Khan v Hassan (Costs Ruling)
[2023] VCC 1153
•11 July 2023
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
Defamation List
Case No. CI-21-05334
| NURUL KHAN | Plaintiff |
| v | |
| MOHAMMAD HASSAN | Defendant |
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JUDGE: | HER HONOUR JUDGE MYERS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 June 2023 | |
DATE OF RULING: | 11 July 2023 | |
CASE MAY BE CITED AS: | Khan v Hassan (Costs Ruling) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 1153 | |
RULING
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Subject:CIVIL PROCEDURE – DEFAMATION
Catchwords: COSTS – Defamation – exercise of discretion as to costs
Legislation Cited: Defamation Act 2005, s12B, s40; Civil Procedure Act 2010, s7, ss16-26, s65C; County Court Civil Procedure Rules 2018, r 13.12(1)
Cases Cited:Khan v Hassan (Ruling) [2023] VCC 852; Georges v Georges [2022] NSWDC 558; Defteros v Google LLC (Costs) [2020] VSC 324; Defteros v Google Inc & Anor (Costs) [2017] VSC 189; Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141; Gatto v Australian Broadcasting Corporation & Ors (Costs Ruling) [2021] VSC 223; Chen v Chan [2009] VSCA 233; Oshlack v Richmond River Council (1998) 193 CLR 72; Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137; Faraday v Rappaport [2007] NSWSC 253; Thompson v Racing Victoria Ltd (No 2) [2020] VSC 684; Harrington v Greenwood Grove Estate Pty Ltd (No 2) [2011] NSWSC 1598; Gales Holdings Pty Ltd v Valuer General [2007] NSWLEC 14
Ruling: 1. The proceeding is dismissed.
2.The plaintiff pay the defendant’s costs of the proceeding up to and including 30 June 2022, including any reserved costs, on a standard basis, to be assessed by the Costs Court in default of agreement.
3. From 1 July 2022, each party to bear their own costs save that:
(a) the plaintiff pay the defendant’s costs of the summons dated 3 May 2023 for summary judgment, and the costs of the hearing of the preliminary issues on 24 and 25 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement;
(b) the defendant pay the plaintiff’s costs of trial preparation for the hearing listed on 23 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J A Castelan | SR Lawyers |
| For the Defendant | Mr J P Wheelahan | Gadens Lawyers |
HER HONOUR:
Introduction
1On 31 May 2023, the Court ruled in relation to the preliminary issues in this matter.[1] The Court determined that the plaintiff had not given the defendant a concerns notice for the purpose of s12B(1) of the Defamation Act 2005 (Vic) (“the Act”).
[1]Khan v Hassan (Ruling) [2023] VCC 852
2The parties agree that the appropriate order consistent with that ruling is that the proceedings be dismissed.
3The parties agree that the defendant should have his costs of the hearing of the preliminary issues.
4The plaintiff otherwise seeks an order that the defendant pay his costs of the proceeding.
5The defendant seeks an order that the plaintiff pay his costs of the proceeding on an indemnity basis.
6For the reasons that follow, I have determined to make the following orders:
(a) The proceeding is dismissed.
(b) The plaintiff pay the defendant’s costs of the proceeding up to and including 30 June 2022, including any reserved costs, on a standard basis, to be assessed by the Costs Court in default of agreement.
(c) From 1 July 2022, each party to bear their own costs save that:
(i)The plaintiff pay the defendant’s costs of the summons dated 3 May 2023 for summary judgment, and the costs of the hearing of the preliminary issues on 24 and 25 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement;
(ii)The defendant pay the plaintiff’s costs of trial preparation for the hearing listed on 23 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement.
Procedural history
7The writ and statement of claim were issued on 15 December 2021.
8Relevantly, paragraphs 5 and 6 of the statement of claim pleaded:
“5.The plaintiff instructed the plaintiff’s lawyer to withdraw the original notice and issue a fresh concerns notice which was dated and served by email to the defendant on the 16th November 2021.
6. The defendant replied by email on the 13th of December 2021 without accepting or providing an offer of amends within the 28 days subsequent to the notice served on the 16th November 2021.”
9The defendant filed a notice of appearance on 21 December 2021.
10The defendant requested further and better particulars of the statement of claim on 31 December 2021.
11On 29 April 2022, directions were made based on consent minutes provided by the parties. These included that the plaintiff provide further and better particulars by 6 May 2022, the defendant file a defence by 6 June 2022, and the matter be mediated by 30 June 2022.
12A defence was filed by the defendant on 7 June 2022. The pleading to paragraphs 5 and 6 of the statement of claim was in the following terms:
“4.In response to paragraph 5 of the Statement of claim, the Defendant says:
a)There was no cause regarding the notice dated 16 November 2021 as the amend had already been made by the Defendant prior to and at the time of receipt of the Notice dated 16 November 2021
5. The Defendant admits paragraph 6 of the Statement of Claim and say that:
a)The Plaintiff had no cause against the Defendant.
b)The Defendant was not the author or the primary distributor of the alleged defamatory content.
c)Being an administrator of the Bangladeshi Broadsheet Facebook Page (the broadsheet), the defendant did not have any editorial control of the matter prior to the publication.
d)The matter was brought to the notice of the Defendant by some unrelated party and the Defendant took all steps necessary to:
i. Delete the publication;
ii. Block the individual author of the alleged defamatory matter from the broadsheet”
13I understand these paragraphs to be referring to the fact that the claimed defamatory post had been removed from the Bangladeshi Broadsheet Facebook page by 13 September 2021. On that basis it was asserted that there was no cause of action as at 16 November 2021.
14Order 13.12(1) of the County Court Civil Procedure Rules 2018 (“the Rules”) provides:
“13.12(1) Except as provided in paragraph (3), every allegation of fact in any pleading shall be taken to be admitted unless it is denied specifically or by necessary implication or is stated to be not admitted in the pleading of the opposite party, or unless a joinder of issue under Rule 13.13 operates as a denial of it, and a general denial of the allegations, or a general statement that they are not admitted, shall not be sufficient.”
15In the defence, the defendant did not ‘deny’ or ‘not admit’ receipt of the 16 November 2021 concerns notice. The defendant did not ‘deny’ or ‘not admit’ that the concerns notice was received on 16 November 2021 by email. Further, the defendant did not allege that the concerns notice was sent to an email address which had not been specified by the defendant for the service of documents.
16Whilst the form of paragraphs 5 and 6 of the statement of claim, and paragraphs 4 and 5 of the defence, were each somewhat unsatisfactory, given the operation of Order 13.12(1) of the Rules, the defence arguably amounted to an admission as to receipt of the concerns notice by email on 16 November 2021.
17On 22 July 2022, further directions were given as to discovery and mediation. The proceeding was set down for trial on 23 May 2023 before a judge alone with an estimate of 3 days.
18On 28 October 2022, the defendant filed and served a proposed amended defence. Paragraph 4 of that proposed pleading was in the same terms as the original defence. The additions to paragraph 5 in that proposed amended pleading are not presently relevant.
19The matter came before the Court for directions on 11 November 2022. At that hearing, the defendant was ordered to provide the plaintiff with a proposed amended defence by 4.00pm on 2 December 2022. The defendant’s application for leave to file an amended defence was listed on 13 December 2022. The defendant was ordered to pay the plaintiff’s costs thrown away by reason of the proposed amended defence fixed in the amount of $750, payable by 16 December 2022.
20On 12 December 2022, the defendant filed and served a proposed amended defence. The proposed pleading deleted the entire defence, and amounted to a new pleading. Relevantly, the amended pleading responded to paragraphs 5 and 6 of the plaintiff’s statement of claim as follows:
“5.As to the allegation in paragraph 5 of the Statement of Claim, the defendant does not know and does not plead to when the plaintiff instructed his lawyers to purportedly withdraw the First Purported Concerns Notice and issue the Second Purported Concerns Notice (the validity of both of which is denied), and otherwise denies the allegations in paragraph 5.
The Second Purported Concerns Notice
6. The defendant denies the allegations in paragraph 6 of the Statement of Claim and says that:
a)The concerns notice of 16 November 2021 (The Second Purported Concerns Notice) was not given to the defendant in accordance with s 12B(1)(a) and s 44(a)(iv) of the Defamation Act 2005 (Vic).
b)In the premises the plaintiff is statute barred from commencing a defamation proceeding against the defendant under s 12B(1) of the Defamation Act 2005 (Vic).
c)In the premises the plaintiff cannot rely on the imputations of concern particularised in The Second Purported Concerns Notice relied upon in paragraph 12 of the Statement of Claim under s 12B (1)(b) of the Defamation Act 2005 (Vic);
d)In the premises the applicable period for an offer to make amends has not commenced under s 12B (1)(c) of the Defamation Act 2005 (Vic).
c)(sic) The defendant purported to respond to The Second Purported Concerns Notice seeking an extension of time to respond the day after he became aware of it on Monday December 13 2021.
Particulars
The Second Purported Concerns Notice is in writing and was emailed by the plaintiff’s lawyers to ###@gmail.com and was received into a spam folder without the defendant’s knowledge. The defendant replied to the Notice by email on Monday December 13 2021 when he became aware of it. The correspondence is available for inspection at the defendant’s solicitor’s office during business hours.
Statutory Bar
7. In answer to the whole of the Statement of Claim, the defendant refers to and repeats paragraph 6, and says the plaintiff is statute barred from commencing a defamation proceeding against the defendant relying on the imputations particularised at paragraph 12 and the serious harm particularised at paragraph 14 of the Statement of Claim under s 12B(1)(a), 12B(1)(b) and 12B(1)(c) of the Defamation Act 2005 (Vic).”
21This was the first pleading in which the defendant denied the allegations in paragraphs 5 and 6 of the statement of claim and raised issues with service of the concerns notice.
22At the directions hearing on 13 December 2022, the defendant was given leave to file and serve an amended defence substantially in the same form as provided to the Court on 12 December 2022. Importantly, the orders also provided a timetable for determination of the concerns notice issue as follows:
“3.By 23 December 2022 at 4.00 pm, the defendant is to file and serve any application in relation to paragraph 7 of the amended defence to strike out the plaintiff’s proceeding or enter judgment for the defendant by summons with an affidavit in support.
4. The summons is fixed for 27 February 2023.
5. By 30 January 2023 at 4.00 pm, the plaintiff is to file and serve affidavit material.
6. By 10 February 2023 at 4.00 pm, the defendant is to file and serve submissions.
7. By 22 February 2023 at 4.00 pm, the plaintiff is to file and serve submissions.”
23The defendant did not file an application by 23 December 2022.
24On 1 February 2023, as no application had been filed, the Court vacated the hearing date of 27 February 2023 of its own motion.
25On 28 April 2023, the plaintiff issued a summons and affidavit in support seeking further discovery. The summons was listed for hearing on 3 May 2023. The Court also listed the matter for directions on that day in relation to the issues with service of the concerns notice.
26On 2 May 2023, the defendant sought a date for the hearing of a summons for summary dismissal of the proceeding pursuant to Order 23 of the Rules.
27The matter came before the Court for directions on 3 May 2023 and further directions were given in relation to the trial listed on 23 May 2023. The defendant’s summons for summary judgment was listed on 23 May 2023.
28On 23 May 2023, on the first day of trial, I determined that it was appropriate to decide the issues relevant to the concerns notice as preliminary issues.
29Further, on 23 May 2023, each party sought, and was given, leave to amend their pleading.
30The plaintiff’s amendments relevantly comprised an allegation that the concerns notice was sent by ordinary post on 16 November 2021 in addition to being sent by email; and an application for leave nunc pro tunc pursuant to s12B(3)(b) of the Act in the event the applicable period had not elapsed prior to the issue of the writ on 15 December 2021.
31The defendant’s amendments relevantly denied that the concerns notice was sent by ordinary post to the defendant’s residential address, or an address specified by him for service; and asserted that the discretion in s12B(3)(b) to grant leave for the proceeding to be commenced despite non-compliance with s12B(1)(c) was not enlivened and leave could not or should not be granted.
Relevant provisions and authorities
32Section 40 of the Act provides as follows:
“Costs in defamation proceedings
(1) In awarding costs in defamation proceedings, the court may have regard to—
(a)the way in which the parties to the proceedings conducted their cases (including any misuse of a party’s superior financial position to hinder the early resolution of the proceedings); and
(b)any other matters that the court considers relevant.
(2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise)—
(a)if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or
(b)if defamation proceedings are unsuccessfully brought by a plaintiff and costs in the proceedings are to be awarded to the defendant—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant.
(3) In this section—
settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made.”
33Section 40 of the Act and the concerns notice provisions of the Act reflect the position that in defamation proceedings early settlement is intended to be the “pre‑eminent mode of dispute resolution”.[2]
[2]Georges v Georges [2022] NSWDC 558 at [60] per Abadee DCJ
34Section 40 of the Act “displaces the usual rule that costs are to be awarded on a standard basis unless there are special or unusual circumstances that justify awarding costs on an indemnity basis”.[3]
[3]Defteros v Google LLC (Costs) [2020] VSC 324 at [13] per Richards J
35In order for a defendant to recover indemnity costs pursuant to s40 of the Act, the following must be established:
(a) The plaintiff was unsuccessful in the defamation proceeding;
(b) Costs in the proceeding are to be awarded to the defendant;
(c) The defendant made a settlement offer in accordance with the provision before the proceedings were determined; and
(d) The plaintiff unreasonably failed to accept the settlement offer.
36If the above matters are established, the Court must award indemnity costs to the defendant unless the interests of justice require otherwise.[4] In determining costs issues, the Court may have regard to the matters identified in s40(1) of the Act.
[4]Defteros v Google Inc & Anor (Costs) [2017] VSC 189 at [4] per John Dixon J
37In Marriner v Australian Super Developments Pty Ltd,[5] the Court of Appeal considered matters to which the Court should have regard when deciding whether rejection of a Calderbank offer was unreasonable:
“… the court should ordinarily have regard at least to the following matters:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.”
[5][2016] VSCA 141 at [234]
38The defendant bears the onus of establishing that the plaintiff acted unreasonably.
39In Gatto v Australian Broadcasting Corporation & Ors (Costs Ruling),[6] Keogh J summarised the authorities on this issue as follows:
“It is not unreasonable for a losing party to reject an offer that does not involve a genuine compromise, but is an invitation to capitulate or a derisory offer. The question is whether rejection of the offer was reasonable in the circumstances and at the time it was made. An offer to capitulate may be reasonable if in the circumstances in which it was made it represents a genuine attempt to settle what may be a hopeless case.”
[citations omitted]
[6][2021] VSC 223 at [14]
40As a general rule, costs follow the event. Whilst that is the general rule, the interests of justice may dictate a different costs outcome. The Court has a wide discretion in respect to costs. In particular, the Court is entitled to examine the realities of the case and attempt to do ‘substantial justice’ as between the parties on the matter of costs.[7]
[7]Chen v Chan [2009] VSCA 233 at [10]
41In Oshlack v Richmond River Council,[8] McHugh J said:
“The expression the “usual order as to costs” embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
…
The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:
“No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.”
“Misconduct” in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.”
[8](1998) 193 CLR 72, at 97-98
42In Beoco Ltd v Alfa Laval Co Ltd,[9] it was stated:
“As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment.”
[9][1995] QB 137, at 154 per Stuart-Smith LJ
43A successful party might be denied costs if the party’s success stems from a late amendment of its case, or if a successful party delayed raising a decisive point until the last minute, the costs incurred by the opponent are likely to have been increased (and indeed wasted) by those omissions.[10]
[10]G E Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021) at [8.48]-[8.49] and the cases referred to therein. Faraday v Rappaport [2007] NSWSC 253 at [28]-[30] per White J. Cf Thompson v Racing Victoria Ltd (No 2) [2020] VSC 684 at [19], [20] per Cavanough J. Harrington v Greenwood Grove Estate Pty Ltd (No 2) [2011] NSWSC 1598
44Where the failure by a party to comply with the Court’s directions results in an adverse costs result for the other party then it may be appropriate for the disadvantaged party to be compensated by a costs order.[11]
[11]Gales Holdings Pty Ltd v Valuer General [2007] NSWLEC 14 at [12] per Talbot J
45In exercising its discretion, the Court ought to consider the conduct of the parties having regard to the overarching obligations under the Civil Procedure Act 2010.[12] In particular, regard must be had to the overarching purpose contained in s7 of the Civil Procedure Act, which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
[12] See ss 16-26, 65C
Settlement offers
46In the concerns notice dated 16 November 2021 the plaintiff sought to resolve the matter on the following basis:[13]
(a) A written undertaking that no further defamatory publications would be made against the plaintiff in the future and a public apology;
(b) Compensation of $100,000.
[13]Court Book (“CB”) 82
47The plaintiff made four offers during the proceeding as follows:
(a) On 3 October 2022, a Calderbank offer seeking an apology, $15,000 compensation and $20,000 costs;[14]
(b) On 26 October 2022, an Offer of Compromise pursuant to Order 26 of the Rules in the sum of $20,000 plus costs on a standard basis, and an apology;[15]
(c) On 3 April 2023, an Offer of Compromise pursuant to Order 26 of the Rules in the sum of $10,000 plus costs on a standard basis, and an apology;[16]
(d) On 25 May 2023, the plaintiff made an open offer at the start of the second day of hearing of the preliminary issues. The offer was to settle the proceedings for $30,000 inclusive of costs, and an apology.[17]
[14]Affidavit of Rumana Jahan sworn 1 June 2023, [31]
[15]Ibid at [32]
[16]Ibid at [33]
[17]Transcript (“T”) 147
48The defendant made a settlement offer on 29 May 2023.[18] This was, after the hearing of the preliminary issues, but prior to the Ruling on 31 May 2023. The offer was identified as being made pursuant to s40(3) of the Act. The terms of the offer were that the proceeding be dismissed and the plaintiff pay the defendant’s costs. The offer identified that in the event it was not accepted, and the Court found the proceeding should be dismissed, the defendant would seek costs on an indemnity basis for the entire proceeding.
[18]Affidavit of Rumana Jahan sworn 1 June 2023, [34]
Plaintiff’s submissions
49The plaintiff submitted that he was entitled to an order for costs. It was submitted that the defendant ought to have raised the issues regarding the concerns notice at the outset of the proceedings, but did not.
50The plaintiff further submitted that the defendant failed to comply with the Court’s orders of 13 December 2022, which would have enabled the concerns notice issues to be determined prior to trial.
Defendant’s submissions
51The defendant submitted that he was entitled to an order for costs of the proceedings on an indemnity basis pursuant to s40 of the Act as the proceedings were unsuccessful and the plaintiff unreasonably rejected the defendant’s settlement offer dated 29 May 2023.
52Alternatively, the defendant submitted that the proceedings were an abuse of process from inception, that the plaintiff was guilty of a “relevant delinquency” by issuing proceedings without proper compliance with the concerns notice provisions of the Act, and the appropriate order was an order that the plaintiff pay the defendant’s costs of the proceeding on an indemnity basis.
53The defendant submitted that as the plaintiff amended the statement of claim on 23 May 2023, and only articulated the foundation of his case on the giving of a concerns notice at that time, the defendant is entitled to his costs down to the date of amendment.
Did the plaintiff unreasonably reject a settlement offer?
54I find that it was not unreasonable for the plaintiff to refuse to accept the offer made by the defendant on 29 May 2023. This is because the defendant was unlikely to be entitled to costs of the entire proceedings given his delay in raising the issue as to the validity of service of the concerns notice on the pleadings, and his failure to issue a summons for summary judgment and otherwise comply with the timetable for determination of such application ordered on 13 December 2022.
Analysis
55The proceedings are to be dismissed because of the plaintiff’s failure to comply with the concerns notice provisions in s12B of the Act. Ordinarily, the defendant would be entitled to the costs of the proceedings.
56However, there are a number of features which make such an order inappropriate in this case. These relate to the time when the issue regarding the concerns notice was first raised in the defendant’s defence, and the time taken to put that issue before the Court for determination.
57Having found that it was not unreasonable for the plaintiff to reject the defendant’s settlement offer dated 29 May 2023, I find that the defendant has not established the matters necessary to recover indemnity costs pursuant to s40(2)(b) of the Act.
58The defendant did not raise the concerns notice issues until the filing of the amended defence in December 2022. That amendment substantially altered the defendant’s case and the defendant has succeeded on the issues raised by that amendment.
59I find that the amendments made by the plaintiff on 23 May 2023 did not substantially alter the plaintiff’s case, and the plaintiff did not succeed in relation to the issues raised by the amendments.
60Where, as here, a party wishes to make application for summary judgment, the party must do so promptly. Delay in making such an application is likely to result in all parties incurring unnecessary costs, and also result in wasted Court time with case management.
61If the defendant had successfully brought on a summary judgment application in a timely manner, he would likely have obtained an order for his costs of the proceeding.
62Here, the defendant ought to have raised the concerns notice issue in his defence, and brought on an application for summary judgment in a timely manner. The failure to do so resulted in both parties incurring unnecessary and significant costs in pursuing other interlocutory steps, mediating and preparing for trial.
63Given the defendant’s success on the preliminary issue, I find that he is entitled to his costs of the proceedings to a date by which his application ought reasonably to have been brought before the Court and determined. Doing the best I can, I find that date to be 30 June 2022, approximately six months after the issue of the writ.
64The parties have agreed that the plaintiff should pay the defendant’s costs of the hearing of the preliminary issues on 24 and 25 May 2023. It follows that the plaintiff should also pay the costs of the defendant’s summons for summary judgment dated 3 May 2023.
65The defendant seeks indemnity costs on the basis that the proceedings were an abuse of process. If the defendant had raised the concerns notice issues at an early stage of the proceedings, there may have been a basis for an order for indemnity costs in the defendant’s favour. However I am not prepared to make such an order in the absence of a satisfactory explanation for the defendant’s delay in raising the concerns notice issue, and absent evidence satisfactorily explaining the failure to comply with the Court’s directions of 13 December 2022 regarding determination of the summary judgment application.
66The defendant’s success on the preliminary issues was not a foregone conclusion.
67Once the defendant raised the concerns notice issue in his amended defence, the Court gave directions which permitted the determination of that issue three months prior to the trial date.
68The defendant’s failure to issue the summons before 2 May 2023 caused the plaintiff to expend costs preparing for trial unnecessarily. I find therefore that it is appropriate that the defendant pay the plaintiff’s costs of trial preparation.
69The remaining costs are those incurred from 1 July 2022 which are not otherwise subject to specific orders. I find that the most appropriate order for those costs is that each party bear their own. This is because, whilst the defendant has been successful, his delay in bringing on the concerns notice issue caused both parties to incur unnecessary costs.
Conclusion
70In accordance with the above, it is ordered:
(a) The proceeding is dismissed.
(b) The plaintiff pay the defendant’s costs of the proceeding up to and including 30 June 2022, including any reserved costs, on a standard basis, to be assessed by the Costs Court in default of agreement.
(c) From 1 July 2022, each party to bear their own costs save that:
(i)The plaintiff pay the defendant’s costs of the summons dated 3 May 2023 for summary judgment, and the costs of the hearing of the preliminary issues on 24 and 25 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement;
(ii)The defendant pay the plaintiff’s costs of trial preparation for the hearing listed on 23 May 2023, on a standard basis, to be assessed by the Costs Court in default of agreement.
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