Central Element Pty Limited v Mindarie Street No. 2 Pty Limited

[2014] NSWSC 1464

Supreme Court

New South Wales

Medium Neutral Citation:	Central Element Pty Limited v Mindarie Street No. 2 Pty Limited [2014] NSWSC 1464
Hearing dates:	24 October 2014
Date of orders:	24 October 2014
Decision date:	24 October 2014
Jurisdiction:	Equity Division
Before:	Brereton J
Decision:	Plaintiffs to pay defendant’s costs of motion
Catchwords:	COSTS – costs of successful application to join party solely for purpose of seeking cost order against it
Category:	Costs
Parties:	Central Element Pty Ltd ACN 151 022 203 (plaintiff) Mindarie Street No 2 Pty Ltd ACN 160 791 186 (defendant)
Representation:	Counsel: A Fernon (plaintiff) D Robinson SC (defendant) Solicitors: Yates Beaggi (plaintiff) Antunes Lawyers (defendant)
File Number(s):	2014/40267

Judgment (ex tempore)

1. HIS HONOUR: In these proceedings, the plaintiff Central Element Pty Ltd sought the imposition, pursuant to (NSW) Conveyancing Act 1919, s 88K, of an easement, which was opposed by the defendant Mindarie Street No 2 Pty Ltd. The substantive proceedings were set down for hearing to commence on 20 October 2014, for two days. However, in late September 2014 the plaintiff obtained, by negotiation with the relevant local government authority, an alternative solution which did not involve imposing any burden on the land of the defendant. It accordingly embarked on seeking ways to bring these proceedings to an end. On or about 23 September, it communicated an offer to the defendant's solicitors which involved discontinuance of the proceedings, with each party to bear its own costs. The defendant, perhaps unsurprisingly, was not minded to accede to that and contemporaneously undertook some investigations of the plaintiff's position in order to ascertain its ability to meet an adverse costs order. Those investigations elicited that the plaintiff was a so-called "$2 company", and that it had not become the registered proprietor of the land for the benefit of which the easement had been sought: although it was the developer of that land and had exercised an option to acquire it, title had been acquired in the name of another company with similar ownership, MB Lane Cove Developments Pty Ltd.

2. Armed with that information the defendant on 1 October 2014 filed a motion which it sought to have made returnable on the first day of the hearing, 20 October, but was in fact made returnable before the Registrar on 8 October 2014, seeking that MB Lane Cove be joined as a defendant, that it pay the costs of the proceedings, and that the costs be in a specified gross sum.

3. This motion thus took the rather radical but permissible course of seeking to join a third party to the proceedings purely for the purpose of seeking a costs order against it, in circumstances where there were grounds for thinking that the plaintiff would be unable to meet a costs order and that MB Lane Cove was the true potential beneficiary of the proceedings brought by the plaintiff. When that motion came before the Registrar on 8 October 2014 - and although the record of proceedings is somewhat scant - it appears that the Registrar vacated the final hearing appointed for 20 October, adjourned the motion to today in the Applications List, and did not grant leave which the plaintiffs had, up to that point, foreshadowed seeking to discontinue the proceedings. The plaintiff had served a notice of discontinuance which contemplated the grant of such leave on 8 October, but it is clear that the proceedings have not in fact been discontinued and no such notice has been filed. The defendant on 17 October 2014, served a notice to produce on the plaintiff for production of various documents relevant to its financial circumstances. When the matter came before the Court today, the parties had agreed that orders should be made, that MB Lane Cove be joined as second plaintiff, that the proceedings and the motion of 1 October 2014 be "otherwise dismissed", and that both plaintiffs as they have now become jointly and severally pay the defendant's costs of and incidental to the proceedings as agreed or assessed.

4. The only outstanding matter was the costs of the motion of 1 October 2014. By reason of the agreement that has been indicated, the purpose of that motion will have been substantially achieved by the joinder of MB Lane Cove (albeit as a plaintiff rather than as a defendant) and the holding of MB Lane Cove as liable for the costs of the proceedings. It is true that the plaintiff has not pressed a lump sum costs order, but that does not, in my view, detract from the position that it can be said that the defendant has achieved substantial success on the motion of 1 October.

5. Although submissions were made to the effect that that could have been achieved by correspondence, I must say that it seems to me doubtful in the extreme that such an order, unusual as it is, would have been consented to in the absence of a notice of motion. Moreover, the proximity of the hearing date as at 1 October demanded that any application to join an additional party be made very promptly once the grounds for doing so were made apparent.

6. While I appreciate and agree that it is desirable that matters requiring interlocutory resolution be agitated in correspondence first, that cannot be an inevitable rule, nor does it seem to me that from the material before the Court that any necessary or extravagant expense has been incurred on the defendant's side in refining and prosecuting this motion. The material relied on is in relatively narrow scope. In my view, there is no reason to depart from the position that the substantially successful defendant on the notice of motion, should have its costs of the motion.

7. Accordingly the Court, by consent, orders that:

1. MB Lane Cove Developments Pty Ltd ACN 1666050 be joined as second plaintiff.

2. The proceedings be dismissed.

3. The plaintiffs jointly and severally pay the defendant's costs of and incidentally to the proceedings.

8. The Court further orders that:

1. The plaintiffs jointly and severally pay the defendant's costs of an incidental to the defendant's motion filed 1 October 2014.

9. The motion filed 1 October 2014 be otherwise dismissed.

**********

Decision last updated: 19 February 2015