Quakers Hill First National Pty Ltd v First National Group of Independent Real Estate Agents Ltd

[2018] NSWSC 1607

Supreme Court

New South Wales

Medium Neutral Citation:	Quakers Hill First National Pty Ltd v First National Group of Independent Real Estate Agents Ltd [2018] NSWSC 1607
Hearing dates:	On the papers; submissions received 5, 12 and 19 October 2018
Decision date:	24 October 2018
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Order that the Second Defendant pay the Plaintiff’s costs of 18 and 19 September 2018.  Otherwise make no order as to costs with the intention that each party pay their own costs.
Catchwords:	COSTS – Party/Party – where principal defendant did not resist relief – where second party assumed role of contradictor and actively resisted plaintiff’s claim - where principal defendant surrendered
Cases Cited:	Mundi v Hesse [2018] NSWSC 1548
Category:	Costs
Parties:	Quakers Hill First National Pty Ltd (Plaintiff) First National Group of Independent Real Estate Agents Ltd (First Defendant) Ruma Mundi (Second Defendant)
Representation:	Counsel: D Pritchard SC with L Beange (Plaintiff) C N Bova (Second Defendant)   Solicitors: Foulsham & Geddes (Plaintiff) Marque Lawyers (Second Defendant)
File Number(s):	SC 2018/265266

Judgment

1. Quakers Hill First National Pty Ltd commenced these proceedings on 29 August 2018. Quakers challenged the validity of a decision made by First National Group of Independent Real Estate Agents Ltd to terminate Quakers’ membership of the First National Group.

2. First National’s decision to terminate Quakers’ membership was made against the background of a dispute between Ms Ruma Mundi and Mr John and Mrs Michelle Hesse. The dispute concerns the conduct of real estate businesses under the name “First National” and involving two other companies; Hills Direct Administration Pty Ltd and Hills Direct Property Management Pty Ltd.

3. That dispute is the subject of separate proceedings currently listed for hearing in the Commercial List for five days commencing 12 November 2018.

4. The background of those proceedings was summarised in the recent judgment of Rees J in Mundi v Hesse [2018] NSWSC 1548.

5. On 5 September 2018 Ms Mundi filed a notice of motion seeking to be joined as a defendant to these proceedings.

6. On 7 September 2018, over the objection of Quakers, I made an order joining Ms Mundi as second defendant to the proceedings.

7. I was told that it was necessary that the proceedings be determined urgently. I fixed the matter for hearing on 18 and 19 September 2018 and made directions for the service of evidence and submissions.

8. On the day before the hearing, 17 September 2018, First National served submissions in which it stated that it did not seek to defend its decision to terminate Quakers’ membership.

9. On the same day Ms Mundi served substantial submissions seeking to justify First National’s decision.

10. On 18 September 2018, at the commencement of the hearing, counsel for First National confirmed that First National did not seek to defend its decision and sought to be excused.

11. The matter proceeded in First National’s absence with Ms Mundi playing the role of contradictor and, actively, seeking to defend First National’s decision.

12. On 19 September 2018, in the course of Ms Mundi’s counsel’s closing submissions, First National appeared by its solicitor and informed the Court that it proposed to withdraw its decision to terminate Quakers’ membership.

13. That position was formalised on 24 September 2018.

14. On 2 October 2018 I ordered that the proceedings be dismissed and made directions for submissions as to costs.

15. Those submissions are to hand. It is agreed I may decide the matter on the papers.

16. Although First National never actively sought to defend its decision to terminate Quakers’ membership, and although it, in effect, surrendered on 19 September 2018 and agreed to withdraw its decision, neither Quakers nor Ms Mundi seek an order that First National Pay their costs. That is perhaps because each wishes to preserve their commercial relationship with First National.

17. However that may be, each of Quakers and Ms Mundi seek an order that the other pay their costs of the proceedings.

18. I have received 20 pages of submissions on the question, but see the issue as being straight forward.

19. By 17 September 2018, First National made clear it did not seek to defend its decision. Thereafter the proceedings continued only because of Ms Mundi’s desire to uphold the decision.

20. I think Quakers is correct to submit that Ms Mundi took on the role of contradictor and must be taken to have accepted the risk as to costs.

21. Had the matter proceeded to hearing, and had Quakers been successful, it is impossible to see how Ms Mundi could have resisted an order that she pay the costs of the proceedings; at least from when she sought actively to uphold First National’s decision. On the other hand, had Ms Mundi been successful, it is hard to see how Quakers could have resisted an order that it pay her costs; at least from that point.

22. As it turns out, First National decided to withdraw the decision that Ms Mundi was seeking to justify.

23. In those circumstances, my opinion is that the appropriate order is that Ms Mundi pay Quakers’ costs from the time when she assumed the role as sole contradictor in the proceedings. That is in substance when, on 18 September 2018, First National’s counsel informed the Court that First National did not seek to justify its decision.

24. I order that Ms Mundi pay Quakers’ costs of 18 and 19 September 2018.

25. Otherwise I make no order as to costs with the intention that each party pay their own costs.

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