Diaz v Ruddock; Attie v Ruddock (No 2)

[2021] NSWSC 908

Supreme Court

New South Wales

Medium Neutral Citation:

Diaz v Ruddock; Attie v Ruddock (No 2) [2021] NSWSC 908

Hearing dates:

23 July 2021

Date of orders:

23 July 2021

Decision date:

23 July 2021

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Plaintiff to pay defendants’ costs

Catchwords:

COSTS — Party/Party — General rule that costs follow the event — Costs of parties up to entry of submitting appearance

EQUITY — Equitable remedies — Declarations and injunctions — Obligation to consult — Not appropriate to grant declaration or injunction where content of obligation fact specific and occasion for consultation had not yet arisen

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Diaz v Ruddock; Attie v Ruddock [2021] NSWSC 881

EB 9 & 10 Pty Ltd v Owners Strata Plan 934 (2018) 98 NSWLR 889; [2018] NSWCA 288

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

Zaiter v Ruddock [2021] NSWSC 880

Category:

Costs

Parties:

2021/192982
Jess Diaz (First Plaintiff)
Peter Camilleri (Second Plaintiff)

2021/194083
Ned Attie (Plaintiff)

Defendants in both proceedings
Phillip Ruddock (First Defendant)
Chris Stone (Second Defendant)
Penny George (Third Defendant)
Christopher Rath (Fourth Defendant)
Tobias Lehmann (Fifth Defendant)
Aileen MacDonald (Sixth Defendant)
Mary-Lou Jarvis (Seventh Defendant)
Matthew Camenzuli (Eighth Defendant)

Representation:

Counsel:

P E King and A Power (Plaintiffs)

S Duggan (First to Seventh Defendants)
S Robertson and M Maconachie (Eighth Defendant)

Solicitors:

Diaz and Diaz (Plaintiffs in 2021/192982)
Concordia Legal (Plaintiff in 2021/194083)

Harpur Phillips (First to Seventh Defendants)
Pryor Tzannes and Wallis (Eighth Defendant)

File Number(s):

2021/192982; 2021/194083

Publication restriction:

Nil

EX TEMPORE Judgment (REVISED)

Summary

1. The Court delivered its reasons in these proceedings on 21 July 2021: Diaz v Ruddock; Attie v Ruddock [2021] NSWSC 881 (the Principal Judgment). This judgment deals with the final disposition of the proceedings. Defined terms in the Principal Judgment have the same meaning in these reasons. The appearances were as set out in the Principal Judgment with the addition of Mr S Duggan of Counsel who appeared for the first to seventh defendants (the Submitting Parties) and the Party. This judgment assumes familiarity and should be read with the Principal Judgment.

2. For the reasons which follow, the final orders of the Court will be:

1. Order that the Amended Summons dated 15 July 2021 (Diaz v Ruddock) / 16 July 2021 (Attie v Ruddock) is dismissed.

2. Order the plaintiff(s) to pay the eighth defendant’s costs of these proceedings.

3. Order that order 5 of the orders made on 9 July 2021 as extended by order 2 (Diaz v Ruddock) / order 3 (Attie v Ruddock) of the orders made on 16 July 2021 (interlocutory injunction) is dissolved.

4. Order the plaintiff(s) to pay the first to seventh defendants’ and the Liberal Party of Australia (NSW Division)’s costs of these proceedings, being their costs of today and:

1. In the case of the Liberal Party of Australia (NSW Division), until it ceased to be a party; and

2. In the case of the first to seventh defendants, until they filed their submitting appearances.

The plaintiffs’ submissions

3. Mr King pressed for these orders in both proceedings:

“1. Note that the parties agree that the conditions set out in clause 13.2.4 of the Constitution by the State Executive for the exercise of power provided by that clause have arisen with respect to selection and endorsement of candidates for the next ordinary local government elections for [Blacktown City Council/Cumberland City Council] to be held on 4 September 2021 or at such later time as may occur for Liberal candidates.

2. Note the parties agree that clause 26.1.4 of the Constitution confers no power on the State Executive to select or endorse candidates for the next ordinary local government elections for [Blacktown City Council/Cumberland City Council] to be held on 4 September 2021 or at such later time as may occur for Liberal candidates.

3. Declaration that as a condition of exercising the power provided for in cases of urgency under clause 21.6.4 of the Constitution of the NSW Division the State Executive must consult with the [Blacktown LGC/Cumberland LGC] as to the proposed modification of procedures for selection of candidates and as to dispensing with such procedures and as to endorsing a member of the NSW Division as a candidate for each publicly elected office in both winnable and unwinnable positions.

4. Order restraining the 1st to 8th Defendants from exercising the power provided for in cases of urgency under clause 21.6.4 of the Constitution of the NSW Division the State Executive [sic] unless having first consulted with the [Blacktown LGC/Cumberland LGC] as to the proposed modification of procedures for selection of candidates and as to dispensing with such procedures and as to endorsing a member of the NSW Division as a candidate for each publicly elected office in both winnable and unwinnable positions.

5. Order that the 8th Defendant pay the costs of the Plaintiff[s].

6. Liberty to apply on 24 hours’ notice in writing.”

4. Mr King submitted that the notations were an appropriate exercise of the Court's jurisdiction, especially given what he said was Mr Camenzuli’s late concession concerning the applicability of cl 13.2.4.

5. It was further submitted that the relevant event for the purposes of the exercise of the Court's costs discretion was to be gleaned from the Principal Judgment and in particular the success that the plaintiffs had enjoyed in relation to the operation of cl 21.6.4(2) and the fact that the plaintiffs were entitled to the notations, declaration and restraining orders that would give effect to the Court's conclusions.

Costs as between the plaintiffs and Mr Camenzuli — Consideration and conclusion

6. In what follows I substantially adopt the submissions put by Mr Robertson which is why I do not set them out separately. What follows are my reasons for rejecting Mr King's submissions and for making the orders sought by Mr Robertson for his client set out in orders 1 to 3 at [2] above.

7. I do not accept that the success that the plaintiffs enjoyed — limited to the proper construction of cl 21.6.4(2) — is the relevant event for the purposes of the exercise of the Court's costs discretion. The event is the outcome of the proceedings as expressed in its orders. The Principal Judgment does not support the making of any of the declarations or injunctions sought in the plaintiffs' respective amended summonses (set out in [15) of the Principal Judgment).

8. It is, however, then necessary to address the notations, declaration and injunction which Mr King proposed for the purposes of today's hearing that I have set out at [3] above. It is convenient to deal with each of those in turn.

9. The first notation concerns cl 13.2.4 of the Constitution. That notation is not appropriate. This is not a case where some intermediate step or agreement needs to be recorded as a notation to explain why the Court has then gone on to make whatever orders it has in fact made. The parties did not require the Court to adjudicate the question of the applicability of cl 13.2.4. That is recorded in the judgment, which must be left to speak for itself. A notation is not itself a source of legal rights or obligations and might be apt to mislead that it has such an effect if it is included in the Court's orders disposing of the proceedings.

10. Furthermore, I do not accept that there was any relevant concession that would have any impact upon costs by Mr Camenzuli in relation to cl 13.2.4. The amended summonses were filed on 15 and 16 July 2021, but had been notified earlier. Mr Camenzuli's submissions responded to them as notified and indicated that there was no issue about cl 13.2.4. That is not a "concession" of the relevant kind that may impact upon costs because the plaintiffs were not put to expense referable to resistance by Mr Camenzuli.

11. The second proposed notation relates to cl 26.1.4. I do not propose to make this notation for the same reasons that I have expressed in [9] above as to why it is not appropriate to make a notation of the kind sought about cl 13.2.4. Insofar as these proceedings were conducted on the basis that both the City of Blacktown LGC and, to the extent it may be relevant (see [16] and [34] of the Principal Judgment), the City of Cumberland LGC were in existence, there could be no dispute about the applicability of cl 26.1.4. For the reasons I have given, it would be quite inappropriate now to make any notation about something that was not really an issue in these proceedings.

12. It is then convenient to consider together the declaration and injunction sought by Mr King in relation to cl 21.6.4 of the Constitution. Mr King eloquently submitted that this was a case of the kind dealt with by Barrett AJA in EB 9 & 10 Pty Ltd v Owners Strata Plan 934 (2018) 98 NSWLR 889; [2018] NSWCA 288, in particular at [34] and [36] (Meagher and Gleeson JJA agreeing):

“34 What s 75 of the Supreme Court Act 1970 (NSW) calls “binding declarations of right” are in the nature of final relief binding on the parties and operating as a res judicata or issue estoppel. Such declarations can only be made by reference to some concrete situation of controversy defined by facts found by the court or agreed by the parties: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9 at [48]-[49]. It is that feature that distinguishes a declaration from an advisory opinion about a hypothetical possibility: Jackson v Slattery (1984) 1 NSWLR 599 at 608-609. It is no obstacle to the grant of declaratory relief that the concrete situation of controversy relates to future actions. Relief in the nature of a quia timet declaration is available to establish what, according to existing rights and obligations, the parties’ positions will be if some defined event happens, at least where it is reasonably foreseeable that the event may happen. Thus, in Woolmington v Bronze Lamp Restaurant Pty Ltd [1984] 2 NSWLR 242, the court declared that one party was entitled to be discharged from a particular liability owed to the other if and when a third party made a particular payment to that other party. A like declaration was made more recently in Clark v Matton Developments Pty Ltd [2016] QSC 251. …

36 The status of a declaration as a means of “enforcing” the underlying right is, to my mind, put beyond doubt when regard is had to the steps that are available in consequence of the obtaining of the declaration. As in the present case, a declaration will often state the successful plaintiff’s right in a way making it clear that certain future conduct of the defendant will amount to an invasion of that right. It is commonplace for a plaintiff to seek not only a declaration but also an injunction enjoining the conduct in question. Sometimes, an injunction will be refused as a matter of discretion, even though a declaration is made and grounds for a grant of injunctive relief are shown. In Port of London Authority v Cairn Line of Steamships Ltd [1913] 1 KB 497, for example, Scrutton J awarded a declaration against a shipping company but declined to grant an injunction “because I have no doubt that the defendants will comply with the declaration made”. In other cases, the award of a declaration may be accompanied by an express grant of liberty to apply for further relief as may be needed: see, for example, Watt v Mortlock [1964] Ch 84 at 88. An express grant of liberty to apply is, however, not necessary. In Royal Insurance Co Ltd v Mylius (1926) 38 CLR 477; [1926] HCA 49, Isaacs J said (with the concurrence of Knox CJ and Starke J) at CLR 497:

“Every order for declaration of right carries with it liberty to apply, and, if the defendant acts contrary to it, the Court on a proper application, and on proper notice, may enforce it.””

13. There will be many situations where a declaration in the terms of, for example, a provision in a statute or a clause of a contract will be the appropriate outcome of proceedings, combined with an injunction to enforce compliance or restrain its breach. The difficulty in the present case which stands in the way of any declaration or order being made of the kind sought by Mr King is that in its reasons the Court has made perfectly clear that the content of the obligation to consult with the LGC is a fact-sensitive exercise that will vary from case to case (see [6(2)] of the Principal Judgment and [86] of Zaiter v Ruddock [2021] NSWSC 880, incorporated into the Principal Judgment by reference at [50]).

14. In these proceedings, the Court has not been called upon to consider, to borrow the language of Barrett AJA, "some concrete situation of controversy defined by facts found by the Court or agreed by the parties" relevant to consultation under cl 21.6.4(2). On the contrary, in the circumstances of this case, the Court has eschewed expressing any definitive view about what the content of the obligation to consult might be in any given case. In those circumstances, there is no utility in making a declaration of the kind sought, not least because at this stage there has been no decision made which might then invoke the requirement to consult with a LGC before the State Executive can exercise the powers in cl 21.6.4. If and when that happens, there will then be a factual context in which the application of the obligation to consult can be considered.

15. This problem is even more acute in relation to the injunction that was sought in the plaintiffs’ proposed order 4 at out at [3] above. It goes without saying that the Court will strain to ensure that the language of any injunction is as clear as it can possibly be to ensure that a party knows what it can or cannot do on pain of contempt. In the absence of the Court having had to consider a particular set of facts about what was or was not proper consultation for the purposes of cl 21.6.4, it is not possible to lay an injunction in the general terms of the clause. Those who would be bound by such an injunction would be left uncertain in any given case whether what they proposed to do would or would not satisfy the obligation to consult. Furthermore, there is no evidence before the Court of any threat that would justify quia timet relief to the effect that if and when a decision is made by State Executive it will not comply with the obligation to consult with a LGC as the Court has found must be done before it can exercise its powers under cl 21.6.4.

16. Finally, the orders propounded by Mr King also included an order that there be liberty to apply on 24 hours' notice in writing. While the practical reasons for that may be readily understood, I do not propose to make that order. The dismissal of these proceedings brings these proceedings to an end. In my respectful view, that means there will be nothing left that could properly be the subject of an order for liberty to apply.

17. It follows that if any further dispute arises between these parties that may be said to be relevant to the issues dealt with in the Principal Judgment, it will be necessary for any such fresh dispute to be brought before the Court by new proceedings.

18. For these reasons, none of the notations or other orders sought by Mr King in the draft orders propounded on behalf of the plaintiffs this morning will be made.

The Submitting Parties' costs

19. Mr Duggan sought the Submitting Parties' costs and those of the Party. The circumstances of the brief appearance of the Party are set out in [10]–[12] of the Principal Judgment.

20. Mr Duggan's submission was that, while they had ultimately and properly entered a submitting appearance when it became apparent that an active contradictor was available to contradict the propositions to be put by Mr Zaiter, the Submitting Parties and the Party were entitled to their costs up to that point (or, in the case of the Party, up to the point at which it was substituted out of the proceedings).

21. Mr King submitted that the submitting appearance entered by the Submitting Parties should be taken to mean what it said. The Submitting Parties had agreed by their submitting appearance to submit to any order or judgment of the Court save as to costs.

22. Mr Duggan candidly informed the Court that he had been unable to find any authority in which a party who had entered a submitting appearance had then had a costs order made in its favour. In circumstances such as these, the Court would normally be hesitant to make an order in favour of a party that has entered a submitting appearance because in many, if not most, cases the relevant "event" would simply not affect the party that had entered the submitting appearance, especially if that party’s submission was akin to an interpleader.

23. However, in this case the event is clear by reason of the dismissal that I will order of the amended summonses. The Submitting Parties and the Party would have been affected by any orders made pursuant to the amended summonses had the plaintiffs succeeded in any respect. In the events which have happened, no orders other than a dismissal will be made so that it may be inferred that the event for all practical purposes, to the extent that they participated in the proceedings, is that the Submitting Parties and the Party may be taken to have notionally succeeded. Putting it another way, they have incurred costs in relation to an unsuccessful cause. In those circumstances, I am satisfied that it is appropriate for the Submitting Parties and the Party to have their costs paid by the plaintiffs for today and until they had entered their submitting appearances or (in the case of the Party) had been substituted out of the proceedings.

Decision last updated: 26 July 2021