Kenny v Ebling Pty Ltd
[2001] NSWSC 393
•10 May 2001
CITATION: Kenny v Ebling Pty Ltd [2001] NSWSC 393 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 2266/01 HEARING DATE(S): 10 May 2001 JUDGMENT DATE:
10 May 2001PARTIES :
John Paul Kenny (P)
Ebling Pty Limited (D1)
Country Heights Australia Pty Limited (D2)JUDGMENT OF: Hamilton J
COUNSEL : J Castrission, Solicitor (P)
No appearance (D1)
G J Mackey, Solicitor (D2)SOLICITORS: Castrission & Co (P)
No appearance (D1)
Tzovaras Legal (D2)CATCHWORDS: PROCEDURE [106] - Practice under Supreme Court Rules - Interim preservation - Party seeking ex parte extension of caveat and injunction - Proposed defendant attends court on notice - Applicant decides not to proceed with application and announces he will withdraw and not file summons - Applicant required by Court to file summons - Proposed defendant seeks costs. CASES CITED: Kenny v Ebling Pty Ltd [2001] NSWSC 392 DECISION: Plaintiff ordered to pay costs of second defendant including costs of ex parte application.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
THURSDAY, 10 MAY 2001
2266/01 JOHN PAUL KENNY v EBLING PTY LIMITED & ANOR
JUDGMENT
1 HIS HONOUR: In this matter on 17 April 2001 I directed that the plaintiff file a summons in this matter, which it had not previously filed, in circumstances set out in the reasons for judgment I gave on that occasion: Kenny v Ebling Pty Ltd [2001] NSWSC 392. The purpose of the direction was to found an adjudication on the second defendant's costs incurred when it attended upon an ex parte application that the plaintiff made but did not proceed with after giving the second defendant notice of the time at which the application would be made to the Court. Now that the summons has been filed, those proceedings are dismissed as against the second defendant, as the plaintiff persists in its intention not to proceed against the second defendant but to proceed against the first defendant for damages.
2 The proceedings arise out of a mortgagee sale of property. The plaintiff is the mortgagee under an unregistered second mortgage. The first defendant is the registered first mortgagee of the property and the second defendant the purchaser from the first mortgagee exercising power of sale. The plaintiff had lodged a caveat to protect its unregistered second mortgage. The summons sought an extension of the caveat, an injunction restraining the completion of the sale to the second defendant and damages against the first defendant. It is with this last claim only that the plaintiff now seeks to proceed.
3 Mr Mackey, the solicitor for the second defendant, seeks an order for the second defendant's costs of the proceedings, including its costs of the ex parte application upon which it attended prior to the commencement of the proceedings. Mr Castrission, the solicitor for the plaintiff, resists this order for costs on the basis that the plaintiff's course of action in making the ex parte application against the second defendant was reasonable. He does this on the basis that the plaintiff had grounds to suspect, and did suspect at the time, that there had been collusion between the first defendant and the second defendant relating to the sale, and the matter was urgent as it was believed that settlement of the contract was imminent. He very properly and frankly concedes that the reason for reversing the course of action as set out in my judgment was that:
- "Counsel has advised that only the first defendant should be pursued as to prove a case of collusion against the purchaser is always difficult."
He also concedes that:
- "One of the reasons for not pressing ahead with the application on 12 April 2001 was because of the necessity for the plaintiff to provide an undertaking as to damages"
which, for various reasons, was thought to be onerous in the circumstances.
4 I accept that the plaintiff did hold suspicions as to the circumstances surrounding the sale which it was difficult or impossible to investigate in the short time available. I equally accept that there was nothing unreasonable about his conduct from his own point of view. For his own purposes and in his own interests, the plaintiff took the action that he did on 12 April 2001 against the defendants, including the second defendant. Although the contrary was suggested by Mr Mackey in argument, I do not think there was anything unreasonable in his joining the second defendant instead of seeking the restraint of the first defendant only, bearing in mind that the allegation that he was pursuing at that time was an allegation of collusion. However, the simple fact of the matter was that the ex parte application in Court was, for other reasons peculiar to the plaintiff and in his own interests, as then perceived, withdrawn rather than pressed. The plaintiff then sought to minimise his costs by proceeding not to file the summons which had necessarily been brought to Court in support of the ex parte application or, indeed, until, directed by the Court, any summons which joined the second defendant. The allegations amounting to allegations of collusion in which the second defendant participated were withdrawn rather than proved, and the second defendant never had any opportunity to answer them. Whatever the precise role of a defendant attending on an ex parte application, the role which the second defendant might have played never came to be defined in light of the withdrawal of the application. The second defendant perfectly properly came to Court, as entitled to do, upon notification of the application. The correct order in my view, in all the circumstances which have been set out, is that I should order that the plaintiff pay the second defendant's costs of the proceedings, including its costs of the ex parte application made on 12 April 2001, and I so order.
5 In addition to that order for costs, the orders I make are:
(1) I order that the proceedings against the first defendant continue on pleadings.
(2) I direct that the plaintiff file and serve a statement of claim on or before 24 May 2001.
(3) I stand the proceedings over to 25 May 2001 at 9.30 am before the Registrar.
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