Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 Hearing dates: On papers Decision date: 30 August 2011 Before: Campbell JA at [1] Macfarlan JA at [117] Young JA at [118] Decision: (1) Appeal allowed in each matter. (2) Order the Respondents to pay the costs of the Appellants of each appeal. (3) Set aside the orders of the court below in each of matters 6278 of 2008 and 6280 of 2008 in the Equity Division of the Supreme Court of New South Wales other than any costs orders made prior to 5 March 2010, and the order made on 5 March 2010 concerning costs in matter 297497 of 2009 in the Equity Division of the Supreme Court of New South Wales. (4) In lieu thereof order: (a) Provided that Zoltan Tomanovic elects that such purchase should occur, making that election by notice in writing delivered to the solicitors for Kenneth Sayer no later than 30 days after the net value is ascertained and accepted by the court as applicable for the purpose of these orders, or within such further time as a Judge or Associate Judge of the Equity Division might hereafter permit, that Kenneth Sayer purchase free from encumbrance the shares owned by Zoltan Tomanovic in Argyle HQ Pty Ltd (" Argyle HQ ") at a price of 50% of the net value of Argyle HQ as at 30 June 2010; (b) That One Australia Pty Limited (" One Australia ") purchase free from encumbrances the shares owned by Australian Financial Services Corporation Pty Limited (" ASFC ") in Global Mortgage Equity Corporation Pty Limited (" GMEC ") at a price equal to 45% of the net value as at 30 June 2010 of GMEC, plus an amount equal to the amount of interest that has accrued on the judgment in proceedings 297497 of 2009 from and including 1 July 2010, minus the net value as at 30 June 2010 of any shares and units in the following entities that have been transferred to AFSC either by One Australia or Kenneth Sayer: (i) Multiown Loans Pty Limited (ACN 108 999 024); (ii) Multiown Realty Pty Limited (ACN 110 556 397); (iii) Multiown Pty Limited (ACN 106 117 104); (iv) Multiown Goods and Services Pty Limited (ACN 109 629 530); (v) Multiown Members Pty Limited (ACN 109 629 549) (vi) Multiown Trust; (vii) Multiown Loans Trust; (viii) Multiown Realty Trust; and (ix) Multiown Goods & Services Trust. (c) The valuations referred to in (a) and (b) above to be: (i) undertaking by reference to the market value of the whole share capital in Argyle HQ and GMEC, respectively; (ii) undertaken subject to an adjustment with respect to any net liabilities of Argyle HQ and GMEC (respectively) or their subsidiaries to any of Kenneth Sayer, One Australia, Zoltan Tomanovic, or AFSC; (iii) not subject to any adjustment with respect to oppressive conduct; and (iv) ascertained after making an adjustment, of such amount as is necessary for the net value of GMEC as at 30 June 2010 not to be decreased by reason of any sums that have been paid by either GMEC, Argyle HQ or any subsidiary of either company prior to or on 30 June 2010 in relation to the conduct of Proceedings 282203/2008, 282201/2008 and 2009/297497 and these proceedings. (d) The Respondents are to use reasonable endeavours to procure the release within 8 weeks of each guarantee and/or indemnity given by either or both Appellants in relation to the obligations of GMEC. Until a release of each such guarantee and/or indemnity is obtained, the Respondents are to indemnify the Appellants against all liability arising under any such guarantee and/or indemnity. (e) The Respondents are to pay 40% of the Appellants' costs of the proceedings at first instance, as agreed or assessed. (f) The judgment in proceedings 297497 of 2009 is stayed until the earlier of the purchase referred to in order 4(b) has occurred, or further or other order of a judge of the Equity Division. (g) The amount owing by: (i) Zoltan Tomanovic and AFSC, to Kenneth Sayer, Ken Sayer Investments Pty Ltd and Mortgage House Australia Pty Ltd, pursuant to the judgment (including interest, and excluding costs) in the Supreme Court proceedings 2009/297497; and (ii) One Australia, pursuant to the buyout order in paragraph 4(b), be set off against each other, such that only the net amount after set-off is liable to be paid. (h) That the parties not be at liberty to procure Argyle HQ or GMEC to incur costs or expenses relating to the conduct of the valuations except costs or expenses: (i) Incurred pursuant to a specific order or direction (including subpoena) of the court other than the order that the valuations occur, and (ii) Unless the court otherwise orders or directs, that the party who causes Argyle HQ or GMEC to incur those costs reimburses to Argyle HQ or GMEC (as the case may be) promptly after the quantum of those costs or expenses is ascertained. 5. Matter 6278 of 2008 and matter 6280 of 2008 be remitted to the Equity Division for ascertainment, in accordance with the direction of a Judge or Associate Judge of that Division, of the values referred to in order 4. 6. Liberty to apply to a Judge or Associate Judge of the Equity Division: (a) with respect to the valuation of the shares and other rights referred to in orders 4(a), (b) and (c); (b) for an order that GMEC be wound up in the event that either: (i) the values referred to in order 4 are not determined within 9 months of the making of these orders; or (ii) One Australia does not complete the purchase referred to in order 4 within 12 weeks of the determination of values referred to therein. (c) generally. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: JUDGMENTS AND ORDERS - order made when delivering earlier reasons for judgment for parties to confer about orders appropriate to give effect to reasons for judgment, submit draft orders if agreement was possible and make submissions if agreement was not possible - orders not made where further order would allow party to re-open their case and put it on a wider basis - orders not made where further order is too imprecise