Moore v Clifforth
[2020] VSC 396
•30 June 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2019 05619
| DR RICHARD MOORE | Plaintiff |
| v | |
| STEPHEN CLIFFORTH (and others according to the attached Schedule) | First Defendant |
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JUDGE: | Derham AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 30 June 2020 |
CASE MAY BE CITED AS: | Moore v Clifforth |
MEDIUM NEUTRAL CITATION: | [2020] VSC 396 |
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COSTS – Discontinuance – Application for preliminary discovery under r 32.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Application abandoned after plaintiff issued substantive proceeding – Plaintiff applying for leave to discontinue with no order as to costs – Application for preliminary discovery flawed from the outset – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 32.05, 25.03, 25.05 and 63.15 – Soteriadis v Nillumbik Shire Council [2015] VSC 363 applied.
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| APPEARANCES: (By written Submission) | Counsel | Solicitors |
| For the Plaintiff | Ms V Plain | Slater & Gordon Lawyers |
| For the First Defendant | Mr S Clement | DWF (Australia) |
HIS HONOUR:
Introduction
The plaintiff (Dr Moore) seeks leave to discontinue this proceeding against the first defendant (Dr Clifforth) under r 25.03 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules), and seeks that Dr Clifforth bear his own costs. The issue is as to the costs, and whether or not Dr Moore should pay Dr Clifforth’s costs and if so on what basis, standard or indemnity.[1]
[1]The application is supported by the affidavit of Robert Auricchio made 5 June 2020 and filed on 9 June 2020 (Auricchio affidavit).
For the following reasons, Dr Moore should pay Dr Clifforth’s costs on an indemnity basis.
Background
By Originating Motion filed on 10 December 2019, Dr Moore sought preliminary discovery under order 32.05 of the Rules from three defendants, Glenelg Surgical Clinic as the first defendant, Dr Clifforth as the second defendant and Dr Uvan Naidoo as the third defendant.
After Dr Clifforth filed his appearance, Dr Moore issued a summons for the relief set out in the originating motion. The summons came on for hearing on 17 February 2020, and was treated as a summons for directions. The Associate Judge ordered that the first defendant’s name be amended to ‘Western District Health Service’ (WDHS), that Dr Moore should file an amended originating motion, that any additional affidavit in support be filed by 11 March and that the matter was otherwise adjourned to 4 May 2020.
On the 16 March an Amended Originating Motion was filed. Oddly, the name of the Glenelg Surgical Clinic was simply deleted, so that Dr Clifforth became the first defendant, and WDHS was made the third defendant. In consequence, there is some confusion in the filed materials about who is what defendant. The WDHS filed an appearance on 18 March 2020. Dr Naidoo has never filed an appearance and is for that reason not considered further in these reasons.
On 1 May 2020, I ordered that a directions hearing scheduled on 4 May 2020 be vacated, and that the parties file and exchange outlines of submissions by 8 June 2020.[2] On 4 June 2020, I ordered by consent that the proceeding against WDHS be dismissed with no order as to costs.
[2]Which was a public holiday, so that the submissions were due on 9 June 2020.
The documents sought were very broadly described and ranged, in point of time, between May 2014 and October 2019. The documents sought largely related to communications by or about Dr Moore with staff of various Hospitals. They also related to his purchase of the Glenelg Surgical Clinic, policies regarding allocation of patient referrals to medical practises and reallocation of surgical patients between surgeons.
Dr Moore commenced proceedings against WDHS and Drs Clifforth and Naidoo on 1 June 2020.[3] He now seeks leave to discontinue the proceeding against Dr Clifforth. He contends that he should not have to pay Dr Clifforth’s costs of this proceeding. Dr Clifforth has filed submissions opposing the application with respect to costs.
[3]Proceeding number S ECI 2020 02407, Moore v Western District Health Service & Ors.
Relevant Law
Because the application was commenced by originating motion, in order to discontinue it Dr Moore must have the leave of the Court or the consent of all other parties: see r 25.03. By r 25.05 where a proceeding is discontinued, liability for costs must be determined in accordance with r 63.15.
By r 63.15, a party who discontinues a proceeding shall pay the costs of the party to whom the discontinuance relates to the time of the discontinuance, unless the Court otherwise orders.
By these rules the wide discretion of the Court as to costs is modified.[4] The modification is that the onus is on the party seeking to discontinue the proceeding to satisfy the Court that the costs should not be paid by him. The principles and factors that the authorities outline on these, and other similar rules in other jurisdictions, have been collected and summarised by Hallen AsJ (as he then was) in Johnson & Anor v Clancy & Anor.[5] My summary of them is as follows:[6]
[4]Unless otherwise expressly provided by any Act or by the Rules, the costs of and incidental to all matters in the Supreme Court are in the discretion of the Court, and the Court has full power to determine by whom and to what extent the costs are to be paid: Supreme Court Act 1986 (Vic) s 24(1).
[5][2010] NSWSC 1301 at [21]; see also One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; 101 FCR 548, at [5]-[8]; Ringwood Plus Pty Ltd v Commissioner of State Revenue [2004] VSC 494 at [13]-[23]; Fehring Livestock Pty Ltd (In Liquidation) [2012] VSC 326 at [30],
[6]This summary is taken from my decision in Soteriadis v Nillumbik Shire Council [2015] VSC 363, [12].
(a) The rule does not give rise to a presumption that costs will be ordered against the discontinuing party.
(b) However, the rule does create a starting position for the plaintiff or discontinuing party to pay the defendant’s costs, subject to a contrary order.
(c) The contrary order itself involves a discretionary decision to be exercised judicially. If there is to be a departure from the starting position, it should be done in a particularised, and principled way. The Court is required to make such order as it thinks just in the particular circumstances of the case.
(d) The burden is on the party who seeks to persuade the Court that a contrary order should be made. If facts are to be relied upon to found the Court making a different order, the plaintiff will bear the onus of proving the relevant facts;
(e) All the relevant circumstances, and not just the fact of discontinuance, should be considered. This may include a consideration of the whole of the proceedings. Generally the discretion will be exercised on the basis of the objective circumstances established on the evidence and not involve the subjective considerations of one party.
(f) A relevant consideration is whether the plaintiff acted reasonably in commencing the proceedings and whether the defendant acted reasonably in defending them. It might also be appropriate for the Court to consider the conduct of the defendant prior to the commencement of the proceedings where such conduct may have precipitated the litigation.
(g) Generally there must be some proper justification, sound positive ground, or a good reason, for departing from the starting position. The reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs, so for example, it may be appropriate to make a contrary order:
(i) where the proceedings have been rendered unnecessary by circumstances beyond the plaintiff’s control;
(ii) where the plaintiff achieved practical success in the proceedings;
(iii) where costs have been significantly increased by the unreasonable conduct of the defendant;
(h) Where the proceedings are discontinued prior to any hearing on the merits, usually it will be impracticable to assess the eventual prospects of success in the action and the Court cannot try a hypothetical action between the parties to determine the question of costs.
(i) There is a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event, or settlement, so removes, or modifies, the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the court’s discretion otherwise than by an award of costs to the successful party. It is the latter type of case that usually creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs.
(j) Where the proceedings are discontinued after interlocutory relief has been granted, the Court may take into account the fact that that interlocutory relief has been granted.
In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, McHugh J observed in a different context:[7]
The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action by which settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. …
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.…
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continue to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the Court will make no order as to the cost of the proceeding. This approach has been adopted in a large number of cases. [footnotes omitted]
[7](1997) 186 CLR 622, 624-5 (citations omitted).
Submissions
Dr Moore
Dr Moore seeks leave to discontinue this proceeding, and submits the Court should exercise its discretion not to award costs against him, on the basis that:
(a) the plaintiff had a proper basis for instituting the proceeding evidenced by the clear omission of particulars in his statement of claim endorsed on the Writ in his proceeding issued on 1 June 2020, which would not have been the case had the defendants provided preliminary discovery of documents; and
(b) despite engaging in lengthy negotiations to narrow the scope of documents to be provided, Dr Clifforth has acted unreasonably in failing to provide documents and, unlike Western District Health, has failed to agree to discontinue the proceeding by consent.
Dr Moore, deposed that he had reasonable cause to believe that he had the right to obtain relief from the prospective defendants and had insufficient information to hand to enable him to make an assessment as to whether or not to commence proceedings. He further deposed to the fact that he had made enquires of the prospective defendants, via his solicitors, which had not been met with a satisfactory response.[8]
[8]Affidavit of Richard Moore made 5 December 2019 (Moore affidavit), [6]-[20]; Exhibits RM-1 – RM-4.
Dr Moore, mindful of his obligations under the Civil Procedure Act 2010 (Vic), did not wish to engage in a costly and protracted preliminary discovery dispute, particularly given the respondents attitude to the provision of documents. Rather than engage in further costly and lengthy correspondence between solicitors, Dr Moore decided to file his statement of claim and did so on 1 June 2020. Dr Moore submits that the deficiencies in his statement of claim in that proceeding show that his application for preliminary discovery had a proper basis.
After commencing this new proceeding, Dr Moore sought consent from the Dr Clifforth to discontinue this proceeding without any order as to costs. The latter was on the basis that it was clear from deficiencies in his statement of claim that Dr Moore needed preliminary discovery. Dr Moore noted that the third defendant had consented to the discontinuance of the preliminary discovery application without any order as to costs.
Dr Moore pre-empted argument from Dr Clifforth that because Dr Moore has commenced his proceeding, r 32.05 does not apply. Dr Moore submitted that this is not unequivocally the law, citing Optiver Australia Pty Ltd v Tibra Trading Pty Ltd,[9] where the Full Federal Court held that even where a person has a reasonable cause to believe that he or she may have a right to relief nevertheless that person may still require information to determine whether the cost and risk of litigation is worthwhile. The reasoning in Optiver was referred to with approval by Besanko J in Astra Zeneca AB v Alphapharm Pty Ltd.[10]
[9][2007] FCA 2065.
[10][2014] FCA 9; See also Poole v Australian Pacific Touring Pty Ltd [2017] FCA 425 at [90].
On this basis, Dr Moore submitted that he was not precluded from seeking preliminary discovery simply because he was able to make out a ‘barely pleadable case.’ It is clear, based upon the pleading as filed, that substantial further particulars are still required, which would have assisted Dr Moore ‘determine whether the cost and risk of litigation is worthwhile.’
There was lengthy correspondence between the solicitors for Dr Moore and Dr Clifforth during which, in good faith, they genuinely sought to narrow the categories of documents sought by Dr Moore. Dr Clifforth’s solicitors seemed receptive to providing discovery of some documents, at least initially.[11] Prior to filing the statement of claim, Dr Moore conveyed to Dr Clifforth that he would withdraw the application on the basis of the provision of a narrower scope of documents.
[11]Auricchio Affidavit, [9]-[11], [13], [14], [16], [17] and [19] together with the Exhibits referred to in each paragraph.
Despite being made aware that Dr Moore no longer wished to press the application for preliminary discovery, Dr Clifforth has failed to provide reasons why he refused to provide the confined categories of documents and to agree to the discontinuance of the proceeding by consent.
Dr Clifforth
Dr Clifforth filed substantive submissions opposing the application for preliminary discovery on 9 June 2020. On the same day, Dr Moore filed submissions seeking leave to discontinue the preliminary discovery proceeding. Dr Clifforth’s solicitors emailed the Court stating they were ‘surprised’ by Dr Moore’s change of position and requested further time to address Dr Moore’s submissions of the 9 June 2020. I granted Dr Clifforth the additional time requested.
Below I have first outlined Dr Clifforth’s submissions regarding the preliminary discovery application, before turning to the submissions that address costs specifically. I have done this as Dr Clifforth’s submissions of 9 June 2020 are referred to in the submissions of 15 June 2020.
Dr Clifforth’s submissions regarding the preliminary discovery application
In forceful and well-constructed written submissions, counsel for Dr Clifforth outlined the evidence advanced by Dr Moore and the law with respect to applications under r 32.05 of the Rules. Reference was made to a range of relevant authorities in this Court and in Courts around Australia, State and Federal, to support the submission, including Alphapharm Pty Limited v Eli Lilly Australia Pty Limited,[12] Morton v Nylex Ltd,[13] Beston Parks Management Pty Ltd v Sexton,[14] Xing Technologies Pty Ltd v Integrated Clinical Oncology Network Pty Ltd,[15] Alex Fraser Pty Ltd v Minister for Planning,[16] and Asahi Beverages Pty Ltd v RFGA Management Pty Ltd.[17] So far as the application of relevant principles to the facts were concerned, the submission undermined the application root and branch and did so with significant success.
[12][1996] FCA 1500.
[13][2007] NSWSC 562.
[14][2008] VSC 392.
[15][2017] FCA 1495.
[16][2018] VSC 391.
[17][2018] VSC 606 (Asahi).
In relation to the description of the documents sought to be discovered, the submission accurately described that there were 33 categories of documents, with up to 16 sub-categories spanning (category A) spanning up to six years (category C) and some were remarkably broad in description. Overall it was submitted that the categories of documents requested excessively broad in scope, onerous to comply with and in many cases with no apparent relevance to matters raised in the Moore Affidavit.
Given this application concerns costs alone, it is not necessary to go into Dr Clifforth’s arguments in depth. The result of the arguments is that Dr Moore’s application under r 32.05 of the Rules would have failed, Dr Clifforth submitted, because the material in support failed to satisfy each of the three prerequisites under r 32.05:
(a) The evidence before the Court did not support Dr Moore’s contention that he had a reasonable belief that he had a right to obtain relief (r 32.05(a)).
(b) Dr Moore has not discharged the onus upon him to show that he has made all reasonable inquiries and taken all reasonable steps necessary before commencing proceedings for preliminary discovery (r 32.05(b)). Dr Clifforth submitted in particular:
(iv) the only enquiry made was to send a letter to the defendants to request documents.[18] There is no evidence of any other enquiries;
[18]The Moore affidavit states that a letter was sent to each defendant before this proceeding was commenced on 10 December 2019 (see para [15]) and exhibits (RM-4) a letter to the WDHS dated 16 October 2019, but no letter to Dr Clifforth. Later, Dr Clifforth’s solicitors corresponded with Dr Moore’s solicitors after the commencement of this proceeding complaining that there is no evidence of any enquiry of Dr Clifforth before the proceeding was commenced: Auricchio affidavit exhibit RA‑6.
(v) critically, as in Asahi, the plaintiff gave no evidence that he had reviewed his own business records or made enquiries of his former employees or colleagues so as to reveal the existence of documents. In fact, Dr Moore had not put forward any evidence of the extent to which he had made such enquiries or searches of his own records;
(vi) there was little evidence of what specific information Dr Moore already had and what further information he requires, so that the documents sought were not shown to ‘fill a gap’ in Dr Moore’s decision making;[19]
[19]Asahi Beverages Pty Ltd v RFGA Management Pty Ltd [2018] VSC 606 at [34].
(vii) the application itself makes plain that Dr Moore knows what occurred and has enough information to make a decision about whether to commence proceedings against Dr Clifforth. The documents sought would not affect any further decision. This is particularly shown by an email sent by Dr Moore’s solicitor on 28 April 2020 stating that:
In view of the delay and lack of response in relation to our offer to finalise the pre discovery application accordingly we are in the process of preparing a Statement of Claim. We confirm we still require the documents previously sort to finalise particulars.[20]
[20]Auricchio affidavit, exhibit RA-15.
It is also shown by later correspondence when on 27 May 2020 the plaintiff’s solicitors stated:
Counsel has drafted the Statement of Claim absent substantial particulars on account of not having the categories of documents set out below. I have sought to negotiate my clients request for discoverable documents to no avail. You are advised that the claim is about to be filed and served, however cannot be properly particularised until the following documents are discovered.[21]
[21]Auricchio affidavit, exhibit RA-16.
(viii) that Dr Moore had (by 9 June 2020)[22] commenced proceedings indicates the plaintiff had ‘sufficient information to enable’ Dr Moore ‘to decide whether to commence a proceeding in the Court to obtain that relief’. The application for preliminary discovery was therefore not justified and should not have been made.
(c) The Moore Affidavit also fails to identify why the plaintiff believes that Dr Clifforth has the documents in his possession, why those documents are relevant to any possible relief or why inspection of those documents would assist the plaintiff to make a decision whether to commence proceedings against Dr Clifforth. Further, given that Dr Moore had commenced proceedings, Dr Moore cannot have reasonably believed Dr Clifforth had documents in his possession which would assist the plaintiff to determine whether he should commence proceedings (r 32.05(c)).
[22]Although the originating motion had not been served as at 9 June 2020.
Dr Clifforth then noted that under s 32.05 of the Rules, the Court has a discretion to refuse a preliminary discovery application, with factors relevant to exercising this discretion being that the application has no real prospect of success and the inconvenience caused to the defendant by the orders for production.[23]
[23]Alex Fraser Pty Ltd v Minister for Planning [2018] VSC 391 [54].
Dr Clifforth also submitted that the categories of preliminary discovery contained in Dr Moore’s originating motion were excessively broad, vague and general in nature, and sought to make inquiries that were not useful in the context of the potential proceedings between the parties.
Dr Clifforth submitted that the Court should refuse the preliminary discovery application entirely, or narrow the categories of documents. Dr Clifforth concluded by stating that Dr Moore should pay Dr Clifforth’s costs of the application, or in the alternative those costs be costs in a proceeding if issued.
Dr Clifforth’s submissions on costs
Dr Clifforth filed further submissions on 15 June 2020, submitting that having regard to the reasons set out in his outline of submissions dated 9 June 2020, it is appropriate for the Court to grant leave to discontinue the application. However, he opposed the costs orders sought by Dr Moore and sought his costs of defending the application on an indemnity basis because:
(a) the applicable principles are set out in Soteriadis v Nillumbik Shire Council[24] (referred to above ([9]-[12]);
[24][2015] VSC 363 [12].
(b) the preliminary discovery application was ‘misconceived from the outset’;[25]
[25]Dr Clifforth’s Written Submissions [9].
(c) the law is that if there is evidence that an applicant has in fact decided to commence proceedings, the application must fail;[26]
[26]Ashai Beverages Pty Ltd v RFGA Management Pty Ltd [2018] VSC 606 [34(h)].
(d) decisions such as Optiver Australia Pty Ltd v Tibra Trading Pty Ltd[27] do not apply here. In that case the applicant still required information to determine whether the cost and risk of litigation was worthwhile. That and the other similar cases are inapt authorities for the scenario where the applicant has already decided to commence proceedings, and has done so;
[27][2007] FCA 2065.
(e) at a very early stage, Dr Clifforth’s solicitors corresponded with Dr Moore’s solicitors and:[28]
[28]Letters from Macpherson Kelly to Slater & Gordon dated 4, 12 and 14 February 2020. Those letters are Exhibits RA-6, RA-8 and RA-10 to the Auricchio affidavit.
(ix)explained why the application was flawed;
(x) offered to provide documents relating to narrowed categories;
(xi)offered at that time, prior to substantial legal costs being incurred, to agree to orders to discontinue the proceeding with no order as to costs; and
(xii) explained that if the offer was not accepted, Dr Clifforth would seek his costs of the proceeding.
(f) Dr Moore did not accept the offer and explicitly refused to engage in further discussion about the issues raised by Dr Clifforth’s solicitors;[29]
[29]Letter from Slater & Gordon to Macpherson Kelly dated 13 February 2020. The letter is Exhibit RA-9 to the Auricchio affidavit.
(g) Dr Clifforth’s position was reasonable in defending the application and attempting to resolve it by making the offers contained in the correspondence;
(h) Dr Clifforth was compelled to needlessly incur legal costs defending this application, including in relation to a directions hearing, further timetabling orders (made ‘on the papers’) and preparing written submissions on the application;
(i) at the directions hearing on 17 February 2020, Associate Justice Mukhtar expressed to Dr Moore’s counsel his concerns with the application;
(j) Dr Clifforth’s solicitors were copied into an email to DLA Piper, representing the WDHS, on 4 June 2020 offering to withdraw the application on the basis that there was no order as to costs (which was accepted). This was not offered to Dr Clifforth;
(k) it was not until 9 June 2020 that Dr Clifforth learnt that Dr Moore proposed to discontinue against him. The application was abandoned at the last minute, without adequate notice, and with no real opportunity for Dr Clifforth to avoid wasted costs;
(l) that his costs should be paid by Dr Moore on an indemnity basis, as his application had been conducted in a manner that wasted the time of the parties and were commenced and continued ‘in wilful disregard of known facts or clearly established law’.[30] In the circumstances of this case, Dr Moore should have known that his application had no prospect of success; and
(m) Dr Moore has contravened his obligations under the Civil Procedure Act 2010 (Vic). As such, in accordance with s 29 of that Act, an indemnity costs order should be awarded.
[30]Citing Cohen v State of Victoria (No 3) [2011] VSC 229; Macedon Ranges Council v Thompson [2009] VSCA 209 [15] (Redlich JA and Beach AJA).
Consideration
The Court’s jurisdiction with respect to ordering costs is discretionary. I have set out above ([9]-[12]) the factors relevant to determination of the costs issue on the grant of leave to discontinue.
It is necessary first to refer to the point that where the proceeding is discontinued before any hearing on the merits, usually it will be impracticable to assess the eventual prospects of success in the action and the Court cannot try a hypothetical action between the parties to determine the question of costs. So if Dr Moore were to discontinue his proceeding now commenced by Writ against the WDHS, Dr Clifforth and Dr Naidoo before a final hearing it would be impracticable, very difficult, and totally inappropriate to attempt to forecast the result hypothetically so as to determine the costs.
That is a proposition that is particularly applicable to a substantive proceeding, as distinct from a preliminary discovery application. In this case, on the evidence before the Court, the submissions filed on behalf of Dr Clifforth make an extremely powerful and persuasive case that there would have been no order in favour of Dr Moore in his application for preliminary discovery. At the very minimum, the matter that is decisive is that Dr Moore did not establish that ‘after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief’, as required by r 32.05(b) of the Rules.
My decision in Asahi demonstrates in a different context the essential requirement that all three prerequisites under the rule must be satisfied and a failure to satisfy the requirement in r 32.05(b) will have the result that the application is dismissed. Dr Moore was given the opportunity to file further evidence in support of the application when the matter was before Mukhtar AsJ on 17 February 2020. It is clear to me that the purpose of that direction was to enable Dr Moore to repair his application, if he could. The opportunity was not taken up.
As I have said, the starting position is that Dr Moore, as the discontinuing party, should pay Dr Clifforth’s costs. The burden is on Dr Moore to persuade the Court that a contrary order should be made. In my view he has not done so. Dr Moore has not, self-evidently, achieved practical success in the application for preliminary discovery.
The application has not been rendered unnecessary by circumstances beyond Dr Moore’s control. The commencement of the substantive proceeding is and has always been a matter within his control.
Once the substantive proceeding against the defendants was commenced, it demonstrated that – to use the words of r 32.05(b) – Dr Moore had sufficient information to enable him to decide to commence a proceeding in this Court against the defendants. As I said in Asahi, if there is evidence that an applicant has in fact decided to commence proceedings, the application must fail.[31]
[31]Asahi, [34(h)] citing Beston Parks [2008] VSC 392, [56].
I agree with the submission made by Dr Clifforth that decisions such as Optiver Australia Pty Ltd v Tibra Trading Pty Ltd[32] do not apply in this case. In that case the applicant still required information to determine whether the cost and risk of litigation was worthwhile. That and the other similar cases are inapt authorities for the scenario where the applicant has already decided to commence proceedings, and has done so.
[32][2007] FCA 2065.
A relevant consideration in the exercise of the discretion as to costs is whether Dr Moore acted reasonably in commencing the proceedings and whether Dr Clifforth acted reasonably in defending them. The correspondence at an early stage after the commencement of the application revealed serious defects in Dr Moore’s application. The defects were pointed out, there was an offer to provide documents in narrowed categories and, before substantial legal costs were incurred, there was an offer to agree to orders to discontinue the proceeding with no order as to costs.[33]
[33]Letter from Macpherson Kelly to Slater & Gordon dated 4, 12 and 14 February 2020. Those letters are Exhibits RA6, RA8 and RA10 to the Auricchio affidavit.
It is astounding, to my mind, that Dr Moore’s solicitor and the solicitors acting for the WDHS agreed for the application to be discontinued, with no order as to costs, on 4 June 2020, and the same proposal was not put to Dr Clifforth, especially when the substantive proceeding had been filed on 1 June 2020 and Dr Clifforth’s solicitors had made that offer as early as 4 February 2020.[34] The result was that Dr Clifforth’s lawyers went to considerable lengths to prepare and file submissions on 9 June 2020, the very day that without warning Dr Moore’s solicitors filed the Auricchio affidavit and accompanying submission seeking leave to discontinue with no order as to costs. The costs of Dr Clifforth have been significantly increased by the conduct of Dr Moore.
[34]Albeit the offer expired on 7 February: Letter Macpherson Kelly to Slater & Gordon, 4 February 2020, Exhibit RA6 to the Auricchio affidavit.
The commencement of the application for preliminary discovery ought to have been known by Dr Moore, properly advised, to be fraught with difficulty. The law in this area is clearly established, indeed I have summarised it compendiously in my decision in Asahi. Dr Moore, properly advised, should have known of the flaws pointed out in correspondence, not just by the solicitors for Dr Clifforth, but also extensively by the solicitors for the WDHS from a very early stage.[35]
[35]Letters from DLA Piper to Slater & Gordon dated 22 November 2019, 6 December 2019, and 4 June 2020, being exhibits RA-2, RA-4 and RA-18 to the Auricchio affidavit.
These matters warrant not only that Dr Moore pay the costs of Dr Clifforth of the proceeding as a whole, but do so on an indemnity basis. The application has been abandoned at the last minute without any justification sufficient to satisfy me that there should be any departure from the starting position.
Conclusion
In the result, for the reasons set out above, Dr Moore will have leave to discontinue the proceeding and be ordered to pay Dr Clifford’s costs of the proceeding on an indemnity basis.
SCHEDULE OF PARTIES
| DR RICHARD MOORE | Plaintiff |
| STEPHEN CLIFFORTH | First Defendant |
| UVAN NAIDOO | Second Defendant |
| WESTERN DISTRICT HEALTH SERVICE | Third Defendant |
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