Supreme Court New South Wales Medium Neutral Citation: S Changizi v H Rizaie [2021] NSWSC 698 Hearing dates: 11-14 May 2021; 18 May 2021; 20 May 2021 Date of orders: 16 June 2021 Decision date: 16 June 2021 Jurisdiction: Equity - Corporations List Before: Black J Decision: Parties to pay the costs of their respective claims. Catchwords: COSTS — Party/Party — General rule that costs follow the event — Application of the rule and discretion. Legislation Cited: - Civil Procedure Act 2005 (NSW), s 98 Cases Cited: - Tonna v Mendonca (No 2) [2020] NSWSC 306 Category: Procedural rulings Parties: Sam Changizi (Plaintiff/Cross-Defendant) Hussain Rizaie (Defendant/Cross-Claimant) Representation: Counsel: A J Bulley (Plaintiff) N Carney (Defendant) Solicitors: Aubrey F Crawley & Co (Plaintiff) Gells Lawyers (Defendant) File Number(s): 2017/138566 Judgment 1. By my judgment delivered on 31 May 2021 ([2021] NSWSC 613), I held that a claim brought by the Plaintiff, Mr Changizi, against the Defendant, Mr Rizaie, should be dismissed and that Mr Rizaie's Cross-Claim against Mr Changizi in respect of different matters should also be dismissed. Mr Rizaie formulated proposed orders to be made in respect of the proceedings, which do not appear to be contested, other than as to the question of costs. 2. I had expressed the preliminary view in my primary judgment that there should be no order as to the costs of the proceedings. That approach reflected the fact that the costs orders that would ordinarily follow from the result of the proceedings were that Mr Changizi pay Mr Rizaie's costs of the claim brought by Mr Changizi against Mr Rizaie and that Mr Rizaie pay Mr Changizi's costs of the Cross-Claim; and, unless there was a significant disproportion between the costs involved in Mr Changizi's claim and the costs involved in Mr Rizaie's Cross-Claim, the parties would incur significant wasted costs in proceeding to an assessment of claims for costs which were of similar magnitude, which would likely ultimately be set-off against each other. The costs of an assessment would likely also be increased by arid disputes as to whether particular costs related to Mr Changizi's claim, or Mr Rizaie's Cross-Claim, or both. Nonetheless, I indicated that I would allow the parties an opportunity to make written submissions as to costs. 3. Mr Rizaie referred to the history of Mr Changizi's claim which is a matter to which a costs assessor may properly have regard. He submits, uncontroversially, that the Court has a discretion under s 98 of the Civil Procedure Act 2005 (NSW) to determine by whom, to whom and to what extent costs are to be paid and that the general rule under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) is 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. Mr Rizaie also submits that the principle that costs follow the event may be qualified where a party succeeds on some issues and fails on others, and that the Court may in an appropriate case differentiate between issues on which a party was successful than those on which it failed. While I accept that submission, nothing follows from it in this case. 4. Mr Rizaie here failed in his Cross-Claim, in its entirety, and any success in respect of any sub-issue in it is of no utility to him. There is, in those circumstances, no basis for the order that he seeks that there be no order as to the costs in the Cross-Claim. There is also no reason to discount the costs that Mr Changizi is ordered to pay in respect of Mr Changizi's claim to 80%, as Mr Rizaie proposed, where that appears to have been a concession offered by Mr Rizaie in order to seek to avoid the costs of the Cross-Claim being ordered against Mr Rizaie. Mr Rizaie's further submission that particular issues were "dominant in case preparation of the hearing" is, it seems to me, a matter that is best left to assessment, once Mr Rizaie rejects the pragmatic approach of avoiding further costs in respect of that assessment. For completeness, I note that Mr Rizaie sought to rely in support of his claim for costs on an affidavit dated 7 June 2021 of his solicitor, Mr Coffey. Mr Changizi objected to Mr Rizaie's reliance on that affidavit on the basis that I had not been asked to grant, and had not granted, leave to file affidavit evidence in respect of the question of costs. It is not necessary to address that question, where Mr Coffey's affidavit would make no difference to the outcome. 5. In response, by his submissions dated 8 June 2021, Mr Bulley, who appears for Mr Changizi, supports the preliminary view that I expressed in my primary judgment and submits that there should be no order as to the costs of the proceedings. Mr Bulley acknowledges that, in an appropriate case, the Court may apportion the costs of proceedings based upon the outcome of particular issues in the proceedings, but observes that that approach would ordinarily be exercised only in exceptional circumstances: Tonna v Mendonca (No 2) [2020] NSWSC 306 at [172]-[173]. He submits that costs should not be apportioned between the respective measures of success (or otherwise) between Mr Changizi and Mr Rizaie in the proceedings. As I have noted above, there seems to me to be no reason to conduct such an apportionment here, where each party failed in its case against the other, and the ordinary result that each pay the other's costs in respect of its failure will do justice as between the parties. 6. I have concluded that I should not adopt the pragmatic approach which I had proposed in the principal judgment, where that approach is opposed by Mr Rizaie. That approach depends on an assumption that the costs of Mr Changizi's claim and the costs of the Cross-Claim are of a similar magnitude, and I am not able to assess whether that is the case, where Mr Rizaie contests that assumption and the evidence does not establish it. The preferable course, where that matter is disputed, is to make the usual order that each party pay the costs of the claim in which he failed, and leave both parties to proceed to assessment as to their respective claims for costs, if they cannot then agree those amounts and any appropriate set-off between them. 7. For these reasons, I make the following orders: 1. Order 1 made on 12 May 2021 be discharged. 2. The Third Further Amended Statement of Claim be dismissed. 3. The Cross-Claim filed by the First Defendant be dismissed. 4. The Plaintiff pay the First Defendant's costs of and incidental to the claim brought by the Plaintiff against the First Defendant as agreed or as assessed. 5. The First Defendant pay the Plaintiff's costs of the Cross-Claim as agreed or as assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 June 2021