5 Ridge Pty Limited v Tryname Pty Limited
[2016] NSWSC 951
•07 July 2016
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: 5 Ridge Pty Limited v Tryname Pty Limited [2016] NSWSC 951 Hearing dates: On the papers Date of orders: 07 July 2016 Decision date: 07 July 2016 Jurisdiction: Equity Before: Darke J Decision: Plaintiff ordered to pay the defendant’s costs of and incidental to the application listed on 15 April 2016.
Catchwords: COSTS – application for freezing order withdrawn by plaintiff – withdrawal followed receipt of information from defendant – whether information contained misrepresentations concerning defendant’s financial position – whether application would have succeeded if pursued Category: Costs Parties: 5 Ridge Pty Limited (Plaintiff)
Tryname Pty Limited (Defendant)Representation: Counsel:
Solicitors:
Mr B Phillips (Plaintiff)
Mr D D Knoll; Mr M A Friedgut (Defendant)
Deutsch Partners (Plaintiff)
Konstan Lawyers (Defendant)
File Number(s): 2016/109536 Publication restriction: None
Judgment
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These proceedings concern a claim for the repayment of a deposit of $428,800 paid by the plaintiff pursuant to a contract which has since been terminated. The contract was for the sale of a property in North Sydney.
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An issue has arisen concerning the costs of an application for a freezing order that was foreshadowed by the plaintiff but not ultimately pressed.
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The proceedings were commenced by the filing of a Statement of Claim on 11 April 2016. The matter was listed for directions in the Real Property List on 6 May 2016. On 14 April 2016, arrangements were made at the behest of the plaintiff’s solicitor to have the matter included at short notice in the List on 15 April 2016 for the hearing of an application for a freezing order. The urgency was stated to be related to the fact that a director of the plaintiff was due to fly out of Australia in the late afternoon of 15 April 2016.
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On that day, Mr Phillips of counsel appeared for the plaintiff and Mr Knoll of counsel appeared for the defendant. I was informed by Mr Knoll that the plaintiff had served a Notice of Motion upon the defendant and was going to seek leave to file it in Court, but had decided not to proceed with it. That was accepted by Mr Phillips. It was then explained by Mr Phillips that the defendant had provided certain information to the plaintiff that day which the plaintiff wished to consider before deciding whether to proceed to seek any freezing order. The application was thus abandoned.
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The defendant seeks costs of and incidental to the abandoned application. It was submitted that the abandonment was a complete vindication of the defendant’s stance in opposition to the application, and that there was no reasonable basis upon which the plaintiff might have expected to obtain the freezing order (preventing the defendant from selling the North Sydney property unless a sum of $500,000 was paid into a controlled monies account). It was put that the evidence to be relied upon by the plaintiff did not come close to discharging the burden of showing a danger of dissipation or disposal of assets by the defendant. It was further submitted that the plaintiff had known since 5 April 2016 that the defendant was offering to place $350,000 into a controlled monies account.
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The plaintiff resists the order sought by the defendant, primarily on the ground that it did not proceed with its application on 15 April 2016 due to misrepresentations by the defendant as to its financial position. In particular, the plaintiff contends that the defendant’s legal representatives (the defendant’s counsel, by a statement made outside Court, and the defendant’s solicitor, by an affidavit served on the plaintiff) made misrepresentations to the effect that the defendant owned two properties in addition to the North Sydney property, whereas in fact the defendant owned only one such property, which was the subject of a contract for sale at a price much less than the value attributed to the property in the company’s financial statements for the year ended 30 June 2014. The plaintiff submits that the appropriate order for costs is that the defendant pay its costs of the application.
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I do not accept that the defendant’s legal representatives made any misrepresentations as alleged. The statement attributed to counsel for the defendant (which, I note, is disputed) could not reasonably be regarded as anything more than a description of what would be contained in an affidavit of his instructing solicitor which was about to be sworn. That affidavit, which was served upon the plaintiff shortly thereafter, annexed documents which clearly disclosed:
that the defendant owned only one property in addition to the North Sydney property;
that it was the subject of a contract for sale at a price of $1.8 million; and
that the property was valued at about $3.7 million in the financial statements for the year ended 30 June 2014.
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The plaintiff’s solicitor concedes that he did not look closely at the annexures to the affidavit. Had he done so, no misapprehension would have arisen. There is no reason why the annexures were not looked at closely. They were not voluminous and could have been read and readily understood within a short time. In my opinion, the plaintiff’s decision to abandon its application cannot be regarded as the result of any improper conduct on the part of the defendant.
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Moreover, having regard to the content of the affidavits sworn by the director of the plaintiff and by the defendant’s solicitor, the plaintiff would not have succeeded on 15 April 2016 in obtaining, over the opposition of the defendant, the relief it was seeking. In particular, such evidence as there was that went to a danger of dissipation of assets was outweighed by evidence of the defendant’s financial position (including evidence of substantial funds held in accounts at the Commonwealth Bank) and the defendant’s offer to deposit $350,000 into a controlled monies account. The fact that on a later occasion (20 May 2016) an undertaking was given by the defendant (and an individual associated with the defendant) in connection with the creation of a fund of $350,000 does not establish that the plaintiff’s application may have succeeded had it been pursued on 15 April 2016.
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In summary, the plaintiff’s application was not abandoned due to any improper conduct on the part of the defendant, and it would not in any event have succeeded over the defendant’s opposition. In all the circumstances, it is my opinion that the appropriate order for costs is that the plaintiff pay the defendant’s costs of and incidental to the application that was listed on 15 April 2016 and which did not proceed. The Court will so order.
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Amendments
02 February 2017 - Mispelt barrister's name
Decision last updated: 02 February 2017
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