123 259 932 Pty Ltd v Cessnock City Council (No 4)

[2021] NSWSC 1598

Supreme Court

New South Wales

Medium Neutral Citation:

123 259 932 Pty Ltd v Cessnock City Council (No 4) [2021] NSWSC 1598

Hearing dates:

On the papers

Decision date:

09 December 2021

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1)   Order that $200,000 of the amount of security for costs paid into Court be released to the defendant.

(2)   Order that release of the balance of the amount of security for costs paid into Court await the results of a costs assessment or further order.

Catchwords:

COSTS — Security for costs — to facilitate the just, quick and cheap determination of the issue regarding release of security some release of security ought be ordered — costs assessor to determine the amount of costs to comply with the order

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 101

Cases Cited:

123 259 932 Pty Ltd v Cessnock City Council (No 3) [2021] NSWSC 1452

Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (No 2) [2010] NSWSC 490

Jin Lian Group Pty Ltd (in Liq) v ACapital Finance Pty Ltd (No 2) [2021] NSWSC 1202

Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 211

Category:

Costs

Parties:

123 259 932 Pty Ltd (Plaintiff)
Cessnock City Council (Defendant)

Representation:

Counsel:
D Williams SC / B Kaplan (Plaintiff)
D Cook SC / G Ng (Defendant)

Solicitors:
Dentons Australia Pty Ltd (Plaintiff)
Holding Redlich (Defendant)

File Number(s):

2017/295180

Judgment

1. On 10 November 2021, I made the following orders:

1. Order that each party bear its own costs of the proceedings up to and including 1 September 2021.

2. Order the plaintiff to pay the defendant’s costs of the proceedings on an indemnity basis thereafter.

3. Grant liberty to apply on the question of release of the amount held by way of security for costs.

4. List the matter for mention on 18 November 2021 in order that the question of release of security for costs can be determined.

2. I published the orders and my reasons: 123 259 932 Pty Ltd v Cessnock City Council (No 3) [2021] NSWSC 1452. The parties subsequently agreed on directions for the determination of the question whether the amount paid by way of security for costs ought be released and that this question ought be determined on the papers.

The facts

3. The plaintiff has paid $240,000 into Court by way of security for costs. The defendant has adduced evidence to show that, since 2 September 2021, it has incurred solicitors’ fees of $78,654.95 (inclusive of GST) and $205,076.13 (inclusive of GST) on account of disbursements, including counsel’s fees, being a total of $283,731.08 (inclusive of GST).

4. The defendant submitted that its entitlement to indemnity costs would result in a probable recovery of 90% of solicitors’ fees and 95% of disbursements, which would amount to $265,611.77 (inclusive of GST).

5. On this basis, the defendant contended that the Court ought order the release of the security to it. It further argued that, as it was undoubtedly solvent and would remain so, there was no risk to the plaintiff in having the security released since, if the result were altered to the plaintiff’s benefit on appeal, the defendant would be ready and able to return any funds to the plaintiff. Further, the defendant argued that it was not beneficial to the parties to have the monies paid into Court where they are not earning interest and that it was positively detrimental to the defendant, which would be entitled to interest on any unpaid costs (pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW)). The defendant relied on the circumstance that, other than the monies paid into Court by way of security for costs, the plaintiff had no assets.

6. The plaintiff submitted that I ought not order release of security for costs unless either there has been a costs assessment or I am satisfied that the defendant’s costs on assessment will exceed the amount of security. It relied on what Stevenson J said in Jin Lian Group Pty Ltd (in Liq) v ACapital Finance Pty Ltd (No 2) [2021] NSWSC 1202 at [74], in reliance on Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (No 2) [2010] NSWSC 490 at [41] – [45] (White J); approved and applied in Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 211 at [21] – [27] (McColl JA).

7. In answer to the plaintiff’s submissions, the defendant adduced further evidence in the form of an affidavit of Bede Haines, to which the invoices rendered by senior and junior counsel (Mr Cook SC and Mr Ng) who appeared on its behalf, were annexed. The plaintiff objected to the further evidence and submitted that I ought not have regard to the invoices.

8. As there has been no application for a gross sum costs order and as leave to adduce further evidence has not been granted, I am not persuaded that I ought have regard to the invoices rendered by counsel which were tendered on 3 December 2021.

9. Although there has not yet been a costs assessment, I am satisfied that some release of security ought be ordered. It will be a matter for the costs assessor to determine the amount of costs to comply with the order. In the absence of evidence about costs (and taking into account the plaintiff’s objection to the defendant’s evidence served on 3 December 2021), I consider that the course that will facilitate the just, quick and cheap determination of the issue regarding release of security is to order that $200,000 of the amount paid as security be released forthwith to the defendant. This equates to approximately 70% of the total fees (costs and disbursements) referable to the period for which the plaintiff is liable to pay the defendant’s costs on an indemnity basis. While the defendant could reasonably expect a higher proportion to give effect to the order that indemnity costs be paid, this will be a matter for the costs assessor.

Orders

10. For the reasons given above, I make the following orders:

1. Order that $200,000 of the amount of security for costs paid into Court be released to the defendant.

2. Order that release of the balance of the amount of security for costs paid into Court await the results of a costs assessment or further order.

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Decision last updated: 09 December 2021