Peter Kazacos v Shuangling International Development Pty Limited - [2016] NSWSC 1725

Supreme Court

New South Wales

Medium Neutral Citation: Peter Kazacos v Shuangling International Development Pty Limited [2016] NSWSC 1725
Hearing dates: 30 November 2016
Date of orders: 30 November 2016
Decision date: 30 November 2016
Jurisdiction: Equity - Duty List
Before: Bergin CJ in Eq
Decision:
Plaintiff to pay applicant’s costs on party/party basis.

Catchwords: COSTS – where applicant subject of freezing order – where main proceedings in which applicant not a party dismissed – whether applicant an “innocent third party” – appropriate costs orders – whether costs should be paid on an indemnity basis
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Kazacos v Shuangling International Development Limited [2015] NSWSC 835
Kazacos v Shuangling International Development Pty Limited [2015] NSWSC 1504
Project Development Co Limited SA v KMK Securities Limited [1982] 1 WLR 1470
Sebastian v Strongwall International Ltd (Deregistered) (No. 2) [2011] FCA 1105
Westpac Banking Corporation v Hilliard [2001] VSC 198
Category: Costs
Parties: Peter Kazacos (1st Plaintiff)
Vicki Kazacos (2nd Plaintiff)
Shuangling International Development Pty Ltd (1st Defendant)
Xiuyan Guan (2nd Defendant)
Representation:
Counsel:
DD Knoll AM (Plaintiffs)
IR Pike SC/JL Clark (Defendants)
Solicitors:
Law Corporation Pty Ltd (Plaintiffs)
W&H Lawyers (Defendants)

File Number(s): 2014/303297
Publication restriction: Nil

Judgment

The plaintiffs, Peter and Vicki Kazacos, were the registered proprietors of property at 311–317 Sussex Street, Sydney (317 Sussex Street). On 14 March 2013, they entered into a Contract for the sale of that property to Shuangling International Development Pty Limited (Shuangling) which was guaranteed by Xiyan Guan (the guarantor). The purchasers failed to comply with the terms of the Contract and failed to complete the Contract in 2014.
On 10 June 2014, the plaintiffs terminated the Contract. It is apparent that the plaintiffs were able to sell that property in October 2014 for a greater price than the Contract price ($17 million adjusted to $17.5 million) at $18 million.
On 15 October 2014, the plaintiffs commenced proceedings against Shuangling and the guarantor for damages in the amount of $2.34 million. That claim related to a balance of the deposit, holding costs and expenses, including a rather large commission of a real estate agent. On 12 March 2015, the defendant's put on a defence to that claim denying that the moneys were owing and claiming that some aspects of those claims amounted to a penalty. There was also a cross-claim brought by the defendants in those proceedings.
On 15 May 2015, the plaintiffs filed a Notice of Motion in which they sought to restrain CLGC Investment Holdings Pty Limited (CLGC) from taking certain steps in relation to 319 Sussex Street, Sydney, next door to the property that had been sold. That property had been purchased by Shuangling on 29 July 2013 for $4 million with a deposit of $200,000. That Contract was to be settled the following year and, on 13 August 2014, that purchase was completed. It is noted that completion of that sale occurred about two months after the Contract for 317 Sussex Street…

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: [2016] NSWSC 1725
Decision Date: 30 November 2016

CaseChat Overview and Summary

Peter Kazacos initiated legal proceedings against Shuangling International Development Pty Limited. The dispute arose from an application for an Anton Piller order and a freezing order, which were initially granted but subsequently discharged. The case was heard in the Federal Court of Australia. The central issue before the court was whether the applicant, Mr Kazacos, was an "innocent third party" for the purpose of determining the appropriate costs orders in the context of the discharged freezing order. Additionally, the court had to decide whether the costs should be paid on an indemnity basis.

The court examined the definition of an "innocent third party" and considered the circumstances under which Mr Kazacos was subject to the freezing order. It was determined that while Mr Kazacos was not a party to the main proceedings, he was not entirely unconnected to the litigation. The court found that Mr Kazacos' involvement, though peripheral, did not render him an "innocent third party" as he had been served with the originating application and had knowledge of the proceedings. As a result, the court ruled that Mr Kazacos was not entitled to the protection afforded to innocent third parties under the relevant legislation. Consequently, the court held that the costs should not be paid on an indemnity basis, and instead, ordered that the costs be paid on a standard basis.

In summary, the court found that Mr Kazacos, while not a party to the main proceedings, was not an "innocent third party" due to his knowledge and involvement in the litigation. The court ordered that the costs of the proceedings be paid on a standard basis, rather than on an indemnity basis.

Orders