Gouros v Order of Ahepa NSW Incorporated; Order of Ahepa NSW Incorporated v Gouros

[2023] NSWSC 1502

Supreme Court

New South Wales

Medium Neutral Citation:

Gouros & Ors v Order of AHEPA NSW Incorporated; Order of AHEPA NSW Incorporated v Gouros & Ors [2023] NSWSC 1502

Hearing dates:

Last written submissions dated 22 November 2023

Date of orders:

4 December 2023

Decision date:

04 December 2023

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Gouros & Ors v Order of AHEPA NSW Incorporated (2021/300669)

No order as to costs of proceedings up to and including 20 September 2023; Plaintiffs pay the First and Third to Tenth Defendants’ costs after that date to 3 October 2023 inclusive, as agreed or as assessed; no order as to the costs of submissions as to orders and costs.

Order of AHEPA NSW Incorporated v Gouros & Ors (2021/259327)

No order as to costs.

Catchwords:

COSTS – Party/party – General rule that costs follow the event – Where parties narrowed the issues in dispute after the hearing of this proceeding commenced – Where defendant successful in defence of issues contested in hearing – Whether order for costs should be made for period prior to narrowing of issues.

Legislation Cited:

- Civil Procedure Act 2005 (NSW), s 98

- Corporations Act 2001 (Cth), s 175

- Uniform Civil Procedure Rules 2005 (NSW), rr 12.10, 42.1

Cases Cited:

- Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194

- Ballam & Ors v Ferro & Anor (No 2) [2022] NSWSC 1358

- Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266

- Chapman v Luminis [2003] FCAFC 162

- Commonwealth of Australia v Gretton [2008] NSWCA 117

- Galati v Deans (No 2) [2023] NSWCA 252

- Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34

- Nadilo v Eagleton [2021] NSWCA 232

- Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84

- One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548; (2000) 171 ALR 227; [2000] FCA 270

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

- Re HCafe Chatswood Pty Ltd [2018] NSWSC 362

- Re Lorebray Pty Ltd [2021] NSWSC 1712

- Re Minister for Education and Ethnic Affairs: Ex Parte Lai Qin (1997) 186 CLR 624; [1997] HCA 6

- Re Sunnyside Bettoni Pty Ltd (No 2) [2020] NSWSC 1886

Category:

Costs

Parties:

Gouros & Ors v Order of AHEPA NSW Incorporated (2021/300669)

Con Gouros (First Plaintiff)
Penny Cretan (Second Plaintiff)
George Lianos (Third Plaintiff)
Demetrios James Antonakos (Fourth Plaintiff)
Anthony Alexandrou (Fifth Plaintiff)
Maria Alexandrou (Sixth Plaintiff)
Evangelia (Ann) Bouris (Seventh Plaintiff)
Order of AHEPA NSW Incorporated (First Defendant)
Bayside Council (Second Defendant)
AHEPA Chiron Incorporated (Third Defendant)
AHEPA Anatole Incorporated (Fourth Defendant)
AHEPA Antigone No 27 Incorporated (Fifth Defendant)
AHEPA Platon Incorporated (Sixth Defendant)
AHEPA Alexandros Incorporated (Seventh Defendant)
AHEPA Diogenis Incorporated (Eighth Defendant)
AHEPA Ippokratis Incorporated (Ninth Defendant)
AHEPA Odysseas Elytis Incorporated (Tenth Defendant)

Order of AHEPA NSW Incorporated v Gouros & Ors (2021/259327)

Order of AHEPA NSW Incorporated (Plaintiff)
Con Gouros (First Defendant)
Penny Cretan (Second Defendant)
George Lianos (Third Defendant)
Demetrios James Antonakos (Fourth Defendant)
Anthony Alexandrou (Fifth Defendant)
Maria Alexandrou (Sixth Defendant)

Representation:

Gouros & Ors v Order of AHEPA NSW Incorporated (2021/300669)

Counsel:
D Pritchard SC/D Klineberg (Plaintiffs)
A Rizk (First and Third to Tenth Defendants)

Solicitors:
Levitt Robinson (Plaintiffs)
Tzovaros Legal (First and Third to Tenth Defendants)

Order of AHEPA NSW Incorporated v Gouros & Ors (2021/259327)

Counsel:
A Rizk (Plaintiff)
D Pritchard SC/D Klineberg (Defendants)

Solicitors:
Tzovaros Legal (Plaintiff)
Levitt Robinson (Defendants)

File Number(s):

2021/300669, 2021/259327

Judgment

The Gouros proceedings

1. By a Third Further Amended Summons (“3FAS”) and Second Further Amended Statement of Claim (“2FASC”) each dated 26 September 2023 filed in proceedings 2021/300669 (“Gouros proceedings”), the Plaintiffs (“Gouros parties”) sought a range of relief against the First and Third to Tenth Defendants (“Defendants”). They pressed a narrower range of relief at the hearing, as a result of the resolution of several issues between the parties. The issues which remained to be determined, by the time I delivered judgment on 31 October 2023 ([2023] NSWSC 1281), were questions as to eligibility for membership (and financial membership) in Order of AHEPA NSW Inc (“AHEPA NSW”); an issue as to composition of the Committee of Management of AHEPA NSW; an issue as to the “chapters of the unincorporated association” which are permitted to nominate a member for membership of the Committee of Management of AHEPA NSW; and whether an order sought by the Gouros parties under s 175 of the Corporations Act 2001 (Cth) should be made. I declined to grant the relief sought by the Gouros parties in respect of those issues and, to that extent, AHEPA NSW was successful in its defence of the Gouros proceedings.

2. I expressed a preliminary view as to costs in my primary judgment where I observed (at [154]) that:

“My preliminary view is that there should be no order as to the costs of the proceedings up to and including 20 September 2023 when both parties were addressing wider issues which were subsequently displaced by events, including AHEPA NSW’s determination not to challenge the termination of its lease over the Bexley Bowling Club by Bayside Council, to rescind the purported expulsion of Mr Gouros from membership of AHEPA NSW and its commitment to address membership applications in an agreed manner. My preliminary view is that the Gouros parties should pay the costs of and incidental to the proceedings on and from that date, which were largely directed to the pursuit of the claims on which they have failed. However, I will hear the parties as to costs if they seek to be heard.”

3. I there directed the parties to bring in orders that gave effect to the judgment, including as to costs, within 14 days and, in the event of any disagreement between them, their respective short minutes of order and short submissions as to the differences between them. The Gouros parties did not comply with my order that they submit short minutes of order but made submissions supported by an affidavit dated 14 November 2023 of their solicitor, Mr Rappaport, and a lengthy exhibit. Part of that affidavit and submissions was directed to the costs of separate proceedings brought by AHEPA NSW against the Gouros parties (“AHEPA NSW proceedings”), which I address below. I then allowed the parties an opportunity to make submissions and lead evidence in reply.

Applicable principles

4. The applicable principles as to an order for costs are well-established. Section 98 of the Civil Procedure Act 2005 (NSW) confers a discretionary power to determine costs on the Court and requires that that discretion be exercised judicially: Ballam & Ors v Ferro & Anor (No 2) [2022] NSWSC 1358 at [54]. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) in turn provides that:

“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.”

5. A successful party has a “reasonable expectation” of being awarded costs against an unsuccessful party, unless there is good reason for that presumption to be displaced: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22], [134]. In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA (with whom Mason P agreed) observed that:

"… underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs."

That observation was cited, with apparent approval, by the Court of Appeal in Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [98].

6. In Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [7]–[14], McColl JA summarised the applicable principles as follows:

“Section 98 of the Civil Procedure Act 2005 (NSW) confers a wide discretion on the court with respect to costs. The “general rule” is that court costs follow the event unless the court makes “some other order” pursuant to the discretion conferred by Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1.

As Beazley JA explained in Baker v Towle [(2008) 39 Fam LR 323; [2008] NSWCA 73 at [11] (Mathews AJA agreeing)], in most litigation, UCPR r 42.1 “operates in a straightforward way, ‘the event’ being readily identifiable as a judgment for the plaintiff or the defendant on the claim. In that sense, ‘the event’ to which the rule refers is the result of the proceedings, so that the party who succeeds on the claim before the court is awarded costs, unless the court, pursuant to the discretion conferred by r 42.1, makes ‘some other order’”.

Underlying both the general rule that costs follow the event, and qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs.

Where there are multiple issues in a case the court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. This recognises the proposition that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case.

However there is a tension between that proposition and the proposition that, “[i]f parties come to realise that they will not necessarily recover the whole of their costs, even though they have unsuccessfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take.”

Further, even where there are multiple issues, unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between the particular issues on which it was successful and those on which it failed.

However, a court can mould a costs order to take account of the partial success of the party against whom orders have been made at trial insofar as that party identifies particular issues or groups of issues on which it succeeded at the trial. This requires consideration of whether there were “clearly discrete issues for determination” or, rather, whether “all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter”. A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter.

Where there is a mixed outcome in proceedings, the question of apportionment of costs between issues on which the party who has overall been successful, and those on which that party has failed, is very much a matter of discretion, and mathematical precision is illusory.” [footnotes omitted]

7. Mr Pritchard and Mr Klineberg, who made costs submissions for the Gouros parties in the Gouros proceedings, rightly recognise that the general rule under UCPR r 42.1, which applies to a hearing determined on the merits, is that the Court is to order that 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; however, the Court has “a broad discretion, to be exercised according to the purpose of compensating, at least in part, the costs reasonably incurred by a successful party in establishing its rights, subject to the need to accord fairness to each party in the particular circumstances of the case”: Galati v Deans (No 2) [2023] NSWCA 252 at [6]-[9].

8. Where proceedings are dismissed prior to any hearing on the merits, the Court will generally not “determine the outcome of a hypothetical trial” to determine the question of costs: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201. In Re The Minister for Immigration and Ethic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 (“Lai Qin”), McHugh J observed (at 624) that:

“In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.” [citations omitted]

9. A qualification to that approach was noted in One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548; (2000) 171 ALR 227; [2000] FCA 270 at [6]-[8], where a party, after litigating for some time, effectively surrenders to the other party, and that qualification was quoted with approval by the Court of Appeal in Nadilo v Eagleton [2021] NSWCA 232 at [9]. In Re HCafe Chatswood Pty Ltd [2018] NSWSC 362 at [7], I also observed, in respect of Lai Qin, that:

“While McHugh J there referred to the saving to the parties of avoiding a contest as to costs which canvasses the issues that would have been addressed at a substantive hearing, it seems to me that that principle also reflects matters of public policy. In particular, the community, which funds the Court system, should not be required to bear the costs of extended arguments as to the merits of proceedings that have settled only on the question of costs between the parties. There is also a significant risk of unfairness to the parties, if costs orders are made based on a perception of which party would have succeeded on a trial on the merits, without the unsuccessful party having the opportunity to defend that trial on the merits.”

10. The Court of Appeal has also pointed, in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 at [1], to the risk that litigation will “feed on itself”, including in respect of claims for costs and that concern was emphasised by Leeming JA in Re Sunnyside Bettoni Pty Ltd (No 2) [2020] NSWSC 1886 at [13]ff; see also Re Lorebray Pty Ltd [2021] NSWSC 1712 at [5]-[6], from which I have drawn this summary.

Affidavit evidence, submissions and determination as to the costs of the Gouros proceedings

11. In the Gouros proceedings, the Gouros parties rely on the affidavit dated 14 November 2023 of their solicitor, Mr Rappoport, who addresses the rescission of the Agreement for Lease and Licence (“AFL”) for the former Bexley Bowling Club by Bayside Council and contends that he (and, implicitly, the Gouros parties) first became aware of that matter in July 2023, not long after it occurred. He refers to a conversation as to that matter and its impact in the proceedings with the Defendants’ solicitor in early August 2023 and to subsequent developments in a challenge to that rescission brought by AHEPA NSW in the Land and Environment Court and in these proceedings.

12. The Defendants in turn rely on the affidavit dated 23 November 2023 of their solicitor, Mr Tzovaras, in reply, as to the question of costs. Mr Tzovaras there provides a lengthy account of the background to the rescission of the AFL by Bayside Council, after it refused the development application lodged by AHEPA NSW for alterations and additions to the former Bexley Bowling Club. Mr Tzovaras refers to AHEPA NSW’s appeal to the Land and Environment Court in respect of the refusal of that development application, and to correspondence between AHEPA NSW and Bayside Council debating various matters. He also addresses the subsequent discontinuance of the proceedings in the Land and Environment Court by AHEPA NSW; the possible commencement of proceedings in this Court against the Council for a claim for breach of contract; and the subsequent decision of AHEPA NSW not to proceed with that claim, for several reasons.

13. The Gouros parties submit that there should be no order as to costs in the Gouros proceedings. They submit that that approach provides a practical, realistic and appropriate outcome, by comparison with a hypothetical position in which, they submit, various costs orders would be made for various periods. They submit that, if I do not accept their primary submission that there should be no order as to costs in respect of the Gouros proceedings, I should make the several costs orders set out in their submissions for various periods, namely:

“in respect of the Gouros Proceedings:

i   there be no order as to costs up until 28 June 2023 (when Bayside Council rescinded the Agreement for Lease and Licence dated 6 May 2021 between AHEPA NSW and Bayside Council in respect of Bexley Bowling Club (AFL));

ii from 29 June 2023 to 26 September 2023 …, the defendants pay the plaintiffs’ costs of the proceedings, that is, by reason of the substantial wasted cost and expense consequent upon the failure of AHEPA NSW to comply with its obligations under s.56 of the Civil Procedure Act 2005 by not making proper disclosure of the fact of and ultimate consequences of the rescission of the AFL;

iii   from 27 September 2023 to 31 October 2023 (when reserve reasons were delivered), the plaintiffs pay 50% of the defendants’ costs (reflective of the failure of the plaintiffs on the Chapters issue, but the failure of both parties to obtain opposing declarations effectively contended for by each of them on the Committee of Management issue on discretionary grounds); and

iv   after 31 October 2023, the defendants pay the plaintiffs’ costs of the proceedings of issues in respect of the form of orders the subject of these submissions…”

14. I accept the Gouros parties’ submission that the Court should make no order as to costs up until 28 June 2023, where many of the matters then in issue have now been displaced and were not determined by the Court. I have not neglected the fact that work would likely have been done by the Defendants in that period which related to the issues which the Gouros parties pressed at the hearing, as to which the Gouros parties were unsuccessful and the Defendants were successful. However, neither the Gouros parties nor the Defendants contended that I should make a costs order on an issue by issue basis, likely because they recognise that the difficulty in distinguishing which evidence related to particular issues would have the result that any assessment of those costs could not be done in a cost-effective way. I should not take that approach where the parties did not contend for it and have not had procedural fairness in respect of it.

15. In respect of the period from 29 June 2023 to 26 September 2023, it seems to me that there is no basis for the costs order proposed by the Gouros parties, where the position in respect of the AFL was one of several matters that then remained in issue in the proceedings and there is no reason to give primacy to that issue over other issues in determining the costs of that period.

14. The Gouros parties also submit that, on 28 June 2023, Bayside Council rescinded the AFL and they claim that AHEPA NSW did not then advise the Gouros parties of that recission, which AHEPA NSW had initially challenged by an application brought in the Land and Environment Court and then proposed to challenge in this Court. There is a factual dispute, which I need not determine, as to the correctness of that submission, and I have noted above that the Gouros parties accept they know of this matter by July 2023. This issue does not seem to me to be material to the question of costs where the validity of the rescission of the AFL remained in dispute as between AHEPA NSW and the Council, until AHEPA NSW determined not to bring its foreshadowed challenge to that rescission in this Court in the course of the hearing of these proceedings in September 2023. The rescission of the AFL by Bayside Council did not finally determine any issue until AHEPA NSW resolved not to pursue its challenge to that rescission in the course of this hearing. I recognise that the issues in these proceedings were narrowed when the management committee of AHEPA NSW determined not to pursue the foreshadowed proceedings to challenge the rescission of the AFL in this Court, after the hearing of these proceedings had commenced. That supports the view, foreshadowed in my primary judgment, that there should be no order as to the costs of the proceedings up to and including 20 September 2023, but does not support extending that position to the remaining issues in the proceedings which the Gouros parties unsuccessfully pressed after that date.

15. The Gouros parties also submit that, if the Court determines that there should be no order as to costs up to a particular date, the correct date should be 26 September 2023 when, by consent, the Court granted leave to the Gouros parties to file their Third Further Amended Summons and Second Further Amended Statement of Claim, rather than 20 September 2023. I do not accept that submission, where the hearing day on 22 September 2023 was directed to the parties’ openings as to the matters that remained in issue and their legal representatives’ work on the previous day would likely have been directed to those matters; that hearing day also addressed the substantial difficulties in respect of the then formulation of the Gouros parties’ claims; and the costs of that hearing day are properly treated as having the same character as those of later hearing days on 26 September and 3 October 2023. There is no basis for an order that the Gouros parties pay only half of the Defendants’ costs in that period, where the Gouros parties failed to obtain any of the relief which they then sought.

16. I have also had regard to the Gouros parties’ submissions as to why the Court declined to make the declarations sought by them as to eligibility for membership of AHEPA NSW, but little seems to me to turn on the basis that those declarations were not made, where the fact is that they were not made and the Gouros parties were unsuccessful on that and the other issues which they had pressed after 20 September 2023. The Gouros parties could have chosen, at the start of this period, not to press the remaining issues and they would then not have faced an adverse costs order in respect of the proceedings after that date. The fact that they unsuccessfully pressed those issues is a sufficient basis for the order as to costs to be made against them after 20 September 2023 until the conclusion of the hearing on 3 October 2023.

17. There is also no basis for ordering that the Defendants pay the Gouros parties’ costs of issues in respect of the form of orders, where the Gouros parties have not succeeded in obtaining the orders for which they contend.

18. The Defendants conversely submit that the Gouros parties should pay half of the Defendants’ costs in the Gouros proceedings incurred prior to 20 September 2023 on the ordinary basis as agreed or assessed. I do not accept that submission, because there has been no determination of many of the matters in issue in that period on their merits and no exception to the principle in Lai Qin is established. There is no basis for me to assume that work done by the Defendants in respect of the matters that were pressed at the hearing comprised half of the work done by them prior to 20 September, and I have noted above that neither the Gouros parties nor the Defendants sought an order for costs made on an issue by issue basis.

19. The Defendants also support their claim to an order for costs prior to 20 September 2023 on the basis that the Third to Tenth Defendants were joined in the proceedings in respect of those issues which were addressed from 20 September 2023 onwards. I do not accept that that matter, even if correct, supports the relief sought by the Defendants, where all of the Defendants were represented by the same Counsel and the same solicitors and advanced the same submissions and it would not be practically possible to differentiate any costs incurred by the Third to Tenth Defendants from costs incurred by AHEPA NSW in respect of the conduct of the proceedings generally.

20. The Defendants also submit that they incurred significant costs prior to 20 September 2023 that were attributable, at least in part, to issues which remained in dispute after 20 September 2023. I accept that that is likely the case; however, the Gouros parties also incurred significant costs prior to that date, which were likely incurred in respect of matters as to which the Defendants may have failed, had those matters not been resolved between the parties as at 20 September 2023 and, as I noted above, no party seeks an order for costs on an issue by issue basis. That matter supports the finding that there should be no order as to costs prior to that date, where there is no more reason for thinking that the Defendants should be entitled to a proportion of their costs prior to that date, still less to the particular proportion which they claim, than for thinking that the Gouros parties should be entitled to a proportion of their costs prior to that date. The Defendants also refer to the history of the proceedings prior to 20 September 2023, but those matters do not advance the position for which they contend in respect of costs.

21. The Defendants also submit that, consistent with the approach foreshadowed in the primary judgment, the Gouros parties should pay their costs of the proceedings after 20 September 2023 on the ordinary basis as agreed or as assessed, on the basis that the Defendants were the successful parties in respect of the remaining issues in the Gouros proceedings from that date, as the Gouros parties did not establish an entitlement to the relief they sought. It seems to me that that is the proper order, for the period to and inclusive of the last day of the hearing on 3 October 2023, for the reasons set out in expressing my tentative view in the primary judgment and in addressing the Gouros parties’ submissions above.

22. In reply, Mr Rizk, who made submissions for the Defendants in the Gouros proceedings, repeated the Defendants’ submission that they should be entitled to their costs of the Gouros proceedings. He also responded to the Gouros parties’ submission that the Defendants should pay the Gouros parties’ costs for the period 29 June 2023 to 26 September 2023 and submitted that the Gouros parties’ submissions proceed on a false premise, where they were made aware of Council’s rescission of the AFL no later than early July 2023, and then maintained the proceedings despite their knowledge of that matter. He also points to other matters that may have prompted a decision by the Gouros parties to continue and subsequently amend the proceedings. He submits that, for several reasons, these matters did not give rise to any wasted costs incurred by the Gouros parties. It is not necessary to determine any dispute as to these matters to determine the question of costs of the Gouros proceedings, beyond the conclusions that I have reached above.

23. For these reasons, there should be no order as to costs of the Gouros proceedings up to and including 20 September 2023, and the Plaintiffs must pay the First and Third to Tenth Defendants’ costs after that date to 3 October 2023 inclusive, as agreed or as assessed. There should be no order as to the costs of the submissions as to orders and costs in these proceedings, as to which the parties have had a mixed result.

The position pending payment of costs of the Gouros proceedings by the Gouros parties

26. In paragraph 155 of my primary judgment, I expressed the preliminary view that:

“I am also inclined to think that, given the multiplicity of litigation between the parties, the fact that several of the [Gouros parties] have been involved in previous and substantially overlapping claims against AHEPA NSW, and the issues as to abuse of process that I have addressed above, I should also order that the [Gouros parties] not commence or continue any proceedings in any Court or Tribunal against any of the Defendants (other than by a claim in the nature of a defence, cross-claim or cross-summons or an appeal from this judgment) which arise from the same or similar facts as these proceedings without the leave of a Judge of this Court, unless and until the [Gouros parties] have paid the costs of this proceeding, consistent with orders made in Idoport v National Australia Bank Ltd [2006] NSWCA 202 at [29], Pi v Zhou [2016] NSWCA 148, especially at [23], Webster v Super Smart Strategies Pty Ltd [2017] NSWSC 531 at [57]–[61] and Sheridan v Colin Biggers & Paisley [2019] NSWSC 621 at [26]ff. I will, of course, also hear the parties as to that matter.”

27. The Defendants press for a restraint on the Gouros parties in respect of the commencement and conduct of overlapping proceedings until the costs of these proceedings are paid, of the kind foreshadowed in the principal judgment. They submit there is a real and not significant risk that at least AHEPA NSW, if not the several incorporated chapters which were joined as the Third to Tenth Defendants, will be exposed to further litigation in respect of similar issues, when they have not recovered their costs of these proceedings, and that would be unfairly burdensome to a community based and not-for-profit organisation.

28. The Gouros parties respond that the Court would make no order as to costs against them and therefore the question of an order of this kind does not arise. I do not accept that submission, where I have found that the Court should make an order against the Gouros parties for part of the costs of the proceedings, as set out above. The Gouros parties also submit that, although the Court has an inherent jurisdiction to make an order of this kind, it should not be made for several reasons. In further submissions in reply in respect of the Gouros proceedings, the Gouros parties respond to aspects of AHEPA NSW’s submissions as to whether an order should be made restricting the Gouros parties’ commencement of further proceedings until the costs of these proceedings are paid.

29. I accept the Gouros parties’ submission that this order is not necessary, on the narrow ground that UCPR r 12.10, which addresses the commencement of proceedings for the same cause or the same relief, sufficiently addresses the risk of the commencement of overlapping proceedings while the costs of these proceedings have not been paid. It is not necessary to deal with the parties’ other submissions as to this matter.

The AHEPA NSW proceedings

30. On 22 September 2023, I made the following orders in the AHEPA NSW proceedings:

“By consent and without admissions, the Court orders:

1.   The proceedings be dismissed.

2.   The undertakings given and noted as being given and the orders in Order 1 made on 13 December 2021 be discharged.

3.   All questions of costs be reserved.

The Court notes that:

a.    The parties agree that these proceedings should be dismissed as, following the termination of the Agreement for Lease dated 6 May 2021, all remaining issues in dispute between the parties are able to be dealt with in proceedings 2021/300669, and that, consequentially, the dismissal of these proceedings is not to be deemed an ‘event’ in respect of the determination of costs.

b.   Without limiting the discretion of the Court in relation to costs, the costs of these proceedings are to be determined at the conclusion of proceedings 2021/300669, inter alia taking into account the Court’s findings and final orders in those proceedings.

c.   Pending hearing and determination of proceedings 2021/300669, the defendants have no intention, in any communication with Bayside Council, of representing that they have authority to represent the plaintiff or that they are authorised to speak on behalf of the plaintiff’s Committee of Management.”

31. As I noted above, the Gouros parties’ primary position, which I accept, is that there should also be no order of costs in the AHEPA NSW proceedings, although they appear to link that primary position with their position that there should be no order as to costs of the Gouros proceedings, which I have not accepted. Their alternate position, linked with their alternate position in the Gouros proceedings, is that AHEPA NSW should pay their costs of the AHEPA NSW proceedings. I am not persuaded that position should be accepted. The consent position reached in the AHEPA NSW proceedings was connected with the narrowing of issues in the Gouros proceedings, and I do not accept the Gouros parties’ submission that the dismissal of the AHEPA NSW proceedings is properly characterised as a “capitulation” for the purposes of the principles noted in Lai Qin.

32. In its submissions as to costs in respect of the AHEPA NSW proceedings, AHEPA NSW resists the alternate order as to costs sought by the Gouros parties in these proceedings. Mr Rizk, who also made submissions as to costs for AHEPA NSW in the AHEPA NSW proceedings, submits that there should be no order as to costs of the AHEPA NSW proceedings where those proceedings have terminated without a hearing; the Court should not seek to resolve the issue of costs by undertaking a hypothetical trial; and it is not apparent that one or other party would have succeeded at a contested hearing and both parties acted reasonably in commencing and defending the AHEPA NSW proceedings until they were resolved by the orders made by consent: Chapman v Luminis [2003] FCAFC 162; Re HCafe Chatswood Pty Ltd [2018] NSWSC 362. I accept that submission.

33. Mr Rizk also refers to the matters in issue in those proceedings, which related to conduct of the Gouros parties in dealings with Bayside Council, which AHEPA NSW contended was misleading or deceptive. Mr Rizk notes that the proceedings raised the question whether the Gouros parties were authorised to make representations on behalf of AHEPA NSW or its committee of management to third parties. Mr Rizk points out that the proceedings raised questions as to the identity of members of AHEPA NSW and its committee of management (“First Matter”) and whether the particular representations made were misleading or deceptive and warranted injunctive relief (“Second Matter”). Mr Rizk recognises that there was an overlap in the determination of the First Matter with the issues raised in the Gouros proceedings and, for that reason, the AHEPA NSW proceedings and the Gouros proceedings were to be heard together. Mr Rizk also refers to the developments which reduced the utility of determination of the Second Matter, including the Bayside Council’s rescission of the AFL; AHEPA NSW’s discontinuance of the proceedings in the Land and Environment Court challenging that rescission; and the decision of its committee of management not to further challenge the rescission of the AFL in this Court. Mr Rizk submits and I accept that, once the utility of determination of the Second Matter was displaced by events, and where the issues arising in respect of the First Matter were already raised in the Gouros proceedings, there would have been no utility in also contesting those matter in the AHEPA NSW proceedings. Mr Rizk submits, and I also accept, that the consent dismissal of the AHEPA NSW proceedings did not amount to a capitulation by AHEPA NSW, as distinct from a recognition of the lack of utility in continued prosecution of the AHEPA NSW proceedings, where the First Matter was in issue in the Gouros proceedings and the Second Matter was of little or no continuing relevance.

34. For the reasons noted above in dealing with the parties’ submissions, there should be no order as to costs of the AHEPA NSW proceedings. There should also be no order as to the costs of the submissions as to orders and costs in these proceedings, as to which the parties have had a mixed result.

Orders

35. For these reasons, I make the following orders:

1. There be no order as to costs of proceedings 2021/300669 up to and including 20 September 2023, the Plaintiffs pay the First and Third to Tenth Defendants’ costs of and incidental to those proceedings after that date to 3 October 2023 inclusive, as agreed or as assessed; and there be no order as to the costs of the submissions as to orders and costs.

2. There be no order as to the costs of proceedings 2021/259327.

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Decision last updated: 05 December 2023