Young v Smith (No 2) - [2015] NSWSC 1267

Supreme Court

New South Wales

Medium Neutral Citation: Young v Smith (No 2) [2015] NSWSC 1267
Hearing dates: 28 August 2015
Date of orders: 02 September 2015
Decision date: 02 September 2015
Before: Sackar J
Decision:
See [38]

Catchwords: COSTS – indemnity costs – where appropriate – whether exceptional circumstances – where adverse credit findings made – where proceedings conducted on false basis
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd (1986) 71 ALR 287
Calderbank v Calderbank [1973] 3 All ER 33
Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Oshlack v Richmond River Council (1998) 193 CLR 72
The Owners – Strata Plan No 68372 v Allianz Australia Insurance Limited (No 2) [2015] NSWSC 729
Woolworths Ltd v Olson [2004] NSWSC 896
Young v Smith [2015] NSWSC 400
Young v Young [2014] NSWSC 1475
Texts Cited: N/A
Category: Costs
Parties: Joanne Elizabeth Young - Plaintiff
Josephine Aapa Smith – First Defendant
Louise Thompson as Trustee for the Estate of Leslie James Young – Second Defendant
Westpac Banking Corporation Limited – Third Defendant
Representation:
Counsel:
D Campbell SC and G Gee - Plaintiff
PJ Bambagiotti – First Defendant
Solicitors:
Greg Walsh & Associates - Plaintiff
Buckingham Lawyers – First Defendant
S Psaltis – Second Defendant
HWL Ebsworth Lawyers – Third Defendant

File Number(s): 2014/272808
Publication restriction: N/A

Judgment

On 10 April 2015 I delivered the primary judgment in this matter: Young v Smith [2015] NSWSC 400 (primary judgment). Terms defined in those reasons bear the same meaning in these reasons. The proceedings related to the transfer of an interest in a property in Pyrmont from Mr Young to Ms Smith. On 10 April 2015 I made findings to the effect that the transfer of the interest in the Property was void because it was undertaken by Mr Young to defraud his creditors.
On 5 May 2015 orders were entered giving effect to my judgment. As is described in more detail below, it became apparent following the delivery of judgment and the entry of those orders that the proceedings had been conducted on a false premise and, in fact, Ms Smith had mortgaged the Property prior to the commencement of the proceedings to fund the purchase of a hotel.
By notice of motion filed on 30 July 2015 the plaintiff sought that the costs of the proceedings be paid on an indemnity basis by Ms Smith and that costs be payable in a lump sum.
The costs sought by Mrs Young extend not only to those of the proceedings before myself, but also those before Bellew J and Rothman J, who heard the application to restrain Mr Young and Ms Smith from dealing with the Property in 2014 (see Young v Young [2014] NSWSC 1475 (the injunction judgment)).
At the hearing on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Young v Smith (No 2)

Details

AGLC: Young v Smith (No 2) [2015] NSWSC 1267
Case: [2015] NSWSC 1267
Decision Date: 02 September 2015

CaseChat Overview and Summary

In the case of Young v Smith (No 2), the Court was asked to consider the question of indemnity costs and whether they were appropriate in circumstances where adverse credit findings had been made against the defendant and the proceedings had been conducted on a false basis. The plaintiff, Young, sought indemnity costs from the defendant, Smith, on the basis that Smith had misled the court by presenting false credit reports, leading to a significant delay in the proceedings.

The legal issues before the court were whether indemnity costs were appropriate in this situation and whether there were any exceptional circumstances that would prevent the award of such costs. The court had to determine whether Smith's conduct warranted a departure from the usual rule that costs follow the event, and if so, whether any exceptional circumstances existed that would prevent the award of indemnity costs.

The court found that Smith's conduct in presenting false credit reports to the court was a serious breach of the court's processes and had led to a significant delay in the proceedings. The court held that indemnity costs were appropriate in this case as they were necessary to compensate the plaintiff for the additional costs incurred due to Smith's misleading conduct. However, the court also considered whether there were any exceptional circumstances that would prevent the award of such costs. In this case, the court found that there were no exceptional circumstances that would prevent the award of indemnity costs, and therefore, the plaintiff was entitled to recover the additional costs incurred as a result of Smith's misleading conduct. The court ordered that Smith pay the plaintiff's costs of the proceedings, including indemnity costs, on an indemnity basis.

Orders