Supreme Court New South Wales

• Medium Neutral Citation: Powell v Stone [2014] NSWSC 574
• Hearing dates: Friday, 28 March 2014
• Decision date: 28 March 2014
• Jurisdiction: Equity Division - Duty List
• Before: Brereton J

Decision

Defendant pay plaintiff's costs fixed in the sum of $9,000

• Catchwords: REAL PROPERTY - Torrens title - caveats against dealings - whether rights to proceeds of sale under Family Court order creates caveatable interest - held it does not
• Legislation Cited: (NSW) Conveyancing Act 1919, s 66G
• Cases Cited: Efax Proprietary Limited v Charrer (Supreme Court (NSW), Young J, 30 October 1987, unreported); Epple v Wilson [1972] VR 440; Re Della-Franca's Caveat [1993] 1 Qd R 382; Simons v David Benge Motors Pty Ltd [1974] VR 585
• Category: Interlocutory applications
• Parties: Adam James Powell (plaintiff); Terri Stone (defendant)
• Representation: Counsel: R Macaulay (solicitor) (plaintiff); T Sperber (solicitor) (defendant); Solicitors: Pryor Tzannes & Wallis (plaintiff); Swaab Attorneys (defendant)
• File Number(s): 2014/91753

Judgment - ex tempore

1 HIS HONOUR: By summons filed on 26 March 2014, the plaintiff sought an order that the defendant forthwith withdraw a caveat lodged over certain property. The caveat claimed an interest described as follows:

As a person with a right to have their land sold and to have a portion of the proceeds of sale.

2 Underlying that claim were orders made between the parties in the Family Court of Australia on 17 December 2013: (1) that within sixty days the husband (the present plaintiff) pay the wife (the present defendant) the sum of $100,000; (2) that in the event that he fails to do so, he do all acts and things and sign all documents necessary so as to effect a sale of the property for the best price reasonably obtainable; and (3) that on completion of the sale, the husband and the wife do all acts and things necessary and execute all documents to cause the proceeds of sale to be disbursed in payment of agents commission, auctioneers expenses, solicitors costs, and disbursements referable to the sale and discharge of the mortgage; and finally, "payment to the wife of any of the sum due to her pursuant to order (1) herein plus interest on that sum at the rate in accordance with the Family Law Rules as from 30 November 2011."

3 A right to the proceeds of sale of property is not an interest in property [Epple v Wilson [1972] VR 440; Simons v David Benge Motors Pty Ltd [1974] VR 585; Efax Proprietary Limited v Charrer (Supreme Court (NSW), Young J, 30 October 1987, unreported).

4 A close analogy to this case is one where trustees are appointed for the sale of land and beneficiaries are given rights in the proceeds under (NSW) Conveyancing Act 1919, 66G, and its equivalents. In Re Della-Franca's Caveat [1993] 1 Qd R 382, it was plainly held that in such a case, the beneficiaries being those formerly interested in the land - have no caveatable or beneficial interest in the land. Their interest in the land is converted by the s 66G order into an interest in the proceeds of sale.

5 In the present case, the wife never had an interest in the land. The husband was ordered to sell the land, and had an obligation akin to that of a trustee for sale to do so, and then to account for the proceeds in a particular way, including in part to the wife. That does not create a caveatable interest in the land itself. The caveat was doomed to be removed. Eventually, that was done by agreement, and the only remaining matter is that of costs.

6 The plaintiff has assessed its costs in the sum of $11,000.

7 The defendant accepts that there should be an order that the defendant pay the plaintiff's costs, but disputes that they should be on an indemnity basis as the plaintiff seeks, and opposes a lump sum order being made.

8 At the outset, it seems to me that, given the size of this dispute, the amount remaining in issue, and the time which it has so far taken, it would be approaching the vexatious to require the parties to go through an assessment process over what is a relatively small amount.

9 When making a lump sum order, the practice of the court is to apply a discount to the total amount, in recognition of the fact that a relatively broad brush approach has been taken, and that because the assessment process is being avoided, the costs will be payable sooner and the costs creditor on that basis obtains an advantage.

10 As to whether the costs should be assessed on an indemnity basis, it seems to me that this is a case in which the caveat ought never have been lodged, and having been lodged, ought immediately have been withdrawn. The fact that through negotiations the defendant was able to prevail on the plaintiff in order to secure a speedy withdrawal, to give an additional undertaking, does not affect that initial position.

11 It needs to be clearly understood that the practice of lodging caveats in this type of situation is one to be deprecated, and one which the court will do its utmost to discourage. For that reason, were I referring the matter for assessment, I would order that the costs be assessed on the indemnity basis. That means they would be assessed on the basis that all costs would be allowed except to the extent that they were shown to be unreasonable.

12 However, having regard to the approach that the court conventionally takes on a lump sum application, I will discount the amount of the order, though not as much as ordinarily.

13 The court orders that the defendant pay the plaintiff's costs fixed in the sum of $9,000.

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Decision last updated: 04 December 2014