In the matter of Beverage Freight Services Pty Ltd [2020] NSWSC 861

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Beverage Freight Services Pty Ltd [2020] NSWSC 861 Hearing dates: 17 June 2020 (last submissions 2 July 2020) Decision date: 03 July 2020 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders made to give effect to costs judgment Catchwords: COSTS – gross sum costs order – indemnity basis – appropriate orders to give effect to judgment. Cases Cited: - Re Beverage Freight Services Pty Ltd [2020] NSWSC 509 - Re Beverage Freight Services Pty Ltd [2020] NSWSC 797 Category: Costs Parties: Brian Charles Hobson & Ors (Applicants/Defendants) J E & Vella Pty Ltd & Anor (Respondents/Plaintiffs) Representation: Counsel: M Dolenec (Applicants/Defendants) A Fernon (Respondents/Plaintiffs)

Solicitors: McEvoy Legal (Applicants/Defendants) Yates Beaggi Lawyers (Respondents/Plaintiffs) File Number(s): 2015/157614

Judgment 1. By my judgment delivered on 24 June 2020 (Re Beverage Freight Services Pty Ltd [2020] NSWSC 797), I held that a gross sum costs order should be made in favour of the Defendants relating to the wasted costs arising from the Plaintiffs' non-compliance with discovery orders and hearings as to whether these proceedings should be dismissed by reason of that non-compliance. I observed (at [43]) that: "In summary, I am satisfied that the Court can do justice to the parties in making a lump sum costs order, which will avoid the detriment to the Defendants of the costs and time of an assessment and avoid the detriment to the Plaintiffs of the proceedings being dismissed, as would otherwise have been appropriate for the reasons noted in the Earlier Judgment. The parties should recalculate the costs on the basis of a discount of 10% to the solicitors' costs quantified in Mr Grossman's affidavit (after excluding items 1-3 and 195 referred to in Appendix 7 to Mr Taylor's report); including the costs claimed in respect of Ms Dolenec's fees, other than the amount of $2100 referable three items noted in paragraph 35 above; including the costs claimed in respect of Mr Ferrier's fees, other than $675 referable to item 16 and $1800 referable to items 18 and 19; and including other disbursements. The parties should seek to agree the question of GST or otherwise address it in submissions as to orders." 1. I directed the parties to bring in agreed short minutes of order to give effect to this judgment within 7 days or, if there was no agreement between them, their respective draft short minutes of order and submissions as to the differences between them. 2. The Defendants calculated the costs payable in accordance with my judgment, and advised the Plaintiffs' solicitors of that calculation by a letter dated 25 June 2020, proposing that payment of the costs should be made by the Plaintiffs by 9 July 2020. The Defendants also confirmed, favourably to the Plaintiffs, that GST was not payable in respect of the claim for costs. The Plaintiffs' solicitors did not engage with that calculation, or suggest that there was any error in it, but responded by an email dated 25 June 2020 as follows: "Thank you. Our clients' are filing an Appeal form [sic] the decision. We will consider the timing of that against the form of Orders required to conclude the decision, and then serve the process." 1. There was therefore no agreement as to the form of orders to be made and the Defendants complied with the directions I had made by submitting their proposed Short Minutes of Order and short submissions, which set out the basis of calculation of each of the components of the costs that were to be ordered in accordance with the earlier judgment. 2. I had noted in my earlier judgment (at [44]) that the Plaintiffs had been on notice of the fact that costs would be payable since my judgment of 8 May 2020 and of the amounts claimed by the Defendants since 22 May 2020, although a lesser amount has been ordered to be paid. I had also observed that: "… the costs orders that I make will be payable within a short time after orders are made to give effect to this judgment. The parties should agree the time to be allowed for payment or, if no agreement is reached, address their respective positions in their submissions as to orders." The Defendants proposed that the amount of costs in their favour be payable by the Plaintiffs on or before 9 July 2020. The Plaintiffs made no submissions and, in particular, no submission as to the time in which costs should be paid. It seems to be preferable, in that situation, not to specify a time for payment but to make an order in the common use that the costs be paid forthwith. The matter will then be listed in a Corporations List in a little more than 21 days to confirm whether that payment has been made and, if not, what consequential order should be made. 1. The Defendants also propose that the Plaintiffs pay the Defendants' costs of the Interlocutory Process filed on 22 May 2020 as agreed or as assessed, such costs to be payable forthwith. The Plaintiffs have not made submissions, including to the contrary of such an order. The Plaintiffs were substantially unsuccessful and the Defendants were substantially successful in respect of the application in respect for a gross sum costs order and the Plaintiffs should pay those costs, on the usual basis that costs follow the event. I set out the basis on which such a "costs forthwith" order should be made in an earlier judgment in this matter (Re Beverage Freight Services Pty Ltd [2020] NSWSC 509) as follows: "An order that costs be paid forthwith is unusual, but may be made where there is, inter alia, unreasonable conduct or substantial delay of a kind that would justify such an order, although the Court will also have regard to the capacity of a costs order to stultify proceedings …" While I was satisfied that a "costs forthwith" order should be made in respect of the substantive hearings relating to the non-compliance with discovery orders and whether the proceedings should be dismissed, I am not persuaded that a costs forthwith order should be made in respect of the application for a gross sum costs order. 1. Accordingly, I make the following orders: 1. The Plaintiffs pay the Defendants' wasted costs of and incidental to (1) the Plaintiffs' failure to give discovery and access to discovered documents from 21 December 2019 until 30 April 2020; and (2) the determination whether the proceedings should be dismissed, on an indemnity basis, quantified in the gross sum of $94,864.00, such costs to be paid forthwith. 2. The matter be listed for directions in the Corporations Directions List at 10am on 27 July 2020. 3. The Plaintiffs pay the Defendants' costs of the Interlocutory Process filed on 22 May 2020 as agreed or as assessed.