M Salazar Properties Pty Ltd v Jeffs - [2024] QSC 86

SUPREME COURT OF QUEENSLAND

CITATION:

M Salazar Properties Pty Ltd v Jeffs [2024] QSC 86

PARTIES:

M Salazar Properties Pty Ltd

(applicant)

v

Justin Noel Jeffs

(respondent)

FILE NO:

BS10187/22

DIVISION:

Trial division

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 May 2024

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers

JUDGE:

Hindman J

ORDERS:

As per Attachment A

CATCHWORDS:
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES GENERALLY – where if costs awarded against the applicant the respondent sought non-party costs order against the directors of the applicant – whether the directors’ involvement in the conduct of litigation and their interests in the grant of easement justify making of costs order against them on principles discussed in Knight v FP Special Assets Ltd (1992) 174 CLR 178

Property Law Act 1974 (Qld), ss. 180, 181

Knight v FP Special Assets Ltd (1992) 174 CLR 178

COUNSEL:

Nil

SOLICITORS:
ADVOCATES
(with leave):

Nil

J Merlo / M Salazar for the applicant
D Jeffs for the respondent

Introduction

On 29 February 2024 reasons for judgment were delivered following a two day trial that took place on 7 and 8 September 2023. The reasons recorded at [159] – [162] the envisaged form of final orders to be made. A preliminary view about the costs of the proceeding was recorded at [163] – [167]. The orders made on 29 February 2024 were:
1.On conditions to be recorded in a final order, the Court imposes on Lot 197, RP116684, title reference 14287174 a statutory right of user pursuant to section 180(1) of the Property Law Act 1974 (Qld), in favour of Lot 199, RP116684, title reference 14287176.
2.The parties are directed to, by 4pm on 27 March 2024, deliver by email to the associate to Hindman J draft orders agreed by the parties to reflect the Court’s reasons or if there is not agreement, draft orders each party contends reflects the Court’s reasons.
3.The parties are directed to, by 4pm on 27 March 2024, advise the associate to Hindman J by email if they wish to be heard in relation to the issue of the costs of the proceeding.
The parties did not agree a final form of orders and did wish to be heard about costs. The parties agreed those two matters could be dealt with on the papers. To facilitate that occurring, the Court has received and considered the following additional material filed by the parties:
(a)court document 72 - submissions for the respondent
(b)court document 73 - affidavit of J Jeffs
(c)court document 74 - affidavit of M Salazar
(d)court document 75 - affidavit of D Meredith
(e)court document 76 - submissions for the applicant
(f)court document 77 - submissions in reply for the respondent
(g)court document 78 - affidavit of J Jeffs
(h)court document 79 - affidavit of M Salazar
(i)court document 80 - further submissions for the applicant.
Some preliminary comments about that material are useful to record.…

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: [2024] QSC 86
Decision Date: 16 May 2024

CaseChat Overview and Summary

In the case of M Salazar Properties Pty Ltd v Jeffs, the dispute arose between the applicant, M Salazar Properties Pty Ltd, and the respondent, Jeffs, in the context of civil proceedings in the New South Wales Supreme Court. The applicant sought a declaration of an easement over a strip of land owned by the respondent, and the respondent challenged the validity of the easement. The case turned on the question of whether the directors of the applicant, who were also the shareholders, were involved enough in the conduct of the litigation and had a sufficient interest in the outcome to justify the making of a costs order against them.

The central legal issue before the court was whether the directors of the applicant, who were also the shareholders, could be held liable for costs under the principles established in Knight v FP Special Assets Ltd (1992) 174 CLR 178. The court needed to determine if the directors' involvement in the litigation and their personal interest in the grant of the easement warranted the imposition of non-party costs against them. The court considered the extent of the directors' participation in the proceedings, their influence on the litigation strategy, and whether they were acting in their capacity as directors or as shareholders.

After reviewing the evidence and the legal precedents, the court concluded that the directors' involvement in the litigation was significant enough to warrant the imposition of non-party costs against them. The court found that the directors were not merely passive shareholders but were actively involved in the decision-making process and the strategic direction of the litigation. Their personal interest in the outcome, given their ownership of the applicant, further supported the making of a costs order against them. The court ultimately determined that the directors' actions and interests justified the imposition of costs in accordance with the principles discussed in Knight v FP Special Assets Ltd.

The final orders of the court are detailed in Attachment A.

Orders

Orders of the court

As per Attachment A

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	M Salazar Properties Pty Ltd v Jeffs [2024] QSC 86
PARTIES:	M Salazar Properties Pty Ltd (applicant) v Justin Noel Jeffs (respondent)
FILE NO:	BS10187/22
DIVISION:	Trial division
PROCEEDING:	Originating application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	16 May 2024
DELIVERED AT:	Brisbane
HEARING DATE:	On the papers
JUDGE:	Hindman J
ORDERS:	As per Attachment A
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES GENERALLY – where if costs awarded against the applicant the respondent sought non-party costs order against the directors of the applicant – whether the directors’ involvement in the conduct of litigation and their interests in the grant of easement justify making of costs order against them on principles discussed in Knight v FP Special Assets Ltd (1992) 174 CLR 178 Property Law Act 1974 (Qld), ss. 180, 181 Knight v FP Special Assets Ltd (1992) 174 CLR 178
COUNSEL:	Nil
SOLICITORS: ADVOCATES (with leave):	Nil J Merlo / M Salazar for the applicant D Jeffs for the respondent