NSI Group Pty Ltd & Ors v Mokas & Anor [2006] NSWSC 976

New South Wales Supreme Court

CITATION : NSI Group Pty Ltd & Ors v Mokas & Anor [2006] NSWSC 976

HEARING DATE(S) : 5 September 2006

JUDGMENT DATE : 5 September 2006

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 09/05/2006

DECISION : Application refused.

CATCHWORDS : INTERLOCUTORY PROCEEDINGS – INTERLOCUTORY DECLARATION – whether the Court can, or should, make an interlocutory declaration of right as to the construction of a contract.

LEGISLATION CITED : Uniform Civil Procedure Rules 2005 (NSW) - Pt 25 r 25.3

NSI Group Pty Ltd – First Plaintiff Sarahton Pty Ltd – Second Plaintiff PARTIES : Nader & Ishak Holdings Pty Ltd – Third Plaintiff Petros Mokas – First Defendant Themistocles Mokas – Second Defendant

FILE NUMBER(S) : SC 3426/06

COUNSEL : N.A. Cotman SC – Plaintiffs J.S. Whyte – Defendants

SOLICITORS : Dibbs Abbott Stillman – Plaintiffs Solari Legal – Defendants

1 The Plaintiffs have sought and obtained leave to file in Court a Notice of Motion, returnable instanter, seeking certain interlocutory relief. The Defendants have appeared by Mr Whyte of Counsel to oppose the relief sought. The matter has been fully argued to a conclusion. 2 The application is to be understood against the following very brief background of fact, none of which is in dispute. 3 The Plaintiffs have commenced proceedings against the Defendants arising out of a transaction between them which I will describe in neutral terms as follows. The Plaintiffs allege that they entered into an agreement with the Defendants, who are the owners of certain land, whereunder they would build upon the Defendants' land a block of home units and that at the end of construction the Plaintiffs would be entitled to twelve of those units, to sell or dispose of as they wished, and the Defendants would be entitled to six of those units to sell or dispose of as they wished. The land has at all times remained in the name of the Defendants. The Plaintiffs have completed, or nearly completed, the construction of the building. 4 A dispute has arisen between the parties as to whether the Plaintiffs are entitled to the benefit of the twelve units which they claim. I need not go into the details of that dispute. Proceedings have been commenced and will, in due course, come on to trial in the Court. 5 On 5 July 2006 the parties agreed to a method of regulating their affairs pending determination of the proceedings. The situation then was that the Plaintiffs had entered into contracts for sale of three of the units to third parties. The Plaintiffs, of course, did not have title to those three units, title to the land reposing in the Defendants. 6 The Plaintiffs and the Defendants agreed that it would be for their mutual advantage for those sales to proceed and they be left then to fight over the proceeds of sale. To that end the parties drew up a document entitled "Interim Management Agreement". That document is dated 5 July 2006 and is signed by the solicitor for each of the Plaintiffs and the Defendants. 7 On 5 December, by consent, the Court noted, without admissions, the agreement of the parties as set out in the Interim Management Agreement and stood over a motion which had been filed returnable on that date to the date set for final hearing of the proceedings. 8 A dispute has now arisen between the parties as to the construction of the Interim Management Agreement. The dispute arises in this way: because title to the three units the subject of the contracts for sale is not in the Plaintiffs, the Plaintiffs are required to get in the title from the Defendants in order to complete those contracts. The Plaintiffs, therefore, have to deliver to the purchasers of the units on settlement stamped and executed transfers of the properties from the Defendants to the Plaintiffs. The issue which divides the parties is whether the Plaintiffs may, at least as an interim measure, have recourse to the fund established the Interim Management Agreement to pay the stamp duty on the transfers from the Defendants to the Plaintiffs. 9 The relevant terms of the Interim Management Agreement are as follows: "5. Proceeds of sale net of commissions and costs shall be deposited to a controlled monies account ("Controlled Monies Account") in the name of Solari Legal under the joint control of the plaintiffs' and defendants' solicitors on the court record from time to time.