Planet Build (NSW) Pty Limited v Lassgol Pty Limited [2001] NSWCA 40 (19 February 2001)

Last Updated: 8 March 2001

NEW SOUTH WALES COURT OF APPEAL

CITATION: Planet Build (NSW) Pty Limited v Lassgol Pty Limited [2001] NSWCA 40

FILE NUMBER(S):

40779/00

HEARING DATE(S): 19 February 2001

JUDGMENT DATE: 19/02/2001

PARTIES:

Planet Build (NSW) Pty Limited v Lassgol Pty Limited

JUDGMENT OF: Priestley JA Meagher JA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): ED 3360/00

LOWER COURT JUDICIAL OFFICER: Hodgson CJ in Eq

COUNSEL:

Claimant - M.J. Walsh

Opponent - A.A. Henskens

SOLICITORS:

Claimant - Tress Cocks & Maddox

Opponent - Colin Biggers & Paisley

CATCHWORDS:

Application for leave to appeal from interlocutory orders

LEGISLATION CITED:

DECISION:

Dismissed with costs.

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40779/00

ED 3360/00

PRIESTLEY JA

MEAGHER JA

19 February 2001

PLANET BUILD (NSE) PTY LIMITED v LASSGOL PTY LIMITED

1    PRIESTLEY JA: This is an application for leave to appeal which arises from interlocutory orders made by Hodgson CJ in Eq on 9 August last year in proceedings which had been begun by a motion for interlocutory relief.

2    The dispute giving rise to the proceedings involved a construction contract and claims and counter claims between the proprietor and the builder.

3    In the motion for interlocutory relief the builder claimed an injunction to restrain the proprietor from calling upon a performance bond which had come into existence by an agreed variation of the contract. From the reasons which the Chief Judge gave on 9 August, it appears that before that day an interim injunction had been granted restraining the proprietor from calling upon the performance bond.

4    At the conclusion of the argument on 9 August, which appears to have been quite detailed, and in respect of which the Chief Judge gave detailed reasons, he said he would continue the existing injunction until further order but he would give leave to the proprietor to have the matter listed for further argument in respect of some matters that he had mentioned earlier in his reasons.

5    There was further argument on 18 August following the proprietor's having taken up the leave granted to have the matter relisted. On that day, as his Honour recorded in his subsequent decision on the argument of that day, both further evidence and further argument were presented.

6    His Honour delivered judgment on 30 August upon the issues as they had been further argued on 18 August. Before 30 August the builder had notified the Court, with the consent of the proprietor, that the builder would seek to re-open the builder's case and place further evidence before the Court. The proprietor's consent to the matter being before the Court once more was only for a hearing of the application to re-open. The proprietor did not consent to the application being re-opened and in fact opposed it.

7    In the reasons he delivered on 30 August the trial judge reviewed some of the arguments which had been put to him previously in continuing the then existing injunction. The result of his review was that he concluded that the case against the continuation of the injunction was stronger than he had earlier thought. He had been asked, apparently, to decide finally the questions of the effect of clause 2.5 of the deed which had been made between the parties varying the original building contract.

8    He did not think it appropriate to give a final decision on that aspect of the dispute, even though he thought it was still a small aspect of the dispute. He thought it appropriate to approach the matter as one where there was a serious question to try, and therefore one where he had to consider the balance of convenience. He then set out the set of facts relating to the balance of convenience as a result of which, following his further consideration of the matter, he thought his mind had changed in the proprietor's favour.

9    The conclusion of his reasons of 30 August was that the balance of convenience was against the granting of the interlocutory injunction and he discharged the existing injunction.

10    The following day he considered the application to re-open. He referred to additional evidence sought to be tendered by the contractor. He mentioned two matters with which that evidence dealt.

11    I think it was agreed between counsel today, but even if I am wrong in that, it is quite plain from his Honour's reasons, that on the application to re-open he read the affidavits which the builder wished to use in the further hearing of the original application for injunction, but admitted only in connection with the application to re-open. He recognised that the material in the two affidavits was relevant to two matters which were significant to his assessment of the balance of convenience in his judgment of the previous day.

12    He then considered the various arguments put by the parties for and against the application to re-open. He briefly summarised the authorities relied on by the opposing parties. Counsel for the builder had relied on Urban Transport Authority v Budweiser (1992) 28 NSWLR 471. Counsel for the proprietor had relied upon the unreported decision of McClelland J, Brimaud v Honeyset Instant Print Pty Ltd, delivered on 19 September 1998.

13    The way in which an application to re-open should be dealt with was, at first glance at any rate, dealt with somewhat differently in the two cases. One of the submissions put to the Court today in support of the application for leave to appeal against his Honour's conclusions was that he had committed himself to the tests for re-opening citing Brimaud and that, in the light of the Urban Transport Authority case and other decisions, this decision should no longer be followed.

14    I do not think that his Honour did commit himself to the allegedly unsound test. After setting out the considerations for and against the application to re-open he said that on the whole he did not think a case was made out for the wholesale re-opening of the application. One reason he gave - although I think it is clear he did not state all the reasons because to some extent they can be discerned by his statement of the case as argued for the proprietor - was that if he were to allow the re-opening he would have to have a short hearing.

15    It is clear in saying that he was referring to the detailed examination which the proprietor would seek to make of the value of the undertaking for damages offered by or on behalf of the builder in circumstances where an administrator had been appointed to the builder since the first hearing. Otherwise I think he indicated that there had been sufficient time and opportunity in his view for the builder to have put in necessary material before him by 18 August when the matter was argued.

16    Implicit in his reasons also is the view that, although the further material was relevant, it would not change the views he had arrived at the previous day.

17    He nevertheless said he was prepared to extend the injunction for seven days on the basis that if within that time the builder tendered the amount of the bond to the proprietor on account of any liability that might be found against the builder, on condition that the proprietor agreed to a discharge of the bond, then the injunction would be extended until further order. There were further requirements made of the builder associated with this potential extension of the injunction which it is unnecessary to mention.

18    In the judge's view the course he was proposing would at least give the builder an opportunity to avoid what the builder apparently saw as the great damage that would be done by the calling up of the bond. This was a reference to a contention advanced on behalf of the builder that if the performance bond procured by the builder in favour of the proprietor was called upon, damage would be done not only to the ability of the builder to obtain further financial accommodation, but the same thing would happen to companies associated with the builder.

19    This submission had been made notwithstanding what might well be thought to be quite a strong argument that the appointment of an administrator to the builder would swamp any prejudice that might be caused to financial institutions by knowledge of the calling up of the bond. Nevertheless, the judge gave the builder an opportunity of avoiding that consequence by complying with the procedure that he had outlined.

20    That procedure was not followed. It was partially followed. But the builder in the event did not pay the money secured by the fund, $115,000, to the proprietor, but paid it into court. Thereafter the injunction was continued after further proceedings before his Honour, but only until the conclusion of the builder's application for leave to appeal against his Honour's decision, or if leave to appeal were granted, until the conclusion of the hearing of the appeal.

21    The principal argument put for the builder is that there was a denial of procedural fairness in the judge refusing, at the stage when he did refuse to allow the application to be re-opened and further evidence to be put before the Court.

22    As well as the two cases I have already mentioned, the builder relied upon a recent decision of this Court, The Nominal Defendant v Manning, decided by the President, Heydon J and Foster AJ on 28 August 2000. Reliance was placed upon a passage in the majority decision, the President having dissented, that procedural fairness required the Court to permit a re-opening in circumstances such as those I have summarised.

23    It does not seem to me that any finding, ruling or decision can be obtained from The Nominal Defendant v Manning to the effect that the first instance judge in the present case was bound to grant the application to re-open. What the authorities make clear is that the decision on such an application is a discretionary matter and one that will be influenced one way or the other as to its result by the particular circumstances of the case. There will be many cases where the ordinary result of an application to re-open in circumstances analogous to the present may be granted.

24    It does not follow from that, however, that the judge in the present case should have granted the application, or has made any error warranting the grant of leave to appeal or the overturning of his decision in an appeal. A question which the judge must consider in such circumstances is fairness to both parties. It is not simply a matter of granting fairness and the right to be heard in fact to one party alone.

25    In the present case time was important to the proprietor. Time had passed already since the beginning of the proceedings. What was being sought would certainly prolong the proceedings for some time hard to estimate, and it seems clear that the first instance judge took into account the material that had been put before him, which the builder desired to use in the principal application for re-opening when considering whether he should allow it to re-open. As I have said, I think it is implicit in his reasoning that, having read the further material sought to be put into evidence if the matter were reopened, and which he agreed was relevant, he did not think it of sufficient strength to warrant a reopening.

26    The judge's reasons in my view show that he took into account the appropriate considerations both for the builder and for the proprietor in determining whether he would grant leave to re-open.

27    For my part, I see no error of principle or adoption of any incorrect rule or misunderstanding of fact or conclusion due to irrelevant matter or overlooked material, or overlooked relevant considerations in the trial judge's arriving at the decision that he did. It therefore seems to me that the application for leave to appeal should be dismissed.

28    MEAGHER JA: I agree.

29    PRIESTLEY JA: Unless there be any argument to the contrary, the dismissal will be with costs.

30    The order of the Court is application dismissed with costs.

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LAST UPDATED: 07/03/2001