The Owners of Unit Plan 932 v De Andrade (nee Marhaba) (No 3)

[2017] ACTSC 410

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

The Owners of Unit Plan 932 v De Andrade (nee Marhaba) (No 3)

Citation:

[2017] ACTSC 410

Written submissions:

13 November 2017

DecisionDate:

22 December 2017

Before:

Mossop J

Decision:

1. The Enforcement Debtor and Defendant pay the Enforcement Creditor and Enforcement Officer’s costs, fixed pursuant to r 1720(3)(c) of the Court Procedures Rules 2006 (ACT), in the sum of $15,403.30.

Catchwords:

PRACTICE AND PROCEDURE – COSTS – Proceedings  by Sheriff to remove caveats from title to property subject to sale and seizure order – fixed sum indemnity costs order appropriate

Legislation Cited:

Court Procedures Rules 2006 (ACT), r 1720(3)(c)

Land Titles Act 1925 (ACT)

Cases Cited:

Andara Homes Pty Limited v Nicholas Palm and Ling Jiang [2014] ACTSC 141 at [45]–[51]

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

The Owners of Units Plan 932 v De Andrade (nee Marhaba)
(No 2) [2017] ACTSC 339

Parties:

The Owners of Units Plan 932 (Enforcement Creditor)

Sheriff of the ACT Supreme Court (Enforcement Officer)

Registrar-General of the ACT (Registrar-General)

Roubi De Andrade (nee Marhaba) (Enforcement Debtor)

Rahab Marhaba (Defendant)

Representation:

Counsel

S Kibbey (Enforcement Creditor and Enforcement Officer)

Self-represented (Enforcement Debtor)

Self-represented (Defendant)

Solicitors

Harrington Kibbey Law (Enforcement Creditor and Enforcement Officer)

Self-represented (Enforcement Debtor)

Self-represented (Defendant)

File Numbers:

ES 2 of 2016

ES 3 of 2016

MOSSOP J:

Introduction

1. This is an application for costs.  The background to the application is provided in my judgment of 2 November 2017: The Owners of Units Plan 932 v De Andrade (nee Marhaba) (No 2) [2017] ACTSC 339. The Enforcement Creditor is the Owners of Units Plan 932 and the Enforcement Officer is the Sheriff of the ACT Supreme Court. Both applied for orders requiring the removal of a caveat which was preventing the settlement of a sale of real property pursuant to a previous order of this Court. The circumstances surrounding the removal of the application, the subsequent lodgement of a caveat and the order that I made requiring the removal of that caveat are set out in the reasons that I gave on 2 November 2017.

1. That Enforcement Creditor and Enforcement Officer (the applicants) seek a gross‑sum costs order covering the whole of the costs involved in the application to remove the two caveats.  They referred to the decision of Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 in which his Honour said that indemnity costs may be awarded where unsuccessful proceedings have been brought and prosecuted not for the bona fides purpose of protecting and enforcing a legal right but to achieve an ulterior or extraneous purpose. The applicants recognised that the filing of a caveat is different from the commencement of proceedings but submitted that the same principle is applicable because the caveats were not lodged in good faith for a bona fide purpose but instead were lodged with the ulterior purpose of blocking completion of the sale of the unit pursuant to the Court’s order.

1. The applicants seek a gross‑sum order in the sum of $15,403.30 being the total of the invoices issued to the Enforcement Officer by its solicitor. That includes amounts for counsel’s fees. The court has power to make such an order pursuant to rule 1720(3)(c) of the Court Procedures Rules 2006 (ACT). The applicants rely upon the statement of Refshauge J in Andara Homes Pty Limited v Nicholas Palm and Ling Jiang [2014] ACTSC 141 at [45]–[48], [50] in which his Honour said the following about the circumstances in which the making of a fixed sum costs order may be warranted.

45.The purpose of the rule permitting such a procedure is to avoid the expense, delay and aggravation involved in protracted litigation arising out of an assessment of costs (called, until the making of the Court Procedures Rules, the “taxation of costs”). See Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120.

46.There is clearly a strong case for assessing a fixed sum where the party required to pay the costs is unlikely to be able to do so due to his, her or its financial position and when a formal assessment will add to the financial burden of the party entitled to the costs without a likelihood of recovering the extra costs spent.  See Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 at [29], Boyapati v Rockefeller Management Corporation (No 2) [2008] FCA 1375 at [42].

47.The conduct of the litigation by the party liable for the costs may also be a very relevant factor in determining whether the court should assess the costs.  Where that party has caused trouble and expense in the proceedings, delayed or failed to comply with court orders, or otherwise failed to ensure an expeditious and efficient disposal of the litigation, this may well indicate a protracted process of assessment that would be unfair or unreasonable to impose on the party entitled to the costs.  See Sony Entertainment (Australia) Pty Ltd v Smith at 812; [192], Summerfield v Summerfield [2007] Fam CA 804 at [109].  There was no obvious issue of that kind here, though Andara Homes did not prepare evidentiary material that should have been adduced.

48.The likelihood that the party liable for the costs will not attend the formal assessment of costs is also a relevant factor when deciding whether to fix a lump sum.  See Sony Entertainment (Australia) Pty Ltd v Smith at 812; [193]. While Andara Homes has delayed in these proceedings, a relevant matter, I have no reason to believe it would not appear at the formal assessment.

…

50.I would add that, in addition, a simple matter may make it “entirely appropriate to save the parties the difficulties and inconvenience, and added expense of a taxation” as noted by Burchett J in Australasian Performing Rights Association Ltd v Marlin[1999] FCA 1006 at [4]. See also Keen v Telstra Corporation Ltd (No 2) [2006] FCA 930 at [6]-[7].

1. The applicants submitted that making a gross‑sum costs order should be preferred in the circumstances of this case in order to finalise the issues between the parties in a speedy and efficient manner, noting that the Enforcement Officer recently holds the net proceeds of the sale of the real estate and would like to be in a position to finalise the matter including the payment of the balance of the proceeds of the sale to the Enforcement Debtor.

1. The Enforcement Debtor and Defendant made no submissions in relation to costs.

In my view this is an appropriate case in which to make a gross‑sum costs order which allows the recovery of the whole of the costs incurred by the Enforcement Officer.  Having regard to the fact that the Enforcement Debtor and Defendant have been unrepresented and there were difficulties with service and the manner in which they have used the caveat process under the Land Titles Act 1925 (ACT) I consider that to require the applicants to use the usual process of assessment would be to unnecessarily increase the costs already incurred without there being a significant corresponding benefit to the Enforcement Debtor or Defendant. That is particularly so in circumstances where I consider it appropriate to make an order which effectively provides an indemnity to the applicants against the costs incurred and where any increase in the costs will reduce the payment of the net proceeds of the sale to the Enforcement Debtor.

1. I consider it appropriate to make an order which gives the applicants an indemnity against costs for the following reasons.  It remains very difficult to understand what the Enforcement Debtor or the Defendant hoped to achieve through the lodgement of caveats that might impede the completion of the sale.  That is because the Enforcement Debtor was to be paid the net proceeds of the sale and there did not appear to be any other means by which the liability the subject of the judgment would be satisfied.  However the lodgement of the first caveat following the proceedings before Burns J, the removal of that caveat and then the lodging by the defendant of a further caveat appear to have been without a reasonable basis and an abuse of the process that permits the lodgement of caveat in order to protect interests in real property. 

1. The rates charged and time spent in relation to the application to the Court are identified in the invoices of solicitor and counsel which I will mark as exhibits.  The rates charged and time spent were not unreasonable.  It was reasonable to brief junior counsel for the purposes of the application.

1. It is therefore that I make the order sought by the applicants.

1. The order of the Court is the Enforcement Debtor and Defendant pay the Enforcement Creditor and Enforcement Officer’s costs, fixed pursuant to r 1720(3)(c) of the Court Procedures Rules, in the sum of $15,403.30.

I certify that the preceding nine [9] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 22 December 2017