UTSG Pty Ltd v Sydney Metro

[2018] NSWLEC 128

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

UTSG Pty Ltd v Sydney Metro [2018] NSWLEC 128

Hearing dates:

20, 22 August 2018

Date of orders:

22 August 2018

Decision date:

22 August 2018

Jurisdiction:

Class 3

Before:

Pepper J

Decision:

See orders at [67].

Catchwords:

CIVIL PROCEDURE: application to vacate hearing dates by applicant – expert forensic accounting evidence served late by respondent due to default of applicant to comply with notices to produce financial records – applicant’s expert accounting opinion subsequently withdrawn – expert forensic accounting evidence central to claim – no prejudice suffered by respondent not met by costs if hearing vacated – irremedial fatal prejudice suffered by applicant if hearing not vacated – hearing vacated.

  COSTS: whether the applicant should pay the costs thrown away of the vacated hearing – vacation caused by default of applicant – applicant to pay the respondent’s costs of the vacation of the hearing dates and the costs of the motion to vacate.

Legislation Cited:

Civil Procedure Act 2005, ss 26, 56, 57, 58, 59, 60 and 66

 

Land Acquisition (Just Terms Compensation) Act 1991, ss 55(d), 59(1)(a)-(b), 59(1)(c) or (f), 66

Transport Administration Act 1988

Cases Cited:

Jeray v Blue Mountains City Council; Jeray v Blue Mountains City Council [2011] NSWLEC 218

 

Lane Cove Council v Ross (No 13) [2013] NSWLEC 80

 

Monti v Roads and Maritime Services [2018] NSWLEC 34

 

Palerang Council v Banfield [2012] NSWLEC 85

Wingecarribee Shire Council v O’Shanassy (No 4) [2014] NSWLEC 52

Category:

Procedural and other rulings

Parties:

UTSG Pty Ltd (Applicant)
Sydney Metro (Respondent)

Representation:

Counsel:
Ms A Pearman with Ms C Palmer (Applicant)
Mr R Lancaster SC with Mr N Eastman (Respondent)

  Solicitors:
Mills Oakley (Applicant)
Ashurst Australia (Respondent)

File Number(s):

2017/00249637

Judgment

The Applicant Seeks to Vacate Hearing Dates

1. The applicant, UTSG Pty Ltd (“UTSG”) seeks by notice of motion dated 20 August 2018, to vacate hearing dates in Class 3 compensation for compulsory acquisition proceedings (order 1 of the notice of motion). The matter is fixed for hearing for seven days commencing on 28 August 2018.

2. UTSG also seeks the vacation of order 3 of the short minutes of order made on 2 August 2018, requiring Ms Simran Singh, the director of UTSG, to attend Court to be cross-examined by the respondent, Sydney Metro, on the adequacy of her affidavit response to a notice to produce (order 2 of the notice of motion).

3. The trial vacation application is opposed by Sydney Metro.

4. By consent, for reasons that are explained below, the application to vacate the order for cross-examination of Ms Singh has been deferred, pending receipt of further medical evidence with respect to her current health.

Nature of the Proceedings: Class 3 Compulsory Acquisition Claim

5. The background to the matter is identified in the points of claim filed 29 June 2018.

6. In summary, UTSG has commenced these proceedings pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (“Acquisition Act”) objecting to the amount of compensation offered by Sydney Metro in accordance with the Valuer-General determination, arising from the acquisition of UTSG’s former leasehold interest in part of the premises known as 40 Park Street, Sydney NSW 2000 (“the premises”) on 13 January 2017.

7. Before the acquisition, UTSG leased the premises from Gwynvill Properties Pty Ltd pursuant to registered lease number AH607363B (“the lease”). The lease was transferred from UTSG Consortium Pty Ltd to the applicant, UTSG, by registered transfer AI302520M and a deed of transfer dated 1 January 2014. The lease was granted for a term of five years commencing on 1 March 2013 and terminating on 28 February 2018, with an option to renew for 5 years.

8. The premises comprised the ground floor and first floor of the building and a total floor area of approximately 570m2. A medical centre that traded under the name "V Health Plus" operated from the premises.

9. The ground floor of the premises operated as a retail area and waiting room, while the first floor comprised of an office and consulting rooms. The premises provided services including general medicine, travel inoculations and skin cancer checks.

10. Prior to the transfer, UTSG Consortium undertook a fit out of the premises. However, UTSG Consortium went into liquidation just after the fit out was completed. The lease of the premises was transferred to UTSG, the present applicant.

11. Sydney Metro is carrying out the Sydney Metro City and Southwest project. The premises were acquired for the purpose of the project under the Transport Administration Act 1988 and in accordance with the Acquisition Act.

12. On 4 October 2016 UTSG was served with a proposed acquisition notice in respect of its leasehold interest in the premises. On 13 January 2017 the acquisition was effected by notice published in the NSW Government Gazette.

13. On 19 December 2016 UTSG submitted a claim for compensation to the Valuer-General seeking compensation in the amount of $19,907,948.10 (being disturbance under s 55(d) of the Acquisition Act). The statutory declaration that accompanied that claim form was signed by "Simran Roselyn Singh". Ms Singh is a director (if not the principal director) of UTSG. A revised claim and revised draft valuation report were prepared for the applicant and submitted to the Valuer-General's valuer on 28 April 2017. On the basis of those documents, UTSG revised its original claim seeking compensation in the amount of $10,984,701.00.

14. On 12 May 2017, the Valuer-General determined the compensation to which the applicant was entitled in the amount of $2,136,834 for loss attributable to disturbance under s 55(d) of the Acquisition Act.

15. On 19 May 2017, Sydney Metro sent to UTSG notice of its entitlement to compensation in the amount determined by the Valuer-General, in accordance with s 42 of the Acquisition Act.

16. The proceedings were commenced on behalf of UTSG on 16 August 2017. On 2 May 2018 the Court listed the matter for hearing at the request of UTSG, and over the initial objection of Sydney Metro, for seven days commencing 28 August 2018. A timetable was set down to prepare the matter for hearing having regard to the commencement date.

17. From the points of claim, it appears that UTSG’s claim is for:

1. $20,683,520.76 on a relocation basis; or

2. $48,757,466.00 on an extinguishment basis; and

3. the costs of Supreme Court proceedings brought by Dr Mirza Baig against UTSG (to be advised).

18. Sydney Metro’s position has not yet been formally notified by way of filing a points of defence (which are required to be filed on 28 August 2018). However, its position is that, first, UTSG is entitled to compensation for legal and valuation expenses under ss 59(1)(a)-(b) of the Acquisition Act, and second, that UTSG is not otherwise entitled to any compensation pursuant to either ss 59(1)(c) or (f).

19. As is obvious from the factual description of the proceedings above, the central evidence in these proceedings concerns forensic accounting.

20. UTSG filed an expert accounting report of Mr Mullins of Axiom Forensics on 29 March 2018 (“the Mullins Report”).

21. When the matter came before the Court on 21 August 2018, the only accounting evidence in reply filed by Sydney Metro was that of an expert forensic accountant’s report by Mr Luke Howman-Giles of KPMG Forensics Pty Limited (“the KPMG Report”). However, it was foreshadowed by Sydney Metro that a principal expert accounting report was to be filed by Dr Rodney Ferrier, based on the foundational KPMG Report (“the Ferrier Report”).

UTSG’s Reasons for Seeking the Vacation of the Trial

22. The reasons for UTSG seeking the vacation of the trial are essentially three-fold and were supported initially by two affidavits of Mr Damian Ward, the solicitor for UTSG, sworn on 20 August 2018, with a further affidavit sworn by Mr Ward on 22 August 2018:

1. first, the purportedly late service of the KPMG Report (see the first affidavit by Mr Ward). And the late filing of the Ferrier Report;

2. second, the asserted ill health of the principal director of UTSG, Ms Simran Singh. Ms Singh appears to be, to all intents and purposes, the mind and will of UTSG (see the second affidavit by Mr Ward. In respect of the second Ward affidavit, it should be noted that the Court declined to make an order of confidentiality urged upon it by UTSG in relation to its contents on the basis that there were insufficient grounds warranting the making of such an order); and

3. third, as the Court was informed on 22 August 2018, of the withdrawal by Mr Mullins of his expert evidence on 20 August 2018, following receipt of the KPMG Report (see the third affidavit of Mr Ward, especially at annexure ‘B’), thereby leaving UTSG with no expert accounting evidence, a state of affairs highly prejudicial, if not fatal, to its claim.

23. Sydney Metro indicates that it is ready to proceed next week. In support, Sydney Metro relies upon the affidavit of Ms Kylie Wilson, a solicitor with the law firm Ashurst Australia, who act for Sydney Metro, affirmed on 22 August 2018 (“the Wilson affidavit”), together with affidavits affirmed by Mr Luke Howman-Giles and Dr Rodney Ferrier on 22 August 2018. The latter affidavits were to the effect that, these experts were available for joint conferencing and that with sufficient diligence, the expert evidence could be finalised prior to the commencement of the hearing on 28 August 2018.

24. Plainly the affidavits of Dr Ferrier and Mr Howman-Giles were prepared prior to the service of the third Ward affidavit indicating that Mr Mullins had withdrawn his expert opinion. In such circumstances, whatever timetable is proposed by Sydney Metro to facilitate the matter proceeding next week can no longer be accommodated.

UTSG’s History of Default in the Preparation of its Expert Accounting Evidence

25. According to a schedule of default handed up by Sydney Metro to the Court on 21 August 2018, and the uncontested evidence contained in the Wilson affidavit, UTSG has been in default on numerous occasions of the various timetables set by the Court in the preparation of its evidence, particularly its forensic accounting evidence.

26. These defaults (leading up to the issuing of the 17 May 2018 notice to produce, referred to in greater detail below) include:

1. orders dated 15 December 2017 that UTSG file its evidence, points of claim and provide documents to Sydney Metro by 19 February 2018, which were not complied with;

2. orders dated 2 March 2018 that UTSG file its points of claim and disturbance schedule by 13 April 2018, which were not complied with (although it did serve the report of Mr Mullins on 29 March 2018 on time); and

3. orders dated 27 April 2018 that UTSG file its points of claim, whereas a document entitled “Draft” points of claim was provided because they were yet to have been settled by senior counsel.

27. The Mullins Report contains an attachment (Appendix 15) which purported to be a spreadsheet showing UTSG’s historic revenues. The points of claim rely on the figures in the Mullins Report.

28. The day after the s 34 conference between the parties was terminated, Sydney Metro issued a notice to produce to UTSG dated 17 May 2018, which called for documents in 44 categories that were directly relevant to an understanding of UTSG’s actual revenues, beyond what had been asserted in a spreadsheet appended to the Mullins Report. These included documents that were required to exist by dint of legislation, such as documents likely to exist for taxation purposes, bank records and agreements with the medical service providers. The source documents were necessary to establish the nature of UTSG’s earnings, which were otherwise almost entirely absent from the material contained in the Mullins Report.

29. Upon the issuing of the notice to produce dated 17 May 2018 (“NTP”), UTSG’s further defaults included:

1. failing to serve additional lay evidence in accordance with orders made on 25 May 2018;

2. failing to produce documents pursuant to the NTP by its return on 12 June 2018;

3. failing to serve additional lay evidence in accordance with orders made on 12 June 2018;

4. failing to serve points of claim and additional expert evidence (by Mr Owen Allsopp) in accordance with the 25 May 2018 orders;

5. failure to comply with orders made by Moore J on 25 June 2018 for the production of documents (including the general ledger of the business, the practice management system and bank statements);

6. failure to comply with orders made by Moore J on 2 July 2018 for the production of documents;

7. failure to comply with orders made by Moore J on 24 July 2018 for the production of documents; and

8. continued late service of documents referred to in the NTP.

30. Sydney Metro asserts to have served the KPMG Report (184 pages) in compliance with the timetable (although this was disputed by UTSG). The KPMG Report is a foundation report for the Ferrier Report. The KPMG Report contains serious assertions concerning alleged deficiencies in the preparation of UTSG’s financial reports and materials.

31. On 22 August 2018 Sydney Metro served the report of Dr Ferrier, albeit two or three business days later than required. The late service was due to the failure by UTSG to provide all of its records pursuant to the NTP.

32. Joint reporting was scheduled to have commenced on 20 August and a joint report provided to the parties on 24 August 2018, to enable the evidence to close, the defence to be filed by 28 August 2018, and the parties to provide the Court with submissions prior to the hearing.

33. As referred to above, some time on 20 August 2018, Mr Mullins, acting entirely appropriately given his paramount duty to the Court and consistent with his duties as an expert, withdrew his expert opinion. His reasons for doing so are contained in his letter dated 21 August 2018, annexed to the third Ward affidavit. In summary, it appears that upon receipt of the KPMG Report it became evident that Mr Mullins was not given sufficient documentation and material to proffer an expert opinion and that he did not “consider that he was able to rely upon the financial materials that I have been provided” with.

34. As the above chronology demonstrates, the proceedings have involved a very lengthy interlocutory process, characterised by UTSG’s continual default and non-compliance with court orders.

35. I accept that, as Sydney Metro submitted, to the extent that Sydney Metro was late in the service of any of its expert accounting evidence this was due entirely to the non-compliance and default by UTSG.

36. Further, as Mr Mullins himself makes clear in his letter dated 21 August 2018, he has had to withdraw his opinion because of the failure of UTSG to properly instruct him and provide him with the necessary materials for him to properly form an opinion. That this came to light as a result of the service of the KPMG Report is not the fault, as UTSG sought to submit, of Sydney Metro.

Applicable Legal Principles to the Vacation of Hearing Dates

37. The statutory scheme constituted by the Civil Procedure Act 2005 (“CPA”) relevant to the vacation of hearing dates is contained in ss 56-60 and 66 of that Act. They include the following provisions relating expressly to delay:

59   Elimination of delay

In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.

38. The provisions of s 56 are well known and not recited here.

39. The provisions of s 57 are matters that predominately relate to the efficient management of the Court’s business, namely:

57   Objects of case management

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects:

(a)     the just determination of the proceedings,

(b)     the efficient disposal of the business of the court,

(c)     the efficient use of available judicial and administrative resources,

(d)     the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2)     This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).

40. The CPA expressly deals with adjournments in s 66, granting the Court the power to adjourn proceedings, but the discretion is not unfettered. An express mandatory consideration is referred to in s 58, which provides that:

58   Court to follow dictates of justice

(1)  In deciding:

(a)  whether to make any order or direction for the management of proceedings, including:

…

(ii)     any order granting an adjournment or stay of proceedings, and

…

the court must seek to act in accordance with the dictates of    justice.

(2)     For the purpose of determining what are the dictates of justice in a particular case, the court:

(a) must have regard to the provisions of sections 56 and 57, and

(b)  may have regard to the following matters to the extent to which it considers them relevant:

(i)     the degree of difficulty or complexity to which the issues in the proceedings give rise,

(ii)     the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,

(iii)     the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,

(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),

(v)    the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,

(vi)     the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,

(vii)     such other matters as the court considers relevant in the circumstances of the case.

41. In Wingecarribee Shire Council v O’Shanassy (No 4) [2014] NSWLEC 52, the Court said (at [6]):

The principles to apply to motions to vacate or adjourn hearings were pithily summarised by Ward JA in Kenoss Pty Ltd v Palerang Council [2013] NSWCA 174 (at [13], recently quoted by Sheahan J in Thaler v Cooma Monaro Shire council (No 2) [2014] NSWLEC 51 at [3]):

The power to adjourn proceedings or vacate hearings in s 66 of the Civil Procedure Act2005 (NSW) confers a discretion that must be exercised in accordance with the overriding purpose described in s 56(1) of the Civil Procedure Act and in accordance with the dictates of justice as described in s 58 of that Act. The considerations that must be taken into account include: the prejudice to the respondent by such an adjournment; the prejudice to the applicant if such an adjournment is refused; the circumstances in which the application is brought; and considerations relating to the administration and management of matters in this Court.

42. See also the recent discussion in the decision of Monti v Roads and Maritime Services [2018] NSWLEC 34 (at [24]), which I adopt and apply.

Ill Health of Ms Singh

43. It is convenient to deal and dispense with the second basis for the vacation of the trial, namely, the alleged ill health of Ms Singh.

44. As stated above, the second affidavit of Mr Ward dated 20 August 2018 deposed to the poor health of Ms Singh. That affidavit indicated that Ms Singh would have a further medical consultation on 21 August 2018, at which point, more would be known as to the severity of her condition. On this basis, the Court adjourned the notice of motion to 22 August 2018, so that further medical evidence could be provided to the Court.

43. On 21 August 2018 Mr Richard Lancaster SC, counsel for Sydney Metro, frankly stated that Ms Singh could be expected to face a lengthy cross-examination. Given the nature of the claim outlined in the Class 3 application and the points of claim (even though a defence has yet to be filed) this must be expected.

44. In the third Ward affidavit, Mr Ward gave the following evidence by way of update:

11.   I am informed by Simran Singh and believe:

11.1.   Ms Singh attended the surgical offices of Dr Ian Sutton, a neurosurgeon practicing at St Vincent’s Hospital in Sydney, at 9.15am on 21 August 2018;

11.2.   The consultation took approximately 1 hour;

11.3.   Ms Singh was referred for an MRI scan of the brain as soon as was possible;

11.4.   That scan was undertaken from approximately 11.00am until 12.00pm today;

11.5.   Ms Singh has been prescribed medication, the precise name and details of which she could not advise. However she indicated she has been taking this medication since yesterday morning.

12.   At or about 1.10pm on 21 August 2018, I had a telephone conversation with Dr Ian Sutton at his surgical rooms. Dr Sutton confirmed he had consulted with Ms Singh that morning and was unable to provide any diagnostic analysis as to her health until an MRI Scan had been completed and he had been afforded the chance to analyse the results of the scan.

13.   At or about 11.00am on 22 August 2018, I had a further telephone conversation with Dr Sutton. Dr Sutton confirmed he would be unable to provide any diagnostic analysis until the results of the MRI Scan were available to him. I advised Dr Sutton the matter was to be relisted before the Court at 4.15pm this afternoon. He indicated that he does not customarily work on Wednesday afternoons but would contact me as soon as he had received the MRI Scan and had the chance to analyse it.

14.   As at the time of swearing this affidavit, being approximately 3.10pm today, I have not been contacted by Dr Sutton. I have no means of contacting Dr Sutton other than through his surgery offices and he has advised that he would not be in attendance at those offices this afternoon as set out above.

47. At the hearing on 22 August 2018, Ms Pearman indicated that she had no further instructions on the medical information to provide to the Court.

48. Sydney Metro contends that this ground for vacation of the hearing dates ought not be accepted because:

1. there is no expert medical evidence that would provide an appropriate basis for the Court to find that the director of UTSG, Ms Singh, is unfit to participate in the trial; and

2. Mr Ward’s evidence on information and belief about the medical condition of Ms Singh is an insufficient basis on which to vacate a substantial hearing, especially given that Ms Singh appeared in Court on 21 August 2018, and in light of three decisions in which medical certificates have been provided and proved to be insufficient in the eyes of the Court as an appropriate basis for an adjournment (Jeray v Blue Mountains City Council; Jeray v Blue Mountains City Council [2011] NSWLEC 218 (at [4] and [9]-[10]), Palerang Council v Banfield [2012] NSWLEC 85 (at [10]-[12]) and Lane Cove Council v Ross (No 13) [2013] NSWLEC 80 (at [1]-[2])).

49. Therefore, Sydney Metro submitted, there was no reliable basis upon which the Court could conclude that the hearing cannot proceed solely because of any neurological condition said to be suffered by Ms Singh.

50. Ms Pearman conceded at the hearing on 22 August 2018 that “the Court doesn’t really have medical evidence as to Ms Singh’s health” (T27:35-38).

51. On the basis of this properly made concession concerning the paucity of the medical evidence as to Ms Singh’s health, the Court accepts the submissions of Sydney Metro that Ms Singh’s asserted ill health affords no basis for vacating the hearing.

52. Having said this, although insufficient to warrant a vacation of the trial, I agree with the parties that the purported medical evidence is sufficient to adjourn the application to cross-examine Ms Singh until such time as the medical evidence can be clarified.

Preparation of the Forensic Accounting Evidence

53. Sydney Metro further contends that the remaining ground for vacation of the hearing dates relied upon by UTSG should be rejected because its expert evidence can be accommodated in the preparation for, and hearing of, this matter. In particular:

1. the KPMG Report was served on time and pursuant to directions of the Court;

2. the KPMG Report was foreshadowed on three separate occasions and could not come as a surprise to UTSG;

3. the Ferrier Report has been served. The following matters mitigate the slight delay in the service of that Report, namely:

1. the late service is a consequence of the need for Dr Ferrier to review and take into account the KPMG Report. It could therefore be reasonably anticipated that Mr Mullins could review and form a view about the matters in the KPMG Report within a similar period of time;

2. the filing and service of the KPMG Report was provided as early as possible in light of the late provision of documents and other defaults by UTSG; and

3. the ability to process the information in the KPMG Report is straightforward because, as the Ferrier Report concludes, the business records of UTSG are not sufficiently reliable in order for a business valuation to be carried out;

4. both Mr Howman-Giles and Dr Ferrier have provided affidavits opining that in their opinion the joint reporting can be completed in time to enable the matter to proceed next week; and

5. addressing the considerations in s 58(2) of the CPA:

1. there is no degree of difficulty or complexity which would tend towards an adjournment. UTSG has consciously chosen to present the records of the business in the way that it has, including in the face of the serious contests on the NTP, and there can be no surprise to see evidence doubting the veracity and reliability of that material. Asking for an adjournment to investigate the existence of further documents is tantamount to admitting that the production under the NTP was not complete;

2. Sydney Metro has approached the interlocutory phases in a timely way (including issuing the NTP at the earliest opportunity), whereas UTSG should not be rewarded for its very significant, continued default and lack of diligence;

3. the matter raised above also reflects the matters in s 56(3), namely, the parties obligation to continue to comply with directions;

4. Sydney Metro has made proper use of the rules and practices of the Court, including multiple re-listings to deal with UTSG’s chronic defaults; and

5. there is no injustice to UTSG because it chose to present the material in the manner that it has in the Mullins Report, that is, almost entirely in the absence of any reliable source financial material and has not responded to many of the categories in the NTP.

The Trial Must be Vacated

54. Were it not for the fact that Mr Mullins has now withdrawn his expert opinion, the Court would have little hesitation in accepting Sydney Metro’s submissions and refusing the application to vacate the hearing. Although the Court finds that the withdrawal of his expert opinion was caused by the failure of UTSG to properly instruct and brief Mr Mullins, the fact remains that the withdrawal by Mr Mullins of his opinion leaves UTSG in a gravely prejudiced state that cannot be remedied prior to the hearing commencing next week.

55. When asked, Mr Lancaster SC properly conceded that vacating the hearing would not occasion Sydney Metro any prejudice that could not be dealt with by an appropriate order for costs (T28:40). As he stated, “Sydney Metro will continue on with its business” (T28:39).

56. Having regard to the principles contained in ss 56-60 and 66 of the CPA, and for the reasons given above, the Court accepts, albeit reluctantly, that UTSG’s application must be acceded to.

57. It follows that the hearing of the matter due to commence on 28 August 2018 for seven days is vacated.

58. Sydney Metro’s application to cross-examine Ms Singh as to the adequacy of her documentary disclosure is, however, postponed pending the receipt of further medical evidence.

Costs of the Vacation Thrown Away and of the Motion

59. Unsurprisingly, Sydney Metro sought its costs thrown away by the vacation and its costs of the Motion (limited for present purposes to order 1).

60. UTSG, somewhat courageously in my view, submitted that the appropriate order was that each party should bear its own costs thrown away by the vacation and of the motion, on the basis that each party was guilty of delay in the provision of its expert accounting evidence. The chronology of UTSG’s defaults above enables the Court to swiftly reject this proposition.

61. In Monti the Court made an order in Class 3 proceedings for costs thrown away upon the vacation of a hearing. In doing so, Molesworth AJ said (at [39]):

With respect to the Applicants’ costs thrown away by the vacation of the scheduled hearing dates, the Court has decided that the Applicants should have their costs thrown away paid by the Respondent, irrespective of the final outcome of the primary hearing. Although the normal course in Class 3 proceedings is that an applicant who is successful will be entitled to their costs, given that the outcome in these proceedings are far from being determined, it is appropriate that the Court flags at this stage that the Applicants are entitled to their costs thrown away come what may.

62. In my opinion, such a costs order is more than warranted in the present case.

63. There having been no application that the costs be payable forthwith or on an indemnity basis, I need not consider these issues.

Mediation

64. The Court has the power under s 26 of the CPA to refer the matter to mediation. Given the scant likelihood of this matter being heard this year in light of the Court’s diary, the ongoing difficulties outlined above in the preparation of the expert evidence in this matter to date, the complexity of the claim and the likely cost of a, at the very least, seven day hearing, I am of the opinion that the matter ought to be mediated notwithstanding that it has already been the subject of a conciliation hearing, but only after the expert accounting evidence of the parties has been finalised.

65. When the Court raised the matter with the parties, not unreasonably, the parties requested more time to obtain instructions. Given that the matter must return to the Court for further timetabling, the issue will be canvassed at that juncture.

66. The Court also requested the parties to consider whether or not additional hearing days should be allocated to the final hearing of the matter, that is, beyond the currently allocated seven days.

Orders

67. In addition to the orders made by the Court on 22 August 2018 vacating the hearing of this matter commencing on 28 August 2018 (order 1 of the notice of motion), and adjourning order 2 of the notice of motion (the cross-examination of Ms Singh) until 10am on 28 August 2018 before Pepper J, the Court further orders that:

1. UTSG is to pay Sydney Metro’s costs thrown away occasioned by the vacation of the hearing;

2. UTSG is to pay Sydney Metro’s costs of order 1 of the Notice of Motion filed 20 August 2018; and

3. the matter is stood over for further directions at 10am on 28 August 2018 before Pepper J.

**********

Amendments

28 August 2018 - edit to coversheet

Decision last updated: 28 August 2018