Metropolitan Petar v Mitreski

[2006] NSWSC 626

CITATION:	Metropolitan Petar v Mitreski [2006] NSWSC 626
HEARING DATE(S):	2 June 2006
JUDGMENT DATE :	2 June 2006
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	No order as to costs of interlocutory injunction application.
CATCHWORDS:	PROCEDURE [553], [573] - Costs - General rule - Costs follow the event - Costs of whole action - Generally - Plaintiff generally successful - Defendants win on some issues - Departing from the general rule - Powers of court - Relevant principle - Whether claims distinct - Whether issues intertwined.
CASES CITED:	Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Others [2006] NSWCA 103 Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2006] NSWSC 480 Metropolitan Petar v Mitreski [2003] NSWSC 262 Metropolitan Petar v Mitreski [2006] NSWSC 336 Rose v Richards [2005] NSWSC 758
PARTIES:	His Grace Metropolitan Petar, the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (P1) The Very Reverend Father Mitko Mitrev (P2) Lambe Mitreski (D1) Pero Damceski (D2) Boris Minovski (D3) Eftim Eftimov (D4) Mile Marcevski (D5) Macedonian Orthodox Community Church St Petka Incorporated (D6) Naum Despotovski (D8) Attorney General for State of NSW (D9)
FILE NUMBER(S):	SC 3369/97
COUNSEL:	T G R Parker SC and R E Steele (Ps) G O Blake SC (Ds1 - 6 & 8) No appearance (D9)
SOLICITORS:	Sachs Gerace Lawyers (Ps) McConnell Jaffray (Ds1 - 6 & 8) I V Knight, Crown Solicitor (D9)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

FRIDAY, 2 JUNE 2006

3369/97 HIS EMINENCE PETAR THE DIOCESAN BISHOP OF THE MACEDONIAN ORTHODOX DIOCESE OF AUSTRALIA & NEW ZEALAND & ORS v LAMBE MITRESKI & ORS

JUDGMENT

1 HIS HONOUR: What has to be decided this morning is what should be done in relation to the costs of the interlocutory injunction application in respect of which I delivered judgment on 27 April 2006: Metropolitan Petar v Mitreski [2006] NSWSC 336 (“my interlocutory judgment”).

2 The application was an unusual one. As appears from my interlocutory judgment, the hearing took 12 days. That is very unusual for an interlocutory injunction application in this day and age. The fact it took so long arises in part from the embattlement of the parties to these proceedings. However, in fairness, it should be said that the application was one that was important to the parties and with, perhaps, far reaching consequences for the conduct of the proceedings. I remind myself that I have conducted one trial of questions ordered to be decided separately and delivered one substantive judgment in those proceedings (Metropolitan Petar v Mitreski [2003] NSWSC 262 – “my substantive judgment”) but there are a considerable number of issues which await a second trial. The degree of the embattlement is illustrated by the fact that applications for leave to appeal from my interlocutory judgment and from a recent interlocutory judgment of the Chief Judge in the judicial advice proceedings referred to below have already been filed. The issues agitated in the interlocutory injunction application go to the expenditure of moneys which are either undoubtedly trust moneys or which are claimed to be trust moneys on the costs of the proceedings, in which the actions of the trustee and those associated with it are impugned.

3 It was plain at all times that on the result of the injunction application might turn the ability of the defendants to continue to be legally represented in these complex and difficult proceedings. Another way in which the result of the interlocutory application is of greater than ordinary significance is the time during which it is likely to operate.

4 I am the managing and trial Judge in respect of these proceedings, but the progress of the matter towards a second trial is bogged down. It is bogged down, in part, over this very issue of the availability to the defendants of funds to allow them to be represented. This turns, to some measure, upon the interlocutory injunction application I have dealt with, but also turns upon the result of judicial advice proceedings, which are properly and necessarily being conducted before another Judge. That Judge has at some times been Palmer J and at other times the Chief Judge. Those proceedings are proceeding very slowly, for reasons which are certainly not the fault of the Court. In addition to complications in the conduct of the proceedings before the primary Judge, there has already been one interlocutory appeal heard by the Court of Appeal in the judicial advice matter, which impeded the progress of that matter before the primary Judge for some seven or eight months. I do not see how things that I have said could be taken as critical of the conduct of that matter by Palmer J and the Chief Judge, but I should make it utterly plain that there is not intended to be a breath of criticism of them in what I have said.

5 It is apparent from these convolutions of the matter that this injunctive relief is likely to be in force for quite some considerable time, almost certainly a longer time than interlocutory relief generally prevails during the ordinary course of proceedings to trial and determination.

6 In this complex and difficult context, Mr Parker, of Senior Counsel for the plaintiffs, has put his submissions on costs in a pleasingly concise and clear fashion. He says simply that, whatever the plaintiffs lost, they obtained a measure of success on their injunction application and that this means it is appropriate that they should have an order for their costs of the application. If they do not have the whole of these costs, they should certainly have a substantial proportion of them, that proportion to be assessed by the Court.

7 I had occasion to consider recently the law of costs in multi issue proceedings in Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2006] NSWSC 480. This matter was dealt with, particularly at [18] - [22] of that judgment, and I need not repeat it here. Those proceedings were longer than these proceedings, occupying 100 days odd, and the costs were of a trial of substantive issues in the case. However, the principles as to multi issue proceedings should not be taken to be substantially different in interlocutory proceedings, where the proceedings are protracted and there are multiple issues.

8 In this case, I do not perceive any disagreement that the arguments on the interlocutory injunction application substantially fell under two heads. The first related to whether or not there should be a restraint in respect of what has been called the Schedule A property, that is, the property which has been determined to be subject to a charitable trust in my substantive judgment. The other head concerned a restraint sought in respect of the use of what may be called the non Schedule A property, that is property of the sixth defendant, the status of which was not determined by my substantive judgment, but which is claimed by the plaintiffs to be subject to a charitable trust, that being an issue to be determined in the second trial in the proceedings.

9 Although there is no dispute that the case was argued under those two heads, there was controversy as to whether or not they could be regarded as discrete issues, in the sense in which that term is used in the cases relating to multi issue proceedings, which I have collected and discussed in Lewis v Nortex supra, or whether the issues and considerations involved were intertwined in such a way that they could not be regarded as discrete. It seems to me that the evidence and submissions concerning these matters were sufficiently separate for them to be regarded as discrete issues.

10 On the issue relating to the non Schedule A property, the defendants were entirely successful. On the issue relating to the Schedule A property, the plaintiffs achieved some success. There has been some debate, and the relevant passages in the transcript are far from entirely clear, as to whether the sixth defendant was at all times ready to undergo injunctive relief restraining the use of the Schedule A property for the costs of the proceedings, being costs incurred after a particular date (“the cut off date”). The sixth defendant put forward three alternative submissions as to the appropriate cut off date. The latest of those was 1 April 2005 and the second latest 26 November 2003. In fact, for reasons given in my interlocutory judgment, I selected a cut off date intermediate between those two, namely, 7 May 2004.

11 The sixth defendant claimed to be allowed to use even Schedule A property for costs incurred up to 1 April 2005, but the injunctive relief was moulded so as to leave them free to do so only up to 7 May 2004. The amount which the sixth defendant claimed to be entitled to expend in relation to costs incurred up to 1 April 2005 was some $612,000. Its counsel stated in argument that what is shown by the evidence is that, on the restraint as ultimately moulded, the sixth defendant was by the injunction granted prevented from expending about $250,000 or 40 per cent of the $612,000 which it claimed it ought be allowed to expend.

12 In general terms, under the established rules the plaintiffs, having succeeded in obtaining a restraint of the expenditure of some $250,000 out of the amount which the sixth defendant sought the liberty to expend, would be taken to be generally successful upon this issue and therefore entitled to an order in appropriate form for the whole of the costs of this issue.

13 Mr Blake, however, contends that this first head should itself be subdivided into two discrete issues. He says that, so far as they, the defendants, won in relation to the expenditure that was not restrained, they had warned the plaintiffs of their resistance to injunctive relief in relation to that subject matter before or at the commencement of the interlocutory hearing. The reasons given for this warning were among the considerations upon which I ultimately refused relief in relation to the non Schedule A property. Mr Blake presses on me that the plaintiffs, in persisting in that application in relation to those moneys, were either making an application which was clearly doomed to failure and were delinquent in that sense, so as to deprive themselves of the right to a general costs order in respect of the first head. He cited to me such cases as the decision of Sir Richard Blackburn CJ in Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21 and the recent decision of Barrett J in Rose v Richards [2005] NSWSC 758.

14 I find the decisions in those cases unexceptionable, but I do not find them apposite to the present case. In Rose v Richards, for example, a litigant in person made by motion an application for the appointment of a liquidator in proceedings that were not winding up proceedings. The opponent, before the argument of the application, pointed out by letter that it was impossible as a matter of law for such an order to be made upon that motion. In those circumstances, the motion ought not have been persisted with. Here, however, the application was determined only after 12 days of litigation and was not entirely easy to decide. It was decided, so far as both heads were concerned, largely upon discretionary considerations. It cannot really be said in those circumstances that the application ought not have been brought or that there was anything inappropriate in the plaintiffs making and prosecuting the application.

15 This means that, as far as I am concerned, having obtained a substantial measure of success under the first head, the plaintiffs are entitled generally to the costs of the application so far as they relate to that head. On the other hand, as I have already said, I regard the two main heads of argument in this case as discrete issues.

16 I advert also to what was said in Lewis v Nortex supra at [16] as to the appropriateness of the Court taking a broad brush approach where proceedings involving various issues have been long and complicated. That means that I do not think that Court time should be taken up with trekking through the extensive transcript and other evidence in this case to determine in any precise way how much of the costs of the proceedings should be attributed to the first head or the second head of the application. The same approach was recently approved and taken in the Court of Appeal in Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Others [2006] NSWCA 103 at [21] - [23] by Ipp JA, with whom Giles and Tobias JJA agreed.

17 Taking that broad approach in this case, it is my view that it is appropriate to say that about one half of the costs of the entire interlocutory application were taken up with each of those two heads of argument. Since in my view the plaintiffs are entitled to the costs on the first head and the defendants are entitled to the costs on the second head, the conclusion that I come to is that the quantum of costs to which the defendants would be entitled against the plaintiffs and to which the plaintiffs would be entitled against the defendants are for practical purposes equal.

18 Various submissions have been put to me as to the result that should follow. Nobody has suggested that I should reserve the costs of the application and I do not think it appropriate to do so. One possible solution is that the costs of the application should be costs in the proceedings generally. Another possible solution is that there should be no order as to the costs of this application. The latter course has the virtue, where so much money is being spent upon this litigation, that there could be no question at any time of the costs of this application having to be assessed, which would in itself be a complicated and costly process. Because of the desirability of avoiding this and because I think that that course in any event achieves substantial justice between the parties in relation to this matter, the view that I have come to is that the order of the Court should be that there be no order as to the costs of the application.

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