Quest Rose Hill Pty Limited v The Owners - Strata Plan No. 64025

[2013] NSWSC 670

Supreme Court

New South Wales

Medium Neutral Citation:	Quest Rose Hill Pty Limited v The Owners - Strata Plan No. 64025 & Anor [2013] NSWSC 670
Hearing dates:	24 April 2013
Decision date:	28 May 2013
Jurisdiction:	Equity Division
Before:	Sackar J
Decision:	See paragraphs [11] and [16]
Catchwords:	COSTS - Whether to apportion costs
Legislation Cited:	N/a
Cases Cited:	Waters v PC Henderson (Australia) Pty Ltd (1994) 254 Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 Elite Protective Personnel Pty Ltd and Anor v Salmon (No 2) [2007] NSWCA 373 Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 James and Ors v Surf Road Nominees Pty Ltd and Ors (No 2) [2005] NSWCA 296 Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) (2011) 288 ALR 385 McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306
Texts Cited:	N/a
Category:	Costs
Parties:	Quest Rose Hill Pty Limited - plaintiff The Owners Strata Plan No. 64025 & Anor - defendants
Representation:	Counsel: D Grieve QC, J Van Aalst - plaintiff M Ashhurst SC - first defendant P Gray SC, P Koroknay - second and third defendants Solicitors: Lodhia lawyers - plaintiff J S Mueller & Co lawyers - first defendant David de Page, lawyers - second and third defendants
File Number(s):	2010/342330

Judgment

1. In this matter I gave judgment on 13 December 2012. As is apparent from that judgment a multitude of issues was raised by each of the respective parties.

1. As is also plain from the judgment each party was faced with a mixture of success and failure.

Principles

1. It would ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between the particular issues on which it was successful and those on which it failed (Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328). This is "the commencing position" (Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA).

1. However, where the matters upon which a party is unsuccessful took up a significant part of the trial, either by way of evidence or argument (Sabah Yazgi v Permanent Custodians Limited (No 2) at [24]) or where a particular issue or group of issues on which a party is unsuccessful is clearly dominant or separable from those on which it was successful (Elite Protective Personnel Pty Ltd and Anor v Salmon (No 2) [2007] NSWCA 373 at [6] per Beazley, McColl and Basten JJA) the costs of the proceedings may be apportioned among the parties. It appears that this qualification to the general rule may apply more readily to a plaintiff who has raised additional issues on which they failed, than to a successful defendant who reasonably raised additional, but unsuccessful, defences (Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19]-[20] per Hodgson JA with whom McClellan CJ at CL agreed, and at [38]-[39] per Basten JA).

1. Where the court decides to apportion costs, the apportionment itself involves the exercise of discretion, and mathematical precision is said to be illusory (James and Ors v Surf Road Nominees Pty Ltd and Ors (No 2) [2005] NSWCA 296 at [36] per Beazley, Tobias and McColl JJA; Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) (2011) 288 ALR 385 at [84] per Campbell JA with whom Macfarlan and Young JJA agreed).

1. The exercise of the court's discretion as to costs ultimately requires an assessment of what is fair in all the circumstances (McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306 at [22] and [24] per Ward J).

As Between the Plaintiff and the First Defendant

1. In its second further amended statement of claim the plaintiff listed approximately 24 prayers for relief almost all of which were not granted. The first defendant although on balance was in my estimation more successful than the plaintiff was nonetheless denied a number of its prayers for relief and ran a number of arguments in its cross claim which were ultimately unsuccessful.

1. For example, the first defendant spent a significant amount of time attacking the validity of the common property lease on the unsuccessful grounds that the lease was not signed pursuant to a properly passed resolution, that the affixing of the seal was not appropriately witnessed and as a result there was relevantly a fraud such as would lead to a successful challenge to the lease being characterised as indefeasible. An alternative argument was raised by the first defendant that certain provisions of the lease did not enjoy indefeasibility on registration. Further it argued a number of key provisions of the relevant lease were void and/or unenforceable because they contravened certain provisions of the relevant legislation. On all those arguments the first defendant was unsuccessful.

1. However a significant issue which occupied much of the time between the plaintiff and the first defendant was the proper construction of clauses 2.2 and 13.2 of the lease upon which issues the first defendant was entirely successful. These issues were of importance because they went to the very heart of the management of the premises. They also to a large extent dictated the outcome (in favour of the first defendant) to various directions given at the 2010 AGM although this question was more relevant to the second defendant.

1. Were it not for the somewhat complex issues raised by the first defendant on its cross claim I would have been minded on balance to make an order that the plaintiff pay the first defendants costs. However as is apparent from the judgment, whilst the questions on construction were time consuming in and of themselves, a significant amount of time was nonetheless spent determining indefeasibility and like issues.

1. Nonetheless the plaintiff was largely unsuccessful against the first defendant. The first defendant in turn enjoyed some success on its cross claim. In all the circumstances I consider a fair outcome is for the plaintiff to pay 50% of the first defendant's costs of the proceedings.

As Between the Plaintiff and the Second and Third Defendants

1. Again an issue which loomed large was the construction of clauses 2.2 and 13.2. On that issue again the plaintiff was unsuccessful. This took a considerable amount of time in the hearing of the matter and, as is obvious in the analysis of those issues in the judgment, it was a key issue in the proceedings.

1. However, the second defendant resisted specific performance. On that issue the plaintiff was successful, but it should be noted that such a claim was made belatedly in the trial in the second further amended statement of claim.

1. Another issue which occupied time was whether and if so to what extent directions given by the plaintiff to the second defendant as to how to vote at the 2010 AGM were reasonable or not. A further issue that arose was whether the plaintiff could unilaterally appoint a managing agent. On these issues the second defendant was largely successful. Technically the second defendant was also successful in establishing various defaults by the plaintiff under the leases but much of this was really determined on the pleadings.

1. The plaintiff, in its submissions on costs, raises the question of whether the Arbitrator's Award ought to have been enforced. I must confess I did not perceive this to be an issue of any substance at all during the hearing.

1. I consider on balance a fair outcome again is that the plaintiff pay 50% of the second and third defendants' cost of the trial.

1. The second defendant makes a discrete claim in respect of the costs occasioned by debating which orders should or should not be made by way of final relief. The issues raised in the proceedings and therefore precisely the type of relief that ultimately was ordered reflects that complexity. In my view it was necessary for there to be debate and reflection prior to formal orders being made. A number of orders of course were specifically required because of the evidentiary insufficiency on both sides of the record. In all the circumstances I do not think that any special order for costs should be made by reason of additional time being taken in debating the terms of the orders.

1. So far as the third defendant is concerned the plaintiff discontinued the case against him on 3 August 2012 in the course of obtaining leave to file a second further amended statement of claim. An order for costs was made that the plaintiff pay any costs thrown away by reason of those amendments. In my view that order should clearly stand. Whilst it may be said that the case against Mr White in his personal capacity raised some separate issues as opposed to those against the represented lot owners, I am not able to determine on this occasion precisely what argument or arguments were abandoned, but they can be taken up if costs cannot be agreed in the taxation and assessment of Mr White's costs thrown away.

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Decision last updated: 29 May 2013