Supreme Court New South Wales Medium Neutral Citation: Luigi Iacullo v Dominic Iacullo and Lillian Iacullo (No 2) [2012] NSWSC 272 Hearing dates: 28 November to 2 December 2011, 6 to 9 December 2011 Decision date: 26 March 2012 Jurisdiction: Equity Division Before: Black J Decision: Plaintiff's motion dismissed. Claim in Plaintiff's points of claim be dismissed. Letters received from Trustees to be treated as the Trustee's report, which is adopted by the Court with a variation. Detailed orders as to the disbursement of the balance of the parties' held by the Trustees. Each party pay their own costs up to 5 May 2010. Plaintiff to pay Defendants' costs of proceedings after 5 May 2010. Liberty to apply reserved in respect of certain matters. Catchwords: COSTS - Orders to be made consequential upon judgment in proceedings. Cases Cited: - Kernaghan v Corrections Corporation of Australia Staff Superannuation Pty Ltd (No 2) [2007] FCA 1040 - Metwally v University of Wollongong (No 2) [1985] 60 ALR 68 - MK and JA Roche Pty Ltd v Metro Edgley Pty Ltd [2004] NSWSC 780 - Twenty-First Australia Inc v Shade & Anor [1998] NSWSC 325 - Wentworth v Rogers [2002] NSWSC 921 - Wentworth v Wentworth [1999] NSWSC 638 Category: Interlocutory applications Parties: Luigi Iacullo (Plaintiff) Dominic Iacullo (First Defendant) Lillian Iacullo (Second Defendant) Representation: Counsel: G. A. Moore (Plaintiff) D. A. Smallbone (Defendant) Solicitors: Kreisson Legal (Plaintiff) Allsop Glover (Defendant) File Number(s): 2007/257124 Judgment Background 1On 7 March 2012 I delivered judgment in three proceedings between Mr Luigi Iacullo (to whom I will refer, without disrespect, as "Luigi") on the one hand and Mr Dominic Iacullo and Mrs Lillian Iacullo (to whom I will refer, without disrespect, as "Dominic" and "Lillian") on the other. 2By way of background, by Summons filed on 16 November 2007, Luigi sought orders under s 66G of the Conveyancing Act 1919 (NSW) for, inter alia, the sale of a property which was owned by Luigi, Dominic and Lillian. Orders were made by consent by Brereton J on 29 February 2008 for the appointment of trustees for sale of that property ("Trustees") and that "there be a taking of accounts after the property has been sold by the trustees". On 4 August 2009, Bergin CJ in Eq made a further order by consent that: "The Trustees for sale appointed by Brereton J pursuant to orders made on 29 February 2008 take [account] in accordance with order 4 made by Brereton J on 29 February 2008 until further order." 3The Trustees delivered their account by letter dated 5 May 2010. By Notice of Motion filed on 21 October 2010, Luigi sought an order that the Trustees' determination dated 5 May 2010 be varied by crediting Luigi with the payment of his one-half share of the sum of $208,000 which he contended he had paid. Dominic and Lillian in turn challenged the Trustees' failure to debit to Luigi a half share of interest which they had paid on the amount of $208,000 claimed to be outstanding. In my judgment delivered on 7 March 2012, I held that Luigi's challenge to the Trustees' determination had failed and Dominic and Lillian's challenge had succeeded to the extent that a half-share of the interest on the Vincentia loan which was paid by them personally rather than by the partnership should be debited to Luigi. 4I indicated that I would hear the parties as to the form of orders that should be made consequential upon my judgment and as to costs. There is agreement between the parties as to several orders which should be made and I will make those orders below. However, both parties have also sought to agitate matters which were not before me at the hearing in their submissions, in respect of the detail of the calculation of interest payable by Luigi in respect of the Vincentia loan and the manner in which the balance of the funds of $236,710.71 held by the Trustees should be disbursed. Quantification of interest 5It will be recalled that I had observed in my judgment that: "It appears that the position adopted by Luigi throughout the period was that he had repaid his share of the loan, not that he contested that he was required to reimburse the amount of interest on the loan if that had not occurred. The Trustees rejected the former submission, and I have found that I should not disturb the Trustees' finding that Luigi has not established that matter. Notwithstanding the inquiries they had made, the Trustees do not seem to have dealt with the question of liability for the interest paid by Dominic and Lillian in respect of the Vincentia loan in their determination. I can see no basis for treating the obligation to pay interest on the Vincentia loan differently from the obligation to repay the principal in respect of that loan. Since the Trustees found that Luigi had not repaid his half of that loan and that amount should be debited to him in the accounting, the interest paid by Dominic and Lillian referable to that amount should be treated in the same manner." 6Luigi now seeks to raise a challenge to Dominic and Lillian's entitlement to interest after 1 May 2010 by reference to a claim that Luigi had proposed that the fund held by the Trustees be held on an interest bearing deposit and Dominic and Lillian had not responded to that proposal. That matter was not raised in the hearing before me and Luigi now seeks to tender further correspondence in that regard in support of that contention. Dominic and Lillian respond to that submission by contending that there is no evidence that the Trustees did not invest the funds, referring to documents (also not in evidence) which indicate that the Trustees received interest income in the relevant period and which, they contend, indicate that the Trustees must have invested the funds; and foreshadowing that Dominic and Lillian will contend that the parties had entered discussions to bring about the end of the Trustees' involvement and it was not Dominic and Lillian's fault, or their exclusive fault, that those discussions failed. They also contend that they were entitled to the bulk of the remaining funds after payment of creditors so any failure to invest the funds was at their cost rather than Luigi's costs. These contentions emphasis that the new matter now raised by Luigi would require new evidence to be led as to matters not previously raised before me in respect of the dispute as to Dominic and Lillian's entitlement to reimbursement of interest on the Vincentia property. 7I do not consider that I should permit this additional contention to be raised in submissions as to the form of orders arising from my judgment. The question of Dominic and Lillian's right to reimbursement of interest on the Vincentia loan was one of the two issues which was determined before me at the hearing and, in my view, any issue which impeached that right needed to be raised by Luigi then and not in submissions as to the form of orders once the proceedings had been determined. It is well-established that, except in exceptional circumstances, a party should not be permitted, after a case had been decided against it, to raise a new argument which it failed to put during the hearing when it had an opportunity to do so: Metwally v University of Wollongong (No 2) [1985] HCA 28; (1985) 60 ALR 68 at [71]. 8Although there are circumstances in which allowing reopening is appropriate to allow a matter to be addressed by a trial judge which would otherwise be open on appeal, the Court's discretion whether to permit that course must be exercised in the interests of justice: Twenty-First Australia Inc v Shade & Anor [1998] NSWSC 325; Wentworth v Wentworth [1999] NSWSC 638 at [8]; Wentworth v Rogers [2002] NSWSC 921 at [5]; MK and JA Roche Pty Ltd v Metro Edgley Pty Ltd [2004] NSWSC 780; Kernaghan v Corrections Corporation of Australia Staff Superannuation Pty Ltd (No 2) [2007] FCA 1040 at [13]. In my view, the interests of justice are not served by now permitting the agitation of a matter which could and should have been raised at the hearing. 9I am reinforced in that view by the fact that it is by no means clear that a dispute as to the wisdom or otherwise of not placing the funds held by the Trustees in an interest bearing account could affect Dominic and Lillian's entitlement to reimbursement by Luigi of half of the interest which they had in fact paid on the Vincentia loan, which arose from the parties' agreement and not from any exercise of a free-ranging judicial discretion as to the merits of the respective parties' decisions or conduct. 10A further dispute has also arisen between the parties as to the methodology to be adopted for the calculation of interest and Dominic and Lillian now seek orders as to the quantification of the interest payable. That matter was also not in issue at the hearing before me and should, in my view, either be resolved between the parties or determined by the Trustees. Orders 11Accordingly, I make the following orders: 1. The Plaintiff's motion filed 21 October 2010 be dismissed. 2. The claim in the Plaintiff's Points of Claim filed 14 April 2010 be dismissed. 3. Pursuant to UCPR r 20.23 the Court orders that the letters from the Trustees appointed to take accounts under the order of 4 August 2009 dated: * 5 November 2009 to the Plaintiff, * 5 November 2009 to the Defendants, * 16 November 2009 to the Defendants, * 25 November 2009 to Kreisson Legal (solicitors for the Plaintiff), * 14 December 2009 to the Plaintiff, * 14 December 2009 to the Defendants, * 21 January 2010 to the Defendants, * 23 February 2010 to the Defendants, * 5 May 2010 to the Plaintiff and * 5 May 2010 to the Defendants be received and treated as the Trustees' report upon the said accounting and that further report be dispensed with. 4. The Trustees' report is adopted by the Court, with the variation that it is determined that the Defendants are entitled to payment from the partnership of interest from 1 July 2003 on the principal sum of $182,569.31 (being the principal sum found by the Trustees to be outstanding on the Vincentia loan as at 30 June 2003). 5. That the balance of the parties' fund of $236,710.71 held by or under the control of the Trustees be paid forthwith by the Trustees to the Defendants, subject to reservation of the following amounts to be paid as provided below: * $12,500 to be paid forthwith by the said Trustees from the fund to Mr & Mrs F and T Iacullo in accordance with the Trustees' report; and * $41,126.18 to be paid forthwith by the said Trustees from the fund to the Australian Taxation Office in accordance with the Trustees' report; and * $220 to be paid forthwith by the said Trustees from the fund to the Australian Taxation Office on account of the Trustees' estimate of income tax payable by the D L & L Iacullo partnership for the year ended 30 June 2012; and * $2,000 to be reserved for the costs of administering the taxation affairs of the D L & L Iacullo partnership, including the preparation and lodgment of the 2012 income tax return, provided that any surplus remaining after those costs is to be thereafter paid as to 50% to the Plaintiff and as to 50% to the Defendants; and * $19,349.39 to be reserved and applied until further order to the Trustees' unreimbursed remuneration, costs and disbursements, including legal costs (pending approval of the same by the Court or agreement by the parties). * 6. That each party pay his or her own costs of the proceedings up to and including 5 May 2010. 7. That the Plaintiff pay to the Defendants the costs of the proceedings after 5 May 2010, including the costs of the motion and the costs of the proceedings on the Points of Claim filed by the Plaintiff and on the Points of Claim filed by the Defendants and 50% of the amount of the Trustees' remuneration, costs and disbursements, including legal costs, incurred or payable in respect of work performed after 5 May 2010. 8. Reserve to any party and to the Trustees liberty to apply in respect of the approval and determination of the amount of the Trustees' remuneration, costs and disbursements in respect of and incidental to their appointments as Trustees for sale and to take accounts. 12These orders reflect the parties' agreement as to what followed from my judgment, except that I have not included the disputed quantification of the amount payable by way of interest in paragraph 4 of the orders which reflects only the matter determined by me at the hearing. ********** 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: 29 March 2012