Alan Sheppard Nominees Pty Ltd v Kangaroo Island Council

[2010] SASC 221

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

ALAN SHEPPARD NOMINEES PTY LTD v KANGAROO ISLAND COUNCIL

[2010] SASC 221

Judgment of The Honourable Justice Kourakis

21 July 2010

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF ISSUES

Parties dispute the proper application of Court order and the provisions of a Deed – order was that plaintiff pay all costs necessary to effect transfer of land – Deed imposes a costs liability on the plaintiff – whether defendant entitled to costs including of legal advice regarding other matter – defendant’s obligation was to pay only those costs necessary to give effect to the conveyance of the land – only costs incurred in accordance with order and Deed are costs of receiving and considering the Notice of Revocation of Community Land proposed by the plaintiff and costs of responding to that request – plaintiff to pay defendant’s costs in sum of $2,000.

ALAN SHEPPARD NOMINEES PTY LTD v KANGAROO ISLAND COUNCIL
[2010] SASC 221

1. KOURAKIS J:     The parties in this matter are in dispute over the proper application of both an order of this Court and the provisions of a Deed entered into by them which impose a costs liability on the plaintiff.  The order of this Court and the Deed concluded a dispute between the parties concerning the transfer of land on which the plaintiff had encroached by building a wall.  The Deed and the orders of this Court required the defendant to transfer the land, and the plaintiff to pay compensation for that transfer.  In addition, the Court made an order as to the costs of the transfer in these terms:

   The plaintiff will pay all of the costs necessary to affect the transfer of the land in accordance with these orders.

2. Clauses 11 and 12 of the Deed provide:

   11.Sheppard must bear all of the costs of such transfer including (but not limited to) the costs of surveying the land, any development applications under the Development Act (including any third party appeals), any stamp duty, any Lands Titles Office registration fees and any costs of any process pursuant to clause 5 of this Deed (including but not limited to public notification costs for any road closure).

   12.Sheppard indemnifies the Council for its reasonable costs and expenses incurred in giving effect to the transfer of the subject land.

3. On 30 April 2009 I gave an ex tempore judgment giving what was, in my view, the proper construction of the costs order and cl 12 (the costs provisions).  In summary, I held that the costs referred to in the costs provisions were in the nature of conveyancing costs.  I held that the defendant was entitled to the costs of taking the steps required of it by the plaintiff to effect a transfer of the land.  I held that the costs provisions did not extend to the costs of obtaining advice as to whether it was lawful or proper for the Council to co-operate in the form of conveyance suggested.

4. Notwithstanding the construction of the provisions I gave on 30 April 2009, the parties were not able to agree the items, or quantum, of the costs which were payable pursuant to the costs provisions.  The plaintiff contended that the costs should be no more than $1,000.  The defendant sought costs in the sum of $8,000, although the solicitor/client costs it had incurred were in the order of $12,000.

5. The order of this Court and the provisions of the Deed requiring the transfer of the land were made in September 2003.  A memorandum of transfer was not executed until 10 October 2007.  It was subsequently lodged for registration at the Lands Titles Office by the plaintiff’s solicitor.  On 18 January 2008 the Registrar-General issued a requisition notice with respect to the memorandum of transfer asking the parties to attend to the two requisitions made therein.  It is the second requisition that is relevant to these proceedings.  The Registrar-General noted that the transferred land was marked as a walkway and required the transferee to provide a Notice of Revocation of Community Land.

6. The plaintiff prepared a Notice of Revocation of Community Land which was forwarded for execution to the defendant.  The defendant took advice on the matter.  It later wrote to the plaintiff explaining that the land was a public road and that it would therefore not sign the Notice of Revocation of Community Land.  Further correspondence passed between the parties.  Ultimately it was agreed that an application should be brought in this Court for directions.

7. The plaintiff filed an application for directions on 12 November 2008.  After the first return of the application before me notice of the proceedings was given to the Registrar-General.  After receiving advice from the Crown Solicitor, the Registrar-General withdrew the requisition.  The transfer has been registered.

8. In my view, the costs of the defendant in obtaining independent legal advice about the proper response to the requisition of the Registrar-General were not costs which fell within either the costs order or cl 11 of the Deed.  The advice was not obtained in order to effect the conveyance.  It was the responsibility of the plaintiff to effect the conveyance.

9. Of course, I do not meant to suggest that it was not proper for the defendant to obtain that advice.  It was appropriate and proper that it do so.  However, the defendant’s obligation was to pay only those costs necessary to give effect to the conveyance of the land.  In obtaining advice about whether or not it should execute the Notice of Revocation of Community Land, and then ultimately in declining to execute it, the defendant was not incurring costs to do that which was “necessary to effect the transfer of the land”.  Nor were the costs incurred “in giving effect to the transfer of the subject land”.  The advice was obtained to ensure that the defendant acted in accordance with its statutory responsibilities.

10. In my view, the only costs which were incurred in accordance with the provisions to which I have referred are the costs of receiving and considering the Notice of Revocation of Community Land proposed by the plaintiff, and the cost of responding to that request.  The costs of receiving advice about whether or not the defendant should execute it are not costs falling within the terms of the costs provisions.  The plaintiff’s costs also include the costs involved in considering and responding to the proposal that an application be made to the Court in this matter for further directions.  The costs also extend to appearing before the Court to abide the event of the plaintiff’s application.

11. In my view, an appropriate sum for the solicitors’ costs of receiving the plaintiff’s requests and responding thereto is $1,000.  The proper costs of the several attendances required on the further directions is a further sum of $1,000.  I order the plaintiff to pay the defendant’s costs in the sum of $2,000.

12. I make no order as to the costs of the argument on the question of costs.