Benson v Rational Entertainment Enterprises Ltd (No 2)
[2015] NSWSC 1261
•01 September 2015
Supreme Court
New South Wales
Medium Neutral Citation: Benson v Rational Entertainment Enterprises Ltd (No 2) [2015] NSWSC 1261 Hearing dates: In chambers Date of orders: 01 September 2015 Decision date: 01 September 2015 Jurisdiction: Equity Before: Robb J Decision: (1) No order as to costs of the amended notice of motion filed on 23 June 2014 with the intention that the plaintiff and the defendants shall pay their own costs.
(2) Order the plaintiff pay the costs of the defendants of and occasioned by the plaintiff’s amendment of his statement of claim.Catchwords: PROCEDURE – costs – the defendants’ amended notice of motion seeking the plaintiff’s statement of claim be set aside was dismissed – however, plaintiff accepted it had misconceived part of his claims and accordingly amended his statement of claim – the court held that each party enjoyed an equal measure of success – each party to bear their own costs Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Agar v Hyde [2000] 201 CLR 552 Category: Costs Parties: Gary Benson (plaintiff)
Rational Entertainment Enterprises Ltd (first defendant)
Rational Group Limited (second defendant)
Oldford Group Limited (third defendant)
Rational FT Limited (fourth defendant)Representation: Counsel: M W Young SC/M Gunning (plaintiff)
Solicitors: Miedzinski Lawyers (plaintiff)
A Zahra (first – fourth defendants)
Addisons (first – fourth defendants)
File Number(s): 2014/336109 Publication restriction: None
Judgment
-
On 10 July 2015, I gave judgment on an amended notice of motion filed by the defendants in which they sought orders that the plaintiff’s statement of claim be set aside pursuant to UCPR rr 11.7 and 12.11, and related relief, essentially on the ground that the Supreme Court of New South Wales is an inappropriate forum to determine the claim made in the statement of claim: [2015] NSWSC 906.
-
I dismissed the amended notice of motion, but gave leave to the parties to deliver submissions as to the appropriate costs order to be made.
-
I invited the parties to deliver submissions on this issue because, at the hearing, the plaintiff accepted that his trust claim was misconceived, and that in due course, it would be necessary for him to amend his statement of claim to delete the allegations of fact relating to the trust issue, as well as the remedies that had been sought in relation to breach of trust. Additionally, the plaintiff conceded that the breach of trust claim did not fall within any paragraphs contained in Schedule 6 of the UCPR, so that he could not, in any event, maintain the trust claim in this court on the basis of a statement of claim that was served on the defendants outside Australia.
-
I directed the plaintiff to file and serve an amended statement of claim within a specified period. I did not make any orders for costs concerning the amendment of the statement of claim.
-
It is now necessary for me to consider the costs orders that should be made in relation to the amended notice of motion and the amendment of the statement of claim.
-
I have received written submissions made on behalf of the plaintiff dated 24 July 2015, and on behalf of the defendants dated 24 July 2015.
-
The plaintiff filed an amended statement of claim on 11 August 2015.
-
It is a fair summary of the statement of claim that it primarily sought relief for breach of trust. It also made a claim for money had and received. It emerged at the hearing that the plaintiff was also making a claim for breach of contract. That claim was made in the statement of claim, although it was somewhat obscure.
-
The amended statement of claim abandons the breach of trust case by deleting all allegations of fact and claims for relief concerning that aspect of the plaintiff’s claim.
-
It also introduces amendments that add detail and refinement to the plaintiff’s breach of contract and money had and received claims: see pars 10(b), 14, 15(b), 20(b), 27 to 29, 32, 34(b), 35 and 36(f).
-
In essence, the defendants failed in their application for orders dismissing the plaintiff’s breach of contract and money had and received claims, because of an argument raised by the plaintiff that the defendants were obliged to pay the money claimed by the plaintiff to him in New South Wales, and they failed to do so. The obligation to make the payment in New South Wales in relation to the contract claim arose because of a demand made by the plaintiff’s solicitors from this State, and the money had and received obligation was payable in this State because the plaintiff was ordinarily resident here.
-
The argument upon which the plaintiff succeeded was not clearly articulated until the plaintiffs served written submissions in opposition to the amended notice of motion immediately before the hearing.
-
The defendants have relied upon a letter dated 20 March 2015 from their solicitors to the solicitors for the plaintiff, with which they served the defendants’ original notice of motion. The letter invited the plaintiff “to explain the basis upon which [the plaintiff] is able to bring these proceedings in the Supreme Court of New South Wales as against the first to fourth defendants”.
-
The plaintiff did not respond to this invitation until his outline submissions were served.
-
The plaintiff’s position is that the court should order the defendants to pay the whole of the costs of the amended notice of motion. I infer that the plaintiff accepts that any such order would be on the ordinary basis. The plaintiff submits that costs should follow the event.
-
In relation to the issue of the plaintiff’s abandonment of his trust claim, the plaintiff submits that he conceded at the start of the hearing, and in his written submissions served the day before, that the trust claim was misconceived and did not fall within the ambit of Schedule 6, and that this concession avoided the cost of either party having to address any arguments in relation to the trust claim.
-
The defendants, on the other hand, submit that the plaintiff should be ordered to pay the defendants’ costs of the notice of motion up until the hearing on 23 June 2015, and the parties should be ordered to bear their own costs of the hearing. The basis of this submission is an argument that the plaintiff abandoned his trust claim, and did not disclose the basis of his contract claim with sufficient clarity until the eve of the hearing. The defendants submit that the relevant principle is that, where a party’s success in proceedings is attributable only to matters raised very late, the successful party should pay the unsuccessful party’s costs up until the time of the late amendment or raising of the matter that allowed success. The defendants relied upon the authorities listed in par 12 of their written submissions on costs.
-
Alternatively, the defendants submitted that the order should simply be that all parties pay their own costs of the amended notice of motion.
-
The defendants relied upon the fact that the original statement of claim did not contain any allegation that the defendants had an obligation to pay the sum claimed by the plaintiff to him in this State, whether as a matter of contract or quasi contract, and did not allege how that obligation arose.
-
With respect, in my view, the defendants’ argument based upon the absence from the statement of claim of any allegations to support the claim that the defendants were obliged to pay the sum claimed by the plaintiff to him in this State is misconceived. The reason is that the place where the defendants were obliged to pay the plaintiff did not form part of his cause of action, and accordingly was not required to be pleaded in accordance with the rules of pleading. The place of payment was highly relevant to the issue of whether the contract and quasi contract claims fell within a paragraph of Schedule 6 of the UCPR, but that did not require it to be pleaded. The plurality in Agar v Hyde [2000] 201 CLR 552 at [52] noticed this point: see [101] of my earlier judgment [2015] NSWSC 906.
-
I, therefore, do not accept that the defendants are entitled to an order that the plaintiff pay their costs up to 23 June 2015, on the basis that the plaintiff succeeded on a ground that should have been pleaded, and was only raised on the day before the hearing of the amended notice of motion.
-
However, it follows from the fact that a plaintiff may not have to plead specifically the facts that bring the plaintiff’s claim within one or more of the paragraphs in Schedule 6, that it may be difficult for a defendant to know the basis of the plaintiff’s claim as to why the court is entitled to exercise extra-territorial jurisdiction over the defendant. Where the defendant is in doubt, it will be a reasonable course for the defendant to formally seek clarification from the plaintiff, and ordinarily the plaintiff should provide the information requested, both out of simple courtesy, and to reduce the risk of misunderstanding and a dispute as to whether or not the court has jurisdiction being fought unnecessarily. There is no rule that the plaintiff must respond properly to such a request, but a failure to do so is a matter that may properly be taken into account by the court in exercising its discretion as to costs.
-
In the present case, the defendants not only succeeded on their amended notice of motion on the issue that the court did not have jurisdiction to entertain the plaintiff’s breach of trust case, but along the way they also succeeded in the plaintiff abandoning that case entirely. That was a significant success on the defendants’ part. The defendants were put to the cost of preparing their case on that issue, and all that the last-minute abandonment of that case by the plaintiff achieved is that a certain amount of court time was saved at the hearing. In my view, the issue of costs should be addressed on the basis that the defendants succeeded on an issue that represented, in broad terms, half of the matters in dispute.
-
It is true that the plaintiff succeeded in relation to the remaining issues concerning the breach of contract and quasi contract claims. However, he did so on the basis of an argument that was only articulated clearly immediately before the hearing, and in circumstances where the plaintiff had not responded to the reasonable request for information made on 20 March 2015.
-
These circumstances, in my view, justify a conclusion that the parties have each enjoyed an equal measure of success, so that each should bear his or their own costs of the amended notice of motion.
-
I have not made an appropriate cost order in relation to the amendment of the statement of claim by the plaintiff, and should now do so.
-
I make the following orders:
No order as to costs of the amended notice of motion filed on 23 June 2014 with the intention that the plaintiff and the defendants shall pay their own costs.
Order the plaintiff pay the costs of the defendants of and occasioned by the plaintiff’s amendment of his statement of claim.
**********
Decision last updated: 11 September 2015
0
1
1