JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : WEDGEPOINT PTY LTD -v- RICHKING NOMINEES PTY LTD [2012] WASC 335 CORAM : ALLANSON J HEARD : ON THE PAPERS DELIVERED : 14 SEPTEMBER 2012 FILE NO/S : CIV 2063 of 2012 MATTER : Section 138(2) of the Transfer of Land Act 1893 BETWEEN : WEDGEPOINT PTY LTD Plaintiff
AND
RICHKING NOMINEES PTY LTD
First Defendant
THE REGISTRAR OF TITLES
Second Defendant
Catchwords:
Practice and procedure - Costs - Application to remove caveat - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1
Supreme Court Act 1935 (WA), s 37
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Transfer of Land Act 1893 (WA), s 138
Result:
No order as to costs
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Solicitors:
Plaintiff : Solomon Brothers
First Defendant : Culshaw Miller
Second Defendant : No appearance
Case(s) referred to in judgment(s):Binningup Nominees Pty Ltd v Brogue Tableau Pty Ltd [2004] WASC 14Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179; (2007) 35 WAR 27Donald Campbell & Co v Pollak [1927] AC 732Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534Midland Brick Co Pty Ltd v Welsh [2006] WASC 122; (2006) 32 WAR 287Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72Westpac Banking Corporation v Dunn [2011] WASC 7
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1 ALLANSON J: Wedgepoint Pty Ltd owns land at Jandakot. Richking Nominees Pty Ltd claims an interest in the land as a beneficiary of a trust. To protect that interest, Richking lodged a series of caveats over the land. These proceedings are about the fourth of those caveats.
2 Wedgepoint summonsed Richking to show cause why the caveat should not be removed. The parties were able to agree everything to resolve the application except who should pay the costs of it.
3 For the reasons below, there should be no order as to costs.
The underlying dispute
4 Wedgepoint is the registered proprietor of land described as lots 804, 805, 806, 809, and 810 on deposited plan 59956, being the whole of the land in certificate of title volume 2739 folios 162, 163, 164, 167 and 168. Those lots (and others) were created by the subdivision of three larger lots.
5 Richking claims that Wedgepoint holds the land as trustee. Wedgepoint has put into evidence two declarations of trust. Both are dated 24 January 2005. One refers only to one of the original lots. Wedgepoint does not dispute that it is authentic. The other refers to all three original lots. That one, Wedgepoint says, is not authentic. Whether or not it is will be decided in other proceedings.
6 Richking lodged the first two caveats before the land was subdivided; the later two caveats are over the subdivided lots. Richking lodged each of them to protect its interest under the disputed declaration of trust. Each was an absolute caveat, that is, it forbade absolutely the registration of any dealing.
7 Before it lodged the fourth caveat, Richking had agreed with Wedgepoint that it would provide signed withdrawals of the caveat to enable the sale of the subdivided lots. Richking and Wedgepoint also agreed how the proceeds from each sale would be applied.
8 In February and March 2012, after Richking had lodged the fourth caveat, Wedgepoint contracted to sell some of the remaining lots. Richking did not, at first, withdraw the caveat. This resulted in the buyers of one of the lots serving a default notice. Eventually, Richking withdrew the caveat on condition that an amount representing GST on the sale be paid into the trust account of Birman & Ride, solicitors, and retained in
(Page 4) the trust account pending resolution of a dispute between the parties about GST. This varied what the parties had earlier agreed, but it was done.
9 On 11 May 2012, settlement of the sale of lot 808 was due. Richking withdrew the fourth caveat to the extent necessary to enable settlement, and again on condition of payment of the GST amount into trust with Birman & Ride. Settlement occurred on 16 May 2012. 10 Wedgepoint then contracted to sell lots 803, 804, 805, 806, 807, 809, and 810. By 3 July 2012, the sales of lots 803 and 807 had settled. At the hearing on 4 July, Wedgepoint asked for orders removing the caveat on the remaining five lots.
11 Wedgepoint filed its summons on 20 June 2012. It filed a memorandum of conferral in which it said, in substance, that conferral was a letter dated 19 June 2012 from its solicitors to Richking. In that letter, Wedgepoint asked Richking to agree to withdraw the caveat on certain terms as to the manner of dealing with the proceeds of sale. I do not need to set out the detail of those terms: the letter described them as 'different to what was agreed, it is within the spirit of what was agreed'.
12 The summons was served on Richking's solicitors on 27 June 2012. On 28 June 2012 the solicitors for Wedgepoint forwarded a proposal to resolve the matter. That proposal differs in some points of detail, but not in substance, from the orders which were ultimately agreed. On 29 June 2012 (a Friday), Richking's solicitors wrote advising that they had instructions 'which indicate a likely agreement to the general substance of the arrangements proposed, but not necessarily as to the form'. The parties exchanged emails on 2 July 2012 and 3 July 2012, and were substantially in agreement by the hearing on 4 July.
The resolution of the application to remove the caveat
13 The parties agreed to orders under which:
(1) the caveat over the remaining lots was removed; (2) Richking was restrained by injunction from lodging further caveats;
(3) Wedgepoint undertook that it would not settle the sale of any of the lots unless it provided Richking with a copy of the proposed settlement statement at least 48 hours before settlement. The agreed orders also secured the purchase price received by Wedgepoint from the sale of the lots, after the payment of
(Page 5) specified obligations, but in a manner slightly different from that previously agreed by the parties.
Who should pay the costs 14 The costs are in the discretion of the court: Supreme Court Act 1935 (WA) s 37(1). The guiding principle in the exercise of the discretion is that the court will generally order that the successful party recovers its costs: Rules of the Supreme Court 1971 (WA) O 66 r 1. The discretion must be exercised judicially, and not on grounds unconnected with the litigation. But it is otherwise absolute, unconfined or unfettered: Oshlackv Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] - [22], [134]; Latoudis v Casey[1990] HCA 59; (1990) 170 CLR 534, 540, 558, 562, 568; Donald Campbell & Co v Pollak [1927] AC 732, 811.
15 Wedgepoint says Richking should pay its costs. It puts forward four reasons.
16 First, it was successful because it obtained orders removing the caveat, and costs should follow the event.
17 Second, Richking was not entitled to an absolute caveat because the interest it claimed was as the beneficiary of a trust: Binningup Nominees Pty Ltd v Brogue Tableau Pty Ltd [2004] WASC 14; Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179; (2007) 35 WAR 27.
18 Third, Richking acted unreasonably when it lodged an absolute caveat, and when it did not comply with the agreement it had made to supply withdrawals of the caveat to allow the sales of the subdivided lots. The unreasonableness is also shown by Richking ultimately consenting to orders that mirrored the earlier agreement between the parties.
19 Finally, the orders, in substance, are no different from those Wedgepoint proposed before it commenced proceedings.
20 Richking asks that the costs be reserved to, or made in the cause in, the main action: CIV 1953 of 2010.
21 I am not satisfied that I should make the costs orders sought by Wedgepoint.
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22 First, Wedgepoint was successful in removing the caveat. But Richking also succeeded to the extent of the undertakings offered by Wedgepoint, which protect Richking's position.
23 Second, had the matter proceeded, the caveat may have been removed because an absolute caveat was not required to protect Richking's interest as a beneficiary under the declaration of trust. But Richking may still have been entitled to an injunction to protect its interest: Midland Brick Co Pty Ltd v Welsh [2006] WASC 122; (2006) 32 WAR 287;Westpac Banking Corporation v Dunn [2011] WASC 7. Whether Richking was entitled to lodge an absolute caveat may not, in a practical sense, have determined the outcome of the proceedings. The court did not need to determine that issue, because Wedgepoint agreed to give undertakings.
24 Third, I accept that Richking had agreed to provide executed withdrawals of caveat, and did not do so. But there is some evidence that Wedgepoint was proposing arrangements for disbursement of the proceeds of sale that did not accord with the parties' earlier agreement. On the information I have available, I am not satisfied that I can fairly resolve whether Richking behaved unreasonably.
25 Whether Richking acted unreasonably was not an issue to be determined on the summons under s 138 of the Transfer of Land Act 1893 (WA). It would have been relevant to whether the court should grant an injunction, but the parties were able to agree those matters once they conferred.
26 Finally, the orders made reflect the proposals of each party - not merely those of Wedgepoint.
27 I do not accept Richking's submission that costs should be reserved, or in the cause, in other proceedings between the parties. Wedgepoint's application under s 138 was quite discrete. It has been finally determined, and the costs are discrete to that application.
28 There will be no order as to costs.