Ferrer Lawyers Pty Ltd trading as Ferrer Lawyers v Khanchedar (No 2)
[2023] NSWSC 1490
•05 December 2023
Supreme Court
New South Wales
Medium Neutral Citation: Ferrer Lawyers Pty Ltd trading as Ferrer Lawyers v Khanchedar (No 2) [2023] NSWSC 1490 Hearing dates: On the papers Date of orders: 05 December 2023 Decision date: 05 December 2023 Jurisdiction: Equity Before: Robb J Decision: The Court's order is that the costs of the application concerning the removal of the plaintiff's caveat be the plaintiff's costs in the cause on the ordinary basis.
Catchwords: COSTS – party/party – costs orders in interlocutory proceedings – whether order for costs of application to extend caveat should be made now or be the parties’ costs in the cause
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Cases Cited: Ferrer Lawyers Pty Ltd trading as Ferrer Lawyers v Khanchedar [2023] NSWSC 1085
Category: Costs Parties: Ferrer Lawyers Pty Ltd trading as Ferrer Lawyers ACN 641 830 873 (Plaintiff)
Majid Ali Khanchedar (First Defendant)
Macquarie Bank Limited ACN 008 583 542 (Second Defendant)Representation: Counsel:
Solicitors:
T Fermanis (Plaintiff)
I Chatterjee (First Defendant)
Ferrer Lawyers (Plaintiff)
Shore Lawyers (First Defendant)
File Number(s): 2023/00251853 Publication restriction: Nil
JUDGMENT
-
On 8 September 2023, the Court delivered judgment in these proceedings: Ferrer Lawyers Pty Ltd trading as Ferrer Lawyers v Khanchedar [2023] NSWSC 1085.
-
These reasons resolve a dispute between the parties concerning the appropriate order for the costs of the application. The second defendant has had no involvement in the application and I will accordingly refer to the first defendant as “the defendant” in these reasons.
-
The plaintiff seeks an order that the defendant pay its costs of the application on the indemnity basis, or alternatively on the ordinary basis. The order proposed by the defendant is that the costs of the application be the parties' costs in the cause.
-
In short, the plaintiff had acted as the solicitor for the defendant in certain proceedings. Under its costs agreement with the defendant, the plaintiff was entitled to a charge over certain land owned by the defendant to secure outstanding legal costs owed to it, as well as its costs of recovering the outstanding costs.
-
The plaintiff lodged a caveat against the title to the charged property in order to protect its charge. The defendant caused a lapsing notice to be issued, and the question at the hearing was whether the plaintiff's caveat should be extended.
-
The amount of costs claimed by the plaintiff was $22,084.42 in unpaid costs plus a further $28,696.43 for the plaintiff's costs to date in seeking to recover the outstanding amount.
-
The defendant paid $24,000 into his current solicitors' trust account for the purpose of providing alternative security to the plaintiff instead of the caveat against the title to his property.
-
On 11 August 2023, the plaintiff offered to withdraw its caveat if the defendant paid the sum of $50,780.85 into court on the basis that the costs of the application would be reserved.
-
The hearing took place on 14 August 2023, three days after the plaintiff made this offer.
-
At the hearing, the defendant increased his offer, so that he would pay $45,000 into Court if the caveat was withdrawn.
-
As appears from [33] of the principal judgment, the defendant then succeeded in achieving an order that the caveat be withdrawn, provided that, as happened, he subsequently paid the $45,000 into court, as a substitute security for the plaintiff.
-
In addition, there was a dispute between the parties as to whether the plaintiff was entitled to retain its file in the proceedings on the basis that it was entitled to enforce a solicitor's lien pending the payment of the outstanding fees that it claimed. On this issue, I found at [32] that the plaintiff was not entitled to maintain its lien insofar as it relied upon the lien to recover the costs that it had incurred in seeking to recover the outstanding legal costs that it claimed to be owed to it by the defendant.
-
The defendant indicated to the Court that he would institute a costs assessment in relation to the total legal fees claimed by the plaintiff, given the amount of those fees as explained at [5] of the principal judgment.
-
The costs of the application are within the discretion of the Court under s 98 of the Civil Procedure Act 2005 (NSW).
-
The application was an interlocutory one in which the plaintiff would have had a good claim for an order extending the caveat had the defendant not agreed to pay into court the amount of $45,000 as an alternative security for the recovery of the legal fees claimed by the plaintiff. Although the defendant did not accept the offer made by the plaintiff on 11 August 2023, the Court was told that the defendant’s financial resources were such that he was unable to pay into court the amount of $50,780.85 sought by the plaintiff, and that he could only afford to pay into court $45,000. On that issue, the defendant succeeded.
-
On the other hand, the defendant had only offered to pay $22,000 into court until the morning of the hearing, when he offered to pay into court the $45,000. Had the defendant not made that offer, then the Court would have made an order for the continuation of the caveat.
-
These circumstances would justify the Court making an order that the defendant pay the plaintiff's costs of the application, were it not for the fact that the application is an interlocutory one. It would not in my view justify the Court making an order that the costs be paid on the indemnity basis, because the result of the principal judgment is that the defendant was justified in not accepting the offer made by the plaintiff on 11 August 2023.
-
However, the Court must have regard to the fact that the application is interlocutory in nature, and the plaintiff may fail at the final hearing. As recorded at [5] of the principal judgment, the defendant has apparently already paid costs and disbursements in the amount of $363,237.40, leaving the balance of $22,084.42 claimed by the plaintiff. It is possible that the result of the costs assessment to be initiated by the defendant will be that the amount of the costs assessed in favour of the plaintiff may be less than the $363,237.40 that has already been paid. In that event, the plaintiff's claim for additional costs, and the costs of recovering those costs, will fail, and it will retrospectively be determined that there is no debt charged on the defendant's property and the caveat ought to have been withdrawn.
-
In these circumstances, the proper order to be made is that the plaintiff's costs of the application on the ordinary basis be the plaintiff's costs in the cause. The order should not be that the costs be the parties’ costs in the cause, because the defendant could have avoided the need for the application if he had offered to pay the $45,000 into court in the first place.
-
The Court's order is that the costs of the application concerning the removal of the plaintiff's caveat be the plaintiff's costs in the cause on the ordinary basis.
**********
Decision last updated: 07 December 2023
0
1
1