PPK Willoughby Pty Ltd v Baird

[2021] NSWCA 212

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

PPK Willoughby Pty Ltd v Baird [2021] NSWCA 212

Hearing dates:

16 August 2021

Date of orders:

16 August 2021

Decision date:

16 August 2021

Before:

Brereton JA

Decision:

1. Within ten business days, the appellant provide security in a form acceptable to the registrar for the sum of $50,000 as security for the costs of the second to 106th respondents of the appeal.

2. The proceedings be stayed until the security is provided.

3. Liberty to apply in the event that the security is not provided in compliance with these orders.

4. Costs of the application for security be costs in the appeal.

Catchwords:

COSTS – Security for costs – On appeal – Statutory power under Corporations Act 2001 (Cth) s 1335 – Relevant factors – Where credible evidence that appellant may be unable to pay adverse costs order if unsuccessful – Where appellant did not appear to oppose security – Reductions to excessive proposed quantum – Security for costs ordered

Legislation Cited:

Corporations Act 2001 (Cth), s 1335

Uniform Civil Procedure Rules 2005 (NSW), r 51.50

Cases Cited:

PPK Willoughby Pty Ltd v Baird [2020] NSWSC 1757

Category:

Procedural rulings

Parties:

PPK Willoughby Pty Ltd (Appellant)
David Baird & ors (2nd to 106th Respondents/Applicants)

Representation:

Counsel:
T Faulkner SC w J D Williams (Respondents/Applicants)

Solicitors:
Gilchrist Connell (Respondents/Applicants)

File Number(s):

2020/370174

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2020] NSWSC 1757

Date of Decision:

8 December 2020

Before:

Harrison J

File Number(s):

2012/163736

Judgment (ex tempore)

1. By notice of motion filed on 4 June 2021 the respondents, being the partners in the law firm HWL Ebsworth, apply for security for costs of an appeal, instituted by notice of appeal filed on 5 March 2021, from a judgment of Harrison J given on 8 December 2020,^[1] in which his Honour gave judgment for the respondents (defendants below) with costs in professional negligence proceedings brought against them by the present appellant.

   1. PPK Willoughby Pty Ltd v Baird [2020] NSWSC 1757.

2. The case, although heard over some eighteen days, was decided on a narrow issue in a judgment of some 21 paragraphs. The notice of appeal seeks, if the appeal succeeds, that the matter be remitted for hearing and determination of the remaining issues. The appeal is therefore of relatively narrow scope, and Mr Faulkner of senior counsel, who appeared for the applicants on the application, responsibly acknowledged that it was probably a one-day rather than a two-day appeal.

3. Security for costs was ordered at first instance. The appellant being a corporation, the respondents are entitled to rely on Corporations Act 2001 (Cth), s 1335, and do not have to show special circumstances as would be required if the application were reliant on Uniform Civil Procedure Rules 2005 (NSW), r 51.50. As was found below and as the evidence before me establishes, there is credible evidence that the appellant, if unsuccessful, may not be able to pay an adverse costs order.

4. The ground is therefore established. The appellant did not appear on the hearing of the motion to oppose the relief sought, and raised no discretionary consideration against the making of an order for security.

5. The respondent's solicitor Mr Haslam has deposed in an affidavit of 4 June 2021 to an estimate of costs of the appeal on a solicitor/client basis of $110,000 approximately plus GST, and the amount of security sought is that amount, subject to a discount of solicitor's costs (but not counsel fees or transcript costs) by 20% to a party/party basis.

6. The estimate includes, for considering and preparing written submissions, three days’ time for each of senior counsel and junior counsel, ten hours for a senior associate and four hours for a principal; for the preparation for the hearing of the appeal, two days for each of senior and junior counsel, eight hours for a lawyer, twenty hours for a senior associate and eight hours for a partner; and for the hearing of the appeal, two days for each of junior and senior counsel, four hours for a partner and twenty hours for a senior associate.

7. The amount of security should be calculated on the basis that the hearing will be one day, not two. In my view, the allowance for written submissions and preparation – being a total of five days for each of junior and senior counsel, as well as for the solicitors involved – is grossly excessive and indulgent. I propose to disallow two-thirds of the amount claimed for written submissions, two-thirds of the amount claimed for preparation, and one-half of the amount claimed for the hearing. That is a total reduction of approximately $52,000, reducing the principal amount to $60,000. Having regard to the fact that allowance then needs to be made for the circumstance that security is calculated on a party/party, not a solicitor/client basis, I would discount that by a further 25% to $45,000. Allowing for GST, I would order security in the amount of $50,000.

8. The Court orders that:

1. Within ten business days, the appellant provide security in a form acceptable to the registrar for the sum of $50,000 as security for the costs of the second to 106th respondents of the appeal.

2. The proceedings be stayed until the security is provided.

3. Liberty to apply in the event that the security is not provided in compliance with these orders.

4. Costs of the application for security be costs in the appeal.

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Endnote

Decision last updated: 09 September 2021