Andrew Wheeler trading as PricewaterhouseCoopers v Aoyin Group Ltd (No 2)

[2021] NSWSC 1115

Supreme Court

New South Wales

Medium Neutral Citation:

Andrew Wheeler trading as PricewaterhouseCoopers v Aoyin Group Ltd (No 2) [2021] NSWSC 1115

Hearing dates:

11 August 2021, 3 September 2021

Date of orders:

3 September 2021

Decision date:

08 September 2021

Jurisdiction:

Equity - Commercial List

Before:

Rees J

Decision:

Cross-claimant to pay the cross-defendant’s costs thrown away by vacation of trial.

Catchwords:

COSTS – 8-day trial vacated – each party seeks orders for costs thrown away – principles at [3]-[7] – leave granted to amend defence at beginning of trial – cross-claimant then sought to join another cross-defendant – cross-claimant had previously decided to keep proceedings against cross-defendants separate – vacation caused by cross-claimant’s decision to join rather than amendment – cross-claimant to pay costs thrown away.

Legislation Cited:

Civil Liability Act 2002 (NSW) ss 34, 37

Competition and Consumer Act 2010 (Cth)

Cases Cited:

Andrew Wheeler & Ors t/a PricewaterhouseCoopers v Aoyin Group Limited [2021] NSWSC 363

Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; (2014) 206 LGERA 40

Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2001) 187 FCR 261; [2010] FCAFC 101

Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244

Harith v Beale [2003] QSC 411

Lydall v Martinson (1877) 5 Ch D 780

Prime Capital Securities Pty Ltd v Calleja [2017] NSWSC 116

The Owners – Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411

Williams v Sandy (1887) 13 VLR 368

Texts Cited:

Gino Dal Pont, Law of Costs (4th ed, 2018, LexisNexis)

Category:

Costs

Parties:

Andrew Wheeler & Others t/as PricewaterhouseCoopers (Plaintiffs)
Aoyin Group Limited (Defendant)

Representation:

Counsel:
S Nixon SC / E Bathurst (Plaintiffs)
RA Dick SC / P Meagher (Defendant)

Solicitors:
Ashurst Australia (Plaintiffs)
Mills Oakley (Defendant)

File Number(s):

2017/252324

Judgment

1. HER HONOUR: This matter was listed for trial on 17 May 2021 for eight days. PricewaterhouseCoopers (PwC) sued client Aoyin Group Ltd for unpaid fees. By cross claim, Aoyin sued PwC for damages in contract, tort and misleading and deceptive conduct.

2. At the commencement of the trial, PwC moved on its motion filed on 11 May 2021, seeking leave to amend its defence by expanding a proportionate liability defence already pleaded in respect of the misleading and deceptive conduct claim – identifying law firm Baker McKenzie as a concurrent wrongdoer – to the contract and tort claims. Leave was granted. Aoyin decided to join Baker McKenzie as a cross-defendant. Necessarily, the hearing was vacated. Both PwC and Aoyin now seek the costs thrown away as a consequence of the vacation of the trial.

PRINCIPLES

3. If the hearing of an action is adjourned to allow parties to be added, the party who applied for the adjournment will ordinarily be ordered to pay the costs of the day, including costs thrown away by other parties in respect of the application: Gino Dal Pont, Law of Costs (4^th ed, 2018, LexisNexis) at [14.40] citing Lydall v Martinson (1877) 5 Ch D 780, a decision followed in Williams v Sandy (1887) 13 VLR 368 per Webb J at 372.

4. As the learned author of Law of Costs also observes: (emphasis added) “That in seeking an adjournment a party is not acting unreasonably is no protection, by itself, against such a costs order … As always, the matter remains within the court’s discretion, and circumstances may incline a court to treat an adjournment as a vagary of litigation rather than sheeting it to a party”. An example of this is Harith v Beale [2003] QSC 411, where the plaintiff was ordered to pay the costs thrown away by reason of the vacation of a trial where the trial did not proceed by reason of the plaintiff’s stated inability to fund legal representation: at [57]-[58] per Dutney J.

5. Cases closer to the facts at hand are illustrative. In The Owners – Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411, an owners’ corporation sought access to a lot to rectify unauthorised works to the common property. Proceedings were commenced against the tenants who occupied the lot. Shortly before the hearing, the lease expired and the tenants vacated the lot. The hearing was adjourned when the owners’ corporation accepted that the registered proprietor should be joined. The owners’ corporation was ordered to pay the costs thrown away by the adjournment: at [34] per Basten JA, with whom Macfarlan and Meagher JJA agreed.

6. Likewise, in Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; (2014) 206 LGERA 40, a council sued a developer for constructing a building in breach of the development consent. Shortly before the hearing of an appeal, it became clear that the lot owners and occupiers of the strata plan were necessary parties. The hearing was vacated. At the conclusion of the resumed appeal, the Council was ordered to pay the costs thrown away. Sackville AJA (with whom McColl and Barrett JJA agreed) held that the hearing was vacated because the appeal was not properly constituted as to parties: at [211]. This was the Council’s responsibility. The appeal could not proceed unless and until the Council regularised the position.

7. Finally, in Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244, an appeal was vacated when, the day before the hearing, the appellant’s solicitor filed an affidavit which gave rise to a dispute as to whether the evidence before the Court was complete. Mason P, with whom Santow and Tobias JJA agreed, considered that the appellant should bear responsibility for the aborted hearing; the late filing of the affidavit made it inevitable that the hearing would have to be vacated. The matter should have been brought to a head well before the hearing and the appellant’s solicitor should have moved more promptly: at [113]. The President did not accept the appellant’s submission that the real cause of the hearing being vacated was an unwillingness by the respondents to embrace the appellant’s proposals as how the matter could be dealt with ‘on the run’: at [114].

8. Ordinarily, then, it may be thought that Aoyin would be obliged to pay the costs thrown away as a consequence of the vacation of the trial so that a further party could be joined, particularly where it was not necessary to join Baker McKenzie. The question, essentially, is whether the trial was vacated as a consequence of Aoyin’s decision to join Baker McKenzie or, rather, PwC’s amended defence.

FACTS

9. Owen Chen is a director of Australia Capital Investment Pty Ltd and Australia Capital Financial Management Pty Ltd. Mr Chen wanted to establish a bank in Australia.

10. In November 2014, Baker McKenzie was engaged to assist in this endeavour. In December 2014, Aoyin was incorporated for this purpose. Australia Capital Investment outlaid funds to acquire shares in Aoyin.

11. In February 2015, Aoyin entered into retainers with both Baker McKenzie and PwC.

12. As I understand it, Australian Capital Financial Management was then conducting a commercial lending business. In mid-2015, that company effectively donated its loan business to Aoyin, apparently on Baker McKenzie’s advice, to assist in efforts to establish a bank. In addition, a capital raising was underway. Aoyin offered shares by subscription under an Information Memorandum (March 2015) and Replacement Information Memorandum (September 2015).

13. Two events are noteworthy for present purposes.

14. First, on 29 October 2015 (the Allotment Date), shares in Aoyin were allotted inter alia to a Hong Kong company, the directors of which had been convicted and sentenced to four years imprisonment. This problem was not discovered for some time but ultimately stymied Aoyin’s plans to establish a bank in Australia as this shareholder did not comply with the ‘fit and proper’ requirements of Australian regulatory authorities and would not part with its shares.

15. Second, on 31 March 2016, Aoyin met with PwC and Baker McKenzie (the Meeting). Baker McKenzie represented that it was unnecessary for Aoyin to change the composition of Aoyin’s substantial shareholders. PwC remained silent. PwC is thereby said to have engaged in misleading and deceptive conduct by silence.

These proceedings

16. In August 2017, PwC commenced proceedings in the District Court of New South Wales against Aoyin, seeking payment of its fees. Aoyin retained Mills Oakley solicitors; Maurice Lynch had the conduct of the matter.

17. In February 2018, Aoyin filed a defence and cross-claim, seeking damages for:

1. breach of contract and negligence in respect of PwC’s performance of its retainer; and

2. misleading and deceptive conduct arising from PwC’s silence at the Meeting.

18. Aoyin claimed damages, being at trial some $10 million said to have been wasted in its efforts to establish a bank, of which:

1. some $1.5 million was incurred between the Allotment Date and the Meeting, and was thus recoverable under the breach of contract and tort claim; and

2. the remaining $8.5 million incurred after the Meeting, and thus recoverable under all three causes of action.

19. The proceedings were transferred to this Court. In June 2018, PwC filed its defence to the cross-claim. In respect of the contract and tort claims, PwC pleaded:

1. Aoyin had retained Baker McKenzie to advise in relation to legal and regulatory matters and attend to the task which it was said formed part of PwC’s retainer.

2. Aoyin had retained Baker McKenzie to advise on the share issue; the Information Memorandum and Replacement Information Memorandum had been developed by Aoyin with the assistance of that firm.

20. According to PwC’s solicitor, Andrew Carter, he was then aware that Baker McKenzie had been engaged by Aoyin to provide legal services but did not know the specific terms of its engagement. Mr Carter did not then have sufficient information to plead an allegation of negligence against that firm. It may be inferred, however, that PwC intended to defend the contract and tort claims on the basis that Baker McKenzie, rather than PwC, was obliged to attend to various matters asserted to formed part of PwC’s obligations and, further, that by reason of Baker McKenzie’s role in the matter, any breach of contract or negligence on PwC’s part was not causative of any loss.

21. In respect of the misleading and deceptive conduct claim, PwC pleaded that the claim was an “apportionable claim” and Baker McKenzie was a “concurrent wrongdoer” within the meaning of the Civil Liability Act 2002 (NSW) and the Competition and Consumer Act 2010 (Cth). PwC’s liability, if any, was said to be limited to an amount reflecting that proportion of damage which was “just” having regard to PwC’s responsibility for any damage or loss.

22. Obviously enough, if PwC was found liable but established the proportionate liability defence in toto, then it was possible that Aoyin would be limited to recovering only $1.5 million of its $10 million claim, and then only if the Court was satisfied, given Baker McKenzie’s role in the transaction, that PwC was obliged to attend to the tasks alleged in the cross-claim, and any failure to do so was causative of Aoyin’s loss. Although no proportionate liability defence was pleaded in respect of the contract and tort claims, Baker McKenzie’s role in the transaction remained relevant and important to those claims.

23. On receipt of PwC’s defence, Mr Lynch considered whether to join Baker McKenzie to the proceedings, but decided not to. It was considered that, if Aoyin succeeded against PwC in contract or tort, this may obviate the need for Aoyin to incur the expense and effort of pursuing a claim against Baker McKenzie. Joinder of Baker McKenzie to the proceedings was considered likely to substantially increase the cost and complexity of the proceedings and protract its resolution. It was thought better if Aoyin faced one, rather than two, well-resourced and sophisticated opponents. There was thought to be reasonable prospects of resolving the claim against PwC before trial. Mr Lynch also considered it would be appropriate to review Aoyin’s strategy as the proceedings progressed.

24. It may be thought a curious choice that, where Baker McKenzie is said to have made a misleading and deceptive representation at the Meeting, and PwC is said to have also made a misrepresentation by silence by failing to have corrected Baker McKenzie’s misleading representation, that only PwC was sued. Aoyin was entitled to choose who it wished to sue, but risks attended that choice if the considerations underpinning it changed and a different choice was thought to be in Aoyin’s interests.

25. In June 2019, orders were made for discovery. This appears to have been a protracted process, with orders made for further rounds of discovery by Aoyin. In parallel, PwC served a subpoena on Baker McKenzie, which produced documents in March 2020. Aoyin claimed privilege over these documents whilst PwC contended that privilege had been waived. This also appears to have been a protracted process. It is apparent from the categories of discovery and subpoena that Baker McKenzie’s role in the transaction was considered relevant to determination of the issues in dispute.

ACapital proceedings

26. Meanwhile, in December 2020, apparently unbeknownst to PwC, Australia Capital Investments and Australia Capital Financial Management (together, referred to as ACapital) commenced proceedings in this Court against Baker McKenzie (ACapital proceedings). Shortly put, ACapital sued Baker McKenzie for loss sustained before the Allotment Date, being the monies outlaid to acquire shares in Aoyin and the ‘donation’ of the commercial lending business.

27. Mr Lynch did not act for ACapital but was provided with a draft pleading. He thought it might be helpful in formulating a claim by Aoyin against Baker McKenzie if Aoyin decided to sue the firm or join it to these proceedings. Mr Lynch did not see the pleading as ultimately filed, and was not aware that the ACapital proceedings had been commenced until February 2021.

Bakers proceedings

28. Mr Lynch was also conscious that a claim by Aoyin against Baker McKenzie may become statute barred on 5 February 2021. In January 2021, he prepared a pleading to sue Baker McKenzie in order to protect against any time bar, but remained of the view that the preferable course was for Aoyin to focus on attempting to achieve a successful resolution of its claims against PwC before incurring the expense and effort of pursuing Baker McKenzie.

29. On 4 February 2021, Aoyin filed a claim against Baker McKenzie (Bakers proceedings). The pleading made no reference to PwC but, as I read it, contended that Baker McKenzie was responsible for the same loss sought to be recovered from PwC in these proceedings by reason of Baker McKenzie’s breach of contract, negligence and misleading and deceptive conduct. The pleadings were not served on Baker McKenzie, nor provided to PwC.

30. Mr Lynch said that Aoyin remained content to sue PwC only in these proceedings, as it was not then contended that the contract or tort claim was apportionable. As I understand it, Mr Lynch considered that the whole of the damages may still be recoverable under the contract and tort claims, notwithstanding the “concurrent wrongdoer” defence pleaded in respect of the misleading and deceptive conduct claim and the operation of section 34(1A) of the Civil Liability Act.

Access to Baker McKenzie documents

31. On 10 February 2021, PwC filed a motion challenging Aoyin’s claim for privilege over documents produced by Baker McKenzie. To PwC’s later chagrin, the terms of Baker McKenzie’s retainer – then the subject of Aoyin’s claim for privilege and PwC’s claim that privilege had been waived – was already pleaded in the ACapital proceedings in detail. Any privilege in the document had likely already been waived, but PwC did not know.

32. On 8 April 2021, Aoyin agreed to produce some of the Baker McKenzie documents, including Baker McKenzie’s retainer agreements. Stevenson J heard the balance of the privilege claims. On 9 April 2021, Stevenson J held that privilege had been waived over two further documents: Andrew Wheeler & Ors t/a PricewaterhouseCoopers v Aoyin Group Limited [2021] NSWSC 363.

33. On 16 April 2021, or more specifically, as PwC emphasised, on a Friday evening, the two documents were produced. The documents comprised Baker McKenzie’s advice on the Information Memorandum and Replacement Information Memorandum. Until then, PwC did not know the precise scope of what Baker McKenzie had been asked to do and, in particular, did not know that the firm had been asked to review the memoranda, being a matter of some significance to Aoyin’s claim against PwC. On receipt of the documents, Mr Carter sought advice from counsel and instructions to amend PwC’s defence.

34. A mediation took place on 27 April 2021.

Application to amend

35. On 4 May 2021, PwC served a proposed amended defence to the cross-claim, extending the proportionate liability defence to the contract and tort claims. Aoyin advised it did not consent to the proposed amended defence as it was said: the amendment should have been made earlier; the delay was not explained by the recent production of Baker McKenzie’s retainer; Aoyin could not meet the amended defence as it had made forensic decisions, including whether to join Baker McKenzie, and would have to vacate the hearing.

36. On 11 May 2021, PwC filed a motion seeking leave to amend its defence. Mr Lynch considered this to be very significant as “the issues of Bakers’ negligence would fall to be determined in [these] proceedings”. (Strictly speaking, Baker McKenzie’s negligence would also fall to be determined in the ACapital proceeding and Bakers proceedings, should Aoyin proceed to serve the originating process in the latter.) Aoyin decided to oppose the amendment and, if unsuccessful, “give serious consideration to whether to join Bakers to the PwC Proceeding”.

37. Mr Lynch swore an affidavit opposing leave to amend, deposing that, if PwC’s proposed amendment was allowed, Aoyin would have to prepare a Reply and:

… give consideration to whether or not to join Baker McKenzie to this proceeding, having regard to the fact that the amendments, if allowed, would give rise to a risk (where none previously existed) that if Aoyin succeeds in establishing its negligence and breach of contract claims, the loss which it may recover from PwC may be reduced on account of an apportionment of liability to Baker McKenzie.

38. In addition, Mr Lynch deposed that Aoyin would need to “revisit forensic decisions made in this proceeding to date concerning discovery and evidence”, prepare further lay and possible expert evidence about Baker McKenzie’s role, and prepare submissions on the subject.

Vacation of trial

39. On 17 May 2021, the trial began. The first order of business was PwC’s application to amend its defence. If leave was granted, PwC did not propose to call any further evidence in support of the amended defence. As to Mr Lynch’s affidavit opposing the amendment, PwC suggested then and on this application that the preparation of a Reply would not be onerous exercise, nor necessary. The Reply filed to PwC's existing pleading that Baker McKenzie was a concurrent wrongdoer simply joined issue and did not admit the matters pleaded.

40. As to the possible joinder of Baker McKenzie, PwC contended that the effect of the amendments was not to raise issues about the role, responsibilities and conduct of Baker McKenzie for the first time, or to raise a proportionate liability defence for the first time, but to expand the existing proportionate liability defence from covering $8.5 million of the damages claimed, to respond to the full $10 million.

41. Mr Lynch's evidence that any amendment would have required Aoyin to "resist forensic decisions made in this proceeding to date concerning discovery" was said to be difficult to understand, when Aoyin and its legal advisers had in their possession, and had reviewed, all relevant communications with Baker McKenzie. It was also difficult to see how any further lay evidence about the role of Baker McKenzie would be required, let alone require any significant time to prepare. Mr Chen had already given affidavit evidence about the advice that he received from Baker McKenzie. Aoyin’s former director, Howard Ting, would be cross-examined about these issues irrespective of whether the amendment was allowed.

39. The necessity to prepare submissions concerning the concurrent liability of Baker McKenzie was not something that would hold up the hearing as such submissions would have been required to be prepared in any event given the existing proportionate liability defence to the misleading or deceptive conduct claim. Aoyin's written opening submissions for the trial effectively accepted that Baker McKenzie was a concurrent wrongdoer in respect of the misleading or deceptive conduct case.

40. I was satisfied that PwC had satisfactorily explained its delay in seeking to amend its defence. I was not satisfied that there was any definitive prejudice identified by Mr Lynch. I asked counsel to confer as to how the eight days of hearing could be used to accommodate Aoyin’s need to attend to various tasks as a consequence, such as adjourning the commencement of the trial for a day or more or to permit Aoyin to adduce further evidence in chief.

41. The Court adjourned for lunch, after which Aoyin’s senior counsel advised that he had now been instructed to join Baker McKenzie to the proceedings. Aoyin’s senior counsel informed the Court as follows: (emphasis added)

The difficulty of course is that that will require us to formulate an application, formulate a pleading. I can candidly tell your Honour we haven’t done those things and we don’t think that there should be any criticism of us for not having done that.

… we don’t think it’s sufficient for our purposes just to pick up and repeat what is set out in Mr Nixon’s defence and, as it were, adopt that for the purposes of our own claim. Because we will now have the additional task of not only delineating the responsibilities of each of the advisers, but needing to give some consideration in a pleading and in a forensic sense to how we think any apportionment should occur across the claims, but in particular with respect to the negligence claim.

45. Of course, Aoyin already had to hand the pleadings in the Bakers proceedings and, for that matter, the ACapital proceedings. Aoyin’s legal team would hardly be ‘starting from scratch’. But regardless of how quickly Aoyin could have produced an amended cross-claim, the joinder of Baker McKenzie necessarily required the hearing to be vacated as that firm would inevitably need time to consider the claim against it, file a defence, become appraised of the evidence already filed in these proceedings, meet that evidence and prepare for trial.

46. Following the vacated hearing, Mr Lynch and PwC’s solicitor, Lorraine Hui, served affidavits in support of an application that their respective clients have the benefit of an order that their costs of the vacation of the trial be paid by the other. In particular, Ms Hui deposed that she had become aware of the ACapital proceedings and noted that a proposed amended cross claim which Aoyin now proposed to file, joining Baker McKenzie, “appears to borrow heavily” from the pleading in the ACapital proceedings. By letter to Mr Lynch, Ms Hui complained:

It therefore appears to us that Aoyin (through its director, Mr Chen) had, in at least December 2020, being five months prior to the trial being vacated on 17 May 2021, already considered making claims against Baker McKenzie in relation to Baker McKenzie’s breaches of duties with respect to Aoyin’s constitution and by-laws, and those claims are now in essence reflected in the proposed FASCC the subject of Aoyin’s application for leave to amend.

47. On 11 August 2021, I heard argument as to who should pay the costs of vacating the trial. I expressed concern that the ACapital proceedings had not been brought to my attention on the first day of the trial. Senior counsel sought an opportunity for Mr Lynch to provide an explanation, which he since has. That explanation included disclosing the Bakers proceedings as well. In short, Mr Lynch said he did not consider it relevant to bring to the Court’s attention either the ACapital proceedings or the Bakers proceedings. I suppose the relevance of those proceedings is that they may shed light on whether Aoyin’s decision to join Baker McKenzie to these proceedings was the consequence of PwC’s amendment or, in truth, that Aoyin had been thinking about suing Baker McKenzie for some time and it was now convenient to do so in these proceedings.

SUBMISSIONS

48. Aoyin contended that PwC should pay its costs thrown away by reason of the vacation of the hearing dates as PwC’s decision to amend its defence on the first day of trial left Aoyin little choice but to join Baker McKenzie to the proceeding. That was said to be a reasonable and likely consequence of PwC’s late amendment, and one which was made known to PwC when Aoyin was notified of PwC’s proposed amendment. Aoyin submitted that the proposed amendments resulted in an important change to the way PwC had, up until that time, put its case. The amendments opened up a means by which PwC could significantly reduce its liability in a manner that was not (absent the amendments) otherwise open to it. Aoyin had made forensic decisions about joining Baker McKenzie to the proceeding on the basis of this pleading. It was said to be appropriate that PwC pay Aoyin’s costs thrown away by reason of the vacation of the hearing dates, consistent with the orthodox position in relation to amendments made on the eve of, or during, trial resulting in a loss of hearing dates: Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2001) 187 FCR 261; [2010] FCAFC 101; Prime Capital Securities Pty Ltd v Calleja [2017] NSWSC 116.

49. Whilst Aoyin accepted that the existing concurrent liability defence may affect the bulk of its claim for damages, at least $1.5 million was not affected, being damages suffered before the Meeting. If Aoyin succeeded in respect of its contractual and tortious claims and was awarded these damages with consequential costs orders, then Aoyin could decide whether it wished to take any further action against Baker McKenzie. The amendment having been granted, Aoyin was said to have been faced with a new risk, “the calculus completely changed”, as it was now possible that PwC could defend Aoyin’s claim entirely by defraying responsibility to Baker McKenzie. If Aoyin then commenced proceedings against Baker McKenzie, it may be said by Baker McKenzie that Aoyin was Anshun estopped, although I confess I did not follow this argument, particularly having regard to section 37(1) of the Civil Liability Act.

50. PwC submitted that the appropriate costs order is that Aoyin pay PwC's costs of the vacation or, alternatively, that those costs be costs in the cause. It could not be said that the vacation of the hearing was attributable to PwC's application to amend its defence. The vacation of the hearing was attributable to Aoyin's subsequent decision to join Baker McKenzie. The other matters identified by Aoyin's solicitor as being necessary in light of the amendment would not have led to the vacation of the hearing. There could be no doubt that Aoyin (through its director, Mr Chen) had, five months prior to the trial, already considered making claims against Baker McKenzie in relation to the firm’s breaches of duties, as pleaded in the ACapital proceedings. This pointed to the vacation of the trial date as being consequent upon Aoyin's late decision to join Baker McKenzie to the proceedings.

CONCLUSION

51. The amendments for which I granted leave on the first day of the trial were incremental rather than seismic. Whilst I understand Aoyin does not necessarily agree with PwC’s characterisation of its defence, PwC asserted that $8.5 million of Aoyin’s loss was an apportionable claim. The effect of the amendment was to extend this defence to the remaining $1.5 million of Aoyin’s claims. There was nothing to stop the trial proceeding on the amended pleadings between the existing parties. Baker McKenzie did not need to be joined. Whatever the outcome of these proceedings as then configured, there was nothing to stop Aoyin later bringing a claim against Baker McKenzie if it wished: section 37(1), Civil Liability Act.

52. The material change was Aoyin’s choice which, until then, had been to keep its claims against PwC and Baker McKenzie separate. Aoyin had its reasons for keeping the claims separate. Whether those reasons are described as forensic or tactical is not exculpatory. As noted at the outset (see [3]-[4]), the fact that Aoyin may have been acting reasonably is no protection, by itself, against a costs order. Aoyin now wished to bring those claims together, which had a consequence that the trial in its then configuration could not proceed. The trial was vacated as a consequence. Aoyin should pay PwC’s costs thrown away.

ORDERS

53. For these reasons, I make the following order:

1. Order the defendant / cross-claimant to pay the plaintiff / cross defendant’s costs thrown away by reason of the vacation of the trial commencing on 17 May 2021, such costs to include the plaintiff / cross-defendant’s costs of the hearing on 3 September 2021.

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Decision last updated: 08 September 2021