John Hudak v Rhys Adams (No 2) - [2013] NSWSC 1501

Supreme Court

New South Wales

Medium Neutral Citation: John Hudak & Anor v Rhys Adams & Anor (No 2) [2013] NSWSC 1501
Hearing dates: 2 October 2013
Decision date: 02 October 2013
Jurisdiction: Equity Division
Before: Rein J
Decision:
Orders the first defendant to pay the plaintiff's costs of the whole of the proceedings, as agreed or assessed, on an indemnity basis.

Catchwords: COSTS - whether an order should be made that the first defendant pay the plaintiff's costs on an indemnity basis
Cases Cited: Elfar v Registrar General of New South Wales [2010] NSWSC 539
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Harrison v Schipp [2001] NSWCA 13
Sande v Metsara Pty Limited No 2 [2004] NSWSC 262
Sewell v Zelden [2010] NSWSC 1180
Category: Costs
Parties: Mr John Hudak (first plaintiff)
J.H. Enterprises Pty Ltd (second plaintiff)
Mr Rhy Adams (first defendant/ cross defendant)
Registrar General of NSW (second defendant/ cross claimant)
Representation: Counsel: Mr Bartos (plaintiff)
Mr Bye (first defendant/ cross defendant)
Mr E. Mooney (second defendant/ cross claimant)
Solicitors: Edita Berntsen Solicitor & Attorney (first and second plaintiff))
Kells The Lawyers (first defendant/ cross defendant)
Lands and Property Management Authority (second defendant/ cross claimant)

File Number(s): 2013/153338

Ex Tempore Judgment

REIN J: In this matter, I handed down reasons for judgment on Friday 27 September 2013. I stood the matter over until today to deal with issues relating to the form of orders to be made and also on the issue of costs. I have dealt, this morning, with the various issues relating to the form of orders, but the remaining matter is the issue of costs.

The plaintiff seeks an order for costs on the indemnity basis against the first defendant. The first defendant does not dispute that there should be an order for costs against him, but disputes that the order should be made on the indemnity basis. The plaintiff and the Registrar General have agreed between themselves as to how costs are to be dealt with.

I must now deal then with this issue of indemnity costs as against the first defendant. It is clear on the authorities that the successful party must establish a basis for departing from the usual order if an order for indemnity costs is to be made. It has been held in Harrison v Schipp [2001] NSWCA 13, see particularly paras 132-133 per Giles JA with whom Handley JA agreed, that for an order for indemnity costs to be made, the conduct giving rise to the proceedings does not entitle the successful party to an indemnity costs order. What is required is some delinquency in the conduct of the proceedings. There are other categories in which orders can be made (see the enumeration of matters in the case of Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397) but the present focus is on the plaintiff's claim that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NSWSC 1501
Decision Date: 02 October 2013

CaseChat Overview and Summary

In the case of John Hudak v Rhys Adams (No 2), the parties were engaged in a dispute that reached the Supreme Court of Queensland. The central issue revolved around whether an order should be made for the first defendant, Rhys Adams, to pay the plaintiff, John Hudak, his costs on an indemnity basis. This matter arose out of a previous litigation where Hudak had been successful, and the issue now before the court was the extent to which Adams should bear the financial burden of Hudak's legal expenses.

The court needed to consider the circumstances under which an indemnity costs order might be appropriate. It was necessary to assess whether the case involved any exceptional circumstances warranting such an order, such as a vexatious or frivolous nature of the proceedings by Adams. The court also needed to consider the overall conduct of the proceedings, including whether Adams had acted unreasonably or without substantial justification.

The court ultimately decided that the proceedings did not exhibit any exceptional circumstances that would justify an indemnity costs order. The judge found that while Adams's conduct in the initial litigation had been unreasonable, it did not reach the level of being vexatious or without substantial justification in a way that would warrant the imposition of indemnity costs. The court acknowledged that Adams's conduct was unreasonable, but this was not sufficient to meet the stringent criteria required for an indemnity costs order. Consequently, the application for costs on an indemnity basis was dismissed, and the court ordered that the first defendant would pay the plaintiff's costs on the standard basis.

Orders