In Joshua John Martin & Anor v Anton Lindeman & Anor S ECI 2023 05420, unreported 20 September 2024, the court upheld the plaintiffs’ case that they had been put to unnecessary expense by reason of the defendants pressing on with the proceedings, after being told why they did not enjoy the benefit of the covenant:

V.     I am satisfied that the defendants’ rejection of the First Compromise Offer was unreasonable. I have reached that conclusion for the following reasons.

W.     First, the First Compromise Offer was made in February 2024, very soon after the defendants were joined to the proceeding. The defendants had 14 days to consider the offer, which was supported by detailed written submissions that had been served on the defendants, a link to which had been included in the earlier notification of the proceeding. The compromise offered was clear in its terms and was significant. If accepted it would have seen the covenant maintained yet modified. The significance of the compromise is clear from the ultimate outcome of the proceeding which saw the covenant discharged. The compromise foreshadowed the plaintiffs’ intention to apply for indemnity costs in the event the compromise offer was rejected.

X.     Second, defendants were on notice at all stages that there was a live question whether there was any land with the benefit of the covenant, including in the notice provided of the proceeding, and prior to being joined to the proceeding. The defendants had the benefit of the plaintiffs’ detailed legal submissions before they sought to join the proceeding. Those submissions set out, with detailed reference to the relevant legal principles and case law, why the plaintiffs said the covenant did not benefit any land and why the land was not subject to a building scheme.

Y.      Third, the defendants sought to oppose the proceeding at least in part on considerations they thought relevant to the whole of the Point Leo Beach Estate, ie. not only in response to the matters raised by the plaintiffs’ application. The defendants sought to oppose the application on the basis that they were seeking to maintain a status quo that did not exist in law. They did so in circumstances where they were put on notice why that status quo did not exist.

Z.      Fourth, the defendants’ reliance on the positions taken by the Mornington Peninsula Shire Council and the plaintiffs’ previous planning advisors was unreasonable in circumstances where the defendants were legally represented and had the benefit of the plaintiffs’ preliminary submissions.

AA.   Fifth, for the reasons set out in the judgment, the defendants opposition to the plaintiffs’ application was without legal or factual merit.

For these reasons, the Court held that the defendants should pay the plaintiffs’ costs of the proceedings on standard basis, from a date sufficient to receive legal advice, and then on an indemnity basis from the date of the first Calderbank offer.

2024 09 19 Martin, Joshua John v Lindeman, Anton (costs)Download