Southern Cross Credit Union Ltd v Reavill Farm Pty Ltd
[2019] NSWSC 911
•17 July 2019
Supreme Court
New South Wales
Medium Neutral Citation: Southern Cross Credit Union Ltd v Reavill Farm Pty Ltd [2019] NSWSC 911 Hearing dates: On the papers Decision date: 17 July 2019 Jurisdiction: Common Law Before: Button J Decision: Reavill Farm Pty Ltd (the defendant) must pay the costs on the ordinary basis to Southern Cross Credit Union Ltd (the plaintiff) of the proceedings before me that were resolved by my judgment of 21 June 2019.
Catchwords: COSTS – party/party – assessment of responsibility for listing of competing notices of motion ultimately not pressed – where mortgagee entered into possession of property not left vacant – application made pursuant to Uncollected Goods Act 1995 (NSW), s 9 – where consent orders endorsed – whether costs to be awarded on indemnity or ordinary basis – costs awarded on the ordinary basis Legislation Cited: Farm Debt Mediation Act 1994 (NSW)
Uncollected Goods Act 1995 (NSW)Category: Costs Parties: Southern Cross Credit Union Ltd (Applicant)
Reavill Farm Pty Ltd (First Respondent)
AR Mortgages Pty Ltd (Second Respondent)
Christopher Dean Nott (Third Respondent)
Tom Hillbon (Fourth Respondent)Representation: Counsel:
Solicitors:
J R Bennett (Applicant)
N Obrart (First Respondent)
Collection Law Partners (Applicant)
Harper James Law Group (First Respondent)
File Number(s): 2016/360541
Judgment
Introduction
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This matter came before in the Duty List on 21 June 2019 for the hearing of two opposing motions. Due to the good work of both counsel, the matter was resolved, except as to costs. The parties were content for me to resolve that question in Chambers, with the benefit of written submissions only. This judgment constitutes that resolution.
Background
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A very concise background of the matter is as follows.
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Southern Cross Credit Union Ltd (the plaintiff in the substantive proceedings, and the applicant on its motion) has entered into possession of real property at 141 Hazlemount Lane, Tuckurimba NSW 2480 (the property), which was owned by Reavill Farm Pty Ltd (the defendant in the substantive proceedings, and the respondent to the motion of the plaintiff). Possession was obtained pursuant to a mortgage attaching to a loan that was in default. The defendant is a company with two directors (Mr Jeffrey Champion and Ms Diana Champion). They were not joined as respondents to the motion of the plaintiff. Another entity and two other persons were, but no costs are sought from me as against any of them.
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On 25 October 2018, default judgment was entered for the plaintiff on its claim for possession of the property, a submission of the defendant that the Farm Debt Mediation Act1994 (NSW) applied having previously been rejected. A writ for possession of land was subsequently granted and executed. The property was not left vacant by the defendant, in that there were various goods and chattels, livestock, and a camper trailer (collectively, “the items”) remaining on the property.
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On 28 March 2019, an agent of the plaintiff engaged removalists to remove the goods from the property and relocate them to a secured storage facility.
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On or about 16 April 2019, the livestock had been removed from the property by stock agents responsible for agisting the livestock, seemingly on behalf of the defendant.
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By way of its notice of motion filed on 8 May 2019, the plaintiff sought orders pursuant to s 9 of the Uncollected Goods Act 1995 (NSW) (the Act) to dispose of the items. Later, a countervailing motion of 3 June 2019 was filed on the part of the defendant; in a nutshell, it proposed that the controversy be resolved by the camper trailer being returned, and by Ms Champion (as I have said a director of the defendant) being authorised to take possession of all of the remaining items, whether seized or remaining on the property.
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As I have recounted, prior to the hearing of the two notices of motion, the parties were able to find a constructive way forward and the matter was resolved by consent orders that I endorsed. In effect, those consent orders authorised the release of the items in storage to Ms Champion and authorised her to enter the property to remove all goods and chattels; if the defendant or its agents had not taken possession of the items by various dates, the plaintiff would be at liberty to deal with them as it sees fit.
Submissions of the plaintiff about costs
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The plaintiff sought orders that the defendant and its directors pay its costs on an indemnity basis, or in the alternative, the ordinary basis, and that each be jointly and severally liable for such costs (I interpolate immediately that Ms Diana Champion and Mr Jeffrey Champion had not been joined as respondents to the motion of the plaintiff.)
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The plaintiff submitted that the proposed costs order is appropriate for four reasons.
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First, it submitted that the conduct of its opponents justifies the proposed costs order.
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It submitted that the entire proceedings arose from the failure of the defendant and those associated with it to leave the property vacant, and subsequently to respond to repeated invitations by the plaintiff to arrange collection of the items, both before and after the filing of its motion. The plaintiff submitted that the only meaningful response by the defendant was a request on 14 January 2019 for an extension of time to refinance.
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The plaintiff further argued that costs incurred for a substituted service application by it could have been saved if the defendant had timeously notified the plaintiff of the identity of the owner of the camper trailer.
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Lastly in relation to the conduct of the defendant, it is submitted that the defendant largely did not comply with a timetable for filing and service of evidence.
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Secondly, the plaintiff contended that the consent orders ultimately made are more similar to the orders sought in its motion than those sought in the countervailing motion of the defendant.
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Thirdly, it submitted that the defendant was incorrect at law to suggest that the underlying problem was that the plaintiff unlawfully “seized” any items, or that the plaintiff was obliged to keep the items on the property. The plaintiff argued that it had possessory title as an involuntary bailee to the items that had remained behind when it obtained possession, or that it was otherwise entitled to transport and store uncollected goods, in accordance with s 10(a) and s 10(b) of the Act.
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Fourthly, the plaintiff asserted that it had not withdrawn its motion by way of an email to my Associate of 17 June 2019 – rather, the plaintiff had merely sought to make clear that the urgency previously communicated to the Court in the matter had dissipated, due to the removal of the cattle.
Submissions of the defendant about costs
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The defendant contended that the plaintiff should pay the costs of the defendant, for three reasons.
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First, the defendant submitted that the plaintiff did not give specific notice to the defendant or its directors of its intention to seize the goods and camper trailer. Nor did the plaintiff invite the defendant or its directors to collect these items prior to the filing of its motion. It was submitted that the plaintiff therefore filed the motion prematurely. Furthermore, the plaintiff ultimately “capitulated”, as the consent orders call for the return of the remaining items to their owners.
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Secondly, the defendant submitted that, despite the purported invitations by the plaintiff for the collection of the goods, the plaintiff nonetheless pressed its motion. And the defendant emphasised that the motion was pressed even though the defendant had put on evidence, in support of its own notice of motion of 3 June 2019, that at least some of the items belonged to a third party (Ms Catherine Champion, daughter of Ms Diana Champion).
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Thirdly, it submitted that the plaintiff’s notice of motion was bound to fail for want of jurisdiction, as leave was required for the plaintiff to bring its notice of motion in the Supreme Court.
Determination
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Turning to my determination of this limited question, it is true that there was arguably no need for these proceedings to be brought by the plaintiff in this Court, despite the fact that the question of possession of land had of necessity been resolved in this jurisdiction. Having said that, this Court is empowered to grant the necessary leave, pursuant to s 18 of the Act, and the first order sought in the notice of motion of the plaintiff was that leave.
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And in any event, speaking more generally and less procedurally, some months passed after judgment was entered in favour of the plaintiff for possession of the land, and more months passed after the writ of possession was executed. And yet items remained for a time, and thereafter the question of what to do about them remained unresolved.
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Clearly enough, a mortgagee in possession needs, again speaking generally, to have vacant possession in order to maximise value when exercising a power of sale.
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As well as that, the correspondence placed before me on this question of costs shows that, for some months, the plaintiff and its solicitors were trying to resolve the question of the items left behind, by way of repeated correspondence to addresses that had undoubtedly been associated with the defendant during the substantive proceedings.
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It may be accepted, in accordance with at least one affidavit placed before me by the defendant, that the defendant and those persons associated with it were not aware of that correspondence. Still and all, it was surely their responsibility to take care to ensure that the plaintiff knew where it could contact them, and reciprocally for them to keep in contact with it, bearing in mind that the items had been left on property, the possession of which had passed into the hands of the plaintiff.
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In my opinion, the filing of the notice of motion of the plaintiff was not precipitous; rather, it was an effort to determine an oft-encountered problem when writs for possession of land are executed that had simply not been able to be resolved by appropriate efforts on the part of the plaintiff to achieve non-curial resolution over some months.
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In the circumstances, the plaintiff should have the costs of the proceedings before me. But I am not persuaded that anything has occurred here that would call for the exceptional step of those costs being ordered to be paid on the indemnity basis. Nor am I persuaded that costs should be ordered against Ms Diana Champion and Mr Jeffrey Champion, bearing in mind that they were neither joined as respondents to the motion of the plaintiff, nor formally moving parties on the motion of the defendant.
Order
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I make the following order:
Reavill Farm Pty Ltd (the defendant) must pay the costs on the ordinary basis to Southern Cross Credit Union Ltd (the plaintiff) of the proceedings before me that were resolved by my judgment of 21 June 2019.
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Decision last updated: 18 July 2019
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