CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 4)Metro Chatswood Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 4)Cri
[2013] NSWLEC 83
•11 June 2013
Land and Environment Court
New South Wales
Case Title: CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 4)Metro Chatswood Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 4)CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) v Metro Chatswood Pty Ltd (No 4) Medium Neutral Citation: [2013] NSWLEC 83 Hearing Date(s): 23 - 24 May 2012; 12, 23 and 26 November 2012 (amendment of application for costs) Decision Date: 11 June 2013 Jurisdiction: Class 4 Before: Craig J Decision: Proceedings 40255 of 2011
In the above proceedings I make the following Orders:
1. By consent:
(i) As between the Applicant and each of the First Respondent to Fourth Respondent inclusive, there will be no order as to costs.
(ii) The Applicants' Notice of Motion filed 8 May 2012 is dismissed with no order as to costs.
2. The application by the Sixth and Seventh Respondents to amend [106] of the reasons for judgment delivered on 31 January 2012 is refused.
3. As among the First Respondent and the Sixth, Seventh, Eighth and Ninth Respondents there will be no order as to costs to the intent that each of those parties should bear its and his own costs.
4. Exhibits may be returned.
Proceedings 40277 of 2011
In the above proceedings I make the following Orders:
1. By consent, no order as to costs.
Proceedings 40534 of 2011
In the above proceedings I make the following Orders:
1. By consent, no order as to costs.
Catchwords: COSTS - multiple parties with cross-claim for costs - successful application for joinder of parties - joined parties did not actively participate in principal proceedings - joinder not for ulterior purpose - consideration of discretion Legislation Cited: Environmental Planning and Assessment Act 1979
Civil Procedure Act 2005
District Court Act 1973
Uniform Civil Procedure Rules 2005Cases Cited: Colgate-Palmolive Company and Colgate-Palmolive Pty Ltd v Cussons Pty Ltd [1993] FCA 536; 46 FCR 225
CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (No 2) [2011] NSWLEC 91
CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 3) [2012] NSWLEC 6
Director General, Department of Services, Technology and Administration v Veall (No 3) [2011] NSWSC 541
DJL v Central Authority [2000] HCA 17; 201 CLR 226
FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340
Joseph Lahoud v Victor Lahoud [2006] NSWSC 126
Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178
Logwon Pty Ltd v Warringah Shire Council (1993) 82 LGERA 158
May v Christodoulou [2011] NSWCA 75
Newmont Yandal Operations Pty Limited v The J. Aron Corporation & The Goldman Sachs Group, Inc & 3 Ors [2007] NSWCA 195; 70 NSWLR 411
R v Jones; R v Hili (No 2) [2010] NSWCCA 195; 79 NSWLR 143
Re Ragata Developments Pty Ltd v Westpac Banking Corporation and Stanley Thompson Valuers Pty Ltd [1993] FCA 72; 217 AlR 175
State of Victoria v Sutton [1998] HCA 56; 195 CLR 291
Todorovic v Moussa [2001] NSWCA 419; 53 NSWLR 463
Williams v Spautz [1992] HCA 34; 174 CLR 509Texts Cited: Gino Dal Pont, Law of Costs, (LexisNexis Butterworths, 2nd ed, 2009) Category: Costs Parties: CTI Joint Venture Company Ltd (Applicant)
CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed (First Respondent)
Metro Chatswood Pty Ltd (Second Respondent)
Transport Construction Authority (Third Respondent)
Rail Corporation New South Wales (Fourth Respondent)
Registrar-General of New South Wales (Fifth Respondent)
Hard & Forester Pty Ltd (Sixth Respondent)
Pierre Hartzenberg (Seventh Respondent)
Grinsell & Johns Pty Ltd (Eighth Respondent)
Gordon Wren (Ninth Respondent)
Metro Chatswood Pty Ltd (Applicant)
CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (First Respondent)
Commonwealth Bank of Australia (Second Respondent)
CRI Australia Pty Ltd (In Liq) (Receivers and Managers Appointed) (Third Respondent)
CRI Australia Holdings Pty Ltd (In Liq) (Receivers and Managers Appointed) (Fourth Respondent)
CBA Corporate Services (NSW) Pty Ltd (Fifth Respondent)
Christopher Clarke Hill (Sixth Respondent)
Stephen James Parbery (Seventh Respondent)
Chalice Investments Pty Ltd (Eighth Respondent)
George Tauber Nominees Pty Ltd (Ninth Respondent)
CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (Applicant)
Metro Chatswood Pty Ltd (First Respondent)
Commonwealth Bank of Australia (Second Respondent)
CRI Australia Pty Ltd (In Liq) (Receivers and Managers Appointed) (Third Respondent)
CRI Australia Holdings Pty Ltd (In Liq) (Receivers and Managers Appointed) (Fourth Respondent)
CBA Corporate Services (NSW) Pty Ltd (Fifth Respondent)
Christopher Clarke Hill (Sixth Respondent)
Stephen James Parbery (Seventh Respondent)
Chalice Investments Pty Ltd (Eighth Respondent)
George Tauber Nominees Pty Ltd (Ninth Respondent)Representation - Counsel: COUNSEL
R P L Lancaster SC with Mr C Withers (Applicant)
A Sullivan QC with Mr R Elliott (First Respondent)
S D Robb QC with Mr T J Breakspear (Second Respondent)
C D Norton (Third Respondent
N Hemmings QC (Fourth Respondent)
Submitting appearance (Fifth Respondent)
P McEwen SC (Sixth and Seventh Respondents)
S T White SC with Mr T To (Eighth and Ninth Respondents)
S D Robb QC with Mr T J Breakspear (Applicant)
A Sullivan QC with Mr R Elliott (First Respondent)
S Mirzabegian (Second Respondent)
Not represented (Third and Fourth Respondent)
S Mirzabegian (Fifth Respondent)
A Sullivan QC and R Elliott (Sixth and Seventh Respondents)
Submitting appearance (Eighth and Ninth Respondents)
A Sullivan QC with Mr R Elliott (Applicant)
S D Robb QC with Mr T J Breakspear (First Respondent)
S Mirzabegian (Second Respondent)
Not represented (Third and Fourth Respondents)
S Mirzabegian (Fifth Respondent)
A Sullivan QC and R Elliott (Sixth and Seventh Respondents)
Submitting appearance(Eighth and Ninth Respondents)- Solicitors: SOLICITORS
Mallesons Stephen Jaques (Applicant)
Blake Dawson (First Respondent)
Kemp Strang Lawyers (Second Respondent)
Clayton Utz (Third Respondent)
Allens Arthur Robinson (Fourth Respondent)
Submitting appearance (Fifth Respondent)
Gilchrist Connell (Sixth and Seventh Respondents)
Indemnity Legal Pty Ltd (Eight and Ninth Respondents)
Kemp Strang (Applicant)
Blake Dawson (First Respondent)
Freehills (Second Respondent)
Not represented (Third and Fourth Respondent)
Freehills (Fifth Respondent)
Blake Dawson (Sixth and Seventh Respondents)
Not represented (Eighth and Ninth Respondents)
Blake Dawson (Applicant)
Kemp Strang (First Respondent)
Freehills (Second Respondent)
Not represented (Third and Fourth Respondent)
Freehills (Fifth Respondent)
Blake Dawson (Sixth and Seventh Respondents)
Not represented (Eighth and Ninth Respondents)File Number(s): 40255 of 2011
40277 of 2011
40534 of 2011
JUDGMENT
In his seminal work on the law of costs, Professor Dal Pont observed that "[a]ctions with a multiplicity of defendants can give rise to special problems" (Gino Dal Pont, Law of Costs, (LexisNexis Butterworths, 2nd ed, 2009) at [11.12]). That observation resonates with considerable magnitude when determining the present dispute among the parties as to the appropriate order for the payment of legal costs.
Judgment in three related proceedings involving the present parties was delivered by me on 31 January 2012 (CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (Receivers and Managers Appointed) (No 3) [2012] NSWLEC 6). Following delivery of my reasons for judgment, final orders were made on 9 February 2012. At that time costs were reserved.
A hearing on costs has since been held. As was the case at trial, the costs hearing involved the participation of 10 active parties, represented by eight different firms of solicitors, each of whom briefed counsel to appear at the hearing. This resulted in eight separate and divergent submissions as to the order for costs that I should make in the separate proceedings that I heard, all of which are the subject of my principal judgment. Following that hearing I reserved my judgment on costs.
More recently, I was informed that a number of parties had settled issues arising from my judgment and that the negotiated settlement among those parties had included an agreement as to the payment of costs. I was provided with short minutes of orders that those parties agreed should be made. However, as the agreement reached has not involved all parties to the proceedings, there are several claims for costs that remain to be determined. I will shortly identify those parties with outstanding claims and the nature of the claims that they make. However, before proceeding to do so, I record a number of matters by way of background to the determination of the outstanding claims.
In this judgment, it is convenient to refer to the judgment delivered on 31 January 2012 as "the" or "my" principal judgment". As I did in the principal judgment, I will refer to the proceedings that were heard together as "the principal proceedings" (40255 of 2011) and "the related proceedings" (40277 of 2011 and 40534 of 2011) respectively. It is also convenient to adopt, for the purpose of this judgment, the abbreviated names that I gave to the parties in the principal judgment as well as the abbreviated manner in which I referred to the land in question, the relevant legislation and various significant documents or plans identified in that judgment.
JVCo was substantially successful in the principal proceedings while CRIC was substantially successful in the related proceedings. However, the apparent simplicity of this statement and the consequence that it would ordinarily have for the making of orders for costs, beguiles the complexity of the interrelationship among the parties to each separate proceeding and the consequence for some parties to the principal proceedings of the determination made in the related proceedings.
All parties accepted that the discretion to award costs that should inform my decision was founded in both s 98 of the Civil Procedure Act 2005 and in Pt 42 of the Uniform Civil Procedure Rules 2005 (the UCPR). Section 98 of the Civil Procedure Act relevantly provides:
"98 Courts powers as to costs
(1) Subject to rules of court and to this or any other Act:
(a) costs are in the discretion of the Court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."
Part 42 r 42.1 of the UCPR is a "rule of court" to which the operation of s 98(1) of the Civil Procedure Act is expressed to be subject. The rule provides:
"42.1 General rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."
As will become apparent, some parties whose claims are to be determined by me and against whom an order would be made on the basis that costs follow the event, seek to have "some other order" made in accordance with the rule.
The provisions of s 101 of the Civil Procedure Act should also be noticed. That section enables the court to order "that interest is to be paid on any amount payable under an order for the payment of costs": s 101(4). An order for payment of interest on costs has been sought by parties whose claims remain to be determined by me. CRIC, against whom such an order was sought, did not resist the making of an order under the section if it is otherwise found liable for the payment of costs, but directed attention to the terms in which such an order should be framed (cf Joseph Lahoud v Victor Lahoud [2006] NSWSC 126 at [85]-[88]). Nonetheless, CRIC opposed the making of any order for costs against it in favour of parties whose claims have not been resolved by agreement.
As will also be seen, costs orders sought by two sets of parties turn upon the financial position of CRIC. It is therefore appropriate to record those facts pertaining to CRIC's financial position that are not controversial.
At the time at which the principal proceedings were commenced by JVCo, receivers had been appointed to CRIC and the company was in liquidation. The receivers appointed were Christopher Hill and Stephen Parbery (the Receivers) who were nominated as the sixth and seventh respondents respectively in the related proceedings. They were not joined as parties in the principal proceedings. They were appointed as receivers by CBA Corporate Services (NSW) Pty Ltd (CBA Corporate Services). While the latter company was the fifth respondent in each of the related proceedings, like the Receivers themselves, it was not a party to the principal proceedings.
The Receivers of CRIC controlled the defence of the principal proceedings as well being responsible for the prosecution and defence, as the case may be, of the related proceedings. The Receivers provided instructions to the solicitors acting for CRIC in all proceedings.
For the purpose of conducting their receivership of CRIC, the Receivers were provided with an overdraft facility by the Commonwealth Bank of Australia (CBA). CBA Corporate Services is a subsidiary of CBA. Legal costs incurred by the Receivers in conducting these proceedings on behalf of CRIC have been paid by drawing upon the overdraft facility. It is a facility that must be repaid. That repayment will be achieved when the assets of CRIC are realised by the Receivers which will include completion of the sale of land which is the subject of the related proceedings. In conducting their receivership, the Receivers hold an indemnity from CBA Corporate Services.
CRIC and the Receivers, through their solicitors, acknowledge that CRIC is insolvent and that it will be unable to satisfy any order for costs that may be made against it in these proceedings.
The outstanding claims for costs
All parties to the related proceedings consent to orders that there be no order for costs in those proceedings. An order to that effect will be made upon the delivery of this judgment.
In the principal proceedings, agreement has been reached among JVCo, CRIC, Metro, TCA (now named Transport for New South Wales) and RailCorp, the first, second, third and fourth respondents in the principal proceedings, that, as among themselves, there is to be no order as to costs. Those parties have also agreed that a notice of motion filed by JVCo, in which it sought to have additional declaratory orders made, should be dismissed with no order as to costs. Once again, the agreement among those parties will be reflected in orders made upon delivery of this judgment.
Those agreements leave for determination claims for costs sought both in favour of and against the surveyors (the sixth and seventh respondents) and the certifiers (the eighth and ninth respondents) in the principal proceedings. In the case of the surveyors, they also seek an amendment to the reasons expressed in the principal judgment.
CRIC seeks an order that the surveyors and certifiers pay the costs of its successful application for those parties to be joined as respondents in the principal proceedings (CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (In Liq) (No 2) [2011] NSWLEC 91) (CTI No 2). In the alternative, CRIC submits that among the surveyors, the certifiers and itself, each party should pay its and his own costs.
The surveyors seek orders to the following effect:
(i)amendment of [106] of the principal judgment by deleting two words from that paragraph;
(ii)that CRIC, the Receivers and CBA, as financier of the Receivers, be ordered to pay their costs;
(iii)that costs so ordered be paid on an indemnity basis; and,
(iv)that an order be made under s 101(4) of the Civil Procedure Act for the payment of interest on costs.
For their part, the certifiers also seek an order for payment of their costs by CRIC and the Receivers. They also seek orders that their costs be paid on an indemnity basis and that an order be made under s 101(4) for the payment of interest on costs. However, unlike the surveyors, the certifiers do not seek an order against CBA.
Each of the surveyors and certifiers oppose the order sought by CRIC for costs of the joinder application.
The claims and counter claims as to the payment of costs necessarily involve, at least in part, concurrent consideration of those claims in order to exercise the discretion available to me when determining the content of an order or orders to be made. However, the determination as to whether the reasons expressed in my principal judgment should be amended in the manner sought by the surveyors is a discrete issue, unrelated to the question of costs. It is appropriate that I first address that issue.
Amendment of reasons for judgment
The surveyors seek an amendment to [106] of my reasons for judgment. That paragraph reads:
"The proper construction of the Development Consent leads me to conclude that the eastern boundary of lot 107 was intended to be located so as to permit Tower 2, as designed at the time of certification of the plan of stratum subdivision, wholly within that lot. The registered plan does not do that; it has not been prepared in accordance with the Development Consent. It does not comply with condition A2 in that the registered plan does not 'accord with' the approved plan. Those responsible for the preparation and registration of the plan of stratum subdivision were required to have that subdivision ('development') effected in accordance with condition A2. Failure so to do constitutes a breach of s 76A(1)(b) of the EPA Act (cf s 122(b)(iii))." (Emphasis added.)
The surveyors submit that the words "preparation and" should be deleted from [106]. In essence they contend that unless those words are removed, the sentence may be interpreted as a finding by me that the sixth and seventh respondents had a legal obligation to prepare the Deposited Plan in accordance with Condition A2 of the Development Consent and that their failure so to do constituted a breach of the Environmental Planning and Assessment Act 1979 (the EPA Act). The application for amendment is opposed by both JVCo and CRIC.
The surveyors identify three sources of power to amend my reasons for judgment in the manner sought. Those powers are said to be:
(i) an implied statutory power to revise reasons for judgment;
(ii) a power inherent in the exercise of jurisdiction; and
(iii) the slip rule.
All parties addressing this issue accepted that reasons for judgment may be revised after delivery and that an entitlement so to do applies not only to an ex tempore judgment but also to reasons published in a reserved judgment (Todorovic v Moussa [2001] NSWCA 419; 53 NSWLR 463 per Beazley JA (Powell JA and Sperling J agreeing) at [41] and [43]). In Todorovic the revised judgment being considered by the Court of Appeal was one delivered by a judge of the District Court. Apart from the "slip rule", there was no provision in the District Court Act 1973 nor in the rules of that court, as then promulgated, that authorised the revision of judgments. Nonetheless, Beazley JA concluded at [50] that there was a power to revise a judge's reasons for decision "implied within the statutory provisions which govern the delivery of judgments in the District Court." As this Court is a statutory Court, her Honour's reasons would, by parity of reasoning, apply to the provision of reasons delivered by a judge of this Court.
In support of the submission that this Court has an "inherent power" to amend a judgment having "unforeseen or unintended consequences", the surveyors rely upon the decision of the Court of Appeal in Newmont Yandal Operations Pty Limited v The J. Aron Corporation & The Goldman Sachs Group, Inc & 3 Ors [2007] NSWCA 195; 70 NSWLR 411 at [58] and [60]. If such a power exists, then in my view it is an implied power rather than an inherent power. That is a consequence of this Court being a statutory court (Logwon Pty Ltd v Warringah Shire Council (1993) 82 LGERA 158 per Kirby P at 159-160; DJL v The Central Authority [2000] HCA 17; 201 CLR 226 per Callinan J at [183]).
The "slip rule" finds expression in Pt 36, r 36.17 of the UCPR. That rule applies to proceedings brought in this Court. Relevantly, the rule provides:
"36.17 Correction of judgment or order ('slip rule')
If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the Court, on the application of any party or of its own motion, may, at any time, correct the mistake or error."
In Newmont Yandel Spigelman CJ (Santow JA and Handley AJA agreeing) stated that the words of the rule should not be read narrowly, having regard to the overriding purpose expressed in s 56 of the Civil Procedure Act which, in it's application to the rules, "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings." His Honour continued at [116]:
"In my opinion, carrying into effect the actual intention of the judge making the order, and making sure that the order did not have a consequence which the judge clearly intended to avoid, falls within the natural and ordinary meaning of the word 'correction', particularly as understood in the light of the overriding purpose."
The observations of Spigelman CJ in Newmont Yandel are, so it is submitted, equally applicable to correction of mistake or error in reasons for judgment (Director General, Department of Services, Technology and Administration v Veall (No 3) [2011] NSWSC 541 at [6]).
I accept that there is power to amend reasons for judgment, albeit that the power is limited. Those limitations were identified in Todorovic at [41] - [43]. Revision is permissible to correct grammar and style in reasons originally given or where there is infelicity of expression that the revision seeks to remedy (at [41]). Revision or amendment may be made where, because of slip, the reasons do not reflect the intention of the judicial officer.
The power to amend reasons for judgment was also considered by the Court of Criminal Appeal in R v Jones; R v Hili (No 2) [2010] NSWCCA 195; 79 NSWLR 143. The relevant principles were identified by Rothman J (McClellan CJ at CL agreeing). Relevantly, his Honour makes clear that the Court is not entitled to alter the wording of a judgment in a manner that is inconsistent with the reasons originally published (at [41]) or in a manner that, in substance, renders the reasons different from those originally articulated (at [42]).
The surveyors submit that the challenged words in [106] of the principal judgment should be deleted essentially because they impermissibly suggest or imply that their conduct involves a breach of the EPA Act. According to the submission, no party sought any order against the surveyors; no evidence was adduced of any conduct by the surveyors directly inculpating them in breach and no submission was made that they had engaged in conduct that constituted a breach.
I do not accept that my reasons for judgment should be altered in the manner sought by the surveyors even if I had power so to do. Those reasons do not reflect any slip or mistake. Moreover, they must be read in context.
As the written submissions of the surveyors accept (at [5]), it was common ground at the hearing that the surveyors prepared both the stratum subdivision plan that was the subject of Condition A1 of the Development Consent and also the Deposited Plan. Apart from [106], the principal judgment contains a number of references to the role of the surveyors in the "preparation of" both plans. Such references can be found in [15], [33], [35], [42], [54], [64] and [75]. In the context of these references, the use of the challenged words in [106] is both unexceptional and consistent.
The context of the challenged words in [106] must also be recognised. At [74] I had concluded that each of CRIC, TCA and RailCorp were responsible for registration of the Deposited Plan. In the section of the judgment that followed and which included [106], I was addressing Issue (2)(i), as identified in [24] of that judgment, namely whether those parties identified at [74] were in breach of the EPA Act because the Deposited Plan did not accord with the stratum plan of subdivision identified in Condition A1. As I have already said, it was uncontroversial that the surveyors were engaged in drawing both of the critical stratum subdivision plans. Inevitably, reference was made to the "preparation of" those plans by them.
Further, as CTI submits, the surveyors could not be surprised by any observation or finding as to their involvement in the preparation of the stratum subdivision plans and the consequence of that involvement. So much follows from the terms of my judgment permitting the joinder of the surveyors and certifiers to the proceedings (CTI No 2). At [18] I said:
"18 While the relief claimed by JVCo is reflected in orders sought to operate in personam, that circumstance does not militate against the judgment operating in rem. As I have indicated at the outset, essential to the success of JVCo in the substantive proceedings is a determination that the registration of the Deposited Plan has, in relevant respects, been procured in breach of the EPA Act. A determination to that effect would, so it seems to me, be a judgment in rem: P E Bakers Pty Ltd v Yehuda (1988) 15 NSWLR 437 at 445 - 6 (per Hope JA, Samuels and McHugh JJA agreeing). Operation of the judgment as one in rem would mean that in any subsequent proceedings of the kind foreshadowed the surveyors and certifiers could not challenge the determination that the Deposited Plan, which they were instrumental in preparing and certifying, failed to comply with the consent and therefore would, when registered, be in breach of the EPA Act."
In the circumstances, I do not consider that the language of [106] is infelicitous such as would afford power to amend my reasons for judgment. Those reasons will not be amended in the manner sought by the surveyors.
Costs
Claimed by CRIC
CRIC seeks an order that the costs of its successful motion for joinder of the surveyors and the certifiers to the proceedings be paid by those who oppose the motion. The motion for joinder was actively opposed not only by JVCo but also by the surveyors and the certifiers. As agreement has been reached between CRIC and JVCo as to all costs associated with the proceedings, it remains to be determined whether any order for costs of the motion for joinder should be made against the surveyors and the certifiers.
CRIC submits that its joinder motion involved the determination of a discrete issue that was not dependent upon the final outcome of the proceedings. As it happened, CRIC submits that the principal judgment vindicated the joinder on which it succeeded because I determined that there was disconformity between the stratum subdivision plan that was the subject of the Development Consent and the Deposited Plan. The prospect that such a determination would be made was the foundation of the joinder application. In the result, so it is submitted, payment of costs should follow the "event" of the order for joinder.
The surveyors and the certifiers all oppose the making of the costs order sought by CRIC. Their reasons for so doing are part and parcel of their reasons for seeking their costs of the proceedings against CRIC. In essence, they contend that their joinder was futile as no order was sought against them by CRIC and no order was ultimately made against them. I will consider that argument in more detail when addressing the respective claims for costs against CRIC.
Considered as a discrete issue, there is substance to the claim for costs sought by CRIC. Contrary to the submissions made by the surveyors and certifiers, the basis upon which I determined that they should be joined as parties to the proceedings was not undermined by my principal judgment nor by the orders made as a consequence of that judgment.
In opposing the application for costs, the surveyors refer to the submissions made on behalf of CRIC in support of the joinder application, contending that a number of submissions made on behalf of the latter at that time were not fulfilled by the principal judgment or orders finally made, with the consequence that CRIC is not entitled to succeed in its present application. I do not accept, as relevant, the surveyors reliance upon CRIC's submissions in support of its application for joinder. Rather, I consider the present application for costs having regard to the basis on which I determined that CRIC's application for joinder should be granted.
Both the orders sought by JVCo in its amended summons and those orders ultimately made by me on 9 February 2012 were consequent upon my determination that there was disconformity between the subdivision plans to which I have earlier referred. As consultants retained by CRIC, the surveyors had prepared each of those plans while the certifiers had played a role in providing a statutory certificate for the Deposited Plan, thereby enabling it to be registered. Moreover, by reason of this involvement with the plans, CRIC had indicated that, if unsuccessful in defending the claim made against it by JVCo, it contemplated the commencement of proceedings claiming damages in contract or tort against the surveyors and certifiers.
The involvement of the surveyors and certifiers coupled with the foreshadowed proceedings by CRIC were the matters considered to be critical by me when determining to join those parties to the present proceedings. Applying the observations of McHugh J in State of Victoria v Sutton [1998] HCA 56; 195 CLR 291, I determined the existence of "an arguable possibility" that any one or more of the parties sought to be joined by CRIC "may be affected" by the making of orders then sought by CRIC (CTI No 2 at [17]). Further, I identified the possibility that a determination of this conformity between the plans in question, resulting in a breach of the EPA Act, would constitute a judgment in rem (CTI No 2 at [18]) and thus a material determination in the proceedings foreshadowed by CRIC.
Also material to my consideration of joinder was the possibility of inconsistent decisions by different courts. This Court had no jurisdiction to determine any action brought by CRIC in contract or tort. Thus, its pursuit of any such claim would need to be undertaken in a different court of competent jurisdiction to entertain those claims. Nonetheless, material to those claims was the determination referred to in the preceding paragraphs. Thus there existed the possibility, which was not remote, that there could be inconsistent judgments as to the very matter that I was required to determine (CTI No 2 at [20]).
While CRIC maintained in the principal proceedings that there was no disconformity between the two subdivision plans in question, its application for joinder was made on the basis that its defence of JVCo's contention in that regard would not succeed. As my principal judgment reveals, the possibility identified by CRIC became a reality.
In my view, CRIC is correct in its submission that the application for joinder of the surveyors and certifiers involved a discrete issue independent of the outcome of the proceedings. That application was decided on legal principles appropriate to it. Notwithstanding the discrete nature of the application, the outcome did not undermine the basis upon which the decision for joinder was made. It was never contemplated that CRIC would, in these proceedings, claim an order or relief against the parties it sought to have joined.
In principle, CRIC is entitled to be compensated for its costs of the successful application for joinder. How this entitlement, in principle, should be reflected in any order will be addressed once I consider the application made by the surveyors and the certifiers that CRIC should be ordered to pay their respective costs of the proceedings. It is to those applications that I now turn.
Claim by the surveyors
As earlier indicated, matters relied upon by the surveyors to resist the claim by CRIC for costs of the joinder application are, in large part, the same matters relied upon by them to seek an order for costs against CRIC. They submit that their opposition to joinder was vindicated by the ultimate result of the proceedings, there being no order made against them and no finding of "liability" on their part. As a consequence, they were "successful", or, at least, as against them, CRIC was "unsuccessful". That consequence should result in an order for costs in their favour.
In support of their application for costs against CRIC, the surveyors further argue that:
(i) their role in the preparation of the Deposited Plan was not "directly challenged";
(ii) the disconformity between the plan of stratum subdivision that was the subject of the Development Consent and the Deposited Plan was not alleged in these proceedings to be their responsibility;
(iii) there was no evidence of "contributory wrongdoing" on their part;
(iv) if the joinder by CRIC was to serve a collateral advantage, it was an abuse of process;
(v) there was no issue "genuinely intending to be determined" as against the surveyors in the absence of a "prima facie" case against them with the result that their joinder was tantamount to an abuse of process.
In support of the last two propositions, the surveyors rely upon the decision of the High Court in Williams v Spautz [1992] HCA 34; 174 CLR 509. However, for reasons that follow I am unable to accept those submissions.
My decision in CTI No 2 to order the joinder of the surveyors and certifiers was not the subject of appeal. The principles applied in reaching that decision and the decision itself cannot now be revisited, at least by me. In so far as the submissions of the surveyors implicitly challenge that decision, those submissions cannot now be entertained.
If the submissions of the surveyors are understood as being directed to the conduct of the proceedings following joinder, the reasons given in my principal judgment and the final orders made by me, I do not accept that the maintenance of proceedings by CRIC after joinder was for the predominant purpose of gaining a collateral advantage which was tantamount to an abuse of process.
The reasons for joinder were articulated in CTI No 2. The circumstance that in my principal judgment I have determined the plan disconformity issue, being an issue relevant and necessary to be determined in the foreshadowed common law claim by CRIC against the surveyors, would not, in my opinion, result in the joinder successfully sought by CRIC being an abuse of process. The fact that an issue that would otherwise arise in the foreshadowed common law claim has been determined by me in a manner that binds the surveyors and certifiers is not an abuse of process, even if it is described as a "collateral advantage" to CRIC. The potentially binding affect of such a determination was a principal reason for ordering joinder of the surveyors and certifiers to the proceedings (CTI No 2 at [17] - [19]).
In Williams v Spautz, the plurality said (at 526):
"To say that a purpose of a litigant in bringing proceedings which is not within the scope of the proceedings constitutes, without more, an abuse of process might unduly expand the concept. The purpose of a litigant may be to bring the proceedings to a successful conclusion so as to take advantage of an entitlement or benefit which the law gives the litigant in that event."
As I have earlier indicated, CRIC opposed the orders sought by JVCo and, importantly, maintained throughout the proceedings that there was no disconformity between the relevant subdivision plans. However, the prospect that such a finding might be made, with potential affect upon subsequent proceedings between CRIC and the surveyors was the purpose of joinder, with the consequence that if that determination was made, it would have the "benefit" of that determination "which the law gives ... in that event".
The separate judgment of Brennan J in Williams v Spautz is to similar effect as that of the plurality. At 535 his Honour said:
"There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce."
By parity of reasoning, CRIC intended that its interests, in common with those of the surveyors and certifiers, was to defeat the claim of JVCo founded upon disconformity between relevant plans. However, by reason of the retainer of the latter parties by CRIC, in the event that the defence was unsuccessful, CRIC had the benefit of a determination on that issue.
Having decided that there is no proper basis to make an order against CRIC in favour of the surveyors on the basis that the joinder of the surveyors involved an abuse of process, it is necessary to consider the other bases for the costs claim made by the surveyors as I have identified them in [50] and [51] above. In so doing, it is important to note the part played by the surveyors in the conduct of the principal proceedings.
The surveyors were represented each day of the hearing by senior counsel together with an instructing solicitor. As recorded in my principal judgment at [16], the surveyors did not take an active role in the hearing before me. They did not adduce any evidence: none of the witnesses called at the hearing were cross-examined by them and no submissions were made on their behalf at the conclusion of the hearing. They seek to explain that passive role on the basis that no order was sought against them and their conduct, as surveyors, was not "directly" impugned.
As CRIC submits, the joinder of the surveyors as parties afforded the latter the opportunity to contend that there was no disconformity between the relevant plans and to explain, as the professionals who had drawn both plans, why that was so, assuming they wished to challenge the allegation of disconformity. No such contention was advanced by them. Instead, they sat by while CRIC sought to defend the claim of disconformity between plans.
CRIC further submits, as consistent with my judgment in CTI No 2, that the basis for joinder was not made with the prospect that any liability of the surveyors to CRIC would be established in the present proceedings. This Court had no jurisdiction to adjudicate upon any such claim. Rather, the joinder was made so as to afford the opportunity to the surveyors to be heard on the issue of plan disconformity. The determination of that issue had the potential to affect directly any liability that they may ultimately have to CRIC. A determination of disconformity between plans was a necessary step relevant to the ultimate determination of any liability to CRIC
In short, the surveyors were bound by a determination of disconformity, potentially operating in rem, with the consequence that by joinder they were afforded the opportunity to be heard on that issue. Their presence as parties thereby ensured that they were afforded procedural fairness.
If, as the surveyors submit, it was appropriate that they play no active role in the proceedings because no order was sought against them and their conduct was not directly impugned, CRIC submits that the appropriate course for the surveyors to take was to file a submitting appearance in the proceedings, having regard to the issues then identified by the pleadings and the orders then sought by any party. At most, CRIC submits that a watching role by a junior legal practitioner could be justified.
While the surveyors assert that uncertainty attended the claim that might ultimately be advanced either by JVCo or by CRIC, exemplified by JVCo filing and seeking leave to rely upon amended points of claim in the course of the hearing, I am not persuaded that the potential for such a course warranted the level of representation that they engaged. If the passive role of the surveyors was justified on the bases asserted by them, they would not have been prejudiced by a submitting appearance. If, as happened, there was an amendment to the claim to which they had filed a submitting appearance, such that an order was sought against them, they would have been entitled to receive notice of the proposed amendment and to reconsider their participation in light of those proposed amendments. The amendment to the claim that was in fact sought and made in the course of the hearing did not cause the nature of participation of the surveyors in the proceedings to change.
Further, in the context of Pt 42.1 of the UCPR, it is necessary to consider "the event" to which the rule would ordinarily require an order for costs to follow. Such an "event" is not so readily discernible when addressing the result of the proceedings as between CRIC and the surveyors.
For reasons earlier explained, CRIC did not seek any order against the surveyors upon which to identify any lack of success. Had such orders been sought but dismissed in my principal judgment, the "event" would have been the practical result of the surveyors successfully defending the claim brought against them.
However, in the present case, there is no such claim to which one may point. The purpose of joinder was as I have earlier described. That purpose achieved practical fulfilment when affording the opportunity to the surveyors to contest the determination ultimately made by me as to disconformity between plans. That practical prospect was the basis upon which joinder was ordered. In that sense, the practical result of the proceedings as between CRIC and the surveyors vindicated the joinder application made by the former.
However, that consequence can hardly be reflective of "the event" which the rule contemplates should trigger, as a general rule, an entitlement to an order for costs. Relevantly, the surveyors did not identify "the event" triggering their entitlement to costs conformably with the rule. It seemed to be assumed that because CRIC had joined them but had not succeeded in obtaining an order against them, their entitlement to costs followed. For reasons earlier explained, I do not accept that reasoning as founding an entitlement to costs.
While I accept that joinder resulted in the surveyors incurring costs for their participation in the proceedings, I do not accept that the cost was incurred on the basis claimed, such that a compensatory order should be made. This is essentially the case for the reasons that I have given in response to the surveyors claims and which substantially reflects the submissions made on behalf of CRIC. This seems to me to be quintessentially a case where "some other order should be made" conformably with the discretion available under r 42.1 of the UCPR. I will further consider the content of such an order after addressing the claim for costs made by the certifiers.
Claim by the certifiers
Like the surveyors, the certifiers were retained by CRIC to provide services that were a prerequisite to the Deposited Plan being registered by the Registrar-General. Prior to its registration, the Deposited Plan was signed by Mr Wren, an accredited certifier and the ninth respondent, certifying that the provisions of s 109J of the EPA Act had been satisfied in relation to that plan, so far as it related to a number of lots to be created upon registration (principal judgment at [17]). In providing that certification, s 109J required a consideration of both the Development Consent, so far as it authorised subdivision as a component of "development", and the Deposited Plan as it sought to give effect to that same subdivision.
It was by reason of the retainer of the certifiers by CRIC and their certification of the Deposited Plan that provided the factual foundation for the joinder in the proceedings sought by CRIC. The principles that informed my decision to order joinder were the same as those upon which I determined to order the joinder of the surveyors.
The bases upon which the certifiers seek payment of their costs by CRIC are substantially the same as those relied upon by the surveyors. To the extent that they have advanced grounds in common, I do not repeat the submissions made by CRIC in response to them and with which, for reasons already indicated, I substantially agree.
However, there are two matters of difference between the bases of claim advanced by the surveyors and those advanced by the certifiers. First, the certifiers submit that the timing of the joinder is relevant to their application for costs. Secondly, while they disavow a submission that joinder was an abuse of process, given that it was ordered by me following a contested hearing, they do submit that the joinder was for the collateral or ulterior purpose "of binding the eighth and ninth respondents in any potential future proceedings to findings made in the present proceedings." It is convenient to deal with each of these additional matters in turn.
The first of the additional grounds is that the certifiers were first given notice of an intention to seek joinder only about one week prior to the motion for joinder being filed and served. The order for joinder was made only five weeks prior to commencement of the trial. By contrast, CRIC had been involved in the proceedings since their commencement in March 2011 and had been aware of the prospect that such proceedings might be brought against that company since January of that year. Moreover, so it was submitted, pleadings in the proceedings had closed and all evidence had been served by the original parties to the proceedings. While the certifiers were provided with a copy of the pleadings, together with JVCo's evidence, shortly prior to the hearing of the joinder application, the evidence to be relied up by CRIC was not provided until about two weeks before the commencement of the trial. According to the submission, the lateness of the application for joinder had two consequences.
First, it was claimed that the certifiers were left without "any real opportunities" to conduct their own "forensic investigations". The second consequence, so it was submitted, was that in the absence of the opportunity for that investigation, it was reasonable for the certifiers to participate to the limited extent that they did in the trial "to observe the unfolding of, and to seek to understand, the evidence and to observe the positions taken by the parties and in particular CRIC, rather than to merely enter a submitting appearance." As CRIC was responsible for the timing of the joinder application, the certifiers contended that CRIC should bear the costs consequent upon "its choice of timing".
I do not accept that this submission sustains the order that the certifiers seek. The final hearing or trial of the proceedings was given an early hearing date because of the commercial significance that the outcome had for the parties first joined and also because an interlocutory injunction had been granted restraining the completion of a contract for the purchase of an interest in land involving many millions of dollars. This had the consequence that all parties were working to a relatively tight timetable. Contrary to the submission of the certifiers, the time for filing pleadings had not closed at the time at which they were joined as parties. The respondents were not required to file their defences until 8 June 2011, that is, some two weeks after the order for joinder was made.
The prospect that the time afforded to the certifiers to prepare for hearing was a relatively short one recognised by me in CTI No 2 at [23] with the prospect that any prejudice would need to be considered. Nonetheless, following the order for joinder the certifiers agreed in a timetable for preparing pleadings and evidence. In accordance with that timetable they filed a defence on 17 June 2011 that was limited in its content because, as it stated in terms, no relief was sought against them.
Importantly, at no time subsequent to joinder or during the course of the hearing did the certifiers seek any adjustment to the timetable for preparation or additional time to consider evidence because there was inadequate time to prepare their case. As a consequence, I am not able to accept that the timing of the application for joinder is, of itself, a basis upon which to order that costs be paid by CRIC.
As I have earlier indicated, the certifiers submit that CRIC should pay their costs because their joinder was sought and obtained for a collateral or ulterior purpose. That purpose was described as being "the forensic purpose of binding [the certifiers] in any potential future proceedings to findings made in the present proceedings."
So categorising the consequence of joinder does not, to my mind, support the claim for costs. The reasons for joinder were conventional. They were as I have earlier summarised them and as I articulated them in my judgment on joinder (CTI No 2). Why CRIC should bear the costs of the proceedings because the outcome had a consequence that was the very rationale for ordering joinder has not been made apparent to me. If the submission is that joinder should not have been ordered on the basis that I determined, then the submission is irrelevant for present purposes, as no appeal was taken from my order to join the certifiers as parties to the proceedings.
Further, I do not understand the decision in Williams v Spautz to support the submission made by the certifiers even where an abuse of process is not alleged. The decisions of the Federal Court in Re Ragata Developments Pty Ltd v Westpac Banking Corporation [1993] FCA 72 at [8] and Colgate-Palmolive Company and Colgate Palmolive Pty Ltd v Cussons Pty Ltd [1993] FCA 536; 46 FCR 225, relied upon by the certifiers do not, on my reading of them, yield the result contended for by them. This was not a case where CRIC had "pursued" the certifiers without a legally adequate basis to do so. The purpose of and reasons for joinder were fulfilled by the litigation.
As CRIC has submitted, the certificate given by the certifiers to the Deposited Plan under s 109J of the EPA Act was intrinsic to the critical issue in the principal proceedings as to whether there was disconformity between the Development Consent and the Deposited Plan. There could be no doubt that the certifiers were in a position to make a meaningful contribution to that issue.
However, as CRIC also submitted, notwithstanding their daily attendance at the trial by senior and junior counsel, together with instructing solicitor, they tendered no evidence and briefly cross-examined only one of the witnesses called in the proceedings. At the conclusion of the trial, only a very brief submission was made by the certifiers in which they acknowledged that their position was "to leave the evidentiary contest to the real protagonists". As a consequence, they stated, in terms, they made "no submissions about what has been described as the boundary issue and the easements issue". The boundary issue to which the submission referred is what has been described in this judgment as the issue concerning disconformity between the Development Consent and the Deposited Plan.
In drawing attention to the absence of any real contribution made by the certifiers to the trial, I should not be taken as suggesting that they were bound to tender evidence or to take an active role. However, having regard to the reasons for their joinder as parties, the fact that they chose to take a spectator role bears upon their claim for costs. If, consistent with their conduct, they took the position that no purpose was served by their active participation in the trial, given the absence of any orders sought against them, the appropriate course was either to file a submitting appearance, save as to costs, or provide a junior lawyer with a brief to monitor the proceedings.
In the context of the matters to which I have just adverted, CRIC submitted that having chartered the course which the certifiers did, signalled by the terms in which they served their defence prior to hearing, there was no justifiable basis for the certifiers to have incurred the costs they apparently did, particularly where the Court had already determined that their joinder was appropriate. There is substance in that submission.
As was the case with the claim made by the surveyors, so also the circumstances attending the involvement of the certifiers in the proceedings calls for consideration of "some other order" in relation to costs, assuming that the "event" referred to in r 42.1 is as the certifiers impliedly claim it to be.
Appropriate orders for costs
I have already indicated that, in principle, CRIC would be entitled to its costs of its successful motion for joinder of the surveyors and certifiers as parties to the proceedings. This said, the surveyors and certifiers were not the only unsuccessful parties to that motion. It would not be just that they bear the whole of the costs, particularly as I am informed that all costs issues between CRIC and JVCo, who also oppose joinder, have been resolved. The basis upon which those issues have been resolved is not known to me, other than the agreement that no order for costs be made as between them.
I have also determined that I would not make an order for costs against CRIC in favour of the surveyors and certifiers founded on the claim of the latter that costs should "follow the event". At best, any claim to an order on their part would relate to consideration of pleadings and evidence sufficient to conclude that a submitting or watching role was sufficient.
Taking account of the conduct of the parties and their respective submissions earlier addressed, it seems to me that the proper exercise of discretion under both s 98 of the Civil Procedure Act and r 42.1 of the UCPR requires that among CRIC, the surveyors and the certifiers, each party should pay its and his own costs.
In light of my determination, it is unnecessary to consider the claim made by each of the surveyors and certifiers that their costs be paid on an indemnity basis. Self-evidently, such a claim would only require consideration if I had first determined that an order for costs should be made against CRIC (cf Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178 at 192; FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340; May v Christodoulou [2011] NSWCA 75).
For the same reason, it is unnecessary to consider the claims made that an order for costs include orders against the Receivers and CBA. Any order made against the latter entities could only be contemplated if I had first determined that CRIC was liable to pay costs.
My determination that there should be no order as to costs among CRIC, the surveyors and the certifiers also renders it unnecessary to consider any order for the payment of interest on costs under s 101(4) of the Civil Procedure Act.
Disposition of the proceedings
As I have earlier indicated, agreement has been reached among JVCo and the first four respondents named in the principal proceedings. The fifth respondent had filed a submitting appearance. Among those parties, I will make orders in accordance with the agreed Short Minutes of Order that have been signed by the legal representatives of each of those parties.
Otherwise, I will make orders on outstanding matters in accordance with this judgment.
In the related proceedings, I will make orders in accordance with those that have been agreed among the parties to those proceedings.
Orders
Proceedings 40255 of 2011
In the above proceedings I make the following Orders:
1. By consent:
(i) As between the Applicant and each of the First Respondent to Fourth Respondent inclusive, there will be no order as to costs.
(ii) The Applicants Notice of Motion filed 8 May 2012 is dismissed with no order as to costs.2. The application by the Sixth and Seventh Respondents to amend [106] of the reasons for judgment delivered on 31 January 2012 is refused.
3. As among the First Respondent and the Sixth, Seventh, Eighth and Ninth Respondents there will be no order as to costs to the intent that each of those parties should bear its and his own costs.
4. Exhibits may be returned.
Proceedings 40277 of 2011
In the above proceedings I make the following Orders:
1. By consent, no order as to costs.
Proceedings 40534 of 2011
In the above proceedings I make the following Orders:
1. By consent, no order as to costs.
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