Turnbull v Turnbull

[2022] NSWSC 350

Supreme Court

New South Wales

Medium Neutral Citation:	Turnbull v Turnbull [2022] NSWSC 350
Hearing dates:	On the papers
Date of orders:	29 March 2022
Decision date:	29 March 2022
Jurisdiction:	Equity
Before:	Darke J
Decision:	Order made that each party bear its own costs of the proceedings.
Catchwords:	COSTS – proceedings seeking the withdrawal of a caveat – caveator amenable to withdrawal of caveat provided proceeds of sale of property are protected – no agreement reached between the parties – proceedings commenced by plaintiffs – caveator takes steps to have caveat withdrawn and seeks relief in respect of proceeds of sale in Federal Circuit and Family Court – caveat withdrawn shortly before consent order made for its removal – caveator successful in obtaining interim relief in respect of proceeds of sale in Federal Circuit and Family Court – order made that each party bear its own costs of the proceedings
Category:	Costs
Parties:	Grant Wesley Turnbull (First Plaintiff) Robeena June Turnbull (Second Plaintiff) Jacqueline Christine Turnbull (Defendant)
Representation:	Solicitors: Cole & Butler Solicitors (Plaintiffs) Evans Brandon Family Lawyers (Defendant)
File Number(s):	2022/20999
Publication restriction:	None

Judgment

1. These proceedings were commenced by Summons filed on 24 January 2022. The plaintiffs thereby sought an order that the defendant withdraw a caveat (AR150876) she had lodged against the titles to certain properties owned by the plaintiffs. The defendant is the wife, or former wife, of the first plaintiff. There is a matrimonial dispute between them. The existence of the caveat meant that a contract for sale of some of the properties, entered into on 8 April 2021, was unable to complete. The contract had been due to complete on 18 January 2022.

2. On 25 January 2022, the plaintiffs approached the Vacation Judge and obtained an order for short service, with the Summons made returnable at 2:00pm on 27 January 2022. At that time, various orders were made by consent, including an order that the defendant withdraw the caveat by 4:00pm on 27 January 2022. As will be seen, that order was unnecessary as it appears that the caveat had in fact been withdrawn by about 12:30pm on 27 January 2022.

3. In any event, the question of costs remained unresolved. The plaintiffs seek an order for costs in their favour. On 11 February 2022, orders were made for the filing of submissions and any supporting material on the question of costs, and for that matter to be dealt with on the papers. The plaintiffs filed submissions on 23 February 2022, and submissions in reply on 4 March 2022. The defendant filed submissions on 25 February 2022. The Court has read and considered those submissions, together with the affidavits filed for the purpose of the costs application and the affidavit filed in support of the Summons, which is also relied upon by the plaintiffs on the application.

4. The caveat was lodged on 16 June 2021. However, it was recorded only as an unregistered dealing. Mr Bartier of NSW Land Registry Services explained that registration was prevented due to the priority of earlier dealings. That seems likely to be a reference to certain writs that were recorded on the titles.

5. On (Friday) 21 January 2022 at 10:42am, the plaintiffs’ solicitors sent an email to the defendant’s solicitor who acted on the lodgement of the caveat, demanding that the caveat be removed forthwith. On (Monday) 24 January 2022 at 1:26pm the defendant’s solicitors, who were acting for her in the matrimonial dispute, sent an email in response to the plaintiffs’ solicitors which included the following:

I note the Caveats were lodged to protect my client’s equitable interests in the properties. There are now proceedings in the Federal Circuit and Family Court of Australia at Brisbane. Any Application brought by your client should be in those proceedings (not NSW State Court).

My client is content for the Caveats being released providing that the sale proceeds are secured in a Solicitor’s trust account (not to be released unless with written agreement of the parties or court order) or some other acceptable form of security is taken. Please advise as a matter of urgency.

6. On 24 January 2022 at 3:24pm, the plaintiffs’ solicitors responded by email which included the following:

It is established law in NSW, that a Family Law property settlement does not of itself give rise to an equitable interest nor a caveatable interest in land. Similarly, the fact that there is a marriage or a de facto relationship and the mere existence of a claim does not give rise to a caveatable interest.

The contention that our clients application for removal of the caveats ought to be brought in the Federal Circuit and Family Court of Australia is misconceived because your clients caveat has been lodged pursuant to the Real Property Act 1900 (NSW) [our Emphasis]. Thus the proper forum for any application for removal of your clients caveat on land in NSW is the Supreme Court of NSW.

We are ready to urgently approach the Duty Judge in the Supreme Court of NSW this afternoon, to move on our summons seeking orders for short service and a hearing of our application for removal of your clients caveat.

There followed a proposal which involved the immediate withdrawal of the caveat over the lots the subject of the sale and an undertaking by the plaintiffs not to dispose of “the remaining properties” without prior written agreement of the parties or Court order.

7. On 24 January 2022 at 3:30pm, the defendant’s solicitors sent an email in response which included a request for the provision of a copy of the settlement statement for the sale.

8. On 24 January 2022 at 4:49pm, the plaintiffs’ solicitors sent a response that included the following:

We are under no obligation to provide your client with a copy of the settlement statement. We have confirmed in writing that there will be no proceeds remaining in the name of Grant Turnbull after settlement….

The resolution proposed in our email at 2:24pm today [Queensland time], more than adequately addressed any purported prejudice to your client, notwithstanding the fact that you have not demonstrated what equitable or caveatable interest your client claims.

It follows, that the ongoing delay has resulted in us having to take steps to file our summons and accompanying affidavit. We expect to serve the same shortly.

9. The Summons was indeed filed at 4:54pm on that day. It was served upon the defendant’s solicitors at 5:23pm. At that stage, the Summons did not have a return date. As already mentioned, an order for short service was obtained on 25 January 2022. That occurred at about 2:00pm

10. On 25 January 2022 at 5:08pm, the defendant’s solicitors sent an email to the plaintiffs’ solicitors in the following terms:

My client has provided instructions to have the Caveat against the Lots the subject of the contract for sale which was due to complete on 18 January, 2022 removed so as the sale transaction can complete.

My client will be bringing an urgent application in the FCFCoA which inter alia seeks:

To join Robeena Turnbull to those proceedings;

Injunctions against both Grant and Robeena Turnbull in relation to the dealings with other real properties;

Disclosure in relation to the matters which have been the subject of correspondence passing in the last couple of days; and

Costs.

Your clients are invited to discontinue their NSW Supreme Court proceedings returnable on 28 January, 2022 with no order as to costs.

11. Instructions for the withdrawal of the caveat were given to the defendant’s solicitor who acted on the lodgement of the caveat. It appears that he made efforts to have the caveat withdrawn, but due to the fact that the caveat was not registered, this could not be effected using the PEXA system. Accordingly, the withdrawal of the caveat was not effected until shortly prior to 12:30pm on 27 January 2022. Of course, withdrawal of the caveat on the previous day was not possible due to the Public Holiday.

12. Following the making of the orders in these proceedings at 2:00pm on 27 January 2022, an urgent application, brought by the defendant against the plaintiffs, was heard in the Federal Circuit and Family Court of Australia in Brisbane. The hearing took place at about 4:00pm (that is at about 3:00pm Queensland time). The application had been made in proceedings that had been commenced earlier in January 2022. An order was made to the effect that any net sale proceeds that were to be paid to the plaintiffs on completion of the contract for sale be paid into the trust account of the defendant’s solicitor, to be held pending agreement of the parties or further order of the Court. The contract for sale was completed on 28 January 2022.

13. In support of their application for a costs order, the plaintiffs submitted that had the defendant acted on the plaintiffs’ demand on 21 January 2022 that the caveat be removed forthwith, the completion of the contract for sale would not have been delayed any more than 3 days after 18 January 2022. It was submitted that completion was instead delayed for 10 days. The plaintiffs submitted that, due to the delay, they incurred additional costs (including legal costs), and were required to pay an additional $20,000 to the judgment creditors who had lodged writs against the titles.

14. In response, the defendant submitted that on the next business day after the demand was made to remove the caveat, she offered to do so provided the proceeds of the sale were preserved, and noted that there were already proceedings on foot in the Federal Circuit and Family Court. The defendant submitted that on 25 January 2022 the plaintiffs were notified that instructions had been given to have the caveat withdrawn and that an urgent application would be brought in the Federal Circuit and Family Court. The defendant further submitted that he plaintiffs should have approached the defendant in relation to the caveat well prior to the 18 January 2022 completion date, and that these proceedings were unnecessary. The defendant submitted that the orders made on 17 January 2022 in the Federal Circuit and Family Court showed that the defendant’s position was appropriate. The defendant submitted that in all the circumstances the appropriate order is that each party bear its own costs of the proceedings in this Court.

15. In reply, the plaintiffs questioned whether the defendant genuinely believed she had an equitable interest in the plaintiffs’ properties, or in fact held such an interest. It was put that as the caveat remained unregistered, the plaintiffs only discovered its existence on 18 January 2022. I note here that title searches carried out by the plaintiffs’ solicitors on that day revealed the existence of the unregistered dealing. The plaintiffs submitted that the defendant’s delay in responding to the demand for removal of the caveat is not explained, and a suggestion is made that the defendant was deliberately stalling so as to give her time to prepare her own application in the Federal Circuit and Family Court. The plaintiffs also submitted that this was a case where they were the successful parties, and costs should follow the event in accordance with the general rule.

16. I do not agree that the plaintiffs should be regarded as the successful parties. Although an order was made for the withdrawal of the caveat (after the caveat had already been withdrawn, following the instructions given by the defendant on 25 January 2022), this outcome was neither a determination made on the merits by the Court, nor a mere capitulation on the part of the defendant. The defendant had indicated on 24 January 2022 that she would be willing to remove the caveat provided the proceeds of sale were protected. With no agreement able to be reached with the plaintiffs, the defendant then gave instructions for the removal of the caveat in circumstances where she indicated that she intended to seek relief in relation to the proceeds of sale by means of an application in the Federal Circuit and Family Court. The defendant was thereafter successful in obtaining interim relief on that application.

17. I am also unable to accept the suggestion that the defendant’s caveat was without foundation. The Court is simply not in a position to make that determination.

18. The plaintiffs did not become aware of the caveat until 18 January 2022. It seems that they had not conducted any title searches prior to that date. In any event, as the contract was due to complete on that date, there was some urgency in having the caveat dealt with. On Friday 21 January 2022, the plaintiffs made a demand that the caveat be removed forthwith. The defendant’s solicitors responded on the next business day. I do not think that was an unreasonable delay in all the circumstances, particularly given that there were two firms of solicitors involved on the defendant’s side. Moreover, it should have been clear from the defendant’s response that she was amenable to withdrawing the caveat to allow the sale to complete, provided the proceeds of sale were protected. In the absence of agreement being reached between the parties, I do not think that it was unreasonable for the plaintiffs to commence the proceedings in this Court, but nor was it unreasonable of the defendant to pursue the course she took. I reject the suggestion that the defendant was deliberately stalling. Similarly, I reject the suggestion made by the defendant in her submissions that the plaintiffs acted “mischievously” in relation to their intentions concerning the sale proceeds.

19. In my opinion, taking all of the circumstances into account, the appropriate exercise of the Court’s discretion as to costs is to order that each party bear its own costs of the proceedings.

20. Accordingly, there is no occasion to consider the plaintiffs’ submission that the Court should make a gross sum costs order in their favour. I will note, however, that were such an order to be made, it would not be appropriate to include the additional $20,000 the plaintiffs paid to the judgment creditors. Even if that payment could be said to have been caused by the lodgment of the defendant’s caveat or her failure to remove it (about which there seems to me to be significant causation issues), the payment is not part of the plaintiffs’ costs of these proceedings.

21. For the above reasons, the Court will order that each party bear its own costs of the proceedings.

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Decision last updated: 29 March 2022