Ferguson v Hyndman [2006] NSWSC 538

New South Wales Supreme Court

CITATION : Ferguson v Hyndman [2006] NSWSC 538

HEARING DATE(S) : 30/05/06

JUDGMENT DATE : 30 May 2006

JURISDICTION : Equity Division

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 05/30/2006

DECISION : I direct that counsel for the plaintiff bring in revised short minutes of order in accordance with the principles indicated during the course of argument.

CATCHWORDS : COSTS – Parties joint owners of property – Plaintiff sought appointment of trustees for sale pursuant to s 66G Conveyancing Act 1919 (NSW) – Defendant resisted – Dispute between parties resolved without hearing on merits – Usual principle that costs incurred in appointment proceedings incident of joint ownership of property – Defendant allegedly tardy in arranging purchase of plaintiff's share of property – Plaintiff allegedly unreasonable in rejecting defendant's offers – Whether usual principle applicable – Principle applicable – Costs to be borne equally by parties.

LEGISLATION CITED : Conveyancing Act 1919 (NSW)

Isabella Patrice Ferguson PARTIES : v Philip Ross Hyndman

FILE NUMBER(S) : SC 2359/06

COUNSEL : Plaintiff: J E Armfield Defendant: In Person

SOLICITORS : Plaintiff: Greylings Attorneys Defendant: N/A

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

WHITE J

Tuesday, 30 May 2006

2359/06 Isabella Patrice Ferguson v Philip Ross Hyndman JUDGMENT 1 HIS HONOUR: The general principle in relation to costs where proceedings are determined on the merits without a hearing on the merits, and where it cannot be said that one party has simply capitulated, is that the courts make no order as to costs with the intent that each party bear its own costs, unless it can be seen that one party has acted unreasonably in bringing the proceedings, or it can be seen that one party has acted unreasonably in defending the proceedings. In very rare cases it may be appropriate to make an order for costs without a contested hearing on the merits, if the court can be almost certain that one party or the other would have won. 2 Those principles are of some relevance in this case, but the general principle has to be modified in the case where one party is seeking an order for the appointment of trustees for sale pursuant to s 66G of the Conveyancing Act 1919 (NSW). The costs incurred in such proceedings are an incident of the joint ownership, and would be necessarily incurred by one or other of the parties in the obtaining of an order for the appointment of trustees. 3 Accordingly, the usual order in relation to the costs for such an application would be that the costs of the proceedings be paid from the net proceeds of sale and, hence, be borne equally by both parties. 4 In this case, the plaintiff seeks an order that the defendant pay all of the costs of the proceedings, principally on the basis, she says, that the defendant, whilst holding out that he was prepared to purchase her half interest in the property, dragged his feet and did not do so. The defendant submits in effect that the costs of the proceedings should be wholly borne by the plaintiff, because, he says, he made reasonable offers and the plaintiff acted unreasonably in refusing the offers which he made. These offers have extended over a period of about a year. 5 It is not practicable for the court to determine where the merits of such negotiations lie, if indeed that would be possible, even on a full investigation, given that parties during the negotiation are entitled to act in their own interests. 6 Accordingly, it seems to me that the usual principle should apply, such that the costs of these proceedings, which I am told amount to $7,400 inclusive of GST up to today, should be borne equally by the parties out of the net proceeds of sale. To give effect to that principle, it will be necessary for particular orders to be made to deal with the circumstance that either the plaintiff or the defendant might purchase the property, because in that event the orders will provide for the purchaser to be allowed a set-off against the purchase price representing the purchaser's beneficial interest in the property. 7 I have discussed with counsel amendments which should be made to the proposed short minutes of order, in particular to the proposed orders 3 and 4 relating to the trustees' offering the property at valuation to the plaintiff, and to the plaintiff being permitted to purchase the land in the exercise of the trustees' power of sale. 8 I direct that counsel for the plaintiff bring in revised short minutes of order in accordance with the principles indicated during the course of argument. The short minutes of order should provide for the costs to be borne in the manner I have indicated. The orders should provide for the amount of the costs to be deducted from the proceeds of sale, or to be borne by each of the parties. ******