Ginelle Pty Limited v Sharon McWeeney

[2013] NSWSC 1798

Supreme Court

New South Wales

Medium Neutral Citation:

Ginelle Pty Limited v Sharon McWeeney & Ors [2013] NSWSC 1798

Hearing dates:

2 December 2013

Decision date:

02 December 2013

Before:

Slattery J

Decision:

1.Order costs of the proceedings against the first defendant on the ordinary basis.

2. Order costs of the proceedings against the second and third defendants in the ordinary basis up to and including 26 September 2013.

Catchwords:

COSTS - plaintiff seeks costs order against three defendants - plaintiff as a mortgagee brought proceedings for possession against the defendants, tenants of the mortgaged property - parties entered into an agreement allowing the tenants to stay in the property until a specified date - defendants did not vacate as agreed - orders to vacate were made based on their agreement to vacate - orders not complied with - plaintiff brought motion for contempt and costs - defendants had by then vacated the property and contempt motion no longer pressed - second and third defendants not before the Court, not represented in the proceedings after the orders to vacate were made and not served with the contempt application - whether a cost order should be made - whether any order against the second and third defendants should include the costs of the contempt application - whether any costs order should be stayed pending the first defendant bringing proceedings against the plaintiff or against the landlord of the property.

PROCEDURE - representation of parties - first defendant appearing trough a next friend.

Category:

Consequential orders

Parties:

Plaintiff:- Ginelle Pty Limited
First Defendant:- Michael Joseph Smullen
Second Defendant:- Ellen Patricia Smullen

Representation:

Counsel:
Plaintiff:- Mr M.W.Young SC
Defendant:- in person
Solicitors:
Plaintiff:- James, Barton Carter, Nugent Wallman & Carter
Defendant:- in person

File Number(s):

2013/283660

Publication restriction:

No

EX TEMPORE Judgment

1. The plaintiff, Ginelle Pty Limited (Ginelle), is the mortgagee of an apartment property in Walton Crescent, Abbotsford (the Abbotsford property). Until recently the defendants occupied the Abbotsford property. The first defendant, Ms McWeeney, is the daughter of the second and third defendants, Mr and Mrs Smullens, who are quite elderly.

1. Today Ginelle seeks an order for costs of the proceedings on the ordinary basis against all the defendants. Ginelle moves upon its summons dated 19 September 2013, order 10, which claims an order for costs. It also moves on a notice of motion dated 14 October 2013, order 4, which in terms seeks an order for indemnity costs. Although Mr Young SC, for the plaintiff, indicates the plaintiff only seeks the costs of the motion on the ordinary basis.

1. Ms McWeeney was present before the Court today. But Mr and Mrs Smullen were not before the Court and not represented. Ms McWeeney asked the Court that Mr Scott Kitas speak on her behalf to assist her as a next friend. Mr Young did not object to that course. It seemed apparent to the Court that Ms McWeeney was somewhat distressed and anxious as a result of these proceedings and the requirement for her to make submissions. She asked the Court for Mr Kitas to represent her, although he was not legally qualified. I granted leave in the circumstances for Mr Kitas to do that. If I may say so, Mr Kitas, although not legally qualified, put much on behalf of Ms McWeeney much that a lawyer perhaps would in the circumstances.

Adjournment Application

1. I will shortly come to the background to the proceedings. But before I do so I should briefly mention an application for an adjournment which Mr Kitas made on behalf of Ms McWeeney. Mr Kitas sought an opportunity on an adjournment to obtain legal representation for Ms McWeeney. Although there is affidavit evidence to the contrary, Mr Kitas asserted that he was not served with the legal process which brought the matter before the Court today. Although he did get notice of today's hearing date. The claim that he was not served is disputed by the other side. Without resolving that dispute the Court required the plaintiff to give all the affidavits it relied upon today to Mr Kitas and Ms McWeeney to allow them an opportunity to read them. Then the Court asked them whether or not they wished to apply for an adjournment. They did.

1. The Court indicated to them that it would give them an adjournment to a date later this week while I am sitting in the Duty List, so they could obtain legal representation. The Court indicated to the parties that the Court was not prepared to adjourn this matter, which is only a costs application, beyond the end of this week. My period as duty judge finishes this week. I already have become involved in this case; it is convenient that I complete it, if possible. I have five-day hearings fixed for the remaining two weeks' of the Court's term.

1. I indicated to Mr Kitas that he could select any day later this week, morning or afternoon at any time which would give the Court sufficient time to complete the matter, so that he could get legal representation. Various problems were raised about bringing the matter back this week. Ms McWeeney said she was involved in aspects of her divorce proceedings on Thursday and possibly Friday and for which preparation would be required on Wednesday. The Court indicated to them both that if a lawyer were present it may not even be necessary for them to appear. After allowing a period from between about 11.30am and 12.30pm today for the affidavits to be served upon Ms McWeeney and Mr Kitas and for them to read them, which they have now done, I raised it with them whether or not an adjournment was still needed. In essence Mr Kitas said he wanted an adjournment beyond this week because this week was not convenient to him. I indicated that the Court would not grant an adjournment for that period but would accommodate him by using today or giving him any day this week that he could find a lawyer.

1. Mr Kitas made further enquires over the luncheon adjournment and indicated to the Court after 2 pm that he was not able to find a lawyer who was prepared to appear for him at any time before Christmas. I reminded Mr Kitas of the option that had been given for him to find a lawyer to appear at some date later this week. He and Ms McWeeney expressly elected to go on with the matter today.

1. The matter then proceeded with Mr Young SC putting submissions upon the evidence. Mr Kitas and Ms McWeeney indicated they did not wish to adduce any evidence beyond exhibit 1, to which I will come shortly. Nor did they wish to cross-examine the deponents of the plaintiff's affidavits.

History of the Proceedings

1. With that procedural background, I can now come to the general background to the proceedings. Ginelle obtained a judgment for possession of the Abbotsford property on 16 April 2013 pursuant to a mortgage given by the registered proprietor, MV Assets Pty Limited ("MV Assets"). Ms McWeeney and her parents were MV Asset's tenants in the Abbotsford property.

1. Mr Kitas, on behalf of Ms McWeeney, makes a number of complaints in the proceedings today about aspects of the transaction by which Ms McWeeney and her parents became tenants of MV Assets, after which it is alleged she spent about $80,000 or $90,000 on the Abbotsford property and paid considerable amounts of money by way of rent in advance to MV Assets. The determination of such allegations is not for today. Those issues would require separate proceedings which would need to be brought, among other things, against MV Assets. Mr Kitas indicated an intention to bring such proceedings in the future. I am not making any judgment today about the merits of such allegations.

1. The way Mr Kitas described the case he wished to bring, it was one not only against MV Assets but also one to set aside the mortgage which gave rise to Ginelle's judgment for possession. But there has been no cross-claim filed in these proceedings and no material before me now which would justify the setting aside of the judgment for possession. I am giving this judgment on the basis of the existing state of the Court record.

1. The judgment for possession of the property was given on 16 April 2013. A writ for possession issued and was due to be enforced on 23 July 2013. The defendants did not vacate the premises by that date. Instead the mortgagee, Ginelle, negotiated with the defendants a licence agreement on 23 July 2013. That licence agreement was made between Ginelle, MV Asset, Ms McWeeney and her parents.

1. The effect of the licence agreement was to allow Ms McWeeney and her parents to re-enter the Abbotsford property. But in exchange for that re-entry the defendants agreed to vacate the property by 31 August 2013 and also agreed not to seek to prolong their occupation of the property beyond 31 August 2013. The defendants did not vacate the property by 31 August 2013. And Ginelle filed the summons the subject of these proceedings.

1. The summons sought a declaration that, since the expiration of the July 2013 licence Ginelle granted that the defendants have been, on and from 1 September 2013, trespassers on the land. There were difficulties in attempting to serve that summons upon the defendants, who were alleged to be keeping house. Orders for substituted service were obtained. I am satisfied those orders for substituted service were complied with.

1. On 26 September 2013 Bergin CJ in Eq made orders requiring the defendants to vacate the Abbotsford property by 10 October 2013, listing the matter before the Registrar in Equity on 14 October 2013 and reserving issues of costs.

1. The defendants, or at least Ms McWeeney, were not without legal representation on the day Bergin CJ in Eq made her orders. The transcript records that for a period of time Mr Agosta, solicitor, and a Mr Levet of counsel appeared for what the transcript describes as "The Defendant." The transcript makes little mention of the Smullens, only of Ms McWeeney. I am prepared to infer from the material before me that Mr Levet and Mr Agosta only appeared for Ms McWeeney on that day. But there is evidence that an elderly man at the Abbotsford property, who I infer was Mr Smullen, in conversation with representatives of Ginelle, adopted Mr Kitas as his representative. I am prepared to infer from that material that both Mr and Mrs Smullen were at least in communication with Mr Kitas about the procedural aspects of this matter at and after 26 September 2013.

1. The defendants did not vacate the Abbotsford property before 10 October 2013. Nor did they vacate by 14 October 2013, when the matter came back before the Registrar in Equity. So on that day the plaintiff filed a motion for contempt of the orders made by Bergin CJ in Eq on 26 September 2013. That motion was filed in Court on 14 October and claimed an order that:

"the defendants be punished for their contempt of this honourable court, being the contempt specified in the statement of charge annexed hereto."

1. The statement of charge, in summary, pleaded that the defendants had refused to comply with the Court's orders made on 26 September and 27 September 2013. Mr Young SC, on behalf of Ginelle, has made clear today that Ginelle does not wish to pursue the motion for contempt itself but merely seeks costs associated with the filing of that motion, and its procedural advancement. So no charge or conviction of contempt will result from today's proceedings. The findings I make here only involve the making of an order for costs. And the findings are only made ancillary to making the orders for costs and are not, in any sense, a finding of contempt of court against Ms McWeeney or her parents.

1. After the filing of the motion the defendants did vacate the property on 22 October 2013, after a hearing before Rein J. The advice and assistance of Mr Kitas was helpful here, in a number of respects in the interests of the defendants.

1. On 22 October 2013 Windeyer J made orders for the service on all defendants of the summons for contempt. He did so by allowing that service of documents on the first defendant may be effected by sending a copy to the first defendant care of Mr Kitas at View Street, Woollahra.

1. The documents to be served included orders that the motion and summons be stood over to today before the Registrar in Equity. There is evidence that before today Mr Kitas received copies of five of the nine affidavits which were relied upon, together with the summons and the notice of motion in these proceedings. With that background, Mr Young SC seeks costs of the proceedings, firstly up to 26 September and then after 26 September.

The Plaintiff's Application for Costs

1. It seems to me that the position up to 26 September 2013 is relatively straightforward. Bergin CJ in Eq made orders on that date reserving costs, but it is evident from her orders that she was satisfied that the plaintiff's claim for the order for possession was made out, as she granted the orders sought on the summons. I see no reason on the evidence before me that costs should not follow the event up to that date. An order for costs up to that date will be made against all defendants who were properly served.

1. In relation to costs after 26 September 2013, it is convenient to divide the position against Ms McWeeney from that against her parents. Looking at Ms McWeeney's position, it seems to me that an order for costs after 26 September should be made on the ordinary basis against her. It is quite clear she did not vacate the property after the date of the orders to vacate on 10 October 2013. It was therefore necessary for further court appearances to take place and for the contempt motion to be filed to persuade her to vacate. Eventually she did vacate on 21 October 2013.

1. These further procedural steps and the listing today have all been occasioned by Ms McWeeney's refusal or reluctance to vacate the Abbotsford property. Whatever be her reasons for that - and they may well be associated with a desire to later litigate against Ginelle - the simple fact is she did not vacate in defiance of the Court's orders. If she had a legitimate claim against Ginelle, the appropriate course was to seek to vary or set aside the Court's orders for possession on the basis of whatever this cross-claim was, rather than to allow her to fall into breach of those orders as occurred. It is unfortunate this course was not taken, but the consequence of that is that the costs that Ginelle has incurred were occasioned by that refusal. I will make a costs order against her on the ordinary basis after 26 September.

1. The position with Mr and Mrs Smullen is somewhat different. I am not satisfied that Mr Kitas appeared for them on 26 September 2013. And it is evident that a gentleman in his eighties, who I infer probably was Mr Smullen, was opposing re-entry in October 2013, and apparently adopted Mr Kitas as some kind of representative. But Mr Kitas is not a lawyer. I am not satisfied there is sufficient evidence that notice of the later process has been given to Mr and Mrs Smullen.

1. Mr Young SC points out that the Smullens' failure to vacate on 10 October 2013 has occasioned later costs. But the difficulty with that argument is that I am not satisfied from the record that the Smullens were represented on 26 September 2013. I therefore decline to make a costs order against them after that date.

Stay of the Costs Orders

1. I raised, in the course of argument, the possibility of these costs orders being stayed to give Ms McWeeney an opportunity to bring such claim as she may be advised to set aside the mortgage or seek damages in respect of the transaction which led to the mortgage. It is not necessary for me to speculate upon the merits of that application, other than procedurally to record Mr Young's argument that it will be necessary, in order for these costs orders to be enforced, for an assessment to take place, and at the bare minimum that will involve a few months before a figure can be ascertained for costs. In that time the defendants to these proceedings will have ample opportunity to bring such other proceedings as they are advised. So there is no necessity to make a stay order.

Orders

1. Accordingly, the Court makes the following orders:

1. Order costs against the first defendant in the ordinary basis in the proceedings.

2. Order costs against the second and third defendants in the ordinary basis up to and including 26 September 2013.

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Decision last updated: 04 December 2013