Supreme Court New South Wales Medium Neutral Citation: Orsini v Habambo [2024] NSWSC 289 Hearing dates: 6 March 2024 Date of orders: 6 March 2024 Decision date: 21 March 2024 Jurisdiction: Equity - Duty List Before: Parker J Decision: See [82] Catchwords: REAL PROPERTY — caveats — solicitor's costs agreement providing for client's property to be charged as security for fees — caveat by solicitor — lapsing notice issued — application for extension of caveat — final relief not claimed — originating process defective CIVIL PROCDURE — service — application for interlocutory relief — respondent inmate of correctional centre — ex parte order for "service in the first instance" on respondent's then solicitor by email — originating process and other court documents not delivered to respondent — no valid service — application dismissed Legislation Cited: Crimes (Administration of Sentences) Act 1999 (NSW) Legal Profession Uniform General Rules 2015 (NSW) Legal Professional Uniform Law 2014 (NSW) Real Property Act 1900 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 Bidmonta Pty Ltd v Gerardo D'Angolo & anor [2009] NSWSC 438 Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) 5 BPR 11,314 Malouf v Constantinou [2017] NSWSC 923 Malouf v O'Donohoe [2001] NSWSC 335 Martyn v Glennan [1979] 2 NSWLR 234 Municipal District of Concord v Coles (1905) 3 CLR 96 Redglove Projects v Ngunnawal Local Aboriginal Council [2004] NSWSC 880 Redman Construction Pty Ltd v Tarnap Pty Ltd [2005] NSWSC 1011 Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489 Troncone v Aliperti (1994) 6 BPR 13,291 Weller v Museth [2017] NSWSC 1809 Texts Cited: Nil Category: Principal judgment Parties: Julie Ann Orsini (Applicant) George Habambo (Respondent) Representation: Counsel: D W Elliott (Applicant) Solicitors: Julie Ann Orsini (Respondent) Self-Represented: George Habambo (Respondent) File Number(s): 2024/80279 Publication restriction: Nil JUDGMENT 1. On 6 March I made orders in these proceedings dismissing an application by the plaintiff for an extension of her caveat over land owned by the defendant. This judgment sets out my reasons for those orders. 2. The plaintiff, Julie Ann Orsini, is a solicitor in sole practice at Lilyfield in the inner west of Sydney. The defendant, George Habambo, is a former client of hers. Ms Orsini claims that she is entitled to security over Mr Habambo's property for fees rendered for acting for him in certain legal proceedings, which remain unpaid. The caveat which she lodged over his property reflected that claim. Background and procedural history 1. Ms Orsini acted for Mr Habambo between 2020 and 2022 in family law proceedings involving his former spouse and in later criminal proceedings against him. In October 2022, Mr Habambo was convicted in the criminal proceedings and taken into custody. Later, he was sentenced to ten years' imprisonment. He is currently serving that sentence. 2. The land the subject of Ms Orsini's caveat is a residential property at Illawong in southern Sydney. It was Mr Habambo's home before he was gaoled. A Land Registry Services search shows that the land has been mortgaged to Pepper Finance Corporation Limited. The evidence does not reveal how much is secured on the property, or what its current market value is. 3. According to Ms Orsini, she first came to act for Mr Habambo through other clients of hers named Mark Taouk and Maroun Taouk. Apparently they were involved in the building industry. Mr Habambo worked as a project manager for them and, according to Ms Orsini, they were keen to help him defend the proceedings. She says that they, and two of their companies, agreed to act as third-party payers ("TPPs"), effectively guarantors, for Mr Habambo's legal fees. For convenience, in the rest of this judgment, I will refer to Mr Mark Taouk and Mr Maroun Taouk, and their companies, as the "Taouks". 4. The security interest which Ms Orsini claims, derives from a costs agreement which she sent to Mr Habambo and the Taouks on 30 November 2020 via email. Also attached to the email were two costs disclosure documents. 5. The family law proceedings began in September 2020 (after Mr Habambo and his wife separated in August). Mr Habamabo was arrested, and, it seems, charges were laid which instituted the criminal proceedings, on 24 October. 6. Clause 1 of the costs agreement dealt with the work to be undertaken by Ms Orsini. It relevantly provided: The work you require us to do and steps required to perform that work will be generally identified under this heading in each individual matter. As you would be aware, it is not always possible to identify all the steps that will be required to be performed in some matters, particularly litigious matters as during the course of the matter the plan or tactics for continuation of the proceedings may significantly change. Accordingly the work described under this heading will be described in general terms setting out the aim of your instructions. Miscellaneous matters such as letters of demand which do not proceed to claims will be charged at Court hourly rate applicable to the nature of the claim. For the present purposes, this agreement relates to all work including but not limited to letters, advices, conferences, Court pleadings, legal representations at meetings and court appearances and all other matters required of us in relation to the prosecution or defence of the proceedings identified in the Cost Disclosure document (CD). Despite the matters set out above, the Agreement is not limited to the proceedings identified in the attached cost disclosure and, subject to any subsequent or independent disclosure, applies in respect of any instructions you may give to this firm for any other representation on your behalf in any other matter. 1. The security clause upon which Ms Orsini relies in this proceeding is clause 9 which provided: In addition to any lien on documents for unpaid fees, each of the client and third party payers agree to grant a charge over any real estate or other property held by you in order to secure fees due to this firm. By acceptance of this agreement you offer to and grant an entitlement to lodge a caveat or mortgage over any real property held in your name in order to secure any unpaid fees and to withhold any settlement funds pending payment of fees. Fees which may be secured are fees and disbursements which are payable and overdue for a period of more than 30 days at the time that the security is required. 1. The costs agreement was not signed by Mr Habambo (or by the Taouks). But clause 13 relevantly provided: We will begin the work when you sign and return this agreement or in any other manner acknowledge acceptance of the terms of this agreement. This means that in the event that you instruct us to do work for you after receipt of this agreement, you have adopted the terms of this agreement in relation to the billing arrangements and our retainer with you in relation to that work. 1. Counsel for Ms Orsini submitted that the costs agreement was a written offer which had effectively been accepted by Mr Habambo, through his conduct in continuing to instruct Ms Orsini in accordance with the terms of the letter. Counsel referred to my decision in Weller v Museth [2017] NSWSC 1809, where, at [25]-[27], I considered that, in somewhat similar circumstances involving a claimed security interest, the failure to sign the costs agreement was not fatal to the solicitor's claim. 2. The costs disclosures attached to Ms Orsini's email of 30 November both related to the family law proceedings. Ms Orsini now says that a third disclosure, dealing with the criminal proceedings, was prepared but was accidentally not attached. She says that she did not notice this at the time. 3. According to Ms Orsini, bills rendered up to February 2022 had been paid in due course. But after February 2022, two bills rendered by Ms Orsini in that month were not fully paid. Nevertheless, Ms Orsini continued to act. 4. By this stage it appears that the family law proceedings had come to an end and Ms Orsini was concentrating on the criminal proceedings. Those proceedings went to trial in the second half of 2022. The trial lasted for 6 weeks. 5. On 6 October, Mr Habambo was convicted. Although the sentencing hearing seems not to have taken place immediately, it appears that Mr Habambo was taken into custody on that day. I assume that it was accepted on his behalf, given the nature of the charges of which he was convicted, that a custodial sentence was inevitable. 6. Over the next week, Ms Orsini continued to work on the matter, preparing a proposed appeal and also an application to have Mr Habambo released. But it seems that the Taouks were unwilling to fund any further steps in the proceedings. 7. On 14 October, Ms Orsini sent an email to the Taouks (the email is recorded as being copied to Mr Habambo, but, given that he was then in gaol, it presumably did not reach him). Ms Orsini stated in the email that there were outstanding fees of $226,000 (this included $20,000 of the February bills still outstanding). Ms Orsini said that a further $77,000 was owing. These figures were said to have been calculated on a discounted basis, at rates less than Ms Orsini was entitled to charge under her costs agreement. She demanded immediate payment and threatened that if this was not forthcoming, she would reissue the bills at her contractual rates, which would be higher. 8. On 19 October, Ms Orsini reissued the 14 October bill. This bill, and the earlier bill, are not in evidence, but it seems that Ms Orsini claimed $260,000 for work on the criminal proceedings, calculated on the "discounted" basis. 9. On the same day, the Taouks responded by terminating any obligations they had as TPPs under the retainer. There was no evidence about any formal termination of the retainer by Mr Habambo but, presumably, Ms Orsini ceased working for him at that point. 10. On 1 November, Ms Orsini's caveat was lodged over the Illawong property. Details of the interest claimed were: "The Registered Proprietor granted a charge over the land pursuant to Cost Agreement dated 30 November 2020". Ms Orsini did not herself lodge the caveat. It was lodged by a solicitor acting for her, Ms Katerina Mihail. 11. Meanwhile, the day before, Ms Orsini issued statutory demands to the Taouk companies for payment of the fees claimed by her. In response, an application was made on behalf of the companies to set the statutory demands aside on the ground that liability was disputed. 12. One of the points taken by the Taouks was based on alleged non-compliance by Ms Orsini with her disclosure obligations under Part 4.3 of the Legal Professional Uniform Law 2014 (NSW) ("LPUL"). LPUL s 178(1) relevantly provides: If a law practice contravenes the disclosure obligations of this Part— (a) the costs agreement concerned (if any) is void; and (b) the client or an associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and (c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; … 1. The non-disclosure alleged was a failure to provide, and keep up to date, an estimate of the fees to be charged in the criminal proceedings. LPUL s 174 relevantly provides: (1) Main disclosure obligation A law practice— (a) must, when or as soon as practicable after instructions are initially given in a matter, provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs; and (b) must, when or as soon as practicable after there is any significant change to anything previously disclosed under this subsection, provide the client with information disclosing the change, including information about any significant change to the legal costs that will be payable by the client — together with the information required under sub-section (2). (2) Additional information to be provided Information provided under— (a) subsection (1)(a) must include information about the client's rights— (i) to negotiate a costs agreement with the law practice; and (ii) to negotiate the billing method (for example, by reference to timing or task); and (iii) to receive a bill from the law practice and to request an itemised bill after receiving a bill that is not itemised or is only partially itemised; and (iv) to seek the assistance of the designated local regulatory authority in the event of a dispute about legal costs; or (b) subsection (1)(b) must include a sufficient and reasonable amount of information about the impact of the change on the legal costs that will be payable to allow the client to make informed decisions about the future conduct of the matter. (3) Client's consent and understanding If a disclosure is made under subsection (1), the law practice must take all reasonable steps to satisfy itself that the client has understood and given consent to the proposed course of action for the conduct of the matter and the proposed costs. … (6) Disclosure to be written A disclosure under this section must be made in writing, but the requirement for writing does not affect the law practice's obligations under subsection (3). … 1. Th effect of s 178 is somewhat mitigated by r 72A of the Legal Profession Uniform General Rules 2015 (NSW) ("LPUGR"). That rule relevantly provides: (1) This rule applies where a law practice has contravened the disclosure obligations of Part 4.3 of the Uniform Law in relation to a particular matter. (2) Section 178(1) and (2) of the Uniform Law do not apply in relation to the law practice (so far as they would otherwise apply to the matter concerned) in circumstances where the relevant authority, a costs assessor, a court or a tribunal is satisfied that— (a) the law practice took reasonable steps to comply with the disclosure obligations of Part 4.3 of the Uniform Law before becoming aware of the contravention, and (b) the law practice, no later than 14 days after the date on which it became aware of the contravention, rectified the contravention, as far as practicable, by providing the client [which includes an associated third party payer: see sub-rule (4)] with the necessary information required to be disclosed under Division 3 of Part 4.3 of the Uniform Law (including, where relevant, an estimate or revised estimate of the costs), and (c) the contravention was not substantial and it would not be reasonable to expect that the client would have made a different decision in any relevant respect. … 1. On 20 November, three weeks after the Taouks' application was filed, Ms Orsini issued an email purporting to constitute notice for the purpose of LPUGR r 72A. The email referred to conversations between Ms Orsini and the Taouks in July and August 2022. In those conversations, according to Ms Orsini, she disclosed to the Taouks that she estimated the costs of the criminal proceedings to be $250,000 or thereabouts. 2. According to Ms Orsini's affidavit, she sent this email to Mr Habambo and the Taouks. The email itself, however, is only addressed to the Taouks. The discrepancy was not addressed at the hearing before me. 3. In late January last year, Ms Orsini issued a fresh bill for the criminal proceedings, purportedly calculated in accordance with her contractual rates. The total amount claimed in the bill was $426,000. 4. The issue of the bill was followed by an application for a costs assessment by Ms Orsini. The application itself was not in evidence, but the Assessor's determination shows that the Taouks were named as costs respondents. So too was Mr Habambo. It seems that a Ms Larissa Abboud, who is a friend of Mr Habambo, presented submissions on his behalf. I assume that she is not legally qualified. 5. The Assessor made his decision on 20 December last year. Relevantly, so far as Mr Habambo was concerned, the Assessor stated: The [costs agreement of November 2020] did not provide any written disclosure in respect of the costs that were subject to the assessment. Accordingly, the agreement failed to comply with s 174(1)(b) of the LPUL. 1. Having found that the costs agreement was not applicable, the Assessor assessed the costs on a "fair and reasonable" basis. He made substantial disallowances to the costs claimed in the January bill. The total assessment was $241,000, and this figure was recorded in the costs certificate. 2. Although completed in December, the certificate was not immediately issued. The Manager, Costs Assessment sent it to the parties on 7 February. 3. On the following day, by email addressed to the Taouks, Ms Orsini foreshadowed an application for review. That review application was filed on 20 February. Mr Habambo was named as a respondent. The address given for him was that of the Illawong property and his email address appears to have been the email used by him in his work as a project manager before he was gaoled. Ms Abboud was identified as his legal representative, but her address was shown as not being known. An email address was given which is illegible. 4. Meanwhile, on 12 February, a solicitor with the law firm Marsdens, Ms Helen Jabbour, wrote to Ms Orsini's solicitor, Ms Mihail, enclosing a lapsing notice on behalf of Mr Habambo against Ms Orsini's caveat over the Illawong property. According to Ms Orsini, and this does not appear to be disputed, the lapsing notice was received on 15 February. This meant that the caveat would lapse on 7 March unless extended by an order of the Court prior to that date. 5. On 20 February, the day after filing the review application, but six days after the lapsing notice had been served, Ms Orsini wrote to Ms Jabbour. Ms Orsini referred to the review application and asserted that, as a consequence, the "determination" by the assessor to "set aside" the costs agreement was suspended. Ms Orsini attached a draft of the summons eventually filed (see [40] below) and sought consent to the orders sought therein. 6. Following a request for more time, Ms Jabbour provided her response a week later on 28 February. She confirmed that she acted for Mr Habambo but denied the validity of the interest claimed by Ms Orsini in the caveat. 7. On the following day, Ms Orsini commenced the present proceedings ex parte in the Duty List. Her counsel obtained orders from the Duty Judge (Lindsay J) for short service, making the summons returnable in the Duty List on 6 March. The short service order provided that the documents were to be served "in the first instance" on Ms Jabbour by email. 8. It seems that at some point over the next few days, Ms Jabbour's instructions (which may have been provided informally through Ms Abboud) were withdrawn. On the morning of 5 March, the day before the matter was fixed for hearing in the Duty List, Ms Abboud approached the Court to have an order made under s 77 of the Crimes (Administration of Sentences) Act 1999 (NSW) to permit Mr Habambo to appear, self-represented, by video link at the hearing. That order was duly made. 9. Later on 5 March, there was an exchange of correspondence between Ms Orsini and Ms Jabbour. At around midday, Ms Orsini emailed Ms Jabbour asking her to confirm that she had "provided all documents relating to this matter" to Mr Habambo. Five minutes later, Ms Jabbour replied: "As you would be aware, Mr Habambo is incarcerated. Documents have been forwarded to Ms Larissa Abboud whom I was authorised to correspond with on behalf of Mr Habambo." 10. The matter was listed before me in the Duty List on 6 March. Mr Habambo appeared via video link in accordance with the s 77 order. He confirmed that he was self-represented. Ms Orsini was represented by counsel and attended the hearing to instruct. Application for extension of caveat Nature of application 1. Ms Orsini's summons, as filed, sought an order that the caveat be extended until 28 days after the date upon which the determination of her review application was delivered to the parties, "and/or" until "further order". Alternatively, the caveat was to be extended "as agreed in writing between the parties". I raised with counsel for Ms Orsini whether this form of relief properly accorded with the nature of the application. 2. A caveat is regarded by some people as amounting to some form of security over the property caveated. Ms Orsini herself seems to have been of that view. In her letter of demand to Ms Jabbour of 20 February (see [34] above), she referred to her "express right to maintain a caveat over that [Illawong property] to secure legal fees." The notion that registration of the caveat created some sort of interest in the property may also have underpinned the contention in that letter that the application to lapse the caveat was premature, given that the assessor's "decision" that the agreement was void had been stayed by the filing of the review application. 3. Section 178 of the LPUL applies of its own force to render a non-compliant costs agreement "void". The operation of the section does not depend on a determination by the costs assessor, such as a decision to set an otherwise valid agreement aside. But it is not necessary to go into the stay question any further. In my view, the assumption that the caveat represented some form of security is misconceived. 4. In the Torrens system, a caveat does not create any proprietary interest in the property caveated. It is no more than a procedural device to protect a claimed proprietary interest until the existence or otherwise of that interest is determined by the Court. 5. As such, a caveat is inherently temporary. The caveator must always, if challenged by an application to remove the caveat from the register, be prepared to proceed to establish the existence of the interest claimed. As Griffith CJ said in Municipal District of Concord v Coles (1905) 3 CLR 96 (at 108), the lodging of a caveat "is really in the nature of the initiation of litigation". 6. The older practice which applied before the lapsing procedure was introduced was that a removal order would be made unless an undertaking was given by the caveator to bring proceedings to establish the existence of the interest claimed, which would be done by way of separate proceedings: see Martyn v Glennan [1979] 2 NSWLR 234 at 237F-G. The more recent practice, where a lapsing notice is given, is to combine the application to extend the caveat and the caveator's substantive claim in the one set of proceedings. 7. Even before 1986, it was established that an application for removal of the caveat attracted principles which are analogous to those which applied to the grant of an interlocutory injunction: see for example Martyn at 237C-E. It is now clearly established that the analogy applies to an application for extension of a caveat which has been the subject of a lapsing notice: see for example Redman Construction Pty Ltd v Tarnap Pty Ltd [2005] NSWSC 1011, at [3]. 8. The position was summarised by Young J in Iaconis v Lazar [2007] NSWSC 1103 at [22]: A caveat should only remain on the title pending the application by the person claiming the equitable or other interest to commence a suit for specific performance or otherwise to vindicate that equitable interest. 1. This being so, the remarks of Gleeson CJ in Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 are in point. His Honour stated, at [9], [11] and [16]: Sir Frederick Jordan, in his Chapters on Equity in New South Wales (6th ed (1947), p 146), said: ''The purpose of an interlocutory injunction is to keep matters in status quo until the rights of the parties can be determined at the hearing of the suit.'' … The corollary of the proposition stated by Sir Frederick Jordan is that a plaintiff seeking an interlocutory injunction must be able to show sufficient colour of right to the final relief, in aid of which interlocutory relief is sought. Lord Cottenham LC in Great Western Railway Co v Birmingham & Oxford Junction Railway Co … formulated the issue as whether ''this bill states a substantial question between the parties''. In McCarty v North Sydney Municipal Council …, the Chief Judge in Equity described the proposition that a plaintiff seeking an interlocutory injunction must show at least a probability that he will succeed in establishing his title to the relief sought at the final hearing as ''so well established that no authority is really needed in support of it''. … In a context such as the present, a proposition that the respondent has a ''free-standing'' right to interlocutory relief is a contradiction in terms. This is demonstrated, not only by the purpose for which interlocutory relief is granted, but by the form of the relief. The Full Court granted the injunction sought ''until further order''. A more usual form of interlocutory injunction would be ''until the hearing of the action or further order'', but the effect is the same. If there were a ''free-standing'' right to injunctive relief, why would the injunction be limited in time? If there is no serious question to be tried because, upon examination, it appears that the facts alleged by the respondent cannot, as a matter of law, sustain such a right, then there is no subject matter to be preserved. There is then no justice in maintaining the status quo, because that depends upon restraining the appellant from doing something which, by hypothesis, the respondent has no right to prevent. 1. It follows that where an application is made for an extension of the caveat, the initiating process also needs to contain a claim for final relief giving effect to the interest claimed in the caveat. It has repeatedly been stated that an originating process which lacks such a claim for final relief is defective: see, for example, Wu v Dardaneliotou [2008] NSWSC 1319 at [2] (Brereton J) and Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260 at [23] (White J, as his Honour then was). 2. In the usual case, the interest claimed will be registrable, in which case the final relief sought should require the execution and registration of the instrument(s) required to create such an interest on the register. Thereafter, that interest can be enjoyed in the ordinary way without any further curial steps. 3. In the present case, the interest claimed is an interest by way of security for fees. It is a claim to a registrable interest under s 56 of the Real Property Act 1900 (NSW) ("RPA") which applies where land is charged with, or made, security for an obligation of the owner. Where the obligation is a debt, the registrable interest is a mortgage: see s 56(1). Where it is some form of obligation other than a debt, the registerable interest is a charge: s 56(2). In the present case, s 56(1) would appear to be the applicable provision, and accordingly Ms Orsini's claim must be one to require Mr Habambo to execute and register a mortgage over the land to secure her fees. In substance, it is a claim for specific performance of Mr Habambo's alleged obligations under the costs agreement of November 2020. 4. There may be potential complications to the application of these principles where there is a contractual right to lodge a caveat. In Troncone v Aliperti (1994) 6 BPR 13,291, the Court of Appeal held that the grant of an authority to lodge a caveat conferred, as a matter of contractual implication, an estate or interest in the land sufficient to support the caveat. Earlier, in Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) 5 BPR 11,314, a case where there was a clause expressly precluding the owner from "removing" the caveat, and the owner made an application to have the Court remove it (rather than causing a lapsing notice to issue), McLelland J held the clause effective to defeat the application. In his Honour's view, ousting the owner's statutory entitlement to apply for removal of a caveat was not contrary to public policy. 5. But such implications do not arise in every case. In Redglove Projects v Ngunnawal Local Aboriginal Council [2004] NSWSC 880, White J held that, on the true construction of the contract in that case, there was an implied obligation on the owner, but that obligation was only an obligation not to deal with the land in question without the consent of the caveator: see [18]. This did not create an interest in land which would support a caveat, although it would presumably have supported the grant of an injunction against the registered proprietor. And in Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489, Bryson AJ declined to interpret a contractual entitlement to lodge a caveat as imposing any additional obligation on the owner at all. In his Honour's view, all the owner was doing by agreeing to the caveat being lodged was accepting the practical inconvenience of getting the caveat removed: at [62]-[63]. 6. Such questions do not arise in the present case. Clause 9 of the costs agreement, which Ms Orsini relies expressly, refers to a charge. There is no need to consider what interest she would have if the reference to a caveat stood alone. Nor was there any express provision obliging Mr Habambo not to take steps to remove the caveat. In any event, by the time the proceedings began, he had already had the lapsing notice issued by the Registrar General. It would have been too late to obtain any injunction, even if his conduct in doing so had been a breach of contract. 7. As already noted, the extension in the summons was sought until 28 days after receipt of the Review Panel's decision, or until further order or agreement by both parties. The criticisms made by Gleeson CJ of "free-standing" relief in the Lenah Game Meats case are equally applicable here. If Ms Orsini was entitled to interlocutory relief, she was entitled to such relief until determination of her claim to have a mortgage in her favour registered on the title of the Illawong property. There was no principled basis for an injunction pending the determination of the costs assessment review, and still less for an injunction until "further order". But the problem with the summons is more fundamental than that. In defiance of well-established principles, it simply sought no final relief at all. 8. When I pointed this out, counsel for Ms Orsini accepted that the summons needed to be amended so as to include a substantive claim. Counsel at first pressed me to make an order extending the caveat for a period of time to allow her to do that. But such an approach would have involved granting interlocutory relief before a proper basis for such relief had been established and I declined to do so. At counsel's request, I instead stood the matter down for a couple of hours to allow the amended summons to be prepared. Service on respondent 1. When the proceedings were re-listed before me, which took place at 12:30pm, counsel for Ms Orsini produced an amended summons (which claimed final relief in satisfactory form) and a supplementary affidavit addressing other issues raised in the course of the argument. There was some further debate about the merits of the application, but in the course of the debate a more fundamental question arose about service of the summons, the amended summons and the affidavit on Mr Habambo. 2. From what Mr Habambo told me, it appears that he received the benefit of a description of the original summons and supporting affidavit from someone else (perhaps Ms Abboud). But he did not receive the actual documents. There was no reason to doubt what Mr Habambo said in this regard. And it was clear that Mr Habambo had not been provided with the amended summons and supplementary affidavit produced in the course of the morning. 3. The Uniform Civil Procedure Rules 2005 ("UCPR") require originating process to be served personally except in certain defined circumstances (r 10.20(2)(a)). Other documents may be served personally, or in other specified ways (r 10.5). These other ways include service by post to an address for service. But Mr Habambo has never entered an appearance and therefore did not have any address for service. 4. As already noted, the orders obtained by counsel from Lindsay J on 1 March provided for service "in the first instance" on Ms Jabbour. Counsel submitted that the documents had been served on her, and that this was service "in accordance with the orders of the Court". But if this was meant to suggest that the originating process and the affidavit had been served in accordance with the UCPR, then I cannot agree. 5. Under the Rules, service may be achieved in one of three ways. It may be effected in a manner prescribed by the UCPR; or it may be effected by a method prescribed in a prior order by the Court for substituted service (UCPR r 10.14(1)); or service may be "effected" informally and then later confirmed by the Court (UCPR r 10.14(3)). 6. The notion of service "in the first instance" is not recognised in the Rules. The practice of making orders for such "service", at least so far as my experience is concerned, crept in during the Covid-19 Pandemic lockdowns. Orders in this form may have been devised as directions for informal service which could be the subject of later confirmation by the Court if necessary. But conditions have now completely changed. The continued use of the formula has been an accident waiting to happen. 7. The Rules specifically provide for service of a prisoner by leaving a copy of the relevant process or court document with the general manager of the correctional centre where that prisoner is incarcerated (UCPR r 10.25). No attempt was made to effect personal service on Mr Habambo by this means or otherwise. It has not been established that the documents were actually delivered to him. It was not suggested that the second-hand description he may have received of them would be sufficient to justify an order confirming service. 8. I did not understand counsel for Ms Orsini to press a submission that the order for "service in the first instance" made in this case was an order for substituted service. It does not, to my mind, read as one. In any event, such an order would not have been justified. Mere convenience to the serving party is an insufficient basis for an order for substituted service. 9. Especially is this so when Mr Habambo was incarcerated. Imprisonment did not deprive him of ownership of the Illawong property or rights associated with that ownership. Mr Habambo no doubt chose not to obtain representation. The Court is not obliged to treat him more favourably on that account. But there is no justification whatsoever for cutting corners, especially given the difficulties created for a prisoner, who is unable to communicate freely with the outside world, in dealing with court proceedings. 10. Counsel urged me again to make the orders sought in the summons granting an extension until after the review proceedings were completed. Counsel asserted that this would be the convenient, cost-effective course for all parties. 11. I found myself unable to accept this suggestion. To make an order in circumstances where Mr Habambo has not been provided with the documents on which the Court was asked to act would have been a flat denial of natural justice. Discretionary factors were all against Ms Orsini. The circumstances of urgency which she faced were not, in any way, Mr Habambo's responsibility. They were a result of the way her own case had been conducted. It could hardly be said that Mr Habambo was in a position to evade service! 12. For reasons discussed below, even if I considered it appropriate to proceed on some sort of interim basis, there would have been a further question about whether Ms Orsini had demonstrated a sufficiently plausible case for the interest which she claimed. But, in my view, the difficulties with service themselves compelled refusal of the application for an extension. 13. I would have taken the same approach with any interlocutory application. But in preparing this judgment, I have noted the specific provision in s 74K of the RPA about service of caveat extension applications. It relevantly provides: Power of Supreme Court to extend operation of a caveat lodged under section 74F (1) Where a caveator is served with a notice prepared under section 74I (1) or (2), 74J (1) or 74JA (3), the caveator may prepare, in the manner prescribed by rules of Court, an application to the Supreme Court for an order extending the operation of the caveat. (2) Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator's claim has or may have substance, make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application. (3) Unless the Supreme Court has made an order dispensing with service, it may not hear an application made under subsection (1) unless it is satisfied that all interested parties disclosed by the notice which gave rise to the application have been served with copies of the application before the hearing. (4) An order under subsection (2) may be made ex parte or otherwise. … 1. There is some tension between subsection (3), which require service on all interested parties, and subsection (4), which permits an order to be made ex parte. In Malouf v O'Donohoe [2001] NSWSC 335 at [1], Young CJ in Eq stated that section 74K requires that "no ex parte application to extend a caveat is to be entertained unless the Court has dispensed with service". But in Bidmonta Pty Ltd v D'Angolo [2009] NSWSC 438 Brereton J stated, at [4]: Although s 74K provides that, unless the Court makes an order dispensing with service, it may not hear an application under s 74K(1) unless satisfied that there has been service of the application, subsection (4) somewhat inconsistently provides that an order under sub-section (2) may be made ex parte or otherwise. It seems to me that the hearing envisaged by s 74K(3) is the substantive hearing of the application for an order extending the operation of the caveat, and that s 74K(4) contemplates that an order may initially be made ex parte where appropriate, notwithstanding the requirement for service of the application before the substantive hearing. What s 74K(3) does is to prohibit the substantive hearing of an application for an extension of the caveat without notice, unless an order dispensing with service has been made. The present application is made before commencing proceedings, and in my view s 74K(3) was not intended to prevent the Court making an ex parte order under 74K(4) in those circumstances. 1. It is not necessary to determine which of these two views is correct (Brereton J does not appear to have had Malouf v O'Donohoe cited to him). For the reasons already given, it would have been quite inappropriate to make an order dispensing with service. Nor would it have been appropriate to proceed to make an order ex parte on 6 March, even if that had been possible without first making an order dispensing with service. Section 74K thus provides further support for my decision on this point. Orders and further proceedings 1. For the reasons given above, I made an order on 6 March dismissing Ms Orsini's application. Although, as a self-represented litigant, Mr Habambo is unlikely to have any recoverable costs, I considered that costs should follow the event and ordered that the application be dismissed with costs. 2. In the course of the hearing, I provided an explanation to Mr Habambo about how the caveat provisions worked. In doing so, I left something important out. I told Mr Habambo that if the extension was not granted, the caveat would automatically be removed from the register. This is incorrect. Although the extension has been refused, the caveat will stay on the register until an affidavit is filed deposing to service and the non-extension of the caveat within the 28 days after the date of service: see RPA s 74J(2). If Mr Habambo has not already been advised of this, he should, when reading this judgment, be aware that it will be necessary to get someone to undertake the task on his behalf. 3. At the request of counsel for Ms Orsini, I made directions for the further conduct of the proceedings. It was unnecessary for me to reach any conclusions about whether Mr Orsini's claim for a caveatable interest was justified or not. That will, if Ms Orsini continues to press her claim, be the subject of further proceedings. But, for the assistance of the parties, I think that I should make the following observations. 4. There seem to be real questions about whether the Assessor's conclusion that the costs agreement was void can be overcome. There are two points to make about this. 5. Firstly, while in the passage which I have quoted at [29] above the Assessor referred to a failure to update the costs estimate in accordance with LPUL s 174(1)(b), on his findings, and as accepted by Ms Orsini, there was also a failure to provide an initial estimate as required by s 174(1)(a). It is hard to see how Ms Orsini could escape from the consequences of that non-disclosure. 6. Secondly, as already noted, there is a discrepancy in the evidence about whether the email on which Ms Orsini relied as notice under LPUGR r 72A was sent to Mr Habambo (see [25]-[26] above). Despite what Ms Orsini said in her affidavit, the email itself is in evidence and it was only addressed to the Taouks. The text of the email, which I have not reproduced in this judgment, also refers to earlier conversations with the Taouks, not with Mr Habambo. 7. I have not overlooked the fact that Ms Orsini claims that she also notified Mr Habambo of the $250,000 estimate orally, but the purported r 72A notice does not refer to that conversation. In any event, even if the email was sent to him, it is hard to see how he could have received it, having been in gaol at the time. 8. The requirements of r 72A are stringent. There is likely to be real debate about the adequacy of Ms Orsini's purported notice. But so far as enforcement against Mr Habambo is concerned, even if the disclosure was adequate, it seems unlikely that the notice was ever communicated to him, and that, seemingly, would be fatal to her claim. 9. There is a further point. Any proceedings in this Court will not be limited to the issues which were raised in the assessment about non-disclosure. The Court has power in a proper case to set aside the costs agreement in equity even if it is valid under the LPUL. The sort of issues which can arise are illustrated by Malouf v Constantinou [2017] NSWSC 923; see in particular at [94]-[121] (fiduciary conflict); [122]-[128] (undue influence); [129]-[132] (unconscionable transaction and misrepresentation); and [133]-[179] (reasonableness). 10. I may of course be overlooking something. Having mentioned these matters, I will leave it to Ms Orsini and her advisors to consider whether to proceed any further with her claim in these proceedings, or the review application. 11. The orders made by the Court on 6 March on Ms Orsini's application for interlocutory relief were: 1. Order the plaintiff's application for extension of the caveat be dismissed with costs. ********** Amendments 18 April 2024 - Grammatical errors amended [43], [46], [51] and [55] 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: 18 April 2024