Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd (No 2)
[2023] QSC 55
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- Unreported Judgment
- Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd (No 2)[2023] QSC 55
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Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd (No 2)[2023] QSC 55
Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd (No 2)[2023] QSC 55
SUPREME COURT OF QUEENSLAND
CITATION: | Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd (No 2) [2023] QSC 55 |
PARTIES: | RECYCLING DEVELOPMENTS PTY LTD ACN 132 325 314 (first plaintiff/first respondent) TEB ENTERPRISES PTY LTD ACN 142 685 372 ATF THE PERROTT FAMILY TRUST ABN 95 197 523 153 (second plaintiff/second respondent) v BESPOKE RECYCLING INDUSTRIES PTY LTD ACN 634 377 030 (first defendant) ROCKY POINT HOLDINGS PTY LTD ACN 645 224 755 ATF ROCKY POINT TRUST ABN 96 370 426 600 (second defendant/applicant) |
FILE NO: | BS No 4963 of 2022 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 24 March 2023 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Orders made on consideration of written submissions with no oral hearing |
JUDGE: | Davis J |
ORDER: | The second defendant, Rocky Point Holdings Pty Ltd, pay the plaintiffs’ costs of the application in the event that it does not obtain an order for specific performance of any contract arising from the exercise of rights under the Call Option Deed. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE – COSTS FOLLOW EVENT – where the second plaintiff owned land – where the second plaintiff and second defendant and others entered into a Call Option Deed – where the second defendant purported to exercise rights under the Call Option Deed to acquire the land – where the second plaintiff contests the exercise of the option – where the second defendant lodged a caveat over the land – where proceedings by counterclaim were commenced to maintain the caveat – where the Registrar of Titles was not notified of the proceedings – where the caveat lapsed – where the second defendant sought leave to lodge a second caveat – where the plaintiffs resisted the application – where the second defendant obtained leave to lodge a second caveat – where the second defendant claimed costs of the application – where the plaintiffs claimed costs – whether the second defendant or the plaintiffs ought to pay costs Land Title Act 1994, s 126 |
CASES: | Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20, related |
COUNSEL: | N H Ferrett KC made written submissions for the applicant/second defendant D de Jersey KC made written submissions for the respondent/first and second plaintiffs |
SOLICITORS: | Francom Legal for the applicant/second defendant Clayton Utz for the respondent/first and second plaintiffs |
- [1]On 17 February 2023, the second defendant (Rocky Point Holdings Pty Ltd) was granted leave to lodge a second caveat over real property owned by the second plaintiff (TEB Enterprises Pty Ltd).[1]
- [2]Although only TEB Enterprises Pty Ltd (TEB) owned the land, the application to lodge the second caveat was brought against both plaintiffs, TEB and Recycling Developments Pty Ltd (Recycling).
- [3]Orders were made on 17 February 2023 to deal with costs on written submissions.
- [4]Rocky Point Holdings Pty Ltd (Rocky Point) did not file and serve written submissions by 24 February 2023 as ordered.
- [5]TEB and Recycling (jointly, the plaintiffs) filed and served written submissions as ordered on 3 March 2023.
- [6]Rocky Point eventually filed and served its submissions on 9 March 2023.
- [7]No point is taken by the plaintiffs as to Rocky Point’s noncompliance with the orders.
- [8]The principal dispute between the parties arises from a series of agreements concerning a refuse recycling business. Proceedings were commenced by the plaintiffs claiming declarations to the effect that they had validly terminated the agreements. Damages and other relief are also sought.
- [9]Rocky Point and the other defendant, Bespoke Recycling Industries Pty Ltd defended and counterclaimed. Rocky Point claimed declaratory relief and also specific performance of a document styled “Call Option Deed”.
- [10]If the Call Option Deed was specifically performed, Rocky Point would acquire from TEB the land on which the refuse recycling business was being conducted. The Call Option Deed, therefore, gave TEB a caveatable interest. On 20 July 2022, Rocky Point lodged a caveat over TEB’s land (The First Caveat).
- [11]The Defence and Counterclaim was filed on 23 September 2022. As earlier observed Rocky Point claimed specific performance of the Call Option Deed. The Counterclaim, therefore, supported The First Caveat.
- [12]However, notification of the counterclaim was not given to the Registrar of Titles and so The First Caveat lapsed.[2] Rocky Point’s submissions on the application for leave to lodge a second caveat were essentially:
- Rocky Point has shown an arguable claim to the land.
- The notification was not given to the Registrar of Titles only through an error of Rocky Point’s solicitors.
- There is no relevant prejudice to TEB if the second caveat was lodged and the status quo maintained.
- [13]The plaintiffs submitted that there were four reasons why Rocky Point would not obtain an order for specific performance of any contract resulting from an exercise of the Call Option Deed. There is no need to analyse those submissions here. None of these were made out.[3]
- [14]Further the plaintiffs submitted that there was unacceptable prejudice that would flow from the lodgement of the second caveat. Those submissions were not successful.[4]
- [15]Two further submissions were made by the plaintiffs which Mr de Jersey KC submitted were relevant to the exercise of discretion;
- There was no satisfactory explanation by Rocky Point as to why the first caveat was allowed to lapse; and
- There was no satisfactory explanation by Rocky Point for the delay in making the application for leave to lodge a second caveat.
- [16]A relevant consideration on an application for leave to lodge a second caveat is an explanation as to why the caveat was allowed to expire.
- [17]The blame for the failure to advise the Registrar of the counterclaim, and thereby preserve The First Caveat, was laid at the feet of Ms Manousaridis, a solicitor who worked at the firm of solicitors representing Rocky Point. A solicitor of that firm, Ms Langan swore that a partner of the firm, Mr El Khoury asserted to her that the failure was “due to an administrative oversight on the part of … Ms Manousaridis”. No further or more detailed explanation was given. Other evidence suggested that Ms Manousaridis had left the firm before the time for advising the Registrar of Titles expired.
- [18]In relation to that evidence I commented in the principal judgment:[5]
“[76] The evidence explaining the failure to notify the Registrar of Titles of the counterclaim seeking specific performance is very thin. Evidence on such an issue should be direct and precise. The assertion of ‘administrative oversight’ by Ms Manousaridis is vague and ambiguous. There is no evidence that Ms Manousaridis was asked to provide direct evidence of the circumstances which led to the Registrar of Titles not being notified of the counterclaim. Even if Ms Manousaridis was not cooperative, surely Mr El Khoury could provide some better explanation of the circumstances.”
- [19]After extensive argument, I observed:[6]
“[79] However, Mr de Jersey KC did not seek to cross-examine either Mr Murray or Mr El Khoury. There is unchallenged evidence that:
- the first caveat was lodged;
- the counterclaim was filed asserting a right to specific performance;
- Ms Manousaridis, who had carriage of the matter for Bespoke Recycling and Rocky Point, left the employ of Francom Legal;
- Mr Murray became aware on 5 December 2022 that TEB was marketing the land for sale;
- he then instructed his solicitors to contact Clayton Utz and secure Rocky Point’s position by lodgement of a second caveat.”
And drew inferences:[7]
“[80] From those facts I draw the inferences that:
- the counterclaim was intended to support the caveat;
- some error has occurred within the offices of Francom Legal which has led to the notification not being given to the Registrar;
- Mr Murray acted by giving Francom Legal instructions to lodge a second caveat as soon as he saw the threat of TEB disposing of the land to a third party;
- altogether, those facts demonstrate that the intention was always to maintain the first caveat and press the claim for specific performance in the counterclaim.”
- [20]Further, there was an unexplained delay in bringing the application. Rocky Point’s solicitors became aware on or about 26 October 2022 that The First Caveat had expired. On 5 December 2022, evidence came to Rocky Point indicating that TEB may be about to sell the land. Rocky Point then took action.
- [21]There was no evidence explaining why no action was taken between 26 October 2022 and 7 December 2022 when Rocky Point’s solicitors wrote to the plaintiffs’ lawyers requiring some assurance that the land would not be sold.
- [22]Although Mr de Jersey KC lost on those points, I think they were reasonable points to explore given the paucity of evidence offered by Rocky Point. In the circumstances it was not unreasonable for the plaintiffs to maintain their position and not consent to a second caveat being lodged.
- [23]The necessity for the application was not in my view contributed to in any way by the plaintiffs. The error was that of Rocky Point’s solicitors. By force of the legislation, Rocky Point had to seek leave to lodge a second caveat having not complied with the statutory preconditions which gave it a right to maintain The First Caveat.
- [24]It would be unjust for the plaintiffs to have to bear Rocky Point’s costs of the application no matter what the outcome of the principal action might be. Should Rocky Point ultimately fail to establish its claim to the land then it would in my view be appropriate for Rocky Point to bear the plaintiffs’ costs of the application to lodge the second caveat. That is in my view the proper balance of the counter-veiling considerations.
- [25]The order will be:
- That the second defendant, Rocky Point Holdings Pty Ltd, pay the plaintiffs’ costs of the application in the event that it does not obtain an order for specific performance of any contract arising from the exercise of rights under the Call Option Deed.
Footnotes
[1]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20.
[2]Land Title Act 1994, s 126(4)(b).
[3]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20 at [28], [32]-[44], [45]-[51] and [52]-[57].
[4]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20 at [29], [58]-[68].
[5]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20 at [76].
[6]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20 at [79].
[7]Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20 at [80].