Milicevic v Ferrari East Pty Limited (No 2)

[2022] NSWSC 786

Supreme Court

New South Wales

Medium Neutral Citation:

Milicevic & Anor v Ferrari East Pty Limited & Ors (No 2) [2022] NSWSC 786

Hearing dates:

On the papers

Date of orders:

15 June 2022

Decision date:

15 June 2022

Jurisdiction:

Equity

Before:

Henry J

Decision:

See [9]

Catchwords:

COSTS – whether costs of application for leave to reopen should be awarded on an ordinary or indemnity basis – no issue of principle

Cases Cited:

Ageist Pty Ltd v Samuel M Holdings Pty Ltd (Receiver and Manager Appointed) (No 2) [2021] NSWSC 1216

Gaskin v Ollerenshaw [2010] NSWSC 788

Milicevic & Anor v Ferrari East Pty Limited & Ors [2022] NSWSC 585

N M Rural Enterprises Pty Ltd v Rimanui Farms Ltd [2011] NSWSC 1561

Stanley v Layne Christensen Co [2006] WASCA 56

Category:

Costs

Parties:

Haris Milicevic (First Plaintiff)
Jasmine Milicevic (Second Plaintiff)
Ferrari East Pty Limited ACN 165 532 669 (First Defendant)
Gerard Ferrari (Second Defendant)
Bevan Ferrari (Third Defendant)

Representation:

Counsel:
R Clark with E Watt (Plaintiffs)
J J Young with A Lim (Defendants)

Solicitors:
Mitry Lawyers (Plaintiff)
Gilchrist Connell (Defendants)

File Number(s):

2018/384221

Publication restriction:

Nil

Judgment

1. On 13 May 2022, I published my reasons for granting the plaintiffs leave to reopen their case to file and tender a supplementary expert report and rely on further written closing submission: Milicevic & Anor v Ferrari East Pty Limited & Ors [2022] NSWSC 585 (Judgment). These reasons deal with the issue of costs and assume familiarity with and adopt the same terms as those used in the Judgment.

2. In the Judgment, I deferred making any costs order but noted my preliminary view was that the plaintiffs should pay the defendants’ costs of the application and any costs thrown away having regard to what might be considered to be an indulgence granted by the court: at [39]. In accordance with the directions made, the parties have filed written submissions on the issue of costs.

3. It is common ground that the plaintiffs should pay the defendants’ costs of the application and any costs thrown away. The dispute between the parties is whether costs should be awarded on an ordinary or indemnity basis.

4. The defendants contend that costs should paid on an indemnity basis. They submit that such an order is appropriate in circumstances where granting leave will lead to further steps in the proceedings and some prejudice by way of delay and the incurring of further costs, and a costs order might help to mitigate that prejudice, as recognised in the Judgment at [34]. They submit that the observations of Garling J in Gaskin v Ollerenshaw [2010] NSWSC 788 are applicable to this case, especially as the need to reopen was linked to the delinquency of the plaintiffs’ solicitors. In that case, Garling J stated, at [38]:

“…weighing against the plaintiff’s application is that there is some prejudice to the defendant. The prejudice consists of having to prepare for, and attend court for, the argument on the motion, the taking of the evidence, and the making of any further submissions in the proceedings. That prejudice can be remedied by an order for costs. The plaintiff will be obliged to pay all of the costs associated with this application and the giving of additional evidence on an indemnity basis whatever be the outcome of the proceedings.”

5. That said, there does not seem to be any usual or special rule that indemnity costs will inevitably be granted in cases where leave to reopen is granted. See for example, N M Rural Enterprises Pty Ltd v Rimanui Farms Ltd [2011] NSWSC 1561, a case in which the plaintiff was granted leave to reopen notwithstanding it had made an informed and deliberate decision not to call a witness, the further evidence would lead to delay and consequential costs and the court considered it had been reasonable for the defendants to oppose the application.

6. As the plaintiffs submit, indemnity costs are typically reserved for situations where there is some special or unusual circumstance. While finding that the plaintiffs’ application for leave to reopen was one more properly characterised as arising from an inadvertent error and oversight, most likely on the part of the plaintiffs’ expert and legal representatives (Judgment at [28]), I do not consider that their application raised such special or unusual circumstances or delinquency to warrant the granting of costs on an indemnity basis. The two issues in respect of which leave to reopen were confined, were not addressed by the defendants’ expert in her evidence or in the joint expert session, and one of the issues arose out of an observation made by the court on the last day of the hearing. Further, the grant of leave to reopen has not led to the need to reconvene the court for a further hearing.

7. The plaintiffs’ submissions also contend that it is also appropriate for the Court to revisit its reservation of costs of the defendants’ notice of motion of 2 February 2022 seeking joinder of Ms Milicevic and amendment of their pleadings given the plaintiffs position on costs of this application, namely their acceptance of the ordinary rule that where a party seeks an indulgence of the court, costs thrown away as well as the costs of the motion should be ordered unless it was unreasonable to oppose the orders sought, referring to Stanley v Layne Christensen Co [2006] WASCA 56 at [52] and Ageist Pty Ltd v Samuel M Holdings Pty Ltd (Receiver and Manager Appointed) (No 2) [2021] NSWSC 1216 at [25]. They submit that the court should also now order the defendants to pay the plaintiffs costs of the defendants 2 February 2022 motion as it would not be fair to order the plaintiffs to pay the defendants’ costs in respect of the plaintiffs’ leave to reopen motion without also ordering the defendants to pay the plaintiffs’ costs of the defendants’ motion, which also involved the grant of an indulgence by the court.

8. The plaintiffs’ submissions refer to them having foreshadowed seeking such an order from the court in correspondence between the parties but did not provide that correspondence to the court or indicate what, if any, response was received from the defendants on that issue. In the absence of that material and any submissions from the defendants on that point, I do not accept that it is appropriate to consider and determine the question of costs of the defendants’ amendment application at this time but will deal with it as part of and when the issue of the costs of the proceedings are determined.

9. For these reasons, I order that the plaintiffs are to pay the defendants’ costs of the plaintiffs’ notice of motion filed on 18 March 2022 and the costs thrown away by reason of the orders made on 13 May 2022 on an ordinary basis, as agreed or assessed.

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Decision last updated: 16 June 2022