Hugh Corporation Pty Ltd v TAL Life Ltd (No 2)
[2015] NSWSC 707
•04 June 2015
Supreme Court
New South Wales
Medium Neutral Citation: Hugh Corporation Pty Ltd v TAL Life Ltd (No 2) [2015] NSWSC 707 Hearing dates: Decided on the papers Date of orders: 04 June 2015 Decision date: 04 June 2015 Jurisdiction: Equity Division Before: Robb J Decision: (1) Order that there be no order for the costs of the plaintiff’s notice of motion filed on 12 December 2014 with the intent that each party will pay its own costs of that notice of motion.
(2) Note that the costs that are intended to be the subject of order (1) include all of the costs from the filing of the notice of motion to the making by the Court of the orders contained in the short minutes of order made on 22 May 2015.
(3) Order that the defendant pay to the plaintiff the additional costs incurred by the plaintiff as a result of the service by the defendant on the plaintiff of an amended defence and an amended cross claim, being costs additional to those that the plaintiff would have incurred if the defendant had not amended its defence and cross claim.Catchwords: PROCEDURE – costs – each party bears its own costs concerning substantive notice of motion – plaintiff seeks costs thrown away – defendant required to amend its pleadings – defendant to pay additional costs of the plaintiff regarding pleading amendments Cases Cited: Tugrul v Tarrants Financial Consultants Pty Ltd (in liq) (No 1) [2013] NSWSC 1561 Category: Costs Parties: Hugh Corporation Pty Ltd (plaintiff)
TAL Life Ltd (defendant)Representation: Counsel: H Insall SC (plaintiff)
Solicitors: Hugh & Associates Lawyers (plaintiff)
TAL Life Ltd (defendant)
Mills Oakley Lawyers 9defs)
File Number(s): 2014/219854 Publication restriction: None
JUDGMENT
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On 26 March 2015, I delivered reasons for judgment in relation to a hearing that took place on 27 February 2015 of a notice of motion filed by the plaintiff on 12 December 2014.
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By its notice of motion, the plaintiff sought orders that certain paragraphs of the defendant’s defence and its cross claim be dismissed, or alternatively struck out. The plaintiff also sought a number of complex interlocutory orders concerning the production of documents by the defendant, the inspection and testing of documents, and answers to interrogatories.
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At the hearing, the defendant accepted that the defence should be amended, and the argument was directed at the adequacy of the pleading of its cross claim. In my reasons for judgment, I identified a number of deficiencies in the pleading of the cross claim. However, in some respects, the hearing of the notice of motion proceeded as if it were a case management hearing, and accordingly I decided that the best course was to invite the defendant to submit a revised draft of its cross claim, rather than to proceed in a formal way to strike out parts of the pleading.
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In relation to the procedural orders, I determined that it was premature to make those orders, particularly in the light of Practice Note Eq 11. There is some substance in the defendant’s submission that the procedural orders sought by the plaintiff were “somewhat extreme”. Nonetheless, for the reasons that I gave in my judgment, I did not dismiss the plaintiff’s application, but effectively adjourned it because of the possibility that the plaintiff may be able to justify some or all of the procedural orders sought, after the defendant had amended its pleadings. That said, in my view, it remained relatively unlikely that the Court would ever be persuaded to make the orders sought by the plaintiff in the manner in which they were formulated in the notice of motion.
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After I delivered judgment, there was a further hearing before me on 23 April 2015, in part for the purpose of settling the final form of the defendant’s cross claim, but also for the purpose of making directions for the further preparation of the matter, so that it could be stood over to the Registrar’s list on an appropriate date. I invited the parties to bring in short minutes to put into effect the position reached as a result of that hearing. I ultimately made the orders in chambers on 22 May 2015.
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One of the orders that I made on 22 May 2015 was that the parties deliver their submissions on the issue of the costs of the plaintiff’s notice of motion. Both parties have delivered those submissions.
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The plaintiff’s position is that it is content for the Court to order that each party bear its own costs of the motion filed on 12 December 2014, as I had effectively suggested in par 49 of my judgment on the notice of motion. However, the plaintiff seeks an order that the defendant pay the costs thrown away by reason of the amendment of its pleadings
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The defendant submits that there should be no order as to the costs either of the plaintiff’s notice of motion or the notice to produce. The plaintiff does not specifically mention the notice to produce in its submissions. I have inferred that the plaintiff accepts that the costs of the notice to produce should be considered to be an integral part of the costs of the notice of motion.
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It appears to me that the parties are substantially in agreement as to the appropriate costs order, but there is an obscure difference between them as to the costs that the defendant should be required to bear if it is ordered to pay the costs thrown away as a result of the amendment to its pleadings.
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As to the costs of the plaintiff’s notice of motion, I remain of the view that the plaintiff was successful in its criticism of the defendant’s pleadings, and it secured an outcome whereby the defendant was required to amend its pleadings. On the other hand, in practical terms, the plaintiff did not succeed in obtaining the procedural orders that it sought concerning disclosure and interrogatories. As it appeared from my perspective, each of the parties enjoyed an equal measure of success in relation to the notice of motion. Each party should bear its own costs of the notice of motion. It is very likely that the costs that would be incurred by the parties in conducting an assessment of the costs of the different aspects of the notice of motion as to which they were successful would be out of proportion to the benefit of the exercise.
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On the other hand, the defendant has had to amend its pleadings, and that will result in the plaintiff incurring some costs that it would not have incurred if the defendant had correctly pleaded its case in its defence and its cross claim in the first place. It is conventional to make a costs order in favour of a party in the position of the plaintiff in these circumstances: Tugrul v Tarrants Financial Consultants Pty Ltd (in liq) (No 1) [2013] NSWSC 1561 at [37].
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The appropriate course for me is to indicate explicitly the costs that the defendant should be required to pay as a consequence of the amendment of its pleadings. As a practical matter, that requires me to differentiate between the costs incurred by the parties that led to the position where the defendant has been required to amend its pleadings (as to which I envisage that there will be no order for the payment of costs), and the extra costs that the plaintiff will incur by reason of the necessity for it to respond to the filing of the amended pleadings by the defendant (which are costs that the defendant should pay to the plaintiff).
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I propose to treat the costs of the filing of the notice of motion, its preparation for hearing, the hearings that took place on 27 February 2015 and 23 April 2015, the preparation of short minutes, and the preparation of the submissions on costs, as being the costs of the notice of motion, as to which there will be no order as to costs. In practical terms that will mean that the communications and other steps taken by the plaintiff that led to the filing of amended pleadings by the defendant will be treated as part of the costs of the notice of motion.
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However, as a result of the defendant filing its amended pleadings, it is likely that the plaintiff will have to incur additional costs in responding to the new pleadings. It is not possible to anticipate precisely what those additional costs will be, but they will include at least the filing of a defence to the amended cross claim. The defendant should pay the additional costs incurred by the plaintiff, in the sense of further costs that the plaintiff would not have had to incur at all if the defendant had originally filed the new pleadings.
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The costs that I envisage the defendant will be required to pay to the plaintiff are not costs for past legal work, but are costs for additional legal work that the plaintiff must undertake in response to the filing of the new pleadings.
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I make the following orders:
Order that there be no order for the costs of the plaintiff’s notice of motion filed on 12 December 2014 with the intent that each party will pay its own costs of that notice of motion.
Note that the costs that are intended to be the subject of order (1) include all of the costs from the filing of the notice of motion to the making by the Court of the orders contained in the short minutes of order made on 22 May 2015.
Order that the defendant pay to the plaintiff the additional costs incurred by the plaintiff as a result of the service by the defendant on the plaintiff of an amended defence and an amended cross claim, being costs additional to those that the plaintiff would have incurred if the defendant had not amended its defence and cross claim.
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Decision last updated: 04 June 2015
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