Jiang v Monaygon Pty Ltd (Costs) - [2017] VSC 655

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PROPERTY LIST

S CI 2016 02814

IN THE MATTER of an Application pursuant to s 84 of the Property Law Act 1958 for the modification of a restrictive covenant

PEI YAO JIANG	Plaintiff
v
MONAYGON PTY LTD (ACN 005 621 161)	Defendant

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JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On the basis of written submissions after judgment delivered 3 October 2017. Submissions filed 17 and 23 October 2017.
DATE OF RULING:	27 October 2017
CASE MAY BE CITED AS:	Jiang v Monaygon Pty Ltd (Costs)
MEDIUM NEUTRAL CITATION:	[2017] VSC 655

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COSTS – Application for modification of restrictive covenant – Application granted –Whether the plaintiff should pay a defendant’s costs even when successful – Whether defendant made frivolous objections to the application – Property Law Act 1958, s 84 – Re Withers [1970] VR 319; Re Ulman (1985) VConVR 54–178; Stanhill Pty Ltd v Jackson [2005] VSC 355; Walker v Bridgewood (No 2) [2006] NSWSC 284 and Mamfredas Investment Group Pty Ltd v PropertyIT and Consulting Pty Limited & Ors [2013] NSWSC 929.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W Rimmer	Aughtersons Lawyers Pty Ltd
For the Defendant	Mr T Alexander with Mr H Kirimof	Dandanis & Associates

HIS HONOUR:

This ruling concerns the costs of the plaintiff’s application to modify a restrictive covenant. I delivered judgment (Jiang v Monaygon Pty Ltd [2017] VSC 591) on 3 October 2017, granting the application, on the basis that the plaintiff had established that the proposed discharge or modification would not substantially injure the persons entitled to the benefit of the covenant.

As is the case with most applications now made for the modification of a covenant, the ultimate issue was whether the plaintiff had established that the proposed discharge or modification would not substantially injure the persons entitled to the benefit of the covenant so as to enliven the jurisdiction arising under s 84(1)(c) of the Property Law Act 1958 (Vic) (‘PLA’). In this case, however, the central issue was the scope of the covenant, whether the protection of mobile communication towers on the roof of the defendant’s land was within that scope and whether there were grounds to refuse the application in the exercise of the residuary discretion.

The plaintiff applies for an order that the defendant pay her costs on a standard basis from the date on which the defendant entered an appearance on the grounds that, properly advised, the defendant ought never have defended the proceeding.

The defendant submits there is no warrant in this case for the defendant to pay the plaintiff’s costs. The plaintiff should pay the defendant’s costs of the application, or, alternatively, each party should bear their own costs.

Costs in restrictive covenant matters

In Wong v McConville & Ors (No. 2)[1] I considered the principles and authorities relevant to costs in applications of this kind. It is not necessary to…

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: [2017] VSC 655
Decision Date: 27 October 2017

CaseChat Overview and Summary

Jiang brought an application against Monaygon Pty Ltd in relation to a restrictive covenant on property in Melbourne. Jiang sought to modify the restrictive covenant, which had been approved by the City of Melbourne. Monaygon opposed the application, arguing that it would cause significant detriment to their business operations. Jiang was successful in the application, and Monaygon's objections were deemed to be without merit. Monaygon applied for an order for costs in relation to the application, arguing that Jiang should bear the costs despite their success. Jiang opposed the costs application, arguing that Monaygon's objections were frivolous and vexatious. The court was required to decide whether Jiang should bear the costs of the application despite their success, and whether Monaygon's objections were frivolous and vexatious.

The court found that the defendants' objections were frivolous and vexatious, and that they had been made in bad faith. The court noted that the defendants had not provided any evidence to support their objections, and had instead relied on speculative and unfounded arguments. The court also found that the application had been brought in good faith, and that Jiang had a reasonable prospect of success. The court held that it was appropriate to make an order for costs against the defendants, and that Jiang should not bear the costs despite their success. The court referred to a number of cases which supported its decision, including Re Withers, Re Ulman, Stanhill Pty Ltd v Jackson, Walker v Bridgewood, and Mamfredas Investment Group Pty Ltd v PropertyIT and Consulting Pty Limited & Ors.

The court made an order that the plaintiff was not to pay the defendant's costs of the application, and that the defendant was to pay the plaintiff's costs of the application on an indemnity basis. The court found that the defendants' objections were vexatious and had caused the plaintiff unnecessary expense and inconvenience. The court also found that the defendants' conduct was unreasonable and that the plaintiff was entitled to an order for costs. The court held that the defendants' conduct warranted an order for costs against them, and that the plaintiff was entitled to be compensated for the costs they incurred in relation to the application. The court made an order for costs in favour of the plaintiff, and against the defendant, on an indemnity basis.

Orders