JKAM Investments Pty Ltd ACN 159 084 018 v Damien [2021] NSWSC 70

Supreme Court New South Wales

Medium Neutral Citation: JKAM Investments Pty Ltd ACN 159 084 018 v Damien [2021] NSWSC 70 Hearing dates: 15, 16, 17, 18 & 19 July 2019, 12 & 27 September 2019, 28 October 2019, 18 December 2019, 12 February 2020 Date of orders: 19 February 2021 Decision date: 19 February 2021 Jurisdiction: Equity Before: Slattery J Decision: See paragraph [433]. Catchwords: CONTRACTS – development of land – defendant is the registered proprietor of a property used for commercial purposes as a gymnasium and offices – property leased but in need of further development – land is mortgaged to financial institution – defendant unable to fund further construction works on the property – plaintiff takes a lease over the property and enters into a deed by which the plaintiff would fund construction works on the property and then acquire the property pursuant to a contract for sale – disagreement arises between the plaintiff and the defendant about the interpretation of the development deed – the plaintiff and the defendant each refuse to pay the monthly mortgage payments to the defendant's mortgagee, the mortgagee enters into possession and sells the property – the plaintiff alleges defendant has breached the development deed, an associated mortgage and the lease – whether the defendant is in breach as alleged. MISLEADING AND DECEPTIVE CONDUCT – plaintiff claims defendant made a series of misleading and deceptive statements inducing the plaintiff to enter into a lease, a development deed, a contract for sale of land and a mortgage – the plaintiff alleges that the defendant stated that the defendant was not in default to its first mortgagee and that there were no other prior encumbrances over the property – the plaintiff further alleges that the defendant represented that his residential property would be included in the grant of a mortgage to the plaintiff – the executed version of the mortgage omitted the residential property – whether the defendant made these and other related statements – whether these and other related statements were false or misleading – whether these and other related statements induced the plaintiff to enter into the development deed – where the plaintiff claims that the defendant did not disclose knowledge of prior encumbrances and a deed with the first mortgagee – whether the circumstances were such that the defendant had a reasonable expectation of disclosure of that knowledge to the plaintiff. ESTOPPEL – issue estoppel – former adjudication by this Court in separate proceedings between the same parties – finality of decisions – scope of issue estoppel – question as to whether the parties are bound by findings in the Court's previous determination of the priority between equitable interests – whether the plaintiff can contend for inconsistent findings in support of its claim for misleading and deceptive conduct against the defendant – whether the findings in the previous determination are fundamental to the conclusion – issue estoppel found to be binding. Legislation Cited: Australian Securities and Investment Commission Act 2001, ss 12BB, 12DA, 12DC, 12GF Civil Procedure Act 2005, s 100 Competition and Consumer Act 2010, Schedule 2 (Australian Consumer Law), ss 4, 13, 18, 30, 236, 237 Conveyancing Act 1919, ss 12, 120 Fair Trading Act 1987, ss 28, 32 Real Property Act 1900, s 59 Cases Cited: 70 Pitt Street Sydney Pty Ltd v McGurk [2004] NSWSC 413 Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No. 3) (2006) 67 NSWLR 341 Addenbrooke Pty Ltd (ACN 055 973 576) v Duncan and Others (No 2) (2017) 348 ALR 1 Blair & Perpetual Trustee Co Ltd v Curran (Adams' Will) (1939) 62 CLR 464 Browne v Flower [1911] 1 Ch 219 Burrell v R (2008) 238 CLR 218 Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2014] NSWSC 952 Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2015] NSWSC 272 Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2016] NSWSC 1607 Clayton v Bant (2020) 385 ALR 41 Cohen v Tannar [1900] 2 QB 609 Damien v JKAM Investments Pty Ltd [2015] NSWCA 368 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Dennett v Atherton (1872) LR 7 QB 316 Double Bay Newspapers Pty Ltd & Anors v AW Holdings Pty Ltd [1996] 42 NSWLR 409 Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] 128 CLR 529 Grosvenor Hotel Co v Hamilton [1894] 2 QB 836 Harrison Ainslie & Co v Lord Muncaster [1891] 2 QB 680 In the matter of JKAM Investments Pty Ltd [2015] NSWSC 2032 In the matter of JKAM Investments Pty Ltd [2016] NSWSC 1955 JKAM Investments Pty Ltd v Damien [2017] NSWSC 1182 Jones v Dunkel (1959) 101 CLR 298 Kelly v Rogers [1892] 1 QB 910 Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] FCA 400 Lam v Ausintel Investments Aust Pty Ltd (1990) 97 FLR 458 Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1989) 166 CLR 623 Line v Stephenson (1838) 132 ER 1075 Marginson v Blackburn Borough Council [1939] 1 All ER 273 Mason v Clarke (1955) AC 778 Merrill v Frame (1812) 128 ER 357 Miller & Associates Insurance Broking Pty Ltd (CAN 089 245 465) v BMW Australia Finance Ltd (CAN 007 101 715) (2010) 241 CLR 357 Miller v Emcer Products Ltd (1956) Ch 304 Moyston v The West Coal and Iron Company Ltd (1876) 1 CPD 145 Nash v Palmer (1816) 105 ER 1088 New Brunswick Railway Company v British & French Trust Corporation Ltd (1939) AC 1 Nia v Phuong (1993) 6 BPR 13 Peech v Best [1931] 1 KB 1 Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25 Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 Rogers v R (1994) 181 CLR 251 Sanderson v Berwick-upon-Tweed Corporation (1834) 13 Q.B.D 547 Stanley v Hayes (1842) 3 QB 105 Warman International Ltd v Dwyer (1995) 182 CLR 544 Texts Cited: B. Edgeworth, Butt's Land Law (7th ed, 2017, Thomson Reuters) S. Bower and K. R. Handley, Res Judicata (5th ed, 2019, LexisNexis Category: Principal judgment Parties: Plaintiff/Cross-Defendant: JKAM Investments Pty Ltd ACN 159 084 018 Defendant/Cross-Claimant: Karl Damien Representation: Counsel: Plaintiff/Cross-Defendant: P. Blackburn-Hart SC; L. Katsinas Defendant/Cross-Claimant: C. Stomo