Australian Securities and Investments Commission v Rich [2009] NSWSC 1456
HEARING DATE(S):
18 December 2009
JURISDICTION:
Equity
JUDGMENT OF:
Austin J
EX TEMPORE JUDGMENT DATE:
18 December 2009
DECISION:
Application for Notice of Motion for interim costs to be made returnable instanter, denied.
CATCHWORDS:
COSTS - interim costs - whether court should entertain application for interim costs when final costs hearing was being expedited
LEGISLATION CITED:
Civil Procedure Act 2005 (NSW), s 98
PARTIES:
Australian Securities and Investments Commission (Plaintiff) John David Rich (First Defendant) Mark Alan Silbermann (Fourth Defendant)
FILE NUMBER(S):
SC 5934/01
COUNSEL:
P Durack SC with A Kuklik (Plaintiff) D L Williams SC with M J Steele (First and Fourth Defendants)
SOLICITORS:
Georgina Hayden, Solicitor for Australian Securities and Investments Commission (Plaintiff) Thompson Eslick (First and Fourth Defendants)
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
AUSTIN J
FRIDAY 18 DECEMBER 2009
5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V JOHN DAVID RICH & ANOR
JUDGMENT (Ex tempore, revised on 21 December 2009)
1 HIS HONOUR: On 27 November 2009, one of the orders made by the Court was to list the proceedings at 9.30am today for further directions and for hearing of any application to be made for orders under s 98(4) of the Civil Procedure Act 2005 for an interim payment to the defendants by the plaintiff on account of costs. The Court also made provision for a mediation, which took place, I am told, yesterday.
2 This morning the defendants made application to file in Court a Notice of Motion for an interim determination of costs in the sum of $3 million, to be made returnable instanter. The application was supported by an affidavit and bundle of documents giving particulars as to costs.
3 The plaintiff objected to making the Notice of Motion returnable instanter on three grounds. The first ground was that the plaintiff is not ready to have the matter dealt with today. The plaintiff wishes to put on evidence as to the prejudice it would suffer if an interim costs order were made as sought. It wishes to raise the issue of whether the Court has the power in the present circumstances to make such an order and it proposes that there be an exchange of outline submissions before the application is considered. Today is the last day of term and there are four business days after today before Christmas. The plaintiff says it is not ready, principally because its attention has been directed towards the mediation.
4 The correspondence before me indicates that on several occasions, from November onwards, the defendants indicated that if the mediation or were to be unsuccessful, it would wish to proceed with its application for interim costs today. On 3 December 2009 the defendants supplied the plaintiff with the folder of costs documents on which they now seek to rely. ASIC submitted today that it treated the folder of documents as information relevant to mediation of costs, and did not see it as the evidentiary support for an application for interim costs, to be made this morning.
5 It seems to me that ASIC has had notice for some time of the prospect that the defendant would seek interim costs today, but it did not receive confirmation of the defendants' intention to push forward until yesterday afternoon, when a draft Notice of Motion was served.
6 I regard it as reasonable for the plaintiff to take the view that the application should not go ahead today, notwithstanding that degree of advance warning. I can see that there could be a question of power to be carefully considered, and that outline submissions are likely to be helpful, and I am persuaded that the plaintiff has a case for seeking leave to provide some additional evidence.
7 After questions from me, the plaintiff indicated that its evidence could be prepared by lunchtime on 23 December. That would mean a hearing on the interim application on Christmas Eve at the earliest. It seems to me a very real prospect that an adjournment would be needed. Unfortunately, for various reasons of a personal kind, I cannot make myself available during my vacation in January. If the matter were part heard before me, it would have to resume in February. If the application were not commenced before me, it could be brought before the vacation judge, but there would have to be appropriate provision made in terms of directions, so as to prepare the matter for hearing.
8 The plaintiff's second point was the defendant has not adduced any evidence of any urgent need why interim costs must addressed separately and urgently. That is true. I take notice of the fact that, inevitably, substantial costs have been incurred by the defendants in defending an action in which their defence has been successful, but that does not seem to me to justify the bringing of an application during vacation on an urgent basis, particularly when the Court is doing what it can to have the final determination of the costs issue made in the period from 10 - 12 February.
9 The third point made by plaintiff is also one that weighs upon my mind. I was told that the mediation process is continuing. It was submitted that the Court should not disrupt this motion by bringing on the interim costs application and diverting ASIC resources for that purpose. I was told that the plaintiff has attempted in good faith to resolve the question of costs in the mediation, and it was not submitted that the defendants had approached the question of costs other than in good faith. I am not in a position to know what the prospects are of resolving the quantum of costs by further mediation. But I should not do anything to divert the attention of the parties away from mediation while mediation is still alive.
10 In all the circumstances, I will not make the notice of motion returnable instanter. My inclination is to grant leave to file it returnable on 10 February before me and to make directions for filing of evidence, if the defendants wish to pursue it as a separate matter.
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Details
AGLC
Australian Securities and Investments Commission v Rich [2009] NSWSC 1456
Case
[2009] NSWSC 1456
Decision Date
CaseChat Overview and Summary
The Federal Court of Australia considered the issue of interim costs in a case between the Australian Securities and Investments Commission (ASIC) and Rich. ASIC had initiated proceedings against Rich, alleging breaches of financial services laws. The dispute centred on whether the court should entertain an application for interim costs when a final costs hearing was being expedited. The court was required to balance the need for a fair and efficient process against the potential for unnecessary costs to the parties.
The primary legal issue before the court was whether it should allow an application for interim costs when a final costs hearing was already being expedited. The court needed to consider the principles guiding the allocation of costs in litigation and the circumstances in which interim costs might be appropriate. The court also had to assess whether the application for interim costs was in the interests of justice and whether it would unduly delay or complicate the final costs hearing.
In delivering its decision, the court noted that while the general rule is that costs should be awarded at the conclusion of the proceedings, there are exceptions where interim costs may be appropriate. The court considered the need for a fair and efficient process, the potential impact of the interim costs on the final costs hearing, and the interests of justice. The court concluded that, in the circumstances of this case, it was appropriate to entertain the application for interim costs, but with conditions to ensure that it did not unduly prejudice the final costs hearing. The court recognised the importance of ensuring that the costs process did not become an obstacle to the resolution of the main proceedings.
The court ordered that the application for interim costs be heard and determined, subject to certain conditions aimed at ensuring that the final costs hearing was not prejudiced. The court also made specific orders regarding the amount of interim costs to be awarded, taking into account the respective positions of the parties and the need for a fair outcome. This decision provides guidance on the circumstances in which interim costs may be appropriate and the considerations that the court will take into account in making such a determination.