Warwick Green Building Pty Ltd v Woodward - [2021] NSWSC 362

Supreme Court

New South Wales

Medium Neutral Citation: Warwick Green Building Pty Ltd v Woodward [2021] NSWSC 362
Hearing dates: On the papers
Date of orders: 9 April 2021
Decision date: 09 April 2021
Jurisdiction: Equity
Before: Darke J
Decision:
First and second defendants ordered to pay two-thirds of the plaintiff’s costs of the proceedings.

Catchwords:
COSTS – proceedings commenced alleging that a mortgage was an alienation of property with intent to defraud creditors – no letter of demand issued prior to commencement – mortgage discharged soon after commencement – proceedings discontinued – appropriate order for costs is that defendants pay two-thirds of plaintiff’s costs

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 98
Conveyancing Act 1919 (NSW), s 37A
Uniform Civil Procedure Rules 2005 (NSW) rr 12.1, 42.19

Cases Cited:
Bates v Lloyd [2005] NSWSC 1253
OPENetworks Pty Ltd v Myport Pty Ltd [2019] FCA 1659
Windgap Foundation Ltd v Solomons [2018] NSWSC 809

Category: Costs
Parties: Warwick Green Building Pty Ltd (Plaintiff)
Leonie Nicole Woodward (First Defendant)
John Leonard Crampton (Second Defendant)
Registrar-General of NSW (Third Defendant)
Representation:
Counsel:
Mr M McCall (Plaintiff)
Mr D A Moujalli (First and Second Defendants)
Solicitors:
MJO Legal (Plaintiff)
Jason McClung Solicitor (First and Second Defendants)
Fiona Harris, Office of the Registrar-General (Third Defendant)

File Number(s): 2020/308452
Publication restriction: None

Judgment

These proceedings were commenced by Statement of Claim filed on 28 October 2020. The plaintiff sought relief pursuant to s 37A of the Conveyancing Act 1919 (NSW) in respect of a mortgage granted by the first defendant in favour of the second defendant over a property in Boambee. The mortgage was granted on 28 July 2020 and registered on 30 July 2020. The third defendant, the Registrar-General, filed a submitting appearance save as to costs.
The proceedings were listed for directions on 19 November 2020. However, on 16 November 2020, the solicitor for the first and second defendants caused a Discharge of Mortgage to be lodged in respect of the mortgage, and informed the plaintiff’s solicitors of that fact. The discharge had been registered by 19 November 2020. In the meantime, a consent order was made standing the proceedings over to 27 November 2020 for further directions.
On 26 November 2020 orders were made, again by consent, including an order that “the proceedings are discontinued with costs reserved”. Directions were also made for the filing of evidence and submissions on the question of costs, with that question to be dealt with on the papers.
The plaintiff contends that the appropriate order for costs is that the first and second defendants pay the plaintiff’s costs of the proceedings. The first and second defendants contend that the Court should order that the plaintiff pay the first and second defendants’ costs of the proceedings, or alternatively that there be no order as to costs.
The plaintiff relies upon the affidavits of Peter James, solicitor, of 3 December 2020 and 22 December 2020. The first and second defendants rely upon the affidavit of Jason McClung,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 362
Decision Date: 09 April 2021

CaseChat Overview and Summary

Warwick Green Building Pty Ltd initiated proceedings against Woodward, asserting that a mortgage held by Woodward over property owned by Warwick Green was an alienation of property with intent to defraud creditors. The matter was heard in the Supreme Court of Queensland. The crux of the dispute revolved around whether the mortgage was a fraudulent conveyance and if Warwick Green was entitled to recover the property or damages from Woodward. Additionally, the court had to determine the appropriate allocation of costs given the circumstances of the case.

The primary legal issue before the court was whether Warwick Green's failure to issue a letter of demand before commencing proceedings precluded them from recovering costs. Furthermore, the court needed to assess whether the discharge of the mortgage shortly after the proceedings were initiated impacted the costs order. The discharge of the mortgage meant that Warwick Green no longer sought to recover the property or damages, but the question remained whether Woodward should bear the costs incurred by Warwick Green.

The court found that the absence of a letter of demand did not preclude Warwick Green from seeking costs, particularly since the mortgage was discharged soon after the proceedings began. The court held that the circumstances justified an order for costs, with the defendants paying two-thirds of the plaintiff’s costs. This decision reflected the court's view that Woodward's actions warranted some financial responsibility despite the proceedings being discontinued. The court ordered Woodward to pay two-thirds of Warwick Green's costs, recognising the need to balance the interests of both parties in light of the mortgage's discharge and the procedural context of the case.

Orders