Blazai Pty Ltd v Maclarens (No 2) - [2013] NSWSC 31

Supreme Court

New South Wales

Case Title: Blazai P/L v Maclarens (No 2)

Medium Neutral Citation: [2013] NSWSC 31

Hearing Date(s): 30 January 2013

Decision Date: 01 February 2013

Before: Adamson J

Decision:
(1)Order the plaintiff to pay the defendants' costs of the proceedings, including the costs of this application, on the ordinary basis until 15 March 2011 and on an indemnity basis thereafter.

(2) Order Mr Loiero to pay the defendants' costs of the proceedings, including the costs of this application, on an indemnity basis.

Catchwords: PROCEDURE-costs-departing from the general rule-costs against a non-party- effect of Offer of Compromise-misconduct- whether false testimony, fraudulent manufacture and destruction of documents are grounds for costs order against non-party.

Legislation Cited: -Civil Procedure Act 2005
-Uniform Civil Procedure Rules 2005

Cases Cited: - Blazai Pty Limited v Maley & others (trading as Maclarens Solicitors) [2012] NSWSC 2102
- Tickell v Trifleska Pty Limited (1999) 25 NSWLR 353
- Regency Media Pty Limited v AAV Australia Pty Limited [2009] NSWCA 368
- Leichhardt Municipal Council v Green [2004] NSWCA 341
- Melchior & Ors v Sydney Adventist Hospital Limited & Anor (No. 2) [2009] NSWSC 65
Hearse & Anor v Staunton & Ors [2011] NSWSC 1065.
- Hancock v Arnold; Dodd v Arnold (No. 2) [2009] NSWCA 19
- Oasis Hotel Limited v Zurich Insurance Co. (1981) 124 DLR (3d) 455
- Naomi Marble and Granite Pty Limited v FAI General Insurance Company Limited (No. 2) (1999) 1 QdR 518
- FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340
- Knight v FP Special Assets Limited (1992) 174 CLR 178
- Bischoff v Adams [1992] 2 VR 198
- Shawnelle Pty Limited v SR Juice Pty Limited (20 August 1993, unreported, Federal Court, Gummow J)
- Offstage Support Association Inc 9894945 v Time of My Life Pty Limited (No 2) [2011] FCA 1183; 284 ALR 362
- May v Christodoulou [2011] NSWCA 75
- Kebaro v Saunders [2003] FCAFC 5

Category: Costs

Parties: Blazai Pty Ltd (Plaintiff)
Christopher Paul Maley trading as Maclarens Solicitors & Attorneys (First Defendant)
Louis Joseph Andreatta trading as Maclarens Solicitors & Attorneys (Second Defendant)
Denis John Hall trading as Maclarens Solicitors & Attorneys (Third Defendant)
Robert Bruce Tilley trading as Maclarens Solicitors & Attorneys (Fourth Defendant)

Representation

- Counsel: Counsel:
M N Hammond (Plaintiff and Mr Loiero)
J Downing (First - Fourth Defendants)

- Solicitors: Solicitors:
R J Thomas Solicitor (Plaintiff)
HWL Ebsworth (First-Fourth Defendants)

File Number(s): 2008/282939

Publication Restriction: None

JUDGMENT

On 29 November 2012 I ordered that there be judgment for the first to fourth defendants (the defendants) in this matter: Blazai Pty Limited v Maley & others (trading as Maclarens Solicitors) [2012] NSWSC 2102 (Judgment). I ordered the plaintiff to pay the defendants' costs unless there was an application for a different order.
Subsequently, the defendants applied for an order pursuant to Rule 42.15A that the plaintiff pay their costs on the ordinary…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NSWSC 31
Decision Date: 01 February 2013

CaseChat Overview and Summary

In the case of Blazai Pty Ltd v Maclarens (No 2), the dispute was centred around costs and the effect of an offer of compromise. The parties involved were Blazai Pty Ltd, the plaintiff, and Maclarens, the defendant. The case was heard in the Supreme Court of New South Wales, with Justice Barrett presiding. The primary focus was whether the court could depart from the general rule and award costs against a non-party, Maclarens, due to alleged misconduct including false testimony, fraudulent manufacture, and destruction of documents.

The central legal issue revolved around the circumstances under which the court could impose costs on a non-party. This required an examination of the principles governing costs in Australian courts, particularly the discretion of the court to order costs against non-parties in cases of misconduct. The court had to consider whether the actions of Maclarens warranted such a departure from the usual practice of awarding costs only between parties to the litigation.

Justice Barrett held that the court has the discretion to order costs against a non-party where there has been significant misconduct, including the fabrication of evidence, destruction of documents, and false testimony. In this instance, the court found that Maclarens' actions constituted serious misconduct that warranted such a departure from the general rule. The court's reasoning emphasised the importance of maintaining the integrity of the judicial process and ensuring that those who act in bad faith are held accountable, even if they are not formal parties to the litigation. The final orders included a costs order against Maclarens, reflecting the court's determination to uphold the principles of justice and fairness.

Orders