Issa v Osman (No.4)
[2017] NSWSC 1790
•24 November 2017
Supreme Court
New South Wales
Medium Neutral Citation: Issa v Osman (No.4) [2017] NSWSC 1790 Hearing dates: 24 November 2017 Date of orders: 24 November 2017 Decision date: 24 November 2017 Jurisdiction: Common Law Before: Garling J Decision: (1) Vacate Order 5 made by the Court on 8 June 2017.
(2) Order that in lieu of that order, the first defendant is pay the costs of the plaintiffs on the ordinary basis.
(3) Order the second defendant to pay the costs of the plaintiffs on an indemnity basis.
(4) Stand the balance of the Notice of Motion filed 21 June 2017 over to 28 March 2018 before the Registrar at 9am.
(5) Order each party to pay their own costs of that part of the Motion which has been disposed of today.Catchwords: COSTS – indemnity basis – where judgment had been given for plaintiffs – where contract of sale of land had been validly and lawfully terminated – where caveat removed - whether defences and cross-claim were hopeless – whether no prospect of success – first defendant to pay ordinary costs – second defendant to pay indemnity costs Legislation Cited: Civil Procedure Act 2005 Cases Cited: Issa v Osman (No 2) [2017] NSWSC 663 Texts Cited: Not Applicable Category: Procedural and other rulings Parties: Peter Issa (P1)
Eva Mary Issa (P2)
Youssef Osman (D1)
Mohamed Khaled Osman (D2)Representation: Counsel:
M O’Connor (P1, P2)
B Symons (D1, D2)
File Number(s): 2016/60481 Publication restriction: Not Applicable
EX TEMPORE Judgment
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On 8 June 2017 I delivered the principal judgment in these proceedings. I held that a contract of sale of land at Glenorie had been validly and lawfully terminated. I ordered the second defendant to remove a caveat. I dismissed two cross‑claims and ordered the defendants to pay the costs of the plaintiffs. My reasons for making those orders were to be found in Issa v Osman (No 2) [2017] NSWSC 663.
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On 15 June 2017 I ordered that if there was to be any variation of the costs order, that a motion was to be filed by 21 June 2017, accompanied by affidavits in support. Pursuant to that order, the plaintiffs have filed a Notice of Motion on 21 June 2017 seeking five orders of substance. By reason of the directions of the Registrar of the Common Law Division, the Court today is hearing submissions about one order contained in paragraph 1 of the Notice of Motion only and not the balance of the orders. That order is in the following form:
“That order 5 made 8 June 2017 be amended by adding the following words at the end of the order: 'On the indemnity basis'."
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Shortly put, the plaintiffs' argument that the defendants should pay costs on an indemnity basis is propounded upon the grounds that the defences and cross-claims by each defendant were at, all relevant times, hopeless. That is to say, that none of the claims of the defendants had any real chance of success. In particular, as far as both defendants are concerned, the plaintiffs draw attention to a letter that was written on 29 October 2015 by Mr Issa's solicitors to the solicitors for the defendants with respect to the terms upon which an extension of time to purchase the property would be allowed. That letter was ultimately responded to on 6 November 2015 by the solicitor for the purchaser.
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It is submitted here that, having regard to that exchange of correspondence, the defences and cross-claims mounted by each defendant were demonstrably hopeless.
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The position of each of the first and second defendants is quite different. The second defendant, who is the first defendant's father, was at all times until 1 February 2017 - and perhaps for a short time thereafter - living in the property at Glenorie. It was accepted by him at the conclusion of the oral hearing on 1 February 2017 that he had no entitlement to remain living in the property. He consented at that time to an order with respect to possession. That was one of the orders which he had been resisting up until that point in time.
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The defence and cross-claims filed by the second defendant were largely based upon maintaining a caveatable interest which precluded all dealings in the property. At its highest, the claims which he articulated were referable to a money sum which was about 25% of the value of the property. He did not establish any caveatable interest of any kind during the hearing of the proceedings. He did not attempt to establish the caveatable interest with respect to the entirety of the property.
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In those circumstances, I would accede to the submission of the plaintiffs that the second defendant's defence of the claim was at all times wholly without merit.
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The position of the first defendant was, as it seems to me, to be different. It was more complex and involved some unusual features. The first of those unusual features was a degree of uncertainty about who was to purchase the property and on what terms. The second feature was that the contract agreed upon required settlement within 14 days which, as the evidence showed, was a period which could not have been complied with by the first defendant, who did not have any approved finance for the purchase of the property at the time the contracts were exchanged. Thirdly, whilst the first defendant obtained the benefit of some extensions of time from the plaintiffs and their solicitors, he also sought to rely upon dealings between the plaintiffs and his father, the second defendant, as being contextual circumstances giving rise to the implication of an identified term. I rejected that argument.
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Whilst I accept that the exchange of correspondence to which I have earlier referred is one relevant factor to be taken into account, I also accept that the way in which counsel for the first defendant argued the proceedings, it may have, had it been persuasive, succeeded in avoiding the consequences of that exchange of correspondence. Whilst it is true that the first defendant did not succeed in defending the claim against him, I am not prepared to conclude, as urged by the plaintiff, that his defence had no prospect of success.
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The Court's power with respect to a grant of indemnity costs is to be found in s 98 of the Civil Procedure Act 2005. Section 98 provides that costs are in the discretion of the Court, that it has full power to determine by whom and to what extent costs are to be paid and that the Court may order costs on either the ordinary basis or on an indemnity basis. Such a discretion must be exercised judicially and in accordance with principles which have been determined in various cases.
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Taking those principles into account, I think that an appropriate exercise of my discretion is to order that the plaintiffs' costs be paid by the second defendant on an indemnity basis, but that the first defendant should only be liable for costs on the ordinary basis.
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I make the following orders:
Vacate Order 5 made by the Court on 8 June 2017.
Order that in lieu of that order, the first defendant is pay the costs of the plaintiffs on the ordinary basis.
Order the second defendant to pay the costs of the plaintiffs on an indemnity basis.
Stand the balance of the Notice of Motion filed 21 June 2017 over to 28 March 2018 before the Registrar at 9am.
Order each party to pay their own costs of that part of the Motion which has been disposed of today.
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Decision last updated: 18 December 2017