Wollongong Coal Limited v NRE Resources Pty Limited

[2017] NSWSC 862

Supreme Court

New South Wales

Medium Neutral Citation:	Wollongong Coal Limited v NRE Resources Pty Limited [2017] NSWSC 862
Hearing dates:	26 and 28 June 2017
Decision date:	28 June 2017
Jurisdiction:	Common Law
Before:	Johnson J
Decision:	1. Defendant granted leave to file Cross Claim. 2. Defendant to pay Plaintiff’s costs of Defendant’s Notice of Motion for leave to file Cross Claim. 3. Defendant to pay Plaintiff’s costs thrown away as a result of vacation of hearing date. 4. The costs orders contained in Orders 2 and 3 are to be assessable and payable forthwith. 5. The proceedings are transferred to the Commercial List in the Equity Division and are to be listed for directions before the Commercial List Judge at 9.45 am on Friday, 30 June 2017.
Catchwords:	CIVIL LAW - application by Defendant for leave to file Cross Claim - application made at commencement of final hearing of commercial dispute - consideration of relevant discretionary factors - leave granted to file Cross Claim - final hearing vacated - application for costs - Defendant ordered to pay Plaintiff’s costs of leave application and costs thrown away as a result of vacated hearing - order that costs be assessable and payable forthwith - proceedings referred for mediation under s.26 Civil Procedure Act 2005 - proceedings transferred to Commercial List of Equity Division
Legislation Cited:	Civil Procedure Act 2005 Corporations Act 2001 (Cth)
Cases Cited:	Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Australian Financial Services & Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560; [2014] HCA 14 Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 Israel v Foreshore Properties Pty Limited (In Liq) (1980) 30 ALR 631 The Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (No 2) [2007] NSWSC 797
Texts Cited:	---
Category:	Procedural and other rulings
Parties:	Wollongong Coal Limited (Plaintiff) NRE Resources Pty Limited (Defendant)
Representation:	Counsel: Mr C Wood; Mr T Cleary (Plaintiff) Mr DR Pritchard SC; Mr A Macauley (Defendant)   Solicitors: Thomson Geer (Plaintiff) Gillard Consulting Lawyers (Defendant)
File Number(s):	2014/160659
Publication restriction:	---

Judgment

1. JOHNSON J: By Notice of Motion filed on 22 June 2017, the Defendant, NRE Resources Pty Limited (“NRE Resources”) sought leave to file a Cross Claim in proceedings commenced by the Plaintiff, Wollongong Coal Limited (“Wollongong Coal”).

2. At the conclusion of the hearing of the Notice of Motion on 26 June 2017, I granted NRE Resources leave to rely upon the proposed Cross Claim. This judgment contains my reasons for making that order.

The Principal Proceedings - the Statement of Claim and Amended Defence

3. By Statement of Claim filed on 28 May 2014, Wollongong Coal sued NRE Resources for the sum of $A3,649,058.00. The claim was advanced upon the basis that NRE Resources (as borrower) and Wollongong Coal (as lender) operated a loan account which duly recorded in the books and records of NRE Resources the various financial transactions which occurred between them including mutual loans and repayments thereof.

4. The Statement of Claim pleaded that the loan account was a “book” within the meaning of the Corporations Act 2001 (Cth). It was asserted that, as at 31 March 2013, NRE Resources was indebted to Wollongong Coal on the loan account in the claimed amount. It was said that, pursuant to s.1305 Corporations Act 2001 (Cth), the loan account was prima facie evidence of NRE Resources’ indebtedness to Wollongong Coal for the loan amount.

5. The Statement of Claim pleaded that this sum remained outstanding so that a claim was made for that sum together with interest, fees and costs.

6. By its Amended Defence filed on 3 November 2016, NRE Resources, amongst other things, said that it was indebted to Wollongong Coal on the loan account only in the sum of $A3,622,116.95. In further answer to the Statement of Claim, NRE Resources referred to other aspects of financial arrangements said to exist between a group of companies including Wollongong Coal and NRE Resources, about which more will be said later in this judgment. These arrangements included what was described as a sanction letter dated 12 September 2012 whereby Mauritius Commercial Bank Limited (“MCB”) sanctioned a term loan facility of $US25 million to Wollongong Coal under which Wollongong Coal was to provide security for the facility itself.

7. The Amended Defence pleaded that NRE Resources had provided a guarantee and indemnity of a facility agreement dated 28 November 2012 under which Wollongong Coal was borrower.

8. The Amended Defence pleaded that, as part of the provision of that guarantee and indemnity, NRE Resources had provided a cash security deposit of $US5 million, that Wollongong Coal had committed an act of default on 10 June 2014 by failing to pay the repayment instalment payable on that date ($US4,165,000.00), that MCB issued a notice of default on 24 September 2014 and that, on 29 September 2014, MCB had exercised its rights under the guarantee and indemnity and appropriated the $US5 million security deposit.

9. The Amended Defence asserted that NRE Resources was entitled to recover the sum of $US5 million plus interest from Wollongong Coal with NRE Resources claiming indemnity from Wollongong Coal in the amount of $US5 million plus interest.

10. The Amended Defence concluded with the assertion that Wollongong Coal owed it an amount of $US6,752,740.00 together with interest and that, accordingly, it had a set-off claim under s.21 Civil Procedure Act 2005 and, further and in the alternative, an equitable set-off against Wollongong Coal that exceeded the value of the loan account.

11. On 23 September 2016, the Court fixed the hearing of the principal proceedings to commence on 26 June 2017 with an estimate of five days.

A Belated Application for Leave to File a Cross Claim

12. In support of the Notice of Motion seeking leave to file a Cross Claim, NRE Resources relied upon the affidavit of Brian James Gillard affirmed 22 June 2017. Mr Gillard, the solicitor for NRE Resources, stated that his firm was first instructed to act for NRE Resources in these proceedings on 4 April 2017. Thereafter, he took steps, between 4 April 2017 and 21 May 2017, to obtain the physical file from the previous solicitor and to obtain instructions and brief counsel for the purpose of the hearing. Mr Gillard stated that this process took longer than expected because the critical directors, employees and former directors and employees of NRE Resources had all been overseas during this period, principally in India. He stated that counsel were retained on 23 May 2017 with a conference taking place on 29 May 2017. Mr Gillard stated that, in the course of that conference, the question was raised as to whether a Cross Claim should be filed in the proceedings.

13. Mr Gillard stated that a proposed Cross Claim was provided to him by counsel on 6 June 2017. He sent the document to his client for instructions on 13 June 2017 and received verbal instructions on that day to serve the proposed Cross Claim on Wollongong Coal.

14. On 14 June 2017, Mr Gillard wrote to the solicitors for Wollongong Coal seeking their consent to the filing of the Cross Claim. On 16 June 2017, the solicitors for Wollongong Coal indicated that such consent was not given.

15. As mentioned, NRE Resources filed a Notice of Motion on 22 June 2017 seeking the leave of the Court to file the Cross Claim.

16. The matter having been allocated to me for the purpose of the final hearing, a directions hearing took place on 23 June 2017 at which time I gave directions for the exchange of written submissions in advance of the contested hearing of the Notice of Motion on 26 June 2017, the scheduled first day of the final hearing of the matter.

17. Helpful written submissions were provided by Mr Wood and Mr Cleary, counsel for Wollongong Coal, and by Mr Pritchard SC and Mr Macauley, counsel for NRE Resources. It is not necessary to repeat the submissions made in writing or orally at the hearing of the Notice of Motion on 26 June 2017. It is sufficient to move directly to my reasons for granting NRE Resources leave to rely upon the Cross Claim.

Reasons for Grant of Leave to File Cross Claim

18. The application for leave to file a Cross Claim has been brought long after the time allowed for such an application as of right has expired: Rule 9.1 Uniform Civil Procedure Rules 2005 (“UCPR”). The application has been made by NRE Resources immediately before the scheduled commencement date of the final hearing. In these circumstances, NRE Resources bore a heavy burden to demonstrate why leave should be granted: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at 182 [40].

19. The Court must apply the provisions contained in ss.56-61 Civil Procedure Act 2005. In particular, in determining the application, the Court must seek to act in accordance with the dictates of justice: s.58(1) Civil Procedure Act 2005.

20. It is necessary to consider the broader factual context in which the Statement of Claim and Amended Defence arise as well as the proposed Cross Claim. The written submissions of the parties on the present application and on the proceedings generally assist in this regard.

21. Up until November 2013, both Wollongong Coal and NRE Resources were part of a group of companies referred to as the Gujarat Group. The Gujarat Group was (and remains) one of the largest independent metallurgical coking coal producers in India. The principal trading entity within the Gujarat Group is Gujarat NRE Coke Limited, a company incorporated and based in India, whose chairman was, at all relevant times, Mr Arun Kumar Jagatramka. Gujarat NRE Coke Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India. It is a company largely owned by Mr Jagatramka and family associated with him.

22. Wollongong Coal is a company incorporated in Australia and listed on the Australian Stock Exchange. Between 24 February 2010 and 25 February 2014, Wollongong Coal was known as Gujarat NRE Coking Coal Limited. Wollongong Coal owns and operates two underground metallurgical coal mines located in the Illawarra region of New South Wales.

23. Up until around November 2013, Wollongong Coal was majority owned by Gujarat NRE Coke Limited and other companies in the Gujarat Group. Mr Jagatramka was the Executive Chairman of Wollongong Coal up until 26 October 2013. At that point, the majority ownership of Wollongong Coal changed from the Gujarat Group to a group of companies referred to as the Jindal Group (which includes Jindal Steel & Power (Australia) Pty Limited and Jindal Steel & Power (Mauritius) Limited).

24. NRE Resources is a company incorporated in Australia. It is entirely owned by entities associated with the Gujarat Group.

25. Between September 2012 and September 2013, significant sums of money were lent back and forth from Wollongong Coal and NRE Resources. These proceedings arise out of these transactions and concern, in particular, one sum of $US5 million advanced by Wollongong Coal on 6 December 2012 to a bank account in the name of NRE Resources with MCB.

26. I have referred earlier to aspects of the Statement of Claim, the Amended Defence and the Cross Claim. The background to the various transactions referred to in these pleadings may be found in complex commercial documentation which forms part of the proposed Court Book prepared for the final hearing. I am satisfied that the existing pleadings and the proposed Cross Claim arise out of what is broadly the same factual matrix which in turn involves the relationship between various companies in the Gujarat Group, MCB and Wollongong Coal which now forms part of the Jindal Group.

27. At the hearing of the Notice of Motion, Wollongong Coal submitted that the alleged indemnity relied upon by NRE Resources in the Amended Defence was not a liquidated debt within the meaning of s.21(6) Civil Procedure Act 2005 so as to be capable of being treated as a set-off. It was submitted for NRE Resources that this aspect ought to have been advanced in a Reply as it constituted an assertion by Wollongong Coal that part of NRE Resources’ Amended Defence was not maintainable: Rule 14.14(2)(b) UCPR. If this had been done at an appropriate time after the filing of the Amended Defence, it was submitted for NRE Resources that the clear necessity for a Cross Claim would have been highlighted at an earlier time.

28. There is some force in this submission. However, it seems to me that the sensible course for a prudent solicitor acting for NRE Resources would have been to seek to file a Cross Claim at the time when the Amended Defence was filed. I accept the submission for Wollongong Coal that the Cross Claim includes additional elements which extend beyond what was asserted in the Amended Defence.

29. I accept the submission for Wollongong Coal that the Cross Claim introduces a new concept that NRE Resources provided security at the request of Wollongong Coal so as to invoke the basis for the indemnity for which Israel v Foreshore Properties Pty Limited (In Liq) (1980) 30 ALR 631 is cited in the particulars of paragraph 22 of the Cross Claim.

30. I accept, as well, the submission of Wollongong Coal that the Cross Claim articulates a restitutionary claim which did not emerge in the Amended Defence. Accordingly, Wollongong Coal may wish to plead a change of position as a Defence to the Cross Claim: Australian Financial Services & Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560; [2014] HCA 14. For this purpose, Wollongong Coal may need to undertake enquiries as to whether it is unjust in all the circumstances to require it (as Cross Defendant) to make restitution, with evidence being potentially relevant concerning the corporate practices within the Gujarat Group and the effect of the payment on Wollongong Coal’s financial position.

31. I accept, as well, that there are further areas of investigation which Wollongong Coal would need to undertake to seek to meet the Cross Claim involving the investigation of the relationship between various entities and MCB and investigation with respect to possible equitable defences.

32. I do not accept the submission for NRE Resources that it was incumbent on the solicitor for Wollongong Coal to swear an affidavit outlining the steps which would need to be taken if leave to file the Cross Claim was allowed. It was the significant delay on the part of NRE Resources which saw this Notice of Motion being heard urgently. It was reasonable for the areas of further enquiry to be outlined by counsel for Wollongong Coal.

33. The critical aspect, however, for the purpose of the leave application is that there is an interrelationship between the various entities and transactions which fall to be considered for the purpose of determining the Statement of Claim, the Amended Defence and the Cross Claim. The issues raised by the Cross Claim are not readily severable from the issues to be determined in the principal proceedings represented by the Statement of Claim and the Amended Defence.

34. Although there are significant issues arising from the very late arrival of the Cross Claim in the proceedings, which will require further consideration on the issue of costs, there is simply no sensible basis for concluding that there should be other than a single hearing of all the issues raised by the parties at this point in the proceedings.

35. I am satisfied that, if leave was not granted to NRE Resources to file the Cross Claim, the prejudice to that party was likely to be significant. If leave was refused, there was a real prospect that NRE Resources would be Anshun estopped from pursuing the claim which is the subject of the Cross Claim in subsequent proceedings, particularly in light of the matters raised in the Amended Defence: Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287. This is a significant factor in determining what the dictates of justice required on this application: s.58 Civil Procedure Act 2005.

36. I am also satisfied that a refusal of leave to file a Cross Claim would (subject to Anshun issues to which reference has just been made) lead to two separate hearings involving overlapping and, at times, near identical issues in the same factual matrix. To require two separate hearings to proceed in this Court in these circumstances would not facilitate the just, quick and cheap resolution of the real issues in the proceedings: s.56 Civil Procedure Act 2005. Nor would it involve the efficient disposal of the business of the Court and the efficient use of available judicial and administrative resources: s.57(1) Civil Procedure Act 2005.

37. All the factors which I have referred to so far pointed in favour of a grant of leave to file the Cross Claim. A strong countervailing factor on this application is the delay in the making of the application in circumstances where, if the application was allowed, the final hearing scheduled to commence on 26 June 2017 would be aborted.

38. The affidavit of Mr Gillard provides limited assistance to NRE Resources on this aspect of the application. It is clear that a different solicitor represented NRE Resources up to April 2017. It was that solicitor who filed the Amended Defence. No explanation is provided as to why NRE Resources changed legal representation in April 2017. There is no evidence to explain what was or was not done by NRE Resources’ previous lawyers in the proceedings. The affidavit of Mr Gillard indicated the matters summarised earlier in his judgment (at [12]-[15]). It may be seen that although a draft Cross Claim had been settled by counsel as at 6 June 2017, it was not until 14 June 2017 that the document was provided to the solicitors for Wollongong Coal. Once it had been indicated on 16 June 2017 that Wollongong Coal did not consent to leave being granted to file the Cross Claim, it was not until 22 June 2017 that NRE Resources filed a Notice of Motion seeking the leave of the Court in this regard.

39. It was submitted for NRE Resources that an explanation had been proffered as to why the Cross Claim had been brought so late in compliance with what was said in Aon Risk Services Australia Limited v Australian National University at 192 [30], 215 [103] and 221 [131].

40. I do not consider that the affidavit of Mr Gillard provides a satisfactory explanation of this “eleventh hour” application. It is, after all, NRE Resources (through its directors or employees) which must explain why it did or did not take certain action at different times whilst this litigation has been on foot.

41. It is not a satisfactory answer to the problems which have arisen on this application that a new legal team had only commenced for NRE Resources in April 2017. Even then, it was not until 14 June 2017 that the Cross Claim was furnished to the legal representatives for Wollongong Coal, with effectively another week passing before NRE Resources made application to the Court for leave to file a Cross Claim.

42. These were significant factors operating against allowing the application for leave. However, having considered the totality of the factors falling for consideration I was satisfied that the appropriate discretionary outcome of the application was to allow NRE Resources to file the Cross Claim.

43. It was for these reasons that I made the order on 26 June 2017 granting leave in accordance with NRE Resources’ Notice of Motion.

Further Issues

44. Having foreshadowed my decision on 26 June 2017 to allow NRE Resources leave to file the Cross Claim, counsel for Wollongong Coal submitted that his client was not in a position to embark upon the final hearing of the proceedings (including the Cross Claim) in the week which had been set aside for that hearing. Counsel referred to the areas of further investigation which would need to be undertaken for the purpose of filing a Defence to the Cross Claim and preparing for a single hearing with respect to all aspects of the matter.

44. Counsel for NRE Resources submitted initially that it was not clear that the final hearing could not get underway with the Cross Claim included in that hearing. However, counsel for both parties came to accept that the hearing could not proceed this week (T22-23, 26 June 2017).

45. I have already recorded my view that the Cross Claim gave rise to legitimate areas of further investigation by Wollongong Coal for the purpose of preparing a Defence to the Cross Claim and litigating the proceedings generally. This was not a simple case of rejigging or fine-tuning aspects of the pleadings so that Wollongong Coal ought be expected to proceed with a final hearing of proceedings which now included the Cross Claim.

46. Accordingly, I was satisfied that the appropriate course was to vacate the hearing otherwise listed to commence on 26 June 2017 and I proceeded to make that order on that day.

47. There are significant costs issues emerging from the decision to grant leave to NRE Resources to file the Cross Claim. I gave directions for the parties to file written submissions on that issue with the Court to hear submissions and make a ruling on the costs of the Notice of Motion, and any application for costs thrown away by the vacating of the final hearing. I will proceed with that hearing today after delivering this judgment.

48. In addition, counsel for NRE Resources made application for the matter to be referred for mediation under s.26 Civil Procedure Act 2005 with that mediation to be undertaken (or commenced) on 27 June 2017. Counsel for Wollongong Coal informed the Court of the pessimism of his instructing solicitor as to the utility of that course given what was said to be the uneasy relationship between the parties which had manifested itself in these and other proceedings.

49. In circumstances where these proceedings involve a commercial dispute between business people and what were once related companies and because the principals of the parties (some of whom were from India) were in Australia for the purpose of the proceedings, I made an order for mediation under s.26 Civil Procedure Act 2005. I was informed that the parties would make their own arrangements concerning the selection of a mediator.

50. I did not consider that the Court should be deterred from an order for mediation by what was said to be the possible lack of enthusiasm for that process on the part of some involved in the proceedings. It may be seen that these proceedings will continue and potentially expand with substantial legal costs being further incurred. Accordingly, I made an order for mediation in these proceedings.

51. I will now hear submissions on costs arising from the decision made by the Court on 26 June 2017 with respect to the application by NRE Resources to file a Cross Claim, and the consequential order vacating the final hearing listed for this week.

[Counsel addressed on costs]

53. I have now heard counsel on the issue of costs.

54. Wollongong Coal makes an application that NRE Resources pay its costs of and incidental to the Notice of Motion filed on 22 June 2017. Wollongong Coal also seeks an order that NRE Resources pay its costs thrown away by reason of the vacation of the hearing date. In addition, it is sought that if those costs orders are made, an order be made that they be assessable and payable forthwith.

55. NRE Resources submits that costs should follow the event so that it should have an order in its favour for the costs of the Notice of Motion, or at worst no order as to costs of the Notice of Motion. With respect to the application by Wollongong Coal for costs thrown away by the vacation of the hearing, NRE Resources submits that the question of costs should be reserved upon the basis that identification of any steps which may need to be taken by Wollongong Coal, and the relevance of those steps to the further progress of this litigation, will be matters for the future. Finally, NRE Resources submits that there should be no order that the costs be assessable and payable forthwith.

56. The Court has determined the interlocutory application constituted by the Notice of Motion seeking leave to file the Cross Claim.

57. Section 98 Civil Procedure Act 2005 provides that, subject to the rules of Court and to any other provision, costs are in the discretion of the Court, and the Court has full power to determine by whom, to whom and to what extent costs are to be paid. Part 42 UCPR makes further provision with respect to costs. Rule 42.1 provides that, subject to that Part, if the Court makes any order as to costs, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs.

58. Rule 42.7 relates to the costs of interlocutory applications. Rule 42.7(2) provides that unless the Court otherwise orders, costs ordered following an interlocutory application do not become payable until the conclusion of the proceedings. That is the statutory framework for the Court to determine the costs issues which have arisen.

59. There were competing submissions made by reference to statements in the judgment of Young CJ in Eq in The Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (No 2) [2007] NSWSC 797 at [6]. The topic which his Honour was there addressing is not in complete alignment with the circumstances of the application which I am presently considering, and what was said there does not play a part in the determination of the present costs application. That said, s.98 Civil Procedure Act 2005 makes clear that costs are in the discretion of the Court.

60. The costs follow the event rule itself is a starting point, although there can at times be debate as to what precisely the “event” is. In this case, the event is determination of a Notice of Motion brought belatedly by NRE Resources seeking leave to file a Cross Claim. The background to the making of that application has been addressed (in part) in the reasons which I have so far delivered. In those reasons, I noted and accepted there was some force in the submission that if Wollongong Coal had filed a Reply, that may have triggered some earlier action by way of a Cross Claim on the part of NRE Resources. That, however, is a matter of complete speculation, because there is simply no evidence at all as to what the lawyers acting for NRE Resources before April 2017 were doing.

61. I am satisfied that the primary problem which has given rise to a contested hearing in this Court, and the loss of a five-day hearing, was the belated application by NRE Resources to rely upon a Cross Claim. In the course of the judgment delivered with respect to the Notice of Motion, I have expressed concern at the delay with respect to that application. The simple fact is that on Friday of last week, on the last working day before the commencement of the final hearing, the Court was presented with a Notice of Motion filed the previous evening, which was to be contested.

62. Having now determined the Notice of Motion, I can understand the approach of Wollongong Coal. This was not a form of bloody-minded contest with respect to the Notice of Motion. The solicitors for Wollongong Coal had only been presented with the draft Cross Claim on 14 June 2017. I do not think that there can be any reasonable criticism of them for indicating an unwillingness to accede to the filing of the Cross Claim at that time. I am not sure that reasons for opposition to the Notice of Motion, if any had been given by Wollongong Coal, would have made any difference in the context of this litigation. Even then, another week passed before the Notice of Motion was filed by NRE Resources.

63. The approach of NRE Resources to the bringing of the Notice of Motion was one which effectively meant that the hearing date was going to be lost, if leave was granted and that is what has happened.

64. Submissions have been made on behalf of NRE Resources on the costs issues that some of the things which counsel for Wollongong Coal say they wish to explore are not likely to go anywhere. That is a matter of speculation at this stage.

65. The problem is that the late bringing of the application by NRE Resources meant that there was no realistic opportunity for the legal representatives of Wollongong Coal to properly investigate these matters. That is a process which now must be undertaken by them. Whether or not those steps lead to significant developments in the litigation remains to be seen.

66. The problem is that the legal representatives for Wollongong Coal, faced with the decision I made on Monday, had professional obligations to their client so that an attempt on their part to keep this hearing going whilst drafting a Defence to the Cross Claim and attempting to deal with the issues raised by the Cross Claim would not, in my view, have been a realistic option.

67. There is nothing in the conduct of this litigation so far which indicated to me that Wollongong Coal has not wanted to get this matter heard and determined. There cannot be any reasonable suggestion that Wollongong Coal was willing to surrender the hearing date for some other purpose. Wollongong Coal has ultimately accepted that the hearing date would have to go because of the issues that they consider need to be explored because of NRE Resources' late and ultimately successful application for leave to file a Cross Claim.

68. With respect to the hearing of the Notice of Motion itself, it seems to me that the appropriate exercise of discretion with respect to costs should involve an order that NRE Resources pay Wollongong Coal's costs of the application. That may be an unusual costs outcome. It is certainly not one where costs follow the event. The problem is that NRE Resources acted in such a way that the relevant event happened so late that there ought be costs consequences for that party in the outcome.

69. My judgment should make clear that allowing NRE Resources leave to file the Cross Claim at this stage, was a decision made, in a sense, through gritted teeth. It seemed to me, in the end, that this approach was necessary to ensure a single hearing of all issues involved in this litigation raised by the Statement of Claim, the Amended Defence and the Cross Claim.

70. The conduct of NRE Resources, and its directors and employees (the living persons within that corporation) certainly did not assist them on the costs issue. They are entitled to have all aspects of the litigation heard and determined at the same time. However, success on the Notice of Motion should not, as a matter of justice in this case, translate into either an order in favour of NRE Resources as to costs, or even no order as to costs. The justice of the case requires an order that NRE Resources pay Wollongong Coal's costs of the Notice of Motion.

71. With respect to the costs thrown away by reason of the vacating of the hearing date, it may be that in the months ahead when Wollongong Coal has had a proper opportunity to investigate these matters, some (perhaps many) of the issues which counsel for Wollongong Coal has identified as being matters for proper investigation, will fall away. I simply do not know. In my view, that is not the point.

72. The point is that Wollongong Coal was presented with this situation as a result of the timing of the application. It involved effectively, in the light of the decision I made on Monday, Wollongong Coal surrendering the hearing date because of things that its legal representatives considered necessary to be done in the interests of their client.

73. I accept that there may be issues of calculation involved in determining what the costs thrown away may be. However, as was submitted by Mr Wood, counsel for Wollongong Coal, these are issues which costs assessors have to grapple with as part of their functions.

74. In my view, the vacating of the hearing date was the direct and inevitable consequence of the timing of NRE Resources’ Notice of Motion seeking leave to rely on the Cross Claim. The justice of the case, in my view, requires an order that NRE Resources pay Wollongong Coal's costs thrown away by reason of the vacation of the hearing date.

75. The application on behalf of Wollongong Coal is that the costs be assessable and payable forthwith as an exception to Rule 42.7 UCPR. I acknowledge that part of the rationale for Rule 42.7 is the desirability of having cost issues considered at the end of the proceedings, and not necessarily distracting the legal representatives for the parties whilst the proceedings are on foot.

76. However, there remains a discretion in the Court to determine whether costs ought be assessable and payable forthwith. The exercise of that discretion relies upon the particular circumstances and justice of the case.

77. It seems to me in all the circumstances, and consequent on reasons which I have already expressed, that the just outcome in this case is to order that the costs orders which I will shortly make in favour of Wollongong Coal be assessable and payable forthwith.

78. I should indicate that I have had regard to other matters which have been raised in submissions, including the letter dated 15 June 2017 (Exhibit A on the application). Wollongong Coal has, in some areas, not been entirely compliant with the procedural requirements on parties in contested proceedings in the Common Law Division of the Court.

79. That said, I do not think that the matters raised in that letter had any bearing on the determination of the Notice of Motion, or on the vacating of the hearing date. I have not regarded those issues as being of particular significance.

80. I make the following orders:

1. NRE Resources is to pay the costs of Wollongong Coal of and incidental to the Notice of Motion filed on 22 June 2017;

2. NRE Resources is to pay the costs of Wollongong Coal thrown away by reason of the vacation of the hearing scheduled to commence on 26 June 2017 with a five-day estimate;

3. I vary the usual order and, pursuant to Rule 42.7 Uniform Civil Procedure Rules, I direct that the costs orders which I have made be assessable and payable forthwith.

[Further submissions on remaining procedural issues]

81. I have made orders with respect to costs for reasons explained most recently in this judgment.

82. The remaining issues concern the future of this litigation. Senior Counsel for NRE Resources has submitted that the appropriate way forward would involve the transfer of these proceedings to the Commercial List in the Equity Division of the Court. Counsel for Wollongong Coal does not oppose that step. Counsel on both sides acknowledge that this is, in truth, a commercial dispute, which is appropriate for determination in the Commercial List.

83. The exposure which I have had to this litigation so far leads me to share that view. It may be that the litigation will become an even more complex commercial dispute.

84. I will shortly make an order transferring the proceedings to the Commercial List in the Equity Division, which I consider to be the appropriate List for the purpose of the future conduct of the proceedings.

85. I have also been informed that the mediation process flowing from the order made by me on Monday under s.26 Civil Procedure Act 2005 has progressed to the point that Mr Robert Kaye SC is to act as mediator, and certain directions have been given for the purpose of a mediation which is to take place on a future date. There is nothing further that the Court needs to do in relation to that order but to commend the process of mediation to the parties.

86. The final order I make is that the proceedings are transferred to the Commercial List in the Equity Division and are to be listed for directions before the Commercial List Judge at 9.45 am this Friday, 30 June 2017.

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Decision last updated: 29 June 2017