Road Services Group Pty Ltd v John Norman Fletcher

[2017] NSWSC 614

Supreme Court

New South Wales

Medium Neutral Citation:	Road Services Group Pty Ltd & Anor v John Norman Fletcher and Ors [2017] NSWSC 614
Hearing dates:	4 May 2017
Decision date:	17 May 2017
Before:	Sackar J
Decision:	See para [17], [28], [32], [38], [41], [47] and [52].
Category:	Costs
Parties:	Road Services Group Pty Ltd (first plaintiff) Tropic Asphalts Pty Limited (second plaintiff)   John Norman Fletcher (first defendant) Norman George Fletcher (second defendant Fernworx Pty Ltd (third defendant) Newpave Asphalt Pty Limited (fourth defendant) Johjul Pty Limited (fifth defendant)
Representation:	Counsel: S Keizer (plaintiffs) Ms Clemmett (defendants)   Solicitors: Kempstrang (plaintiffs) Sparke Helmore (defendants)
File Number(s):	2015/377458

Judgment

1. This matter came before me in the Expedition List some little time ago and I have granted expedition.

2. It has been fixed for hearing for 15 days commencing 13 June 2017.

3. There have been a significant number of interlocutory disputes between the various parties and costs have been reserved in respect of each of them. This judgment now deals with all outstanding costs issues.

4. The plaintiffs seek their costs of the following:

1. The plaintiff’s notice of motion seeking discovery dated 25 August 2016;

2. The third and fourth defendant’s notice of motion dated 10 October 2106 and the first, second and fifth defendants amended notice of motion dated 12 October 2016 (the subpoena motions);

3. The interlocutory hearing on 14 November 2016;

4. The costs of the directions hearing before Stevenson J on 1 July 2016;

5. The directions hearing on 12 August 2016;

6. The directions hearing on 9 February 2017; and

7. The directions hearing on 10 March 2017.

5. I shall deal with each of the above separately.

The Discovery Motion

6. The plaintiffs sought discovery by notice of motion dated 25 August 2016. I heard the matter on 22 and 23 September 2016.

7. The plaintiffs’ notice of motion attached the proposed discovery categories. Following the commencement of the hearing on 22 September 2016, amended discovery categories were served. The dispute over the amended categories was heard on 23 September 2016.

8. Although the categories sought by the plaintiffs were re-drafted before discovery was ordered, the plaintiffs submit they were largely successful in obtaining an order for discovery in accordance with the amended categories. Further the plaintiffs submit many of the categories were objected to by the defendants on the basis that there were no documents responsive to the category or that the category amounted to fishing.

9. The determination of the objections took a significant period. The plaintiffs submit those objections were largely unsuccessful. The first, second and fifth defendants oppose the application for costs. They quite appropriately refer to the fact I directed the plaintiffs to amend their request, as their initial request was far too general and onerous. Again, those defendants correctly submit the hearing which took place on 23 September was conducted in the context of the amended list of categories provided by the plaintiffs.

10. Those defendants also submit that during the course of argument some of the categories were narrowed or limited and/or clarified further.

11. The third and fourth defendants make similar points as to the width of the categories originally requested by the plaintiffs. As a result of the revision and/or reformulation of the categories the third and fourth defendants submit there should be no costs of the 20 September 2016 hearing, they should have their costs of the hearing of 22 September, they oppose any costs awarded to the plaintiffs for 23 September, and costs of these various dates and on the issue of discovery should be costs in the cause.

12. In response the plaintiffs submit prior to filing their notices of motion seeking discovery they provided the defendants with proposed categories of discovery and invited them to identify objections to those categories in order to reach an agreement and avoid, if possible, the unnecessary costs of the hearing.

13. The plaintiffs submit the first, second and fifth defendants responded to the letter indicating they opposed the application on the basis the categories were too wide and lacked specificity and invited the plaintiffs to withdraw the application. Further a request was made for particulars of each category of discovery.

14. The third and fourth defendants, the plaintiffs submit, contended the application for discovery constituted “fishing” and that the categories had little or nothing to do with the question of liability.

15. Detailed particulars of the proposed categories were provided to the defendants but subsequently all defendants objected to any discovery being given. The plaintiffs submit that where the defendants oppose the plaintiffs’ application for discovery but proposed no form of discovery they would be prepared to give, and where the plaintiffs were largely successful in obtaining orders for discovery, the plaintiffs should have their costs for the motion. I agree.

16. Section 56 of the Civil Procedure Act provides the overriding purpose of the Act and the Rules of court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The Court must seek to give effect to this overriding purpose. However a party to the civil proceedings is under a duty to assist the court to further that overriding purpose (Section 56(3)).

17. Whilst the plaintiffs were overly ambitious, prompting a rebuke at commencement of the application, the defendants not only in respect of this application but others (prior to the change of solicitors and counsel) developed, what in my observation appeared to be, a somewhat obstructive position. They did not act in a collaborative or constructive way. Quite the contrary. In part it was appropriate for them to reject some of the initial categories but in my view they played no constructive role in bringing the discovery motion to a just, quick, and cheap resolution. On that basis, in my view, the plaintiffs should have their costs of the motion including the various days it was before me.

The Subpoena Motion

18. During September and October the plaintiffs served subpoenas on a range of third parties. Pursuant to the subpoena motions the defendants sought to have large parts of the subpoenas set aside. The first, second and fifth defendants, the plaintiffs submit, sought to have part or all of 27 subpoenas set aside. The plaintiffs further submit the first, second and fifth defendants sought to set aside every part of every subpoena that was already the subject of a similar objection by the third and fourth defendants.

19. The plaintiffs further submit the third and fourth defendants sought to have part or all of 18 subpoenas set aside.

20. I determined the subpoena motions which took approximately one day on 13 October 2016. The plaintiffs submit they were almost entirely successful on every matter that was argued. No subpoena was set aside and only a small number of categories for production were limited in some way. The plaintiffs therefore submit they should have their costs of the motions. The first, second and fifth defendants accept some subpoenas were amended and their scope limited and some paragraphs were withdrawn. These defendants also submit a number of the subpoenas were narrowed in scope subsequently by correspondence.

21. These defendants submit that although many subpoenas were submitted and a vast quantity of materials produced, the extent to which the documents produced will ultimately be deployed is not known until the hearing. It is submitted that it may be the case that the time spent reading what may ultimately be considered irrelevant material will amount to significant time lost.

22. On the other hand the third and fourth defendants submit they did not take a global objection to every subpoena issued by the plaintiffs. They submit that their objections in large measure overlapped with objections taken by the other defendants. The third and fourth defendants submit the majority of the hearing time and argument was promoted by counsel for the first, second and fifth defendant, and that any costs order should reflect that. On that basis the third and fourth defendants submit that if costs are going to be ordered in favour of the plaintiffs they should be shared such that the first, second and fifth defendant ought to pay 70% and the third and fourth defendants should pay 30% of the costs as agreed or assessed.

23. The plaintiffs submit, correctly in my view that the first, second and fifth defendants have reserved to them the ability to make an application for a special costs order for the costs of inspection documents produced on subpoena and again, correctly, that such application should await the conclusion of the hearing when the relevance of such documents will then be apparent.

24. The plaintiffs however submit they are entitled to their costs of the notices of motion seeking to set aside the subpoenas which largely failed.

25. Collectively, the plaintiffs submit the defendants objected to every subpoena, and yet the court allowed each subpoena.

26. The plaintiffs also submit, in my view quite correctly, the original hearing date was not vacated by reason of the time required to review the volume of documents procured as a result of subpoenas issued but rather because of my concern the proceedings would not conclude in the time that I had allocated.

27. The plaintiffs make no submissions as to the proposed allocation between the first, second and fifth defendants on the one hand, and the third and fourth defendants on the other.

28. I do not accept the arguments put forward by the defendants and I am of the view the plaintiffs are entitled to their costs of the notices of motion to set aside the subpoenas. Further I do not agree the cost ought to be spread 70% as against the first, second and fifth defendants and only 30% as against the third and fourth defendants. In my view, the two groups of defendants should each bear 50% of the respective costs.

The hearing of 14 November 2016

29. On 14 October 2016 I made orders any defendant wishing to make a privilege claim by Whitelaw McDonald was to provide an itemised list of documents over which privilege was claimed. I listed the matter for resolution on 14 November 2016.

30. An itemised list was served prior to the hearing and the main issue to be determined on that day were the claims for privilege. For various reasons, there was some confusion among the defendants as to which defendant was claiming privilege and therefore which defendant was entitled to be heard on the dispute. Once that was clarified the privilege was claimed by the third and fourth defendants although they were not ready to proceed on that day. In the circumstances the plaintiffs submit their costs of the day were unnecessarily thrown away as the third and fourth defendant should have been ready to argue the matter. The plaintiffs therefore seek their costs of that day. The first, second and fifth defendants accept that the third and fourth defendants were not ready to proceed on that day. However they submit that the claim was dealt with ultimately on the papers and as the hearing listing occupied very little time the costs order should reflect that.

31. The third and fourth defendants submit if costs are to be awarded in favour of the plaintiffs they should be equally borne between the first, second and fifth defendants on the one hand and the third and fourth defendants on the other so that each group of defendants pays 50% of the costs agreed or assessed.

32. The confusion which clearly arose in the defendants’ camps cannot, in my view, be placed at the feet of the plaintiffs. I consider it is appropriate they get their costs of the hearing of 14 November and the two groups of defendants should bear equally those costs so that each makes a contribution of 50% to the plaintiffs’ costs of 14 November 2016 hearing.

Direction Hearing 1 July 2016

33. The plaintiffs seek an order the third and fourth defendants pay their costs for the hearing on the stay.

34. The plaintiffs submit on 20 May 2016 Stevenson J made orders the third and fourth defendants serve their affidavit evidence by 9 June 2016 which was not done. The plaintiffs submit further the third and fourth defendants remain in default and were in default on 1 July 2016.

35. The plaintiffs submit that although Mr Sirtes SC appeared on 1 July 2016 for the third and fourth defendants explaining delays in relation to the preparation of the evidence, no application was made to extend time for evidence and no orders were sought to that effect. The plaintiffs submit that Stevenson J merely stood the matter over to 20 July 2016 before myself at which time I made an order extending the time for the filing of evidence to 5 August 2016.

36. The plaintiffs submit the costs of the directions hearing of 1 July 2016 was entirely wasted and unnecessarily thrown away and request the costs of that day.

37. The third and fourth defendants make no submission in relation to the directions hearing before Stevenson J on 1 July 2016. The first, second and fifth defendants however submit that the costs of the various directions hearings in respect of which a claim for costs is made should be costs in the cause. Further that the time and costs associated with retrospectively piecing together precisely what occurred was outweighed by the need to push on with the case. I do not agree.

38. In my view, the plaintiffs should get their costs of the directions hearing of 1 July 2016.

12 August 2016

39. Having made an order the third and fourth defendants file and serve their evidence by 5 August on 4 August the solicitors for the plaintiffs received an email from the solicitors for the third and fourth defendants advising that their clients would not be in a position to comply with the order by 5 August. The plaintiffs indicated they did not agree to any variation in the orders and as a result of failure on the part of the third and fourth to respond the plaintiffs had the matter relisted before me on 12 August 2016. On that occasion I did make orders extending the time for the filing of the further evidence to 19 August 2016.

40. I agree entirely with the plaintiffs that the relisting of this matter was due solely as the result of the third and fourth defendants’ failure to comply with orders of the court.

41. Again the third and fourth defendants submit these costs should be costs in the cause. I do not agree. In my view the plaintiffs should be ordered the costs thrown away as the result of the 12 August 2016 directions hearing.

9 February 2017

42. On 19 December 2016 I made orders including that Mr Geoffrey Cox be joined as the sixth defendant and that the plaintiffs be given leave to file a further amended summons and an amended statement of claim. An order was also made that the first to fifth defendants file and serve any defences to the amended statement of claim on or before 6 February 2017.

43. On 23 December 2016 the plaintiffs filed and served a further amended summons and an amended statement of claim. The first to fifth defendants did not however file and serve defences by 6 February 2017 and the sixth defendant did not file and/or serve a defence within the 28 day time limit imposed by the Rules.

44. On 3 February 2017 the solicitors for the plaintiffs were advised by the solicitors for the third and fourth defendants that they were ceasing to act on behalf of the third and fourth defendants. At the directions hearing on 9 February 2017 no appearance was made on behalf of the third and fourth defendants. The plaintiffs submit the directions hearing on 9 February 2017 was spent determining a new timetable for the defendants as the previous timetable had not been complied with and therefore further submit they should have their costs of the 9 February 2017 direction.

45. In relation to the 9 February 2017 directions hearing the first, second and fifth defendants submit in the circumstances where they had only recently retained new legal representatives and counsel who were unavailable in January, the delay in February would have been difficult to avoid. Further it is submitted on behalf of these defendants that orders made on 19 December 2016 at the end of the court term and just before Christmas could be described as “optimistic”. As the result of assessments made by counsel in February 2017 a decision was made that further time would be needed by reason of the volume of the documents. It is submitted on behalf of these defendants that this should be seen as part of the exigencies of litigation and some leeway should be given.

46. The plaintiffs’ response is that the new legal representatives for the first, second and fifth defendants went on the record on 6 December 2016. The solicitors with the carriage of the matter then appeared at the directions hearing on 19 December 2016 but made no submissions about likely inability to comply with a new timetable. The plaintiffs submit that from other materials in particular an affidavit of Mr Andrew Pacey dated 10 March 2017 read by the first, second, fifth and sixth defendants on 10 March 2017 new counsel were in fact not briefed until 7 February 2017.

47. Whatever the term “exigencies of the litigation” is meant to encompass timetables should not be agreed to if they cannot be adhered to. The moment a practitioner appreciates that a timetable is not going to be complied with prudence would suggest that not only his or her opponent, but the court, should promptly be informed so as to minimise the need of protracted correspondence and/or unnecessary directions hearing. In my view, the reasons put forward as to why the particular defendants should not meet the costs of the plaintiffs for the 9 February 2017 directions hearing are unacceptable. In my view the plaintiffs again should get the costs of this directions hearing.

10 March 2017

48. On 8 March 2017 the day before the defendants were due to file and serve defences to the amended statement of claim the solicitors for the first, second, fifth and sixth defendants informed the solicitors for the plaintiffs that their clients were unable to comply with the orders made by me on 9 February 2017. The solicitors for those defendants exercised liberty to restore the proceedings before me and the proceedings were indeed listed on 10 March 2017. At that directions hearing the third and fourth defendants were again not represented. The directions hearing was again spent determining a new timetable for the defendants and the plaintiffs seek their costs of this directions hearing.

49. The first, second and fifth defendants submit that the plaintiffs were offered an opportunity to consent to an extension of the timetable which was inevitable in the circumstances. By a letter of 8 March 2017 it is submitted it was proposed that an email be sent to my Associate the terms of which were included in the letter. The proposal it is submitted by these defendants was largely the same as the timetable they ultimately set on 10 March 2017. The defendants submit that although the directions hearing came about as a result of a default in the timetable steps were taken to remove the need for the parties to incur that cost. The defendants also submit that on that occasion the plaintiffs obtained an order relating to the provision of confidential documents to experts so on no view could it be said that the costs of that day were wasted. Again these defendants submit the costs of 10 March 2017 ought to be costs in the cause.

50. The plaintiffs submit the directions hearing on 10 March 2017 occurred solely as a result of the defendant’s default in meeting the already existing timetable for defences. Although the plaintiffs accept these defendants took the proper course in having the matter relisted so as to address their default this does not mean that they should not pay the plaintiffs costs for the relisted hearing. As to the correspondence suggesting a further extension and the plaintiffs’ response by indicating that they would not consent to such an extension by reason of the history of delay, that position in my view was entirely reasonable and appropriate for the plaintiffs to take.

48. The pattern of delay identified above has become somewhat of a recurrent theme. Indeed as recently as 4 May 2017 the plaintiffs had the matter relisted before me again as a result of the default on the part of the defendants in their evidence. I made further directions on that day requiring the defendants to take certain action and ordered that the defendants pay the plaintiffs costs of and incidental to the directions hearing of 4 May 2017.

49. In my view such a pattern can only be addressed in the short term by costs orders. It is my view therefore that the plaintiffs should get their costs of the directions hearing of 10 March 2017. If this pattern of default continues serious consequences may flow.

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Decision last updated: 18 May 2017