Gatto Corporate Solutions Pty Ltd v Mountney - [2016] VSC 752

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2016 01459

GATTO CORPORATE SOLUTIONS PTY LTD (ACN 151 599 825)	Plaintiff
v
LORRAINE JOAN MOUNTNEY	Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	23 November 2016
DATE OF JUDGMENT:	12 December 2016
CASE MAY BE CITED AS:	Gatto Corporate Solutions Pty Ltd v Mountney
MEDIUM NEUTRAL CITATION:	[2016] VSC 752

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CAVEATS – Lodgement of caveats and issue of proceedings without proper basis.

COSTS – Whether solicitors should be jointly liable with caveator for costs ordered in favour of the registered proprietor of the property upon which a caveat had been lodged – Whether solicitor should indemnify caveator for costs for which it is liable by reason of issuing proceeding without instructions – Unnecessary to resolve factual disputes prior to resolving cost matters – Solicitor not liable for costs not caused by his conduct – Ordered that solicitor jointly liable with caveator for part of the costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ian G Hone
For the Defendant	Mr B J Murphy	Holding Redlich
For Mr Darroll Nelson	Ms S Tatarka	Darroll Nelson

HER HONOUR:

On 18 October 2016, I made orders directing the Registrar of Titles to remove a caveat lodged on behalf of the plaintiff by its former solicitor, Mr Darroll Nelson, over a property in Mordialloc owned by the first defendant (‘property’) on 29 February 2016. The order was made with the consent of the plaintiff, who conceded that it had no caveatable interest in the property. There is in fact an outstanding dispute between the plaintiff and the first defendant concerning a sum said to be owing by the first defendant to the plaintiff pursuant to an agreement, but it is common ground that the terms of that agreement did not give rise to a caveatable interest in the property. Following notification by the Registrar of Titles on 18 March 2016 that the first defendant had made an application under s 89A of the Transfer of Land Act 1958 (Vic) (‘TLA’), Mr Nelson filed and served a Writ and General Indorsement on 20 April 2016 to commence this proceeding. The General Indorsement stated as follows:

1.The Plaintiff is and was at all material times a company capable of suing.
2.The Defendant is and was at all material times the proprietor of the properties comprised in Certificates of Title Volume 07702 Folio 080 (Property).
3.The Plaintiff provided funds and services to the Defendant for improvements to the Property based on representations by the Defendant that the Defendant would hold the Property on trust for the Plaintiff to the extent of those improvements.
4.The Plaintiff claims by reason of the matters aforesaid that they have a caveatable interest in the Property.

Contrary to s 41 of the Civil Procedure Act 2010 (Vic) (‘CPA’), the Writ and General Indorsement was not accompanied by an overarching obligations certificate signed by the plaintiff. Nor did Mr Nelson file a ‘Proper Basis…

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: [2016] VSC 752
Decision Date: 12 December 2016

CaseChat Overview and Summary

In the case of Gatto Corporate Solutions Pty Ltd v Mountney, the dispute arose from the lodgement of a caveat by Mountney on Gatto’s property without a proper basis. The proceedings were initiated by Mountney against Gatto, leading to a legal challenge over the validity of the caveat. The case was heard in the Supreme Court of Queensland. The primary issue before the court was whether solicitors involved in the issuance of proceedings without proper instructions could be held jointly liable for costs ordered in favour of the registered proprietor. Additionally, the court had to determine if a solicitor could be held responsible for indemnifying the caveator for costs incurred due to issuing proceedings without instructions.

The court considered the nature of the solicitor’s role and the extent to which their conduct contributed to the costs incurred by the registered proprietor. It was established that the solicitor was not liable for costs not caused by their conduct. However, the court held that when a solicitor issues proceedings without proper instructions, they can be held jointly liable with the caveator for part of the costs. The reasoning of the court was that it was not necessary to resolve factual disputes prior to addressing the issue of costs. The court concluded that the solicitor, by virtue of their improper conduct, was indeed jointly liable with the caveator for part of the costs, thereby affecting the distribution of liability in such cases.

The final orders of the court directed that the solicitor be held jointly liable with the caveator for part of the costs incurred by the registered proprietor. This decision underscored the importance of proper legal procedures in the lodgement of caveats and the initiation of proceedings, highlighting the potential financial repercussions for solicitors who act without due diligence or proper instructions.

Orders