Patakas v Bevan (No.2)

[2017] NSWSC 303

Supreme Court

New South Wales

Medium Neutral Citation:	Patakas v Bevan (No.2) [2017] NSWSC 303
Hearing dates:	On the papers
Date of orders:	31 March 2017
Decision date:	31 March 2017
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Costs of the interlocutory applications heard on 29 and 30 September 2016 to be costs in the cause.
Catchwords:	COSTS – application for an interlocutory injunction – application for summary dismissal – whether the costs of the applications should be costs in the cause – no question of principle
Legislation Cited:	Civil Procedure Act 2005 (NSW) s 98(1) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Deveraux Holdings Pty Limited v Pelsart Resources NL (No.2) Supreme Court of NSW, 24 July 1985, unreported His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Community Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No.2) [2007] NSWCA 142 Patakas v Bevan [2016] NSWSC 1618
Category:	Costs
Parties:	Evangelos Patakas (Plaintiff) Christopher John Bevan (Defendant)
Representation:	Counsel: TGR Parker SC /S Tame (Plaintiff) M Einfeld QC / E W Young (Defendant)   Solicitors: Judd Commercial Lawyers (Plaintiff) WM Lawyers Pty Ltd (Defendant)
File Number(s):	2016/124927

Judgment

1. HIS HONOUR:   In reasons given on 18 November 2016[1] , I decided that:

1. on the application of the plaintiff (the solicitor), the injunction restraining the defendant (the barrister) from proceeding with his applications for assessment of costs should be continued; and

2. the barrister’s application for summary dismissal of the solicitor’s case should be dismissed.

   1. [2016] NSWSC 1618.

2. I expressed the tentative view that the costs of the applications should be costs in the cause[2] . Unsurprisingly, the parties could not agree.

   2. See at [162].

3. The solicitor contended that the costs of his application, for continuation of the interlocutory injunction, should be his costs in the cause, and that he should have his costs of the barrister’s summary dismissal application. The barrister opposed both those applications, and submitted (as I had suggested) that in each case the costs of the application should be costs in the cause.

4. The starting point is that costs are in the discretion of the court[3] . Division 1 of Part 42 of the Uniform Civil Procedure Rules 2005 (NSW) sets out, in subrules 42.1 to 42.11, ways that the costs discretion should ordinarily be exercised in the various factual situations with which each subrule deals. It is plain, including by the repeated invocation of the words “unless the court orders otherwise”, that those subrules are intended to guide rather than to direct the exercise of discretion.

   3. Civil Procedure Act 2005 (NSW) s 98(1).

5. Rule 42.1 provides that unless the court orders otherwise, and subject to Part 42 itself, costs follow the event. It is reasonably clear that the outcome of the interlocutory application may be regarded as an “event”, for the purposes of r 42.1. However, r 42.7 provides, relevantly, that unless the court orders otherwise, the costs of an interlocutory application are to be costs in the cause (a loose but sufficient paraphrase).

6. The function of costs is compensatory, not punitive. In exercising the costs discretion, the court is concerned to achieve, in so far as an order for costs can ever do it, justice between the parties. The compensatory principle and the invocation of the notion of justice are fundamental to the court’s unfettered discretion as to costs, and underlie the position stated, as presumptive at least, in r 42.1. However, the difficulty of recognising where, in an interlocutory application in which the facts and merits that will ultimately be resolved are often not able to be decided, the interests of justice lie, seems to me to underlie the position stated in r 42.7.

7. There will undoubtedly be cases where a respondent’s opposition to the grant or continuation of interlocutory relief is so wrong-headed as to require that the successful applicant should have its costs even ahead of a determination on the merits of the whole of the dispute between them. That I think is what underlies the oft-cited observation of Young J in Deveraux Holdings Pty Limited v Pelsart Resources NL (No.2) [4] .

   4. Supreme Court of NSW, 24 July 1985, unreported.

8. In the passage in question Young J spoke of a respondent who “does not concede the inevitability of an interlocutory injunction being granted” when an arguable or prima facie case was disclosed in the material put before the court. His Honour suggests that in those circumstances, the respondent ought to pay the costs of the interlocutory application.

9. The Court of Appeal referred to that observation with apparent approval in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Community Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No.2)[5] .

   5. [2007] NSWCA 142 at [23] – [26], [32].

10. I do not think that Young J intended to state some general rule for interlocutory applications that, in the absence of a concession once a prima facie case has been shown, the respondent should pay the applicant’s costs. For example, the balance of convenience issues may be very difficult indeed to resolve, and hence justifiably arguable either way.

11. Nor do I think that some such general rule can be drawn from what the Court of Appeal said. In my view, reading what was said in each case in context, the particular circumstances before the court required the unfettered discretion as to costs to be exercised in the manner set out by Young J.

12. I acknowledge that decisions bearing on the exercise of a statutory discretion may provide valuable guidance as to the policy underlying the discretion and the range of factors that may, and in some cases should, be taken into account in considering its exercise. Nonetheless, any attempt to divorce general statements of principle from the precise factual context with respect to which they were uttered is, in my view, dangerous.

13. In the present case, the range of factual and legal issues that required consideration, and required the publication of 165 paragraphs of reasoning spread over more than 40 pages for their resolution [6] , suggests very strongly that the barrister’s opposition to the continuation of the injunction was by no means unreasonable. On the contrary, in my view, there were very powerful arguments each way, and (as so often happens), the resolution came down to balancing, against the impression I formed of the strength of the solicitor’s case overall, the competing and very powerful considerations bearing on the balance of convenience.

    6. Following a two day hearing which, because of its length, had required a special fixture.

14. In my view, this is almost the archetypal case where the costs outcome should be governed by whatever costs order is to be made when the proceedings are heard and determined on a final basis. To do otherwise would run the very real risk that the costs order, instead of achieving justice to the extent that it is possible, would be at least likely to wreak injustice.

15. So far, I have dealt (although not always explicitly) with the costs of the application for an interlocutory injunction. For the reasons I have given, they should be costs in the cause.

16. It was submitted for the solicitor that the application for summary dismissal was a separate event, and that its costs consequences should follow according to r 42.1. It was submitted for the barrister, in response, that the application for summary dismissal was no more than the reflex of the solicitor’s application, and that the former would succeed or fail as the latter failed or succeeded.

17. In principle, I think, the analysis contained in the submissions for the barrister is correct. Although (as the submissions for the solicitor emphasised), the application for summary dismissal was pursued forcefully, the simple fact is that once an arguable case was shown for the purposes of the solicitor’s application, the application for summary dismissal could not succeed. I do not think that the institution and prosecution of the application for summary dismissal had any significant impact (if indeed it had any impact) on the costs incurred in the preparation and prosecution of the interlocutory applications.

18. Thus, in my view, the costs of the application for summary dismissal should be treated as costs in the cause.

19. I order that the costs of the interlocutory applications heard on 29 and 30 September 2016 be costs in the cause.

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Endnotes

Decision last updated: 31 March 2017