Solak v Registrar of Titles (No. 3)

[2010] VSC 235

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST C
No. 6728 of 2009

TARIK SOLAK	Plaintiff
v
REGISTRAR OF TITLES	Defendant
and
KHEIRS FINANCIAL SERVICES PTY LTD (ACN 100 505 324)	Firstnamed Third Party
GAMEL KHEIR	Secondnamed Third Party
BANK OF WESTERN AUSTRALIA LTD (ACN 050 494 454)	Thirdnamed Third Party

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JUDGE:	DAVIES J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 May 2010
DATE OF JUDGMENT:	31 May 2010
CASE MAY BE CITED AS:	Solak v Registrar of Titles (No. 3)
MEDIUM NEUTRAL CITATION:	[2010] VSC 235

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PRACTICE & PROCEDURE – Costs – Whether unsuccessful plaintiff to pay defendants and third party costs – Whether party/party costs or indemnity costs to be awarded – Meaning of “full costs” – s 110(5) Transfer of Land Act1958 (Vic)

PRACTICE & PROCEDURE – Whether third party claim should be dismissed as no order made on the disposition of that proceeding

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. M Wise	Francis Abourizk Lightowlers
For the Defendant	Mr. H Fraser	Victorian Government Solicitors
For the First and Second Third Parties	Mr. G P Harris	Monahan and Rowell
For the Third Third Party	Mr. D G Robertson	Corrs Chambers Westgarth

HER HONOUR:

1. This judgment should be read in conjunction with the reasons for decision handed down 21 April 2010 in which I ordered the summary dismissal of the proceeding on the application of the defendant (“the Registrar”).  The question of costs was reserved. 

1. The Registrar seeks his costs on an indemnity basis. He relies on s 110(5) of the Transfer of Land Act 1958 (Vic) (“TLA”) which provides as follows:

(5)If in any action under this section judgment is given in favour of the Registrar or the plaintiff discontinues or is nonsuited the plaintiff shall be liable to pay the full costs of the Registrar in the action, but save as aforesaid a court may make such order as to costs as it thinks fit.

It was submitted on behalf of the Registrar that the expression “full costs” means indemnity costs or costs on a solicitor/client basis. 

1. The plaintiff does not oppose an order for costs against him on a party/party basis but contended that there was no warrant for costs on an indemnity basis.  It was submitted that the meaning of the expression “full costs” is fixed in law as “ordinary costs as between party and party”.  There is ample support for that proposition.[1] Counsel for the plaintiff argued that the Legislature must have been taken to have known of the judicial interpretation of the expression and intended that meaning. Specifically it was argued that s 110(5) of the TLA was enacted one year after the decision of the Supreme Court of Victoria construing the same phrase in the context of the Local Government Act 1946 (Vic) in that way.[2] 

   [1]Irwine v Reddish (1822) 106 5 B & ALD 795, 1382, 1383; Jamieson v Trevelyan (1855) 10 Ex 748; Avery v Wood (1891) 3 Ch 115; Allen v Tobias (1957) 98 CLR 367.

   [2]Tobias v Allen (1956) VLR 683, 684.

1. For the Registrar it was accepted that the expression had that meaning usually, but it was argued that the phrase should be construed having regard to the distinction drawn in the Supreme Court Rules between party/party costs and indemnity costs and that “full costs” in the context of s 110(5) of the TLA was intended to pick up that distinction and to be construed as indemnity costs.

1. The section however does not use the phrase “indemnity costs”. If that was what was intended by the Legislature, it would have been a simple matter to use that expression rather than an expression which had a well understood meaning. I am not persuaded that the phrase should be construed other than in accordance with that well understood meaning. To put it another way, I am not persuaded that a change in meaning was intended in the context of s 110(5) of the TLA. The context does not indicate that the phrase was intended to pick up on the distinction between party/party costs and indemnity costs provided for under the Supreme Court Rules. Accordingly I reject the Registrar’s argument that s 110(5) of the TLA entitles him to indemnity costs.

1. The orders contended for by the plaintiff were:

(a)       The plaintiff pay the defendant’s cost of the proceeding save and except for the defendant’s costs of the third party proceedings.

(b)      The defendant pay the third parties’ costs of the proceeding.

The third parties supported the submission that the defendant pay their costs of the proceeding. 

1. For the Registrar it was argued that the plaintiff should pay the third parties’ costs, alternatively that if the Registrar is to pay those costs, then the Registrar is entitled to have those costs as part of his costs paid by the plaintiff. 

1. In my view, costs of the third parties should be paid by the Registrar.  The Registrar cannot succeed in his claim against the third party because that claim depended upon the plaintiff’s success in his claim against the Registrar.[3]  I am not satisfied that costs on the third party claim should not follow the event in the usual way. 

   [3]Transfer of Land Act 1958 (Vic) s 109(3).

1. However I consider that it is appropriate that the costs which the plaintiff is to pay the Registrar should include the costs of the third parties for which the Registrar is liable.  The joinder of the third parties was both reasonable and to be expected by the plaintiff.  The plaintiff’s conduct in not joining the Registrar to the first proceeding in the circumstance where it was to be expected that the Registrar would bring third party proceedings against the third parties if he had been joined, warrants an order in that form.  Once the plaintiff commenced this proceeding against the Registrar it was inevitable that the Registrar would join the third parties.  I found that the plaintiff’s conduct in not making the Registrar a party to the first proceeding was unreasonable in the Anshun sense and that conduct makes it appropriate that he should bear the Registrar’s costs of the third party claim.

1. The last issue for consideration is whether the third party proceeding should be dismissed or no order made on the disposition of that proceeding.   For the Registrar it was contended that there should be no order pronounced by reason that there had been no adjudication on the merits.  Reliance was placed on Devon Down Administrators Pty Ltd v Theoporopoulos[4] in which Kaye J held that no order ought to be made in the third party proceedings in circumstances where the defendants were not found to be held liable to the plaintiff.  Although a similar approach has been taken in other cases[5] I do not consider that it is the correct approach in this case.  The Registrar cannot succeed on his claim as against the third parties and they are entitled to an order that the proceeding be dismissed in that circumstance.

   [4]VSC (Unreported, Kaye J, 7 April 1992).

   [5]Bourke v Gillett [1996] 1 VR 196; Allman v Daly (No 2); Allman v Country Roads Board [1959] VR 614.

1. Accordingly the orders that I will make are:

(i)      The defendant’s claim against the third parties is dismissed.

(ii)      The defendant is to pay the third parties’ party/party costs of and incidental to the third party proceedings including reserved costs.

(iii)     The plaintiff is to pay the defendant’s party/party costs of and incidental to the proceeding, including the party/party costs which the defendant must pay the third parties and any reserved costs.