Lowe v Tu (No 2)

[2021] NSWDC 438

District Court

New South Wales

Medium Neutral Citation:

Lowe & Anor v Tu & Anor (No 2) [2021] NSWDC 438

Hearing dates:

20 August 2021 (Written Submissions)

Date of orders:

25 August 2021

Decision date:

25 August 2021

Jurisdiction:

Civil

Before:

Coleman SC DCJ

Decision:

1. The defendants are to pay the plaintiffs’ costs of the proceedings.

Catchwords:

COSTS – Costs Assessment – General Rule that Costs Follow the Event – Uniform Civil Procedure Rules 2005 (NSW) – Court’s Discretion to Make Costs Orders Notwithstanding the General Rule – Civil Procedure Act 2005 (NSW) s 98(1) – Whether the Court Should Exercise that Discretion

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss56, 57, 60, 98(1)

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited:

Anglo‑Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Hooker v Gilling (No 2) [2007] NSWCA 214

Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164

Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72

Texts Cited:

N/A

Category:

Costs

Parties:

Mr Geoffrey Lowe (First Plaintiff)
Mrs Mary Lowe (Second Plaintiff)
Mrs Shiu Sing Sze Tu (First Defendant)
Mr Shiu Sze Tu (Second Defendant)

Representation:

Counsel:
Ms M Castle (First & Second Plaintiffs)
Ms J McDonald (First & Second Defendants)

Solicitors:
HWL Ebsworth Lawyers (First & Second Plaintiffs)
CLS Legal (First & Second Defendants)

File Number(s):

2021/85346

Publication restriction:

N/A

Judgment (costs)

1. On 13 August 2021, the Court allowed the plaintiffs’ appeal and made orders setting aside the Certificates of Determination issued by the Cost Review Panel and the Cost Assessor. The matter has been remitted to the Review Panel to re‑determine the Review Application in accordance with law.

2. Directions were made for the parties to serve submissions with respect to the question of costs. The Court has now received submissions from each of the plaintiffs and the defendants. The costs issue was to be determined on the papers unless either party requested an oral hearing. Neither did.

3. The plaintiffs submit that the “usual” rule (UCPR 42.1) that costs should follow the event should be applied in this case. They submit that there is no reason for some other order to be made with respect to the whole or any part of the costs.

4. The plaintiffs submit that they were successful in obtaining the relief sought in the summons and there is no disentitling conduct or displacing circumstances which would otherwise mean they are not entitled to their costs.

5. The plaintiffs referred to Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [24]‑[25] (per Kiefel CJ and Bell, Gageler, Keane and Nettle JJ). Their Honours there said:

1. It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. While the width of the discretion "cannot be narrowed by a legal rule devised by the court to control its exercise", the formulation of principles according to which the discretion should be exercised does not "constitute a fetter upon the discretion not intended by the legislature". Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.

2. A guiding principle by reference to which the discretion is to be exercised – indeed, "one of the most, if not the most, important" principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. For example, a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action. But in the present case, there was nothing of this kind in the conduct of the appellant in relation to the litigation that might have weighed against the exercise of the discretion in its favour. There was no suggestion of any conduct on the part of the appellant, whether by unreasonable delay or a want of the cooperation required of litigants to ensure the "just resolution of the real issues in civil proceedings with minimum delay and expense", that might have been taken into account to justify refusing the appellant an order for its costs.

   6. The plaintiffs submit that a proper application of these principles would result in them being awarded their costs.

   7. The defendants submit that although the plaintiffs have been successful, the Court retains a discretion pursuant to s 98(1) of the Civil Procedure Act 2005 (NSW) and UCPR 42.1 to make a different order. They submit that having regard to the findings of the Court with respect to the nature and length of litigation, the uncertainty as to whether or not a re‑assessment of the costs of the proceedings at first instance will make any difference and my comments at [63] of my judgement, that the Court should either:

   1. make no order as to costs; or

   2. reserve the question of cost pending the outcome of the remittal to the Review Panel; or

   3. allow the plaintiffs costs at a capped amount of $10,000.

   8. The defendants submit that the overriding principle in the exercise the discretion as to costs is doing justice between the parties: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. However, the defendants point out that whilst the most important fact Courts have viewed as guiding that discretion is the result of litigation, the Court is permitted to have regard to the practical result of the litigation, namely, whether the “successful” party has really been successful in the proceedings: Anglo‑Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873.

   9. The defendants acknowledge that the authorities confirm that, where the object of the action is to establish a legal right, costs ordinarily will be payable to the plaintiff if they establish that right irrespective of whether any substantial remedy is obtained: Anglo‑Cyprian, supra at[874]; Hooker v Gilling (No 2) [2007] NSWCA 214 at [23]. However, they submit that when one has regard to the modern notions of the efficient and cost‑effective use of judicial resources reflected in Part 6 of the Civil Procedure Act 2005 (NSW) (particularly ss 56, 57 and 60), the utility of establishing the legal right must also be considered.

   10. The defendants submit that the plaintiffs have established an error by the Review Panel but have only established that the result on re‑assessment might be different, but not that it will be different. Thus, they submit, a fair result would be one of the three alternatives referred to in [7] above (in that order).

   11. In my opinion, the plaintiffs’ submissions should be accepted. I did make comments in my Judgment that the utility of the appeal was questionable. That was because of the uncertainty of whether or not any re‑assessment of the costs of the separate costs orders will have any, or any material, difference to the amount payable by the plaintiff to the defendants. However, the simple fact is that the plaintiffs were successful in establishing the error and were entitled to the relief sought. There may be other consequences which flow from the orders I have made of which I am unaware on the evidence.

   12. I do not accept it would be a proper exercise of the Court’s discretion with respect to costs to await the outcome of any re‑assessment to assess what, if any, is the difference in the result. That would, in my opinion, deny the fact of the success of the plaintiffs in establishing their legal right to the relief that the Court granted.

   13. Nor do I accept that awarding a capped sum would be appropriate exercise of the Court’s discretion. The sum suggested by the defendants appears, in my experience, to significantly underestimate the costs that I expect would have been incurred in the prosecution of a contested appeal. To award that, or any sum, without evidence to support the amount (as a cap or a lump sum) may penalise the plaintiffs by failing to award them an appropriate amount for costs to which they are otherwise entitled.

   14. In the circumstances, I do not see any reason to depart from the usual rule the cost should follow the event.

   15. For these reasons, I order that the defendants pay the plaintiffs’ costs of the proceedings.

ORDERS

16. I make orders as follows:

1. The defendants are to pay the plaintiffs’ costs of the proceedings.

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Decision last updated: 25 August 2021