Andara Homes Pty Limited v Justin Robert Mallitt and Michelle Bernice Mallitt

[2014] ACTSC 142

ANDARA HOMES PTY LIMITED v JUSTIN ROBERT MALLITT AND MICHELLE BERNICE MALLITT
[2014] ACTSC 142 (18 June 2014)

REAL PROPERTY – Caveats – Extension of caveat – Lapsing of caveat – Subsequent caveats

PROCEDURE – Costs – Party and party costs – Lump sum assessment - Principles

Land Titles Act 1925 (ACT), s 107C
Real Property Act 1900 (NSW), s 74O

Court Procedures Rules 2006 (ACT), rr 1720(3)(c), 2802, 2806, s 4.1 in Sch 4

Andara Homes Pty Ltd v Tai [2014] ACTSC 37
Andara Homes Pty Ltd v Palm [2014] ACTSC 141
Bennett v Seaman (1993) 117 ACTR 1
Boral Ltd v Aghili [2009] ACTCA 18
Cape v Redarb Pty Ltd (Unreported, Australian Capital Territory Supreme Court, Higgins J, 12 June 1991)
Carter v Newcastle Wallsend Coal Co (1909) 9 SR (NSW) 474
Gurwitz v Gurwitz (1988) V Conv R 54-317
London, Chatham and Dover Railway Company v South-Eastern Railway Company (1889) 60 LT 753
Macphillamy v Vizovitis [2003] ACTSC 60
Prudential Finance Ltd v Davander Nominees Pty Ltd [1992] 1 VR 468
Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission (Unreported, Federal Court of Australia, Forster J, 11 July 1986)
Taylor v Commonwealth Development Bank of Australia (1992) ANZ Conv R 161

No. SC 152 of 2014

Judge:             Refshauge J
Supreme Court of the ACT

Date:              18 June 2014

IN THE SUPREME COURT OF THE     )
  )          No. SC 152 of 2014
AUSTRALIAN CAPITAL TERRITORY           )          

BETWEEN:ANDARA HOMES PTY LIMITED

Applicant

AND:JUSTIN ROBERT MALLITT AND MICHELLE BERNICE MALLITT

Respondent

ORDER

Judge:  Refshauge J
Date:  18 June 2014
Place:  Canberra

THE COURT ORDERS THAT:

1. The costs payable by the applicant, Andara Homes Pty Limited, by order dated 14 May 2014 be assessed as set under rule 1720(3)(c) of the Court Procedures Rules 2006 (ACT) in the sum of $7,500.

1. The title of the proceedings be amended to Andara Homes Pty Limited v Justin Robert Mallitt and Michelle Bernice Mallitt.

1. On 22 April 2014, the plaintiff, Andara Homes Pty Limited, which I will call in these reasons Andara Homes, applied for the extension of a caveat lodged on the title of a certain property at Crace in the Australian Capital Territory.

1. Because of similar proceedings (Andara Homes Pty Ltd v Tai [2014] ACTSC 37), I can identify the background to the proceedings despite the absence of affidavit material. Some of the facts were stated in the Originating Application described as the “ground” of the application, but in reality assertions of fact.

1. The respondents, Justin and Michelle Mallitt, and Andara Homes entered into a building contract, which the Originating Application states was made on or about 23 March 2012.

1. I note that the respondent’s surname appears to be incorrect on the Originating Process.  It appears to me that they spelt their name with two “t’s” and not one.  I will, accordingly, make an appropriate amendment order.

1. The contract appears to have been a standard form Master Builders Association of the ACT Home Building Contract.  Clause 31 of the contract charges the land on which the home is to be built with any outstanding monies due to be paid by the registered proprietor of the land:  Andara Homes Pty Ltd v Tai.

1. Relying on that provision, Andara Homes lodged a caveat.  In circumstances of which there was no evidence, that caveat was removed by the Registrar-General.

1. On 2 April 2014, Andara Homes lodged a further caveat. Under s 107C of the Land Titles Act 1925 (ACT), however, the Registrar-General has power to remove a subsequent caveat as the section provides that such a caveat shall not be registered except by order of the court. The Registrar-General sent Andara Homes a notice dated 8 April 2014 that he was intending to remove the caveat.

1. On 22 April 2014, Andara Homes filed its Originating Application seeking that the Registrar-General be restrained from removing the caveat.

1. No affidavit was filed with the application.  This is very undesirable as the Court has no evidence then on which to make any decision required on the Originating Application.

1. Of course, in cases of urgency, that may be unavoidable, but even then, the court will often require the evidence to be reduced to affidavit form, or a transcript prepared and kept on the file.

1. On 22 April 2014, I made an order extending the caveat.  I also ordered

That an affidavit supporting this application made by Originating Application dated 22 April 2014 and annexing exhibits at least to the subject caveats and the building contract be filed before 5:00 pm on 29 April 2014.

1. No such affidavit was filed.  I also note that the filing fee for these proceedings was apparently paid by a personal cheque;  the cheque was dishonoured on presentation.  So far as I can see, this does not render the proceedings a nullity nor prevent Andara Homes prosecuting its application.

1. When the matter was further mentioned, it became clear that the caveat had lapsed before I was in a position to extend it.  It appears that, once it had lapsed, it was not able to be extended nunc pro tunc:  Boral Ltd v Aghili [2009] ACTCA 18.

1. In any event, the extension that I purported to make was only until 5:00 pm on 1 May 2014 and it was not then extended.  Thus, even if the orders made on 22 April 2014 had been effective to extend the caveat, it lapsed after 5:00 pm on 1 May 2014.

1. As Andara Homes did not, as required, file the further affidavit which it was directed to do, I did not have a copy of the caveat or, for that matter, the earlier caveat, so that I could not see whether there was a caveatable interest asserted in either of them.  The grounds of the application set out in the Originating Application suggested some differences in the caveatable interests claimed in the two caveats.

1. It was suggested that this meant that the second caveat was not a “subsequent caveat” within the meaning of s 107C of the Land Titles Act.  That section relevantly provides:

107C   Successive caveats

(1)Where a caveat has been removed by the registrar-general in accordance with section 107(2), the registrar-general shall not enter on the register any subsequent caveat affecting the same land or interest by the same person, or for the same purpose, except by order of the court.

1. It seems to me that this provision is wider than, for example, the New South Wales provision, s 74O of the Real Property Act 1900 (NSW), which refers to a restriction on lodging a caveat “in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat”.

1. I see no reason to read each “or” in s 107C(1) as meaning “and”. The Explanatory Statement for the Bill which became an Act that introduced s 107C simply stated that it was intended to prevent “frivolous and vexatious caveats”.

1. In any event, if the interest to be protected is essentially the same, it is a subsequent caveat, even if the evidence for it is different.  Gobbo J in Gurwitz v Gurwitz (1988) V Conv R 54-317 at 64,053 said that what was prohibited was a caveat that “was, in substance, the same interest that was set up”. To the same effect was what Young J said in Taylor v Commonwealth Development Bank of Australia (1992) ANZ Conv R 161 at 161 that, in that case, “essentially the one transaction was being relied upon by the bank for both caveats”.

1. Although the evidence may differ, it seems to me that what was asserted here, so far as I could understand it, was in essence the one transaction.

1. In any event, I do not think I have to rely on that, for the caveat affected the same land by the same person.  That the section prohibits.

1. It became clear on 14 May 2014 that the caveat had lapsed and I dismissed the application of Andara Homes to extend the caveat.

1. Mr and Mrs Mallitt sought an order for costs and that the court assess the costs under r 1720(3)(c) of the Court Procedures Rules 2006 (ACT).

1. I adjourned the application for fourteen days to permit the parties to discuss the quantum, in the hope that there could be some agreement.

1. I was later informed that agreement has not been able to be reached.  Accordingly, I will consider the application.

1. I have set out in some detail the basis on which a court will decide that it should make an order for costs and specify in the order the amount of costs, as provided for under the rule, in Andara Homes Pty Ltd v Palm [2014] ACTSC 141. I apply those principles here.

1. In this regard, I note that the cheque provided by Andara Homes for the filing fee was dishonoured on presentation and, to date, the filing fee for these proceedings has not been paid.  That is some indication that Andara Homes may not be able to pay any costs awarded by the Court.

1. The proceedings were relatively simple and I can identify with no great difficulty the work that would be necessary and proper in the matter.

1. The burden of a formal assessment of costs would probably be unreasonable on Mr and Mrs Mallitt in the circumstances.

1. Mr and Mrs Mallitt filed and relied on a detailed affidavit of Steven John Gavagna, setting out the work done from which I can assess the appropriate order for costs.

1. Andara homes appears to be presently unrepresented, despite its lawyers failing to act in accordance with the Court Procedures Rules and seek leave to withdraw if, in fact they are no longer instructed, or arrange for Andara Homes to act for itself under r 2802.

1. Nevertheless, I permitted the director of Andara Homes to make submissions on this question. Mr Simon Anderson, the director of Andara Homes, did so and opposed the application that I assess the costs.

1. Mr Anderson sought a deferment of my decision so that he could obtain legal representation.  I did so on two occasions, but after fourteen days, I considered that he had had enough time to arrange his affairs for representation and set a deadline, giving him a further four days within which to make submissions.

1. I did receive a submission in which Mr Anderson opposed the application, submitting that the costs should assessed by an “external party”.  The grounds were based on a complaint that Mr Anderson had made about the solicitor for Mr and Mrs Mallitt which, he submitted, would mean the costs would not be justified.

1. A judge of the Court is, of course, an “external party” and can assess costs in a fair and impartial manner, though I accept without the expert knowledge that the Registrar or Deputy Registrar would bring as the officers charged ordinarily to the task.

1. I am quite unable to assess the complaint made by Mr Anderson against the solicitor for Mr and Mrs Mallitt which is, in any event, irrelevant, since the Court must assess the actual evidence.

1. I further note that the detail provided in support of the application with permit a transparent assessment of the costs to be made within the limits of an assessment order under r 1720(3)(c) of the Court Procedures Rules.

1. I consider that the delay and assertions of Mr Anderson reinforce my view that to proceed with a formal assessment of costs is likely to result in delay and additional costs to Mr and Mrs Mallitt, which they are unlikely to be able to recover.

1. Accordingly, I propose to proceed to determine the amount of costs.

1. I apply the same approaches that I used in Andara Homes Pty Ltd v Palm where the same general information was provided.

1. The total of the work done was assessed at $11,155.10 plus $1430 for the appearance on 14 May 2014.  Mr Gavagna, however, estimated that the allowable party and party costs would be $8,809.57.

1. There are some concerns in this matter.  No affidavits were filed by or on behalf of Mr and Mrs Mallitt, other than that of Mr Gavagna relating to costs, yet a substantial claim is made for the preparation of three affidavits.  I am aware that authority is clear that evidence not used in Court is not necessarily evidence for the preparation of which a proper charge cannot be made.  See London, Chatham and Dover Railway Company v South-Eastern Railway Company (1889) 60 LT 753 at 755 per Kekewich J. It is, of course, difficult to assess whether the affidavits were necessary and proper when I do not have the material on which to make such a decision. That is a consequence of the kind of application which has been sought by the plaintiff. However, an affidavit by Mr and Mrs Mallitt would almost inevitably have been required if the application were to be opposed and a proper allowance is appropriate, but some moderation seems necessary.

1. I also note that these proceedings were effectively conducted simultaneously with those involving Mr and Mrs Palm (see Andara Homes Pty Ltd v Palm) and, as a result of the lapsing of the caveat, there was little required in the matter at the hearing. 

1. Counsel claimed a separate brief fee and the solicitors sought costs for attendance at both proceedings.

1. That is a complex issue.  In general terms, counsel is entitled to a brief fee in each matter.  Traditionally, such a brief fee has included preparation for the appearance which, as Ashley J pointed out in Prudential Finance Ltd v Davander Nominees Pty Ltd [1992] 1 VR 468 at 474-5, is incidental to the central task for which counsel has been paid. Indeed, in Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission (Unreported, Federal Court of Australia, 11 July 1986, Forster J), it was regarded as being “taken to include a good deal of time spent on reading facts or law in preparation for trial”.  That principle has been generally accepted in this Territory in Macphillamy v Vizovitis [2003] ACTSC 60 at [36], though it was accepted (at [40]) that, in appropriate cases, some additional preparation can be allowed.

1. Thus, some preparation is allowable even if there is one appearance in court for two different parties in separate cases heard together, where the question of whether moderation should be applied to that part of the brief fee which relates to the actual appearance, is, as Simpson ACJ made it clear in Carter v Newcastle Wallsend Coal Co (1909) 9 SR (NSW) 474 at 479-480, a matter of discretion.

1. The issues in both cases were very similar and the issues of successive caveats applicable to both.  It seems to me that some discount should be applied for this.

1. So far as the attendance of a solicitor instructing counsel is concerned, only one allowance for an attendance can be permitted, though there will be some specific preparation for each separate matter.

1. I am also conscious that an allowance is made in a party and party bill of costs for general care and conduct (s 4.1 in Sch 4 of the Court Procedures Rules) which, in an earlier version of this provision, was referred to often as an “allowance for care, skill and attention”, as in Cape v Redarb Pty Ltd (Unreported, Australian Capital Territory Supreme Court, Higgins J, 12 June 1991) at 6-7.  This was conventionally allowed at one-third of the costs allowed, though up to fifty percent could be allowed:  Bennett v Seaman (1993) 117 ACTR 1 at 8. No separate allowance was made for this amount in the itemised bill of costs annexed to Mr Gavagna’s affidavit for this amount, but I should have regard to it.

1. Doing the best I can with the material to hand, I am prepared to assess the costs on a party and party basis in the sum of $7,500.00.

1. I will so order.

   I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.

   Associate:

   Date: 18 June 2014

Counsel for the applicant:  Mr R Thomas
Solicitor for the applicant:  Elringtons
Counsel for the respondents:  Mr G Blank
Solicitor for the respondents:  Goodman Law
Date of hearing:  14 May 2014
Date of judgment:  18 June 2014