Ahmad v Mohamed (No 2)

[2022] NSWSC 1532

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Ahmad v Mohamed (No 2) [2022] NSWSC 1532

Hearing dates:

On the papers

Decision date:

09 November 2022

Jurisdiction:

Equity

Before:

Peden J

Decision:

(1) Order 2 made on 24 October 2022 is vacated.

(2) The respondents are to pay 75% of the applicant’s costs of the Notice of Motion as agreed or as assessed.

(3) No order as to costs of the respondents’ application for a different costs order than that provided in the substantive judgment.

Catchwords:

COSTS — General rule that costs follow the event — Application of the rule and discretion — Where applicant succeeded in interlocutory motion for a stay of proceedings in this Court while Federal Circuit and Family Court of Australia proceedings on foot — Where respondents seek an order that costs of the motion be reserved — Where respondents alternatively seek orders that the applicant only receive 50% of her costs — Where order made that the applicant only receive 75% of her costs

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 56-60

Uniform Civil Procedure Rules 2005 (NSW) r 42.21

Cases Cited:

Ahmad v Mohamed [2022] NSWSC 1445

Farley Bay Pty Ltd (in liq) v Davis [2022] VSC 604

Valceski v Valceski (2007) 70 NSWLR 36

Vaughan v Frost [2010] NSWSC 492

Yu v Wang [2021] NSWSC 1280

Category:

Costs

Parties:

Gulmaki Ahmad (First Plaintiff/First Respondent)
Mustafah Ahmad (Second Plaintiff/Second Respondent)
Sharihan Mohamed (Defendant/Applicant)

Representation:

Counsel:
G McNally SC (Plaintiffs/Respondents)
M Condon SC (Defendant/Applicant)

Solicitors:
Breene & Breene Solicitors (Plaintiffs/Respondents)
Dorter Family Lawyers (Defendant/Applicant)

File Number(s):

2022/175209

Publication restriction:

Nil

Judgment

1. On 24 October 2022, I made orders in this matter staying the proceedings until further order of the Court: [2022] NSWSC 1445. As a result, the Federal Circuit and Family Court of Australia (FCFCOA) will resolve the issue of ownership of a property instead.

2. I provided liberty to apply for an order other than that the plaintiffs/respondents to pay the defendant’s/applicant’s costs of the Notice of Motion as agreed or assessed.

3. The plaintiffs have exercised that liberty and sought an order that the costs of the Motion be reserved and, in the alternative, that the plaintiffs pay the defendant only 50% of the defendant’s costs of the Motion.

Whether costs of the Motion should be reserved

4. The plaintiffs submitted that, in other cases where proceedings in the Equity Division of the Supreme Court have been transferred to the FCFCOA, the costs of the motion seeking the transfer have been ordered as the successful applicant’s costs in the FCFCOA proceedings: Vaughan v Frost [2010] NSWSC 492 (Vaughan); Farley Bay Pty Ltd (in liq) v Davis [2022] VSC 604 (Farley). Such an order is said to be justifiable here on the grounds that the plaintiffs had a right to commence proceedings in this Court and their claim may prove successful in the FCFCOA proceedings.

5. I am not satisfied that the costs should be reserved. I accept the defendant’s submission that the “event” here for the purposes of the Uniform Civil Procedure Rules 2005 (NSW) r 42.1 is not the FCFCOA’s final determination, but the application for a stay, in circumstances where the Motion was substantively argued before me and was decided on considerations which do not turn on the merits of the parties’ positions in the FCFCOA proceedings. That application of the general rule of costs can be seen in other analogous cases: Valceski v Valceski (2007) 70 NSWLR 36 and Yu v Wang [2021] NSWSC 1280. I further accept that a judge in the FCFCOA ought not be burdened with determining costs of a motion, upon which she had not adjudicated.

6. While I accept, as the plaintiffs submitted, that the parties will need to return to the Supreme Court for orders disposing of these proceedings and possibly costs incurred before the stay, the relief sought in the Motion was resisted, yet granted, and therefore costs ought to be determined now.

Whether costs should be reduced

7. In support of its alternative argument, the plaintiffs submitted that the costs order should reflect the fact that, at the hearing, the defendant abandoned her “primary claim” for a transfer of the proceedings to the FCFCOA, and proceeded only with her alternative claim for a stay, and the plaintiffs unnecessarily wasted costs dealing with constitutional and jurisdictional issues arising under the cross-vesting legislation.

8. The defendant submitted the transfer and stay were always sought in the alternative, depending on whether the FCFCOA proceedings were in Division 1 or Division 2, and the plaintiffs were aware of that issue because they corresponded with the FCFCOA to confirm the division in which those proceedings were listed. However, I do not consider that correspondence demonstrated the plaintiffs’ engagement with the defendant’s alternative case for a stay, as it is equally consistent with the plaintiffs seeking to rely on the FCFCOA proceedings being in Division 2 as a reason to oppose any transfer, as the plaintiffs’ evidence suggested an internal transfer between Division 1 and 2 could not be assumed.

9. I am not satisfied the defendant’s conduct caused the plaintiffs to focus attention on constitutional issues, particularly where the plaintiffs were content for the defendant to rely on the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) rather than the Commonwealth Act. However, I do not accept the defendant’s submissions that the constitutional issue was an “unnecessary distraction”. Whether the Court had the power to make the orders sought under the relevant legislation is always a necessary question.

10. I accept the defendant could have articulated her abandonment of the transfer relief in prior correspondence with the plaintiffs, having regard to the requirements of the Civil Procedure Act. The abandonment could also have been made explicit in submissions. For example:

1. Although the submissions noted there were “alternative formulations of relief” because this Court only has power to transfer to Division 1 FCFCOA, the fact that the prayers for a transfer and a stay were framed as alternatives was not a concession that the defendant would only seek one or the other.

2. The defendant’s submissions never stated that no transfer would be sought if the proceedings were in Division 2. The defendant accepted that an internal transfer was a possibility.

11. I consider that the defendant’s abandonment of the transfer was late and, at the earliest, occurred on 18 October 2022 with the service of the defendant’s submissions, noting the Motion had been filed weeks earlier on 30 September 2022 and was heard on 21 October 2022. I accept that the plaintiffs incurred costs in preparing argument to assist the Court on the issue of transfer, and they could have been avoided.

12. Therefore, I will allow the defendant only 75% of her costs.

13. As both parties have had some measure of success on this application, I will make no order as to costs.

Orders

14. For those reasons I make the following orders:

1. Order 2 made on 24 October 2022 is vacated.

2. The respondents are to pay 75% of the applicant’s costs of the Notice of Motion as agreed or as assessed.

3. No order as to costs of the respondents’ application for a different costs order than that provided in the substantive judgment.

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Amendments

09 November 2022 - Solicitors' details corrected on coversheet

Decision last updated: 09 November 2022