DWD Project Pty Ltd v McKenzie - [2022] NTSC 8

CITATION:DWD Project Pty Ltd & Anor v McKenzie & Anor [2022] NTSC 8 Decision on Costs

PARTIES:DWD PROJECT PTY LTD (ACN 601276108)
AND

ANTHONY, Michael Adrian

v

MCKENZIE, Chantal

AND

NORTHERN TERRITORY ENVIRONMENT PROTECTION AUTHORITY

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT exercising Territory jurisdiction
FILE NO:2020-01907-SC
DELIVERED:  25 January 2022
HEARING DATE:  20 November 2020
JUDGMENT OF:  Blokland J

CATCHWORDS:

PRACTICE AND PROCEDURE – Costs order – litigation futile – whether costs order should be made – no order for costs made.

PRACTICE AND PROCEDURE - Costs order – fragmentation of litigation – consequences for the parties – review of conduct of litigation – if both parties have acted reasonably – no order for costs made.
Waste Management and Pollution Control Act 1988 (NT)
Local Court (Criminal Procedure) Act 1928 (NT)

ASIC v GetSwift LTD [2020] FCA 504; The Queen v Baker [2021]
Peter Vasel v Michael Anthony and DWD Project Ltd No’s 21916221 and 21916218, Local Court, 13 October 2020

REPRESENTATION:
Counsel:
First Plaintiff:  D Robinson SC
Second Plaintiff:  D Robinson SC
First Defendant:  T Moses
Second Defendant:  T Moses
Solicitors:
First Plaintiff:  Clayton Utz
Second Plaintiff:  Clayton Utz
First Defendant:  Hutton McCarthy
Second Defendant:  Hutton McCarthy

Judgment category classification:    C
Judgment ID Number:  BLO2201
Number of pages:  15

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
DWD Project Pty Ltd & Anor v McKenzie & Anor
Decision on Costs [2022] NTSC 8
No. 2020-01907-SC

BETWEEN:
DWD PROJECT PTY LTD (ACN 601276108)

First Plaintiff
AND:
MICHAEL ADRIAN ANTHONY

Second Plaintiff
AND:
CHANTAL MCKENZIE
First Defendant

AND:
NORTHERN TERRITORY ENVIRONMENT PROTECTION AUTHORITY
Second Defendant

CORAM: BLOKLAND J
Decision on Costs
(Delivered 25 January 2022)
Background

This is a ruling on costs following the dismissal of an action on the basis of futility. At its core the action concerned the validity of notices issued by the defendants pursuant to s 74 of the Waste Management and Pollution Control Act 1998 (NT) (“the Act”).
The plaintiffs sought costs for the conduct of the matter up until the proceedings were dismissed. The defendants submitted there should be no award for costs and if no award was made the defendants would not press an application for costs over two discrete parts of the proceedings.
Each of the plaintiffs were charged with an offence under s 83(1) of the Act. At the relevant time, the prosecution was being dealt with in the Local Court. The s 74 notices required the recipients of the notices to provide certain information stated to be reasonably necessary for the administration or enforcement of the Act. The plaintiffs claimed material sought under the s 74 notices, could be subject to legal professional privilege and/or the notices were not valid.
By originating motion the plaintiffs sought declaratory relief to the effect that the notices were not authorised by law and were an abuse of process and/or contempt of Court. Further, the plaintiffs sought a declaration that…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading DWD Project Pty Ltd v McKenzie

Details

AGLC: DWD Project Pty Ltd v McKenzie [2022] NTSC 8
Case: [2022] NTSC 8
Decision Date: 25 January 2022

CaseChat Overview and Summary

In the case of DWD Project Pty Ltd v McKenzie, the Federal Circuit and Family Court of Australia was tasked with determining whether a costs order should be made in the context of a litigation that had become futile. The plaintiffs, DWD Project Pty Ltd, sought costs from the defendant, McKenzie, after their action was dismissed on 20 November 2020. The core of the dispute centred around the costs of the proceedings, particularly whether the litigation had become futile due to the actions of the defendant, and if so, who bore the responsibility for that state of affairs.

The legal issues before the court were whether the plaintiffs' action had become futile and, if so, who was responsible for that futility. The court was also required to determine if an order for costs should be made under the principle set out in Ex parte Lai and Quinn, which suggests that if both parties acted reasonably until the litigation became futile, no costs order should be made. The plaintiffs argued that the litigation became futile due to the defendant's actions, specifically by electing to proceed in the Local Court using a subpoena for the same documents and purposes as those sought in the s 74 notice. They contended that this fragmentation of litigation led to the proceedings becoming futile. The defendant, however, maintained that their actions were reasonable and that the plaintiffs were primarily responsible for the futile state of the litigation.

The court considered the principle in Ex parte Lai and Quinn, which posits that if both parties acted reasonably until the litigation became futile, the court should not make a costs order. The plaintiffs' counsel emphasised the plaintiffs' commendable conduct, including attempts to resolve the matter before litigation and continuous efforts to secure a hearing date. The defendant's conduct, on the other hand, was deemed unreasonable as they elected to contest a point for which litigation was contemplated, leading to the proceedings becoming futile. Despite this, the court found that both parties had acted reasonably until the litigation became futile, thus adhering to the principle in Ex parte Lai and Quinn. Consequently, the court decided not to make an order for costs for either party.

In conclusion, the court dismissed the plaintiffs' application for costs, finding that both parties had acted reasonably until the litigation became futile, in line with the principle in Ex parte Lai and Quinn. The court's decision underscored the importance of reasonable conduct in litigation, even when proceedings become futile, and highlighted the need for parties to avoid fragmentation of litigation.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The plaintiffs’ action was dismissed on 20 November 2020.[4] Arguments were heard on costs of the proceedings in this Court. Consideration of the arguments on costs Senior counsel for the plaintiffs emphasised the plaintiffs had expended funds to agitate their position before this Court. The following submissions were made on behalf of the plaintiffs; the defendants elected to proceed in the Local Court by subpoena for the same documents and for the same purpose as the documents in the s 74 notice. Although the prosecution of proceedings in this Court had become futile, the proceedings became futile as a result of the actions and the election by the defendants. Both parties relied on the principle in Ex parte Lai and Quinn,[5] as stated by McHugh J:[6] If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the Court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. The plaintiffs did not argue it was necessarily unreasonable to resort to a subpoena issuing in the Local Court given unforeseeable delays in this Court, rather the critical question was whether the defendants invited the commencement of the plaintiffs’ litigation by failing to act reasonably at an earlier time. The defendants then abandoned the course which they had elected to take. As a result there were two courts dealing at the same time with the same documents. In support of this submission counsel relied on the fact that the solicitor for the plaintiffs wrote to solicitors for the defendants on 4 April 2020 in the following terms:[7]Further, the procedures for obtaining documents for the purposes of the prosecution are governed by the rules of court and the attendant processes administered by the court to ensure fairness and the protection of privilege. Having regard to the availability of these processes to the prosecution, it cannot be said that the information sought by the notices is reasonably necessary for the administration or enforcement of the Act (even if there were power to issue them). For the above reasons we seek you confirmation that the notices will be withdrawn forthwith. If the notices are not withdrawn, we will need to seek instructions to bring an application to have them set aside. As the defendants did not take up the course suggested on behalf of the plaintiffs and elected to contest the point for which the initiation of litigation was contemplated, the defendants bear responsibility for the litigation. The defendants’ position lasted only as long as it suited their case. When it did not suit their case, the defendants abandoned the s 74 notices. It was by those actions that the defendants were said to have brought the proceedings to a futile state. By comparison it was submitted the plaintiffs conduct was commendable. The plaintiffs wrote to the defendants before instituting proceeding. The plaintiffs continued to apply for a hearing date until unforeseen circumstances leading to adjournments developed. Once the defendants joined issue in this Court the plaintiffs sought to keep the issue in this Court for resolution. Although the defendants joined in obtaining fresh hearing dates, they took collateral action in the Local Court obtain the documents to avoid a hearing in this Court. Consequently, the question of whether an authorised officer has the power to issue the notices and conduct interviews after a charge has already been laid has not been determined. For those reasons, it was argued, the plaintiffs should be entitled to costs.