Coffee and a Case Note

By James d'ApiceEducation

Coffee and a Case Note episodes

November 26, 2020 CEG Direct Securities v Shining (No 3) [2020] NSWSC 1562
“I should’ve accepted that offer…”

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P sued 4 Ds for money, and for possession of some land. He failed.

But before P’s failure, D3 and D4 had made an offer to settle.

P having “lost” in his claim, was in a worse position than he would have been had he accepted the offer: [11]

The Court said P had to pay D3’s and D4’s legal costs up to the date of the offer on the “ordinary” basis.

The Court then considered whether P should have to pay D3’s and D4’s costs on the more generous “indemnity” basis from the date of the offer.

The offer was made in accordance with “the Rules” (UCPR r42.15A) entitling D3 and D4 to costs on the indemnity basis *unless the Court orders otherwise* which it will only do in an exceptional case: [21]

The P’s claim failed because D3 and D4 were the owners of the land but D2 (their son) had forged their signatures on powers of attorney and then mortgages: [23] - [25]

D3 and D4 served evidence showing they were in Australia when the forged documents were allegedly signed by them in China: [26]

The Court accepted that P could continue despite that evidence but to do so did not render this an “exceptional case” in a way that would work around the normal r42.15A consequences: [31], [33]

D3 and D4 got their indemnity costs: [38]
9 min
November 08, 2020 Superannuation v Turner [2020] NSWCA 246
“I don’t have to do what the deed I signed says. It’s unjust!”

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An accountant resigned after suffering bullying and harassment: [14]

A dispute arose after the former employer made an aggressive threat about the accountant’s conduct, including threatening criminal prosecution: [23]

The parties settled their dispute in a wide-ranging deed.

At the time the deed was signed the accountant said he was “completely worn out, stressed and distressed by” the former employer’s behaviour: [26]

He did not obtain legal advice: [29]

The deed required the accountant to pay the former employer 100% of fees he charged to any the clients whose details he had taken, 50% of that in advance: [37] - [41]

Payment of his employment entitlements, and the release, relied on these payments being made: [42], [43]

The accountant did not pay. The former employer sued.

At first instance, the deed was found to be unjust pursuant to s7 of the Contracts Review Act 1980 (NSW) as the employee argued the deed was procedurally unjust (i.e. the difficult circumstances in which it was entered into) and substantively unjust (i.e. in its terms, such as withholding statutory entitlements or potentially 100% of any fee): [45]

The former employer appealed, and failed: [1], [149], [150]
7 min
October 28, 2020 Christian v Cooper [2020] QSC 224
"Are we partners, or what?"

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P and D were former friends who worked together on software they used to place bets on horse-racing.

They shared the profits, in the form of gambling returns, in various proportions over time.

The relationship broke down. P sought to recover from D $870K he said he was entitled to as a partner.

A partnership is relevantly defined as a relationship between "persons carrying on a business in common with a view of profit”: [105]

Noting the venture relied on "chance… as a predominant ingredient", the Court considered it was not a "business", and so not a partnership: [114]

However, if the venture was a business, it was not a partnership for a number of reasons: [115]

Those reasons included: (i) an important part of the software was used by D with no intention of sharing with any other, aside from the discrete way he shared it with P, (ii) P undertook work at D's request and was paid, (iii) there was no legal obligation for P or D to continue the work they were doing, (iv) there was a power imbalance between P and D such that D controlled access to software, servers, and the relevant bank account, and (v) despite saying he was unpaid, P actually received $428K over the venture: [116]

P's application failed: [129]
9 min
October 21, 2020 Lotus Property Fund No 8 [2020] NSWSC 1349
“Let me get the company its share of the money!”

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~$100m was paid following the sale of a site in Sydney.

The Co stood to receive some of the proceeds.

P - a former director of the Co - had the benefit of a “side deed” which might see a related entity of his take a benefit if the Co received a greater share of the proceeds.

It was contemplated that some of the sale proceeds would be distributed in a manner that concerned P.

P brought a derivative action - tried to “stand in the company’s shoes” - to bring a claim that the Co should take a greater share of the funds: [59]

It was uncontroversial that the Co was not going to bring the claim itself: [72]

The Court found the application was brought in good faith, with the P’s motive being to seek a proper distribution of funds for the benefit of the Co, or info that would aid that pursuit: [89], [92]

The “relatively low” threshold of a serious question to be tried was met: [94], [113]

The purpose of P bringing the proceedings - for the Co to take a greater share of funds, or get info that would enable that - was found to be in the Co’s best interests, despite uncertainties about prospects and recoverability: [130]

P was granted leave, notwithstanding the absence of notice: [132], [135]
8 min
October 12, 2020 J P Morgan Australia Ltd v Consolidated Minerals Pty Ltd [2011] NSWCA 3
"It’s not clear that I have to pay your fees – and you drafted the contract!"

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A client appointed an investment banker to advise on takeovers and mergers.

The contract was formed by an engagement letter from the banker being accepted by the client: [3] The engagement letter entitled the banker to various fees based on different events, offers and payments.

Following a "bidding war" the client became a wholly owned subsidiary of a purchaser: [24]

The banker issued an invoice for $50m. The client objected to it and paid only $20m. The banker sued for the balance, lost, and appealed.

Critical was whether payment for a pre-bid stake in the client was "in connection with" the eventually accepted offer: [50]

If it was, the banker was entitled to a higher fee than if it was not.

The Court found that matters "in connection with" an offer in these circumstances could only arise after the offer, and not before: [52]

The Court took some support for this view from the doctrine of contra proferentem. The banker drafted the term, it gave rise to a large fee, and if it was ambiguous then the banker had no claim to have those doubts resolved in its favour: [54]

The banker's appeal (and the client's contention) were dismissed with no order as to costs: [121], [123]
6 min
October 05, 2020 Baxter Global v Marco [2020] NSWSC 1293
"I'll repay the funds you invested. Trust me?!"
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Two Ps invested money with D1. D1 didn’t repay it.

The Ps said D1 held the funds on trust.

The Ds didn’t go to the hearing but the Court found it was OK to go ahead in their absence: [12]

D1 made representations about an investment being “100% safe and secure”: [24]

The Ps then made a number of investments with D1. As they did, D1 would send a document titled “Declaration of Trust” for the relevant P to sign: [27], [31]

The Ps invested around $2.4m in this way: [35]

In considering whether a trust arose the Court had to consider whether there was certainty of intention, subject matter and object: [40]

The test of certainty of subject matter (the money) and object (investing with the hope of a return) were comfortably met: [41]

But did the parties intend that the money be held on trust?

Yes.

The Court found: (i) the documents referred to the sums being held “in trust”; (ii) the use of the word “trust” was purposeful; (iii) the surrounding circumstances suggest a trust purpose; and (iv) even if the relationship was debtor/creditor, that does not exclude the obligations of a trust arising: [47] - [51]

The Court declared D1 held the sums on trust. Costs followed the event: [59]
6 min
September 22, 2020 Balzola v Passas (No 2) [2020] NSWSC 1200
“Worth the ‘powder and shot’?”

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P sued D1 and D2 claiming statements made in a meeting were defamatory.

P succeeded against D1 and failed against D2.

Damages against D1 were modest - the sum of $11K: [6]

Thought P raised the issue of delay, the Court found P should pay D2’s costs, costs following the event: [15]

The P’s failure to accept an offer made jointly on behalf of D1 and D2 did not elevate D2’s costs order to costs on the indemnity basis: [17]

Having been successful against D1, P pressed for costs against her on the indemnity basis.

P failed. An offer, which D1 did not accept, required a wide-ranging apology and did not provide for a “clean exit” from the litigation: [19]

The Court found D1 should only pay a proportion of the successful P’s costs because: (i) the very modest claim raised a proportionality issue, (ii) the P was only partially successful, having lost on more of the claim than he won, and (iii) D1 ought to be quarantined from paying legal costs relation to P’s unsuccessful pursuit of D2: [25]

The Court queried whether the proceedings were worth “powder and shot” (i.e. whether the small claim justified the legal costs) and considered it appropriate that D1 pay only two thirds of P’s costs: [29]
6 min
September 16, 2020 Instagram CLE - "One lawyer's approach to personal branding" talk 16 September 2020
OK! The final one of these Instagram Live sessions. This one was a little loose with a lot of questions, but hopefully a lot of value too.
It's basically my approach to marketing online as a lawyer, and some suggestions for you.
Hope it brings you value!
And if you could sling this pod a review, I'd be really grateful. Cheers!
1 hr
September 09, 2020 Instagram CLE - Corporation oppression talk 9 September 2020
Another great session of legal rigour and tonal lightheartedness. Please join in this fun and informative chat about ss232 and 233 of the Corporations Act.
And please consider heading to instagram.com/coffeeandacasenote if you'd be so kind.
59 min
September 09, 2020 Charter Pacific v Securicom [2020] NSWSC 1067
"Stop telling everyone you own my patents!"
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Some Ps asked the Court for an interlocutory injunction – an immediate stop – preventing some Ds from saying they owned, or had a licence to use, some patents.

The Ds accepted they didn’t own them: [37]

But the Ds' website said they had an exclusive licence to use them and that one of the Ds owned or exclusively controlled them: [108], [111]

The Ps said this was misleading and deceptive, and that an interlocutory injunction should be granted: [31], [33]

The Court had to direct its attention to (i) whether there was a serious question to be tried and (ii) whether the balance of convenience favoured an injunction: [41]

There was back-and-forth about various versions of patent licence deeds: [55] to [97]

The Ds argued for the validity of a certain deed; such validity meaning the website was not misleading. The Court found it was seriously arguable that the deed was not valid, meaning the representations would be misleading: [139]

There was also a serious question – if the licence was valid – as to whether the liquidator's s568(1) disclaimer of it as an "unprofitable contract" was effective: [147]

The Court found the balance of convenience favoured relief: [163]

Injunction granted: [207]
7 min

About Coffee and a Case Note

From the publisher's feed

I’m Australian lawyer, James d’Apice. Coffee and a Case Note began as a video series where I sip a coffee and chat about recent legal cases. This is the audio version! I hope it brings you value.