Ciccarelli v Cavasinni Developments [2004] NSWSC 992

New South Wales Supreme Court

CITATION : Ciccarelli v Cavasinni Developments [2004] NSWSC 992 HEARING DATE(S) : 30 September 2004 JUDGMENT DATE : 30 September 2004

JUDGMENT OF : McDougall J at [1] DECISION : See paras [29] - [31] of judgment

CATCHWORDS : INTEREST - where referee's report adopted - where no evidence that plaintiff has undertaken repairs quantified by referee in damages award - whether damages awarded by reference to cost of repair equivalent to diminution in value of premises - where allegation of delay - whether delay unreasonable - whether delay diminishes entitlement to interest - whether interest should be awarded at market rate or Schedule J rate - COSTS - where plaintiff did not entirely succeed on adoption application - whether partial success of plaintiff reason for departing from usual order for costs - PRACTICE AND PROCEDURE - where interlocutory orders made - where defendant seeks inquiry into whether defendant suffered loss from imposition of interlocutory orders - whether necessary for interlocutory relief to be granted Frank and Maria Ciccarelli (Plaintiffs) PARTIES : Cavasinni Developments Pty Limited (First Defendant) Wilhand Pty Limited (Second Defendant) FILE NUMBER(S) : SC 55046/01 COUNSEL : Mr D T Miller (for the Plaintiffs) Mr C C Dwyer (for the First Defendant) SOLICITORS : Colin Biggers & Paisley (for the Plaintiffs) Maclarens (for the First Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST

McDOUGALL J

30 September 2004 Ex tempore (Revised 21 October 2004)

55046/01 FRANK CICCARELLI & ANOR v CAVASINNI DEVELOPMENTS PTY LIMITED & ANOR JUDGMENT 1 HIS HONOUR: In these proceedings, I gave judgment on 2 September 2004, concluding that with certain exceptions identified in my reasons, the report of the referee should be adopted. I reserved to the parties the right to put submissions on interest and costs (the latter relating to the adoption dispute). 2 Cavasinni raises three matters arising out of my reasons. The first relates to interest. The second relates to the costs of the adoption dispute. The third relates to certain issues that, it says, were not determined by the referee and are, therefore, not decided by my decision that, in substance, the report should be adopted. 3 The issue on interest arises because, Cavasinni submits, there is no evidence that the Ciccarellis have undertaken any of the repairs that were quantified by the referee and that, to the sum of $51,282, I have in substance upheld. 4 Cavasinni also refers to what it characterises as two periods of significant delay. The first, said to be of about 12 months, relates to a period before the commencement of these proceedings and to a period when, it is said, the Ciccarellis were aware of the likely causation of damage to their factory premises by the Cavasinni retaining wall. The second period of delay relates to the time, approximately 15 months, that it took for the referee to produce his report. 5 Further, Cavasinni submits that if the Court is minded to award interest to the Ciccarellis, it should do so at market rates (said to be between 4 per cent and 5 per cent for the relevant time) rather than at Schedule J rates (10 per cent for part of the time and 9 per cent for the remainder). 6 The Ciccarellis have made it plain that they claim interest only from the date of commencement of the proceedings. They submit that the question of whether or not they have undertaken repairs is irrelevant; but that, in any event, there is no evidence either way. Mr Ciccarelli, who gave evidence before the referee, was not cross-examined on the point. 7 The Ciccarellis submit further that the damages that have been effectively awarded, although assessed by reference to the cost of repair, can be seen to represent the diminution in value of their premises by reason of the transmission of lateral loads from the Cavasinni property. 8 As to delay, the Ciccarellis submit that the usual principle is that the party who has had the use of the money should pay interest unless the delay can be laid at the feet of the party entitled to the money and the delay is, in all the circumstances, excessive. 9 As to the rate of interest, the Ciccarellis submit that no basis is shown for departure from the prescribed rates. 10 If it is appropriate to regard the amount that, to the extent that I have adopted the referee's report, is payable by Cavasinni to the Ciccarellis as reflecting the cost of repair then, on principle, it should be regarded as the cost of repair at the time the damage was sustained. 11 Mr Dwyer of counsel, who appears for Cavasinni, submits that there is no evidence as to when damage was sustained. However, it is clear on any view of the evidence that it had been sustained by the time the proceedings were commenced. 12 If the Ciccarellis had carried out the repairs, then their entitlement to interest would be undoubted. I see no reason why the position is different because (if it be the case) they have not carried out the repairs. I think it is appropriate to regard the sum as representing the diminution in value of the Ciccarellis' premises. If that is correct, then diminution had occurred at the very latest by the time the proceedings were commenced and it is appropriate to award interest from that date. 13 I do not regard any of the periods of delay referred to by Cavasinni as sufficient to diminish the amount of the Ciccarellis' entitlement to interest. That is because (now that it is clear that interest is claimed only from the date of commencement of the proceedings) the only real period of delay that is relevant is the delay in production of the report, and on any view that is something that cannot be attributed to the parties. To the extent that there was delay once the proceedings had been commenced, I am satisfied that the evidence of negotiations between the parties, in which the Ciccarellis sought to ascertain what works were being carried out and what was the impact of those works, indicates that they were not acting in any way unreasonably. 14 As to the third issue relating to the question of interest, I see no reason for departing from the statutory rates. There is no evidence before the Court that the Ciccarellis have paid interest on any indebtedness (assuming that they have any) at a lower rate, or that Cavasinni has earned interest on investments (assuming that it has any) at a lower rate. Even if those matters had been shown, I am not certain that they would operate to diminish the prima facie entitlement at the statutory rate. But in the absence of any evidence relating to the propriety of the statutory rates, I think that interest should be awarded at the rates from time to time applicable. 15 The question of costs arises because, it is submitted for Cavasinni, the Ciccarellis did not entirely succeed on the adoption application. That is because, in one respect, I rejected the referee's report. 16 As will be apparent from my reasons, the issue on which I disagreed with the referee was relatively confined in its scope. The proceedings before me were concluded in a day. The argument on the particular point did not occupy a great length of time. The preparation that was undertaken for the adoption hearing would not have been significantly different if that issue were not raised (because all of the relevant background and underlying material was necessary to be referred to in respect of the other issues in any event). 17 The real issue in these proceedings was whether the works undertaken by Cavasinni had caused the transmission of lateral load to the Ciccarellis' premises and, if so, whether damage had been suffered thereby. The particular matter in respect of which I disagreed with the referee related to the quantification of one of the claimed items of damage. On balance, I do not think that the partial success of Cavasinni is a reason for departing from the usual order for costs. 18 The alleged outstanding issues relate to the question of whether it was necessary for interlocutory relief to be granted. Cavasinni's position is that the interlocutory orders made on 10 October 2001 by Barrett J, in relation to the Cavasinni property, were not necessary. It says, therefore, that there should be an inquiry into whether it has suffered loss as a result of the imposition of those orders. 19 The order for reference made on 26 July 2002 required "the whole of the proceedings" to be referred to the referee for inquiry and report. As I recounted in my earlier reasons, the parties (it would appear, after some prodding from the referee) agreed that the issues that required determination were some 11 in number. They are paraphrased in paragraph 21 of my earlier reasons. There was no reference to the alleged necessity for the interlocutory orders, or to the question of loss or damage sustained by Cavasinni as a result of the imposition of those orders. 20 Mr Dwyer submitted that that is because the parties made it plain to the referee that he should not consider those matters. That may be so, although it does not appear from the issues that were given to him or from the report. But even if that be the case, I do not think that it is a relevant factor. 21 The Ciccarellis obtained interlocutory ex parte relief from Barrett J on 10 October 2001. Thereafter, that relief was continued, from time to time modified, by consent until ultimately, in circumstances recounted by the referee and referred to in my earlier reasons, the interlocutory orders (as modified) were discharged by consent. 22 In his reasons on the ex parte application, Barrett J recounted the evidence at that time. That included both evidence of the works carried out on the Cavasinni land and its alleged effect on the Ciccarelli premises, and evidence of correspondence, discussions and negotiations both between representatives of the parties and between the Ciccarellis and Fairfield Council. His Honour concluded that the case for interlocutory relief had been made out and that the balance of convenience favoured the granting of relief. 23 Nothing that happened thereafter gives me any reason (if I may say so with the greatest of respect) to question what his Honour said on 10 October 2001. For example, Cavasinni did not move to discharge the orders although, as I have said, they were from time to time varied, until there had been a very significant change in circumstances which meant that the continuation of the interlocutory relief was no longer justified. 24 Further, to the extent that the referee was asked to consider issues that bear upon the question (including the first, second, third, fifth, sixth, seventh and eighth issues), his findings support the view that the application for interlocutory relief was justified and support the conclusion of Barrett J that it should be granted. 25 This is not a case where there has been a final hearing in which the Court has determined that the Ciccarellis were not entitled to interlocutory relief. It is therefore not a case where, in terms, Cavasinni is entitled as of right to an inquiry as to damages. Both on the material before Barrett J and on the reasons given by the referee in relation to the particular issues that I have just nominated, I do not think that there is any utility in now conducting a final hearing to see whether, with the benefit of hindsight, interlocutory relief should have been granted. 26 If I thought, on the totality of the material, that there was a real likelihood that Cavasinni would suffer injustice if there were no inquiry as to damages then I might be inclined to take a different view. But the findings made by the referee seem to me to indicate quite clearly that there was a real case for interlocutory relief (I say that without intending in any way to express any dissatisfaction with the reasoning of Barrett J to which I have referred). 27 Further, the findings of the referee, which I have held should be adopted, make it plain that the works carried out by Cavasinni on its land did result in the transmission of lateral load to the Ciccarellis' premises and did result in loss and damage. That seems to me to make it almost unarguable that there would be any utility in now conducting a final hearing for the purpose of seeing, retrospectively, whether the Ciccarellis were entitled to the interlocutory relief which they have obtained. 28 If there were a real basis to argue that, one would have expected it to be argued back in 2001 or 2002, when the issue was live. Instead, as I have noted, the interlocutory regime, modified in certain presently irrelevant respects, was continued until the parties agreed that it was no longer necessary. There is no basis for any suggestion that it was continued for longer than necessary, or in my judgment, that it was unnecessary when it was first imposed and thereafter continued. 29 I therefore conclude that there is no utility in conducting any further hearing into the alleged outstanding issues. 30 The result is that the Ciccarellis should have interest on the sum of $51,282 from the date of commencement of these proceedings until the date of entry of judgment. They should have their costs of the notices of motion for adoption and rejection of the report. There should be no further hearing into any allegedly outstanding issues. 31 For the avoidance of doubt, the costs of the motion for adoption rejection include the costs of the argument before me today. ******