Supreme Court New South Wales Medium Neutral Citation: KB Productions 2001 Pty Ltd (Deregistered) and Ors v Kurt and Anor [2015] NSWSC 1415 Hearing dates: 18 September 2015 Date of orders: 18 September 2015 Decision date: 18 September 2015 Jurisdiction: Common Law Before: Beech-Jones J Decision: (1) The proceedings be dismissed. (2) Pursuant to s 98(4)(c) of the Civil Procedure Act 2005, George Dimitriou and Kangoo Holdings Pty Ltd pay the defendants the sum of $27,500. (3) The defendants' notice of motion filed 11 September 2015 be otherwise dismissed. Catchwords: DISMISSAL – proceedings dismissed following plaintiffs abandoning them – costs – Plaintiff sought ex parte injunction – no authority to conduct proceedings on behalf of tenant – duty judge not advised of correct position – lump sum costs order made on indemnity basis. Legislation Cited: - Civil Procedure Act 2005 – s 61, s 98 Cases Cited: - KB Productions 2001 Pty Ltd (deregistered) & Ors v Kurt & Anor [2015] NSWSC 1330 Category: Procedural and other rulings Parties: KB Productions 2001 Pty Ltd (deregistered) – First Plaintiff Kangoo Property Holdings trading as The Lexington Café – Second Plaintiff George Dimitriou – Third Plaintiff Avnur Kurt – First Defendant Osman Kurt – Second Defendant Representation: Counsel: B.M. Zipser – Defendants Solicitors: Rizos & Associates – Defendants File Number(s): 15/258997 Publication restriction: Nil Judgment (revised from ex tempore) 1. Before the Court is a notice of motion filed on 11 September 2015, seeking, inter alia, the dismissal of the proceedings pursuant to s 61 of the Civil Procedure Act 2005, orders to the effect that two of the three named plaintiffs, George Dimitriou and Kangoo Holdings Pty Ltd, pay the costs of the proceedings on an indemnity basis, and that the Court specify a gross sum to represent those costs pursuant to s 98(4)(c) of the Civil Procedure Act. 2. The background to the matter is set out in the judgment in KB Productions 2001 Pty Ltd (deregistered) & Ors v Kurt & Anor [2015] NSWSC 1330 ("KB (No 1")) The judgment in KB (No 1) records the reasons why on 3 September 2015 I granted an adjournment of the proceedings on the application of counsel who had just been retained for one of the plaintiffs, Mr Dimitriou, but also ordered that the ex parte injunction that had been obtained against the defendants be dissolved. The reason for the adjournment was that Mr Dimitriou stated that he needed to seek legal advice, in circumstances where an accusation had been made that he had fabricated a letter and provided it to the duty judge in order to obtain an ex parte injunction (KB (No 1) at [34]). 3. In KB (No 1) I ordered that the proceedings stand over to 8 September 2015 at 9.30am before me. When the matter returned on that day, Mr Dimitriou did not appear and no legal representative appeared on his behalf. On the application of the defendants, I granted them leave to file this notice of motion and made it returnable today. I ordered that in serving the notice of motion, they advise the recipients, including Mr Dimitriou, that if he did not attend, the matter may be dealt with in his absence. 4. When the matter was called on today, the three named plaintiffs, including Mr Dimitriou, did not attend. Their names were called outside the court. They still did not attend, and there was no appearance on their behalf. 5. Counsel for the defendants, Mr Zipser, read an affidavit from his instructing solicitor, Mr Rizos, setting out the efforts made to serve the plaintiffs with the notice of motion. In respect of the two corporate plaintiffs, Mr Rizos served the material at their registered offices, as well as other addresses that have appeared on correspondence associated with them. 6. In relation to Mr Dimitriou, service was undertaken by a number of different means. The first was posting to his last known address. Mr Dimitriou is an accountant and has been pursuing this matter with the defendants over many months. He has used an address for service in related proceedings in the New South Wales Civil and Administrative Tribunal. Mr Rizos served the material on that address which was the business address of an accounting firm of which Mr Dimitriou is a member. Mr Rizos tracked the delivery of the material via Australia Post. He confirmed that the material was delivered to that address on 14 September 2015. Mr Rizos also caused the documents to be sent by email, including to a personal email associated with Mr Dimitriou at which he has corresponded with Mr Dimitriou for many months. He also served the material by email upon Mr Dimitriou's personal assistant, who has from time to time attended at this Court either with him or for him. In addition, Mr Rizos served the material on a firm of solicitors who were acting for Mr Dimitriou in bankruptcy proceedings. Via an exchange of emails and a conversation with the relevant solicitor, Mr Rizos received confirmation that that firm of solicitors had supplied the material to Mr Dimitriou. Finally, Mr Rizos sent a text message to Mr Dimitriou's mobile number, confirming that the documents had been served by post and by email. This led to a text response from Mr Dimitriou, in which he made various complaints but implicitly accepted that he had received the documents. These attempts at service have been undertaken in circumstances where Mr Dimitriou's office is apparently locked and the entrance is barred. 7. In these circumstances, I have no doubt in concluding that each of the plaintiffs have received reasonable and proper notice of this application. It is, after all, to be remembered that it is their case that they commenced. 8. In terms of the application to dismiss the proceedings, in KB (No 1) I indicated that the probable effect of lifting the ex parte injunction would be the end of the proceedings. Since that time, the named plaintiffs have not taken a single step to progress them, this all occurring in circumstances where the matter is said to be urgent. To the contrary, it seems to me self-evident that the plaintiffs have effectively abandoned this matter. In the context of an urgent application and where the plaintiffs repeatedly do not attend court, I have no hesitation in dismissing them. 9. There remains the question of costs. The orders sought in the notice of motion seek costs against Mr Dimitriou and Kangoo Holdings Pty Ltd. They do not seek costs against KB Productions 2001 Pty Ltd because, as I understand it, that company is deregistered. Despite a number of attempts to raise the matter with Mr Dimitriou, there has never been anything to suggest that in conducting the proceedings he had the authority of KB Productions to conduct the matter on its behalf. However Mr Dimitriou is a director of Kangoo Holdings. 10. The fact that the proceedings are to be dismissed is a more than sufficient basis to make a costs order against Mr Dimitriou and Kangoo Holdings. However, the notice of motion seeks an order that they be paid on an indemnity basis. A number of matters are put forward in support of that contention. I record the matters which I accept. 11. The first concerns the position of KB Productions, to which I have already referred. In the reasons given by McCallum J for granting the ex parte injunction, her Honour records that the tenants of the property are KB Productions, Mr Dimitriou, Kangoo Holdings and another named person. It was submitted that her Honour was in effect misled because the only registered tenant is KB Productions. It is not necessary to go so far as to conclude that her Honour was misled. What is significant is that at least her Honour was not informed of the correct position vis-à-vis the tenancy. That, coupled with the matter I noted earlier, namely, that at no stage has there been anything to indicate that Mr Dimitriou had authority to bring proceedings on behalf of KB Productions, warrants the making of a costs order on a special basis. The fact is that there was a fundamental difficulty with this aspect of the proceedings from the very start. Further, simply because Mr Dimitriou is not a solicitor does not mean that he is not bound by the obligations of candour that attend an ex parte application of the kind he made. 12. A further matter was adverted to in KB (No 1) at [13] to [14], namely, that one gains the distinct impression from reading McCallum J's judgment that her Honour was informed by Mr Dimitriou at the time he applied for the ex parte injunction that the landlords, that is, the defendants, had only just attempted to take possession of the cafe. However, the true circumstance was that, at the time that injunction was applied for, the landlords had been in possession of the cafe for over a week. That appears to have been a very significant matter that led her Honour to grant the ex parte injunction. In applying for the injunction Mr Dimitriou knew the true position, which was to the contrary. 13. It was further submitted that, based on all this, Mr Dimitriou knew that the proceedings had no real prospects of success. From my observation of Mr Dimitriou, it is not clear to me that that is true. However, it suffices to state that that should have been apparent, however, to any reasonable person that was in his position. 14. Finally, there are the circumstances in which the proceedings were adjourned and then effectively abandoned. At the time I granted the injunction I felt compelled to do so because of the serious accusation that had been made against Mr Dimitriou. Nevertheless, it should be noted that counsel for the defendants submitted that the professed basis for the adjournment, namely the need to obtain legal advice, was disingenuous having regard to his deliberate refusal to obtain legal representation up to that point. The subsequent events have borne out what counsel submitted, in that there is nothing to suggest that Mr Dimitriou followed up what the Court was told on his behalf at the time the adjournment was granted, namely, that he wished to obtain legal advice. 15. In all the circumstances, what transpired was ultimately quite disgraceful. Although not a legal practitioner, a professional person did not place the true circumstances before a duty judge, who considered his matter on a Sunday. He thereby obtained an ex parte injunction. When attention was focused upon the case that he was attempting to bring, he effectively abandoned the case. In my view, the costs that are to be awarded must be awarded on an indemnity basis. 16. Further, in view of the long history of disputation between the parties and what I have already stated about the conduct of Mr Dimitriou, I think it is appropriate to make a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005. I do not consider that the defendants should be put to any further costs of having to deal with Mr Dimitriou in relation to this matter via the cost assessment process. 17. The affidavit material has set out the costs that have been charged to the defendants by their solicitor and counsel up to 10 September 2015. It specifies the basis upon which their solicitor and counsel charged. From my observation of those rates and the professionalism that accompanied their conduct, those rates appear generally reasonable. The material indicates that the sum of $20,022.81 is sought to be charged for the period up to and including 3 September 2015, including counsel's fees, and for the period from that time to 10 September, a sum of $3,837 is sought to be recovered for solicitor's fees (although there is an acceptance that $800 of that amount may not relate to this matter), and $3,923 for counsel's fees. In respect of the period since 10 September 2015, the amount claimed is $2,800 for solicitor's and counsel's fees, bearing in mind the considerable effort the defendants' solicitor had to make in effecting service on the three named plaintiffs. The total amount claimed is $30,781.81. 18. Having regard to my conclusion that an assessment of costs on an indemnity basis is warranted, I consider the appropriate course is to apply a relatively small discount to that overall sum, bearing in mind that if there is any doubt about the reasonableness of the amount charged, it should be resolved in favour of the defendants. Accordingly I propose to allow the sum of $27,500 by way of costs. 19. Finally, I note one matter. I have not attempted to make any findings concerning whether or not the letter of 26 August 2015 that was provided to McCallum J was fabricated (see KB (No 1) at [19] to [20] and [36]). If the defendants wish to take any further action in that regard, that will be a matter for them. Further, I note that I previously reserved liberty to apply to the defendants for a particular period in respect of the undertaking as to damages that Mr Dimitriou proffered in support of the ex parte injunction. 20. Accordingly, the Court orders: 1. The proceedings be dismissed. 2. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005, George Dimitriou and Kangoo Holdings Pty Ltd pay the defendants the sum of $27,500. 3. The defendants' notice of motion filed 11 September 2015 be otherwise dismissed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 September 2015