Supreme Court New South Wales Medium Neutral Citation: Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust v Nadinic (No 2) [2019] NSWSC 604 Hearing dates: 21 May 2019 Date of orders: 21 May 2019 Decision date: 21 May 2019 Jurisdiction: Equity Before: Emmett AJA Decision: See orders at [6] Catchwords: COSTS – whether amount paid to Ms Drinkwater from a bank account should be deducted in calculating damages payable to her – whether amount paid is only a relevant factor in determining the extent to which judgment entered has been satisfied COSTS - whether Mortgage granted by Ms Drinkwater to Mr Nadinic pursuant to the Settlement Deed should secure the sum of $2,050,000 that was provided for in the Settlement Deed – whether the Mortgage should be varied such that it secures only the balance owing to Mr Nadinic after the payment of damages owing Legislation Cited: Competition and Consumer Act 2010 (Cth) Civil Procedure Act 2005 (NSW) Cases Cited: Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust v Nadinic [2019] NSWSC 365 Category: Costs Parties: Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust (Plaintiff) Andrew Frane Nadinic (Defendant) Representation: Counsel: M A Ashhurst SC with L D Corbett (Plaintiff) A G Martin (Defendant) Solicitors: Hewitts Commercial Lawyers (Plaintiff) Summer Lawyers (Defendant) File Number(s): 2016/00242022 EX TEMPORE Judgment 1. HIS HONOUR: On 5 April 2019, I published my reasons for the conclusions I reached in relation to the claims Ms Drinkwater made in these proceedings against Mr Nadinic. In essence, the conclusion I reached was that Ms Drinkwater is entitled to damages by reference to the difference between the amount that she would have derived, had the joint venture gone to completion, on the one hand, and the amount she will, in fact, derive under the deed of settlement dated 24 November 2015 (Settlement Deed). 2. Two questions have arisen in connection with the formulation of orders to reflect my conclusions. The first concerns the payment to Ms Drinkwater of a sum of money from a bank account. The second question is whether the Mortgage, granted by Ms Drinkwater in favour of Mr Nadinic pursuant to the Settlement Deed, should secure the sum of $2,050,000 that was provided for in the Settlement Deed or whether the Mortgage should be varied such that it secures only the balance owing to Mr Nadinic after the payment of the damages that I have concluded are owing. 3. In relation to the first question, Mr Nadinic contends that the amount paid from the bank account should be deducted in calculating the damages payable to Ms Drinkwater. That contention appears to me to be based on a misconception. The task is to calculate the quantum of the damages. Once that calculation has been made, it may be necessary to investigate the extent to which Ms Drinkwater has, in fact, been paid the amount of the damages. While the sum that has been paid to her may be a relevant factor in determining the extent to which any judgment that is entered has or has not been satisfied, it is not a relevant factor in the calculation of the damages. 4. It follows that the quantum of damages to which Ms Drinkwater is entitled is the sum of $1,679,790, referred to at [75] of my reasons of 5 April 2019. Of course interest has to be added to that sum. However, there appears to be no dispute about the calculation of the amount of the interest. 5. In relation to the second question, as Mr Ashhurst pointed out, the relief claimed by Ms Drinkwater has always included an order varying the Mortgage. If there had been no misleading conduct, such as I have found, the Mortgage would never have been given by Ms Drinkwater. In that event, on the taking of accounts, following the completion of the joint venture, whatever was found to be owing would be paid to the party who was entitled to receive it. In all of the circumstances, it seems to me to be logical that the relief to be granted in the light of the conclusions that I have reached is that the amount secured by the Mortgage should be varied to reflect the amount that is payable to Mr Nadinic by Ms Drinkwater, after deducting the amount payable by her to him pursuant to the conclusions that I have reached. 6. On that basis, I propose to make orders as follows: 1 Order, pursuant to the Australian Consumer Law (ACL), s 237, that the Defendant pay to the Plaintiff the sum of $1,679,790.00 plus pre-judgment interest (in accordance with Civil Procedure Act 2005 (NSW), s 100) of $223,026.20 (being the sum of $1,902,816.20); 2 Order, pursuant to ACL, s 243, that: a. clause 5b. of the Deed of Settlement between Cheryl Louise Drinkwater atf Cheryl Drinkwater Trust, Cheryl Louise Drinkwater, Brooks Parade Pty Ltd, Andrew Nadinic and Commercial Builders NSW Pty Ltd dated 25 November 2015 be varied by substituting the words '$147,183.80' for the words '$2,050,000'; b. Annexure 'A' of the mortgage number AK57948 be varied: i. Such that 'the Principal Sum' is varied from the amount of $2,050,000 to the amount of '$147,183.80'; ii. The words '30th June 2016' in cl. 1(c) are amended to read '31st May 2019'; and, iii. the words '30th June 2016' in cl. 3 are amended to read '31st May 2019'; 3 Order that the Defendant pay the Plaintiff's costs of the proceedings not already the subject of a costs order, including the costs of the hearing before Pembroke J., such costs to be as agreed or assessed on the ordinary basis; 4 Direct the defendant's solicitor to execute all documents and do all things to authorise the release to the solicitor for the plaintiff of funds from account number 76 162 7422 with the National Australia Bank, such that the balance of that account is not less than $147,183.80; 5 Direct that the balance of funds in account number 76 162 7422 with the National Australia Bank are to remain in such account pending determination of the balance owing between the parties after the various costs orders are agreed or assessed; 6 Direct the defendant provide the plaintiff a discharge of mortgage AK57948 ('the Discharge') within fourteen (14) days of the date hereof, failing which the Registrar in Equity is authorised to execute all such documents to enable the plaintiff to register the discharge; 7 Orders and directions 1-6 inclusive are stayed for a period of 28 days from the date they are entered. ********** 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: 22 May 2019