Danthanarayana v GR8 Constructions Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Danthanarayana v GR8 Constructions Pty Ltd (No 2) [2012] FCA 250

Citation: Danthanarayana v GR8 Constructions Pty Ltd (No 2) [2012] FCA 250
Parties: WAJI DANTHANARAYANA and MARIA DANTHANARAYANA v GR8 CONSTRUCTIONS PTY LTD, GRANT WILSON, ROBERT PETROVIC and KENYON HOPKINS; GR8 CONSTRUCTIONS PTY LIMITED, GRANT WILSON and ROBERT PETROVIC v WAJI DANTHANARAYANA and MARIA DANTHANARAYANA  
File number: ACD 35 of 2011
Judge: FOSTER J
Date of judgment: 15 March 2012
Cases cited: Danthanarayana v GR8 Constructions Pty Ltd [2012] FCA 231 related
Date of hearing: 15 March 2012
Place: Sydney (via video link to Canberra)
Division: GENERAL DIVISION
Category: No Catchwords
Number of paragraphs: 11
Counsel for the Applicants: Dr AJ Greinke
Solicitor for the Applicants: Colquhoun Murphy
Solicitor for the First, Second and Third Respondents: Leonie Kennedy & Associates
Solicitor for the Fourth Respondent: McCabe Terrill

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

GENERAL DIVISION

ACD 35 of 2011
BETWEEN:

WAJI DANTHANARAYANA
First Applicant

MARIA DANTHANARAYANA
Second Applicant
AND:

GR8 CONSTRUCTIONS PTY LTD
First Respondent

GRANT WILSON
Second Respondent

ROBERT PETROVIC
Third Respondent

KENYON HOPKINS
Fourth Respondent
AND BETWEEN:

GR8 CONSTRUCTIONS PTY LTD
First Cross-Claimant

GRANT WILSON
Second Cross-Claimant

ROBERT PETROVIC
Third Cross-Claimant

AND:

WAJI DANTHANARAYANA
First Cross-Respondent

MARIA DANTHANARAYANA
Second Cross-Respondent

JUDGE:

FOSTER J

DATE OF ORDER:

15 MARCH 2012

WHERE MADE:

SYDNEY (VIA VIDEO LINK TO CANBERRA)

THE COURT ORDERS THAT:

The application made by the applicants that the order for costs made by Foster J on 15 March 2012 in Danthanarayana v GR8 Constructions Pty Ltd [2012] FCA 231 be varied is refused.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.  


IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

GENERAL DIVISION

ACD 35 of 2011
BETWEEN:

WAJI DANTHANARAYANA
First Applicant

MARIA DANTHANARAYANA
Second Applicant
AND:

GR8 CONSTRUCTIONS PTY LTD
First Respondent

GRANT WILSON
Second Respondent

ROBERT PETROVIC
Third Respondent

KENYON HOPKINS
Fourth Respondent
AND BETWEEN:

GR8 CONSTRUCTIONS PTY LTD
First Cross-Claimant

GRANT WILSON
Second Cross-Claimant

ROBERT PETROVIC
Third Cross-Claimant

AND:

WAJI DANTHANARAYANA
First Cross-Respondent

MARIA DANTHANARAYANA
Second Cross-Respondent

JUDGE:

FOSTER J

DATE:

15 MARCH 2012

PLACE:

SYDNEY (VIA VIDEO LINK TO CANBERRA)

REASONS FOR JUDGMENT

  1. After I delivered judgment in this matter today (Danthanarayana v GR8 Constructions Pty Ltd [2012] FCA 231) (the principal judgment) and announced orders, Counsel for the applicants made an application that I hear him on the question of costs.  That application was made in circumstances where I had already announced an order for costs in respect of the applicants’ application.  Notwithstanding that fact, I said that I would hear Counsel, and I have done so. 

  2. Counsel submitted to me that I should vacate the order for costs which I just made and should reserve the question of costs until the final determination of the whole proceeding.  Counsel submitted that the proprietors’ undertaking had been given in order to procure the removal of a caveat lodged against the…

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Details
Case
[2012] FCA 250
Decision Date

CaseChat Overview and Summary

In the Federal Court, Danthanarayana and GR8 Constructions Pty Ltd were involved in a dispute relating to an equitable charge secured by the builder against the property title. The applicants sought to have their undertaking vacated and for the issue of costs to be reserved until the final determination of the whole proceeding. Counsel for the applicants argued that the builder's equitable charge was not validly engaged because no debt was owed to the builder as at the date the caveat was lodged. Counsel also argued that the caveat was lodged "late" because the building contract had terminated in June 2009.

The court considered the argument that the builder had a prima facie case for its contention that a debt of at least $250,000 was due under the building contract as at 2 March 2011. The court held that the builder had established a prima facie case that the equitable charge had been engaged. Therefore, it was incumbent upon the applicants to approach both the builder's application for an extension of the caveat and their recent application to be released from their undertaking on the basis that, prima facie, the builder's equitable charge had been engaged at least to the extent of $250,000. Both applications had to be considered in that light. The court refused the applicants' application that the order for costs made by Foster J on 15 March 2012 be varied.

Orders

Orders of the court

The application made by the applicants that the order for costs made by Foster J on 15 March 2012 in Danthanarayana v GR8 Constructions Pty Ltd [2012] FCA 231 be varied is refused.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

After I delivered judgment in this matter today (Danthanarayana v GR8 Constructions Pty Ltd [2012] FCA 231) (the principal judgment) and announced orders, Counsel for the applicants made an application that I hear him on the question of costs. That application was made in circumstances where I had already announced an order for costs in respect of the applicants’ application. Notwithstanding that fact, I said that I would hear Counsel, and I have done so. Counsel submitted to me that I should vacate the order for costs which I just made and should reserve the question of costs until the final determination of the whole proceeding. Counsel submitted that the proprietors’ undertaking had been given in order to procure the removal of a caveat lodged against the title to the property by the builder in circumstances where the interest claimed by the builder to support that caveat was the equitable charge afforded to it under the building contract. Counsel submitted that the builder had contended that its equitable charge had been enlivened because a sum of money of at least $250,000 was due to it under the contract. Counsel argued that, in the event that it should transpire that the builder was not owed that amount or anything at all as at the date the caveat was placed on the title, then the basis upon which the caveat had been lodged would fall away. In the event that the applicants demonstrate that nothing was owed to the builder as at 2 March 2011 when the caveat was lodged against the title to the property, the applicants will have been shown to have been correct in attempting to have their undertaking released. Furthermore, in that event, the builder’s failure to consent to the proprietors being released from their undertaking will be shown to have been unreasonable. Counsel also submitted that it was an abuse of process for the builder to lodge the caveat on 2 March 2011 because the building contract had terminated in June 2009. He submitted that the caveat had been lodged “late”. It was submitted that costs should be reserved in order to enable the applicants to argue these points at the end of the case. It was said that it was more appropriate to deal with these arguments then. As to the first of these arguments, it seems to me that the argument ignores the fact that, as was conceded by the applicants at the hearing of the present application, the builder had a prima facie case or, as Counsel put it, a triable issue in respect of its contention that $250,000 was due under the building contract as at 2 March 2011. According to the terms of the building contract, that amount was secured by the equitable charge granted in favour of the builder. The appropriate starting point for my consideration of the applicants’ argument is the fact that, at the time when the caveat was lodged and an extension of its operation sought, the builder had established a prima facie case that the builder’s equitable charge had been engaged. That being so, it was incumbent upon the proprietors to approach both the builder’s application for an extension of the caveat and their recent application to be released from their undertaking upon the basis that, prima facie, the builder’s equitable charge had been engaged at least to the extent of $250,000. Both applications had to be considered in that light. It is not to the point that, in the end, the proprietors may succeed overall in the proceedings. Each interlocutory application had to be considered on its merits at the time when it was made.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.