Property Builders Pty Limited v Carlamax Properties Pty Ltd; Property Builders (Constructions) Pty Limited v Carlamax Properties Pty Ltd [2011] NSWSC 1200

Supreme Court New South Wales

Medium Neutral Citation: Property Builders Pty Limited v Carlamax Properties Pty Ltd; Property Builders (Constructions) Pty Limited v Carlamax Properties Pty Ltd [2011] NSWSC 1200 Hearing dates: Friday, 23 September 2011 Decision date: 23 September 2011 Jurisdiction: Equity Division - Corporations List Before: White J Decision: Refer to paras [8]-[11] of judgment. Catchwords: PRACTICE AND PROCEDURE - final orders to give effect to reason - further submissions raised - further submissions fail on the merits - costs - no question of principle Category: Costs Parties: Property Builders Pty Ltd (Plaintiff 2011/61609) Property Builders (Constructions) Pty Ltd (Plaintiff 2011/61746) Carlamax Properties Pty Ltd (Defendant) Representation: R Freeman (Plaintiffs) G P McNally SC (Defendant) Phontos Legal (Plaintiffs) Deutsch Partners (Defendant) File Number(s): 2011/61609; 2011/61746

Judgment 1HIS HONOUR: In my reasons of 14 September 2011 I directed that the plaintiffs provide a calculation in accordance with my reasons of the amount of offsetting claim that I found to be arguable. That calculation has been provided. The amount of the offsetting claim calculated in accordance with my reasons is $120,506.01. Consistently with my reasons, the statutory demand in each matter should be varied by substituting the sum of $528,366.51 for the sum stated in the statutory demand of $648,872.52. 2The plaintiffs raise further submissions. They contend that in the statement of claim the relief sought included a declaration that Property Builders (Constructions) was discharged from its guarantee, and that this means that at least Property Builders (Constructions) does not owe any sum. 3On the basis of my findings that it was arguable that Carlamax breached a duty it owed to the guarantor by agreeing to postpone the priority of its mortgage to the Bank of Adelaide, I accept that it might be arguable that Property Builders (Constructions) was discharged from any liability under its guarantee incurred or arising after Carlamax agreed to the postponement of its mortgage to the Adelaide Bank. I cannot see how the argument could lead to the conclusion that Property Builders (Constructions) was discharged from its guarantee in respect of a liability that had already accrued. 4However, the short answer to the arguments is that the cause of action of Carlamax against Property Builders (Constructions) on the guarantee has merged in the judgment at the District Court of 19 January 2011. As I have said there was no appeal from that judgment. This claim was not pleaded in the District Court. That does not affect the fact that the existence of the debt owed by Property Builders (Constructions) to Carlamax is res judicata . Thus, any offsetting claim available either to Property Builders or to Property Builders (Constructions) can only be a claim for damages or compensation as described in my reasons. 5For these reasons, I do not accept that there should be an order setting aside either statutory demand. 6I should note that Senior Counsel appearing for Carlamax this morning also contends that the argument raised in the plaintiffs' further submissions is not open because it is not advanced in the supporting affidavits. I think that submission in principle is well based, although I have some difficulty in seeing how it can be advanced, whilst at the same time not opposing the plaintiffs relying upon the argument as to an offsetting claim. Be that as it may, I think, on the merits, that the further submission raised by the plaintiffs cannot succeed. 7For these reasons I make the following orders: 8In each matter I order that the statutory demand served by the defendant on the plaintiffs dated 3 February 2011 be varied by substituting the sum of $528,366.51 for the sum of $648,872.52. 9Secondly, in each matter I declare the demand has had effect as varied in accordance with order 1 as from when the demand was served on the plaintiff. 10On the question of costs, the defendant submits it has been substantially successful because the amount claimed in the statutory demand has been reduced by only approximately 20 per cent. On the other hand, the defendants have been successful to that extent. In the circumstances, I think the appropriate order is there be no order as to costs with the intent that each party bear its own costs. I so order. 11The exhibits may be returned after 28 days. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 October 2011