Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 7)

[2024] NSWSC 1205

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 7) [2024] NSWSC 1205

Hearing dates:

On the papers; written submissions 5 September 2024

Date of orders:

24 September 2024

Decision date:

24 September 2024

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Unsuccessful applicant for security to pay 80% of respondent’s costs; costs to be payable forthwith; gross sum costs order refused

Catchwords:

COSTS – unsuccessful application for security for costs – costs to follow the event – where applicant for security successful on some issues – whether costs should be payable forthwith – whether a gross sum costs order should be made

Cases Cited:

Hamod v State of New South Wales [2011] NSWCA 375

Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 3) [2024] NSWSC 21

Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 4) [2024] NSWSC 657

Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 5) [2024] NSWSC 714

Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 6) [2024] NSWSC 958

Nature’s Care Holdings Pty Ltd v Chen (No 4) [2024] NSWSC 379

Wang v Cai (No 2) [2021] NSWSC 1268

Category:

Costs

Parties:

Metro Environmental Logistics Pty Ltd (Plaintiff/Respondent)
Newcastle Port Corporation trading as Port Authority of New South Wales (Defendant/Applicant)

Representation:

Counsel:
S T White SC/D Tynan (Plaintiff/Respondent)
J A Hogan-Doran/A A Cameron (Defendant/Applicant)

Solicitors:
McCullough Robertson Lawyers (Plaintiff/Respondent)
HWL Ebsworth Lawyers (Defendant/Applicant)

File Number(s):

2022/101288

JUDGMENT

1. The background to this matter is set out in my earlier judgments. ^[1]

   1. Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 3) [2024] NSWSC 21; Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 4) [2024] NSWSC 657; Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 5) [2024] NSWSC 714; Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 6) [2024] NSWSC 958.

2. I will use the same abbreviations here.

3. The matter is now fixed for hearing for 40 days commencing on 4 August 2025.

4. I am now dealing with the costs of Port Authority’s Notice of Motion of 12 March 2024 seeking an order that MEL provide security for costs.

5. I dismissed that application for the reasons set out in my judgment of 13 June 2024. ^[2]

   2. Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 5) (supra).

Undertaking

6. A factor that I considered in refusing to order security was the proffering of undertakings by Mr Ellis and Mr Deane and their associated companies, Jetset and Cereo, to meet any costs order made against MEL in favour of Port Authority.

7. In my 5 August 2024 judgment, I resolved a dispute as to whether there should be a carve out, of the kind that I described in that judgment, ^[3] in relation to the undertakings to be given by Jetset and Cereo.

   3. Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 6) (supra).

8. Jetset and Cereo have now given undertakings which do not contain that carve out, but which are consistent with those I discussed in my 29 May 2024 judgment. ^[4]

   4. Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 4) (supra).

9. I was invited by Port Authority to become involved in a further dispute evidently brewing between the parties as to what course of action may or not be permissible by Jetset and Cereo now that those companies have given those undertakings.

10. Absent an application by Port Authority that raises any such issue, I do not propose to become involved in that dispute.

Costs

11. There is no reason why the costs of Port Authority’s unsuccessful application for security should not follow the event.

12. There is no dispute that on 9 April 2024 and 26 April 2024 consent orders were made that costs of several motions dealing with matters allied to Port Authority’s security for costs application should be costs in the cause of that application.

13. Port Authority points out that although MEL was ultimately successful in resisting an order for security, Port Authority succeeded in relation to an issue that arose as to whether Mr Ellis and Mr Deane beneficially owned shares in North Scottsdale Resources Pty Limited (“NSR”), ^[5] and as to the form of the undertakings to be given by Jetset and Cereo.

    5. Discussed in my 13 June 2024 judgment: Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 5) (supra) at [87].

14. Further, as Port Authority also points out, extra costs were incurred because of the belated revelation by MEL of its funding arrangements, ^[6] and because of the necessity to adduce expert evidence in response to that of Mr Lackey, whose evidence concerning the net present value of NSR I allowed only as evidence of the fact that he had produced a report expressing an opinion on that subject.

    6. Discussed in my 29 May 2024 judgment: Metro Environmental Logistics Pty Ltd v Newcastle Port Corporation (No 4) (supra).

15. Taking those matters into consideration, my conclusion is that Port Authority should pay 80% of MEL’s costs in relation to the application for security for costs.

Payable forthwith

16. MEL seeks an order that its costs be paid forthwith.

17. Such an order can be made in circumstances where the interlocutory application in question represents a determination of a separately identifiable matter and where there is still a considerable amount of time to go until the proceedings will be finally resolved. ^[7]

    7. For example, see Wang v Cai (No 2) [2021] NSWSC 1268 at [23]-[24] (Ward CJ in Eq, as the President then was).

18. Those circumstances exist here.

19. The security for costs dispute was a “separately identifiable” matter and the proceedings are not likely to be resolved for well over a year from now.

20. However, as Port Authority has pointed out, and as the circumstances in which MEL successfully resisted an order for security for costs show, there is a serious prospect that were Port Authority to pay MEL its costs of the security for costs application now, it would not be able to recover those costs were it to be ultimately successful.

21. In those circumstances, I propose to adopt the course that I adopted in a case earlier this year,^[8] and order that MEL’s costs of Port Authority’s motion be payable forthwith on the condition that Mr Ellis and Mr Deane, and their companies Jetset and Cereo, acknowledge, in terms, that their undertakings will apply to the costs to be paid by Port Authority pursuant to these reasons, assuming Port Authority were to be ultimately successful in the proceedings.

    8. Nature’s Care Holdings Pty Ltd v Chen (No 4) [2024] NSWSC 379.

Gross sum costs order

22. MEL’s actual costs of its defence of Port Authority’s security for costs application are in the order $571,400.

23. MEL has adduced evidence from a costs assessor, Mr Paul Taylor, that MEL’s reasonable and likely recoverable costs are in the order of $415,700.

24. Good reason must be shown to make a gross sum costs order.

25. The circumstances in which such an order can be made are not closed but have been held to include the complexity of the proceedings in relation to costs in question, and the capacity of the unsuccessful party to meet those costs. ^[9]

    9. See Hamod v State of New South Wales [2011] NSWCA 375 at [813]-[820] (Beazley, Giles and Whealy JJA).

26. The security for costs application before me was not overly complex and there is no question of Port Authority’s capacity to satisfy the costs order.

27. As MEL has pointed out, the experts agree there will be some delay in costs associated with a conventional costs assessment process. But that is always the case and cannot, itself, be a reason to make a gross sum costs order.

28. Although Port Authority’s costs assessor, Mr Ramsey-Stewart, does not himself offer an opinion as to what MEL’s reasonable costs could be, he offers criticisms of Mr Taylor’s methodology. Further, Port Authority’s solicitor, Mr Little, has offered a line-by-line critique of MEL’s costs.

29. I would not be able to come to a reasoned view as to what MEL’s gross costs should be without myself conducting a detailed analysis of those criticisms. That is a function that is normally reserved for the traditional costs assessment process.

30. I do not propose to make a gross sum costs order.

Conclusion

31. I order that the defendant pay 80% of the plaintiff’s costs of the defendant’s notice of motion of 12 March 2024 and of the plaintiff's notice of motion of 24 July 2024, including the costs that have been ordered to be costs in the cause of the former motion, and that such costs be payable forthwith upon assessment.

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Endnotes

Amendments

19 December 2024 - Costs order at [31] amended pursuant to slip rule.

Decision last updated: 19 December 2024