Westpac v Lee (Costs)
[2021] VSC 164
•1 April 2021
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT COMMERCIAL LIST – DIGBY J | Not Restricted |
S ECI 2019 5783
| WESTPAC BANKING CORPORATION (ABN 33 007 457 141) | Plaintiff |
| v | |
| ANDI TUAN LEE AND ORS | Defendants |
---
JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 1 April 2021 |
CASE MAY BE CITED AS: | Westpac v Lee (Costs) |
MEDIUM NEUTRAL CITATION: | [2021] VSC 164 |
---
COSTS – Costs of strike out application – Where strike out application adjourned to a date to be fixed pending amendments to pleadings – Where costs of and occasioned by adjourned strike out application reserved – Default position that interlocutory costs are ‘costs in the proceeding’ – Default position that interlocutory costs are not taxable until after completion of the proceeding – Whether court should depart from default position - Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 63.20, 63.20.1.
---
The papers filed:
Plaintiff’s Material
Submissions filed 24 February 2021
Affidavit of Colin Almond sworn 24 February 2021
Eighth Defendant’s Material
Submissions filed 12 February 2021
HIS HONOUR:
These reasons concern competing costs applications by Westpac Banking Corporation (the plaintiff) and AJ&J Partners Pty Ltd (the eighth defendant) in respect of costs of and incidental to the Summons of the eighth defendant filed 6 April 2020 (the 6 April 2020 Summons) seeking to strike out claims made against the eighth defendant by the plaintiff in its Statement of Claim filed 25 February 2020 (the Statement of Claim), as amended.
Those competing costs applications in summary are as follows –
Orders sought by the eighth defendant against the plaintiff in relation to Submissions filed 12 February 2021:
(a) The eighth defendant, by its Submissions filed 12 February 2021,[1] seeks orders that the plaintiff pay its costs of and incidental to:
[1]See also Affidavit of Colin Almond, 24 February 2021 (Second Almond Affidavit).
(i) the eighth defendant’s 6 April 2020 Summons;
(ii) the adjourned directions hearing scheduled for 15 May 2020 (adjourned to 7 October 2020); and
(iii) the eighth defendant’s Submissions filed 14 August 2020;
(b) That the plaintiff pay its costs thrown away by reason of the amendments to the Statement of Claim and the Amended Statement of Claim filed 30 June 2020 (the Amended Statement of Claim), including costs associated with the eighth defendant’s Defence filed 27 March 2020;
(c) That such costs payable by the plaintiff pursuant to the preceding two paragraphs be payable on a standard basis and to be immediately taxed in default of agreement.
Orders sought by the plaintiff against the eighth defendant pursuant to Submissions filed 24 February 2021:
(d) The plaintiff, by its Submissions filed 24 February 2021, seeks orders that the eighth defendant pay the plaintiff’s costs occasioned by the 6 April 2020 Summons incurred after 30 June 2020 or alternatively, there be no order as to costs.
Background
Sufficient of the relevant history of the proceeding is set out at [4]-[5] of my Ruling in this proceeding on 22 May 2020.[2]
[2]Westpac Banking Corporation v Lee & Ors [2020] VSC 291, [4]-[5].
The eighth defendant, by its 6 April 2020 Summons, applied under r 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) for an order that the Statement of Claim be struck out (the Strike Out Application).
The plaintiff applied for an adjournment of the hearing of the Strike Out Application and applied for leave to amend its Statement of Claim.
The Court determined that the plaintiff should be ’permitted to develop its proposed amended statement of claim’[3] and granted the plaintiff leave to file and serve an Amended Statement of Claim by 4:00pm on 12 June 2020. The costs of and associated with the Strike Out Application were reserved, and the Strike Out Application was adjourned.[4]
[3]Ibid [37].
[4]Westpac Banking Corporation v Lee & Ors [2020] VSC 291.
In making the Orders summarised in the last preceding paragraph, I provided Reasons on 22 May 2020. With respect to costs reserved, those Reasons stated:[5]
40.In addition the defendants will be entitled to make such applications as to costs as they consider justified and those costs claims, including the costs associated with their present strike out summonses, the adjourned directions hearing of 15 May 2020, costs thrown away and the defendants’ costs in relation to any future strike out applications, will be addressed and determined in near future.
41.Accordingly, I do not consider it to be efficient or costs effective to deal further with only parts of the defendants’ likely costs associated with the plaintiff’s amendments to its pleadings at this point. Further, it is likely that if issues as to costs are deferred to be decided at the conclusion of the plaintiff’s amendment of its statement of claim, or attempts to amend that pleading, the Court will be better able to evaluate where costs should lie in relation to the present pleading disputes and associated applications.
[5]Ibid.
The plaintiff filed its Amended Statement of Claim on 30 June 2020.[6]
[6]Pursuant to Orders of Digby J made 29 June 2020, [1].
By letter dated 17 July 2020, the solicitors for the eighth defendant communicated with the solicitors for the plaintiff alleging deficiencies with the Amended Statement of Claim, including inconsistency between the relief foreshadowed in the pleading and the prayer for relief.[7]
[7]Second Almond Affidavit, [17]; Exhibit ‘CMA-3’.
By letter dated 22 July 2020, the solicitors for the plaintiff responded to the solicitors for the eighth defendant, setting out proposed amendments to the Amended Statement of Claim to address the issues raised. The solicitors for the plaintiff advised that upon receipt of the eighth defendant’s consent to the proposed amendments, proposed consent orders would be circulated.[8]
[8]Ibid [18]; Exhibit ‘CMA-4’.
By email dated 27 July 2020, the solicitors for the eighth defendant advised the solicitors for the plaintiff that it did not oppose the proposed amendment to the Amended Statement of Claim, and requested that consent orders be circulated.[9]
[9]Ibid [19]; Exhibit ‘CMA-5’.
By email dated 30 July 2020, the solicitors for the plaintiff advised the solicitors for the eighth defendant in substance that it did not propose to circulate consent orders to give effect to the proposed amendment while there were strike out applications in train (by the eighth defendant and other parties), as it would be more efficient to deal with any potential amendments to the Amended Statement of Claim in their entirety following the conclusion of such strike out applications.[10]
[10]Ibid [20]; Exhibit ‘CMA-6’.
Between 30 July and 2 August 2020 there was further communication between the parties’ solicitors. By email dated 3 August 2020, the solicitors for the eighth defendant advised the solicitors for the plaintiff in substance that the eighth defendant is unable to plead its defence where no proposed Further Amended Statement of Claim has been served, and if the amendments were not forthcoming, the eighth defendant would pursue its Strike Out Application in respect of the Amended Statement of Claim.[11]
[11]Ibid [21]; Exhibit ‘CMA-7’.
Pursuant to consent Orders made 7 October 2020,[12] as amended by further consent Order made 23 November 2020, the Strike Out Application was adjourned to a date to be fixed, not before 14 December 2020, and the plaintiff was required to serve its proposed Further Amended Statement of Claim. The plaintiff ultimately served its proposed Further Amended Statement of Claim on 6 November 2020.
[12]Orders of Digby J made 7 October 2020; see also Order of Digby J made 23 November 2020.
Pursuant to the Order of 7 October 2020, as amended by Order of 23 November 2020, in the event the eighth defendant maintained an objection to the proposed Further Amended Statement of Claim, it was required to serve written notice of such objection on the plaintiff by 4:00pm on 20 November 2020.
Neither the eighth defendant nor any other defendant provided notice of objection as foreshadowed in the preceding paragraph. Accordingly, the plaintiff filed its Further Amended Statement of Claim on 23 November 2020.
The second, third and fourth defendants (the Phan Defendants) acknowledge that the issues with the Statement of Claim and its further iterations have now been finalised.[13]
[13]Phan Defendants’ Submissions, [7]; note also that in light of the consent Order dated 10 March 2021 between the plaintiff and Phan Defendants, this admission is likely no longer relevant.
The plaintiff, by email dated 25 February 2021 (5:45pm), advised that it consents to an order that it pay the eighth defendant’s costs, including its reserved costs, in relation to the 6 April 2020 Summons, incurred up to and including 30 June 2020.[14] As a result of the plaintiff’s concession, the orders sought by the eighth defendant for costs incurred prior to 30 June 2020, including costs in respect of the adjourned directions hearing scheduled for 15 May 2020 and costs incurred prior to 30 June 2020 by reason of amendments to the plaintiff’s Statement of Claim, including costs associated with the eighth defendant’s Defence filed 27 March 2020, no longer require consideration or determination.
[14]Plaintiff’s solicitors email, 25 February 2021 (5:45pm).
Submissions
The eighth defendant’s submissions
The eighth defendant submits that the 6 April 2020 Summons was necessary where the ‘obvious deficiencies’ with the Statement of Claim were raised in correspondence with the plaintiff however no substantive response was forthcoming. The eighth defendant says further that in response to the Statement of Claim, on a reservation of rights basis, the eighth defendant filed the Defence and that, in connection with the 6 April Summons, the eighth defendant filed written submissions on 9 April 2020, 30 April 2020 and 11 May 2020.[15]
[15]Eighth Defendant Submissions, 12 February 2021, [1].
As pointed out by the plaintiff, and foreshadowed at [18] above, in light of the plaintiff’s consent to an order that it pay the eighth defendant’s costs, including its reserved costs, in relation to the 6 April 2020 Summons incurred up to and including 30 June 2020, it is unnecessary for me to deal with potential cost related issues before that date.[16]
[16]See Plaintiff Submissions, 24 February 2021, [33].
The eighth defendant submits that the plaintiff’s Amended Statement of Claim was filed late (pursuant to orders made on 29 June 2020) and was also defective, which defects it submits were acknowledged by the plaintiff in July 2020, and consequentially the eighth defendant was required to put on further submissions filed 14 August 2020.[17]
[17]Eighth Defendant Submissions, 12 February 2021, [3].
The further matters raised by the eighth defendant in written submissions include that the plaintiff initially refused to accept that the Statement of Claim required amendment, and the plaintiff thereafter failed to articulate its claim in a sustainable fashion until November 2020, causing the eighth defendant to incur costs and materially delaying the progress of the proceeding, all while the eighth defendant remains subject to a freezing order.
The eighth defendant applies for an order that costs awarded against the plaintiff be capable of immediate taxation. Citing the Victorian Court of Appeal in Setka v Abbott (No 2)[18] (Setka) the eighth defendant submits that the Court’s discretion in this regard to depart from the default position under r 63.20.1 of the Rules regarding the taxation of costs of an interlocutory application or hearing (and r 63.17 regarding amendment) is plainly enlivened in circumstances where:[19]
[18][2013] VSCA 376.
[19]Eighth Defendant Submissions, 12 February 2021, [4]; [2013] VSCA 376, [27].
(a) there is the prospect of considerable delay in completion of the proceeding;
(b) the 6 April 2020 Summons pertained to a discrete issue (being the plaintiff’s pleading);
(c) the plaintiff’s conduct has been unsatisfactory.
The plaintiff’s submissions
The plaintiff submitted that it was necessary to retain the services of a forensic expert (Deloitte) to be able to plead with precision how, where and to which of the relevant defendants the misappropriated funds were channelled, and that this was a complex task involving thousands of transactions. The plaintiff has also filed evidence to substantiate these submissions.[20]
[20]Plaintiff Submissions, 24 February 2021, [4]; Affidavit of Colin Almond sworn 11 May 2020 (First Almond Affidavit), [17]-[23].
The plaintiff submits that in order to address missing links in relevant transaction chains it was necessary to issue a number of subpoenas, and that between 9 June and 9 October 2020, the plaintiff was in receipt of various bundles of statements of account which were then passed on to Deloitte to enable it to undertake its forensic assessment.[21] The plaintiff submits that these processes were necessarily made more time consuming as a result of various lockdown restrictions in place due to the Covid-19 public health crisis and associated Australia Post delays,[22] requiring the plaintiff to seek extensions of time in which to serve the proposed Further Amended Statement of Claim.[23]
[21]Plaintiff Submissions, 24 February 2021, [10]; see also Second Almond Affidavit, [4]-[12].
[22]Plaintiff Submissions, 24 February 2021, [10].
[23]Ibid [11].
The plaintiff submits that the near completion of Deloitte’s task has advanced the parties’ readiness for trial, and the parties have the advantage of the plaintiff’s case now being based on accurate accounting and having a full picture of the relevant transactions.[24]
[24]Ibid [24].
The plaintiff submits that, save for the amendments in the Further Amended Statement of Claim that were foreshadowed in the plaintiff’s letter to the eighth defendant on 22 July 2020 (as described above at [10]) the amendments made in the Further Amended Statement of Claim do not impact upon the claim made against the eighth defendant.[25]
[25]Ibid [37].
The plaintiff submits that the eighth defendant admits that the first defendant has a beneficial interest in the property registered in the name of the eighth defendant, and says that this interest was acquired using misappropriated funds. Therefore, the plaintiff submits, the relevant property is susceptible to a judgment for an order for sale.[26]
[26]Ibid [38].
The plaintiff further submits that in all the circumstances the eighth defendant’s conduct was unreasonable and in conflict with the overarching duties set out in the Civil Procedure Act 2010 (Vic): not to take any step in a proceeding unless that step is necessary to facilitate the resolution of the proceeding;[27] to cooperate with other parties and the court in the conduct of the proceeding;[28] and to use reasonable endeavours to ensure costs incurred in connection with the proceeding are reasonable and proportionate having regard to the complexity or importance of the issues in dispute and the amount in dispute.[29] The plaintiff submits that it follows that the eighth defendant should pay the plaintiff’s costs of and in connection with the 6 April 2020 Summons incurred after 30 June 2020, or alternatively there be no order for costs.
[27]Civil Procedure Act 2010, s 19.
[28] Ibid s 20.
[29]Ibid s 24. Plaintiff Submissions, [39].
The plaintiff submits that in the event the eighth defendant is successful in its application for costs against the plaintiff, the default position under r 63.20.1 of the Rules should apply and those costs should not be taxable until the proceeding is completed.[30] The plaintiff submits that the default position should apply because:[31]
[30]Plaintiff Submissions, 24 February 2021, [40].
[31]Ibid [23]-[30].
No considerable delay
(a) The preparation and filing of the Further Amended Statement of Claim has been prosecuted with all due expedition, having regard to the circumstances of the matter, as explained in the Affidavit of Colin Almond sworn 11 May 2020, including:
(iv) due to the necessity of obtaining the freezing orders urgently, the plaintiff had insufficient time to engage the assistance of an expert forensic accountant, or to subpoena documents required to fill accounting gaps;[32]
[32]First Almond Affidavit, [3]-[12].
(v) the unique circumstances presented by the Covid-19 public health crisis severely impacted the plaintiff’s ability to obtain advice and provide instructions. The plaintiff submits that such effects continued into November 2020 throughout the various restrictions on activity in place in Victoria and impacted time for production and inspection of documents produced by subpoena.
(b) There has been no delay brought about by the plaintiff in the production of a pleading that best reflects the relevant chain of events: had the plaintiff filed a statement of claim prior to receiving the subpoenaed documents (on the eighth defendant’s case) it would have been obliged to amend the pleading again, which would have occasioned additional cost and delay, including requiring amendment of any responding defences filed.
(c) The eighth defendant has not suffered any prejudice as a result of the freezing orders currently in place, and has always had liberty to apply under such orders were any prejudice to arise.
(d) In Setka the Court declined to make an order that costs be immediately taxed even where delay was a factor as it was not ‘very great’.[33]
[33][2013] VSCA 376, [29].
Not a discrete issue
(e) The resolution of the issues which culminated in the filing of the Further Amended Statement of Claim is not a discrete issue in the proceeding as there was no attack on the factual matters pleaded, instead the focus being on eliciting further facts in the nature of accounting matters relating to the transactions. The amendments therefore amount to an enhancement of the plaintiff’s claims for resolution at trial.
Unsatisfactory conduct
(f) The eighth defendant has not identified any unsatisfactory conduct of the plaintiff which could be genuinely described as ‘unreasonable’, ‘reprehensible’ or involving a want of ‘competence and diligence’ as understood in Setka.
Considerations
There are two interrelated issues which arise for determination. Firstly, the costs of and incidental to the eighth defendant’s now redundant Strike Out Application incurred after 30 June 2020,[34] including any costs of the eighth defendant thrown away by reason of the amendments to the Amended Statement of Claim; and secondly, whether there should be, as the eighth defendant submits, an order that any costs order so made against the plaintiff be taxed immediately.
[34]Plaintiff’s solicitors email, 25 February 2021 (5:45pm).
There is no dispute that the Court has an absolute discretion in relation to costs although of course that discretion must be exercised judicially.
For the reasons which follow I reject the plaintiff’s submission that the eighth defendant should pay the plaintiff’s costs occasioned by the 6 April 2020 Summons, incurred after 30 June 2020, or alternatively that there be no order made for costs in relation to the 6 April 2020 Summons and associated costs.
However, I recognise that there were factors which explain why the plaintiff’s Statement of Claim filed 25 February 2020, and its preceding endorsement, were produced in the absence of many details of the relevant misappropriations and the chain of transactions leading to misappropriated funds reaching defendants accounts.
Those factors principally included the urgency with which the plaintiff was forced to commence proceedings in late 2019, subsequent to the discovery of the misappropriations, together with the number and complexity of the transactions related to those misappropriations and the need for the plaintiff to involve a forensic accountant, Deloitte, to unravel and detail relevant transactions.
Further, I recognise that from early 2020 there were further circumstances which made it difficult for the plaintiff to bring its pleading to a state of development which satisfied the Court’s pleading rules and addressed the defendants’ legitimate in relation to the plaintiff’s pleading.[35]
[35]Including the urgency associated with preparing and filing the plaintiff’s initial pleading (Plaintiff Submissions, 24 February 2021, [30(a)(i) and (ii)]); the complexity of the tasks involved in adequately particularising the plaintiff’s pleading (Plaintiff Submissions, 24 February 2021, [24]); missing information and links and with the associated need to issue subpoenas; and the delay caused to the plaintiff by Covid-19 restrictions (Plaintiff Submissions, 24 February 2021, [25]).
Those subsequent factors principally included the impact of the Covid-19 restrictions on those working to adequately detail the transactions at the heart of the plaintiff’s case.[36]
[36]Plaintiff’s Submissions, 24 February 2021 at [4], [10], [11] and [23(b)] and [24]; First Almond Affidavit, [17]-[23].
I also accept that the adequate development of the plaintiff’s pleading was a complex, time-consuming task involving thousands of transactions.
The above factors which are relied upon by the plaintiff, although not caused by the conduct of the defendants, in particular the eighth defendant, during the course of these proceedings, however (with the exception of the exacerbating effect of the 2019 public health crisis), have their genesis in the circumstances giving rise to the plaintiff’s causes of action.
In that regard I refer to the short general summary of the circumstances in which the ex parte applications (heard on 18 and 19 December 2019) and inter partes application (from 23 December 2019) for freezing orders were made in this proceedings:[37]
[37]Westpac v Lee [2020] VSC 291, [3]-[5].
(a) The plaintiff alleges that between 2 August 2010 and 5 December 2019, during his employment with the plaintiff the first defendant misappropriated funds from the plaintiff, and distributed the funds to various people and companies associated with him, including the defendant parties,[38] broadly in the following tranches:
[38]Affidavit of Rebecca Wong, 18 December 2019, [5].
(i) ‘First 2015 Misappropriation’: On 1 April 2015 to 2 April 2015 the first defendant caused $350,000 to be wrongfully transferred from an account held for the benefit of a customer of the plaintiff unrelated to the defendants (Customer 1). These funds were ultimately transferred to an account held by the sixth defendant;
(ii) ‘Second 2015 Misappropriation’: On 19 August 2015 the first defendant caused $500,000 to be wrongfully transferred from an account held in the name of a customer of the plaintiff unrelated to the defendants (Customer 2) to an account wrongfully created and controlled by him;
(iii) ‘Third 2015 Misappropriation’: On 19 August 2015 the first defendant caused $500,000 to be wrongly transferred from an account held in the name of Customer 1 to an account held in the name of the fifth defendant;
(iv) ‘2017 Misappropriation’: On 19 August 2015 the first defendant caused $1,500,000 to be wrongfully transferred from a joint account held in the name of a customer of the plaintiff unrelated to the defendants (Customer 3) to an account wrongfully created and controlled by him;
(v) Part of the 2017 Misappropriation was paid to the eighth defendant;[39]
[39]Further Amended Statement of Claim, 23 November 2020, [33].
(vi) ‘2018 Misappropriation’: On 7 June 2018 the first defendant caused $500,000 to be wrongly transferred from an account held in the name of Customer 1 to an account wrongfully created and controlled by him;
(vii) ‘2019 Misappropriation’: On 29 April 2019 the first defendant caused $1,200,000 to be wrongly transferred from an account held in the name of a customer of the plaintiff unrelated to the defendants (Customer 4) to an account wrongfully created and controlled by him.
(viii) Part of the 2019 Misappropriation was paid to the eighth defendant.[40]
[40]Ibid [43].
(b) On 2 December 2019 the first defendant was arrested and charged with obtaining financial advantage by deception and dealing with the proceeds of crime in relation to the alleged misappropriation of funds. The first defendant has since been charged with further offences in relation to the alleged conduct.
(c) By its Writ and Indorsement of Claim dated 18 December 2019, the plaintiff initiated proceedings for relief against the first to eighth defendants. By Summons of the same date the plaintiff also sought freezing orders on an ex parte basis against the assets of the first to eighth defendants.
(d) In relation to the present pleading and interlocutory management issues the plaintiff relies upon the urgency with which, in these circumstances, it issued its proceedings and applied to secure any future judgment in these proceedings, by obtaining freezing orders.
(e) Freezing orders were made substantially in terms sought by the plaintiff on 18 December 2019, as varied on 23 December 2019, 24 December 2019, 3 February 2020, 14 February 2020 and 30 March 2020.
(f) I also note that the Court has been advised that the first defendant does not intend to defend the present proceedings and consents to judgment being entered against him.[41]
[41]Affidavit of Thomas Li, 20 December 2019, [3]-[6] and Exhibit ‘TFL-1’.
I also accept that associated with the inherent difficulties faced by a plaintiff which was not in ready possession, indeed not likely to be in possession of the facts and documents associated with the dispersal of the substantial funds alleged to have been misappropriated, it was also necessary to issue a number of subpoenas and wait for a receipt of the subpoenaed documents and then in turn have those documents analysed including by Deloitte. This also probably effected the plaintiff’s ability to produce a compliant pleading.
Why the eighth defendant should win a further order for costs
The above matters provide some explanation as to why, the plaintiff struggled from about December 2019, the time of it finalising its Writ and Indorsement of Claim dated 18 December 2019 , until about late November 2020 when the plaintiff filed and served is Further Amended Statement of Claim, to file a pleading which addressed the criticisms of a number of the defendants.
Accordingly, the eighth defendant was justified in issuing its Strike Out Application of 6 April 2020 and in my view it is sufficiently plain that the deficiencies in the plaintiff’s initial pleading, and proposed subsequent pleadings justified the eighth defendant filing the submissions it did in relation to the inadequacies in the plaintiff’s then current proposed pleading on 14 August 2020.
Further, the chronology of events, interlocutory steps and related communications summarised in paragraphs [4]-[18] above, sufficiently demonstrate that the plaintiff on a number of occasions throughout the period between April 2020 and 23 November 2020, sought to provide a proposed amended Statement of Claim, sufficient to meet the attacks a number of defendants, including the eighth defendant, made in relation to its pleading.
Further, the plaintiff by the email communication of 25 February 2021 referred to in paragraph [18], accepted liability for the eighth defendant’s costs associated with the eighth defendant’s 6 April 2020 Summons, incurred up to and including 30 June 2020. I consider that the plaintiff in this regard effectively accepted that its proposed pleading to that point was defective.
After 30 June 2020 the above chronology, at [8]-[18] above, establishes that the plaintiff’s Amended Statement of Claim filed on 30 June 2020 continued to exhibit deficiencies insofar as a number of defendants, including the eighth defendant, were concerned and that the plaintiff in substance accepted that further amendment to its pleading was required, including by the consent orders made on 7 October 2020 requiring the plaintiff to serve its proposed Further Amended Statement of Claim and the service of that proposed Further Amended Statement of Claim in early November 2020 and the filing of the plaintiff’s Further Amended Statement of Claim on 23 November 2020.
Further, although as outlined above there were factors which impaired and delayed the adequate development of the plaintiff’s pleading these are not matters which can be squarely placed at the eighth defendant’s feet.
Nor do the above circumstances change the character of the costs of the parties pursuing compliance with pleading rules and incurring costs which were thrown away addressing proposed and ultimately amended plaintiff pleadings as well as the costs of producing a pleading in response to the plaintiff’s proposed and ultimate amendments of its Statement of Claim, including the plaintiff’s Amended Statement of Claim filed 30 June 2020.
For the above reasons, I consider that the plaintiff ought be responsible for the costs sought by the eighth defendant in this application.
I do not however accept the eighth defendant’s claim for a specific order for the costs thrown away in relation to the eighth defendant’s Defence filed 27 March 2020. In my view the order below in paragraph [61(b)] is an appropriate and sufficient order to deal with these cost.
Further, I do not accept the plaintiff’s submissions that it is to be weighted in its favour that the near completion of the Deloitte’s task of detailing the missing links of the relevant transactions effecting placement of misappropriated funds has, or will, advance the parties’ readiness for trial and advantaged all parties because the plaintiff will be able to present a full picture of relevant transactions. Nor do I regard it as significant in relation to this cost related application that, as the plaintiff observes, the property at 11 Thiele Street, Doncaster is susceptible to a judgment for an order of sale.
Finally, I do not accept as substantiated the plaintiffs’ submission that in seeking to strike out the plaintiff’s pleading the eighth defendant has conducted itself in an unreasonable way and in conflict with the overarching duties set out in the Civil Procedure Act 2010 (Vic).
Should costs be immediately taxable
Order 63.20.1 of the Rules establishes the default position, namely that costs should not be taxable until the relevant proceeding is complete.
Order 63.20.1 of the Rules provides the default position in relation to the taxation of costs, namely that:
If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.
I do not accept the eighth defendant’s submission that costs awarded against the plaintiff in this application should be capable of immediate taxation.
In my view it is an insufficient basis for such an order in this matter that there is a prospect of considerable delay in completing the proceedings. I do not accept that this is likely to occur or that I can at this point conclude that it is likely that this proceeding will take an unusually long time to be heard at trial.
I do not consider that the delays to date could be regarded, in the difficult circumstances referred to in paragraphs [34]–[39] and in this complex multi-party proceeding, as ‘very great’ or that there is a sound basis upon which it is open to conclude that there will be ‘very great’ delays in completing this proceeding.[42]
[42]Setka v Abbott (No 2) [2013] VSCA 376, [29].
Further, I am not persuaded that the Strike Out Application concerns a discrete issue in this proceeding. The nature of the many issues raised in relation to the plaintiff’s pleading, including by the eighth defendant, were focused on attaining a clearer and more understandable plaintiff case in respect of most defendants in relation to details associated with transactions concerning the channelling of misappropriated funds to the defendants. The strike out issues were broad, including those raised by the eighth defendant. The eighth defendant’s 6 April 2020 Summons sought to strike out the whole of the plaintiff’s statement of claim.
Neither am I persuaded that the eighth defendant has established any conduct on the part of the plaintiff which would justify an exercise of discretion ordering the immediate taxation of costs in favour of the eighth defendant.
Decision
The eighth defendant should, for the above reasons, succeed in obtaining the costs orders it seeks but taxed costs should not be required to be taxed immediately.
Orders
Accordingly, I shall make the following orders:
(a) The plaintiff pay the eighth defendant’s costs of and incidental to:
(ix)the eighth defendant’s 6 April 2020 Summons;
(x) the adjourned directions hearing scheduled for 15 May 2020 (adjourned to 7 October 2020); and
(xi)the eighth defendant’s Submissions filed 14 August 2020.
(b) The plaintiff pay the eighth defendant’s costs thrown away by reason of the amendments to the Statement of Claim filed 25 February 2020 and the Amended Statement of Claim filed 30 June 2020.
(c) That such costs payable by the plaintiff pursuant to the preceding two paragraphs be payable on a standard basis.
0
2
0