Golden v V'landys (No 2)

[2016] NSWCA 350

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Golden v V’landys (No 2) [2016] NSWCA 350
Hearing dates:	On the papers
Decision date:	13 December 2016
Before:	McColl JA; Leeming JA; Payne JA.
Decision:	(1) The respondents pay 40 per cent of the appellant’s costs of the trial as agreed or assessed.  (2) The motion dated 21 November 2016 filed by Mr V’landys be dismissed as incompetent.
Catchwords:	COSTS – appeal allowed in part – costs of trial – appropriate costs order where a number of issues at trial not ventilated on appeal   COSTS – application to vary costs order made in the appeal – application made out of time – motion incompetent
Legislation Cited:	Civil Procedure Act 2005 (NSW) ss 98, 101 Uniform Civil Procedure Rules 2005 (NSW) r 36.11, 36.16
Cases Cited:	Bartlett v Australia & New Zealand Banking Group Ltd (No 2) [2016] NSWCA 142 Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 Tomanovic v Global Mortgage Equity Corporation (No 2) [2011] NSWCA 256; (2011) 288 ALR 385
Category:	Costs
Parties:	Joseph Golden (applicant) Peter V’landys (first respondent) Racing New South Wales (second respondent)
Representation:	Counsel: A Crossland (applicant) G Connellan (first respondent) H El-Hage (second respondent)   Solicitors: Moray & Agnew Lawyers (first respondent) DLA Piper Australia (second respondent)
File Number(s):	2015/362606
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Citation: [2015] NSWSC 1709 Date of Decision: 17 November 2015 Before: Adamson J File Number(s): 2013/140063

Judgment

1. THE COURT: On 4 November 2016, this Court allowed an appeal by Mr Golden, and made an order that the respondents pay 75 per cent of Mr Golden’s costs of the appeal as agreed or assessed.

2. Given the number of issues ventilated at trial, many of which were not the subject of appeal, orders were made for the parties to file and serve submissions about the appropriate orders to be made concerning the costs of the hearing before the primary judge.

Brief factual outline

3. The applicant, Mr Joseph Golden, was a professional horse trainer. At all relevant times the first respondent Mr Peter V’landys was the Chief Executive Officer of the second respondent, Racing New South Wales (RNSW).

4. On 8 June 2011, Mr V’landys communicated his decision to Mr Golden to suspend Mr Golden’s horse trainer’s licence for six months (the first decision).

5. On 24 June 2011, Mr V’landys communicated his decision to Mr Golden that Mr Golden be “warned off” all racetracks under the control of RNSW for an unlimited period of time (the second decision).

6. The first and second decisions were challenged in proceedings commenced by Mr Golden in the Supreme Court. The appellant relied upon the following grounds:

1. bias;

2. apprehended bias;

3. irrelevant considerations;

4. improper purpose;

5. bad faith;

6. unreasonableness / irrationality; and

7. misfeasance in public office.

7. The primary judge dismissed the proceedings. The appellant only challenged her Honour’s conclusions about the second decision in this Court. The appeal was limited to:

1. apprehended bias;

2. improper purpose; and

3. misfeasance in public office.

8. This Court allowed the appeal on the apprehended bias ground but dismissed the appeal in relation to the improper use of power and misfeasance in public office grounds.

The parties’ submissions

Appellant’s submissions

9. Mr Golden submitted that the Court should take essentially the same view about costs at trial as it took in respect of costs of the appeal. The orders sought by the appellant were:

1. the respondents pay 75 per cent of the appellant’s costs of the trial not including the cost of preparing expert evidence or evidence about damages; or in the alternative

2. the respondents pay 70 per cent of the appellant’s costs of the trial; and

3. an award of interest on costs be made pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW).

10. The appellant submitted these orders should be made because the “vast majority” of the trial and its preparation concerned matters that were “essential or relevant” to the claim of apprehended bias and the question of whether the Court should exercise its discretion to grant relief to the applicant. The appellant accepted that he could not recover costs relating to damages evidence that the appellant prepared but the primary judge rejected.

11. More specifically, the appellant submitted:

1. the facts and evidence on which each of the grounds argued at trial were based were “completely intertwined”, with the result that the pressing of grounds on which the appellant was unsuccessful “did not add except negligibly” to the cost of the trial. The unsuccessful allegations were grounded in the same factual matters on which the successful case was based. Therefore the scope of the evidence would not have differed significantly if the unsuccessful grounds were not pleaded;

2. the trial was efficient, lasting only two days. It is difficult to see how it could have finished sooner;

3. the time spent exclusively on actual bias was very small. Generally the discussion of actual bias and apprehended bias overlapped;

4. little time was spent on irrelevant considerations, bad faith or irrationality. Although her Honour said the claim of bad faith “ought not to have been made” (primary judgment at [123]) the ground did not add appreciably to the length of the trial since there were few written and oral submissions addressing this ground. There was no suggestion that the appellant raised other grounds unreasonably. The fact that some allegations failed is accounted for in the costs order sought by the appellant – that the respondents pay 75 per cent of the appellant’s costs.

First respondent’s submissions

12. Mr V’landys submitted that he should be awarded his costs of the trial. He submitted that Mr Golden was wholly unsuccessful against him. This contention was based upon the premise, developed in submissions, that only the allegation of misfeasance in public office required Mr V’landys to be joined as a party. Mr V’landys was made a necessary party only in order to enable Mr Golden to maintain his claim for damages. The damages issue was the “dominant” issue as against Mr V’landys. It was asserted that “but for the misfeasance claim”, Mr V’landys would have not joined in proceedings or, alternatively, he would have submitted to the court’s order and incurred no legal costs.

13. Characterised in this way Mr V’landys was “entirely successful in defeating [Mr] Golden’s claim against him” – Mr Golden’s claim failed in respect of liability, the mental element of the tort lacking any evidentiary basis, and in respect of damages.

Second respondent’s submissions

14. RNSW submitted that the parties should bear their own costs in the proceedings before the primary judge. In summary, it submitted that Mr Golden’s claim against RNSW initially encompassed nine separate causes of action; this was reduced to eight after amendments; and Mr Golden failed on all but one. RNSW was required to investigate, plead to, give discovery and consider evidence in relation to the unsuccessful grounds.

15. More specifically, RNSW made the following submissions:

1. the claims alleging a lack of power were made without basis and led to an unnecessary protraction of the proceedings; they were made without particulars and were without foundation; the allegations of denial of procedural fairness were also “hopeless”;

2. apart from apprehended bias, the other grounds of review and the claim of misfeasance were without merit. The appellant did not challenge the primary judge’s findings as to bad faith, actual bias, irrelevant considerations and unreasonableness/illogicality. Furthermore, after discovery it should have been clear that improper purpose and misfeasance would fail;

3. RNSW was required to prepare and file evidence to meet the failed allegations, and a great deal of time at the hearing was spent dealing with objections to the evidence relied upon by the appellant in respect of those allegations. It was therefore incorrect for the appellant to submit that the “vast majority” of the trial was spent dealing with matters essential or relevant to the question of apprehended bias and the exercise of discretion.

Relevant principles

16. The Court has full power to determine by whom and to what extent costs of the trial were to be paid: Civil Procedure Act s 98(1)(b). In exercising the discretion to award costs a court will sometimes deprive a successful party of costs relating to an issue where that party failed, when the issue was clearly dominant and separable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [63]-[66]. The relevant question is not limited to the final outcome of the proceedings but includes consideration of individual issues determined in the case: Tomanovic v Global Mortgage Equity Corporation (No 2) [2011] NSWCA 256; (2011) 288 ALR 385.

Consideration

17. Mr V’landys submission that “but for the misfeasance claim” he would have not joined in proceedings or, alternatively, he would have submitted to the court’s order and incurred no legal costs should be rejected. Whether or not Mr V’landys was a necessary party, he plainly was a proper party in the proceedings on all issues.

18. Mr V’landys chose to participate fully on all issues determined at the trial. The trial record demonstrates that Senior Counsel for Mr V’landys was the only cross-examiner of Mr Golden (on all issues in the case). That cross-examination principally addressed the circumstances of Mr Golden’s failure to appeal the second decision, which was an issue going only to her Honour’s discretion to grant the relief sought, an issue upon which the respondents failed in this Court.

19. As a principal participant in the trial, Mr V’landys is equally liable for costs as RNSW.

20. Mr Golden’s submissions that he should receive 75 per cent of his costs of the trial should also be rejected. He ultimately failed on most issues, including the claim of bad faith which the primary judge correctly found “ought not to have been made” (primary judgment at [123]). Clearly enough, his success before the primary judge was far more limited than the success he enjoyed on appeal.

21. Whilst initially attracted to the submission by RNSW that each party should pay their own costs of the proceedings, in circumstances where Mr Golden was ultimately successful in having the second decision set aside and where the trial itself only occupied two days this is a case where he is entitled to some proportion of his costs.

22. Having regard to the breadth of the issues agitated, the parties’ relative success, the agitation of at least one claim which should not have been made and Mr Golden’s ultimate success in having the second decision set aside, the respondents should be ordered to pay 40 per cent of Mr Golden’s costs of the trial as agreed or assessed.

Mr V’landys’ motion on appeal costs

23. On 21 November 2016, Mr V’landys filed a separate notice of motion in which he sought to have the costs order made in the appeal varied. It will be recalled that on 4 November 2016 the Court ordered that the first and second respondents pay 75 per cent of the appellant’s costs of the appeal as agreed or assessed. By the motion Mr V’landys seeks a variation of that order, to the effect that the appellant pay his costs of the appeal, or alternatively, that as between himself and the appellant there be no order as to costs in respect of the appeal.

24. In support of the motion Mr V’landys relies on the same submissions as those outlined in [12]-[13] above. That is, Mr V’landys was only joined to enable Mr Golden to claim damages for misfeasance in public office; and Mr V’l andys was entirely successful in defeating this claim, both at trial and on the appeal.

25. The Court’s original order was entered on 4 November 2016 upon the reasons for decision and the orders being entered into the Court’s computerised record system: Uniform Civil Procedure Rules 2005 (NSW) r 36.11(2). The motion is an application to vary the orders of the Court made pursuant to UCPR r 36.16(3A). That rule concerns the power to set aside or vary a judgment or order. The rule provides:

(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

(2) The court may set aside or vary a judgment or order after it has been entered if:

(a) it is a default judgment (other than a default judgment given in open court), or

(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or

(c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order.

(3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:

(a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or

(b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.

(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.

(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.

(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).

(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.

26. Rule 36.16(3A) clearly provides that a notice of motion seeking the variation of orders must to be filed within 14 days after the order is entered. Although there is some difference of views as to the construction of paras (3) and (3A), there is no doubt that an application for variation of an order under Rule 36.16(3A) must be filed within 14 days of the entry of the order which is sought to be varied: Bartlett v Australia & New Zealand Banking Group Ltd (No 2) [2016] NSWCA 142 at [20]-[23].

27. The orders here were entered on 4 November 2016. The motion was filed on 21 November 2016, outside the 14 day limit. Therefore, the motion is incompetent.

Orders

28. Accordingly the following orders should be made:

1. The respondents pay 40 per cent of the appellant’s costs of the trial as agreed or assessed.

2. The motion dated 21 November 2016 filed by Mr V’landys be dismissed as incompetent.

**********

Decision last updated: 13 December 2016