FEDERAL COURT OF AUSTRALIA

Brasington v Overton Investments Pty Ltd [2001] FCA 571

RITA BRASINGTON v OVERTON INVESTMENTS PTY LTD

N 878 OF 1999

EMMETT J

30 APRIL 2001

SYDNEY

THE COURT ORDERS THAT:

1. Richard John Shipman and Cheryl Ann Patrick be granted leave to file an amended notice of motion seeking:

·        leave to file a cross claim, and

·        relief against:

-       Overton Investments Pty Limited, and

-       Cuzeno RVM Pty Limited,

in relation to the fund held by the solicitors for Cuzeno RVM Pty Limited in respect of the consideration for the proposed grant of a new lease.

2. The amended notice of motion be made returnable before Emmett J for hearing on 12 June 2001 at 10.15am.

3. Richard John Shipman and Cheryl Ann Patrick pay the costs of the motion returnable today incurred by:

·        Overton Investments Pty Limited, and 

·        Cuzeno RVM Pty Limited.

4. Overton Investments Pty Limited and Cuzeno RVM Pty Limited be granted leave to have a bill of costs taxed forthwith pursuant to Order 63 Rule 3(2) of the Federal Court Rules, notwithstanding that the principal proceeding in which that order is now made is not yet concluded.

5. The time for Overton Investments Pty Limited to file its evidence in the matters listed for hearing on 12 June 2001 be extended, up to and including 1 June 2001.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 28 March 2001 I ordered that an amended notice of motion brought by Richard Shipman and Cheryl Patrick (“the executors”) in proceeding N 871 of 1999 (“the Shipman proceeding”) be dismissed.  I ordered that they pay the costs of the motion.  Overton Investments Pty Ltd (“Overton”) asked that I make an order under Order 62 Rule 3(2) in respect of those costs.  At that stage I reserved a decision on that question since at the same time I gave the executors leave to file a further notice of motion either in that proceeding or in proceeding N 878 of 1999.  In fact they filed a motion in proceeding N 878 of 1999 and have now indicated they do not wish to pursue the question of a further motion in the Shipman proceeding.  Accordingly, Overton renews its application for an order under Order 62 Rule 3(2).

2                     The motion in N 878 of 1999 is misconceived.  It seeks an order giving leave to file a cross claim and also seeks interlocutory relief of the nature sought in the motion that I dismissed on 28 March 2001.  It is apparent from the consideration of the trust deed that any interlocutory relief sought is premature.  Under the terms of the lease to the deceased, in particular clause 3(b) provides that the lease shall terminate upon the death of the lessee. Clause 13(1) of the trust deed provides in part:

“… a refund shall become payable by the Manager at … the termination of a Lease:-

(b) by reason of a death of a Lessee …

PROVIDED ALWAYS THAT the Trustee shall have received a Lease in respect of the … unit duly executed by the manager and the incoming Lessee together with the Lease price.”

3                     Clause 13(2) provides in part:

“A refund pursuant to [clause 13(1)] shall be payable…

(a) in the caseof termination of a Lease by death in accordance with clause 42.”

4                     Clause 13(4) provides in part:

“…the Manager must pay to whomsoever is entitled the full amount of the Refund PROVIDED THAT  such amount shall only be payable:-

(a)       upon production by whomsoever is so entitled to a legal release in respect of such Refund; and

(b)       in the case of a Refund paid to a Lessee's legal personal representative in accordance with Clause 42.”

5                     Clause 41(1) provides in part:

“Upon receipt by the Manager of:

(a) A duly completed request to surrender and re-lease substantially in the form of that contained in the 3rd Schedule, …; and

(b) A Form of Application and Lease in respect of the Unit duly signed by the Applicant together with the Lease Price; and

(c)  the Lessees Lease relating to the Unit or such other evidence as the Manager may require to prove the title of the Lessee, or his right to the Unit,

the Manager shall accept and record the surrender and re-leasing in the Register. …”

6                     Clause 42(3) provides in part:

“… a legal personal representative of a deceased Lessee … upon signing an authority substantially in the form set out in Part 1 of the 2nd Schedule hereto and on delivering up the Lease of such Unit to the Manager shall be regarded as the Lessee of such Unit for the purposes of claiming an entitlement to the Refund.”

7                     It is common ground that none of the steps contemplated by clauses 41 or 42 have yet been taken by the executors.  Accordingly it could not be suggested that at this point any refund is yet payable to them.  In so far as the motion that was returnable today sought interlocutory relief based on some such entitlement, it is misconceived.  In so far as today’s motion sought leave to file a cross claim, it is accepted that the cross claim is not in a form which should be filed.  In any event, as the executors have not made a request to surrender the lease, none of the relief sought in the proposed cross claim could yet arise.

8                     The executors also intended to rely on s 181 of the Retirement Villages Act 1999 (NSW).  Section 181 applies to former occupants of residential premises in a retirement village who do not own the residential premises concerned.  It contains provisions specifying the date upon which the operator of a retirement village must make refund of a former occupants ingoing contribution. 

9                     The way in which s 181 is pleaded in the proposed statement of claim is embarrassing and it could not be allowed to stand.  Accordingly it is clear that the motion that was filed pursuant to the leave that I gave on 28 March 2001 cannot succeed.  Rather than simply dismiss it, I have suggested that the executors be given leave to amend it, if, and when, the circumstances that would entitle them to any relief have arisen.

10                  Accordingly, I propose to give leave to file an amended notice of motion.  Such notice of motion to be made returnable before me on 12 June 2001 for hearing on that date at 10.15am.  I shall order the executors to pay the costs of that motion to date to the respondents to the motion, namely, Overton and Cuzeno RVM Pty Limited. 

11                  Overton has renewed its application for an order under Order 62 Rule 3(3) in respect of the costs of the motion in the Shipman proceeding, which I dismissed on 28 March 2001. It has also sought an order under Order 62 Rule 3(3) in respect of the costs of the motion in N 878 of 1999 returnable today.

12                  Order 62 Rule 3(3) provides as follows:

“An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.”

13                  The rationale for such a provision appears to me to be that, since an interlocutory proceeding does not resolve the final issues between the parties, it would, in ordinary circumstances, be inappropriate that an unsuccessful party in an interlocutory proceeding be required to pay costs immediately, since that party might ultimately be entitled to an order for costs in the substantive proceeding.  The general principle appears to be that costs ought to be resolved when the proceeding has been concluded, and the rights of the parties have been finally determined.

14                  However, the rule clearly contemplates that, in some circumstances, the principle should be varied.  Where costs have been incurred by one party by reason of an interlocutory application that is incompetent or misconceived, such that on proper analysis, it should never have been brought, it appears to me to be an appropriate circumstance in which to vary the ordinary rule. Where a final decision is some way off in a proceeding, either because it is lengthy and complex, or for some other reason, that is a factor that should be taken into account.  Any costs incurred by reason of an ill considered pleading may also give rise to an exception to the principle.

15                  I consider that those circumstances are present here.  While the executors’ claim, of itself, is not complicated or lengthy, the history of the proceeding indicates that it is likely to be some time before the matter is resolved, as it is very much tied up with many other proceedings that raise similar issues.  I have already decided proceedings brought by the Murphys against Overton ([2000] FCA 801). The orders that I made in that proceeding are the subject of an appeal to the Full Court which is still reserved.  I have fixed for hearing on 12 June 2001 the part heard case brought by Mr Carnegie against Overton (proceeding N 857 of 1999). 

16                  It could not be suggested that the Shipman proceeding is being delayed in any way. I do not understand there to be any suggestion that the conduct of the proceeding has been unreasonable in so far as it has not yet been brought on for hearing. Nevertheless, as it is inextricably intertwined with the other proceedings, it will be some time before the Shipman proceeding will be brought on for hearing.  On the other hand, the motion brought in that proceeding on 28 March 2001 was misconceived, as I indicated in my reasons on that occasion (see [2001] FCA 410). 

17                  For the reasons I have just outlined, the motion, brought pursuant to the leave that I gave on 28 March 2001 and which was returnable before me today, is also misconceived. In the circumstances I consider that it is appropriate that I make an order as is contemplated by Order 62 Rule 3(2). The costs of the motion that I dismissed on 28 March 2001 in the Shipman proceeding, and the costs of the motion in N 878 of 1999 that was returnable today, may be taxed forthwith.

Associate:

Dated:              16 May 2001