New South Wales Supreme Court CITATION : Business Acquisitions Australia Pty Ltd v Renshall - Costs [2006] NSWSC 1399 16/11/06 HEARING DATE(S) : Judgment: 21/11/06 Written submissions on costs: 06/12/06, 12/12/06 JUDGMENT DATE : 15 December 2006 JURISDICTION : Equity Division JUDGMENT OF : Barrett J DECISION : Plaintiff to pay costs of first and second defendants assessed on the indemnity basis. No order as to costs between plaintiff and third defendant. CATCHWORDS : PROCEDURE - costs - where plaintiff resisted claims for removal of three caveats - two caveats found to have no substance whatsoever - indemnity costs awarded against plaintiff - where third caveat had substance but removal was ordered on payment into court where parties should have agreed on such alternative arrangement - no order as to costs CASES CITED : Business Acquisitions Australia Pty Ltd v Renshall [2006] NSWSC 1238 Business Acquisitions Australia Pty Limited - Plaintiff PARTIES : Robert Renshall - First Defendant Christopher Frederick - Second Defendant HTT Huntley Heritage Pty Ltd - Third Defendant FILE NUMBER(S) : SC 5703/06 COUNSEL : Mr A.D. Campbell - Plaintiff Mr M.W. Sneddon - Defendants SOLICITORS : Gillard Consulting Lawyers - Plaintiff Edwin Davey Commercial and Litigation Lawyers - Defendants IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BARRETT J FRIDAY, 15 DECEMBER 2006 5703/06 BUSINESS ACQUISITIONS AUSTRALIA PTY LIMITED v RENSHALL & 2 ORS - COSTS JUDGMENT 1 I am dealing with the question of costs consequent upon my decision (a) to order that the plaintiff remove a caveat affecting land of Mr Renshall and his wife; (b) to order that the plaintiff remove a caveat affecting land of Mr Frederick and his wife; and (c) to order that the plaintiff remove a caveat affecting land of HTT, subject to HTT's paying into court a sum of $150,000 to abide the outcome of the plaintiff's claim to be owed moneys by HTT supported by an equitable charge affecting that land. 2 The reasons for decision carry the medium neutral citation [2006] NSWSC 1238. 3 Mr Renshall and Mr Frederick say that they should have a costs order against the plaintiff on the simple basis that they were successful in their claims to have the relevant caveats removed. Moreover, Mr Renshall and Mr Frederick contend that their costs should be assessed on the indemnity basis since, as is reflected at paragraphs [12] and [13] of the earlier judgment, the caveats were entirely devoid of foundation and substance. As a result, it is submitted, those caveats should never have been lodged and there should have been no resistance to the proposition that they be removed. 4 It is submitted on behalf of the plaintiff, in relation to the caveats affecting the Renshall and Frederick properties, that the orders for their removal were made not because of arguments advanced by the defendants "but rather due to the fact that the land was not referred to in the mandate agreement", with the result that, for a reason not articulated, there should be an order that defendants pay the plaintiff's costs. The obvious and glaring deficiency in the two caveats in question was one to which the defendants adverted in argument. The defendants Renshall and Frederick were wholly successful. 5 I am satisfied that, so far as Mr Renshall and Mr Frederick are concerned, each should have an order for costs against the plaintiff and that those costs should be assessed on the indemnity basis. The Renshall and Frederick properties were simply not affected by the relevant agreement. On no conceivable construction could the agreement have been thought to create in the plaintiff any kind of interest in the Renshall and Frederick properties. There was no basis whatsoever for the caveats. They should never have been lodged and Mr Renshall and Mr Frederick should never have been put to the trouble and expense of proceedings to obtain their removal. 6 I turn now to the position as between the plaintiff and HTT. In that case, I found that there was a serious question to be tried as to the existence of the security interest in the HTT land claimed in the plaintiff's caveat – but that payment of $150,000 into court would represent an appropriate alternative security. 7 Counsel for the defendants has referred to a letter of 3 October 2006 from the plaintiff's solicitors in which those solicitors, as well as presenting arguments in support of the validity of the caveat, said: "Finally, we are instructed that should our client's caveats impede on any proposed refinance by your clients, our client will, on a without admission basis, withdraw its caveats on the basis that the fees due to our client are paid into Court or into a joint controlled money account pending final resolution with respect to our client's fees due pursuant to the Agreements." 8 HTT makes the point that, despite this indication, the plaintiff never indicated the amount of "the fees due to our client" and therefore never provided a basis on which an alternative security arrangement could be assessed or pursued. It was left to HTT to make an open offer in court at the hearing on 16 November 2006 to pay into court a sum of $150,000. The plaintiff did not accept that offer, arguing that both interest and its costs of the proceedings should be included. That argument was rejected by the court. In these circumstances, HTT says, the plaintiff should be ordered to pay HTT's costs. 9 The plaintiff submits that HTT should be ordered to pay the plaintiff's costs because the court made findings which led to the conclusion of serious question to be tried regarding the existence of the claimed interest in the HTT land. Furthermore, the plaintiff submits as follows: "In a similar case referred to in reasons for decision (FTFS Holding Pty Limited –v- Business Acquisitions Australia Pty Ltd [2006] NSWSC 846) Palmer J ordered the successful Plaintiff to have indemnity costs and it is submitted in relation to the HTT Caveat that the Defendant pay the Plaintiff's costs on an indemnity basis." 10 In the case mentioned, Palmer J decided, for reasons largely corresponding with those in this case, that the caveator had shown a prima facie or arguable case in support of the existence of the caveat. There was no proposal for alternative security. His Honour's judgment concludes: "The summons will, therefore, be dismissed. The plaintiff will pay the defendant's costs of the proceedings." The judgment makes no reference to assessment on the indemnity basis and therefore does not support the submission made in that respect. 11 As regards the HTT caveat, the parties could, at an earlier time, have reached an agreed position with respect to payment into court. Each could therefore have avoided this litigation. Each should therefore bear the costs it has incurred. 12 Accordingly the court (a) orders that the plaintiff pay the costs of the first and second defendants of and incidental to the defendants' notice of motion filed on 13 November 2006, such costs to be assessed on the indemnity basis; and (b) makes no order for costs, as between the plaintiff and the third defendant, in relation to that notice of motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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