Supreme Court New South Wales Medium Neutral Citation: Assure (NSW) Pty Limited v Taouk [2016] NSWSC 1234 Hearing dates: 2 September 2016 Date of orders: 02 September 2016 Decision date: 05 September 2016 Jurisdiction: Equity Before: Darke J Decision: Order that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis. Catchwords: COSTS – proceedings for removal of caveat – consent order made for removal of caveat – agreement as to interim regime for proceeds of sale of property – interim regime not continued – offer of settlement not accepted by defendant – what is appropriate order for costs in the circumstances Category: Costs Parties: Assure (NSW) Pty Limited (Plaintiff) Joseph Taouk (Defendant) Representation: Counsel: Mr P Reynolds (Plaintiff) Mr F F F Salama (Defendant) Solicitors: BC Lawyers (Plaintiff) Yazbeck Law (Defendant) File Number(s): 2016/205720 Publication restriction: None Judgment 1. These proceedings for the removal of a caveat were commenced on 7 July 2016. Orders for short service were made, and on 8 July 2016 the matter was set down for hearing in the Duty List on 13 July 2016. 2. On that day, orders were made by consent which provided for the withdrawal of the caveat, the filing of a cross-claim by 8 August 2016, and that costs be costs in the cause. The Court also noted that upon the defendant giving the usual undertaking as to damages and agreeing to provide an affidavit within 14 days demonstrating an ability to support the undertaking, the plaintiff without admission agreed to an interim regime whereby until 12 August 2016 the proceeds of sale of the property the subject of the caveat would only be paid for certain purposes. 3. On 12 August 2016 the Court was informed that no cross-claim was to be filed, and that if any claim was to be pursued by the defendant it would be by way of separate proceedings. The Court was further informed that the defendant had not provided an affidavit in accordance with the direction made on 13 July 2016. In those circumstances, the Court declined the defendant's application for an order continuing the interim regime. 4. The only remaining issue was costs. A direction was made for the provision of written submissions and the matter was stood over to 2 September 2016. 5. Written submissions were duly provided. The plaintiff sought an order that the defendant pay its costs of the proceedings on the indemnity basis. The defendant submitted that the appropriate order was an order that each party bear its own costs. 6. I heard further submissions from the parties on 2 September 2016. The matter did not conclude until about 4:15pm. The Court indicated that it would order that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis, and provide brief written reasons as soon as practicable. These are those reasons. 7. The plaintiff raised numerous matters relevant to the exercise of the discretion in relation to costs. In essence, these were: 1. the plaintiff succeeded in having the caveat removed, and costs should follow the event; 2. on 13 July 2016 the parties agreed that costs be costs in the cause; 3. the defendant acted unreasonably in not accepting an offer made by the plaintiff on 5 July 2016, which was more favourable than the orders made on 13 July 2016; 4. the defendant failed to comply with orders of the Court concerning the filing of a cross-claim and the provision of an affidavit as to financial position; 5. it was unreasonable of the defendant to lodge the caveat, which was the third caveat he had lodged relating to the same underlying facts, and his conduct as a whole should be seen as brinkmanship designed to achieve a result rather than conduct showing an intention to substantiate his claims; and 6. the defendant's position in seeking to maintain the caveat or obtain injunctive relief was hopeless. 1. The defendant primarily resisted the making of any adverse order for costs on the ground that prior to the commencement of the proceedings (between about 4 July 2016 and 6 July 2016) the defendant had attempted to come to an agreement to settle the caveat dispute on a basis similar to that ultimately ordered by consent on 13 July 2016. The defendant also submitted that if costs were nonetheless ordered against him, it should not be on an indemnity basis. 2. The communications between the parties in the days prior to the commencement of the proceedings do suggest a willingness on the part of the defendant to come to a satisfactory agreement which would involve removal of the caveat to allow sales to occur, and the proceeds of sales to be dealt with in a manner that would protect each party's position until the defendant's claims were dealt with. Nevertheless, no such agreement was reached prior ot the commencement of the proceedings. It is noteworthy that the defendant and his then solicitor made no detailed response to the offer conveyed by the plaintiff's solicitors on 5 July 2016. An agreement was ultimately reached, but not until the matter was due to be heard on 13 July 2016. 3. It seems to me that in all the circumstances it is appropriate that the defendant pay the plaintiff's costs of the proceedings. The parties agreed on 13 July 2016 that the costs would be costs in the cause, and the plaintiff has in substance been successful. It has obtained removal of the caveat subject to an agreed regime limiting the manner in which it could deal with proceeds of sale, and that regime came to an end following the failure of the defendant to file a cross-claim and provide evidence of an ability to support an undertaking as to damages. 4. Moreover, the defendant failed to accept the plaintiff's offer of 5 July 2016, which in my view was no less favourable to the defendant than the orders of 13 July 2016. However, the plaintiff's offer of 5 July 2016 (which was not an offer of compromise under the Uniform Civil Procedure Rules or expressly stated to be a Calderbank offer) provided only a very short time for response, namely, by close of business that day. The defendant's solicitor, in his brief response at 4:15pm that afternoon, explained that he had just finished in court. 5. In my view, particularly having regard to the terms of the Development Deed to which the plaintiff (as owner) and the defendant (as guarantor) were parties, the plaintiff had a strong case for the removal of the caveat. However, it is less clear whether the defendant may nonetheless have a claim of some type against the plaintiff in connection with the property and its development. Whilst no cross-claim is pursued in these proceedings, I was informed that the defendant had recently commenced separate proceedings. In the circumstances I am not prepared to go so far as to conclude that there was no proper basis for the lodgement of any caveat by the defendant. 6. Viewing the matter overall, and noting that it is not for the Court on an application such as this to effectively hear the case for the purpose of determining the appropriate order for costs, I am not persuaded that the defendant's position should be regarded as so hopeless, and its conduct regarded as so unreasonable, as to warrant an award of indemnity costs. 7. For these reasons, the Court ordered that the defendant pay the plaintiff's costs of the proceedings on the ordinary basis. ********** 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: 05 September 2016