Raad v Toplot/Toplot v Raad [1999] NSWSC 1035

New South Wales Supreme Court CITATION : Raad v Toplot/Toplot v Raad [1999] NSWSC 1035 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 11709/98; 11735/98 HEARING DATE(S) : 03/02/99 JUDGMENT DATE : 15 October 1999

PARTIES : Milad Sarkis Raad Toplot Pty Limited JUDGMENT OF : Dowd J

LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 1676/94 LOWER COURT JUDICIAL OFFICER : Magistrate M Stoddart

COUNSEL : Mr J Patel Mr C Stomo SOLICITORS : Milad S Raad & Associates Wight & Strickland CATCHWORDS : Stated case - no error on verdict; Stated case concerning costs; No error on indemnity costs - wrong application of scale ACTS CITED : Local Courts (Civil Claims) Act 1970 Hurstville Municipal Council v Connor &Anor (1991) 24NSWLR 724 Dennis v Watt (1942) 43SR 32 CASES CITED : Mitchell v Nestle Australia Ltd (1988) 36ACR 119 Wentworth v Rogers (1986) 6NSWLR 534 Fountain Select Meats v International Product Merchants (1998) 81ALR 39 Degman Pty Ltd v Wright (No.2) (1993) 2NSWLR 534 DECISION : Stated case on verdict dismissed; Stated case on costs upheld in part; Costs order substituted

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1 By Summons, each of the plaintiffs have commenced proceedings as an appeal by way of stated case from decisions of Stoddart M, at the Burwood Local Court in respect of proceedings brought by Toplot Pty Limited ('Toplot') against Milad Sarkis Raad ('Raad') in the Civil Claims Jurisdiction, for monies owed under a contract for sale of a real estate business. 2 The background facts are that in early 1991, Toplot agreed to buy a Real Estate agency and three rent rolls from P & M Jones Real Estate Pty Limited ('Jones'). Four separate agreements were entered into. All the sales were concluded on 16 April 1991. Three of the agreements dated 22 March 1991 were drawn by Raad, who was the solicitor for Jones. 3 Clause 3 of the Rent Roll Agreements provided for a retention fund to be invested by Raad. The funds were to be released in circumstances set out in Clause 3(b) of each Agreement. 4 Raad paid approximately half of the retention funds of the sum of $15,000, but disputed Toplot's claim for the remainder. Raad released the balance of the retention funds, some of which were paid to himself, and paid other debts of Jones. 5 In the proceedings, Toplot claimed that Raad breached Clause 3 of the Rent Roll Agreements and that Raad owed a duty of care to Toplot to exercise reasonable skill, care and diligence, and competence as a solicitor, to invest the retention funds and to release the funds only in accordance with the agreements, and that Raad held the retention funds on trust and had a fiduciary relationship duty to Toplot, and that he had a duty not to abuse his position and to use due skill and care in the conduct of his affairs. The amount claimed was $15,782.14 as liquidated damages. 6 The court hearing, which was lengthy and involved protracted cross-examination, had been preceded by a considerable number of procedural motions and preliminary hearings, with protracted hearings in relation to pleadings and the issues in the proceedings. The hearing was followed by extensive written submissions before determination by his Worship, who found that the principal issue for determination by the court was the interpretation of the three rent roll Agreements, and in particular cl 3. There was no issue that Raad was acting for Jones in relation to the agreement. 7 The Learned Magistrate found, on a preliminary issue relating to Toplot filing a Notice of Discontinuance, that Toplot had an entitlement to recommence the proceedings. Raad's contention was that Toplot's witness, Mr Kenneth Wolf, failed to substantiate his legal entitlement in respect of three subject properties, giving rise to the entitlement of a refund. 8 His Worship found that Mr Wolf, Toplot's witness, was unable to give evidence to substantiate Toplot's claim, and His Worship found that Raad was entitled to disburse the retention funds in the way that he did. 9 The Learned Magistrate found for Raad, and made an order for costs against Toplot, but declined to make that order for costs on an indemnity basis. 10 The Summons filed by Raad attaching a Stated Case on the order for costs, sought a declaration that the determination of the Learned Magistrate was erroneous in point of law, and sought an order reversing, affirming or amending the determination, and that the stated case which was attached to the summons be remitted to the Magistrate. Costs were also sought. 11 The costs judgment was made on 4 May 1998, and awarded defendant's costs assessed at $8,300.00.