Coleman v Australasian Fencing Pty Ltd (No 2)

[2020] NSWSC 1173

Supreme Court

New South Wales

Medium Neutral Citation:

Coleman v Australasian Fencing Pty Ltd (No 2) [2020] NSWSC 1173

Hearing dates:

On the papers

Date of orders:

31 August 2020

Decision date:

31 August 2020

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Order the defendants to pay the plaintiffs’ costs of the notice of motion filed by the defendants on 22 May 2020 seeking the summary dismissal of the proceedings or striking out of the amended statement of claim.

Catchwords:

COSTS — Party/Party — Meaning and application of general rule that costs follow the event

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56-60, 98, 146

Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28, 42.1

Cases Cited:

Coleman v Australasian Fencing Pty Ltd [2020] NSWSC 1090

Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261

Galati v Deans (No 3) [2018] NSWSC 1861

James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Roache v News Group Newspapers Ltd [1998] EMLR 161

Category:

Costs

Parties:

Michael Coleman (First Plaintiff/First Respondent)
Anthony Mesic (Second Plaintiff/Second Respondent)
Australasian Fencing Pty Ltd (First Defendant/First Applicant)
Neville James Barnes (Second Defendant/Second Applicant)

Representation:

Counsel:
P Newton (Plaintiffs/Respondents)
JK Raftery (Defendants/Applicants)

Solicitors:
The Law Man (Plaintiffs/Respondents)
Gilchrist Connell (Defendants/Applicants)

File Number(s):

2018/00388179

Publication restriction:

Nil

Judgment

1. HER HONOUR: On 18 August 2020, I published reasons (Coleman v Australasian Fencing Pty Ltd [2020] NSWSC 1090) determining an application, by notice of motion filed on 22 May 2020 by the defendants in these proceedings, Australasian Fencing Pty Ltd (Australasian Fencing) and Mr Neville Barnes (a director of Australasian Fencing), for summary dismissal of the plaintiffs’ claim pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) or, in the alternative, for the plaintiffs’ amended statement of claim filed on 28 December 2018 to be struck out pursuant to r 14.28 of the UCPR.

2. For the reasons that I there gave, I dismissed the application for the summary dismissal of the proceedings or striking out of the amended statement of claim; gave leave for the plaintiffs (Mr Michael Coleman and Mr Anthony Mesic) to file the further amended statement of claim in the form attached to the plaintiffs’ written submissions (but omitting the claim for declaratory relief in prayers 3 and 4) and made consequential directions, including as to the filing of the further amended statement of claim.

3. As to costs, I made the usual order to the effect that the plaintiffs should pay the costs thrown away by the further amendment of the pleading. However, I otherwise deferred the making of costs orders in relation to the notice of motion (in circumstances where the defendants had indicated their desire to serve further written submissions as to costs).

4. The defendants filed their further written submissions on 28 August 2020 (which I will consider below). The plaintiffs relied on their earlier written submissions as to costs (to which I made reference in my earlier judgment).

5. As with the summary dismissal/strike-out application itself, the deferred issue as to costs has been dealt with on the papers. Meanwhile, when the matter came back before me for directions this morning, I acceded to the application of the plaintiffs (not opposed by the defendants) for the proceeding to be transferred pursuant to s 146 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act), having regard to the fact that the claims for declaratory relief have been struck out and having regard to the monetary value of the claims for damages in the proceeding.

6. In my earlier judgment, I summarised the background to the dispute between the parties as drawn from the pleadings and I do not propose here to repeat it.

Relevant principles

7. The general principles in relation to the award of costs are well known. There is a broad discretion as to costs (see s 98 of the Civil Procedure Act; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11), which discretion must nevertheless be exercised judicially and having regard, among other things, to the overriding statutory mandate in respect of the conduct of litigation in this Court (see ss 56-60 of the Civil Procedure Act and the UCPR).

8. The general rule is that costs will “follow the event” (r 42.1 of the UCPR) unless it appears to the court that some other order should be made as to the whole or any part of the costs. Where there is a mixed outcome in proceedings, the “event” may be difficult to determine. Similarly, where the event relates to an interlocutory issue arising during the course of a matter, it may be (and often is) appropriate to defer the question of costs until the final determination of the proceeding (as, for example, where interlocutory injunctive relief is obtained at an early stage in the proceeding that may ultimately not be sustained) or for costs to be expressed as costs in the cause.

9. As I noted in Galati v Deans (No 3) [2018] NSWSC 1861, where there is a mixed outcome in proceedings the question of apportionment is very much a matter of discretion and mathematical precision is illusory; it being dependent on matters of impression and evaluation (see Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 per Gummow, French and Hill JJ, as cited by the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36] and again in Bostik Australia Pty Limited v Liddiard (No 2) [2009] NSWCA 304 at [38]). There, I adopted the same approach to the assessment of costs where there had been a mixed outcome albeit on the same issue.

Plaintiffs’ submissions

10. As indicated in my earlier judgment, the plaintiffs’ submissions as to the costs of the defendants’ summary dismissal/strike-out application (made in advance of the outcome of that application) were that, if the defendants were unsuccessful in their application, they ought to be ordered to pay the plaintiffs’ costs of the motion as agreed or assessed (that is to say, that costs should follow the event); and in the event that the plaintiffs were successful (such that the amended statement of claim were to be struck out), the only order for costs that ought to be made in the proceedings is that the plaintiffs pay the defendants’ costs of the application (in circumstances where, it was said, the defendants brought their application after the parties had served their evidence and not at an early stage).

Defendants’ submissions

11. The defendants (now the outcome of their summary dismissal/strike-out application is known) contend for orders that the plaintiffs pay their costs or, in the alternative, for costs to be the defendants’ costs in the cause, on the basis that the defendants were partially successful in their application.

12. In this regard, the defendants point to their solicitors’ letter dated 14 May 2020 to the plaintiffs’ solicitors (The Law Man) in which the defendants’ solicitors (Gilchrist Connell) noted that the plaintiffs had pleaded that ACJV Holdings (not a party) had entered into three contracts with third parties and that, on the pleaded case, the entity which suffered loss was ACJV Holdings; to which the response from the plaintiffs’ solicitors (on 15 May 2020) was to maintain the plaintiffs’ position and there was no mention of seeking to amend the pleading.

13. It is noted that the notice of motion seeking summary dismissal and in the alternative a strike out order was filed on 22 May 2020 and that on 23 July 2020 the defendants filed and served written submissions addressing that motion.

14. The defendants say that they had by then put the plaintiffs on notice of the issues with their pleading and that it was not until after the filing and service of written submissions by them that (on 1 August 2020) the plaintiffs sought “fundamentally” to change their case by providing a proposed amended pleading whereby the allegations that clients of each of the projects “paid ACJV Holdings” were removed.

15. In this context, the defendants say that they were partially successful on their application and hence they contend for the costs orders indicated above.

Determination

16. In my earlier judgment, I indicated that my preliminary view was that the costs of the motion should follow the event (see at [83]). By that, I had in mind that the event was the outcome of the summary dismissal/strike-out application, which application was dismissed (and, hence, what I then had in mind was an order that the defendants pay the costs of the plaintiffs of the relevant motion or, perhaps, that the costs be the plaintiffs’ costs in the cause).

17. The defendants’ position is that, although unsuccessful on their summary dismissal/strike-out application overall, they did succeed partially insofar as the claims for declaratory relief in prayers 3 and 4 were struck out; and, as I apprehend it, the thrust of their costs submissions is that there was a fundamental change to the pleading following service of the notice of motion and submissions (which amendment had not been foreshadowed at an earlier time).

18. It is here relevant to note that the plaintiffs, in their first (and only) set of submissions, put forward the argument that, in the event that the plaintiffs were successful in their application (such that the amended statement of claim were to be struck out), nevertheless, in circumstances where the defendants brought their application after the parties had served their evidence and not at an early stage of the proceedings (when the costs associated with the preparation of evidence may have been avoided), the only order for costs that ought be made in the proceedings would be that the plaintiffs pay the defendants’ costs of the notice of motion.

19. Ultimately, what transpired was closer to the position for which the plaintiffs in the end had contended for (namely, that the proceeding not summarily be dismissed and that, if there were to be a strike out of any of the pleading, there be liberty to re-plead). It should be recalled in this regard that what the defendants were maintaining was, first, that Mr Coleman and Mr Mesic were not the proper plaintiffs (an issue on which they failed) and, second, that not all the necessary parties had been joined to the proceedings (an issue on which they also failed).

20. As to the proposed amended pleading (which was resisted by the defendants), the defendants submitted that the proposed amended pleading did not alter the plaintiffs’ case in such a way that would entitle the plaintiffs to damages; and that it followed that there was no utility in the plaintiffs being granted leave to rely upon the proposed pleading (an issue on which they again failed).

21. Other than insofar as I agreed that the plaintiffs were not the proper parties to maintain claims for the declaratory relief sought in the amended statement of claim (as to which ACJV Holdings was the proper party), I concluded that the plaintiffs were proper plaintiffs to maintain the causes of action sought to be brought by them (for damages or loss suffered as a result of an alleged breach by the defendants of a contract alleged to be entered into between them and the plaintiffs). I also concluded that once there was no longer a claim for declaratory relief then ACJV Holdings was not a necessary or appropriate party to be joined to the proceedings (and there would be no apparent utility in its joinder) (see at [72]).

22. I also permitted (over the defendants’ objection) the proposed further amendments to the pleading in the plaintiffs’ draft further amended statement of claim, having regard to the requirement to facilitate the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act) and having regard to the reasons for the making of those amendments as had emerged from the submissions on the summary dismissal/strike-out application (see at [77]-[79]).

23. Overall, if one were to approach the question of costs in the manner suggested by the Court of Appeal of England and Wales (Bingham MR, as his Lordship then was, Stuart-Smith and Simon Brown LJJ) in Roache v News Group Newspapers Ltd [1998] EMLR 161 at 168-169 (there, the question as to who was to be seen as the successful party “in the event” being posed as being a question as to “who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?”), my view is that the defendants in the present proceeding were seeking something akin to a coup de grâce – the summary dismissal of the proceeding or striking-out of the pleading without liberty to re-plead. Had they succeeded in that application, the proceeding would have been at an end. They did not so succeed.

24. Albeit that there was a portion of the claims for relief that was struck out, in substance the claims sought to be brought by the plaintiffs have persisted and will proceed (absent some other intervening event) to a contested hearing. In those circumstances I consider that the plaintiffs are the parties who have been successful for all practical purposes in the “event”.

25. Accordingly, I will order that the defendants pay the plaintiffs’ costs of the notice of motion filed 22 May 2020.

Orders

26. For the above reasons, I make the following order.

1. Order the defendants to pay the plaintiffs’ costs of the notice of motion filed by the defendants on 22 May 2020 seeking the summary dismissal of the proceedings or striking out of the amended statement of claim.

27. As the matter has now been concluded in this Court, I will cause the file to be transferred to the District Court of New South Wales in accordance with the orders made earlier today.

**********

Decision last updated: 31 August 2020