Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd v Ejada Office Automation-EOA Pty Ltd

[2024] NSWSC 1122

Supreme Court

New South Wales

Medium Neutral Citation:	Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd v EJADA Office Automation-EOA Pty Ltd [2024] NSWSC 1122
Hearing dates:	On the papers – final submissions received 2 September 2024
Date of orders:	3 September 2024
Decision date:	03 September 2024
Jurisdiction:	Equity - Duty List
Before:	Kunc J
Decision:	The first defendant is to pay the plaintiffs’ costs of the summons assessed in the gross sum of $14,000 (GST inc).
Catchwords:	COSTS — Party/Party — Bases of quantification — Indemnity basis — Assessment as a gross sum — No issue of principle
Category:	Costs
Parties:	Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd (First Plaintiff) ENA Developments Pty Ltd (Second Plaintiff) EJADA Office Automation-EOA Pty Ltd (First Defendant) Registrar General of NSW (Second Defendant)
Representation:	Counsel: M L Rose (First and Second Plaintiffs) Solicitors: ERA Legal (First and Second Plaintiffs) Solicitor for the Registrar General of NSW (Second Defendant)
File Number(s):	2024/268925

JUDGMENT

Summary

1. Sitting as Duty Judge on 29 July 2024, I heard on a final basis the plaintiff’s summons for orders that the first defendant withdraw a caveat over certain land at Homebush and be restrained from lodging any further caveats over the land. I granted that relief and ordered the first defendant to pay the plaintiffs’ costs of the proceedings on the indemnity basis.

2. This judgment deals with the plaintiffs’ application that their costs be assessed in a gross sum of $14,000 (GST inc). For the reasons which follow, that application will be granted.

The parties and their representation

3. The first plaintiff, Mr Krejci, is the liquidator of the second plaintiff, ENA Development Pty Ltd (in liquidation).

4. The first defendant is EJADA Office Automation-EOA Pty Ltd.

5. The second defendant is the Registrar General of NSW, who filed a submitting appearance.

6. EJADA has never filed an appearance. Like much about EJADA, and the background to the present application, the position as to its representation can only be described as opaque.

7. When the matter came before me for hearing on 29 July 2024, Mr M L Rose of Counsel appeared for the plaintiffs, instructed by Mr B O’Neill of ERA Legal. Mr Rose also prepared the plaintiffs’ written submissions on the present application, which were received on 7 August 2024 in compliance with directions I had made for the resolution of the application on the papers.

8. EJADA was represented at the hearing by Mr M Swanson of Counsel. The hearing was on a Monday and he informed the Court that had only been briefed the previous Friday. With no disrespect to him, it was clear that his instructions were less than adequate.

9. Since the hearing, the Court has been receiving emails from a Demy Gabilin of “Leader R Pty Ltd”. After an enquiry from the Court, Demy Gabilin responded to my associate by saying “I am not a solicitor, I am an accountant for the trustee”. I assume that the reference to “trustee” is intended to mean EJADA in its purported capacity as trustee of the land.

10. The written submissions belatedly and purportedly provided on behalf of EJADA on the present application were sent under cover of an email dated 2 September 2024 from Demy Gabilin but are purportedly signed by a Natasha Carroll of EJADA. The submissions also provide for a signature by Awad Al-Nisrat of EJADA, but no signature from that person has been appended to the submissions.

11. The company search that was in evidence before the Court for EJADA records Awad Al-Nisrat as EJADA’s sole current director, secretary, and shareholder. There is no reference to Ms Carroll as a director, secretary, or shareholder of that company.

12. In the absence of an appearance, it would be technically open to the Court to ignore the submissions that have been provided purportedly on behalf of EJADA. Taking a practical approach, given the amounts involved, I have had regard to those submissions. However, the procedural irregularity which attends them and EJADA’s participation in the proceedings, fortifies me in the real doubts which I expressed about EJADA’s bona fides in both lodging its caveat and purporting to defend the present proceedings.

Procedural history

13. The plaintiffs’ summons was filed on 22 July 2024 and claimed urgent relief that EJADA’s caveat be withdrawn and that EJADA be restrained from lodging any further caveat over the property. The summons also sought an order that EJADA pay the plaintiffs’ costs of and incidental to the summons on an indemnity basis.

14. On the evidence that was before me, it appeared that parties of unclear antecedents but somehow related to ENA had lodged a series of caveats over the land, in the face of Mr Krejci having entered into a contract for sale of the land to a third party. It is sufficient for present purposes to note that in proceedings in the Federal Circuit and Family Court of Australia (FCFCOA), Henderson J determined on 11 August 2023 that ENA was the beneficial owner of the land. The proceedings were before that court in connection with proceedings for a property settlement between two persons again said to be connected in some way to ENA. In the determination of those proceedings, to which Mr Krejci and ENA were parties, her Honour did declare that ENA was the beneficial owner of the land, which had been an asset in the “ENA Development Trust”.

15. EJADA’s caveat over the property had been lodged on 16 July 2024. The estate or interest claimed was described as (emphases in original):

“Estate in Fee Simple

By virtue of: Trustee of Trust

Details Supporting The Claim: EJADA Office Automation-EOA Pty Ltd in a property interest in the land in entirety.”

16. At the conclusion of the hearing on 29 July 2024 I granted the relief sought by the plaintiffs in their summons. Neither party required formal reasons, however I gave short form reasons on the transcript both as to the substantive issues and as to costs:

HIS HONOUR: All right. I am satisfied that the orders in the summons should be made. My practice in this list, as in the applications list, is to give very short informal reasons and if someone wants written reasons they can have them, but in essence it’s this:

1.   The caveat is plainly bad in its form and doesn’t disclose what the interest is;

2.   I accept Mr Rose’s submission that if, as has been put, Ejada says it became the trustee on 11 December last year, that postdates the decision of Henderson J and really doesn’t assist in explaining how it is that Ejada could have become the trustee having regard to the timing;

3.   I am satisfied that there is sufficient urgency, given that there has to be a settlement tomorrow; and

4.   I have serious doubts in any event, quite apart from its formal defects about the bona fides of the caveat, given that it was filed so shortly after Justice Pike dismissed an application brought in relation to the property and claiming a trust interest by One T Development Pty Ltd, a company which is plainly in some way related to Mr Jemmott who is also in some way related to the present defendant (Tcpt, 29 July 2024, p 12(36) – 13(7)).

[after argument as to costs]

HIS HONOUR: Yes. I accept Mr Rose’s submission that this is a case which, today, it should have been apparent to the defendants that their case was doomed to fail and it is appropriate in the circumstances, having regard to my real doubts about the bona fides of the caveat in the events which have happened, that there be an order for indemnity costs. (Tcpt, 29 July 2024, p 16(20)-(24)).

Consideration

17. The submissions received purportedly on behalf of EJADA do not disclose any reasoned opposition to the present application. The submissions are almost completely devoted to questioning the Court’s decision to grant the relief sought on the plaintiffs’ summons, together with a series of complaints about the conduct of Mr Krejci and others.

18. EJADA’s only submission that relates to the present application is:

“The defendant (sic) position is to oppose order 5 and the matter should be transferred to the Federal Circuit and Family Court of Australia, pursuant to the pending application. A lump sum order should not be made until further orders by Federal Circuit and Family Court of Australia.”

19. I understand the reference to “the pending application” to be an application that I was told about by Mr Swanson from the bar table at the hearing. This was an application said to have been filed by EJADA in the FCFCOA at 11:10am on that day in relation to the decision of Henderson J, notwithstanding that her Honour’s judgment had been delivered nearly a year earlier and EJADA had not been a party to the proceedings before her Honour. The submissions were accompanied by short minutes of order providing for a transfer of these proceedings to the FCFCOA.

20. The Court concludes that EJADA’s submissions do not provide any basis to refuse the plaintiffs’ application if the Court is otherwise satisfied that application should be granted. Furthermore, these proceedings have concluded (subject to determination of the present application) so there is nothing left to transfer to the FCFCOA, even if the Court were otherwise minded to accede to EJADA’s application for that to occur (which it is not).

21. Turning to the plaintiffs’ evidence and submissions, the Court has been provided with detailed affidavit evidence from Mr O’Neill including the relevant charge out rates for the legal practitioners involved in the matter, and a properly enumerated WIP ledger setting out how the costs were incurred with narrative explanations.

22. Mr O’Neill’s evidence, which the Court accepts, is that the plaintiffs’ solicitor/client costs, reduced by 10 percent, would result in the recovery of $23,275.60 (ex GST) for solicitors’ fees, counsel’s fees, and other disbursements. Notwithstanding that, the plaintiffs’ seek a gross sum costs order in the sum of $14,000 (including any applicable GST).

23. The Court accepts Mr Rose’s written submissions that an order for gross sum costs in that amount should be made because:

1. The proceedings are at an end and involved a discrete issue which has been resolved against EJADA;

2. The quantum of costs is modest and the costs of any assessment process are likely to be disproportionate to the amount of costs claimed;

3. Mr O’Neill’s evidence is detailed such that the Court can be confident that it can arrive at a fair assessment;

4. Given what appears to be a history of serial caveat lodgements by persons connected in some way with ENA, the present application should be resolved with as little technicality and expense as possible; and

5. The figure sought by the plaintiffs represents a discount of approximately 40 percent to the costs that they might be expected to have recovered on an assessment on the indemnity basis. A discount of those proportions, where indemnity costs have been ordered, more than adequately takes account of what might be referred to as the usual discount applied to allow for the Court’s familiar “broad brush” approach to the assessment of costs on a gross sum basis.

Conclusion

24. The Court orders:

1. The first defendant is to pay the plaintiffs’ costs of the proceedings assessed in the gross sum of $14,000 (GST inc).

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Decision last updated: 03 September 2024