Muriti v Prendergast [2005] NSWSC 922

New South Wales Supreme Court

CITATION : Muriti v Prendergast [2005] NSWSC 922

HEARING DATE(S) : 29,31/08/05, 01,12/09/05

JUDGMENT DATE : 13 September 2005

JUDGMENT OF : Burchett AJ

DECISION : Report of expert adopted subject to variations and deletions.

CATCHWORDS : Practice and Procedure - reference of questions to expert - Part 72 of the Supreme Court Rules - transitional provisions of Civil Procedure Act - reference to continue under Part 72 - report adopted with variations and certain questions referred back.

Civil Procedure Act 2005 LEGISLATION CITED : Uniform Civil Procedure Rules 2005 Supreme Court Rules 1970

Vincent Carl Muriti (first plaintiff) Keanlong Pty Limited (second plaintiff) PARTIES : John Francis Prendergast (first defendant) Rolcross Pty Limited (second defendant) Worthbrook Pty Limited (third defendant)

FILE NUMBER(S) : SC 5094 of 2004

COUNSEL : Mr J W J Stevenson SC, Mr G Curtin, Ms N C Bearup (plaintiffs)

Henry Davis York (plaintiffs) SOLICITORS : The first defendant appeared in person and (by leave) for the other defendants

LOWER COURT JURISDICTION :

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BURCHETT AJ

13 September 2005

5094 of 2004 VINCENT CARL MURITI AND KEANLONG PTY LIMITED V JOHN FRANCIS PRENDERGAST, ROLCROSS PTY LIMITED AND WORTHBROOK PTY LIMITED JUDGMENT 1 These reasons for judgment concern yet another stage in the progress, much interrupted by litigation, of a complex commercial transaction towards completion. When the agreement initiating the transaction was made on 4 August 2004, it was contemplated by its clause 13 that completion would take place "as soon as practicable" and, subject to preparation of documents and rearrangement of securities, "prior to 30 September 2004". Almost twelve months later, and after a specific performance suit, a rectification suit, an application for leave to rescind for repudiation and various applications for declaratory and other relief, the date of completion seems still to be receding like a traveller's weary horizon. As the facts have already been recited in two detailed judgments, one delivered by White J on 11 April 2005 and the other by myself on 2 June 2005, I shall not repeat them here, except to say what is essential for an understanding of the nature of the present issues. 2 Subject to the rectification relief granted by White J, which did not concern any of the matters now before me, and some further terms agreed in connection with the specific performance proceeding, the core agreement between the parties is that of 4 August 2004 to which I have already referred. That agreement was called "Heads of Agreement". It provided the terms on which Messrs Prendergast and Muriti and entities controlled by them should separate their respective interests in a Mercedes Benz dealership known as "Marshalls Motors", a motor vehicle repair business known as "Perfect" and various properties associated with these businesses. The object was to leave the businesses in the hands of Mr Muriti and Keanlong Pty Limited, a company controlled by him, and the real estate in the hands of Mr Prendergast and entities controlled by him, Rolcross Pty Limited and Worthbrook Pty Limited, subject to leases to enable the businesses to be carried on at their existing locations. It was envisaged that at completion there should be a process of setting off but also substantial sums should be paid in cash. 3 It is convenient that I should divide into separate sections my discussion of the particular issues that now arise. (a) An aspect of the agreement, in respect of which some dispute developed early in the history of the matter, was the form of the leases to be entered into. After some debate, the parties decided to refer for the decision of an expert, being the solicitor Margaret C Hole, those issues which arose, in respect of the drafting of the leases, from their agreement that the clauses to be inserted, other than those they had specified, should be "Normal commercial terms". Subsequently, when further disputes developed in respect of various matters of detailed conveyancing practice, I made on 25 May 2005 an order pursuant to Part 72 Rule 2 of the Supreme Court Rules referring to Ms Hole a number of additional questions. On 27 June 2005 she furnished her report under Part 72, and the question arises under Rule 13 of that Part whether the report should be adopted and what orders I should make in respect of it. I should note that an earlier report in relation to a number of aspects of the form of the leases had been made by Ms Hole on 24 November 2004, one important aspect of which was the subject of a separate question raised before me as to which separate reasons will be delivered. The first question which arises now is whether the present proceeding, and any further step to be taken by Ms Hole, should continue to be governed by Part 72 of the Supreme Court Rules, 1970 or, now that the Civil Procedure Act, 2005 and the Uniform Civil Procedure Rules 2005 have come into effect, should for the future be governed by those Rules. Section 6 (3) of the Civil Procedure Act gives effect to Schedule 6 in which are to be found transitional provisions and, in particular, clause 5 dealing with pending proceedings. By clause 5 (1) the Uniform Rules apply to a proceeding commenced before the commencement of the Civil Procedure Act, but they do so subject to sub-clause (2) of that clause. Under sub-clause 2, the Court "may make such orders dispensing with the requirements of the uniform rules in relation to the proceedings, and such consequential orders …, as are appropriate in the circumstances". In my opinion, it would be appropriate, the reference having been made under Part 72 of the old Rules, that it continue to be dealt with under those Rules. I shall order accordingly.