Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 2)
[2006] SASC 87
•28 March 2006
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ALSTOM POWER LTD v YOKOGAWA AUSTRALIA P/L & ORS (No 2)
Reasons for Decision of The Honourable Justice Debelle
28 March 2006
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE
Applications for costs in respect of two interlocutory applications – failed application to transfer proceedings to Supreme Court of New South Wales – whether order should be made that costs be payable forthwith – relevant principles – application for production of documents referred to in affidavit for inspection – whether application misconceived – consideration of r 59.02 – held, on transfer application costs payable forthwith – on other application costs not to include counsel fees and payable on party and party basis.
Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 13; Supreme Court Act 1935 (SA) s 40; Supreme Court Rules 1987 (SA) r 59, r 101; Supreme Court Rules 1947 (repealed) (SA) O 31; Supreme Court Rules 1970 (NSW) r 9; Uniform Civil Procedure Rules 2005 (NSW) r 42; Federal Court Rules 1979 (Cth) O 62, referred to.
Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347, applied.
All Services Australia Pty Ltd v Telstra (2001) 171 ALR 330; Allstate Life Insurance Co v Australia & New Zealand Banking Corporation Ltd (No 13) [1995] FCA 626; Allstate Life Insurance Co v Australia & New Zealand Banking Corporation Ltd (No 14) [1995] FCA 660; Australian Flight Services v Minister for Industry Science & Technology [1996] FCA 288; Bagley v Pinebelt Pty Ltd [2000] NSWSC 830; Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136; Bankinvest AG v Seabrook (1988) 14 NSWLR 711; Beneficial Finance Corporation Ltd v Price Waterhouse (1996) 68 SASR 19; BHP Billiton v Schultz (2004) 79 ALJR 348; Brasington v Overton Investment Pty Ltd [2001] FCA 571; Charlie Brown Pty Ltd v Green (unreported, Supreme Court of NSW, McLelland CJ in Eq, 3 July 1995); Doran Constructions Pty Ltd v University of Newcastle (unreported, Supreme Court of NSW, Giles J, 16 December 1994); Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; Gattellari v Meagher [1999] NSWSC 1279; Horrobin v Australia & New Zealand Banking Group (unreported, New South Wales Court of Appeal, 6 June 1997); Life Airbag Company of Australia v Life Airbag Company (New Zealand) Ltd [1998] FCA 545; McKellar v Container Terminal Management Services Ltd [1999] FCA 1639; Mitanis v Pioneer Concrete (Vic) Pty Ltd (1998) ATPR 41-623; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (2000) 191 ALR 579; Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460; Stack v Brisbane City Council (1996) 71 FCR 523; Thunderdome Racetiming & Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297; Vasyli v AOL International Pty Ltd [1996] FCA 804, considered.
ALSTOM POWER LTD v YOKOGAWA AUSTRALIA P/L & ORS (No 2)
[2006] SASC 87Civil
DEBELLE J. On 9 March 2006 I dismissed the defendants’ application to transfer this action to the Supreme Court of New South Wales. Two issues concerning costs remained to be determined.
Application for Costs to be Paid Forthwith
The first issue concerned the time for payment of the costs of the application. The plaintiff is entitled to an order for the costs of the application. The defendants acknowledged that fact. However, when applying for costs, counsel for the plaintiff also applied for an order that the costs be taxed and paid before the action is heard and determined. The defendants opposed the application. I adjourned the hearing to enable the parties to provide outlines of submissions.
Sub‑rule (7) of r 101.01 of the Rules of this Court enables the Court to order payment of costs of an interlocutory proceeding before the conclusion of the principal proceeding. It provides:
(7)An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.
The rule was made on 23 May 2002. Notwithstanding the absence of such a rule prior to that date, the Court occasionally made an order permitting a party to be paid the costs of interlocutory proceedings before the principal proceedings had been determined. Such orders were made pursuant to s 40 of the Supreme Court Act 1935 which invests the Court with a wide discretion as to costs.
The discretion with which r 101.01(7) invests the court is unfettered. The rule is expressed in terms which make it clear that the general rule is that a taxation of costs will occur at the conclusion of the proceedings, unless the court makes an order to the contrary. It is not appropriate to state that the order for costs shall be paid forthwith will be made in “rare” or in “exceptional” circumstances. The rule clearly states the general position so that to add epithets such as “rare” or “exceptional” is to add words to the rule in an impermissible manner, which may cause the exercise of the court’s discretion to be improperly fettered.
As far as the research of counsel and my own research disclose, the rule has not been the subject of consideration by this Court in any reported decision. However, the rule is in the same terms as O 62 r 3(3) of the rules of the Federal Court of Australia which has received quite a degree of judicial notice.
The Underlying Policy
The policy reasons underlying O 62 r 3(3) were noted by Sackville J in Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347. They include
1.discouraging interlocutory applications: Stack v Brisbane City Council (1996) 71 FCR 523 at 534;
2.avoiding the inconvenience and possible oppression involved in a series of taxations where there are successive interlocutory applications: Vasyli v AOL International Pty Ltd [1996] FCA 804; and
3.the fact that it is usually inappropriate to require the unsuccessful party to interlocutory proceedings to pay costs immediately, since that party might ultimately succeed in the substantive proceedings and set‑offs can be made in light of the ultimate orders as to costs: Brasington v Overton Investments Pty Ltd [2001] FCA 571 at 13; Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 145.
Those policy considerations apply with equal force to costs orders made in this Court. Those policy reasons inform the factors to be considered when this Court is deciding whether to depart from the general rule.
In the Federal Court O 62 r 3(3) has been generally interpreted as conferring a discretion which should be exercised in favour of a party who establishes that the demands of justice require a departure from the general practice: Thunderdome Racetiming & Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312; Stack v Brisbane City Council (supra) at 535; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (2000) 191 ALR 579 at 594. Some judges in the Federal Court have expressed the view that a departure from the general rule should be countenanced only in “rare cases”: Vasyli (supra). Others have suggested that the power might be somewhat under‑utilised: Allstate Life Insurance Co v Australia and New Zealand Banking Corporation Ltd (No 14) [1995] FCA 660; Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545; McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [41]. I do not believe that anything is to be gained by considering whether or not the power should be rarely used. The question for consideration is whether it is in the interests of justice to make an order in the individual case, having regard to the fact that the general rule is that costs are not payable until the conclusion of the principal proceeding.
Relevant Factors
The factors identified by the Federal Court as justifying a departure from the general rule include the following.
1.Where an interlocutory proceeding involving a discrete issue has been resolved: Australian Flight Services v Minister for Industry Science & Technology [1996] FCA 288; Courtney v Medtel Pty Ltd (No 3). However, where the interlocutory proceeding concerns pleadings, especially pleadings in a complex action, such an order will not usually be made: All Services Australia Pty Ltd v Telstra (2001) 171 ALR 330 at 333; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (supra).
2.Where the principal proceedings are not likely to be resolved for some time so that, in the absence of an order, the successful party will not enjoy the fruits of the interlocutory order for a long period: Life Airbag (supra); Allstate Life Insurance Co v Australia and New Zealand Banking Corporation Ltd (No 13) [1995] FCA 626.
3.Where the interlocutory application has had the effect of removing one of several causes of action in its entirety: Mitanis v Pioneer Concrete (Vic) Pty Ltd (1998) ATPR 41‑623.
4.Where the application is an unsuccessful application for leave to appeal on an interlocutory matter of practice and procedure given the strong public policy against the proliferation of such applications: Bailey v Beagle Management Pty Ltd (supra) at 145.
These principles are equally applicable to an application under r 101.01(7). There are further matters for consideration. The court will, as a general rule, set its face against multiple applications for costs to be taxed and payable forthwith as the interlocutory proceedings unfold. That proposition does no more than reflect the terms of the rule and the policy reasons underlying it.
It is not uncommon for a substantial difference to exist between the financial resources of parties to litigation. An order that costs be paid after an interlocutory proceeding could so detrimentally affect the limited financial resources of a party that it is unable to continue to prosecute or defend the action. Very substantial reasons would have to exist before the court would make an order which would have the consequence that the party is no longer able to participate in the action. As the Full Court of the Federal Court noted in Bailey v Beagle Management Pty Ltd at 145:
Impecunious litigants who have a meritorious claim or defence should not be forced out of court because of inability to meet interlocutory costs orders.
Thus, another relevant factor is whether the order will affect the ability of the party who must pay the costs to prosecute or defend the proceedings.
In the Supreme Court of New South Wales the relevant rule is r 9 of Pt 52A of the Supreme Court Rules 1970. Rule 9 relevantly provides:
9(1) Where before the conclusion of any proceedings … the Court makes an order for the payment of costs or a motion is refused with costs, the costs shall not, unless the court otherwise orders, be payable until the conclusion of the proceedings.
…
(3)Where in any proceedings:
(a)it appears to the Court that:
(i)a party has been subject to unreasonable delay or default on the part of any other party;
(ii)the proceedings are unreasonably protracted; or
(b)a costs order is made under r 43 or r 43A,
the Court may order that costs, or a specified amount on account of costs, be payable forthwith.
In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1, Barrett J held that sub-r (3) did not represent an exhaustive catalogue of the circumstances in which the court may order that costs be payable forthwith. The starting point, he said, was an unreported decision of Priestley JA in Horrobin v Australia & New Zealand Banking Group Ltd (unreported, New South Wales Court of Appeal, 6 June 1997) at 9:
None of the cases is on all fours with the present one; indeed, a reading of them emphasises the need for cases to be considered by reference to their own particular facts. Nevertheless, those relied on by counsel for H and S show there is a tendency for costs orders to be made payable forthwith and without waiting for the conclusion of further proceedings when the proceedings in respect of which the costs orders have been made are regarded as sufficiently self contained and detached or detachable from proceedings yet to be heard, whether between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime.
From that starting point he identified three kinds of cases where it might be appropriate to depart from the general rules, namely
1.where the interlocutory proceeding represents the determination of a separately identifiable matter or may be viewed as a completion of a discrete aspect of the action: see, for example, Charlie Brown Pty Ltd v Green (unreported, Supreme Court of NSW, McLelland CJ in Eq, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830;
2.where there has been unreasonable conduct on the part of the party against whom costs have been order: Gattellari v Meagher [1999] NSWSC 1279; and
3.a considerable time remains before the proceedings will ultimately be determined: Doran Constructions Pty Ltd v University of Newcastle (unreported, Supreme Court of NSW, Giles J, 16 December 1994) at 21.
There is an obvious correspondence between these principles and those expressed by judges in the Federal Court of Australia. The New South Wales rule has been replaced by r 42.7(2) of the Uniform Civil Procedure Rules in that court which provides:
Unless the court orders otherwise, costs referred to in subrule (2) do not become payable until the conclusion of the proceedings.
However, the above principles are still relevant.
Conclusion
I apply the above principles to the determination of this application. Applications under the Jurisdiction of Courts (Cross-vesting) Act 1987 to transfer proceedings from one court to another are, as a general rule, discrete applications quite unrelated to any other interlocutory application in the action. The applications are usually resolved at an early stage of the proceedings. The order is not subject to appeal: s 13 of the Jurisdiction of Courts (Cross‑vesting) Act except in limited circumstances as in BHP Billiton v Schultz (2004) 79 ALJR 348. As such an application is usually made at quite an early stage in the proceedings, the successful party may not be able to enjoy the benefit of the order for costs for a reasonably lengthy period of time. In this case the plaintiff has succeeded and it is quite unlikely that it will be able to enjoy the costs order for a very long time, especially as the issues in the counterclaim will require an examination of many aspects of a complex building contract. The order will not cause financial disadvantage or otherwise stifle the proceedings. It is the kind of order which, generally speaking, satisfies the criteria identified earlier in these reasons. It is a discrete order made at an early stage of the proceedings. There is no likelihood that the order requiring the costs of the application to be paid will disadvantage the defendants. They are all companies of financial substance. They are all liable to pay the costs, jointly as well as severally. They are in a position where each may contribute to the costs. The full burden of the order for costs will therefore not fall on any one of them.
Having regard to all of the relevant factors, it is in the interests of justice to order that the plaintiff be at liberty to have its costs taxed and paid forthwith.
The Application for Discovery
Before the defendants’ application to transfer these proceedings had been heard, the defendant had applied for an order for discovery pursuant to r 59.02. I summarise the events leading to that application and its outcome.
Mr Rosser is a solicitor in the employ of the plaintiff’s solicitors. He has the conduct of this matter subject to the supervision of a partner of the firm. He swore an affidavit on 28 November 2005 in opposition to the defendants’ application to transfer. In that affidavit he gave reasons why it was more appropriate that the action be heard in this Court, despite the fact that the plaintiff’s solicitors have an office in Sydney. In para 52 of his affidavit he said:
However, Ms Ellis, the partner responsible for the conduct of this matter on behalf of Alstom, is based in Adelaide. These proceedings have been conducted out of the Adelaide office of this firm. This firm has acted for Alstom in a number of disputes arising from the Project, including a dispute in the Supreme Court of South Australia. This firm is in possession of a substantial number of documents relating to the Project and Alstom’s dealings with YDRML.
On 10 February 2006 the defendants’ solicitors wrote with a request that the documents referred to in the last sentence of para 52 be produced for inspection pursuant to r 59.02. Rule 59.02 provides:
59.02Where a party has filed a pleading or an affidavit referring to a document he shall within seven days of receipt of any request from another party in accordance with the request either make such document available for inspection by that other party, or furnish that other party with a copy of the document at that party’s cost.
By letter dated 14 February 2006 and sent by facsimile transmission, the plaintiff’s solicitors refused to produce the documents for inspection. The relevant part of the letter read:
We disagree that paragraph 52 of Mr Rosser’s affidavit contains a reference to any document for the purposes of Rule 59.02. Further, inspection of those documents is unnecessary as they will not assist you in understanding Mr Rosser’s affidavit. The statement in paragraph 52 of that affidavit is clear and will not be assisted by production of those documents. Accordingly we are instructed to refuse to produce the documents.
The statement that the documents would not assist an understanding of Mr Rosser’s affidavit was presumably grounded on r 59.03, which provides:
59.03An order for the production of any document or copy thereof shall not be made unless the Court is of the opinion that the order is necessary for disposing fairly and expeditiously of the action and is not injurious to the public interest.
The defendants’ solicitors replied by a letter sent by facsimile transmission on 15 February 2006 in these terms:
We refer to your facsimile dated 14 February 2006 and respond as follows:
1.First, Mr Rosser, at paragraph 52 of his affidavit deposes to “the substantial number of documents relating to the Project and Alstom’s dealings with YDRML”. That is a clear and specific reference to documents for the purpose of Rule 59.02. For your assistance, we refer you to the decisions on this point of Chitty J in Smith v Harris (1883) 48 LT 869 at 870, and Slade LJ in Dubai Bank Ltd v Galadari (No 2) [1990] 2 All ER 738 at 743g-746c.
2.Secondly, it is with respect completely irrelevant whether the statement in paragraph 52 of Mr Rosser’s affidavit is clear or not. Rule 59.02 does not impose any such restriction on a party’s entitlement to inspect documents.
3.Mr Rosser has clearly deposed to, and your client has sought to rely on the number of documents held by your firm as a factor that should be taken into account by the Court in refusing our client’s application. Our clients are entitled to inspect the documents relied upon by your client.
4.Our clients’ request to inspect the documents was made on 10 February 2006. In accordance with Rule 59.02, your client has seven days in which to make the documents available for inspection.
5.We again repeat our request that our local agent be allowed to inspect the documents referred to in paragraph 52 of Mr Rosser’s affidavit. Our clients will not be in a position to proceed with the totality [of] their cross vesting application until our local agents have inspected the documents, and they reserve the right to rely upon this letter if they seek an adjournment to permit inspection of documents before they complete their argument.
In the event that you do not confirm that your client will make the documents available for inspection by 17 February 2006, we shall most likely approach the Court on an urgent basis for the necessary orders compelling inspection without further reference to your office.
We put you on notice that we shall rely on this letter in relation to any argument on costs, including but not limited to costs thrown away as a result of any adjournment of the cross vesting application. This is an open letter.
We await your most urgent reply.
On 20 February 2006 the defendants’ solicitors sent another letter requesting an urgent response and stating that if the plaintiff did not produce the documents for inspection, that they were instructed to apply for an order requiring production.
By letter sent by facsimile transmission on 20 February, the solicitors for the plaintiff replied in these terms:-
We refer to your letter[s] dated 15 February and 20 February 2006. We respond as follows:
1.We maintain that the words used in paragraph 52 of Mr Rosser’s affidavit do not fall within the scope of the mattes intended to be dealt with by Rule 59.02.
2.In paragraph 4 of your letter dated 15 February you state that Alstom has seven days (from your 10 February 2006 request) within which to make the documents available for inspection. In accordance with Rule 6.01(c), the time for compliance with your request (if valid) expires on 21 February 2006, not 17 February 2006.
3.Even if Rule 59.02 does apply, it would not be possible for us to provide your agents with access to inspect the documents by 21 February 2006. The documents contain a substantial number of privileged or confidential documents. We should require time to review those documents and extract or mask those documents.
4.Please let us know what information, relevant to the application, you seek to obtain from inspecting the documents. If the attention is merely to ascertain the volume of the documents, the documents comprise the equivalent of approximately 200 lever arch folders.
5.Your proposed application for orders to compel inspection of those documents will not succeed because:
5.1 Rule 59.02 is to be read down as being subject to Rule 59.03 (Beneficial Finance Corporation Limited v Price Waterhouse (1996) 68 SASR 19);
5.2 further, the purpose of Rule 59.02 is to enable parties fairly to dispose of an issue to which the affidavit relates;
5.3 the contents of the “substantial number of documents” referred to in Mr Rosser’s affidavit are not relevant to the issues arising in your clients’ application to have the whole of the proceedings transferred to the Supreme Court of New South Wales; and
5.4 your clients do not need to inspect the content of the documents to deal fairly with Mr Rosser’s evidence as to the substantial number of documents.
6.If you are instructed to seek orders to compel inspection of those documents, we require you to notify us of that fact and to coordinate the timing of the application with us. The statement in your letter dated 15 February that you will approach the Court without reference to us is clearly inappropriate.
On 24 February the defendants’ solicitors replied by letter sent by facsimile in the following terms:
We refer to your facsimile dated 20 February 2006, in relation to the Rule 59.02 call.
With respect, your assertion at paragraph 5.3 of your facsimile that “the contents of the ‘substantial number of documents’ referred to in Mr Rosser’s affidavit are not relevant” to the cross‑vesting application is either wrong, or amounts to an admission that paragraph 53 of Mr Rosser’s affidavit is inadmissible on grounds of relevance.
Our clients are entitled to know in what way the documents are relevant to the proceeding (if at all), and this can only be ascertained by a knowledge of their content.
For example, the content of the documents logically must be relevant to whether they are likely to be discoverable, and what part they will play (if any) in issues of proof. Similarly, it is likely to be evident from the content of those documents, whether they are (as we suspect) in the most part copies of documents in the possession of your client in Sydney (a point upon which the affidavit of Mr Rosser is silent). In turn these are all matters to be weighed by the Court in a cross‑vesting application.
Thus, our clients do need to inspect the contents of the documents to deal fairly with the evidence presented in paragraph 53 of Mr Rosser’s affidavit. Indeed, using the words of the authorities justice and fairness demands that, unless your client agrees to paragraph 53 of Mr Rosser’s affidavit being struck out, our clients be entitled to inspect the documents referred to in that paragraph.
To this end, we invite your client to consent to paragraph 53 of Mr Rosser’s affidavit being struck out. Alternatively, we again seek your client’s consent to allow our local agent to inspect the documents. Given your comments at paragraph 3 of your facsimile, we are prepared to allow you a reasonable amount of time to review the documents. We therefore propose inspecting the documents on Wednesday, 1 March 2006.
We ask for your response by 3 pm on Monday, 27 February 2006. If you do not agree to either of the above proposals, we will make the foreshadowed application without further reference to your office.
Because we have given your client a number of opportunities to consent to inspection of the documents and taken the step of setting out precisely the reasons why our clients are entitled to an inspection, we reserve the right to seek indemnity costs.
The solicitors for the plaintiff did not reply and on 27 February the defendants issued an application for production of the documents for inspection. The application was listed for hearing. On the eve of the hearing, the plaintiff’s solicitors informed the defendants’ solicitors that they would consent to the last sentence of para 52 of Mr Rosser’s affidavit being struck out. The defendants applied for an order for costs on the footing that they had to incur solicitors’ costs and counsels’ fees unnecessarily.
The purpose of r 59.02 is apparent from its terms. It is to require a party to produce for inspection a copy of a document referred to in a pleading or affidavit without the necessity for formal discovery. In Beneficial Finance Corporation Ltd v Price Waterhouse (1996) 68 SASR 19 at 50 Lander J said:
The purpose of r 59.02 is to make available, without the necessity of going through the discovery process in the case of a pleading or in the case of an interlocutory proceeding requiring a deponent to attend for cross-examination in the case of an affidavit, those documents to which a party has referred in the pleading or affidavit. The rule assumes that if a party believed that those documents were important enough to refer to in that party’s pleading or affidavit they ought to be made available immediately and in a summary way to the opposing party. The rule also assumes the documents are necessary for an understanding of the pleading or affidavits. (Emphasis added.)
I respectfully agree with all that Lander J said, save for the emphasised passage. There will be occasions when it is appropriate to cross‑examine the deponent to an affidavit instead of relying on r 59.02. My reasons for that appear later.
Rule 59 must be read as a whole. When it is, it is apparent that r 59.03 qualifies the operation of r 59.02, as do other rules such at r 59.04 and r 59.05. It is impossible to read r 59 in any other way. Indeed, as I understand their submissions, the defendants do not contend to the contrary. In Beneficial Finance Lander J said at 50:
I cannot see in its terms how r 59.03 could not apply to an order sought to be made under r 59.02. I agree it operates in relation to orders sought under r 59.01 but that does not mean that it does not also act in relation to orders under r 59.02.
As I understand the reasons of Cox J in Beneficial Finance at 25, he agreed with Lander J on this point. In that passage Lander J did not express any reason for that view. The reason lies in reading r 59 as a whole. This conclusion is consistent also with practice under the previous Supreme Court Rules 1947 (as amended): see O 31 r 15 of those Rules.
When determining which court was the more appropriate forum, it was necessary to have regard to factors which connected the action to one court more than another, that is to say, to have regard to the connecting factors identified by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 478. Expressed another way, it was necessary to have regard to the nuts and bolts management decision as to which court was the more appropriate to hear and determine the action: Bankinvest AG v Seabrook (1988) 14 NSWLR 711 per Street CJ at 713 – 714. It is apparent that the intent of the plaintiffs in referring to the documents being held by their solicitors in Adelaide was to advance that fact as one relevant factor pointing to the conclusion that this Court was the more appropriate forum.
When referring to the documents, the purpose was not to rely on the content of each document but, instead, on the volume of documents. The content of each document could not assist the resolution of the question whether the action should be transferred to the Supreme Court of New South Wales or remain in this Court. The only respect in which the content of the documents was a material consideration was whether the content of each document was relevant to an issue in the action. The issue was how many of the documents held by the plaintiff’s solicitors in Adelaide were documents relevant to the issues in the action.
The defendants asserted that they required inspection in order to ascertain how many relevant documents were held by the plaintiff’s solicitors. It must be acknowledged that the assertion that the plaintiff’s solicitors held documents in Adelaide was of no weight unless an assessment could be made of the number of documents which have relevance to the action. The only means by which that fact could be ascertained with any degree of certainty was for each document to be inspected. However, it was inappropriate to seek an order under r 59 because on an application to transfer an application to another court, the court will not, generally speaking, inspect each and every document, especially when there are a substantial number of documents. Such a task would engage the court in an undertaking of a scale quite disproportionate to the nature of the application to transfer the proceedings to another court and the issues involved in that application. Shortly put, it would allow the tail of production of documents to wag the substance of the application in a wholly inappropriate way.
The enquiry as to how many documents held by the plaintiff were relevant to the issues in the action should have been undertaken by applying to cross‑examine Mr Rosser on his affidavit. The court would assess the veracity of Mr Rosser’s evidence and determine the issue. The issue is to be determined by cross‑examination of the deponent of the affidavit, not by inspection of documents.
For these reasons, the application of the defendants was misconceived. Section 40 of the Supreme Court Act invests the Court with a general discretion on the issue of costs. That discretion is, of course, subject to the Rules of Court. The defendants have been put to unnecessary cost and expense for the purpose of securing the concession that the plaintiff would not rely on the assertion as to the number of documents held by their solicitors in Adelaide. In all the circumstances, it is appropriate to order that the plaintiff pays the defendants’ costs of and incidental to the securing of the concession, which costs shall include the issue and service of the application for production of the documents. However, as the defendants incorrectly proceeded pursuant to r 59.02, it is not appropriate to award them counsel fees or to permit them to recover their costs on a solicitor and client basis.
For these reasons I make the following orders as to costs
1.That subject to paragraph 3 of this order the defendants shall pay the plaintiff’s costs of and incidental to the application to transfer these proceedings to the Supreme Court of New South Wales.
2.The plaintiff shall be entitled to have a bill of costs taxed and, upon the costs being taxed, to have those costs paid within 21 days of the taxation.
3.The plaintiff shall pay the defendants’ costs of and incidental to the defendants’ application dated 27 February 2006.
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