Maria Bechara v Theodors Haratsaris (on costs)

[2013] NSWSC 606

Supreme Court

New South Wales

Medium Neutral Citation:	Maria Bechara v Theodors Haratsaris (on costs) [2013] NSWSC 606
Decision date:	20 May 2013
Jurisdiction:	Equity Division
Before:	Rein J
Decision:	Orders that the first and second defendant pay the plaintiff's costs on the indemnity basis.
Catchwords:	COSTS - whether an order for costs on the indemnity basis should be made
Legislation Cited:	Conveyancing Act 1919 (NSW)
Cases Cited:	Bechara v Haratsaris [2013] NSWSC 577 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Harrison v Schipp (2002) 54 NSWLR 738 Westpac Banking Corp v Victor Warren Ollis & Ors [2007] NSWSC 1008
Category:	Costs
Parties:	Maria Bechara (plaintiff) Theodoros Haratsaris (first defendant) Denise Haratsaris (second defendant)
Representation:	Counsel: Mr Bates (plaintiff) Mr Perla (first and second defendants) Solicitors: Bechara & Co (plaintiff) Clamenz Evans Ellis Lawyers (first and second defendants)
File Number(s):	2012/154997

Judgment

1. REIN J: In these proceedings the plaintiff was successful in obtaining declarations that the:

(1)   transfer of an interest in an Adelaide property by the first defendant to his wife and the second defendant, and

(2)   transfer of a second property at Belmore from the first defendant to a family trust,

were void by virtue of s 37A of the Conveyancing Act 1919 (NSW) (or its South Australian equivalent) being transfers effected with the intent of defrauding the plaintiff. My reasons for that conclusion are contained in Bechara v Haratsaris [2013] NSWSC 577.

1. The plaintiff seeks an order for indemnity costs. The defendants accept that they must pay the plaintiff's costs on the usual basis but dispute the plaintiff's entitlement to an order that her costs be paid on the indemnity basis.

1. Mr Bates, junior counsel for the plaintiff, and Mr Perla, junior counsel for the defendants, have provided me with written submissions and are content for me to reach a decision without the need for oral argument.

1. Mr Bates contends that the relevant principles are summarised in Westpac Banking Corp v Victor Warren Ollis & Ors [2007] NSWSC 1008 per Einstein J and that in this case (as in Ollis):

(a) the defendants pleaded & maintained knowingly false defences and allegations of fact (at [7]);

(b) these prolonged and added to the expenses of the pretrial preparation (by the plaintiff) and the proceedings up to the final hearing (at [7], [11]);

(c) the defendants gave dishonest evidence (at [13]-[14]), as found in the principal judgment;

(d) the defendants carried out a plan seeking to frustrate enforcement of the District Court judgment previously obtained by the plaintiff against the present first defendant;

(e) The grounds of Defence (in both the initial and Amended filed verified Defences) also raised challenges to the District Court judgment that were never pursued at trial and were hopeless, but required rebuttal in preparation (see Reply filed 21 September 2012).

1. Mr Perla makes the following points:

(1)   Whilst accepting that the principles are correctly stated in Ollis, Ollis is distinguishable from the present case because in Ollis there was blatant fraudulent intent.

(2) The general principle is that costs should be on the usual basis unless the circumstances warrant a different order: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.

(3)   The purpose of a costs order is to compensate the successful party not to punish the unsuccessful party.

(4) The defendants did make concessions, namely that the first limb of s 37A of the Conveyancing Act 1919 (NSW) was established and that Mrs Haratsaris could not rely on an exception in the case of the Adelaide property.

(5)   The Court was required to make factual findings on the balance of probabilities.

(6)   The defendants were entitled to maintain their defences and

(a)   Did not behave inappropriately,

(b)   Did not concoct false factual allegations in an attempt to deny the plaintiff her rights,

(c)   There was no lengthening or delay in terms of the issues which had the result of grossly prolonging the litigation or which had the effect beyond what she could reasonably have expected.

1. It is important to distinguish between the conduct which led to the litigation and the conduct of the litigation. It is only conduct in the course of proceedings that can warrant an order for indemnity costs: Harrison v Schipp (2002) 54 NSWLR 738.

1. It is also important to recognise that the mere fact that the Court did not accept a party's evidence does not mean that an order for indemnity costs is appropriate.

1. I do not accept Mr Perla's characterisation of the matters set out in [5](6). In my view the defendants did take a stance in the proceedings that they must have known was false in an endeavour to preclude the plaintiff from obtaining orders to which, without false evidence from the defendants, she was entitled (see [28] of Bechara v Haratsaris [2013] NSWSC 577). The claims by Mr Haratsaris that he had no knowledge of Ms Bechara's bill of costs were clearly false and Mrs Haratsaris' evidence was designed to prop up that deliberate falsehood. The attempt to portray the transfer from the first defendant to the trust as carried out pursuant to an obligation to the first defendant's mother was a further compounding example of their dishonesty (see [53], [54], [64] and [65]). Without this evidence I doubt that the proceedings could have been contested. I accept Mr Bates' submission that the dishonest evidence "infused their defence of the whole proceedings".

1. I am therefore persuaded that the defendants should pay the plaintiff's costs on an indemnity basis.

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