Gee v Burger [No 3]

[2009] NSWSC 1153

CITATION:	Gee v Burger [No 3] [2009] NSWSC 1153
HEARING DATE(S):	27 April 2009
JUDGMENT OF:	McLaughlin AsJ
EX TEMPORE JUDGMENT DATE:	27 April 2009
DECISION:	1. I order that the plaintiffs pay the costs of the first defendant occasioned by or thrown away in consequence of the filing by the plaintiffs of an amended statement of claim. 2. I order that the costs of the notice of motion filed by the plaintiffs on 8 February 2008 be the costs of the plaintiffs in the proceeding. 3. I order that the costs of the notice of motion filed by the first defendant on 20 March 2008 be the costs of the plaintiffs in the proceedings. 4. I order that the costs of the present hearing regarding costs be the costs of the plaintiffs in the proceedings.
CATCHWORDS:	COSTS - application for leave to amend statement of claim - tension between principle that costs follow the event and principle that party seeking an indulgence from the Court is usually required to pay the costs of the application for that indulgence.
CATEGORY:	Procedural and other rulings
PARTIES:	Andrew Gee (First Plaintiff) and 25 other Plaintiffs Grace Veronica Burger (First Defendant)
FILE NUMBER(S):	SC 4236 of 2007
COUNSEL:	Mr D. Feller SC and Mr S. Jacobs (Plaintiffs) Mr R. Stitt QC and Mr J. Doyle (First Defendant)
SOLICITORS:	Alexander & Associates (Plaintiffs) Dibbs Abbott Stillman (First Defendant)

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Monday, 27 APRIL 2009

4236 of 2007 ANDREW GEE & ORS v GRACE VERONICA BURGER & ORS

JUDGMENT ON COSTS

1 HIS HONOUR: On 13 March 2009, after a contested hearing occupying three days, I published my reserved judgment and made orders upon the application of the plaintiffs for leave to file an amended statement of claim. My orders included orders as to costs. However, as I had not heard submissions as to costs during the hearing, and it was submitted on behalf of the plaintiffs that it was appropriate that costs be dealt with in the light of my decision, I reserved to the parties liberty to seek other costs orders. Such other costs orders are the subject of the present hearing.

2 I have had the benefit of receiving a written outline of submissions regarding costs from Counsel for the respective parties. Those written outlines will be retained in the Court file.

3 It has been submitted on behalf of the first defendant that, irrespective of what substantive costs orders are made regarding the application of the plaintiffs for leave to amend the statement of claim, the plaintiffs should in any event pay the costs of the first defendant thrown away or occasioned by reason of such amendment.

4 The plaintiffs do not oppose the making of such an order. The argument before me has essentially turned upon the appropriate costs order which should be made in respect to the application by the plaintiffs for leave to amend the statement of claim. That application was opposed by the first defendant. As I have already observed, the hearing of that application occupied three days.

5 Normally a successful party either on an interlocutory application or on a final hearing is entitled to have his or her costs paid by the unsuccessful party. There is, however, a tension between that normal principle (which is recognized by the Uniform Civil Procedure Rules 2005, rule 42.1) that usually costs follow the event) and the principle that a party seeking, as here, leave to file an amended pleading is seeking an indulgence from the Court, and that such party is usually required to pay the costs of the application granting that indulgence.

6 It has been submitted on behalf of the plaintiffs that not only were they ultimately successful in their application for leave to amend but that that application was opposed by the first defendant upon grounds which ultimately were found to be without substance. The first defendant, however, submits that the appropriate costs order should be that the costs of the application be reserved or, in the event that I be unwilling to make such an order for the reserving of costs, that the costs of the application for leave to amend should be costs in the proceedings.

7 During the course of argument I observed to Senior Counsel for the first defendant that I was unlikely to order that the costs be reserved, first, because it was unlikely that I would be dealing with the final hearing of the proceedings, and further that, in any event, the entire flavour of the hearing which occupied three days would long since have been lost to everyone involved.

8 In support of the submission that the costs of the application be costs in the proceedings, the first defendant submitted that it would be inappropriate, if ultimately the first defendant were successful in the final hearing, but still had to pay a significant amount of costs in respect to the application for leave to amend. In this regard it was also submitted on behalf of the first defendant that the application for leave to amend was the culmination of a number of previous attempts by the plaintiffs to formulate their claim in an appropriate pleading, and that even during the course of the hearing for leave to amend a further version of the proposed amended statement of claim was provided by the plaintiffs.

9 The submission of the first defendant that the costs of the application for leave to amend should be costs in the proceedings would, so it was submitted, reflect the fact that if ultimately the plaintiffs were unsuccessful in their substantive claim it would not be necessary for the defendants to pay any costs of the plaintiffs regarding that final hearing. The plaintiffs, however, relied upon the fact that the application for leave to amend was one which was strenuously contested by the first defendant, that that contest occupied three hearing days, that it raised substantial questions which needed to be determined by the Court and that ultimately the plaintiffs were successful in their application.

10 I recognise the tensions between the principle that costs should follow the event, which would result in the first defendant being required to pay the costs of the plaintiff of the application for leave to amend; and the principle that ultimately the plaintiffs might not be successful in their final hearing but that the first defendant would still be required to pay the costs of the application for leave to amend.

11 It seems to me that the appropriate costs order in the circumstances of this case should be, first, that the plaintiff should pay the costs of the first defendant occasioned by or thrown away by reason of the amendment to the pleading. That order, as I have already observed, is not opposed by the plaintiffs.

12 Further, I consider that the costs of the substantive hearing in respect to the application for leave to amend (which was the hearing of the notice of motion filed by the plaintiffs on 8 February 2008 and the hearing of the notice of motion filed by the first defendant on 20 March 2008) should be the costs of the plaintiffs in the proceedings. The effect of such an order will be that if the plaintiffs are ultimately successful in their claim against the first defendant they will have the costs of the hearing regarding the application for leave to amend. If, however, they are not ultimately successful, then neither party will be required to pay the costs of the other party in respect to that application.

13 I make the following orders:

1. I order that the plaintiffs pay the costs of the first defendant occasioned by or thrown away in consequence of the filing by the plaintiffs of an amended statement of claim.
2. I order that the costs of the notice of motion filed by the plaintiffs on 8 February 2008 be the costs of the plaintiffs in the proceeding.
3. I order that the costs of the notice of motion filed by the first defendant on 20 March 2008 be the costs of the plaintiffs in the proceedings.
4. I order that the costs of the present hearing regarding costs be the costs of the plaintiffs in the proceedings.
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