Cocco v Treadtel International Pty Ltd

[2019] NSWSC 31

Supreme Court

New South Wales

Medium Neutral Citation:	Cocco v Treadtel International Pty Ltd & Anor [2019] NSWSC 31
Hearing dates:	6 December 2018
Decision date:	31 January 2019
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	COSTS – Application for costs of affidavit, correspondence and attendance at directions hearing dismissed.
Catchwords:	COSTS – Whether order for costs should be made in respect of preparation of affidavit, correspondence and attendance at directions hearing.
Cases Cited:	Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Category:	Costs
Parties:	Piero Cocco (Plaintiff) Treadtel International Pty Ltd (First Defendant) Richard Crosher (Second Defendant)
Representation:	Counsel: G P Gee (Plaintiff) D Robertson (Second Defendant)   Solicitors: Roland Ross (Plaintiff) Thompson Eslick (Second Defendant)
File Number(s):	2014/205607

Judgment

Nature of the application and factual background

1. This is an application in respect of the costs of an affidavit, certain correspondence and attendance at a short directions hearing. Perversely, the parties will have incurred further costs in the pursuit of that application, which may well be disproportionate to the amount in issue in the claim for costs.

2. By way of background, on 24 August 2018, Brereton J noted that the Defendants had served their expert valuation evidence in these proceedings and made orders by consent that, inter alia, extended the time for the Plaintiff to serve any expert valuation evidence to no later than 31 October 2018; extended the time for the expert witnesses on the valuation to confer with each other and endeavour to reach agreement in relation to any matters in issue in accordance with UCPR 31.24 and deliver their joint reports to the parties’ legal representatives to no later than 23 November 2018, or as ordered by the Court; and listed the proceedings for further directions before the Corporations Judge on 26 November 2018. The Plaintiff did not comply with the order that he serve his expert valuation evidence by 31 October 2018. On the afternoon of 23 November 2018, the last business day before the next directions hearing in the proceedings on 26 November 2018, the Plaintiff served that expert’s report.

3. At that directions hearing, the Second Defendant sought an order that the Plaintiff pay his costs of the preparation of an affidavit dated 23 November 2018 of his solicitor, Mr Thompson, his costs of and incidental relating to communications referred to in several paragraphs of that affidavit, and of the Second Defendant’s appearance at that directions hearing. Mr Thompson’s affidavit dated 23 November 2018 comprises six pages of text and 33 pages of annexed correspondence. That affidavit was apparently prepared for the directions hearing on 26 November 2018, in anticipation that the Plaintiff’s expert report would not be served, although that report was in fact served before that affidavit was completed. Mr Thompson there referred to the commencement of the proceedings in July 2014, to orders that were subsequently made in respect of expert evidence and correspondence concerning that matter, and to the service of the Defendants’ expert valuation reports in August 2018. Mr Thompson also referred to the subsequent issue of subpoenas by the Plaintiff and to the production of documents in subpoena which continued into October 2018. Mr Thompson’s affidavit also annexed correspondence between the solicitors for the Plaintiff and the Second Defendant in November 2018, as to which the Second Defendant also now seeks costs. It is not apparent to me that any attempt to take the Court through that correspondence, in the course of a busy Corporations Directions List, would have been productive, where it would have established no more than that there had been a delay in the service of the Plaintiff’s expert evidence; the Second Defendant had objected to that delay; and steps would have needed to be taken at that directions hearing to address that delay, if it had not been resolved (as it was) by service of the expert’s report before that directions hearing.

4. On 6 December 2018 I made further directions in this matter, including noting the Defendants had served their expert valuation evidence on 17 August 2018 and that the Plaintiff had served an expert valuation report on the afternoon of 23 November 2018. I also made directions for the service of further evidence and submissions as to the costs sought by the Second Defendant and reserved that question for judgment to be delivered in Chambers.

5. The Plaintiff in turn relies on the affidavit dated 12 December 2018 of his solicitor, Mr Patel. Mr Patel set out the history of production of the documents by the parties and referred to suggested inadequacies in production of documents by the Defendants and to the issue of subpoenas to which Mr Thompson had also referred. Mr Patel confirmed that he had not consented to a communication to the Corporations List Judge to restore the matter:

“as it did not appear to [him] to be efficient to request an additional directions hearing at that stage, but rather to wait for the Plaintiff’s expert report to be finalised, and then attempt to agree further directions prior to the directions hearing already scheduled for 26 November 2018”.

I will return to the position taken by Mr Patel in that regard below. Mr Patel also referred to a personal matter affecting him in early November 2018, although it is not apparent that it had any particular impact upon the continuing delay in service of the Plaintiff’s expert’s report.

The parties’ submissions

6. In his initial submissions in support of its application for costs, made on 26 November 2018, the Second Defendant submitted that the Defendants were placed in a position on 23 November 2018 that the Plaintiff’s expert valuation report had not been served and the Plaintiff’s solicitor had not further communicated in respect of that matter since 16 November 2018. The Second Defendant submitted that, by reason of these matters, Mr Thompson was put to the trouble and expense of various communications with the Plaintiff’s solicitor during November 2018 and the preparation of his affidavit which he was in the process of drafting at the time the Plaintiff’s expert report was received on the afternoon of 23 November 2018. The Second Defendant submits that those costs arose by reason of the Plaintiff’s failure to comply with the timetable and Court orders agreed by the parties in August 2018.

7. The Second Defendant also submitted that the Plaintiff’s liability for those costs “should not be a matter of argument” and (in an impressively long sentence) that:

“The Second Defendant submits that the Plaintiff’s continued failure to comply with Court orders and failure to proactively engage with the Defendants in relation to the delay and provide realistic or reliable estimates for the service of the expert’s report, and the Plaintiff’s solicitor’s failure to respond to correspondence from the Second Defendant’s solicitors, justify an order that the Plaintiff pay the costs incurred by the Second Defendant, in having his solicitors having to take the initiative to correspond with the Plaintiff’s solicitor in relation to what the Plaintiff was doing about the delay and an proposed relisting of the matter given the non-compliance with the orders, and in the preparation of Mr Thompson’s affidavit in anticipation that the report might not be available prior to the directions hearing on 26 November.”

8. The Plaintiff responds that the Court should not make the orders for costs sought, and that it was not necessary for the Second Defendant to incur the costs of preparation of Mr Thompson’s affidavit sworn 23 November 2018, where expert evidence had been served that afternoon and that affidavit was then still being drafted and was not served until later that evening. The Plaintiff submits that both parties have incurred costs of correspondence which they consider has not been adequately answered during the history of these proceedings and that the directions hearing on 26 November 2018 was necessary, in any event, to allow the matter to be fixed for hearing. The Plaintiff also seeks to attribute the delay in service of the expert report to delay in production of documents which were under the Defendants’ control; to a delay in production of subpoenaed documents which, it is said, continued into October 2018; and to the extent of the evidence to which the Plaintiff’s expert had to respond.

9. In submissions in reply, the Second Defendant variously submitted that he should have the costs sought because the proceedings were listed for directions on 26 November 2018 at a time when the Plaintiff’s expert report should have been served and the experts should have attended a conclave; the Plaintiff had not served that expert report which was due some weeks earlier; the Plaintiff’s solicitor had objected to the Second Defendant communicating with the Court to request to have the matter relisted due to that delay; the Plaintiff’s solicitor had stated on 16 November 2018 that that report would be served “early next week” and it had not been; and the Second Defendant’s solicitor had on 21 November 2018 sought an indication as to what the Plaintiff proposed should occur on 26 November 2018 to which there had been no response. The Second Defendant submits that its solicitor had commenced drafting his affidavit and proposed short minutes in preparation for the directions hearing on 26 November 2018 at which, until the Plaintiff’s expert report was served on the afternoon of 23 November 2018, it had reasonably expected that the Plaintiff might not have served that expert report.

10. The Second Defendant also advances various criticisms of the extent of explanation given for the delay in service of the Plaintiff’s expert report and contends that the preparation of Mr Thompson’s affidavit was necessary and the costs were thrown away. The Second Defendant submits that the correspondence for which it seeks costs was necessitated by the Plaintiff’s failure to comply with the Court’s earlier orders, where the Plaintiff had not explained that default to the Defendants and had not agreed to relisting the matter. The Second Defendant submits that the costs of the directions hearing on 26 November 2018 may have been avoided, or reduced, if the Plaintiff had communicated his position, so that an agreed position could have been reached.

Determination

11. The principles applicable to whether an order for costs should be made are well-established, and the parties did not, and likely did not need to, address them in any detail in submissions. Section 98 of the Civil Procedure Act 2005 (NSW) confers a discretionary power to determine costs on the court and requires that that discretion be exercised judicially, that is to say rationally and for the purpose for which it was conferred: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [63]–[66].

12. I am not persuaded that I should order that the Plaintiff pay the Second Defendant’s costs of the preparation of Mr Thompson’s affidavit sworn 23 November 2018. It does not seem to me that the detail of that affidavit or the lengthy correspondence annexed to it was likely to illuminate the questions that the Court would need to determine at the directions hearing on 26 November 2018, or was necessary to establish the obvious propositions that there had been default in compliance with the orders made by the Court as to the Plaintiff’s expert report; the Second Defendant was concerned as to that default, for good reason; and the matter would need to be addressed by further directions. I am also not persuaded I should order the costs of the communications referred to in the paragraphs of Mr Thompson’s affidavit, where that would isolate the costs of one dispute in this matter, where there have no doubt been a range of such disputes in the long period that this matter has taken to reach a hearing.

13. It also seems to me that the costs of preparation of that affidavit and of those communications would have been avoided if the parties had together, or the Second Defendant’s solicitor had unilaterally, relisted the matter once the Plaintiff’s default in compliance with the timetable for expert evidence had emerged. It seems to me that both parties’ approach to whether the matter should have been restored for further directions was unfortunate. In my view, the Second Defendant’s solicitor did not require the consent of the Plaintiff’s solicitor to communicate with the Associate to the Corporations Judge to seek a relisting of the matter in the Corporations Directions List, indicating no more than it arose from a default in compliance with the timetable, since that would be an administrative and not a substantive communication. Equally, there was no reasonable basis for Mr Patel to decline to consent to a communication by the Second Defendant’s solicitor to the Court seeking to relist the matter, where there had been a significant and ongoing default by the Plaintiff in compliance with the Court’s directions as to the service of that expert report.

14. I am also not persuaded that I should order the Plaintiff to pay the costs of the directions hearing on 26 November 2018 where, as the Plaintiff points out, that directions hearing was necessary in any event to assess the likely length of the hearing, as to which the parties were in substantial disagreement, and allocate a hearing date, and the Plaintiff’s expert report had been served before it took place.

15. I should add that, as I noted in the course of oral submissions, it seems to me that applications for costs in respect of directions hearings often amount to, and here amounted to, putting good money after bad. I considered whether the Second Defendant should be ordered to pay the wasted costs of this application, but do not consider that such an order should be made, where that would likely have the same result. Accordingly, I do not make the order as to costs sought by the Second Defendant, and there will be no order as to the costs of the relevant matters and no order as to the costs of this application.

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Decision last updated: 12 February 2019