Glenis & Anor v Ikosedikas & Ors (No 2)  VSC 324
(15 June 2018), T. Forrest J.
This is the costs decision (apparently not released online until late January) in the case of this name ( VSC 278) covered in blog post 17. The defendants alleged that in 2011 the first plaintiff entered into a loan agreement consolidating previous loans with a then balance of about $250,000. The agreement gave the lender the right to caveat over certain residential land owned by both plaintiffs if the loan was not repaid that year. By 2018 the debt was unpaid and inflated by interest.
In March 2018 the plaintiffs entered into a contract to sell that land for $1.995 m. It was subject to a registered mortgage securing loans currently over $2 m., though apparently another property owned by the second plaintiff was linked to this mortgage.
In April 2018 the defendants caveated. The plaintiffs successfully applied to remove the caveat. His Honour held that the existence of the loan agreement established a serious question to be tried but that, notwithstanding the substantial debt, the balance of convenience favoured the registered proprietors both because of the delay in caveating until after the contract of sale and because the registered mortgage rendered the caveat worthless.
Both parties now unsuccessfully applied for costs. His Honour held –
- The plaintiffs had engaged in sharp practice in that: they took advantage of the defendants’ dilatory response to restructure their affairs so that the property was mortgaged to its full value and another property (not the subject of the caveat) was now owned virtually outright.
- The caveators were not entitled to costs: his Honour knew of no authority that a caveator demonstrating a serious question to be tried but losing on the balance of convenience was entitled to costs.