Lum v M V Developments (Lane Cove) Pty Limited (in liquidation) [2016] NSWSC 1248

Lum v M V Developments (Lane Cove) Pty Limited (in liquidation) [2016] NSWSC 1248

The issuing and maintaining of the lapsing notices, together with the liquidators' stated intention to ignore the contracts and market the properties, unreasonably forced the plaintiffs to commence proceedings to protect their proprietary interests. The liquidators were therefore properly treated as instigators of the litigation and ordered personally to pay the plaintiffs' costs. Their conduct before 2 May 2016 warranted costs on the ordinary basis, but their rejection of the plaintiffs' Calderbank offer of 2 May 2016 was unreasonable, warranting indemnity costs thereafter. A fixed sum costs order was not appropriate because the asserted reasons for bypassing ordinary assessment were not...

Jurisdiction
Australia
Judgment Date
07 September 2016
Procedural Posture
Equity Proceedings for Specific Performance of Contracts for Sale of Land and Costs / On the Papers; Declarations and Final Orders, Including Costs
Outcome
Declarations and orders were made for specific performance of the contracts for sale of land; the plaintiffs obtained costs against the liquidators of the first defendant, ordinary basis up to 2 May 2016 and indemnity basis thereafter; no fixed sum costs order or set-off was made.
Legal Topics
['specific Performance of Contracts for Sale of Land' 'caveats and Lapsing Notices' 'costs Against Liquidators Personally' 'ordinary Basis Costs' 'indemnity Costs' 'calderbank Offer' 'gross Sum Costs Order' 'set Off']
['costs' 'equity' 'property Law' 'insolvency'] ['specific Performance of Contracts for Sale of Land' 'caveats and Lapsing Notices' 'costs Against Liquidators Personally' 'ordinary Basis Costs' 'indemnity Costs' 'calderbank Offer' 'gross Sum Costs Order' 'set Off']

Case Brief

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Procedural Posture

Equity Proceedings for Specific Performance of Contracts for Sale of Land and Costs / On the Papers; Declarations and Final Orders, Including Costs

Legal Issues

  1. 1 ["Whether the liquidators of the first defendant should personally pay the plaintiffs' costs." "Whether any costs should be paid on the indemnity basis because of the liquidators' conduct or failure to accept Calderbank offers." 'Whether a fixed sum costs order should be made under s 98(4)(c) of the Civil Procedure Act 2005 (NSW).' 'Whether any fixed sum costs order should be set off against the unpaid purchase price.' 'Whether declarations and orders for specific performance of the contracts for sale should be made.']

Ratio Decidendi

The issuing and maintaining of the lapsing notices, together with the liquidators' stated intention to ignore the contracts and market the properties, unreasonably forced the plaintiffs to commence proceedings to protect their proprietary interests. The liquidators were therefore properly treated as instigators of the litigation and ordered personally to pay the plaintiffs' costs. Their conduct before 2 May 2016 warranted costs on the ordinary basis, but their rejection of the plaintiffs' Calderbank offer of 2 May 2016 was unreasonable, warranting indemnity costs thereafter. A fixed sum costs order was not appropriate because the asserted reasons for bypassing ordinary assessment were not...

Court Disposition

Declarations and orders were made for specific performance of the contracts for sale of land; the plaintiffs obtained costs against the liquidators of the first defendant, ordinary basis up to 2 May 2016 and indemnity basis thereafter; no fixed sum costs order or set-off was made.

Orders

  • ['Declare that the contract for the sale of the land contained in Folio Identifier 49/SP85782 and situated at 49/3-9 Finlayson Street, Lane Cove, NSW (Lot 49), between the first plaintiff as purchaser and the first defendant as vendor, dated 29 June 2012 (the Lot 49 Contract), is valid and enforceable.' 'Declare...