Urban Traders Pty Limited v Proceris Pty Limited

[2005] NSWSC 409

CITATION:	Urban Traders Pty Limited v Proceris Pty Limited [2005] NSWSC 409
HEARING DATE(S):	26/04/05
JUDGMENT DATE :	26 April 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Einstein J
DECISION:	Indemnity costs ordered

CATCHWORDS:	Costs - Indemnity costs
LEGISLATION CITED:	Conveyancing Act 1919 (NSW)
PARTIES:	Urban Traders Pty Limited ACN 065 803 661 (Plaintiff) Proceris Pty Limited ACN 091 569 176 (Defendant)
FILE NUMBER(S):	SC 2055/05
COUNSEL:	Mr D Hammerschlag SC, Mr G Sirtes (Plaintiff) Mr T Alexis SC, Ms P Sibtain (Defendant)
SOLICITORS:	Cara Marasco & Company (Plaintiff) Hazan Hollander (Defendant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Tuesday 26 April 2005 ex tempore
Revised 29 Apirl 2005

2055/05 Urban Traders Pty Limited v Proceris Pty Limited

JUDGMENT

1 These proceedings were heard on 8 April 2005 and a reserved judgment was delivered on 20 April 2005. The proceedings are presently before the court for the purpose of determination of the precise orders to be made and for the purpose of orders in relation to costs being made.

2 As I indicated in the judgment the proper approach in terms of the principled exercise of the court’s relevant discretion is to stay the proceedings. To my mind the formal terms of that appropriate order should be that the proceedings be stayed until further order.

3 The issue of costs has been the subject of written submissions advanced by the defendant and submissions from the bar table by Mr Sirtes of counsel who appears for the plaintiff.

4 In my view there is substance in the submissions put by the defendant in this regard. The defendant has sought an order for indemnity costs.

5 In my view the following submissions by the defendant are appropriate to be adopted in their entirety and I do so.

6 The defendant has achieved success in resisting the order being made pursuant to section 66G of the Conveyancing Act 1919 (NSW).

7 On 15 March 2005, the plaintiff demanded the defendants “full co-operation in the facility of the sale” of the subject property. The plaintiff informed the defendant that any failure by the defendant to immediately co-operate in such a sale would result in the plaintiff initiating court proceedings pursuant to section 66G.

8 On 17 March 2005, the plaintiff then invited the defendant to participate in a mediation conference (but not pursuant to the joint venture agreement).

9 The plaintiff gave the defendant until 18 March 2005 to respond to the invitation. The plaintiff informed the defendant that any failure to respond in time would result in an application to the court. The time given by the plaintiff for the defendant to respond was, I accept, clearly unreasonable.

10 I further accept that not surprisingly the defendant responded on 18 March 2005 seeking further time to seek instructions in relation to the mediation. The following business day namely 21 March 2005 at 11.13 am saw the plaintiff give the defendant a little over 5 hours to respond to its request for a mediation. Later that same day the defendant informed the plaintiff that it could not commence court proceedings without first providing written notice of the dispute pursuant to clause 20 of the Joint Venture Agreement.

11 I accept that the defendant clearly and expressly put the plaintiff on notice that it would tender that letter to the court should the plaintiff commence proceedings without first complying with the requirements of the agreement.

12 On 22 March 2005, the summons in the proceedings was filed by the plaintiff clearly in face of this warning and clearly in blatant disregard of the joint venture agreement.

13 As the defendant has submitted, the finding was that prior to any entitlement to commence proceedings, the plaintiff was obliged to provide the defendant with a written notice specifying the nature of the dispute. The defendant stated as much to the plaintiff on 21 March 2005. In light of the letter from the defendant’s solicitors on 21 March 2005, it seems to me, as the defendant has submitted, that the plaintiff has acted unreasonably in commencing proceedings.

14 The proposition put forward by Mr Sirtes has essentially been that to an extent when one reads the reasoning in the judgment of 20 April 2005, the plaintiff succeeded in some areas of the matters which were in issue. However, to my mind that submission whilst correct, fails entirely to take into account that where a plaintiff, as here, commences proceedings in the face of a clause requiring that prior to such proceedings being commenced there be first provided written notice of the dispute, the plaintiff takes its chances on an application for the proceedings to be stayed. To the extent that the judgment dealt with some matters by way of issues material to the stay application, that is simply a concomitant of the bigger picture which was that the defendant was taking its stance on its entitlement to have a stay and succeeded in that regard.

15 I grant leave to file the affidavit of Bruce Jamieson of 26 April 2005 in court. In that affidavit Mr Jamieson deposes to certain circumstances which followed the delivery of the reserved judgment, namely that on 15 April the parties attended a mediation before Miss Mary Walker, that mediation having been adjourned until 1.00pm on Thursday 28 April 2005. The affidavit also makes clear that on 21 April 2005, yet another notice of termination has been served on the defendant.

16 To my mind nothing in Mr Jamieson’s affidavit of 26 April 2005 suggests that a principled exercise of the court’s discretion to order costs on an indemnity basis would be incorrect.

17 For those reasons the court’s orders are as follows:

1. Order that the proceedings be stayed until further order.
2. Order that the plaintiff pay the defendant’s costs on an indemnity basis.
3. The parties have liberty to apply to the court on reasonable notice.


I certify that paragraphs 1 -18
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 26 April 2005 and revised
on 29 April 2005

___________________
Susan Piggott
Associate

29 April 2005