Fabcot Pty Ltd v Tannous

EX TEMPORE Judgment 1In 2010 the plaintiff commenced proceedings by a summons seeking a declaration that the plaintiff, as the registered proprietor of the landholding and estate for interest in land, held that entitlement free of any interests of the first and second defendants, and an order that the third defendant, the Registrar-General of NSW ( "the Registrar-General" ), be restrained from otherwise giving effect to the primary application lodged by the first and second defendants in respect of that land. 2The Registrar-General filed a submitting appearance and has taken no active part in the proceedings since then. 3The first and second defendants asserted, by cross-claim, a claim based upon adverse possession in respect of the land and filed an affidavit in support of that case. 4Orders were made in September last year for discovery and the filing of evidence. 5The plaintiff did not serve the affidavit of Mr Luke Turner until May this year, and the other affidavit of Mr Steven Brett Chesher was not served until September this year. 6The plaintiff's solicitors did query the adequacy of the first and second defendants' discovery, but the primary reason for delay seems to be that there were settlement discussions, which discussions failed to produce an agreed outcome. There was also an order for mediation at one point. 7I do not think there is any dispute that the plaintiff did not meet the required timetable for the filing of evidence and there were some further orders made which again were not complied with. 8On 21 September 2011 the plaintiff filed a statement of claim in these proceedings, which referred to ss 28J, 28M and 28MB of the Real Property Act 1900 (NSW)( "the Act" ) and asserted that by virtue of those provisions, the first and second defendants could have no claim in respect of the land. The statement of claim pleaded all the necessary ingredients to make out its case that the first and second defendants had been deprived of any entitlement, for example, by pleading the fact that the plaintiff was a purchaser for valuable consideration without fraud. It also pleaded that there was no subsisting interest recorded in the folio for the land, that the first and second defendants have not lodged a caveatable interest in the land, and that their asserted estate for interest in the land was not preserved by s 32 of the Act. 9On 25 October this year at a directions hearing before me, the first and second defendants, through Mr G M McGrath of counsel, indicated that his clients would not be filing a defence and would accept that their cross-claim should be dismissed. He indicated that the only issue which remained was the question of costs. 10The plaintiff today seeks orders for relief which are all agreed to by the first and second defendants except that dealing with costs. The orders which are sought include a declaration of the sort originally contained in the summons, an order that the first and second defendants give the plaintiff vacant possession of the land or the block before 24 November 2011, an order that the Registrar-General be restrained from processing or giving effect to the first and second defendants' primary application, an order that the cross-summons be dismissed and note an undertaking by the first and second defendants to do all things reasonably necessary to withdraw the primary application on or before 24 November 2011. 11I am satisfied that the plaintiff has made out the case for the declaration it seeks and that it is entitled to the orders which have been consented to by the first and second defendants and not opposed to by the Registrar-General. 12This then brings me to the question of costs. The first and second defendants today resist the order for costs, and in addition, seek an order that the plaintiff pay their costs. 13So far as the first and second defendants' claim for costs is concerned, it is based upon the late provision of the plaintiff's affidavits that I have mentioned earlier. While late provision of affidavits would justify re-listing the matter by the other parties to the proceedings and an order that the party in default pay the costs of so doing, in the absence of special identified prejudice leading to additional costs on the part of the insistent party, I can see no basis for an order that the party in default pay the costs of the proceedings generally and I reject the first and second defendants' contention. That is quite apart from the evidence that indicates that the delay in filing the affidavits can be attributed in some measure to the settlement discussions. 14Turning to the plaintiff's claim for costs, the plaintiff has brought the present proceedings and obtained the relief sought. The first and second defendants' cross-claim has been abandoned. The normal rule is that costs follow the event. 15Mr McGrath has sought to paint this case as one which is governed by the approach identified by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 625 where his Honour said: "If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the court will make no order as to the cost of the proceedings." This passage been cited in many cases, including cases in the Court of Appeal such as Amaca Pty Ltd (under NSW Administered Winding up) v Harry Daines Pty Ltd [2011] NSWCA 317. 16This issue of costs where the case has not proceeded to finality has also been considered in Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302, a decision of Davies AJA with whom Mason P and Meagher JA agreed. General principles relevant in this area are identified in [3]-[6] of Davies AJA's judgment. Reference is also made to the same passage from Lai Qin that I have earlier cited. 17As Davies AJA pointed out in Stack , although McHugh J said in Lai Qin the "usual" course is that the court will make no order as to costs, McHugh J made it clear he was not laying down an invariable rule, and his Honour said: "In an appropriate case a court will make an order for costs even with no hearing on the merits and the moving party no longer wishes to proceed with the action." 18Mr McGrath submits that there has been no hearing on the merits and that the Court should not order costs because there has not been a determination upon which the usual costs could be hinged. I accept that where parties have reached agreement but do not agree on costs, it is generally inappropriate for the Court to venture into the merits of the claims and defence, unless the position is very clear, or is a case of where one of the parties has acted unreasonably. There are cases, as Lai Qin itself demonstrates, in which supervening events have rendered the proceedings otiose and futile so that the termination of the proceedings at that party's behest should not attract the usual consequences. 19Mr McGrath described the case that was previously brought by the plaintiff as having been abandoned and he submitted that by reason of the submission on 25 October occasioned by the legislative change and receipt of the statement of claim filed on 21 September 2011, the new case has never been in contest and hence there has not been a determination of the case as originally advanced. 20I accept that by the filing of the statement of claim, a new element was introduced into the proceedings by reliance on the legislative provisions which, coupled with the failure of the first and second defendants to lodge a caveat on or before 13 August 2011, destroys any claim that the first and second defendants might have had as at midnight of 13 August 2011. However, there has been determination of the plaintiff's claim that the first and second defendants did not have an interest in the land. I think that rather than abandon its case by the pleading, what the plaintiff did recognise after 13 August this year is that the case which it had previously had to fight had ceased to be a necessary one because of the legislative effect upon the situation. It is not necessary to consider the strength or weakness of the claims in relation to adverse possession. 21The plaintiff was forced to bring these proceedings because of the first and second defendants' primary application. The plaintiff was also defending a cross-claim brought by the first and second defendants seeking relief to which, as a result of the effect of the legislation and their failure to lodge a caveat, the first and second defendants now have no entitlement, irrespective of the merits of their position prior to 13 August 2011. 22The plaintiff now puts its claim properly for entitlement based upon the legislation and its provisions and has succeeded on that basis. 23In my view there is no reason to depart from the usual consequence that the plaintiff has been successful in obtaining the relief it seeks and it should have the costs of the proceedings. 24Having regard to what has been put before me in the submissions, I think that the breakdown of costs totalling $70,000, which I shall mark as exhibit MFI 1, indicates a reasonable approach to the costs. I am informed by Mr R Yezerski, counsel for the plaintiff, that his instructions are that an amount in excess of $100,000 has been billed to the client by the plaintiff's solicitors. To ensure that the amount ordered is no more than could be expected to be obtained on an assessment, I will reduce the amount of the order to $60,000.