MKM Capital Pty Ltd v De Pledge
[2011] WASC 32
•10 FEBRUARY 2011
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MKM CAPITAL PTY LTD -v- DE PLEDGE [2011] WASC 32
CORAM: ALLANSON J
HEARD: 10 DECEMBER 2010
DELIVERED : 10 FEBRUARY 2011
FILE NO/S: CIV 1980 of 2010
BETWEEN: MKM CAPITAL PTY LTD
Plaintiff
AND
MARY ROSE PERALTA DE PLEDGE
Defendant
Catchwords:
Practice and procedure - Costs - Application for costs against successful party - Turns on own facts
Legislation:
Nil
Result:
Applications dismissed
Category: B
Representation:
Counsel:
Plaintiff: Ms N Fraser
Defendant: Mr J A Robertson
Solicitors:
Plaintiff: Gadens Lawyers
Defendant: Williams & Hughes
Case(s) referred to in judgment(s):
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52
Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
ALLANSON J: On 10 December 2010, I heard an urgent application to suspend the execution of an order to evict the defendant from her residence. The application was refused, primarily because the order had already been executed before the application was brought before the court. Both the plaintiff and the defendant now seek the costs of that application. Written submissions have been filed, and the question of costs is to be determined on the papers.
Background
In June 2010, the plaintiff commenced proceedings in the Supreme Court. The plaintiff's claim arose out of default by the defendant in the repayment of a loan advanced by the plaintiff pursuant to a loan agreement. The loan was secured by a registered mortgage over a property owned by the defendant. The property is sufficiently described for the purposes of this judgment as Unit 54, Alexander Place, Belmont. The plaintiff claimed repayment of the sum owing, plus interest at the rate specified in the loan agreement, possession of the property, and costs.
The defendant did not enter an appearance, and on 28 September 2010 a registrar made the following orders:
1.No appearance having been entered by the defendant herein leave is granted to the plaintiff pursuant to Order 62A rule 4(1) to enter judgment in the terms set out hereunder.
2.The defendant within 28 days of service of this judgment on her deliver up to the plaintiff vacant possession of the property at Unit 54, Alexander Place Belmont, 68 Fisher Street, Belmont in the State of Western Australia being Lot 54 on survey strata plan 48416 and being the whole of the land comprised in Certificate of Title Volume 2617 Folio 554.
3.The defendant pay to the plaintiff the sum of $263,113.40 being the principal and interest due under the mortgage as at today's date.
4.The defendant pay the plaintiff's costs of the action including the costs of the application for judgment to be taxed.
On 5 November 2010, the court issued a Property (Seizure and Delivery) Order at the request of the plaintiff. By s 96 of the Civil Judgments Enforcement Act 2004 (WA), the order authorised the sheriff, using any force and assistance that is reasonably necessary in the circumstances, to enter the property and evict from it any person who is not lawfully entitled to be on the property. The order was executed at about 12 noon on 10 December 2010.
Shortly after that time, the court received an application on behalf of the defendant (although, stating on its face that it was on behalf of Mr Henry Christie) requesting that execution of the order be stayed until 2.00 pm on 17 December 2010. An affidavit in support of the application was provided at about 1.00 pm and the matter was then called on in chambers. I was then advised that the enforcement had already proceeded. I was told that the sheriff was still present at the property, but it was my opinion that because the order had then been executed it was no longer open to me to suspend the enforcement of the judgment. Had the order been a Property (Seizure and Sale) Order, it may have been open to the court to make an order suspending the enforcement in part (that is, suspending the sale).
Events leading up to the enforcement
Detailed affidavits have been filed on behalf of both the plaintiff and the defendant. There is little difference between them. The events apparently unfolded as follows:
(1)On 21 October 2010 the defendant contacted the plaintiff by email, advising it that Mr Henry Christie, a retired Perth lawyer, would be in contact with it with respect to the property. That email was copied to Gadens, the solicitors for the plaintiff.
(2)On the same day, Mr Christie contacted the plaintiff, confirming that he had offered, subject to finance, to purchase an interest in the property and fund repayment of the loan to the plaintiff. He requested that the plaintiff provide a payout figure at 1 December 2010 and the daily rate of interest.
(3)On 28 October 2010, Mr Emmel, the officer of the plaintiff dealing with this matter, provided Mr Christie with an 'indicative' payout figure.
(4)On 2 November 2010 the plaintiff instructed Gadens to enforce the judgment. On 4 November, Gadens applied for the issue of the Property (Seizure and Delivery) Order.
(5)On 7 December 2010 the defendant again emailed the plaintiff, advising that Mr Christie would find out on 8 December regarding the day of settlement for finance, and asking for an extension of one week. The defendant had already been notified that execution and eviction would occur on 10 December. Mr Christie also contacted the plaintiff on the same day and to the same effect.
(6)On 9 December 2010, the defendant contacted Ms Fraser, an articled clerk at Gadens, who appears to have had conduct of the file subject to the direction of her principal, Ms Blount. Ms Fraser says that the defendant asked for a deferral of the enforcement pending the outcome of the finance application by Mr Christie.
(8)A short time later that same morning, the defendant sent to Ms Fraser a document showing that Mr Christie's bank had approved the loan, although subject to conditions. The conditions were primarily related to the completion of documents, but included credit checks.
(9)Ms Fraser then requested instructions from Mr Emmel. The plaintiff claims privilege over the email containing that request. Ms Fraser does not say whether there was a reply.
(10)On 9 December 2010, Mr Robertson from Williams & Hughes, the solicitors acting for Mr Christie and the defendant, contacted Ms Fraser and told her that Mr Christie proposed to pay $280,000 into Williams & Hughes' trust account. Later that afternoon (at 4.37 pm) Williams & Hughes set out that offer in a letter.
(11)Ms Fraser responded that she would seek instructions. She could not get instruction immediately as Mr Emmel was in Sydney. With daylight saving, the time difference between Perth and Sydney was three hours.
(12)On 9 December 2010 at about 4.48 pm, Ms Fraser requested instructions by email. Again the plaintiff claims privilege over that email.
(13)On 10 December 2010,
(a)at about 8.45 am, Ms Fraser attempted to contact Mr Emmel, and was advised that he was not in the office that day. She requested another officer of the plaintiff to provide instructions.
(b)at about 8.45 am, Ms Fraser also received a phone call from the Deputy Sheriff, enquiring if enforcement was to proceed. She advised him that 'at that stage' the instructions were to proceed, but obtained his mobile telephone number to enable her to contact him.
(c)at about 8.51 am, Ms Fraser advised Williams & Hughes that she was awaiting instructions and would respond as soon as possible.
(d)at about 9.50 am Ms Fraser was advised that Mr Emmel had phoned and provided instructions that he may consider deferral if a payment of $40,000 to $50,000 was made.
(e)at about 10.15 am, Ms Fraser advised Williams & Hughes that the plaintiff was not prepared to defer when no funds had been paid towards the judgment debt.
(f)at about 10.25 am, Williams & Hughes informed Ms Fraser that they had instructions to apply to stay the enforcement and that the application would be served as soon as possible. Ms Fraser then contacted Mr Emmel and advised him of the application.
(g)at about 11.15 am, Williams & Hughes emailed Gadens advising of their instructions to apply for a stay.
(h)at 11.20 am, Ms Fraser and Mr Robinson of Williams & Hughes, discussed the matter by telephone.
(i)at 11.40 am, Ms Fraser spoke again to Mr Emmel, who said, in effect, that the proposal outlined by Williams & Hughes was not suitable and the plaintiff required the enforcement to proceed.
(j)at about 11.45 am, Ms Fraser advised Williams & Hughes of her instructions. During that conversation she discussed with Mr Robinson the need for evidence of cleared funds; Mr Robinson said he could arrange for Mr Christie to obtain a bank cheque but that he would require a payout figure. Ms Fraser said again that she needed to obtain instructions, but that it would not be possible to obtain a payout figure at such short notice.
(k)at 11.50 am, the deputy sheriff contacted Ms Fraser and told her that he had received a call from Williams & Hughes advising him of the application to stay enforcement and indicating that it would be inappropriate for the enforcement to proceed in the circumstances. Ms Fraser advised him that her instructions were still that the enforcement was to proceed. She was told it would proceed in about 15 minutes.
(l)Ms Fraser made further attempts to contact Mr Emmel without success.
(m)at 12.21 pm, Ms Fraser received a copy of the chamber summons by email. A letter sent by email at about the same time by Williams & Hughes advised:
We confirm Mr Christie has instructed us that he is prepared to draw a bank cheque to discharge in full MKM Capital Pty Ltd's mortgage over Ms Pledge's property. He cannot however do so unless and until your client provides to a final payout figure. Can you please:
1.provide a final figure; and
2.confirm this will resolve the matter and your client will not proceed with the property seizure and delivery order.
The letter concluded:
It would in our view be highly inappropriate for your client to proceed with execution of the Property (Seizure and Delivery) Order in these circumstances. If your client does so notwithstanding the above we confirm that we will seek the costs of our client's application on a full indemnity basis.
The order had already been executed at the time this letter was sent.
The matter came before the court at 1.17 pm.
Mr Robertson in his affidavit does not substantially differ from the account set out by Ms Fraser. He says, however, that on 9 December he advised Ms Fraser that Mr Christie did not need finance, but had access immediately available to funds in the amount of at least $280,000.
The application to suspend enforcement
The principles governing an application to suspend enforcement are well settled. They are conveniently collected in the Full Court decision in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308; see also Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 [3] ‑ [4]. In particular, the court will generally not order a stay unless special circumstances are shown; further, a stay may still be refused if it appears that the balance of convenience does not lie in the favour of the applicant for a stay.
I was advised at the hearing that the amount owing by the defendant was less than the value of the property.
The defendant, and Mr Christie, put forward proposals to the plaintiff for the satisfaction of the judgment. At least by late on 9 December, there were proposals before the plaintiff's solicitor that were reasonable and credible. It is difficult to assess precisely what was forwarded to the plaintiff, as it has claimed legal professional privilege over the emails from Gadens. This is not the occasion to consider whether it is inconsistent for the plaintiff to maintain that privilege having regard to the affidavits that it has filed.
The period of suspension of enforcement sought was comparatively short, and the continuation of the enforcement involved the eviction of the defendant from her residence. Because of the circumstances, I had no occasion to finally determine the merits of the application to suspend enforcement of the order. My tentative opinion at the time was that the circumstances were sufficient to show special circumstances, and that the balance of convenience favoured the defendant. But the matter was not argued, so I express no final view.
The costs of the application
Section 37(1) of the Supreme Court Act 1935 provides:
Subject to the provisions of this Act and to the rules of court and to the express provisions of the Magistrates Court (Civil Proceedings) Act 2004, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or judge, and the Court or judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid.
The discretion as to costs under s 37 is unconfined. In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] ‑ [22], Gaudron and Gummow JJ said of the similardiscretionin s 69(2) of the Land and Environment Court Act 1979 (NSW):
The provisions of s 69 of the Court Act which confer upon the Court the discretion exercised by the primary judge attract the application of the general proposition that it is inappropriate to read a provision conferring jurisdiction or granting powers to a court by making conditions or imposing limitations which are not found in the words used. The necessity for the exercise of the jurisdiction or power by a court favours a liberal construction. Considerations which might limit the construction of such a grant to some different body do not apply.
The terms of s 69(2) contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as 'the subject matter and the scope and purpose' of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be 'definitely extraneous to any objects the legislature could have had in view'.
There is no automatic rule thatcostsalways follow the event: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 [26] ‑ [27], [34]; Oshlack [40]. The ordinary principle observed in civil litigation in Australia is that legalcosts would usually be ordered in favour of the successful party: Oshlack [66] (McHugh J), [134] (Kirby J). See also Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 543, 562 ‑ 563, 566 ‑ 567. The conduct of a party prior to or during proceedings may result in an otherwise successful party being deniedcosts: Latoudis v Casey (544, 565).
On the facts of the present matter, as set out above, I am not satisfied that this is a proper case to award costs against the successful party.
I take into account the following factors. First, the application to suspend enforcement was brought only on 10 December 2010. While, in the days before, the defendant properly tried to negotiate to make the bringing of proceedings unnecessary, the result was an application brought on the day the order was to be enforced, and only at around 1.00 pm on that day. Second, there appears to have been a misunderstanding or miscommunication. The plaintiff sought payment of a sum of $40,000 to $50,000 towards the judgment debt for it to consider deferral of execution. The defendants sought a payout figure, to enable the whole amount then owing to be paid, when that figure was not available at short notice. It does not appear to have been communicated to the defendant's solicitors at this stage that the plaintiff may agree not to enforce on receipt of a partial payment. Third, I accept that there were genuine difficulties in Ms Fraser obtaining instructions from Sydney, due to the time difference of three hours, and to Mr Emmel not being in the office on 10 December 2010. Finally, it was disappointing that the order was executed before the application came before the court. But I do not, on the facts before me, find that conduct warrants an order for costs against the plaintiff.
The plaintiff has also sought costs. In part it relies on the claim that the application to suspend was incompetent, as it was brought on behalf of Mr Christie who had no standing to seek the order. While the application bore on it front page the endorsement that it was filed on behalf of Mr Christie, when the matter was brought before me, Mr Robertson announced that he represented the defendant and has confirmed on affidavit that he acts for the defendant in relation to the application. Further, I accept that at no time in the period of negotiation did the plaintiff, or its legal representatives, ever question the involvement of Mr Christie. The email communications to the plaintiff by both the defendant and Mr Christie show that they were acting together. The point was not raised at the hearing.
In my opinion, the defendant's application was properly brought and, had the order not been executed before the court could hear the application, may have succeeded.
Further, the plaintiff seeks the costs of 10 December fixed at $891, under the scale in pt 4.7 of the consolidated practice directions. I gave Ms Fraser leave to appear on that occasion. She was not, however, a legal practitioner.
Conclusion
In my opinion, there should be no order for costs in relation to the defendant's application of 10 December 2010, but each party should bear its own costs. Both parties have now, unsuccessfully, sought the costs of that day. In my opinion, there should be no order for costs on the costs application.
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