote Pty Limited v North Queensland Land Development Pty Limited (No 2) [2011] FCA 608 Parties: GUSDOTE PTY LIMITED (ADMINISTRATOR APPOINTED) ACN 089 937 253 v NORTH QUEENSLAND LAND DEVELOPMENT PTY LIMITED (IN LIQUIDATION) ACN 125 265 358 File number: NSD 1496 of 2010 Judge: EMMETT J Date of judgment: 30 May 2011 Date of hearing: 30 May 2011 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 5 Counsel for the plaintiff: V. R. Gray Solicitor for the plaintiff: Corporate and Civil Legal Counsel for the defendant: M. A. Jonsson Solicitor for the defendant: Preston Law IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1496 of 2010 BETWEEN: GUSDOTE PTY LIMITED Plaintiff AND: NORTH QUEENSLAND LAND DEVELOPMENT PTY LIMITED Defendant JUDGE: EMMETT J DATE OF ORDER: 30 MAY 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. As soon as practicable and in any event within 90 days from today, an account be taken under the supervision of a registrar of the Queensland District Registry of the Court of all benefits received by the defendant and all outgoings and expenses, including purchase price, incurred or paid by the defendant since 17 May 2007 in connection with the acquisition and holding of lot 400 on SP223926, title reference 50771526 (the Land). 2. If on the taking of such account it be found: 2.1 that the benefits received by the defendant exceed the outgoings and expenses incurred or paid by the defendant, the defendant transfer legal title to the Land to the plaintiff and pay the amount of such excess to the plaintiff within 14 days of the registrar certifying the amount of such excess; 2.2 that the outgoings and expenses incurred or paid by the defendant exceed the benefits received by the defendant, the defendant transfer legal title to the Land to the plaintiff within 14 days after the plaintiff pays to the defendant the amount certified by the registrar to be the amount of such excess; or 2.3 that the benefits received by the defendant are equal to the outgoings and expenses incurred or paid by the defendant, the defendant transfer legal title to the Land to the plaintiff within 14 days of the registrar certifying to that effect. 3. Liberty be reserved to either party to apply in relation to any matter arising in the taking of the account, or to request the registrar to refer to a judge of the Court any such matter, or to apply in relation to the implementation of these orders. 4. The question of the costs of the proceeding be reserved pending the taking of the said account. 5. The proceeding be listed for directions at 9.30am on Friday, 30 September 2011. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1496 of 2010 BETWEEN: GUSDOTE PTY LIMITED Plaintiff AND: NORTH QUEENSLAND LAND DEVELOPMENT PTY LIMITED Defendant JUDGE: EMMETT J DATE: 30 MAY 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 3 March 2011, I gave leave to the plaintiff in this proceeding (Gusdote) to file a statement of claim, and listed the proceeding for further directions on 8 April 2011. My reasons for making those orders (see Gusdote Pty Limited v North Queensland Land Development Pty Limited [2011] FCA 202) contained some provisional findings concerning the nature of the proceeding and the circumstances in which the proceeding arose. In these reasons, the terms used have the same meaning as defined in my earlier reasons. Following the filing of a statement of claim and a defence, the matter was fixed for further hearing today. 2 In the course of argument today, it emerged that there may have been some misunderstanding, arising from lack of communication between the parties, as to the precise relief now claimed by Gusdote, and the extent to which that relief is opposed by the defendant (North Queensland). North Queensland accepts that it is not entitled to benefit from the transfer of the Disputed Parcel. North Queensland's concern, however, is that there is evidence to indicate that the deposit of $200,000 was in fact paid to Gusdote, shortly after the contract for sale of 17 May 2007. In those circumstances, if legal title to the Disputed Parcel is to be transferred back to Gusdote by North Queensland, the sum should be reimbursed to North Queensland by Gusdote or credit should be given for that sum. 3 It is not clear whether the holding of the Disputed Parcel by North Queensland has resulted in a net benefit or a net loss to North Queensland. To the extent that there has been a loss occasioned by the holding of the Disputed Parcel, it is common ground that Gusdote should reimburse North Queensland in respect of outgoings properly incurred in maintaining the Disputed Parcel. On the other hand, to the extent that North Queensland has derived a profit from the holding of the Disputed Parcel, there should be an account of that profit to Gusdote. However, there may be a question as to whether or not the Liquidators contend that any such profit should be treated as an unsecured claim by Gusdote in the winding up of North Queensland. That question has not been argued and, at present, it is by no means clear whether or not it is purely hypothetical. 4 Ultimately, however, the Liquidators do not dispute that, subject to the proper taking of accounts, legal title should be transferred to Gusdote. In the circumstances, I consider that the appropriate course is to direct that an account be taken as soon as practicable of all benefits received by North Queensland, and all outgoings and expenses, including any purchase price, incurred or paid by North Queensland, since 17 May 2007, in connection with the acquisition and holding of the Disputed Parcel. Once the account has been taken, and it is determined whether Gusdote should pay money to North Queensland, or vice versa, a transfer may then be effected upon the payment of the excess either way, as the case requires. If, in the course of the taking of accounts, questions arise, they may be referred by the Registrar to the Court, on the application of either party. 5 That leaves open the question of the costs of the proceeding. In its application, Gusdote sought an order for transfer of the Disputed Parcel, without providing for any allowance in connection with payment of the purchase price or expenses incurred by North Queensland or the Liquidators. On the other hand, in early communications between the parties, the Liquidators, or their solicitors, asserted that the only course open to Gusdote was to prove in the winding up of North Queensland. In the result, neither of those views has prevailed. In the circumstances, I consider that the appropriate course is to await the outcome of the account, in order to see what money is owing as between the parties. That, in my view, will have a considerable bearing on the question of costs. It may be that neither party is entitled to all of its costs. That will depend upon the outcome of the account. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 2 June 2011