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Alliance Developments Pty Ltd v Arbab

Alliance Developments Pty Ltd v Arbab

Case [2019] VSC 832 20 December 2019

Costs

Indemnity Costs

Standing

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
PROPERTY LIST

S ECI 2019 04202

ALLIANCE DEVELOPMENTS PTY LTD (ACN 162 911 248)	Plaintiff
V
MAHBOOB ALI JAN ARBAB	First Defendant
and
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 December 2019
DATE OF JUDGMENT:	20 December 2019
CASE MAY BE CITED AS:	Alliance Developments Pty Ltd v Arbab and Anor
MEDIUM NEUTRAL CITATION:	[2019] VSC 832

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PRACTICE AND PROCEDURE – Costs – Application for an order for indemnity costs against caveator and solicitor who lodged disputed caveats – Conduct of caveator and solicitor – Whether solicitor failed to act with reasonable competence – Exercise of caution – Indemnity costs – Supreme Court Act 1986 (Vic) s 24(1) – Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 63.23(1) - Civil Procedure Act 2010 (Vic) – Transfer of Land Act 1958 (Vic) ss 89(1), 89(4), 89A(1), 89A(5), 90(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Jones	SMR Legal
For the First Defendant	In person
For the Second Defendant	No appearance
For Ms Hina Pasha and Pasha Legal	Ms G Berlic	Lander & Rogers

HIS HONOUR:

Introduction

On 3 October 2019, the Court ordered that the Registrar of Titles (‘Registrar’) remove two caveats lodged by the solicitor for Mahmoob Arbab, the first defendant and a resident of Pakistan, over two properties owned by the plaintiff. The plaintiff now seeks an indemnity costs order in this proceeding against Mr Arbab, as well as against Pasha Legal and its sole principal Ms Hina Pasha, who acted for Mr Arbab. The plaintiff says that there was no proper basis for lodging the caveats, and that Mr Arbab never had the interests in the two properties that were claimed. Mr Arbab and Ms Pasha oppose the application.

The application is made under:

(a) s 24(1) of the Supreme Court Act 1986 (Vic), which gives the Court a general discretion as to costs; and

(b) r 63.23(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) which gives the Court power to make a ‘wasted costs order’ against the solicitor of a party to litigation.

Background

The plaintiff has three shareholders, Raymond Abela, Abdul Syed and Mr Arbab. Mr Abela and Mr Syed are the current directors.

Previously, Mr Abela and Mr Arbab had 50 shares each in the plaintiff, and were the sole shareholders and directors. Mr Arbab subsequently resigned as a director of the plaintiff.

On 19 March 2013, the plaintiff entered into a contract to buy vacant land at 25 Alliance Avenue, California Gully (‘California Gully property’) for a purchase price of $207,000. The intention was to subdivide the California Gully property into five lots, and build new homes on the lots. The contract settled on 6 June 2013. Mr Arbab says he contributed $34,300 to the purchase.

In May 2014, Mr Abela entered into a contract to buy a property located at 5/100 Pipe Road,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Alliance Developments Pty Ltd v Arbab

Details

AGLC: Alliance Developments Pty Ltd v Arbab [2019] VSC 832
Case: [2019] VSC 832
Decision Date: 20 December 2019

CaseChat Overview and Summary

The case of Alliance Developments Pty Ltd v Arbab involved a dispute over costs related to the lodging of disputed caveats. The plaintiff, Alliance Developments, sought an order for indemnity costs against the defendant, Arbab, and his solicitor. The matter was heard in the Supreme Court of Victoria. The court was required to determine whether the defendant's solicitor had failed to act with reasonable competence and whether indemnity costs were appropriate under the relevant legislation and court rules.

The court considered whether the defendant's solicitor had acted with reasonable competence by failing to advise the defendant that the caveats were likely to be invalid, and whether this constituted a breach of professional conduct. The court also examined the relevant statutory provisions, including the Transfer of Land Act 1958 (Vic) and the Supreme Court Act 1986 (Vic), as well as the relevant court rules and civil procedure legislation. The court found that the solicitor had indeed failed to act with reasonable competence and that the defendant's conduct in lodging the caveats was vexatious.

Consequently, the court ordered that the defendant and his solicitor pay indemnity costs to the plaintiff. The court emphasised the importance of exercising caution when lodging caveats and the need for solicitors to advise their clients appropriately. The court also noted that indemnity costs were an appropriate remedy in cases where a party or their solicitor had acted vexatiously, unreasonably, or without reasonable cause. This decision serves as a reminder of the importance of professional competence and the potential consequences of failing to act with due care and diligence in legal proceedings.

Orders