Ghannam v BB&B Penrith Pty Ltd - [2021] NSWSC 1131

Supreme Court

New South Wales

Medium Neutral Citation: Ghannam v BB&B Penrith Pty Ltd [2021] NSWSC 1131
Hearing dates: On the papers
Date of orders: 7 September 2021
Decision date: 07 September 2021
Jurisdiction: Equity
Before: Darke J
Decision:
Plaintiff ordered to pay defendant’s costs.

Catchwords:
COSTS – plaintiff commenced proceedings to extend the operation of his caveat – caveat recorded on title of Lot in strata development of which the defendant was registered proprietor – parties settled caveat dispute but not the costs of the proceedings – plaintiff’s caveat failed to specify his interest in the Lot and was therefore fundamentally defective – continuation of caveat would also prejudice the defendant’s ability to obtain refinancing and therefore imperil completion of the development – such an outcome would prevent the defendant from conveying the Lot to the plaintiff – continued operation of caveat highly inconvenient in these circumstances – defendant offered to protect the plaintiff’s interest in the Lot in exchange for removal of the caveat – held that it was inevitable the caveat would have been ordered to be withdrawn – order made that the plaintiff pay the defendant’s costs

Legislation Cited:
Real Property Act 1900 (NSW) ss 74F, 74L

Cases Cited:
Hanson Construction Materials v Vimwise Civil Engineering (2006) NSW ConvR 56-137; [2005] NSWSC 880
Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84

Category: Costs
Parties: Jamal Ghannam (Plaintiff)
BB&B Penrith Pty Ltd (Defendant)
Representation:
Counsel:
Mr S Lipp (Plaintiff)
Solicitors:
SD Commercial Lawyers (Plaintiff)
Hall Partners (Defendant)

File Number(s): 2021/215340
Publication restriction: None

Judgment

Introduction

The plaintiff commenced these proceedings by Summons on 28 July 2021, in which the plaintiff urgently sought interlocutory relief to extend the operation of his caveat.
Before the Court determined the dispute, the parties sent consent orders to the Court. The caveat dispute was thereby resolved, but the question of costs remained outstanding. The Court directed the parties to provide written submissions on the question of costs, such question to be dealt with on the papers.
In that regard, the plaintiff relies on written submissions dated 19 August 2021. The defendant relies on the written submissions of 15 August 2021 and submissions in reply dated 19 August 2021. The plaintiff seeks no order as to costs, and the defendant seeks costs on an indemnity basis.

Background

In 2017, the plaintiff exchanged contracts for sale in respect of Lots 2 and 6 of an off-the-plan unregistered strata scheme in Penrith. The vendor was the defendant, who is the registered proprietor and developer of the Lots. The plaintiff advanced $440,000 to the defendant pursuant to the contracts.
On 22 October 2019, the plaintiff arranged for a caveat to be lodged in respect of Lot 2. The caveat form prompts the caveator to supply particulars of the estate or interest that they claim. The plaintiff’s caveat form is, in this respect, blank. But the plaintiff did indicate that the estate or interest claimed was by virtue of “PURCHASE OF…

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: [2021] NSWSC 1131
Decision Date: 07 September 2021

CaseChat Overview and Summary

The case of Ghannam v BB&B Penrith Pty Ltd involved the plaintiff, Ghannam, who had lodged a caveat against a lot in a strata development. BB&B Penrith Pty Ltd, the defendant, was the registered proprietor of the lot. The dispute centred around the costs associated with the proceedings after the parties had settled the issue of the caveat but not the costs. The matter was heard in the Supreme Court of New South Wales.

The legal issues the court had to address were whether the plaintiff's caveat was fundamentally defective and whether its continuation would cause undue prejudice to the defendant. The caveat, which was intended to protect the plaintiff's interest, was found to be defective because it failed to specify the plaintiff's interest in the lot. Additionally, the court considered the broader implications of the caveat's continuation, such as the potential impediment to the defendant's ability to refinance the development and complete it, which in turn would prevent the conveyance of the lot to the plaintiff. The court held that the continuation of the caveat was highly inconvenient and would likely result in its withdrawal.

In its reasoning, the court acknowledged that the defendant had offered to protect the plaintiff's interest in the lot if the caveat was removed. Given the fundamental defect in the caveat and the potential for significant prejudice to the defendant, the court concluded that it was inevitable the caveat would have been ordered to be withdrawn. Consequently, the court ordered the plaintiff to pay the defendant's costs, reflecting the inevitable outcome of the proceedings and the need to compensate the defendant for the costs incurred.

Orders