Adamson v Liu & Ors (No. 2)

[2009] NSWSC 864

CITATION:	Adamson v Liu & Ors (No. 2) [2009] NSWSC 864
HEARING DATE(S):	22 June 2009, Written Submissions 6/07/09, 13/07/09 Mention-30 July 2009
JUDGMENT DATE :	31 August 2009
JUDGMENT OF:	Forster J at 1
CATCHWORDS:	An unsuccessful party's financial situation does not bear on the costs orders to be made against him - Court should not assume that assessment of costs will miscarry.
CATEGORY:	Consequential orders
CASES CITED:	Adamson v Liu & Ors [2009] NSWSC 663
PARTIES:	Christopher Michael Adamson Adeline Marie Liu Kenneth John Ede
FILE NUMBER(S):	SC 5312/04
COUNSEL:	Plaintiff- in person Defendant- R. Horsley
LOWER COURT JURISDICTION:	Supreme Court (Associate Judge)
LOWER COURT FILE NUMBER(S):	5312/04
LOWER COURT JUDICIAL OFFICER :	Macready AsJ
LOWER COURT DATE OF DECISION:	20/02/09 and 27/02/09

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

FORSTER J

MONDAY, 31 AUGUST 2009

5312/04 CHRISTOPHER MICHAEL ADAMSON v ADELINE MARIE LIU & ANOR

JUDGMENT

1 HIS HONOUR: I delivered my reasons for judgment in this matter on 21 July 2009: see Adamson v Liu & Ors [2009] NSWSC 663.

2 I had before me a Notice of Motion filed by the plaintiff on 24 March 2009. By that Notice of Motion (as subsequently amended pursuant to leave) the plaintiff sought to set aside certain of the orders made by Associate Justice Macready on 20 and 27 February 2009.

3 At the end of my reasons for judgment I said:

“33. The orders I propose to make are as follows:

1. Order 1 of the orders made by Macready AsJ on 20 February 2009 be set aside.
2. Orders 1, 2, 3, 6 and 8 of the orders made by Macready AsJ on 27 February 2009 be set aside.
3. The plaintiff have leave to file a Further Amended Statement of Claim within 21 days in the form of the draft Fourth Further Amended Statement of Claim annexed to the affidavit of the plaintiff affirmed on 5 October 2008, but varied in the following respects:
(a) paragraphs 8 to 13 to be amended so as to conform with the principles expressed in this judgment;
(b) the allegation of disclosure presently appearing in paragraph 11 to be particularised in the document itself;
(c) paragraphs 14 to 26 to be amended so as to conform with the principles expressed in the judgment of Macready AsJ of 20 February 2009;

(d) paragraphs 32 to 35 to be amended:

(i) in the manner set out in paragraph 20 of this judgment; and
(ii) otherwise to conform with the principles expressed in this judgment;
(e) prayers for relief numbered 4 to 7 to be deleted and that the following prayers for relief be substituted in their place:
(i) a declaration that the plaintiff is entitled to set off any judgment which may be entered in these proceedings in his favour against the judgment entered against him and in favour of the second defendant in District Court proceedings 1157/08;
(ii) an order for interest;
(iii) an order for costs;
(iv) such further or other relief as the court may consider appropriate; and
(f) prayer for relief numbered 8 to be amended by adding at the end thereof the words “until the final determination of these proceedings or until further order”;
4. The plaintiff pay any costs of the defendants thrown away by the filing of the Fourth Further Amended Statement of Claim;
5. Save as aforesaid, and save as is provided in orders 4 and 5 made by Macready AsJ on 27 February 2009, the costs of the plaintiff’s notices of motion filed respectively on 5 November 2008 and 24 March 2009, as well as the costs of the applications before Macready AsJ and myself, all be costs in the proceedings.

34. As the parties have not yet had an opportunity to address the form of the orders I propose to make, I will give them an opportunity to do so, in writing, within seven days from today. I should make it clear that I am not inviting further submissions at large; such submissions as may be made should be restricted to the form of the orders, having regard to the substance of my reasons. I will review any submissions received within the seven day period, and will thereafter make my final orders.”

4 On the application of the plaintiff, the matter was again listed before me on 30 July 2009. The plaintiff appeared in person and Mr Horsley of Counsel again appeared for the defendant.

5 At the commencement of this hearing, Mr Horsley indicated that he did not have any submissions to make in relation to the form of orders that I had proposed in paragraph 33 of my principal judgment. The plaintiff raised only one issue, with which I shall now deal. However, in order to do so, it is necessary to review the somewhat complex background of this application.

6 I noted in paragraphs 4 and 5 of my principal judgment that Associate Justice Macready had before him two Notices of Motion. The first Notice of Motion had been filed by the defendants on 4 March 2008 (“the defendants’ Notice of Motion”). By that Notice of Motion, the defendants sought the following orders:

“1. That the ‘third further amended statement of claim’, filed irregularly on 8 January 2007, be removed from the file and its filing be set aside pursuant to s 63(3)(a) of the Civil Procedure Act 2005.

2. Further or in the alternative, that the ‘third further amended statement of claim’ be struck out pursuant to r 14.8 of the Uniform Civil Procedure Rules.

3. Further or in the alternative, that the proceedings be dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules.

4. Such further or other order as the court thinks fit.

5. The plaintiff pay the defendants’ costs of the proceedings.

6. The plaintiff pay the defendants’ costs of this motion.”

7 The second Notice of Motion before his Honour, which had been filed by the plaintiff on 5 November 2008 (“the plaintiff’s Notice of Motion”) sought the following orders:

“1. That leave be granted to file and serve a fourth Further Amended Statement of Claim.

2. That the plaintiff pay the first and second defendants costs thrown away by the amendments.”

8 In his judgment of 20 February 2009, Associate Justice Macready noted the two Notices of Motion which were before him and in paragraph 3 of that judgment, his Honour said:

“3. The debate centred on the proposed fourth further amended statement of claim.”

9 His Honour then proceeded in paragraphs 4 to 42 of his judgment to deal with the proposed fourth further amended statement of claim concluding, in paragraph 42 of his judgment in the following terms:

“42. I propose to give leave to the plaintiff to file a further amended statement of claim relating to the second claim in the presently propounded draft claim provided that it complies with the terms of this judgment.”

10 His Honour then turned his attention to the third amended statement of claim (the subject of the Defendants’ Notice of Motion) and dealt with in just one paragraph in the following terms:

“43. There was also a third amended statement of claim which appeared to have been filed one day out of the time limited for the filing of that claim. In the circumstances although it had been posted some time earlier it is irregular and it should not be on the file.”

11 In his orders, which appear in paragraph 44 of that judgment, his Honour ordered that the third further amended statement of claim be struck out.

12 On 27 February 2009, his Honour delivered his judgment on costs. In dealing with the defendants’ Notice of Motion his Honour said the following:

“The motion filed 4 March 2008 related to a statement of claim which was to be filed by post but was out of time by a day as a result. I think that is a minor discrete matter . It was struck out because it was irregular and debate about the appropriateness of the matter of the proposed pleadings is in the next orders. I do not think there is any basis for dealing with this on an indemnity basis, but I think it is a separate area which is now finished. I think the costs should be assessable forthwith.” [Emphasis mine]

13 As a consequence, his Honour’s orders included the following:

“Costs of defendants’ notice of motion filed on 4 March 2008

4. The plaintiff pay the defendants’ costs of and incidental to-


(a) the third further amended statement of claim (filed irregularly on 8 January 2008 and ordered removed from the court’s file on 20 February 2009), and

(b) the defendants’ notice of motion filed on 4 March 2008.

5. The costs referred to in paragraph 4 be assessable and payable forthwith.”

14 The said orders 4 and 5 made by Associate Justice Macready remain undisturbed by my proposed orders.

15 In this application before me, the plaintiff submitted that order 4 (b) of his Honour’s judgment should be amended by limiting its ambit to the costs related to the order sought in paragraph 1 of the defendants’ Notice of Motion namely to the order that the third further amended statement of claim be removed from the file and that the filing be set aside. The plaintiff submitted that that was the only issue dealt with by Associate Justice Macready in relation to the defendants’ Notice of Motion, and that leaving order 4 (b) in its current form would mean that on an assessment, all of the costs of that Notice of Motion would be assessed as payable by him. He drew attention to (but did not challenge) order 5, by which such costs were ordered to be assessable and payable forthwith.

16 The plaintiff sought to file in court an affidavit dealing with his financial position. There then followed some debate about whether or not the affidavit should be admitted, but I ultimately did so, and noted its contents. It shows that the plaintiff is in an impoverished state and is concerned that if the costs ordered to be paid by him were a substantial amount, and if it were assessed and presented to him for payment, he would not be in a position to do so, and that this had a real propensity of preventing him from prosecuting his claim.

17 After some further debate, the parties agreed that I should note that there are various claims and counter claims, orders and a significant amount of litigation between them.

18 I do not propose to accede to the plaintiff’s application. There are a number of reasons for this.

19 First, as a matter of general principle, the defendants are prima facie entitled to an order for the whole of their costs of the defendants’ Notice of Motion. They were successful in respect of the order sought in paragraph 1 thereof in that his Honour made the order sought, namely that the third further amended statement of claim was found to have been filed irregularly and was ordered to be removed from the file. The orders sought in paragraphs 2 and 3 were sought “further or in the alternative”. His Honour did not have to consider those orders as the defendants succeeded in relation to order 1. In circumstances such as those, except in a special case, the successful party is also entitled to the costs of the other relief that the court did not have to consider. That is particularly so, as it would no doubt have been in the present case, where there were no additional facts involved in the determination of the alternative orders, and where, as here, it was reasonable for the moving party to put his claim in the alternative. I consider that all of those features were present in the case before his Honour.

20 The same principles apply with even greater force to the relief sought in paragraphs 4, 5 and 6, which are ancillary orders in relatively standard form and require neither further facts nor further arguments in relation to law.

21 Secondly, in the various passages that I have quoted, his Honour made it pellucidly clear that in the hearing before him, the defendants’ Motion was a “minor discrete matter”, undoubtedly because the issues raised by the defendants’ Notice of Motion were superseded by the issues raised by the plaintiff’s Notice of Motion, whereby he sought leave to file the fourth further amended statement of claim. By doing so, the defendant effectively abandoned the third further amended statement of claim, resulting in very little, if any, time being spent on it.

22 Not only is the foregoing clear on the face of his Honour’s judgments but Counsel for the defendant very properly conceded that as the plaintiff did not seek to support the third further amended statement of claim before his Honour:

“…there was substantial argument about whether there was an arguable case focused not on the pleading which was the subject of [the defendants’ Notice of Motion] but on a proposed pleading which was the subject of [the plaintiff’s Notice of Motion]. That would explain why, as my friend has pointed out, Macready AsJ referred to our notice of motion as a minor discrete matter because even though the relief claimed was large, the scope of that motion that needed to be addressed in the hearing became much reduced once my friend brought his motion on.”

23 In my opinion, given those circumstances and concessions, as a practical matter orders 4 and 5 of his Honour’s judgment are most unlikely to impose any substantial burden on the plaintiff and any further qualification of the ambit of order 4 (b) will have minimal effect, if any.

24 Thirdly, as Counsel for the defendant pointed out, the plaintiff’s submissions are effectively based on the assumption that the assessment of costs may miscarry and that is not a proper basis on which the Court should vary the orders. He submitted, and I accept, that it can be assumed that the assessors will be seized of all issues in relation to costs and will receive appropriate submissions from the parties. As Counsel pointed out, the plaintiff can no doubt obtain a copy of the transcript of this application before me and rely on the various admissions made on behalf of the defendants.

25 Fourthly, I do not attach any particular significance to the plaintiff’s impoverished financial situation. I do not consider that a party’s financial position bears upon the court’s discretion on whether the costs he is ordered to pay relates to the whole or only part of the costs incurred in relation to a particular notice of motion. Even if I be wrong in that view, the significance of such party’s financial position would have to be minimal where there are claims and counter claims, orders and a significant amount of litigation between the parties. The existence of those claims and counter claims, orders and litigation, as well as the plaintiff’s impoverished financial position will be more relevant in the event that there is a subsequent application to stay a particular court order.

26 As I have earlier indicated, I do not propose to accede to the plaintiff’s further submissions. Accordingly I now make the orders set out in paragraph 33 of my principal judgment, which orders I have set out above in paragraph 3 hereof. I also order that the costs of this further application be likewise costs in the proceedings.

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