Lombardo v Bahnan (No 2) - [2014] VSC 438

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

S CI 2014 4070

MICHAEL LOMBARDO	Plaintiff
v
SAMIR BAHNAN	First Defendant
and
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	WARREN CJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 August 2014
DATE OF JUDGMENT:	11 September 2014
CASE MAY BE CITED AS:	Lombardo v Bahnan (No 2)
MEDIUM NEUTRAL CITATION:	[2014] VSC 438

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COSTS – Special costs orders – Where plaintiff successful in application to have caveat removed – Where no basis for asserting caveatable interest – Whether plaintiff entitled to costs of application on an indemnity basis.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S E Marantelli	Hentys Lawyers
For the First Defendant	Mr S P Matters	Vasilaras & Co
For the Second Defendant	No appearance

HER HONOUR:

On 28 August 2014, I made orders allowing the plaintiff’s application seeking the removal of a caveat and published my reasons for doing so.[1] At that time, the plaintiff foreshadowed making an application seeking that the first defendant pay his costs on an indemnity basis, however requested the opportunity to consider the Court’s reasons before deciding whether to pursue such an application. The foreshadowed application was pursued and the parties filed written submissions on the question of costs.
[1]Lombardo v Bahnan [2014] VSC 410.

For the reasons that follow, I consider it is appropriate that the first defendant should pay the plaintiff’s costs of the application on an indemnity basis.

The Court has a broad, unfettered discretion in the awarding of costs pursuant to s 24 of the Supreme Court Act 1986. The principles upon which a special costs order may be made are well established.[2] Also relevant to the exercise of the Court’s discretion to award costs are the provisions of the Civil Procedure Act2010, which has an overarching purpose ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’ in proceedings.[3] Section 28 of that Act provides that the Court may take into account any contravention of the overarching obligations in exercising any power in relation to a civil proceeding, including the exercise of its discretion as to costs.[4]
[2]See Colgate-Palmolive Co v Cussons Pty Ltd (1993) FCR 225 and see also the various authorities referred to in Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 [538]-[551].
[3]Civil Procedure Act 2010 s 1.
[4]Civil Procedure Act 2010 s 28.

The plaintiff made two principal submissions in support of his claim that he should be awarded costs on an indemnity costs. First, he claimed that it should have been clear to the first defendant that there was no basis upon which he could properly assert a caveatable interest. Secondly, he submitted that the timing of the lodgement of the caveat and the fact that the caveat sought to prohibit a transfer of the property to anyone save for the caveator showed that the lodgement of the…

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: [2014] VSC 438
Decision Date: 11 September 2014

CaseChat Overview and Summary

In Lombardo v Bahnan, the plaintiff, Lombardo, sought an order for the removal of a caveat entered by Bahnan over certain property. Bahnan had lodged the caveat to prevent the transfer of the property, asserting an interest which Lombardo contested. The matter was heard by the Supreme Court of New South Wales. The central issue before the court was whether Bahnan had a legitimate basis for lodging the caveat and, if not, whether Lombardo was entitled to costs on an indemnity basis for the application to have the caveat removed.

The court examined the grounds upon which Bahnan claimed a caveatable interest. It found that Bahnan's assertion of an interest was without merit and that the caveat was therefore invalid. The court held that the absence of a genuine basis for the caveat justified an order for its removal. Regarding costs, the court recognised that where a caveat is improperly entered, the successful party may be entitled to indemnity costs. Given that Bahnan had no reasonable grounds for lodging the caveat, the court concluded that Lombardo was entitled to the costs of the application on an indemnity basis.

The court's decision was grounded in the principle that a party must have a legitimate interest to support a caveat. Since Bahnan did not meet this requirement, the court ordered the caveat to be removed and awarded Lombardo costs on an indemnity basis. The ruling reinforced the importance of ensuring that caveats are entered only when there is a genuine interest to protect, and it underscored the potential financial consequences for those who abuse the caveat process.

Orders