Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd (No 2) - [2018] NSWCA 329

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd (No 2) [2018] NSWCA 329
Hearing dates: 13 December 2018
Decision date: 13 December 2018
Before: Basten JA
Decision:
(1)   Subject to order 2, the appeal against the first and second respondents shall be dismissed on 29 January 2019.

(2)   Order 1 shall not take effect if on or before 29 January 2019 the appellant has lodged with the registrar of the Court the sum of $85,000 or a bank guarantee in that amount by way of security for the costs of the first and second respondents to the appeal.
(3)   The appellant shall pay the costs of today’s proceedings with respect to security for costs, such costs to be payable forthwith.
Catchwords:
CIVIL PROCEDURE – appeal – security for costs – security for costs by way of caveatable interest over property owned by third party – property subject of testamentary trust – whether property acceptable as security – further opportunity to provide acceptable security
CIVIL PROCEDURE – variation of interlocutory order – exercise of liberty to apply – whether notice of motion required – whether respondents knew of nature of owner’s interest in property when order for security made – whether variation warranted
Legislation Cited: Real Property Act 1900 (NSW), s 82
Trustee Act 1925 (NSW), s 38
Cases Cited: Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2018] NSWCA 271
EB 9 & 10 Pty Ltd v The Owners Strata Plan 934 [2018] NSWCA 288
Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213
Category: Procedural and other rulings
Parties: Comlin Holdings Pty Ltd (Applicant)
Metlej Developments Pty Ltd (First Respondent)
Nova Scotia Developments Pty Ltd (Second Respondent)
Kayrouz Constructions Pty Ltd (Third Respondent)
L.A.D.S. Developments Pty Ltd (Fourth Respondent)
Representation:
Counsel:
Mr P King (Applicant)
Mr L Gor (First and Second Respondents)
Mr A d’Arville (Third and Fourth Respondents)
Solicitors:
McKell Solicitors (Applicant)
Sachs Gerace Broome (Solicitors)

File Number(s): 2018/185926
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2018] NSWSC 761

Date of Decision:

28 May 2018

Before:

Parker J

File Number(s):

2014/285405

Judgment

BASTEN JA: There is an appeal pending in this Court brought from a judgment of Parker J in the Equity Division, delivered on 28 May 2018. The plaintiff in the proceedings below now appeals from the dismissal of its claim.
The four respondents have each sought security for their costs of the appeal. Arrangements have been made which were acceptable to the third and fourth respondents. On 12 November 2018 I ordered that the appeal be stayed pending the provision of security for the costs of the first and second respondents in an amount of $85,000 by way of a caveatable interest over one of the properties in the ownership of Mrs Betty Bassil. [1] The respondents now seek to vary the orders made on 12 November on the basis that they cannot accept the…

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.

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Details

Case: [2018] NSWCA 329
Decision Date: 13 December 2018

CaseChat Overview and Summary

The appeal concerned an application for security for costs brought by the first and second respondents against the appellant, Comlin Holdings Pty Ltd. The dispute arose in the context of an appeal where the respondents sought security for their costs, proposing that this security be provided by way of a caveatable interest over property owned by a third party, which was held under a testamentary trust. The primary question before the court was whether this property was acceptable as security, and if not, whether the appellant should be granted a further opportunity to provide acceptable security.

The court was required to determine two principal legal issues. Firstly, whether the property held under a testamentary trust, proposed as security for costs, was acceptable for that purpose. Secondly, the court considered whether an interlocutory order for security for costs could be varied, and if so, whether the respondents had sufficient knowledge of the owner's interest in the property at the time the original order was made, and whether such variation was warranted.

In its reasoning, the court addressed the nature of the proposed security, noting that property held under a testamentary trust presented complexities regarding its suitability as security for costs. The court considered the principles governing the exercise of a liberty to apply to vary an interlocutory order, including the requirement for notice and the circumstances under which such variations are permissible. The court ultimately determined that the proposed security was not acceptable and that the appellant should be afforded a further opportunity to provide adequate security.

The court ordered that, subject to compliance with a further condition, the appeal against the first and second respondents would be dismissed on 29 January 2019. This dismissal would not take effect if, by that date, the appellant lodged $85,000 in cash or a bank guarantee of that amount with the registrar as security for the respondents' costs. The appellant was also ordered to pay the costs of the proceedings concerning security for costs forthwith.

Orders

Orders of the court

(1) Subject to order 2, the appeal against the first and second respondents shall be dismissed on 29 January 2019.

(2) Order 1 shall not take effect if on or before 29 January 2019 the appellant has lodged with the registrar of the Court the sum of $85,000 or a bank guarantee in that amount by way of security for the costs of the first and second respondents to the appeal.

(3) The appellant shall pay the costs of today’s proceedings with respect to security for costs, such costs to be payable forthwith.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd (No 2) [2018] NSWCA 329
Hearing dates:	13 December 2018
Decision date:	13 December 2018
Before:	Basten JA
Decision:	(1) Subject to order 2, the appeal against the first and second respondents shall be dismissed on 29 January 2019. (2) Order 1 shall not take effect if on or before 29 January 2019 the appellant has lodged with the registrar of the Court the sum of $85,000 or a bank guarantee in that amount by way of security for the costs of the first and second respondents to the appeal. (3) The appellant shall pay the costs of today’s proceedings with respect to security for costs, such costs to be payable forthwith.
Catchwords:	CIVIL PROCEDURE – appeal – security for costs – security for costs by way of caveatable interest over property owned by third party – property subject of testamentary trust – whether property acceptable as security – further opportunity to provide acceptable security CIVIL PROCEDURE – variation of interlocutory order – exercise of liberty to apply – whether notice of motion required – whether respondents knew of nature of owner’s interest in property when order for security made – whether variation warranted
Legislation Cited:	Real Property Act 1900 (NSW), s 82 Trustee Act 1925 (NSW), s 38
Cases Cited:	Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2018] NSWCA 271 EB 9 & 10 Pty Ltd v The Owners Strata Plan 934 [2018] NSWCA 288 Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213
Category:	Procedural and other rulings
Parties:	Comlin Holdings Pty Ltd (Applicant) Metlej Developments Pty Ltd (First Respondent) Nova Scotia Developments Pty Ltd (Second Respondent) Kayrouz Constructions Pty Ltd (Third Respondent) L.A.D.S. Developments Pty Ltd (Fourth Respondent)
Representation:	Counsel: Mr P King (Applicant) Mr L Gor (First and Second Respondents) Mr A d’Arville (Third and Fourth Respondents) Solicitors: McKell Solicitors (Applicant) Sachs Gerace Broome (Solicitors)
File Number(s):	2018/185926
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: [2018] NSWSC 761 Date of Decision: 28 May 2018 Before: Parker J File Number(s): 2014/285405