Birch v Glissen Pty Ltd [2005] NSWSC 337

New South Wales Supreme Court

CITATION : Birch v Glissen Pty Ltd [2005] NSWSC 337

HEARING DATE(S) : 30.03.05

JUDGMENT DATE : 15 April 2005

JURISDICTION : Equity Division

JUDGMENT OF : McDougall J at 1

DECISION : Order that the costs payable pursuant to order (2) made by me in these proceedings on 30 March 2005 be payable on the indemnity basis. Those costs are to include the costs of this application.

CATCHWORDS : Practice and procedure - costs - indemnity costs - special circumstances - where extension for caveat sought but could not be supported on either existing or amended claim - whether notice of motion subsequently withdrawn - whether indemnity costs ought

Home Building Act 1989 LEGISLATION CITED : Real Property Act 1900

Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) 5 BPR 11314 Oshlack v Richmond River Council (1998) 193 CLR 72 Harrison v Schipp [2001] NSWCA 13 CASES CITED : NMFM Property Pty Ltd v Citibank Ltd [No 11] (2001) 109 FCR 77 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 White ACT (in liquidation) v G B White & Ors [2004] NSWSC 303

P: Peter Birch PARTIES : D: Glissen Pty Ltd

FILE NUMBER(S) : SC 2047/05

P: Mr J Johnson COUNSEL : D: Mr AC Iuliano

P: Dennis & Company SOLICITORS : D: Colin Biggers & Paisley

LOWER COURT JURISDICTION :

1 HIS HONOUR: The question for decision is whether the costs payable by the plaintiff to the defendant in respect of the plaintiff's unsuccessful notice of motion for extension of a caveat should be ordered to be paid on the indemnity basis. 2 By his summons filed on 22 March 2005, the plaintiff claimed, relevantly: "(1) A declaration that in accordance with the terms of be [sic] made between the plaintiff and the defendant dated 21 January 2005 the plaintiff has a relevant estate or interest sufficient to sustain Caveat No: AB 252333. (2) An order that caveat No. AB 252333 be extended". 3 By notice of motion filed on the same day, the plaintiff sought, among other things, an interlocutory order extending the caveat. 4 I heard the claim for interlocutory relief on 30 March 2005. On that day, the plaintiff sought and was granted leave to amend prayer 1 of the summons so that it read (for convenience the deleted word is struck through and new words are in bold): "(1) A declaration that in accordance with the terms of be agreements between the plaintiff and the defendant dated 19 and 21 January 2005 the plaintiff has a relevant estate or interest sufficient to sustain Caveat No: AB 252333. (2) An order that caveat No. AB 252333 be extended". 5 In Schedule 1 of the caveat, the estate or interest claimed by the plaintiff is described as "monies due pursuant to Deed dated 21/1/05". It is said further that the interest arose by virtue of a Deed dated 21st January made between the defendant and the plaintiff. 6 It is apparent from the Deed of 21 January 2005 that the plaintiff and the defendant were parties to a building contract and that there were disputes under that contract. The plaintiff (the builder) had lodged a caveat against the title to the land at 1 Turramurra Ave, Turramurra upon which the building operations were carried out. The defendant (the proprietor) said that the caveat was lodged in breach of s7D of the Home Building Act 1989. That would appear to be correct, although I do not need to express a concluded view. In any event, by the Deed of 21 January 2005, the plaintiff agreed, among other things, to withdraw that caveat. (In fact, it appears, the caveat had been withdrawn prior to the date of the Deed.) 7 By cl 3 of the Deed, the defendant agreed to pay to the plaintiff $330,000. $280,000 of that was payable upon execution of the Deed. The balance was payable no later than "the registration of a second mortgage over the Site securing a further borrowing by the Owner from an additional financier". 8 By cl 4, the defendant agreed that "[i]n order to secure to the builder the payment of the sum of $50,000" it would "arrange for the grant to the Builder of a mortgage over the property at 26 George Street Avalon". 9 The property at Avalon was not the property on which the building works were carried out; it was not property owned by the defendant; and it was not against the title to that property that the present caveat, AA 252333, was lodged. 10 By cl 6 of the Deed, the plaintiff was required to do certain things before "becoming entitled to receive any payment from the Owner". It was not submitted that the plaintiff had failed to comply with any of its obligations under cl 6. 11 There was no other clause in the Deed of 21 January 2005 that the plaintiff relied upon as giving it an interest in the Turramurra land, or otherwise as entitling it to lodge a caveat against the title to that land. Nonetheless, that is what the plaintiff did. 12 As I have noted, the plaintiff sought and was granted leave to amend his summons so as to rely additionally upon an agreement dated 19 January 2005. That agreement was a handwritten document of one page. It provided in cl 1 for payment of $330,000 by instalments of $280,000 on execution of a "Termination Deed" (which, I infer, is the Deed that was made two days later, on 21 January 2005). It provided further that the balance "will be secured by way of a Mortgage against 1 Turramurra Ave Turramurra and is to be discharged upon registration of a 2nd Mortgage". 13 It was that agreement upon which the plaintiff relied. However, the estate or interest claimed in the caveat made no mention of that agreement. Even if that agreement survived the making of the Deed of 21 January 2005 – a point that was not fully argued and upon which, therefore, I express no concluded view – it follows that the agreement of 19 January 2005 could not support the estate or interest claimed in the caveat. 14 Mr Johnson of Counsel, who appeared for the plaintiff, submitted that the Court could amend the description of the estate or interest claimed by the caveat. Mr Johnson referred to s 74L of the Real Property Act 1900, but did not otherwise indicate the source of this power. I referred Mr Johnson to the decision of McLelland J in Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) 5 BPR 11314. His Honour there said, in substance, that s 74L empowered the Court to amend defects in the prohibitory provisions of caveats, but not in the provisions defining the estate or interest claimed. It is apparent from his Honour's decision in that case that he did not consider that there was any other source of power entitling the Court to amend the description of the estate or interest claimed by a caveat. 15 Upon considering the decision in Depsun, Mr Johnson sought to "discontinue" the notice of motion. As I recorded in my brief reasons given on 30 March 2005, the notice of motion was dismissed with costs, and the question of the basis upon which those costs were payable was reserved, to be dealt with by me upon receipt of written submissions. 16 For the defendant, Mr Iuliano of Counsel, submitted that the claim for extension of the caveat had no real prospect of success, and that the plaintiff had acted unreasonably in seeking that relief. He relied on Oshlack v Richmond River Council (1998) 193 CLR 72; Harrison v Schipp [2001] NSWCA 13; NMFM Property Pty Ltd v Citibank Ltd [No 11] (2001) 109 FCR 77; and Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. 17 I attempted to summarise the applicable principles in my judgment on costs in White ACT (in liquidation) v G B White & Ors [2004] NSWSC 303 at paras [5]-[11]. I said: "The basic rule is that a successful party is entitled to its costs on a party and party basis: see for example Pt 52A r 32. See also the judgment of Mason P in Rosniak v Government Insurance Office (1997) 41 NSWLR 608, 616.