Wendt v Northwood [No 2]

[2003] NSWSC 871

CITATION:	Wendt v Northwood [No 2] [2003] NSWSC 871
HEARING DATE(S):	29/08/03
JUDGMENT DATE:	24 September 2003
JUDGMENT OF:	Shaw J
DECISION:	(1) Affirm the order for costs made on 24 June 2003; (2) Dismiss the defendant's notice of motion to revist that order.
CATCHWORDS:	Costs - application to revist proposed costs order - reasonable expectation of costs order following amendment application only in the usual course
CASES CITED:	Ritter v Godfrey [1920] 2 KB 47; Wendt v Northwood [2003] NSWSC 546;
PARTIES :	Roy Wendt - Plaintiff Kenneth Edward Northwood - Defendant
FILE NUMBER(S):	SC 20172/00
COUNSEL:	W Haffenden - Plaintiff D Williams - Defendant
SOLICITORS:	Kenneally & Co Solicitors - Plaintiff Acuiti Legal Solutions - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Shaw J

24 September 2003

20172 of 2000


Roy Wendt (Plaintiff)

v

Kenneth Edward Northwood (Defendant)

JUDGMENT

1 Shaw J: I delivered a judgment in this matter on 24 June 2003. I refer, by way of incorporation, to the text of that judgment: [2003] NSWSC 546.

2 The judgment included orders that the plaintiff was granted leave to file and serve and rely upon an amended statement of claim and that the proceedings were to be then referred to the list judge to set a new hearing date for the proceedings.

3 The only outstanding question was the question of the costs of that amendment application.

4 During the course of that judgment I expressed a tentative view, subject to further argument, that the costs of those proceedings before me, prior to the amendment application, should be the defendant’s costs in the cause. I declined to make any decision as to whether those costs should be awarded on an indemnity basis, because it seemed premature and would be determined more satisfactorily once the trial had been completed. Nonetheless, it seemed to me that the defendant should have the costs thrown away by the amendment.

5 In response to these indications about how those costs would be disposed of, I had a further hearing in relation to those costs. The plaintiff, at that hearing repeated submissions that were made during the amendment application. That is, the plaintiff joined issue with the defendant’s claim for costs, and for indemnity costs, on the basis that:

(a) if the procedural decision [i.e. to grant leave to the plaintiff to amend the statement of claim] then the first defendant should appeal;
(b) there is no ground for the existing application [i.e. of the first defendant to amend the initial order in the judgment of 24 June 2003] in the sense that there is no ambiguity or confusion in the findings made about costs in par [30] – [31] of that judgment;

6 It is further argued that the evidence in the prior proceedings should be used in the present proceedings and, thus, a costs order in the first defendants favour would provide an unjust benefit. Secondly, it is also said that the costs application of the first defendant did not take into account the substantial costs that went into the plaintiff’s amendment application.

7 I acknowledge that it is a reasonable expectation on the part of the defendant that if an amendment application is granted, in the ordinary course, it is on the basis that the defendant will be compensated with the costs thrown away because of the need for the amendment.

8 However, I also note the plaintiff’s submission that it is difficult for the Court to re-visit a matter in a judgment after having heard both parties on the issue.

9 What is sought by the defendant is that the plaintiff should actually pay the defendant’s costs thrown away by reason of the amendment application. However, it should be noted that the plaintiff was successful in the notice of motion that was vigorously opposed by the defendant.

10 I find it unnecessary, at this stage of the proceedings, to determine whether the stance of one party can be described as ‘discreditable’ or ‘reprehensible’. In my view there is a general discretion afforded to the Court in dealing with costs, and despite the reasonable expectation that I have noted earlier, this approach will apply in the ordinary course of events. Here, the plaintiff has provided a reason not to follow the ordinary course, namely, that if these proceedings are based, originally or after the amendment, on a failure by a solicitor of this Court to obey his duties to this Court, then that failure should not be rewarded.

11 I am unpersuaded that the order that the costs of the initial proceedings of the defendant’s costs in the cause was in any way untoward, harsh or oppressive: see Ritter v Godfrey [1920] 2 KB 47 at 53.

12 If the defendant is successful in the subsequent proceedings, he will recover all costs. If he fails in the subsequent proceedings, it will be due to a finding of the court that the defendant has breached his fiduciary duty to his client and may involve a breach of his duties to this Court. If those circumstances arise then the defendant should be entitled to a deduction of the costs paid in the subsequent proceedings on the basis that he successfully defended those initial proceedings, but he should not have the costs of them.

13 It seems to me that there is force in the submission of the plaintiff that it is difficult to assess the conduct of the defendant until the evidence is before the Court and the proceedings are concluded. At that time either party could seek to revisit the interlocutory costs order. I adopt my earlier observation at par [30] of the interlocutory judgment on the amendment application that:

...a determination made by made in a more satisfactory way in a latter stage in the proceedings. It is premature to make such an order until all the facts have been ascertained.

14 In all of these circumstances it seems to me that a balanced and reasoned conclusion is as I have already foreshadowed, having regard to the fact that, as I have said, the plaintiff now seeks to recast his case in a ‘radical’ way ([2003] NSWSC 546 at [5]). There should be some costs benefit to the defendant for the amendment but it is sufficient that the costs ‘thrown away’ should be the defendant’s costs in the cause.

15 Accordingly, I affirm the earlier order and dismiss the notice of motion to review that order.

16 The costs of the defendant’s application to revise the order of the Court on costs should be costs in the cause.

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Last Modified: 09/26/2003