Norcross Pictorial Calendars Pty Ltd v Central Coast Council (No 2)

[2020] NSWSC 1409

Supreme Court

New South Wales

Medium Neutral Citation:

Norcross Pictorial Calendars Pty Ltd v Central Coast Council (No 2) [2020] NSWSC 1409

Hearing dates:

On the papers

Date of orders:

13 October 2020

Decision date:

13 October 2020

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Claim made by first plaintiff is dismissed; Enter judgment that the defendant pay the second plaintiff $913,439; Defendant pay the second plaintiff pre-judgement interest; Cross-claim is dismissed; Defendant to pay the plaintiffs’ costs of the proceeding (save for costs incidental to the preparation of the court book and the experts reports detailed in [22](5)) and the costs incurred in respect of the asbestos and acid sulphate soil claims to be paid on an indemnity basis; Defendant to pay plaintiffs’ interest on costs and disbursements

Catchwords:

COSTS – whether plaintiff should have the costs of preparing evidence not served or tendered

COSTS – indemnity costs - effect of contractual indemnity

COSTS – interest – whether delay disentitles successful plaintiff to interest on judgment

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bennett v Jones [1977] 2 NSWLR 355

Falkner v Bourke [1990] 19 NSWLR 574

Kalls Enterprises Pty Limited (in liquidation) v Baloglow (No 3) [2007] NSWCA 298

Lahoud v Lahoud [2006] NSWSC 126

Norcross Pictorial Calendars Pty Ltd v Central Coast Council [2018] NSWSC 1475

Norcross Pictorial Calendars Pty Ltd v Central Coast Council [2020] NSWSC 1201

Category:

Consequential orders (other than Costs)

Parties:

Norcross Pictorial Calendars Pty Ltd (First Plaintiff)
PTL Land Pty Ltd (Second Plaintiff)
Central Coast Council (Defendant)

Representation:

Counsel:
M Condon SC with N Bentley (Plaintiffs)
E A Walker (Defendant)

Solicitors:
Holman Webb (Plaintiffs)
Central Coast Council Legal (Defendant)

File Number(s):

2017/348639

Judgment

1. I gave judgment in this matter on 4 September 2020. [1] These reasons assume familiarity with that judgment. I will use the same abbreviations.

   1. Norcross Pictorial Calendars Pty Ltd v Central Coast Council [2020] NSWSC 1201.

2. The plaintiffs were, in substance, successful and, on the face of it, entitled to judgment, interest to judgment, costs and interest on those costs.

3. However, a number of matters continue to divide the parties.

Should the plaintiffs have the costs of preparing evidence not served or tendered?

4. The plaintiffs have incurred costs preparing expert reports from Mr Mariano Rossetto and Ms Tammara Lindsay, as well as an affidavit of Mr Graham Murdoch.

5. Those reports and that affidavit were not relied on by the plaintiffs at the hearing. No explanation is offered by the plaintiffs as to why that evidence was not deployed.

6. I understand the plaintiffs’ submissions that the Court should eschew detailed examination of the manner in which parties conduct litigation and that a party should not necessarily be discouraged from refining or trimming its forensic sails at the peril of an adverse costs order.

7. But here, the Council does no more than submit that the plaintiffs should not have their costs of preparing evidence that they did not use in the proceedings.

8. I accept that submission.

9. I should add that the plaintiffs accept that they should not have the costs of preparation of the Court Book, which was not prepared in accordance with the Court’s directions and which, in particular, was not in a chronological sequence.

Indemnity costs?

10. The plaintiffs submit that they should have their costs on that part of their claims as concerned with the asbestos contamination issue [2] and the acid sulphate soil issue [3] on an indemnity basis.

    2. Dealt with at [108]-[109] of my judgment.

    3. Addressed at [110]-[112] of my judgment.

11. The basis for this contention is cl 7.2 of the JVA which provided that the Council would indemnify the plaintiffs for “legal costs on a full indemnity basis” in relation to those issues.

12. I see no reason not to give effect to this contractual indemnity.

13. It is true that the plaintiffs did not, in terms, claim costs on an indemnity basis. However, cl 7.2 of the JVA featured prominently in the proceedings. The Council must have been aware of its effect and of the fact that the plaintiffs were calculating their costs on an indemnity basis in relation to the asbestos and acid sulphate soil issues.

Interest to judgment

14. The Council accepts it must pay interest on the judgment to be entered in favour of PTL against it.

15. However, the Council submits that PTL should not have interest from 4 September 2019 (a year prior to delivery of my judgment) because on 2 October 2018, some 11 months after the proceedings were commenced, the plaintiffs’ then Statement of Claim was struck out[4] obliging the plaintiffs to, in effect, start afresh.

    4. Norcross Pictorial Calendars Pty Ltd v Central Coast Council [2018] NSWSC 1475 (Lonergan J).

16. Delay does not generally disentitle a successful plaintiff to interest on a judgment. [5] This is because an award of interest is intended to be compensatory and because an unsuccessful defendant has had the benefit of the money ultimately payable to the successful plaintiff during the entirety of the contested period.

    5. Eg Falkner v Bourke [1990] 19 NSWLR 574 at 576B (Priestly JA) and Bennett v Jones [1977] 2 NSWLR 355 at 370 (Moffitt P, Huntley and Samuels JJA agreeing); Kalls Enterprises Pty Limited (in liquidation) v Baloglow (No 3) [2007] NSWCA 298 at [10] (Macfarlan JA; McColl JA and Sackville AJA agreeing)

17. The Council was awarded its costs on its strike out application. The plaintiffs did not seek to disturb that costs order.

18. In my opinion that costs order sufficiently compensated the Council for the delay caused by whatever shortcomings then existed in the plaintiffs’ pleadings.

19. PTL has proved ultimately to be successful and should have interest on the judgment to be entered in its favour from the time its causes of action arose to judgment. The relevant amount is agreed.

Interest on costs

20. Unless the Court otherwise orders, interest is payable on costs. [6]

    6. Civil Procedure Act 2005 (NSW) s 101(4) and (5).

21. The plaintiffs have proposed that such interest be assessed upon the basis suggested by Campbell J (as his Honour was then) in Lahoud v Lahoud; [7] that is to have interest calculated with reference to the proportion that their actual costs bears to those ultimately recovered on assessment. I accept that that is the appropriate course to adopt.

    7. [2006] NSWSC 126 at [85].

22. In those circumstances, I:

1. Order that the claim made by the first plaintiff is dismissed.

2. Enter judgment that the defendant pay the second plaintiff $913,439.

3. Order pursuant to s 100 of the Civil Procedure Act 2005 (NSW) that the defendant pay the second plaintiff pre-judgement interest at the rate prescribed by r 6.12(8) of the Uniform Civil Procedure Rules 2005 (NSW) in the amount of $191,434.

4. Order that the cross-claim is dismissed.

5. Order that the defendant/cross-claimant pay the plaintiffs’/cross-defendants’ costs of the proceeding (save for the plaintiffs’ costs of or incidental to the preparation of the court book that was marked Exhibit ‘A’ and the plaintiffs’ costs of preparing the expert reports of Mariano Rossetto of 15 June 2018 and Tammara Lindsay of 28 August 2019, and the affidavit of Graham Murdoch sworn 24 July 2020), as agreed or assessed, with the costs incurred in respect of the claims concerning asbestos and acid sulphate soil under clause 7.2 of the JVA to be paid on an indemnity basis.

6. Order that the defendant/cross-claimant pay the plaintiffs’/cross-defendants’ interest on costs and disbursements pursuant to s 101(4) and (5) of the Civil Procedure Act 2005 (NSW) from the date on which the costs and disbursements were paid at the prescribed rate under UCPR r 36.7 on the Allowed Percentage (as defined below) of each amount of costs and disbursements actually paid by the plaintiffs/cross-defendants, from the date of payment by the plaintiffs/cross defendants of each such amount of costs and disbursements until the first to occur of:

1. such time as the defendant/cross-claimant has paid the costs due to the plaintiffs/cross-defendants under any order made in these proceedings; or

2. any further order relating to interest on costs in these proceedings.

In this order:

1. X - equals the total amount of costs and disbursements which the plaintiffs/cross defendants have paid or are liable to pay to their legal advisers in connection with these proceedings save for the plaintiffs’ costs of or incidental to the preparation of the court book that was marked Exhibit ‘A’.

2. Y - equals the total amount of costs and disbursements allowed on assessment to the plaintiffs/cross-defendants in connection with these proceedings.

3. The Allowed Percentage equals ((Y/X ) x 100)%.

7. Note the agreement between the parties that these orders are not intended to disturb the operation of previous costs orders made in these proceedings.

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Endnotes

Decision last updated: 14 October 2020