Knox Street Apartments Pty Ltd v Rabinowitz [2005] NSWSC 159

New South Wales Supreme Court

CITATION : Knox Street Apartments Pty Ltd v Rabinowitz [2005] NSWSC 159

HEARING DATE(S) : 22/12/04

JUDGMENT DATE : 11 March 2005

JURISDICTION : Equity Division

JUDGMENT OF : Barrett J

DECISION : By consent, first defendant to pay plaintiff's costs in a fixed sum. No order as to costs of second and third defendants.

CATCHWORDS : PROCEDURE - costs - application by registered proprietor for order removing caveat - other persons with interests in the land joined as second and third defendants - first defendant caveator agrees to withdraw caveat and pay plaintiff's costs - whether second and third defendants should also have order for costs

LEGISLATION CITED : Real Property Act 1900, s.74MA

CASES CITED : Flexman v Knox Street Apartments Pty Ltd [2004] NSWSC 1154

Knox Street Apartments Pty Ltd - Plaintiff Lirun Rabinowitz - First Defendant PARTIES : Roger Flexman - Second Defendant Philippa Flexman - Third Defendant

FILE NUMBER(S) : SC 6892/04

Mr T.G.R. Parker - Plaintiff COUNSEL : Mr D.M. Bernie - First Defendant Mr D.A. Smallbone - Second and Third Defendants

Beswick Solicitors - Plaintiff SOLICITORS : Thurlow Fisher - First, Second and Third Defendants

LOWER COURT JURISDICTION :

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

FRIDAY, 11 MARCH 2005

6892/04 – KNOX STREET APARTMENTS PTY LTD v LIRUN RABINOWITZ & 2 ORS JUDGMENT 1 By summons filed on 21 December 2004, the plaintiff sought, as against the first defendant, an order under s.74MA of the Real Property Act 1900 that caveat AB119105V affecting Lot 56 in Strata Plan 67022 be withdrawn. The caveat had been lodged by the first defendant. Two other persons were named in the summons as second defendant and third defendant. The summons contained no claim for relief against either of them. 2 On 22 December 2004, the first defendant consented to the making of the order sought by the plaintiff and I thereupon made that order. There remains the question of costs, as to which written submissions have been filed in accordance with directions I made on that occasion. 3 The question of costs as between the plaintiff and the first defendant has been resolved by agreement reached on 8 February 2005. I am asked by them to make by consent an order for the payment of costs in a fixed sum by the first defendant to the plaintiff. There is, however, an outstanding question as to the costs of the second and third defendants. They submit that their costs should be paid by the first defendant and that such costs should be assessed on the indemnity basis. 4 The plaintiff effected a strata development of land owned by it at Chippendale. In early 1999, the second and third defendants entered into contracts to purchase from the plaintiff some of the lots in the strata subdivision. These included Lot 56, being the lot that became subject to the caveat with which these proceedings are concerned. At a later time, another party purportedly acting as agent for and with the authority of the plaintiff, entered into a contract for the sale of Lot 56 to the first defendant. In proceedings subsequently commenced, one of the matters for determination was definition of the plaintiff's obligations in respect of Lot 56, having regard to the two purported contracts for the sale of it. The result, in the form of a judgment delivered by Bergin J on 8 December 2004, was to the effect that the plaintiff was required to convey Lot 56 to the second and third defendants by way of completion of its contract for sale with them: see Flexman v Knox Street Apartments Pty Ltd [2004] NSWSC 1154. 5 Before that result emerged on 8 December 2004, the first defendant had lodged, in respect of Lot 56, the caveat that later became the subject of these proceedings. On 15 December 2004, the plaintiff's solicitors wrote to the solicitors for the first defendant demanding that the caveat be withdrawn. The response was an offer to withdraw the caveat, but on terms. On 20 December 2004, the plaintiff's solicitors renewed the demand for unconditional withdrawal, pointing to a timing constraint imposed by the orders of the court with respect to completion of the sale by the plaintiff to the second and third defendants. The renewed demand was not complied with and these proceedings were commenced. 6 Relief was sought in these proceedings only against the first defendant. On the face of things, there was no reason for the second and third defendants to be made parties. The claim by the plaintiff, as registered proprietor, against the first defendant, as caveator, was sufficient to cause the proceedings to be properly and fully constituted. 7 It is nevertheless clear that the second and third defendants, in addition to the plaintiff, had standing to apply under s.74MA for an order for the removal of the defendant's caveat. They were within the description, "Any person who is or claims to be entitled to an estate or interest in the land described in a caveat …": see s.74MA(1). They did not, however, join as plaintiffs. The sole plaintiff chose to join them as defendants. The first defendant says that the proper course, if the second and third defendants were to be parties at all, was for them to be plaintiffs. Plaintiff status is not something that can be forced upon a person. No one can become a plaintiff except by choice: see Part 8 rule 8(2). The first defendant points out that, had the second and third defendants been co-plaintiffs with the plaintiff, all would have had the same legal representation and only one set of costs would have been incurred. 8 The response of the second and third defendants is that it would have been inappropriate for the second and third defendants to be co-plaintiffs because their interests differed from those of the plaintiff: they were purchasers from the plaintiff under the uncompleted contract and had distinct and conflicting interests thereunder. But the fact remains that, so far as removal of the first defendant's caveat was concerned, the interests of the second and third defendant coincided with those of the plaintiff. The effect of the court's orders of 8 December 2004 was to require both the plaintiff as vendor and the second and third defendants as purchasers to complete their contract by the stipulated deadline. Whether one side was more or less anxious than the other to see that deadline met, the reality is that both were required to adhere to it. There was a common interest in achieving that adherence. 9 In those circumstances, if the second and third defendants were to be involved at all as parties to the caveat removal proceedings (and there was no abstract need for them to be involved), they could conveniently have joined as plaintiffs. 10 The second and third defendants say that, if they had not been parties, they would still have incurred costs in the preparation of an affidavit of their representative prepared for the proceedings. That may be so, but it really has nothing to do with the question whether their presence as parties was either necessary or desirable. The sole plaintiff could have filed and relied upon such an affidavit without the second and third defendants being parties. 11 To sum up: the second and third defendants were not necessary parties; they had an interest in assisting and supporting the plaintiff but that interest did not warrant the plaintiff joining them as defendants; there was, on the question of prompt removal of the caveat, no divergence of interest as between the plaintiff and the second and third defendants; and the second and third defendants, if they were to be parties at all, should have been co-plaintiffs. The first defendant is, in my view, correct when he says that he should not be required to pay more than one set of costs in favour of the parties who argued for the removal of his caveat. The general rule is that an unsuccessful party should not have to pay more than one set of costs merely because he is unsuccessful. There is no reason why that general rule should not apply here. 12 I will make, by consent as between the plaintiff and the first defendant, order 1 in the short minutes of order signed by the legal representatives of those parties, which short minutes I have today initialled and dated. I note the matter in item 2 of the short minutes. I make no order as to the costs of the second and third defendants. **********