Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust v Nadinic (No 2)

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).

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.

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.

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.

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.

On that basis, I propose to make orders as follows: