Smith v New South Wales Crime Commission (No 3)

[2024] NSWSC 1610

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Smith v New South Wales Crime Commission (No 3) [2024] NSWSC 1610

Hearing dates:

11 November 2024

Date of orders:

13 December 2024

Decision date:

13 December 2024

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

The fourth defendant bear the plaintiffs’ costs of their motion, as agreed or assessed.

Catchwords:

COSTS – costs of motion – competing claims for indemnity costs and order that each party bear their own costs – whether circumstances warrant a departure from usual order for costs – no justification for departure – usual order made

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 98

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266

Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Smith v New South Wales Crime Commission [2024] NSWSC 1486

Texts Cited:

Nil

Category:

Costs

Parties:

John Smith (a pseudonym) (First Plaintiff)
Jane Smith (a pseudonym) (Second Plaintiff)
New South Wales Crimes Commission (First Defendant)
Director of Public Prosecutions (Second Defendant)
State of New South Wales (Third Defendant)
Jane Doe (Fourth Defendant)

Representation:

Counsel:
D Gasic (Fourth Defendant)

Solicitors:
Zali Burrows at Law (First and Second Plaintiff)
Crown Solicitors (First, Second and Third Defendants)
BlackBay Lawyers (Fourth Defendant)

File Number(s):

2024/165594

Publication restriction:

Nil

JUDGMENT

1. I gave judgment for Mr Smith in November 2024, restraining the fourth defendant from retaining Blackbay Lawyers to advise and represent her in these proceedings: Smith v New South Wales Crime Commission [2024] NSWSC 1486. There is still a dispute between the parties about the appropriate costs order.

2. The fourth defendant sought an order that each party bear their own costs of the motion. The plaintiffs sought that the Court order the fourth defendant to bear the costs of their motion on an indemnity basis and to also give them leave to seek a costs order on a gross lump sum basis, by filing a motion on or before 16 December 2024.

3. I am satisfied that the orders which the parties seek cannot justly be made.

4. The proposal for a motion clearly involving unnecessary costs and the circumstances which arise for consideration not permitting any departure from the usual order under the Uniform Civil Procedure Rules 2005 (NSW), that costs follow the event, if justice is to be done between these parties.

5. The fourth defendant relied on the plaintiffs’ unexplained, ongoing delays and repeated failure to comply with the Court’s orders in respect of the filing of their motion, service of submissions, providing answers to requests for particulars and service of a proposed amended statement of claim, to resist a costs order in favour of the plaintiffs, despite their success on the motion.

6. But not all of what was relied on had any relevance to the appropriate costs order on the motion.

7. What was contended being that the plaintiffs’ approach had resulted in unnecessary expenditure which would have been avoided, had the Court’s orders been complied with, so that the representation issue could have been resolved promptly once raised. The result of their delays being that the fourth defendant was now being put to additional, unnecessary cost in retaining new legal representation, that warranting the exercise of the Court’s discretion to depart from the usual costs order.

8. The plaintiffs relied on having put the fourth defendant on notice of the claimed conflict within 11 days of Blackbay entering an appearance in the proceedings, to support its application for an indemnity costs order. Their later failure to comply with the Court’s orders in relation to the filing of the motion was explained by the difficulty of contacting them, dealt with in the November 2024 judgment.

9. It was also argued that the resulting time before the motion was pursued had given the fourth defendant ample opportunity to deal with Blackbay’s conflict, about which it was always in a position to advise her.

10. The prudent course would have been for Blackbay’s retainer to have been terminated by the fourth defendant, given all that had been disclosed in the evidence she led on the motion. It was urged that when that was considered with the history of the parties’ communications about Blackbay’s position and with the plaintiffs’ difficult circumstances, an indemnity costs order in their favour was warranted. It being known that they have to live overseas on limited sums to support their family, having fled the jurisdiction, with the result that they were incurring considerable expenses, including for their security, as well as for medical and travel expenses.

11. There is no issue about the Court’s wide costs discretion under s 98 of the Civil Procedure Act 2005 (NSW), to depart from the usual order. But costs must be ordered on a principled basis: Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [24].

12. The Court has the power to order costs on an indemnity basis and when there are multiple issues and mixed outcomes in relation to what is in issue between the parties, to make orders which reflect the parties’ respective success on what they put in issue: Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [7]-[14].

13. The issue on which the plaintiffs failed was the claimed joinder of Blackbay as a party to the proceedings. The fourth defendant had earlier raised this with the plaintiffs, who did not respond to or explain why its joinder was sought and then unsuccessfully pressed its joinder at the hearing. The fourth defendant relied on her successful resistance of that joinder, as well as the plaintiffs’ delay and inaction in respect of the filing of their motion, contrary to the Court’s repeated orders and in responding to what she had raised with them, to provide a basis for her proposed departure from the usual order.

14. I have concluded that this cannot be accepted.

15. The issue about the joinder of Blackbay played a minor role in the hearing of the matters over which the parties joined issue and, I am satisfied, of itself cannot justly provide a basis for a departure from the usual costs order.

16. A departure may also be warranted by misconduct in the proceedings: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [69]. The plaintiffs’ failure to adhere to the Court’s orders in relation to the motion may be accepted as involving relevant misconduct.

17. But that must be considered in light of the obvious conflict which the judgment on the motion recognised Blackbay had, together with the difficulties in communication with the plaintiffs, given their undoubtedly difficult circumstances. Light being shed on that even by the evidence led by the fourth plaintiff. That was because of Blackbay’s earlier experiences, when acting for the plaintiffs, which that evidence explained.

18. It is apparent that had these parties and their legal representatives complied with the obligations which s 56 of the Act imposed on them in respect of assisting the Court to facilitate the overriding purpose there specified, the just, quick and cheap resolution of the real issues in these proceedings, the issues raised by the motion could have been resolved without the hearing and determination of the motion.

19. That they were not, reflected both that the parties’ legal representatives did not respond promptly to each other’s communications and that the parties did not adequately consider what they each raised and pursued in respect of the motion which was finally filed.

20. Had their statutory obligations been complied with, the plaintiffs would have recognised that the proposed joinder of Blackbay was unnecessary. And the fourth defendant, a lawyer, that she could not continue to retain Blackbay, given all that the evidence she led resulted in being disclosed at the hearing, that establishing that orders restraining her from retaining Blackbay, had to be made.

21. In all of those circumstances I am not satisfied that the Court can justly exercise its discretion to order a departure from the usual costs order in respect of the motion. Accordingly, I order that the fourth defendant bear the plaintiffs’ costs of their motion, as agreed or assessed.

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Amendments

20 December 2024 - Amended to reflect pseudonym orders made by Schmidt AJ. 20 December 2024

Decision last updated: 20 December 2024