Soueid v Pham

These reasons concern the plaintiff’s application for costs arising out of its application to remove a caveat that had been lodged by the defendant on the title of a property in the Sydney suburb of Croydon Park.

The withdrawal was ultimately achieved by agreement between the parties. But they did not agree on costs, leading to this decision. The specific order sought by the plaintiff is:

The plaintiff relied, in respect of costs, on the affidavit of his solicitor, Nazih Touma, dated 15 May 2025, which had been served with the summons. The plaintiff also relied on his own affidavit of 20 May 2025 and affidavits of Yuqian Shang (also known as Ryan Shang) dated 23 May 2025, 26 May 2025 and 10 June 2025. Yuqian Shang is a solicitor working at the same firm as Mr Touma. The defendant relied on her own affidavit dated 2 June 2025.

The defendant opposed the plaintiff’s proposed order, suggesting the appropriate order was that each party pay its own costs. The parties agreed that costs should be decided on the papers. Written submissions were received from counsel for the plaintiff (Mr Gerard), and the defendant’s solicitor (Mr Nguyen).

The background includes reference to separate proceedings concerning the same property. The plaintiff (the same in both proceedings) sought specific performance against a Ms Dang, the registered owner of the subject property, to enforce a contract for the sale of that property by Ms Dang to the plaintiff. The contract was dated 2 December 2021.

On 14 June 2024, Peden J granted the plaintiff default judgment whereby Ms Dang was ordered to specifically perform the contract of sale.

On 15 October 2024, Ms Dang filed a notice of motion endeavouring to set aside the orders made by Peden J. This motion was dismissed by Kunc J on 6 December 2024. There had been no appearance by Ms Dang.

Consequent upon the orders made by Peden J, the Registrar, on 3 April 2025, signed a transfer of the property to the plaintiff and, on 4 April 2025, ordered that settlement of the contract of purchase was to occur at 2:30pm on 9 May 2025.

There was also a mortgage on the property in favour of Westpac Banking Corporation. The outstanding balance of the mortgage exceeded the purchase price of the property. Nevertheless, the plaintiff was prepared to pay the whole amount owing to Westpac on settlement. Part of the urgency in the current proceedings was that the outstanding mortgage sum was increasing as time passed without settlement of the sale.

On 8 May 2025 the Registrar made the following orders:

The defendant (in the proceedings before me) lodged the caveat on 8 May 2025. There were in fact a number of other caveats lodged on the property, but the caveators had agreed to their removal on settlement.

The effect of the lodging of the caveat on 8 May 2025, was to frustrate the orders of Peden J and Kunc J and of the Registrar.

The caveat was lodged by the defendant through Victor Lawyers Pty Ltd who notified the plaintiff of the lodging of the caveat in the early afternoon of 8 May 2025. The defendant’s interest in the property was said to be an “Estate in Fee Simple” and to arise from a “deed of loan agreement”. Notably, Victor Lawyers also acted for the defendant in the specific performance proceedings.

On 16 May 2025, the plaintiff filed a summons seeking withdrawal of the caveat pursuant to s 74MA and compensation from the plaintiff pursuant to s 74P of the Real Property Act 1900 (NSW). Hammerschlag CJ in Eq abridged time for service on the defendant to 19 May 2025 and the matter was made returnable before the Duty Judge on 21 May 2025. I was the Duty Judge.

The defendant, having apparently ceased retaining Victor Lawyers, retained Mr Nguyen, a solicitor, to appear for her on 21 May 2025. Mr Nguyen sought an adjournment to enable him to take full instructions. Mr Nguyen said he was unaware of any connection between Ms Pham and Ms Dang, but he understood Ms Pham had provided finance to Ms Dang, the current balance being in the order of $1 million. Mr Nguyen also stated that the instructions he did have were that the summons was being defended.

On 21 May 2025, the parties agreed to directions which brought the matter back on 26 May 2025. The directions included the production to the plaintiff of the loan documents between Ms Pham and Ms Dang.

The loan documents were produced to the plaintiff and also sent to the court. The agreement seems to be dated 9 April 2024 and is short. It states that Ms Pham is the lender, and Ms Dang is the borrower. It goes on:

It seems clear that the agreement does not substantiate the alleged caveatable interest.

When the matter came back before me on 26 May 2025, the parties had again reached an agreement which resulted in consent orders including the defendant’s agreement to the removal of the caveat. As I have said, the parties did not agree on costs.

The background seems to provide an overwhelming case for costs to be awarded in favour of the plaintiff. The defendant lodged a caveat, at the last moment, on the most uncertain grounds, refused to remove the caveat, thus leading to the commencement of the proceedings and the ultimate agreement to withdraw the caveat.

Consistent with the impression stated in the previous paragraph, Mr Nguyen says in his written submissions:

Mr Nguyen then attempts to dispel the first impression. Drawing on the affidavit of Mr Touma, in particular paras 74 to 89, he is anxious to convey that the defendant “was not properly notified about the Plaintiff intention to commence proceedings to remove the caveat”.

Mr Nguyen directed attention to the following:

The denial of procedural fairness is at the core of Mr Nguyen’s submissions. He submitted:

The affidavit of the defendant referred to in the above quoted passage attaches the loan agreement and describes the defendant’s travel arrangements, engaging of Mr Nguyen and finally seeing the relevant court documents.

Victor Lawyers were served with the summons and supporting affidavit, under the orders for substituted service, on or by 19 May 2025. The defendant was then overseas and was presumably informed of the service by Victor Lawyers. There is no indication if this occurred on 19 May or later. It must have occurred by 21 May because that is when Mr Nguyen appeared and filed a notice of appearance. It is not clear when Mr Nguyen was first contacted. Nevertheless, when Mr Nguyen did appear on 21 May 2025 he said:

I accept that when answering my question Mr Nguyen probably had very limited instructions, but it is worth repeating that Victor Lawyers acted for the defendant in the specific performance proceedings. It is perhaps conceivable that Victor Lawyers only acted for the defendant in lodging the caveat as part of an effort by the other defendant to delay the transfer of the property. I make no finding to that effect because it would not reflect well on Victor Lawyers.

Returning to the defendant’s substantial point; it is that she never knew about the application to withdraw the caveat until after the summons was filed. The defendant accepts this was not the fault of the plaintiff because of the order for substituted service but nevertheless the defendant argues that Victor Lawyers were not her lawyers, and she should not bear the consequences, for which she is blameless, of not being aware of the request to withdraw the caveat and the subsequent filing of the summons.

However, no evidence has been filed by the defendant substantiating the position and involvement of Victor Lawyers. The affidavit of the defendant does not help, and nothing has been forthcoming from Victor Lawyers. I find it hard to accept the defendant and Ms Dang had no connection to each other, especially if there had been a loan of $1 million. As I have already intimated, the lodging of the caveat on 8 May 2025 is, at least, suspicious.

While I entirely accept Mr Nguyen’s description of his involvement in the matter, I find the ‘innocence’ that he attributes to his client more difficult to accept. In any event, the plaintiff acted appropriately in seeking substituted service, he served the defendant accordingly and the defendant ultimately agreed to the withdrawal of a caveat that should never have been lodged in the first place.

Therefore, in respect of the withdrawal, the plaintiff achieved complete success which in my view is enough to justify the costs order that has been sought, although with some slight grammatical amendment.

I order that: The defendant is to pay the plaintiff’s costs, on the ordinary basis, of these proceedings to date: In particular the defendant is to pay the plaintiff’s costs of the proceedings so far as the proceedings have concerned the plaintiff’s application for withdrawal of caveat AV41522 pursuant to s 74MA(2) of the Real Property Act 1900 (NSW).