Dr Bill Lyon Pty Limited v Smooth as Silk Lasers Cosmetic Clinic (No 2) [2018] NSWSC 1389

Supreme Court New South Wales

Medium Neutral Citation: Dr Bill Lyon Pty Limited v Smooth as Silk Lasers Cosmetic Clinic (No 2) [2018] NSWSC 1389 Hearing dates: 07/09/2018 Date of orders: 07 September 2018 Decision date: 07 September 2018 Jurisdiction: Equity - Commercial List Before: McDougall J Decision: Order the respondents to pay the sum of $21,500 into the plaintiffs' solicitors' trust account. Order the respondents to pay the cost of the motion on the indemnity basis. Make ancillary orders. Catchwords: CIVIL PROCEDURE – application to order the respondents to pay money into the plaintiffs' solicitors' trust account – where the relevant money is held on trust for the defendants in the substantive proceedings – defendants accept that money should be paid over as sought – orders made.

COSTS – where the failure of the respondents to pay over the money obstructed the realisation of the court's earlier orders and necessitated this application – where no explanation provided regarding that failure – costs ordered on the indemnity basis with ancillary orders made. Category: Procedural and other rulings Parties: Dr Bill Lyon Pty Ltd (First Plaintiff) Dr Bill Lyon Services Pty Ltd (Second Plaintiff) Smooth as Silk Laser and Cosmetic Clinic Pty Ltd (First Defendant) Tommy Meyir Yitzhak Jodlovich (Second Defendant) Representation: Counsel: J P Knackstredt (Plaintiffs)

Solicitors: McLachlan Thorpe Partners (Plaintiffs) File Number(s): 2018/158608

Judgment 1. HIS HONOUR: The plaintiffs seek an order that Cantwell Health Consulting and Advisory and Mr Nicholas Cantwell (the respondents) pay the sum of $21,500 held by them in their trust account into the plaintiffs' solicitors' trust account. That money represents the balance of the deposit held by the respondents as the agents who negotiated the sale of the business from the defendants to the plaintiffs that lies at the heart of the dispute in these proceedings. The relevant background has been outlined in earlier judgments of the Court, which are available on the Court's website, and I shall not repeat it. 2. It is relevant to note that the defendants have admitted liability and judgment for damages to be assessed has been entered. The question of assessment has been referred out. 3. The defendants accept that the money held by the respondents should be paid over as the plaintiffs seek. They have given the respondents a direction to do so. For reasons that are unclear, the respondents have declined to act on that direction. 4. There is no evidence that the respondents have any claim to the balance held by them. On the contrary, the evidence suggests that their costs and disbursements relating to the sale that apparently they negotiated have been paid or retained out of the deposit, and that the balance remaining is not subject to any further claim on their part. No doubt if it was, they would have taken steps to inform the Court or the parties' solicitors of this. 5. The obvious intention of the Court's orders relating to the direction was that the money would be paid over. There is no explanation for the respondents failure to pay it. In effect, their refusal to pay is obstructing realisation of the intention of the Court's prior orders. It is to be noted that the defendants have done all they can to ensure that the intent of the orders would be satisfied. 6. I am satisfied that the notice of motion and the supporting affidavit of Ms Juliana Ng have been served on the respondents. I am satisfied that they have been made aware that the matter is to be listed today. They were called outside Court and there was no appearance. It is appropriate to make the first order sought in the notice of motion, which is for payment over. 7. The plaintiffs seek also orders that their costs be paid on the indemnity basis. That is appropriate. The respondents have not indicated any reason why the money should not be paid over. They have not explained why they have failed to comply with the direction given to them to do so. They have necessitated this application. It is plainly inappropriate that the plaintiffs should be left out of pocket for having to come back to Court to seek vindication of their rights. Those same considerations suggest that costs ought be assessed forthwith. 8. In the circumstances, it may be appropriate to make an order for immediate payment of a sum, without prejudice to the right of either party to apply for some other sum to be allowed on assessment. [Counsel addressed.] 1. Mr Knackstredt of Counsel submitted that it would be appropriate at this point to order that the sum of $10,000 be paid, as it were, on account pending assessment. It is obvious that the plaintiffs have been put to a deal of trouble. There was the need to prepare and file the notice of motion and the affidavit in support. There was the need to serve those documents, which was complicated by the respondents' futile attempts to avoid service. There was then the need to prepare and file a further affidavit detailing the efforts made to serve, and the success of those efforts. 2. On one view of things, the sum of $10,000 may seem disproportionate to the amount at stake. That however is a matter that is entirely the respondents' fault. Had they paid the money over as they were directed to do, none of that money would have been spent. 3. I make the following orders: 1. order that the respondents pay into the plaintiffs' solicitors' trust account, within three business days of service of these orders, upon them the sum of $21,500. 2. Order the respondents to pay the plaintiffs' costs of and incidental to the notice of motion filed 24 August 2018, such costs to be assessed forthwith and on the indemnity basis. 3. Order that pending assessment of costs the respondents forthwith pay to the plaintiffs, on account of costs payable pursuant to order 2, the sum of $10,000. That sum is fixed without prejudice to the right of the plaintiffs or the respondents to contend upon assessment for some other sum to be allowed. 4. Direct that these orders be entered forthwith.