Zaiter v Ruddock (No 2)

[2021] NSWSC 907

Supreme Court

New South Wales

Medium Neutral Citation:

Zaiter v Ruddock (No 2) [2021] NSWSC 907

Hearing dates:

23 July 2021

Date of orders:

23 July 2021

Decision date:

23 July 2021

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Plaintiff to pay defendants’ costs

Catchwords:

COSTS — Party/Party — General rule that costs follow the event — Costs of parties up to entry of submitting appearance — Whether construction of major political party’s constitution public interest litigation

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Zaiter v Ruddock [2021] NSWSC 880

Category:

Costs

Parties:

Martin Zaiter (Plaintiff)

Phillip Ruddock (First Defendant)
Chris Stone (Second Defendant)
Penny George (Third Defendant)
Christopher Rath (Fourth Defendant)
Tobias Lehmann (Fifth Defendant)
Aileen MacDonald (Sixth Defendant)
Mary-Lou Jarvis (Seventh Defendant)
Matthew Camenzuli (Eighth Defendant)

Representation:

Counsel:

P E King and A Power (Plaintiff)

S Duggan (First to Seventh Defendants)
S Robertson and M Maconachie (Eighth Defendant)

Solicitors:

Stanton and Stanton (Plaintiff)

Harpur Phillips (First to Seventh Defendants)
Pryor Tzannes and Wallis (Eighth Defendant)

File Number(s):

2021/185012

Publication restriction:

Nil

EX TEMPORE Judgment (Revised)

Summary

1. The Court delivered its reasons in these proceedings on 21 July 2021: Zaiter v Ruddock [2021] NSWSC 880 (the Principal Judgment). This judgment deals with the final disposition of the proceedings. Defined terms in the Principal Judgment have the same meaning in these reasons. The appearances were as set out in the Principal Judgment with the addition of Mr S Duggan of Counsel, who appeared for the first to seventh defendants (the Submitting Parties) and the Party. This judgment assumes familiarity and should be read with the Principal Judgment.

2. For the reasons which follow, the final orders of the Court will be:

1. Order that the amended summons dated 7 July 2021 is dismissed.

2. Order the plaintiff to pay the eighth defendant’s costs of these proceedings.

3. Order that order 14 of the orders made on 1 July 2021 as extended by order 1 of the orders made on 16 July 2021 (interlocutory injunction) is dissolved.

4. Order the plaintiff to pay the first to seventh defendants’ and the Liberal Party of Australia (NSW Division)’s costs of these proceedings, being their costs of today and:

1. In the case of the Liberal Party of Australia (NSW Division), until it ceased to be a party; and

2. In the case of the first to seventh defendants, until they filed their submitting appearances.

Mr Zaiter's submissions

3. Mr King pressed for this notation and order:

“1. Note that the parties agree that the conditions set out in clause 13.2.4 of the Constitution by the State Executive for the exercise of power provided by that clause have arisen with respect to selection and endorsement of candidates for the next ordinary local government elections for the City of Parramatta Council to be held on 4 September 2021 or at such later time as may occur for Liberal candidates.

2. Order that each party pay their own costs.”

4. He submitted that the notation was an appropriate exercise of the Court's jurisdiction, especially given what he said was Mr Camenzuli’s late concession concerning the applicability of cl 13.2.4.

5. In relation to costs, recognising that costs are ultimately in the discretion of the Court (see s 98 of the Civil Procedure Act 2005 (NSW)), he submitted that there were three reasons why the Court should make no order as to costs:

1. As a dispute between members of the State Executive, it was appropriate to assist the proper and harmonious functioning of that body to avoid a situation where some members of that body had the benefit of costs orders against another member of that body.

2. The plaintiff's case had been brought bona fide and raised matters about which reasonable minds could differ. In the event, his client's loss was what might be termed, without any disrespect, a "near run thing".

3. The litigation concerned the constitution of a major institution in Australian political life. It was, therefore, public interest litigation of the kind considered by the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 (Oshlack), especially at [20] and [47]–[49].

6. Mr King also put that there was another way of reaching the same result by reference to various interlocutory matters which would give rise to an entitlement to costs in the plaintiff. These could be offset against costs to which the eighth defendant might be entitled with the just outcome being that there should be no order as to costs.

Costs as between Mr Zaiter and Mr Camenzuli — Consideration and conclusion

7. In what follows I substantially adopt the submissions put by Mr Robertson which is why I do not set them out separately. What follows are my reasons for rejecting Mr King's submissions and for making the orders sought by Mr Robertson for his client (being orders 1 to 3 set out in [2] above).

8. The proceedings were heard by reference to the amended summons which is set out in [13] of the Principal Judgment. In the light of the Court's conclusions in the Principal Judgment, there was no basis to make any of the declarations or injunctions that had been pressed. The total failure to obtain any of the relief sought is the relevant "event" for the purposes of exercising the Court's costs discretion.

9. Costs follow the event (see r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW)) and there is no reason why that should not be the case here.

10. Turning to Mr King's submissions:

1. While institutional harmony is, of course, a desirable thing, the harmony or otherwise as between the members of State Executive is not relevant to the Court's exercise of its costs discretion.

2. While there can be no doubt that the matters advanced by Mr Zaiter were brought bona fide and raised arguable questions, neither of those things is a basis to alter what would be the usual costs consequences in this case. There are many cases that come before the Court where the unsuccessful party has quite properly raised matters that were seriously arguable, but has failed at the end of the litigation. Absent some other factor, costs nevertheless follow the event.

3. While the Party plays an important part in Australia's democracy, litigation about the construction of its constitution is not public interest litigation in the sense used in Oshlack. In particular, the High Court noted at [20] that one of the grounds upon which the trial judge had made the order in that case was that Mr Oshlack had no personal interest in the litigation and did not stand to make any personal gain by its outcome. That is not the case here. With absolutely no disrespect intended, Mr Zaiter was advancing, as he was perfectly entitled to as a citizen and member of the Party, his personal interest to advance his wish to be an endorsed Party candidate in the forthcoming elections. As between him and Mr Camenzuli, this was adversarial litigation.

11. As for the alternative method advanced by Mr King to reach the result that there should be no order as to costs, this was urgent litigation where the parties worked very hard to bring about a swift resolution of an important matter. It would not be appropriate in those circumstances to dissect failings in interlocutory steps that had been ordered at short notice to enable the proceedings to be heard very quickly in an attempt to determine who should obtain costs of particular steps along the way or which were occasioned as a result of delays in those steps being achieved. This is a matter where, in relation to the interlocutory steps, a classic broad brush needs to be applied and there is no reason why the ordinary rule should not apply that interlocutory costs go with the general costs of the proceedings (see r 42.7 of the Uniform Civil Procedure Rules 2005 (NSW)).

12. Finally, the notation sought by Mr King is not appropriate. This is not a case where some intermediate step or agreement needs to be recorded as a notation to explain why the Court has then gone on to make whatever orders it has in fact made. The parties did not require the Court to adjudicate the question of the applicability of cl 13.2.4. That is recorded in the judgment, which must be left to speak for itself. A notation is not itself a source of legal rights or obligations and might be apt to mislead that it has such an effect if it is included in the Court's orders disposing of the proceedings.

The Submitting Parties' costs

13. Mr Duggan sought the Submitting Parties' costs and those of the Party. The circumstances of the brief appearance of the Party are set out in [9]–[11] of the Principal Judgment.

14. Mr Duggan's submission was that, while they had ultimately and properly entered a submitting appearance when it became apparent that an active contradictor was available to contradict the propositions to be put by Mr Zaiter, the Submitting Parties and the Party were entitled to their costs up to that point (or, in the case of the Party, up to the point at which it was substituted out of the proceedings).

15. Mr King submitted that the submitting appearance entered by the Submitting Parties should be taken to mean what it said. The Submitting Parties had agreed by their submitting appearance to submit to any order or judgment of the Court save as to costs.

16. Mr Duggan candidly informed the Court that he had been unable to find any authority in which a party who had entered a submitting appearance had then had a costs order made in its favour. In circumstances such as these, the Court would normally be hesitant to make an order in favour of a party that has entered a submitting appearance because in many, if not most, cases the relevant "event" would simply not affect the party that had entered the submitting appearance, especially if that party’s submission was akin to an interpleader.

17. However, in this case the event is clear by reason of the dismissal that I will order of the amended summons. The Submitting Parties and the Party would have been affected by any orders made pursuant to the amended summons had Mr Zaiter succeeded in any respect. In the events which have happened, no orders other than a dismissal will be made so that it may be inferred that the event for all practical purposes, to the extent that they participated in the proceedings, is that the Submitting Parties and the Party may be taken to have notionally succeeded. Putting it another way, they have incurred costs in relation to an unsuccessful cause. In those circumstances, I am satisfied that it is appropriate for the Submitting Parties and the Party to have their costs paid by Mr Zaiter for today and until they had entered their submitting appearances or (in the case of the Party) had been substituted out of the proceedings.

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Decision last updated: 26 July 2021