Australian Securities and Investments Commission v MacDonald (No 2)

[2008] NSWSC 1020

CITATION:	Australian Securities and Investments Commission v MacDonald (No 2) [2008] NSWSC 1020
HEARING DATE(S):	29 September 2008
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	29 September 2008
DECISION:	ASIC to pay 20 per cent. Legal representatives of defendants other than the 11th defendant to pay 10 per cent each.
CATCHWORDS:	PROCEDURE - Costs - How fixed costs of the provision of electronic court facilities should be borne in the first instance - Civil penalty proceedings by ASIC against 12 defendants - 3 defendants represented by the same legal representative - 11th defendant playing little part in the proceedings - ASIC offer to pay 11th defendants share of the costs - Whether ASIC should pay 50 per cent and the defendants pay the balance divided equally between 12 defendants - Whether costs should be divided into 10 shares
PARTIES:	Australian Securities and Investments Commission (Plaintiff) Peter Donald MacDonald (First Defendant) Peter James Shafron (Second Defendant) Phillip Graham Morley (Third Defendant) Michael Robert Brown (Fourth Defendant) Michael John Gillfillan (Fifth Defendant) Meredith Hellicar (Sixth Defendant) Martin Koffel (Seventh Defendant) Geoffrey Frederick O'Brien (Eighth Defendant) Gregory James Terry (Ninth Defendant) Peter John Willcox (Tenth Defendant) ABN 60 Pty Ltd (Eleventh Defendant) James Hardie Industries NV (Twelfth Defendant)
FILE NUMBER(S):	SC 1490/07
COUNSEL:	Mr A Bannon SC/ Mr R Beech-Jones SC/ Ms D Hogan-Doran (Plaintiff) Mr S Finch SC/ Mr D Studdy/ Mr D Mackay (First Defendant) Mr B Walker SC/ Mr R Lancaster/ Mr N Owens (Second Defendant) Mr B Oslington QC/ Mr R Dick/ Mr N Bender (Third Defendant) Mr T Bathurst QC/ Mr R Whitington QC/ Mr R Hollo/ Mr R Hardcastle/ Mr I Colquhoun (Fourth to Seventh Defendants) Mr P Wood/ Mr M Henry (Eighth Defendant) Mr R McHugh SC/ Mr S Nixon (Ninth Defendant) Mr T Jucovic QC/ Mr R Scruby (Tenth Defendant) Mr I Pike (Eleventh Defendant) Mr A Meagher SC/ Ms K Morgan (Twelfth Defendant)
SOLICITORS:	Clayton Utz (Plaintiff) Minter Ellison (First Defendant) Middletons (Second Defendant) Henry Davis York (Third Defendant) Atanaskovic Hartnell (Fourth to Seventh Defendants) Arnold Block Leibler (Eighth Defendant) Blake Dawson (Ninth Defendant) Kemp Strang (Tenth Defendant) Baker & McKenzie (Eleventh Defendant) Mallesons Stephen Jaques (Twelfth Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

MONDAY 29 SEPTEMBER 2008

1490/07 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v PETER DONALD MACDONALD & ORS (NO 2)

EX TEMPORE JUDGMENT

1 An electronic courtroom has been established for the hearing of these proceedings. The question for determination by the court is how should the fixed costs associated with the establishment of the electronic courtroom be borne by the parties?

2 Variable costs are to be borne by the parties on a “user pays” basis. These include the costs of supplying PCs, monitors and standard software; the costs of subscribing to a hardcopy transcript, or an electronic transcript, service; the costs of in-court connection to a real time transcript service; the costs of remote access to the electronic courtroom; and the costs of technical support for the individual benefit of a party.

3 The fixed costs are the costs of providing the facilities; e Law support staff costs, including court operators; transcript facilities; and broadbrand facilities.

4 The 12th defendant, James Hardie Industries NV, supported by other defendants, contends that the plaintiff, Australian Securities and Investments Commission, should bear 50 per cent of the fixed costs and the defendants should bear the remaining 50 per cent to be shared equally between the 12 defendants.

5 It was submitted in their behalf that the fixed costs would remain the same whether ASIC sued one defendant or 12. If it sued one defendant, it would be appropriate that it bore 50 per cent of the fixed costs. It was submitted that should set the benchmark regardless of the number of defendants involved.

6 It was also submitted that none of the defendants is involved in all the incidents raised in the third further amended statement of claim. ASIC is the only party interested in establishing all the issues in that pleading. It was submitted that because of this feature ASIC is likely to use the facilities to a greater extent than other parties.

7 ASIC submitted that each party will benefit from the provision of the facilities in the presentation of their respective cases.

8 Eight firms of solicitors represent the defendants other than ABN 60 Pty Ltd, that used to be called James Hardie Industries Ltd. The same firm represents the 4th to 7th defendants. Thus, it was submitted, there are 10 recipients of the benefit of the facilities provided upon payment of the fixed costs.

9 ABN 60 has already announced that it will take little part in the proceedings. ASIC has offered to pay 20 per cent of the fixed costs representing a 10th share for it and a 10th share for ABN 60.

10 It seems to me that payment of the fixed costs will give rise to the provision of facilities for use by each of the 8 firms of solicitors involved in the defence. I do not accept that there will necessarily be a higher use of the facilities by ASIC. With respect to the circumscribed events upon which ASIC relies against individual defendants there is, in my view, likely to be considerable use of the facilities made possible by payment of the fixed costs. It is certainly not the case that ASIC is likely to use the facilities as much as all the defendants put together.

11 This is not a case against one defendant. It is a case against many, each of whom has an interest in the utilisation of the facilities to be provided upon payment of the fixed costs. But with the 4th to 7th defendants being represented by the one legal representative, I think it appropriate to consider the sharing of cost on the basis of 10 legal representatives rather than 13 parties. I do not consider that the legal representative for the 4th to 7th defendants is likely to use the facilities 4 times more than other legal representatives.

12 ASIC having offered to pay the share of the fixed costs of ABN 60, I am of the view that the appropriate resolution of this issue is that ASIC pay 20 per cent and each of the defendants represented by the 8 legal representatives other than ABN 60 pay 10 per cent of the fixed costs in the first instance. The ultimate question of who bears these costs will depend in large measure upon the ultimate resolution of the proceedings.

13 Subject to such final costs orders as may be made at the conclusion of these proceedings, I order the plaintiff to pay 20 per cent of the fixed costs of the electronic courtroom as defined by e Law. I order each of the 1st, 2nd, 3rd, 8th, 9th, 10th and 12th defendants to pay 10 per cent of the fixed costs. I order the 4th to 7th defendants to pay 10 per cent of the fixed costs. I direct that the digital content of my judgment in Australian Securities and Investments Commission v MacDonald (No 2) when entered on the Caselaw data base be entered in the court record data base.

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