Damjan Zugic v Vesuvius Australia Pty Ltd [2018] NSWSC 1544

Supreme Court New South Wales

Medium Neutral Citation: Damjan Zugic v Vesuvius Australia Pty Ltd [2018] NSWSC 1544 Hearing dates: 2 & 9 October 2018 Decision date: 09 October 2018 Jurisdiction: Equity Before: Rees J Decision: Orders made for expert evidence Catchwords: EVIDENCE – Directions for expert evidence –Whether scope of expert evidence supported by pleadings – Claim for equitable compensation – Plaintiff's directions made. Legislation Cited: Supreme Court Act 1970 (NSW), Cases Cited: Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066 Davidovic v Vesuvius Australia Pty Ltd (No 2) 2016 NSWSC 1679 Davidovic v Vesuvius Australia Pty Ltd (No 3) [2017] NSWSC 76 Zugic v Vesuvius Australia Pty Ltd, 4 September 2017 (Unreported) Vesuvius Australia Pty Ltd v V & M Davidovic Pty Ltd [2011] NSWSC 539 Pilmer v Duke Group Ltd (in liq) (2001) 75 ALJR 1067 Day v Mead [1987] 2 NZLR 443 at 462 (CA) Category: Procedural and other rulings Parties: Damjan Zugic - Plaintiff Vesuvius Australia Pty Ltd - Defendant Representation: Counsel: J R Young - Plaintiff P T Russell - Defendant Solicitors: James Legal Pty Limited - Plaintiff Pikes & Verekers - Defendant File Number(s): 2013/385037

ex tempore Judgment 1. HER HONOUR: This matter has been referred to me by the Registrar for directions to be made in respect of expert evidence. 2. These proceedings were commenced in December 2013 and have a complicated and difficult procedural history which is the subject of judgments by Darke J in Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066, Stevenson J in Davidovic v Vesuvius Australia Pty Ltd (No 2) 2016 NSWSC 1679 and Davidovic v Vesuvius Australia Pty Ltd (No 3) [2017] NSWSC 76 and Parker J (Unreported, Zugic v Vesuvius Australia Pty Ltd, 4 September 2017). 3. The proceedings concern leasing negotiations between V & M Davidovic Pty Ltd (V&M) and Vesuvius Australia Pty Ltd in respect of two sites: 1. land with a factory at 32-34 Doyle Avenue, Unanderra, NSW ("the Doyle land"); and 2. unimproved land at 10-12 Sylvester Avenue, Unanderra, NSW ("the Sylvester land"). The plaintiff sues as an assignee of V&M's causes of action against Vesuvius Australia Pty Ltd, although the validity of the assignment is disputed by the defendant. 1. In the last mentioned judgment, Parker J heard a Motion by the plaintiff to amend his pleading, and by the defendant to dismiss the proceedings for want of prosecution. The Statement of Claim had, prior to the hearing before Parker J, sought the following relief: 1. Equitable compensation … for loss and damage suffered by the plaintiff not entering into a lease of the Doyle land … on the terms of the lease annexed to the Deed. 2 Alternatively, damages for breach of the Sylvester Agreement … 1. By the proposed Amended Statement of Claim, the plaintiff proposed (amongst other amendments) to: 1. delete the claim for equitable compensation suffered by failure to enter into a lease of the Doyle land; and 2. no longer assert that there was a binding agreement in relation to the Sylvester land but merely a proposal. 1. Paragraph 56 of the Statement of Claim was to be deleted. It had pleaded: The plaintiff says that: (a) V&M was induced by the conduct of the first defendant in making the First Sylvester Representation to believe that it no longer had any obligation to carry out its obligations under the Deed, including completion of the Works, as first defendant would enter into a lease of the Sylvester land on the terms of the Sylvester Proposal; ... (c) It has suffered detriment by ceasing to carry out its obligations under the Deed, including completion of the Works in that it was deprived of the opportunity to enter into the Doyle lease…: (d) First defendant's conduct in inducing V&M to cease to carry out its obligations under the Deed, including completion of the Works, and not informing V&M that the first defendant might not enter into a lease of the Sylvester land … was unconscionable (e) In the premises, first defendant is estopped from denying that it would have entered into the Doyle Lease; and (f) V&M is entitled to be compensated for the loss it has suffered by not entering into the Doyle lease. Particulars V&M's lost profit on the rent it would have earned on the Doyle lease, less the expenses it would have incurred in developing the Doyle land to enable it to be leased to the first defendant. Further particulars may be provided in due course. 1. Whilst there were no submissions or argument before Parker J in respect of these amendments, the defendant submits that there was to be no claim or pleading of a breach of the agreement in respect of the Doyle land, nor could there be, because it was accepted in earlier proceedings that it was properly terminated. I take this to be a reference to the judgment of Biscoe AJ in Vesuvius Australia Pty Ltd v V & M Davidovic Pty Ltd [2011] NSWSC 539 in which his Honour noted that V&M accepted that the lease in respect of the Doyle land had been terminated, either by Vesuvius Australia Pty Ltd issuing a Termination Notice of the Deed of Option to Lease, or the acceptance by V&M of the defendant's repudiatory conduct in issuing a Termination Notice and V&M proceeding to terminate the lease itself. Such an acknowledgment by V&M does not appear to me to preclude V&M seeking damages in respect of the termination, and indeed both V&M and Vesuvius Australia Pty Ltd sought damages in those proceedings as I understand it. 2. During argument before Parker J on 29 August 2017, the plaintiff's counsel agreed to further amend the proposed pleading by deleting a claim for damages pursuant to s 68 of the Supreme Court Act 1970 (NSW), commonly referred to as Lord Cairns' Act damages.