Nguyen v Grippaudo

[2017] NSWSC 1209

Supreme Court

New South Wales

Medium Neutral Citation:	Nguyen v Grippaudo [2017] NSWSC 1209
Hearing dates:	04/09/2017
Date of orders:	04 September 2017
Decision date:	04 September 2017
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Declarations and orders by consent; no order as to costs.
Catchwords:	COSTS – where there is a final decision that has not been reached or made after a consideration of the merits – where it was necessary to approach the Court to obtain relief – where the defendant was willing to accept an offer earlier made by the plaintiff – where there is a disputed issue that has not been determined – no order as to costs
Legislation Cited:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Ferguson v Hyndman [2006] NSWSC 538 Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622
Category:	Costs
Parties:	The Nghiep (Andrew) Nguyen) (First Plaintiff) Toan Vuong (Second Plaintiff) Thai Trac (Third Plaintiff) Susan Tailo (Fourth Plaintiff) Peter Fowler Grippaudo (Frist Defendant) Christopher Stone (Second Defendant) Stuart Clark (Third Defendant) Geoffry Underwood (Fourth Defendant) Anthony Herron (Fifth Defendant)
Representation:	Counsel: D A Smallbone (Plaintiff) S J Duggan (Second Defendant)   Solicitors: Solve Legal Pty Ltd (Plaintiffs) Harpur Phillips (Second Defendant)
File Number(s):	2017/242449

Judgment   (ex tempore – revised 4 september 2017)

1. HIS HONOUR: The essential issue in these proceedings is whether the plaintiff's faction or the first defendant's faction controls the affairs of the Edensor Park/Canley Vale branch (the Branch) of the Liberal Party of Australia (NSW Division) (the Division). The only active defendant is the second defendant, who is the State Director of the division.

2. It appears that the issue is perceived to be significant by the plaintiff and the first defendant, because it relates to preselection for Liberal Party candidates for the next elections to be held for Fairfield City Council. It is suggested that control of the Branch may dictate the outcome of that preselection.

3. The proceedings were expedited and fixed for hearing today. The Court was informed on Friday last that there was now no dispute between the plaintiff and the second defendant as to all but two of the orders that the plaintiff seeks. One of those orders relates to the validity of a meeting of the Branch said to have been held on 4 August 2017. The other relates to costs. The second defendant did not oppose the grant of the declaration as to the meeting of 4 August 2017, but did oppose the making of an order for costs against him.

4. In the result, I will make declarations and orders as sought in paras 1 to 9 of the short minutes of order, by consent as to all but para 8 and because I am satisfied that it is appropriate to make the declaration sought in para 8. I will return and make those orders formally in a moment.

5. Thus, when that is done, the issues in the proceedings will have been determined on their merits. There will be a final decision. But it will not be a determination on the merits, or a final decision, reached or made after a consideration of the merits.

6. For the plaintiff, Mr Smallbone of Counsel submits that, nonetheless, costs should follow the event. He points to the fact (undoubtedly correct) that it was necessary for his client to approach the Court to obtain the relief that, in a moment, he will obtain. He points, again correctly, to the fact that the issues had been flagged in correspondence before the hearing, but the second defendant had taken the position that he was bound by a decision of the Disputes Panel of the Division.

7. Until recently, it might have been thought that the real dispute was between the plaintiff and the first defendant, and that the second defendant was there mainly to ensure that the Division was represented, so that any orders made would be binding upon it and obeyed by it. However, all that changed rather quickly, on 28 August 2017, when the first defendant indicated that he would submit save as to costs. In those circumstances, the second defendant was the only person left who had any ability to oppose the relief sought.

8. If the second defendant had not continued to oppose the relief sought, there would still have had to be a hearing on the merits if the plaintiff were to obtain the relief that he seeks. It is very difficult to see how any time would have been saved. In fact, the contrary may be correct, because Mr Smallbone would have had to satisfy the Court that all of the paragraphs in the short minutes were appropriately to be made having regard to the evidence and whatever questions of principle were thrown up by the evidence.

9. The other matter to bear in mind is that on 17 August 2017, the plaintiff’s solicitor spoke to the second defendant's solicitor, stating that if the second defendant consented to the orders, the plaintiff would not seek costs. Some twelve days later (and the day after the first defendant filed his submitting appearance), the second defendant's solicitor wrote to the plaintiff's solicitor purporting to accept the offer that had been made, although, it must be said, in terms pointing out that the second defendant could not consent to order 8 (relating to the meeting of 4 August 2017). Whether or not that could be said to be an acceptance capable of giving rise to a binding contract is a difficult question. It is nonetheless important in a factual sense, because it cleared the air and brought us to the position we are at today. I should add that it has not been suggested that the offer of 17 August 2017 had been withdrawn or otherwise rendered nugatory prior to 29 August 2017.

10. For the second defendant, Mr Duggan of Counsel submits that the appropriate costs order, and the usual one to be made in the circumstances where there has been no hearing on the merits, is that there should be no order as to costs. He relies on the decision of White J in Ferguson v Hyndman [2006] NSWSC 538. His Honour at [1] set out the principle to which I have just referred.

11. The proposition for which Mr Duggan cited Ferguson is well-recognised. It is often traced back to the judgment of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622.

12. In essence, Mr Duggan submitted, his client had behaved reasonably, because he could not consent to the offer in terms unless and until proceedings were commenced. That followed, Mr Duggan submitted, from cl 17.17.7 of the Division's constitution. It is common ground that cl 17.17.7 makes binding upon the Division (and hence upon its State Director, the second defendant) "a decision of the Disputes Panel".

13. Mr Smallbone submits that the rule has no application, because it can relate only to valid decisions of the Panel. In this case, he submits, there was no valid decision, because the impugned decisions was made in circumstances which denied natural justice to the plaintiff.

14. The very fact that Mr Smallbone puts that submission indicates, if I may say so with respect, the wisdom underlying the approach taken by White J in Ferguson, and the propositions asserted by McHugh J in Lai Qin. In effect, to resolve that question, the Court would be required to determine the proper construction of cl 17.17.7, in the events that are either proved or admitted, when no-one is present who wishes to argue the point against the plaintiff.

15. To suggest that the Court should be required to decide a question of principle that is in issue only because it is relevant to costs does not strike me as being consonant with s 56 of the Civil Procedure Act 2005 (NSW).

16. Section 98 of that Act provides that, subject to the act and the rules and any other legislation, costs are in the discretion of the Court. UCPR r 42.1 provides a general guide that, subject to the rules, costs should follow the event. There is however, a well-recognised exception to that general guide in circumstances where there has been a final decision, but not one that was reached after a hearing on the merits.

17. In this case, the relevant factors seem to me to include the second defendant's willingness, admittedly relatively late in the day, to accept the offer earlier made, and the fact that, as I have said, there would have to have been a hearing in any event if the second defendant had filed a submitting appearance. They must include also the fact that there is a disputed question of the proper construction and application of the Constitution, which is one that I do not propose to decide on an application for costs.

18. As against that, there is the fact that the plaintiff had to come to Court to get the relief that he seeks, and has been (more accurately, in a moment will be) vindicated in taking that course.

19. Balancing those conclusions as best I can, I come to the view that there should be no order as to costs as between the plaintiff and the second defendant. To do otherwise would in effect give the plaintiff costs from a defendant who was required to be a party to the litigation but who had no interest in the substance of the real dispute, which was a factional dispute between the plaintiff and the first defendant relating to the affairs of the Branch.

20. For those reasons I make declarations in terms of paras 1, 3, 4, 5, 6, 7 and 8 of the short minutes of order initialled by me and dated today's date. I make orders in accordance with paras 2 and 9. I make no order as to costs. I direct that the exhibit to the plaintiff's affidavit affirmed 8 August 2017 be handed back.

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Decision last updated: 08 September 2017