J D M Investments Pty Ltd v Toddern Pty Ltd

[2000] NSWSC 432

CITATION:	JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 432
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 1225/00
HEARING DATE(S):	12 May 2000
JUDGMENT DATE:	12 May 2000
PARTIES :	JDM Investments Pty Ltd (Receiver & Manager Appointed) (Administrator Appointed) (P) Todbern Pty Limited (D)
JUDGMENT OF:	Hamilton J

COUNSEL :	R R I Harper (P) F P Donohoe (D)
SOLICITORS:	Coudert Brothers (P) Verekers (D)
CATCHWORDS:	PROCEDURE [573] - Costs - Departing from the general rule - Powers of court - Relevant principle - Whether claims distinct.
LEGISLATION CITED:	Supreme Court Rules Part 52A r11
CASES CITED:	JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 349 Waters v P C Henderson (Aust) Pty Ltd NSWCA, 6 July 1994, unreported Ritchie’s Supreme Court Procedure [52A.11.2]
DECISION:	That costs should follow the event.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

FRIDAY, 12 MAY 2000

1225/00 JDM INVESTMENTS PTY LIMITED (RECEIVER & MANAGER APPOINTED) (ADMINISTRATOR APPOINTED) v TODBERN PTY LIMITED

JUDGMENT

HIS HONOUR:

1    In this matter I have already delivered a substantive judgment: JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 349. The question of the costs of these proceedings has been argued before me today. It is of some importance in my deciding the question of costs that these proceedings have arisen from complex leasing transactions and from diffuse negotiations between the parties leading to the commencement of the litigation. The stances of both parties have changed at various times as to the interpretation of clause H.2 of the relevant sublease, which became the first and central question in the proceedings as they were ultimately heard and determined. The most important relief that was actually granted in the litigation is a declaration as to the meaning of that clause, but the interpretation given by the Court to the clause is not that which was primarily contended for by either party.2 Part 52A r 11 of the Supreme Court Rules provides as follows:

“If the Court makes any order as to costs, the Court shall, subject to this Part, order that the costs follow the event, except where it appears to the Court that some other order should be made as to the whole or any part of the costs.”

In the event, I take the view that the relevant event of these proceedings was that the plaintiff was unable to obtain relief which justified the transaction into which it seeks to enter, namely, an assignment of the reversion of the sublease, and was thus unsuccessful in the proceedings. Mr Donohoe, of counsel for the defendant, has contended that in those circumstances I should adhere to r 11, and make a general order for the costs of the proceedings in the defendant’s favour.

3 Mr Harper, of counsel for the plaintiff, has earnestly put to me, as a primary contention, that there should be a general order for costs, but in his client's favour. However, he has during debate also put to me various considerations which he says should at least diminish the generality of a costs order in favour of the defendant, perhaps down to there being no order as to costs. Mr Harper has reminded me, as I have already observed, that the declaration, which is the primary relief granted, was not in the form primarily sought by either party. He has drawn to my attention that there were certain issues upon which the plaintiff was successful, namely, the validity of the notice given under s 129 of the Conveyancing Act 1919 in respect of an alleged breach of contract constituted by a deemed assignment of sublease arising from the change of a company’s shareholding. In this regard, Mr Donohoe has pointed out that, although an amendment of the summons was sought and obtained to deal with the notice, the question of whether or not there was such a breach was already in play between the parties on the question of whether or not there was compliance with the conditions of clause H.2 and that, although his client lost on the question of subclause (iv), it was overall successful on that argument by reason of its success in relation to subclause (viii).

4    Mr Harper has reminded me of the statement in Ritchie’s Supreme Court Procedure [52A.11.2] which is as follows:

“The general approach taken by the courts in these situations is that it will ordinarily be appropriate to award the costs of proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed - unless a particular issue or group of issues is clearly dominant or separable: Waters v P C Henderson (Aust) Pty Ltd (CA(NSW), 6 July 1994, unreported) (which approved the proposition stated in this note) …”

Other authority was cited in Ritchie to support the proposition, which I accept as correct.

5    In my view, the long and short of the matter is that the issues in this case on which Mr Harper can point to success were not dominant. Neither, in the end, do I think they were separable in the relevant sense. And it should be noted that they did not take a great deal of time at the hearing. Mr Harper has also put to me that there is a public interest issue, in that the proceedings were brought by a company receiver attempting to maximise the realisation of a company's assets for the benefit of the creditors. In some circumstances this may be a material consideration, but I do not think it is a consideration which should be treated as operative in this piece of adversarial litigation. The conclusion that I have come to is that the general rule ought not be departed from and, on the basis of my view of the real event of the proceedings, the order of the Court as to costs will be that the plaintiff pay the defendant’s costs of the proceedings.

6    There has also been debate before me this morning on the precise terms of the declaratory relief to be included in the orders, and my views concerning this have been expressed in debate with counsel. Short minutes will be brought in later today incorporating the results of that debate and including the order for costs which I propose to make.

7    Mr Harper has asked me not to dispose finally of the proceedings on the basis that further issues arising from the subject transaction may call for adjudication arising from the giving of consent or even, perhaps, the failure by the State Rail Authority to give such consent. He suggests that it would be beneficial in those circumstances that the balance of the proceedings not be disposed of, but be stood over to permit any such matter to be dealt with in the present proceedings. The Court will not now except in the most exceptional circumstances stand any matters over generally, and in the face of that, Mr Harper is asking for the proceedings to be stood over to a finite date in the future. However, the view in the year 2000 is that both the Courts and the public have an interest in the final disposal of court proceedings at an early date and it is, I think, contrary to this interest that these proceedings be kept alive. I have indicated, as it may be economical of court time and of cost to the parties, that further proceedings (if any) be dealt with by a Judge with knowledge of the matter, that if a further summons is to be taken out arising from the same transaction, approach may be made for leave for that summons to be made returnable before me, at least in the first instance. The minutes when brought in should contain an order disposing of the balance of the proceedings.

…oOo…

Last Modified: 09/25/2000