Yazbeck v Rachid [2020] NSWSC 743

Supreme Court New South Wales

Medium Neutral Citation: Yazbeck v Rachid [2020] NSWSC 743 Hearing dates: 15 April 2020 Date of orders: 16 June 2020 Decision date: 16 June 2020 Jurisdiction: Equity Before: Robb J Decision: Order the defendant to pay the plaintiffs' costs of the proceedings on the ordinary basis. Catchwords: COSTS — Party/Party — Bases of quantification — Ordinary basis — where the defendant ultimately consented to the orders made by the Court, but resisted the plaintiffs' claim for relief up until the hearing — where the issue of costs is not to be dealt with as if the parties had settled the proceedings Legislation Cited: Conveyancing Act 1919 (NSW) Cases Cited: Denton by her tutor NSW Trustee and Guardian v Denton [2019] NSWSC 660 Hypec Electronics Pty Ltd (in liquidation) v Mead (2004) 61 NSWLR 169; [2004] NSWSC 731 Category: Costs Parties: Milad Mark Yazbeck (first plaintiff) Patrick Yazbeck (second plaintiff) Patrick Zoghbi (third plaintiff) Zena Rachid (defendant) Representation: Counsel: S Stanton (plaintiffs) Z Rachid (self) (defendant)

Solicitors: Yazbeck Law (plaintiffs) File Number(s): 2020 / 44476

Judgment 1. The plaintiffs apply to the Court for an order that the defendant pay their costs of these proceedings on the indemnity basis. As I understand the submissions made on behalf of the defendant by her solicitor, she does not oppose a costs order being made, but submits that the order should be made on the ordinary basis. 2. The plaintiffs commenced these proceedings by summons filed on 11 February 2020. 3. The plaintiffs sought orders for the appointment of trustees for sale under s 66G of the Conveyancing Act 1919 (NSW) of certain property at Brighton-le-sands. The evidence suggests that the property was owned by the three plaintiffs and the defendants as tenants-in-common. Each of the three plaintiffs was registered as having a 1/100 share in the property and the defendant had a 97/100 share. However, the first plaintiff deposed to the fact that he and the defendant each had a one half beneficial interest in the property under a partnership between the parties. 4. It was said in the affidavit in support of the summons that the somewhat unusual nature of the beneficial ownership and the registered proprietorship of the property was explained by a number of complicated circumstances related to the parties also having interests as tenants-in-common in other properties. 5. Apparently, the need for the sale of the property arose because partnership projects for the development of various properties had not proceeded as expected, and a mortgage debt had accumulated on the property which was in arrears and could only be met from the proceeds of sale of the property. 6. The first plaintiff gave evidence that, in about November 2019, he and the defendant agreed that the property needed to be sold, but that, after a purchaser had been found, the defendant refused to sign the contract. The plaintiffs put in evidence a contract of sale for the property signed by purchasers with the sale price of $1,800,000. That was said to be higher than all offers previously received for the property. 7. The plaintiffs asserted that the defendant had been entirely uncooperative. The plaintiffs commenced the proceedings in order to achieve a judicial sale of the property so that the mortgage debt could be repaid and interest would cease to accumulate. 8. On 26 March 2020, the plaintiffs filed a notice of motion seeking leave to file an amended summons. 9. Among other things, the affidavit in support of the notice of motion explained that, on about 12 February 2020, the defendant had signed the contract of sale and exchange of contracts had taken place with the purchasers. It also explained that, on 20 March 2020, the defendant's solicitor advised that the defendant had withdrawn the authority granted to her solicitor to complete the contract of sale through PEXA and had withdrawn her instructions to act on the sale. 10. Settlement of the contract for sale was scheduled for 25 March 2020 but did not occur because of the position taken by the defendant. 11. The affidavit in support explained that the original application for an order for judicial sale of the property had been overtaken by the defendant having signed the contract for sale. The plaintiffs wished to amend their summons. 12. On 30 March 2020, the purchasers served a notice to complete on the parties to these proceedings whereby they appointed 3 PM on 17 April 2020 as the time for settlement of the contract for sale. 13. The Court gave the plaintiffs leave to file an amended summons on 31 March 2020, and the amended summons was filed on that date. 14. In brief, the amended summons sought a declaration that an agreement made between the plaintiffs and the defendants on 3 December 2019 to sell the property ought to be specifically performed and carried into execution. The plaintiffs sought consequential orders to give effect to the declaration. They retained, as alternative relief, the relief originally sought in the summons. 15. The proceedings were case managed by the Real Property List Judge with the aim of securing an early final hearing. On 9 April 2020, the proceedings were listed in the Equity Duty List on 15 April 2020 for hearing. 16. On the hearing, which was a virtual audio hearing, Mr Stephen Stanton of counsel appeared for the plaintiffs and the defendant represented herself. 17. After some discussion between the Court and the parties, orders were made by consent. The Court made a declaration that the contract made between the plaintiffs and the defendants entered into no later than 12 February 2020 to sell the property on the terms of the contract exchanged with the purchasers ought to be specifically performed and carried into execution. The Court made an order that the defendant specifically perform and carry into execution the said contract, and also made orders that had the effect that the solicitor for the plaintiffs was authorised to do everything necessary, on behalf of the parties, to effect the settlement of the contract for sale on PEXA. 18. On 6 May 2020, the Court made orders by consent concerning the payment out of the plaintiffs' solicitor's trust account of the balance of the sale price. 19. The Court also made orders for the service of submissions on the issue of costs. 20. In dealing with the issue of costs, the Court has had regard to the plaintiffs' submissions dated 20 May 2020 and the defendant's submissions, which are undated but were received after that date. 21. It must be noted that, by their original statement of claim filed on 11 February 2020, the plaintiffs sought an order for judicial sale of the property under s 66G of the Conveyancing Act. That was in circumstances that, by their amended summons filed on 31 March 2020, they sought specific performance of an alleged contract between the parties made on 3 December 2019 to sell the property. At least arguably, if the contract alleged had been made on 3 December 2019, the existence of that contract would have been inconsistent with the making by the Court of an order for the judicial sale of the property. The proper relief would have been to seek an order for the specific performance of the contract. 22. However, at the hearing on 15 April 2020, the Court pointed out to the parties that, even if some form of oral agreement was made between them on 3 December 2019, it could not be made the subject of an order for specific performance, because it was apparently oral, and the terms on which the property was to be sold were not identified and agreed. However, the Court suggested that the position may have changed when the defendant signed the contract for sale on or about 12 February 2020. At that stage, all of the terms of the contract between the parties could be identified by reference to the fact that they had all signed the contract for sale. It was at least arguable that the contract for sale would provide a sufficient memorandum in writing for the purposes of s 54A of the Conveyancing Act. 23. It became apparent, from the material that was before the Court, that the defendant had formed the view that the sale of the property should only take place in the context of some accounting process that dealt with all of the issues that arose out of the various partnership arrangements between the parties. As a layperson, the defendant may not have had a sufficient understanding of the different legal relationships that may have existed between the parties in relation to the various properties. 24. In any event, whatever may have been said about the cooperativeness of the defendant at earlier times, when the Court explained to her the consequences of the parties having signed the contract of sale, if it was not completed at the time specified in the notice to complete, the defendant relatively readily consented to the making of the orders that the Court made on 15 April 2020. 25. Unfortunately for the defendant, I am satisfied that this is an appropriate case for the Court to make an order that the defendant pay the plaintiffs' costs of the proceedings, but this should only be on the ordinary basis. 26. Even though the defendant ultimately consented to the orders made by the Court on 15 April 2020, she resisted the plaintiffs' claims for relief up until the hearing, so the issue of costs is not to be dealt with as if the parties had settled the proceedings. 27. Although the plaintiffs initially sought orders under s 66G of the Conveyancing Act, relief was not ultimately given under that provision, so the decision by Darke J in Denton by her tutor NSW Trustee and Guardian v Denton [2019] NSWSC 660, upon which the plaintiffs relied, is not material. 28. It is reasonable for the plaintiffs to submit that the conduct of the defendant before they commenced the proceedings, and then the conduct that led to the amendment of the summons, was unreasonable. But the conduct of a defendant that creates the necessity for the plaintiffs to commence the proceedings is not ordinarily relevant to the issue of whether costs should be ordered against the defendant on the indemnity basis. Indemnity costs may be awarded against the defendant for delinquency in the conduct of the proceedings, and for other reasons: Hypec Electronics Pty Ltd (in liquidation) v Mead (2004) 61 NSWLR 169; [2004] NSWSC 731 at [41]-[46] per Campbell J (as his Honour then was). 29. In reality, the defendant hardly did anything in the litigation, and did not serve any evidence. She simply did not cooperate with the plaintiffs by acting in the manner that the plaintiffs sought the assistance of the Court to order her to act. 30. Furthermore, the plaintiffs did not ultimately succeed in obtaining any of the relief that they sought in their summons or amended summons against the defendant. It has not been established that the plaintiffs were actually entitled to any of the relief that they sought. 31. In the face of the pressing need for the parties to be able to complete the contract for sale at the time specified in the notice to complete, the Court identified an arguable basis for the making of appropriate orders that appeared to be consistent with principle, and the defendant, as well as the plaintiffs, consented to those orders being made. 32. In these circumstances, the Court will make the following order as to costs: 1. Order the defendant to pay the plaintiffs' costs of the proceedings on the ordinary basis.