Sood v Kalokeri [2011] NSWSC 85

Supreme Court New South Wales

Medium Neutral Citation: Sood v Kalokeri [2011] NSWSC 85 Hearing dates: 4/2/2011 Decision date: 04 February 2011 Before: Sackar J Decision: Summons dismissed; Plaintiffs to pay 75% of Defendants' costs Catchwords: Costs Legislation Cited: Local Court Act 2007 Uniform Civil Procedure Rules 2005 Workers Compensation Act 1987 Cases Cited: McCusker v Rutter [2010] NSWCA 318 Category: Principal judgment Parties: Vivek Sood (first Plaintiff), Neena Sood (second Plaintiff), Christopher Michael Kalokeri (first Defendant), Soula Kalokeri (second Defendant) Representation: Counsel: V Bedrossian (Plaintiffs) G Mackey (sol) (Defendants) Solicitors: Michael Abboud & Co (Plaintiffs) Greg Mackey & Associates (Defendants) File Number(s): 2010/00305474-1

Judgment PROCEEDINGS 1These proceedings were commenced by summons on 14 th September 2010. 2The Plaintiffs sought the leave of the court under s74O of the Real Property Act to lodge a further caveat in respect of land at 13 Florida Road, Ermington ("Ermington") contained in certificate of title folio identifier 1/30641. It was asserted in the summons that there was an equitable interest sufficient to support a caveat by reason of terms of settlement dated 6 May 2008 (between the Plaintiffs and Defendant and his estranged wife). 3As a result of the recent sale of "Ermington" on 23 December 2010 the application under s74O has unsurprisingly not been pursued. What is at stake is costs, and indeed whether costs on an indemnity basis is appropriate. 4Evidence read on the costs argument comprised one affidavit for the Plaintiffs sworn by their solicitor Mr Abboud dated 13 September 2010 and three for the Defendant (Mr Kalokeri) - one by Mr Kalokeri dated the 17 September 2010 and two sworn by his solicitor Mr Greg Mackey dated the 9 December 2010 and 25 January 2011 respectively. In addition a number of documentary exhibits were tendered. I note that no deponents were required for cross-examination on their affidavits. Mr Abboud was required to give some brief evidence on his change of email address. BACKGROUND 5The Plaintiffs and Defendant and his estranged wife were opposed to each other in litigation in the District Court of New South Wales in a suit commenced in 2004. No details of the matter are before this court but it was settled in May of 2008. 6The deed of settlement entered into between the parties specified that a sum of $65,000 was to be the settlement sum. The Defendants in those proceedings, Mr and Mrs Kalokeri, then owned a property at 24 Malvern Road, Glenwood ("Glenwood"). As part of the settlement they consented to a caveat being lodged over that property to secure payment of the settlement sum. 7At the time of the settlement there was apparently an agreement between the Kalokeris that the settlement sum was to be the sole responsibility of Mrs Kalokeri (para 2 of the deed) and in the event of default she was the person against whom judgment would be entered. 8Late in 2008 the Kalokeri's sold "Glenwood." The proceeds of sale were not sufficient to satisfy the entire settlement sum. Approximately $11,000 was received leaving a balance upon which interest has been accruing ever since. 9At that time (late 2008) there were negotiations between the solicitor for the Plaintiffs and what he believed, in my view reasonably, were solicitors for both Mr and Mrs Kalokeri to replace "Glenwood" with "Ermington" as security for the balance outstanding. A caveat was thereafter lodged on the 29 October 2008 against that property by Williams Boxsell Georgas, then acting for at least Mrs Kalokeri. There is no doubt from the title search that at the relevant date in 2008 both the Kalokeris were shown as tenants in common in equal shares in "Ermington". 10On 20 August 2010 the Defendant in these proceedings served upon the Plaintiffs a notice pursuant to s74N of the Real Property Act. This gave the Plaintiffs 21 days from the service of the notice to make an application for the caveat's extension or it otherwise would lapse. No such application was made. No explanation has been given as to why. 11Unbeknownst to the Plaintiffs, on 9 August 2010 Mrs Kalokeri had affected a transfer of her interest in the Ermington property to her husband for no monetary consideration. 12Mr Abboud, solicitor for the Plaintiffs, in the middle of September 2010 discovered the property was listed for sale. He was told on the 10 September by a real estate agent that Mr Kalokeri had bought his wife out of "Ermington" and was about to become the sole owner of it. The current proceedings were commenced by summons dated 14 September 2010. 13On the 15 of September, Mr Kalokeri's then solicitor Mr Mackey wrote to the Plaintiff's solicitor. For the first time it was disclosed that there existed what was described as a "financial agreement" apparently executed in 2001 in accordance with the Family Law Act. I note that Mr and Mrs Kalokeri have never been divorced. It has been asked in written submissions filed by the Defendant that the 2001 agreement had the effect of making Mr Kalokeri the sole beneficial owner of "Ermington", notwithstanding both he and Mrs Kalokeri were registered as joint owners until 22 September 2010. 14Further, the letter of the 15 states (as does Mr Kalokeri in his affidavit of the 17 September 2010) that he did not consent to nor was he aware of the 2008 caveat given over "Ermington". It was also asserted that he at no time was responsible for the debt and there was therefore no basis for the present application. Notice was given that the application would be opposed and if successful the Defendant would seek costs on an indemnity basis. 15It was further put by the Defendant in written submissions that "Ermington" was in fact sold on 23 December 2010. Whilst I accept the submissions were lodged on the 28 January, I only received them by email on the 3 February. It seems that Mr Abboud was first aware of the sale when he too read the submissions on or about that date. Mr Mackey informed me during argument that he was only told by his client of the sale on the 17 January and immediately sent an email on that day to what appears to be an old email address of Mr Abboud's. I accept Mr Abboud when he said that he did not recall receiving it (T.16 , line 40 ). 16Whilst the summons should be dismissed with costs, the question is what is the appropriate order in all the circumstances. Costs are of course entirely within the discretion of the court. There are some factors in this case that point in my mind in favour of a discount of what otherwise might be ordered. 17It must be said that for whatever reason the affairs of the Kalokeri's are by no means easy to understand. They for whatever reason have not been made transparent at all times. The assertions in the letter of 15 September from the Defendants solicitors, although powerful if true, could not be expected without some scepticism and investigation to have been immediately accepted by the Plaintiffs. The transfer of "Ermington" to Mr Kalokeri alone, and its subsequent sale on 23 December especially at the time it was done has not really been explained. It is the fact that the Plaintiffs have sought without success to secure payment from Mrs Kalokeri and have filed a bankruptcy petition against her. Mrs Kalokeri was co-operating with her husband as recently as September last year in the transfer of the "Ermington" to him but she has not filed any evidence corroborating his assertions about the 2008 caveat. 18I do not regard the commencement of the proceedings on the 14 September as unmeritorious or unreasonable. Nor do I consider persisting in them for a time to be unreasonable; although I do consider that during the last part 2010 and early into 2011 (notwithstanding the long vacation) a more aggressive effort could have been made with the effect of bringing these proceeding to an earlier conclusion. 19Given all the circumstances - as already indicated - I refuse the application for indemnity costs. I do not consider the Plaintiffs have occasioned unnecessary litigation or have acted wrongfully in the relevant sense so as to attract such an order. 1 20Although they could and perhaps should have acted sooner in making enquiries about the sale of "Ermington" I consider in all of the circumstances as again I have already indicated to the parties that a fair outcome is for the Plaintiffs to pay 75% of the Defendants costs of the summons including of the hearing before me on the 4 February. 21The orders I therefore make are: 1. Summons dismissed. 2. Plaintiffs to pay 75 % of the Defendants costs of the summons.