Abigroup Contractors Pty Ltd v River Street Developments Pty Ltd (No. 2)
[2007] VSC 479
•15 November 2007
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 6578 of 2007
| ABIGROUP CONTRACTORS PTY LTD (ACN 000 201 516) | Plaintiff |
| v | |
| RIVER STREET DEVELOPMENTS (ACN 096 725 558) AND OTHERS | Defendants |
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JUDGE: | CAVANOUGH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 November 2007 | |
DATE OF JUDGMENT: | 15 November 2007 | |
CASE MAY BE CITED AS: | Abigroup Contractors Pty Ltd v River Street Developments Pty Ltd (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 479 | |
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COSTS – Unsuccessful application for freezing orders against multiple parties represented separately by two legal teams – Possible conflict of interests between successful parties - Plaintiff required to pay both sets of costs.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Burnside QC Mr J Twigg | Clayton Utz Lawyers |
| For the First Defendant | No appearance | |
| For the other Defendants (called the Respondents) | Mr P Crennan | Robert James Lawyers |
HIS HONOUR:
The parties are in dispute in relation to certain questions as to costs. This proceeding was dismissed on 6 September 2007 in accordance with the reasons for decision that I gave on that day. [1] The question of costs was not fully resolved. The plaintiff concedes that it must pay the costs of the first defendant, River Street Developments Pty Ltd (“the defendant”), of the proceeding. However, the plaintiff denies that it should be required to pay the costs of the other defendants, collectively described as “the respondents”.
[1][2007] VSC 478.
The plaintiff submits that it should not have to bear a second set of legal costs because the respondents’ case could have been presented by the defendant’s legal team. It points out that one of the respondents, Mr Leslie Smith, controls the defendant and controls each of the corporate respondents and is the husband of the other personal respondent, Susan Smith.
It says that the case presented by the respondents was identical to that presented by the defendant. It says that there was no possible conflict of interest between the defendant and the respondents in relation to the conduct of the proceedings. It submits that, in circumstances of that kind, the court will not normally allow two sets of costs, and refers to Statham v Shepard and Another (No.2),[2] and also to Furber v Stacey.[3]
[2](1974) 23 FLR 244 at 246-247 (per Woodward J).
[3][2005] NSWCA 242.
In my view, the principle to which the plaintiff refers is not applicable to this case. There was a possible conflict of interest between the defendant and the respondents. The plaintiff was seeking freezing orders of varying kinds against the defendant and the several respondents respectively. The relief sought was discretionary in each case.
Relevant factors included the balance of convenience, and, in particular, the hardship which might be suffered respectively by the various parties sought to be restrained. Conceivably, one or more of the respondents might have submitted that the plaintiff’s position could be sufficiently protected by the making of orders against the defendant alone or against the defendant together with some other respondent or respondents.
No such submission was in fact made, but the mere prospect that such a submission might have been made, or might have been called for, in the best interests of a particular party viewed individually is enough, in my view. I refer to what was said by Young CJ in Nangus Pty Ltd v Charles Donovan Pty Ltd[4] about the need for separate representation of parties with potential conflicts of interest.
[4][1989] VR 184 at 185-186.
The plaintiff itself repeatedly submitted that each company in a group must be treated as having its own interests, citing Walker v Wimborne[5] and other cases. In those circumstances, the plaintiff’s present submission has a hollow ring, to my mind: compare Australian Conservation Foundation Incorporated v Forestry Commission of Tasmania)[6]; CGU Insurance Limited v Katherine Electronic Services Pty Ltd[7]; and Conte Mechanical and Electrical Services v Roach[8]; and see Dal Pont, Law of Costs.[9]
[5](1976) 137 CLR 1.
[6](1988) 81 ALR 166 (Burchett J) at 169.
[7][2004] NTCA at [5].
[8][2005] VSC 353 at[1]-[8].
[9]2003 at [11.46]-[11.51].
Indeed, conceivably, each respondent might have been separately represented and the plaintiff might then have been faced with many more claims for costs, some or all of which might well have been legitimate.
Of course, the very fact that the plaintiff was seeking distinct relief against distinct parties, each with a distinct financial situation, meant that someone had to do the distinct legal work involved in meeting each such claim for relief. That work had to be paid for.
I have listened to everything that Mr Burnside QC has had to say this morning in relation to these matters, but I am not persuaded that it is a sufficient answer that Mr Smith was unlikely to have changed his instructions in relation to the position of any of the particular companies. The fact is that the plaintiff was seeking orders that would have fundamentally upset the way in which the group normally operated, and had it emerged during the course of the hearing of the proceeding that there was a real prospect of success against one of more of the parties sought to be restrained, that may well have led to a situation in which a single set of counsel acting for the defendant and all the respondents would have been put into an impossible position. In my view that is sufficient to show that, as a matter of discretion, I should not deny the respondents their costs. I think it was reasonable and appropriate that the respondents be separately represented. The result is by no means to impose on the plaintiff the costs of a “luxury”, to use the language of the cases.
So, for those reasons, I would accept Mr Crennan’s contention in this respect, and I would order that the plaintiff pay not only the defendant’s costs, but also the respondents’ costs of the proceeding, subject to the exclusions which have been discussed this morning.
I think that the parties can probably work out a form of orders that would cover those exclusions without my having to deal with the words of it, but essentially I would say this: that the respondents should pay the plaintiff’s costs of the respondents’ summons filed 22 June 2007, that the third respondent should pay the plaintiff’s costs of the third respondent’s notice of objection dated 17 July 2007, including the costs of the hearing before Master Evans held on 31 July 2007, but that the costs reserved by Justice Pagone on 13 July 2007 and the costs reserved by Justice Hollingworth on 25 July 2007 should lie where they fall.
I will hear the parties as to the costs of today.
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