LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 4)

[2015] NSWSC 1158

Supreme Court

New South Wales

Medium Neutral Citation:	LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 4) [2015] NSWSC 1158
Hearing dates:	7 August 2015
Decision date:	07 August 2015
Jurisdiction:	Equity Division - Commercial List
Before:	Stevenson J
Decision:	Defendant to pay two thirds of the plaintiff's costs of the proceedings (such costs not to include the $12,085 paid by the plaintiff in respect of Mr Craddock's attendance)
Catchwords:	COSTS – whether plaintiff entitled to indemnity costs on the basis of a Calderbank offer – whether plaintiff entitled to indemnity costs for production of court book – plaintiff successful overall but unsuccessful in relation to one of two distinct bases of misconduct claim – whether plaintiff should be liable for travel costs of witness whose evidence predominantly related to basis upon which plaintiff was unsuccessful – whether costs order should reflect the defendant’s partial success in the proceedings
Cases Cited:	LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 2) [2015] NSWSC 992 LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 3) [2015] NSWSC 1156
Category:	Costs
Parties:	LCM Litigation Fund Pty Ltd (Plaintiff/Cross-Defendant) Patrick Mark Coope (Defendant/Cross-Claimant)
Representation:	Counsel: S Fendekian (Plaintiff/Cross-Defendant) J Clarke SC (Defendant/Cross-Claimant) Solicitors: Piper Alderman (Plaintiff/Cross-Defendant) Esplins Solicitors (Defendant/Cross-Claimant)
File Number(s):	SC 2015/60819

EX TEMPORE Judgment (REVISED)

1. I gave judgment in these proceedings on 24 July 2015: LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 2) [2015] NSWSC 992. I will use the same abbreviations in these reasons as in that judgment.

2. Subject to the transcript issue (which I have dealt with in a judgment I gave earlier today: LCM Litigation Fund Pty Ltd v Coope; Coope v LCM Litigation Fund Pty Ltd (No 3) [2015] NSWSC 1156), the parties have reached agreement as to the declaration and orders that should be made, other than as to costs. I made that declaration and those orders earlier today.

3. In relation to costs, LCM pointed to a Calderbank offer it made on 5 June 2015 and submitted that, on the basis of that offer, it should have its costs on an indemnity basis from that date.

4. The Calderbank offer was complicated and included that:

1. Mr Coope not compete with LCM up to and including 30 June 2015;

2. LCM pay Mr Coope $45,000 on account of his statutory claims for annual and long service leave;

3. the proceedings be dismissed with no order as to costs, but Mr Coope make a "contribution" towards LCM's costs of $150,000 (stated in a letter to exceed the costs actually incurred by LCM to that date by some $350,000);

4. funds held in Court and security for those funds be repaid to LCM; and

5. the amount of $12,085 paid by LCM to Mr Coope in respect of Mr Craddock's attendance (see below) be repaid.

5. The Calderbank offer did involve some compromise by LCM (for example, as to the quantum of its costs). It did also offer Mr Coope an opportunity to avoid a finding of serious misconduct. However, in substance, the offer was little short of an invitation to Mr Coope to capitulate. Certainly I cannot conclude that it was unreasonable of Mr Coope not to accept the offer. I therefore do not consider it a basis to make any special order as to costs.

6. LCM also contended that it should have an order for indemnity for costs in respect of the preparation of the court book. Ms Fendekian, who appeared today for LCM, pointed to the fact that of the 8 volumes of the court book, only some 60 documents were referred to at the hearing. Ms Fendekian submitted that the size of the court book was the product of Mr Coope's failure to cooperate appropriately in the production of the court book. On the other hand, Mr Clarke SC, who appeared today for Mr Coope, submitted that the bulk of the court book comprised material relevant to issues abandoned by LCM. It is not appropriate that, on a costs argument, I engage in a detailed analysis of the provenance of the material in the court book. The costs of the court book should follow the event.

7. As I noted in my judgment of 24 July 2015, by the commencement of the trial, the issues between the parties had considerably narrowed. Prior to the commencement of the trial, LCM had abandoned its claims for restraint, (other than for a nominal period), its monetary claims against Mr Coope, and its contentions for what the parties called “PILN” (which involved an asserted set off against Mr Coope's statutory entitlements regarding long service leave). Orders have been made and a judgment has been entered in Mr Coope's favour in relation to those issues. Mr Coope is the beneficiary of costs orders made on 22 and 29 May 2015 in relation to some or all of those issues. LCM does not suggest that those costs orders should be disturbed.

8. Ultimately, the issues agitated before me were whether Mr Coope had engaged in serious misconduct in respect of the Wind Down Proposal and the Separation Proposal and, if not, the quantum of Mr Coope's damages for wrongful termination of the Employment Contract. LCM was ultimately successful, but only in respect of one of the two distinct bases upon which it was submitted that Mr Coope engaged in serious misconduct. It was successful in relation to the serious misconduct said to arise from the Separation Proposal. It was not successful in relation to its contention that Mr Coope had decided, well prior to being asked to put the Separation Proposal, to enter into a commercial relationship with Vannin in competition with LCM.

9. Mr Craddock travelled to Sydney from his home on the Isle of Man to give evidence for Mr Coope in relation to the Wind Down Proposal issue and LCM's contention that Mr Coope had adopted the intention to which I have just referred. On 1 May 2015, Mr Coope applied for an order that Mr Craddock's evidence be taken via video link from the Isle of Man or from London. Hammerschlag J ordered that if LCM agreed to pay $12,085 on account of the expense of bringing Mr Craddock to Australia, the application to take evidence via video link would fail; and that otherwise it would succeed. LCM paid that sum and Mr Craddock came to Australia and gave evidence before me. LCM now seeks to have the $12,085 returned. However, LCM did not succeed on the issues to which Mr Craddock's evidence primarily was directed; namely, the Wind Down Proposal and LCM’s contention that Mr Coope had formed the intention to which I have referred. It is true that Mr Craddock was involved in communications relevant to the Separation Proposal issue. However, the substance of the cross-examination of Mr Craddock was directed to the issues in respect of which LCM failed. In those circumstances, I do not propose to make any order in respect of the $12,085.

10. On behalf of Mr Coope, Mr Clarke suggested a complicated series of orders reflecting Mr Coope's partial success in the proceedings. Mr Clarke invited me to look at the "score card" and make some assessment of the issues in respect of which Mr Coope succeeded, either because he made appropriate offers and concessions, or because LCM did not press its claims. In particular, Mr Clarke sought an order for indemnity costs in relation to the claim made by LCM in respect of the "PILN" statutory entitlements issue. Mr Clarke submitted that LCM's contentions in that regard were "baseless" and pointed out that ultimately they were not pressed.

11. I do not think it appropriate in the circumstances of this case to deal with the matter by way of Mr Clarke's proposed "score card". I do accept, however, that I should take into account the matters to which he has directed my attention.

12. LCM has, overall, been successful in that it has justified its decision to terminate Mr Coope's Employment Contract. In those circumstances, it appears to me that costs must follow the event. But the appropriate costs order should reflect the issues not pressed by LCM and the fact that its success was not complete.

13. It is not possible, in an exercise like this, to achieve mathematical precision. In my opinion, the order I should make is that Mr Coope pay two thirds of LCM's costs of the proceedings (such costs not to include the $12,085 paid by LCM in respect of Mr Craddock's attendance).

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Decision last updated: 14 August 2015