Atkinson v Faure [2004] NSWSC 997

These proceedings were commenced by a motion by which the plaintiff sought an order that a “mortgage taken over the plaintiff’s property” be declared null and void because no authority was given by the plaintiff for the raising of the loan secured by the mortgage.

In fact, the ownership of the property referred to had in various forms already been dealt with by the Family Court of Australia, by the courts of Vanuatu, by this Court and by the Court of Appeal on appeal from this Court.

The defendant, who was a lender of the property, had also applied by summons for the dismissal of the proceedings under Part 13 r 5 of the Supreme Court Rules 1970 (“the SCR”) on the ground that the proceedings were frivolous, vexatious and otherwise an abuse of the process of this Court.

The central fact in this case was that the registered proprietor of the property was not the plaintiff, but rather a Vanuatu based company. The plaintiff did not own shares in that company. The central and important fact was that he was not the company. The Court held it is quite plain, therefore, that he had no legal interest in the property.

He did at one stage propound that he had an equitable interest in the property. The claim was that he and not the company had provided some or the entire purchase price of the property and that the company when it took title therefore held the property in whole or in part on a resulting trust for him. That claim was dismissed in earlier proceedings and an appeal from that decision had been disposed of by the Court of Appeal.

The proceedings as they stood were deficient for parties because the company, which was the registered proprietor of the property and the borrower under the subject mortgage, was not joined as a party to the proceedings. If the proceedings had any prospect of success, that situation could be remedied, but, without, was totally without prospect of success.

The Court held that this action fell within all the heads mentioned in Part 13 r 5 of the SCR, ie, no reasonable cause of action was disclosed, the proceedings were frivolous and vexatious and the proceedings were an abuse of the process of the Court. The result was that the proceedings were dismissed and costs were ordered to be paid on an indemnity basis by reason of the fact that the proceedings were quite hopeless. No material was brought forward to support the proposition that the property was the plaintiff’s property. That of itself would be sufficient to justify an order on the indemnity basis. However, a letter was written prior to coming to Court by the defendant’s solicitors, drawing attention to the hopelessness of the proceedings and warning that costs would be sought on the indemnity basis if they were proceeded with. That was another ground for awarding costs on the indemnity basis, although in any event the hopelessness of the proceedings was itself a sufficient basis.

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