De Varda and Tov-Lev v The Board of Directors of The Strathfield and District Hebrew Congregation Ltd & Anor (No 2) [2012] NSWSC 1442 (28 November 2012)

On 2 and 8 November 2012, Black J heard a Notice of Motion filed on 11 October 2012 by two of the nine persons named as the First Plaintiff in these proceedings and by the Second Plaintiff.  Judgment was delivered on 15 November 2012. It was held the Notice of Motion should be dismissed and the Second Further Amended Summons and Second Further Amended Statement of Claim should be struck out. Submissions on costs were received and the matter was heard again on 28 November 2012.

Black J considered the issue of whether he should be disqualified from determining the question of costs and concluded that neither actual nor apprehended bias were established.

In the ordinary course, costs would follow the event. Section 98(1) of the Civil Procedure Act 2005 (NSW) relevantly provides that:

"Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court; and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."

Rule 42.1 of the Uniform Civil Procedure Rules 2004 (NSW) ("UCPR") provides that, where the Court makes an order as to costs, the Court is to order that 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. The principles underlying an award of costs include that costs are awarded to compensate the successful party for the expense of being put to the necessity of litigation; a wholly successful defendant should ordinarily receive its costs unless good reason is shown to the contrary; and the discretion to order costs must be exercised judicially and not against the successful party except for some reason connected with the proceedings: Milne v Attorney-General (Tas) [1956] HCA 48; (1956) 95 CLR 460 at 477.

Black J found that, as the Plaintiffs were unsuccessful in the motion, costs should follow the event in the ordinary course, so as to compensate the successful defendants for the costs to which they have been exposed in defending the motion. Three other issues relating to the question of costs arose:

1.     Whether the Defendants should have leave to read a further affidavit;

2.     Whether indemnity costs should be awarded; and

3.     Whether an order for costs should be made against Mr Cliffe (one of the two persons of the nine persons named as First Plaintiff who filed the motion).

 The first two issues were answered in the negative. The following orders were made:

1.     Mr Joseph de Varda and Rabbi Dr Samuel Tov-Lev pay the costs of the Defendants of and incidental to the Plaintiffs' motion of 11 October 2012 on the ordinary basis as agreed or as assessed.

2.     Mr David Cliffe pay the costs of the Defendants of and incidental to the Plaintiffs' motion of 11 October 2012 up to 30 October 2012 on the ordinary basis as agreed or as assessed.

Re Webuildem Pty Limited and Re Maroun Investments Pty Limited (No 8) [2012] NSWSC 882 (2 August 2012)

This case was a hearing for costs following an unsuccessful interlocutory application by the defendants, Maroun Investments Pty Ltd, and being denied leave to appeal further. At the first instance, Black J had noted that in the ordinary course, costs would follow the event, with costs to be heard later. In this hearing, the plaintiffs and Arab Bank Australia Ltd (‘the Bank’) sought orders for costs.

The cases related to an unpaid loan resulting in administrators being appointed. During this process ‘Escrow Orders’ were agreed to as part of a settlement procedure. The defendant then sought to stay the operation of those orders through the interlocutory application. In the current case, the plaintiffs sought costs on an ordinary basis while the Bank sought it on an indemnity basis. The Bank’s claim relied primarily upon the terms of the mortgage, which provided for payment of costs on an indemnity basis, where those costs relate to administering or terminating the mortgage, the loan or another arrangement.

Black J held that there was no reason to depart from the general rule that costs should follow the event. His Honour affirmed the fact that costs are compensatory in nature to reflect the vindication of a successful claim or defence. An order was subsequently made for the plaintiffs to receive costs on an ordinary basis.

An order was also given for costs on an indemnity basis for the Bank. His Honour held that the reference to ‘another arrangement’ included the settlement terms reached on 7 March 2012, which in turn provided for the entry of the Escrow Orders in certain circumstances.

The defendants sought to rely upon the decision of Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 (incorrectly cited as [2008]) to support the contention that indemnity costs could not be claimed. Black J distinguished this case as in that instance, the bank had sought costs on a party/party basis – here, costs on an indemnity basis were sought. His Honour affirmed that the proper course is to give effect to contractual entitlement and therefore awarded costs of and incidental to the interlocutory process on an indemnity basis.

Kashani-Malaki v Di Carlo (No 2) [2012] QSC 261 (10 September 2012)

The Defendant had sought an order that proceedings be stayed unless and until the Public Trustee of Queensland consented in writing to the plaintiff continuing with the proceeding. The Defendant contended that as a result of the Plaintiff being sentenced to imprisonment s 95 of the Public Trustee Act 1978 (Qld) was trigged. The Defendant therefore submitted that the Plaintiff was precluded from continuing to maintain the proceedings or that to do so would involve the alienation of property or the making of contracts, from which he was precluded. Following the rejection of those arguments, the Plaintiff applied for costs.

The Plaintiff sought costs on the usual basis of costs following the event. The Defendant countered this with reference to a number of issues, mostly relating to the involvement of the Public Trustee and the seemingly arguable case of the Defendant. Daubney J ruled awarded costs to the Plaintiff and commented on the following issues raised by the Defendants:

  • The incarceration of the plaintiff is irrelevant;
  • The fact that the Public Trustee does not seek costs is irrelevant;
  • The possibility of the case being 'seriously arguable' is not of importance;
  • That the case was brought in compliance with case management was not relevant as the earlier hearing had reserved the costs of the caseflow review until the current hearing; and
  • That the current hearing involved discrete issues of statutory interpretation, separate from the principal proceedings.
Daubney J also commented that the Defendant's submission of seeking leave to appeal, before seeing a judge's reasons, was inappropriate and to be ignored.

J & MD Milligan P/L v Queensland Building Services Authority (No 2) [2012] QSC 262 (12 September 2012)

On 20 June 2012 the Plaintiff applied to amend its claim to add a cause of action in estoppel and for an interlocutory injunction, both of which were refused. On 9 July 2012 the Defendant applied for summary judgment or alternatively for an order striking out the whole or part of the statement of claim, succeeding to the extent that three paragraphs were struck out. The Plaintiff sought no order of costs for the first application and that the Defendant pay for the second application. The Defendant sought costs for the first on an indemnity basis and costs for the second.

As the Plaintiff was unsuccessful on its application, and had ample opportunity to abandon its application, costs were awarded to the Defendant. Costs were awarded on the standard basis as it was not a sufficient reason for an indemnity basis. While in the second claim the Defendant was only partially responsible, the paragraphs struck out were critical to the estoppel case and interlocutory injunction application. The Plaintiff was therefore ordered to pay half of the Defendant's costs on that application.

Current Images Pty Ltd v Dupack Pty Ltd (No 2) [2012] NSWCA 256

Following an earlier judgment the Court directed parties to make submissions on interest and the question of costs. The case itself related to the potential incorporation of pricing conditions into an agreement for the purchase of a press.

The Appellant contended it was entitled to $41,655.83 in interest per s 100 Civil Procedure Act 2005 (NSW) and the Respondent did not dispute this.

In the primary hearing, the Court found that due to inconsistencies that would arise if the pricing conditions were incorporated, it should not be. Alternatively, if it were incorporated it should be disregarded to the extent it conflicted with express terms. The Respondent contended that as these matters were not argued at first instance, the issue of costs should be deferred.

While disputing the extent to which the first matter was put to the trial judge, the Respondent ultimately acknowledged that the second matter was put to the trial judge. Bathurst CJ, with whom Macfarlan JA and Sackville AJA agreed, found that as the second matter was raised it could not be said a different course may have been followed at trial and on appeal. Subsequently, there was no reason to deprive the appellant of its costs of the appeal or the costs of the proceedings in the court below.

Clarke v Nationwide News Pty Ltd trading as The Sunday Times (No 2) [2012] FCA 990 (4 April 2012)

The Applicant had succeeded in proving that some of the imputations made by the Respondent were in breach of the Racial Discrimination Act 1975 (Cth). The parties agreed upon interest and contested the issue of costs. The Applicant submitted that costs should follow the event and that the comments created a single issue of discrimination. The Respondent contended that as the Applicant initially listed other imputations that did not make it to trial, and did not succeed on some of those that were raised, costs should be reduced using a mathematical-type calculation.

Barker J ruled that while the case was narrowed when it came to trial, no major deviation from the essence of the case was put. His Honour held that this was a case in which it was difficult to unbundle successful points from unsuccessful points and as such, costs should be awarded. However, costs in relation to amendments made to the pleadings raising points which were not pursued were not awarded.