Constantinidis v Landcorp (NSW) Pty Ltd (in liq)

[2011] NSWSC 872

Supreme Court

New South Wales

Medium Neutral Citation:	Constantinidis & Anor v Landcorp (NSW) Pty Ltd (in liq) & Ors [2011] NSWSC 872
Hearing dates:	14, 19 July 2011
Decision date:	16 August 2011
Jurisdiction:	Equity Division
Before:	Black J
Decision:	Plaintiffs pay costs of the proceedings
Catchwords:	Costs - costs ordered against plaintiffs where application to extend caveat could not have succeeded
Legislation Cited:	Corporations Act 2001 (Cth) - s 471B
Category:	Costs
Parties:	George Constantinidis - First Plaintiff Gemma Constantinidis - Second Plaintiff Landcorp (NSW) Pty Ltd (in liq) - First Defendant Robert William Whitton & Peter Grealish - Second Defendant Donovan Oates Hannaford Mortgage Corp Ltd (R&M app) - Third Defendant Adam Shepard - Liquidator for Third Defendant Greg Hall, Ian England & Sam Marsden - Fourth Defendant
Representation:	Counsel: In person - Plaintiffs J.A. Darvall - Third Defendant Solicitors: In person - Plaintiff Brett Scott - Third Defendant
File Number(s):	10/382398

Judgment

1. On 14 July 2011, I delivered judgment in respect of a motion ("Motion") filed by Donovan Oates Hannaford Mortgage Corporation Limited (receivers and managers appointed) (in liquidation) ("DOHMC") which sought an order that the Amended Statement of Claim filed 6 May 2011 be dismissed against it; that certain funds held in a controlled moneys account in the name of a solicitor be paid to DOHMC; and that the Plaintiffs pay the costs of DOHMC of the proceedings including the Motion as agreed or assessed. I held that, in consequence of Macready AsJ's previous judgment declining to grant leave to the Plaintiffs under s 471B of the Corporations Act to continue the proceedings as against DOHMC ("section 471B application"), I should dismiss the proceedings against DOHMC and that I should also order that the funds held in the controlled moneys account to be paid to DOHMC.

1. I dealt with DOHMC's application for costs in paragraphs 22-27 of my reasons for judgment and indicated a preliminary view that the Plaintiffs should be ordered to pay DOHMC's costs of and associated with the application for leave to file the Further Amended Statement of Claim, the section 471B application and the Motion. I granted leave to each party to make any written submissions which they wished to make as to the form of that order and set a timetable for those submissions.

1. Both DOHMC and the Plaintiffs have made written submissions and have canvassed a range of issues in respect of the form of costs order which should be made in respect of the proceedings. In my view, it is appropriate that I should reconsider the views which I expressed in paragraph 24 of my judgment delivered on 14 July, particularly in circumstances where I had noted that no submissions had then been made before me as to whether the Plaintiffs would, or would not, have sustained the caveat had agreement to its withdrawal not been reached and both parties have now taken the opportunity to make submissions as to that matter.

1. On the one hand, DOHMC submits that it should have its costs of the entire proceedings on the basis that, in the ordinary course of an application to extend a caveat, costs of the "caveat" portion of the proceedings will form part of the costs order for the proceedings as a whole and the usual order as to costs, namely that costs follow the event, will generally be made. DOHMC also submits that the finding made by Macready AsJ that the Plaintiffs had not established a series question to be tried as against DOHMC, while made in dealing with the section 471B application, necessarily indicated that the caveat lodged by the Plaintiffs would not have been sustained had that caveat not been withdrawn by agreement. Third, DOHMC contends that the proceedings were delayed by reason of the matter in which the Plaintiffs conducted the proceedings. DOHMC also makes an alternative submission that, if it is not allowed its costs of the proceedings generally, the Plaintiffs should be ordered to pay its costs from 15 December 2010 by reason of the matters which it identifies in its submissions.

1. The First and Second Plaintiffs delivered an initial submission in respect of costs on 29 July 2011 and the Second Plaintiff delivered a further submission on 1 August 2011. I have had regard to each of those submissions. The Plaintiffs contend that they should not be liable for DOHMC's costs of the proceedings at all, including in respect of the period indicated in my earlier judgment. The matters raised by the Plaintiffs in opposition to an order for costs against them included that:

(a) the unit which was the subject of the proceedings would have been in their possession and the proceedings would not have been necessary but for allegedly fraudulent and questionable actions on the part of DOHMC's prior directors;

(b) the Plaintiffs were forced to take action against DOHMC by reason of specified matters;

(c) the Plaintiffs reported various matters to the receivers and liquidator of DOHMC who, it is contended, failed to act in a professional and diligent manner; and

(d) DOHMC's issue of a lapsing notice forced the Plaintiffs to commence the proceedings.

The Plaintiffs also take issue with each of the matters raised by DOHMC in support of its application for costs and argue that DOHMC should pay their costs.

1. The Second Plaintiff also takes issue with the service of the lapsing notice in respect of the caveat upon her in January 2011 and makes further submissions as to the identification of the relevant property, a matter which was argued before Macready AsJ on 18 May 2011 and which was determined by his judgment delivered on 31 May 2011. The Second Plaintiff also contends that the caveat would readily have been sustained against DOHMC for reasons which she sets out in her submissions and contends that this is not a case in which costs should follow the event.

1. The First and Second Plaintiffs in their initial submissions and the Second Plaintiff in her further submissions also criticise the level of attendances by Counsel and solicitors for DOHMC in the proceedings, although this is a matter which can be addressed in any assessment of the costs which are ultimately ordered to be paid by the Court.

1. In my view, DOHMC is correct in its submission that Macready AsJ's determination that the Plaintiffs had not established a serious question to be tried against DOHMC, by reason of the deficiencies in the description of the unit which they wished to purchase in the correspondence on which they relied, indicates that the Plaintiffs' application to extend the caveat could not have succeeded. In these circumstances, I consider that DOHMC is entitled to its costs of the proceedings prior to 4 April 2011. I am also satisfied that DOHMC is entitled to its costs of proceedings since 4 April 2011 for the reasons set out in paragraphs 25 and 26 of my judgment of 14 July, and I do not consider that the matters raised by the Plaintiffs in their further submissions as to costs provide any basis to alter that result.

1. Accordingly, I order that the Plaintiffs pay DOHMC's costs of the proceedings, including the costs of the Motion, as agreed or as assessed.

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Decision last updated: 16 August 2011