Wilson v Hickey - [2009] WASC 156

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WILSON -v- HICKEY [2009] WASC 156

CORAM: BEECH J

HEARD: ON THE PAPERS

DELIVERED : 8 JUNE 2009

FILE NO/S: CIV 1456 of 2009

MATTER :In the matter of s 138C of the Transfer of Land Act 1983 (WA)

BETWEEN: LEIGH HERBERT WILSON
Plaintiff
AND
PETER ROBIN HICKEY
KATHERINE MAY BURNETT
First Defendants
THE REGISTRAR OF TITLES
Second Defendant
PERMANENT CUSTODIANS LTD (ACN 001 426 384)
Third Defendant

Catchwords:

Costs - Application to have caveator execute a withdrawal of caveat on certain conditions - No substantial dispute as to order sought - Appropriate costs order - Turns on own facts

Legislation:

Nil

Result:

Plaintiff to pay third defendant's costs of the application

Category: B

Representation:

Counsel:

Plaintiff:     No appearance
First Defendants            :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance

Solicitors:

Plaintiff:     Western Legal
First Defendants            :     Gadens Lawyers
Second Defendant         :     Gadens Lawyers
Third Defendant            :     Gadens Lawyers

Case(s) referred to in judgment(s):

Nil

BEECH J: On 10 March 2009 I ordered, without opposition from the third defendant, that the operation of a caveat lodged by the plaintiff be extended until further order. On 23 April 2009, on the third defendant's application and by consent, I ordered that the plaintiff withdraw the caveat on certain conditions. The substance of the third defendant's application was able to be resolved without any substantial dispute, but the question of the costs of the application has led to an exchange of contentious affidavits and submissions. That is, to say the least, a regrettable situation, but it is one which seems to me to be all too common.
Both the plaintiff and the third defendant seek an order for the costs of the third defendant's application.
For the reasons that follow, I would order that the plaintiff pay the third defendant's costs of the application. In essence, that is because until 20 April 2009 the plaintiff failed to respond to the third defendant's proposal, made on 18 March 2009, substantially to the effect of the orders ultimately made by consent.
It is necessary to put the costs application into the context of the proceedings as a whole.
The proceedings concern a caveat lodged by the plaintiff over land owned by the first defendants. The plaintiff, Mr Leigh Wilson, lodged a caveat on 9 August 2007 claiming an interest in the land under an undated deed evidently executed some time in 2007. By the deed, the first defendants became the registered proprietors of the land on condition that on the permanent departure of their father/father-in-law from the property, on his death, or on sale of the property, they would pay to the plaintiff and to another person one-third each of the then value of the property. The deed also provided that the first defendants would charge their assets to secure payment of that sum.
Subsequently, on 8 February 2008, a mortgage in favour of the third defendant was registered. The mortgage had been granted by the first defendants on 14 March 2007.
On 17 February 2009 the Registrar of Titles issued a notice pursuant to s 138B of the Transfer of Land Act 1983 (WA). The notice was given at the request of the first defendants. The notice stated that the caveat would lapse 21 days after the deemed date of service of the notice unless extended by court order.
On 9 March 2009 the plaintiff commenced these proceedings by originating summons, and also applied by chambers summons for an interim order for the extension of the caveat.
The proceedings came before me on 10 March 2009. The plaintiff and the third defendant appeared at the hearing. On 10 March 2009 I made the following orders:
1.The time for service of this summons be abridged;
2.Permanent Custodians Ltd (ACN 001 426 384) of 5/35 Clarence Street, Sydney, New South Wales ('Permanent') be joined as the third defendant to these proceedings.
3.Subject to paragraphs 4 and 5 of these orders, the operation of the caveat bearing registered dealing number K301952 lodged against the first defendants' land situate at and known as 66 Holman Street Alfred Cove in the State of Western Australia and being lot 124 on plan 5272 and being the whole of the land comprised in Certificate of Title Volume 1177 Folio 516 be extended until further order of this Court.
4.The plaintiff do serve a copy of these orders on the first defendants by no later than 4pm on 24 March 2009.
5.The plaintiff do within 14 days of the date of these orders commence proceedings in this court by writ of summons for the purpose of determining the claims of the plaintiff and Permanent in respect of the property the subject of the caveat. The plaintiff should also apply for those proceedings to be in the CMC List, with Beech J as Case Manager.
6.The costs of these proceedings be reserved to the trial judge of the proceedings commenced pursuant to paragraph 5.
7.The parties have liberty to apply upon three days' written notice.
8.In the event that the first defendants invoke their liberty to apply to discharge the order in paragraph 3, the onus shall be on the plaintiff in all respects to satisfy the Court that the operation of the Caveat should be extended.
9.The matter be entered in the CMC List with Beech J as Case Manager.
There was no substantial dispute as to the making of those orders.
In the course of the hearing on 10 March 2009 it emerged that the property was subject to a contract of sale that was due to settle on 24 April 2009. Counsel for the third defendant foreshadowed an application to have the caveat removed on condition that one-third of the proceeds of sale be retained. I made the following observations:
Without expressing any concluded views on the matter I would have to say it would seem unfortunate if the court would need to become involved in circumstances where it is, as I understand it at least, clear that the full extent of the plaintiff's claimed interest is to one-third of the proceeds of sale. If one-third of the proceeds of sale were retained pending the resolution of issues as to entitlement, it would not be easy at the moment to see the purpose of extending the operation of the caveat against that and thereby preventing any sale (ts 6).
In fact, well before 10 March 2009 the proposal for the conditional removal of the caveat with the retention of one-third of the proceeds of sale had been conveyed by solicitors for the third defendant to the plaintiff's solicitors by letter of 16 December 2008.
On 18 March 2009 solicitors for the third defendant wrote to the plaintiff's solicitors. The letter enclosed a copy of the contract for sale of the land, noting that the contractual settlement date was 24 April 2009 and that the third defendant wished to bring settlement forward to a date to be confirmed.
The letter referred to the observations that I had made on 10 March 2009 and enclosed a draft memorandum of consent orders. The draft memorandum of consent orders enclosed with the letter included orders, in substance, to the following effect:
(a)the plaintiff would execute a withdrawal of caveat and deliver it to the third defendant's solicitors, who would hold it in escrow; and
(b)one-third of the net proceeds of sale of the land would be held in trust by the plaintiff's solicitors, and the balance would be distributed to the third defendant to apply it against the first defendants' mortgage.
The letter sought the plaintiff's solicitors views on the draft orders, requesting a response by 20 March 2009. The letter also requested information as to how the first defendants might be contacted.
Mr Boni, the plaintiff's solicitor, says in his affidavit sworn 4 May 2009 that he considered the letter of 18 March 2009 to be 'a little pre-emptive' because the first defendants had not then been served with the originating summons or any subsequent documentation. I do not accept that there was anything premature about the letter of 18 March 2009. To the contrary, given that a settlement was due in five weeks and that the third defendant sought an earlier settlement, it would have been wrong for the third defendant's solicitors to have delayed in writing this letter. The letter requested a prompt response and its subject matter called for a prompt response, but it did not receive a prompt response. As will appear, the plaintiff did not respond until 20 April 2009.
On 23 March 2009 the plaintiff's solicitors wrote to the third defendant's solicitors. The letter stated that the plaintiff's solicitors were awaiting instructions regarding the proposed consent orders and would revert to the plaintiff's solicitors shortly.
On 25 March 2009 Mr Boni spoke with Mr Albrecht, solicitor for the third defendant, by telephone. Mr Boni told Mr Albrecht that he was yet to receive instructions from the plaintiff about the third defendant's proposed consent orders. They also discussed the merits of the substantive claim of the third defendant to the entire proceeds of sale.
On 7 April 2009 Mr Boni and Mr Albrecht again spoke by telephone. It is common ground that Mr Boni told Mr Albrecht that he was preparing a letter to send. Mr Albrecht says, and Mr Boni denies, that Mr Boni told Mr Albrecht that he did not have instructions from the plaintiff in respect of the proposed consent orders. It is neither necessary nor appropriate to attempt to resolve that conflict. What is evident from Mr Boni's affidavit is that, in fact, as at 7 April 2009 Mr Boni still did not have instructions from the plaintiff in respect of a proposal which had been emailed to him almost three weeks earlier. The letter of 18 March 2009 had requested a response by 20 March 2009.
In my opinion, it was incumbent upon the plaintiff's solicitor to have obtained instructions well before 7 April 2009. The matters referred to in Mr Boni's affidavit do not, to my mind, provide a satisfactory explanation for the failure to do so. Any ongoing discussion of the merits of the substantive claim did not detract from the need to deal with the existence of the caveat in light of the impending settlement of the sale of the property.
On 8 April 2009 the third defendant filed a chamber summons seeking orders substantially to the effect that had been set out in the proposed consent orders attached to the letter of 18 March 2009, although it was proposed that the one‑third proceeds of sale be held in the third defendant's solicitors' trust account, not in the plaintiff's solicitors' trust account.
The plaintiff contends, in his submissions, that the filing of this application without first giving three days' written notice involved a contravention of par 7 of the orders of 10 March 2009. That submission involves a misunderstanding of the effect of an order of liberty to apply on a stipulated amount of notice. Liberty to apply on three days' written notice requires that the liberty be invoked in writing, and that any hearing resulting from that invocation be listed not less than three days after the written notice invoking the liberty is served. It does not require that a party intending to invoke the liberty gives three days' prior written notice to the other party of its intention to do so.
The third defendant's application was listed for 23 April 2009. By letter of 9 April 2009, my associate requested that the plaintiff file submissions in opposition to the third defendant's application by no later than 4.00 pm 15 April 2009. There was neither compliance with nor a response to that request.
On 17 April 2009 Mr Boni received instructions from the plaintiff that he should agree orders with the third defendant on the basis that the plaintiff's solicitors hold the money on trust and attend settlement of the property. The plaintiff instructed Mr Boni to negotiate to have $350,000 set aside from the proceeds of the sale of the property. This figure represented approximately 42% of the value of the property.
On 20 April 2009 the plaintiff's solicitors wrote to the third defendant's solicitors enclosing the form of orders to which, the letter said, the plaintiff would consent. In substance, the orders proposed that the plaintiff would attend at settlement with a withdrawal of caveat, $350,000 would be paid into the plaintiff's solicitors' trust account to be held on trust until further order, with the remainder to be distributed to the third defendant under the mortgage.
This letter came almost five weeks after the third defendant's letter of 18 March 2009.
Late on 20 April 2009, Mr Albrecht and Mr Boni spoke about the orders that had been proposed by Mr Boni. Mr Albrecht said that the third defendant would not agree to setting aside $350,000, but would agree to set aside one-third of the proceeds of sale and the remaining orders proposed by the plaintiff. The question of costs was raised and no agreement was reached. Mr Boni says that he expected, as a result of this telephone conversation, that an amended form of the minute of consent orders would be prepared by Mr Albrecht and provided to him. Mr Albrecht considered that because the issue of costs had not been resolved, a memorandum of consent orders was not appropriate.
Mr Boni attended the hearing on 23 April 2009 expecting that a minute of consent orders would be handed up. No party had prepared a minute of consent orders. However, orders were ultimately made by consent to dispose of the third defendant's application. The orders made were as follows:
1.The plaintiff shall by 5.00 pm on 23 April 2009 do all things necessary to promptly deliver the third defendant's solicitors a withdrawal of the caveat bearing registered dealing number K301952 lodged against the first defendants' land situate at and known as 66 Holman Street Alfred Cove in the State of Western Australia and being lot 124 on plan 5272 and being the whole of the land comprised in Certificate of Title Volume 1177 Folio 516 in registrable form.
2.The third defendant's solicitors shall upon delivery to them by the plaintiff of the withdrawal of caveat referred to in paragraph 1 herein, hold the said document in escrow until settlement of the sale of the property occurs on 24 April 2009 or if settlement occurs on a date before or after then, then at that time.
3.After the settlement of the sale of the first defendants' land situate at and known as 66 Holman Street Alfred Cove in the State of Western Australia and being lot 124 on plan 5272 and being the whole of the land comprised in Certificate of Title Volume 1177 Folio 516 the third defendant's solicitors are to bank the proceeds of sale and thereafter act in accordance with paragraphs 4 and 5 of this order.
4.One-third of the gross proceeds of the sale of the land situate at and known as 66 Holman Street Alfred Cove in the State of Western Australia and being lot 124 on plan 5272 and being the whole of the land comprised in Certificate of Title Volume 1177 Folio 516 be distributed to an interest bearing trust account maintained by Western Legal, solicitors for the plaintiff to be held on such trust until further order of this Honourable Court.
5.The balance of the proceeds of the sale of the land situate at and known as 66 Holman Street Alfred Cove in the State of Western Australia and being lot 124 on plan 5272 and being the whole of the land comprised in Certificate of Title Volume 1177 Folio 516 be distributed to the third defendant and the third defendant is to apply these funds in accordance with paragraph 6 herein.
6.The third defendant shall apply the balance of the proceeds of the sale of the land to reducing the [first] defendants' liability under the said mortgage, and if there is a surplus thereafter, to transfer any said surplus to the [first] defendants.
7.The parties have liberty to apply on one day's written notice.
8.The plaintiff have leave to file and serve an affidavit and submissions on the question of costs by 30 April 2009.
9.The third defendant file and serve any affidavit in reply and its submissions on costs by 7 May 2009.
10.The question of costs is to be determined on the papers.
In substance, the orders made reflected what had been proposed by the third defendant's solicitors in their letter of 18 March 2009 with only one exception. The exception was that one-third of the gross proceeds, rather than one‑third of the net proceeds, was to be retained in the plaintiff's solicitors' trust account. It appears from the affidavits of the solicitors that Mr Boni considered that that change had been agreed in the telephone conversation of 20 April 2009, while Mr Albrecht believed it was agreed only on the morning of 23 April 2009.
The plaintiff submits that the third defendant filed the chamber summons without having conferred in accordance with O 59 r 9 of the Rules of the Supreme Court 1971 (WA). In this regard, Mr Boni says, in his affidavit, that during a telephone conversation with Mr Albrecht, Mr Albrecht failed to say that the conversation amounted to conferral under O 59 r 9. In my opinion, that submission and evidence involves a misunderstanding of O 59 r 9. The third defendant's solicitors' letter of 18 March 2009 set out what was proposed by the third defendant and the reasons for it. The letter invited a response. The letter also explained the need for the response to be made in a timely way, given the impending settlement. In a letter of 23 March 2009 to the third defendant's solicitors, and in the telephone conversation of 25 March 2009 with Mr Albrecht, Mr Boni said that he did not have instructions in relation to the proposal. On 7 April 2009, he still did not have instructions in relation to it. Given the impending settlement, the third defendant was not required to wait indefinitely while Mr Boni obtained instructions.
In my opinion, the most important consideration in the exercise of the costs discretion is that the first response from the plaintiff to the third defendant's proposal in its letter of 18 March 2009 (and which had been already foreshadowed and substantially made in the letter of 16 December 2008) came on 20 April 2009. The plaintiff should, I find, have responded by 7 April 2009 and avoided the need for the third defendant having to bring the application at all. Having failed to do so, the plaintiff should have acted with urgency to avoid the need for a hearing. It did not do so.
For these reasons, I order that the plaintiff pay the costs of the third defendant's application dated 8 April 2009, to be taxed if not agreed.