District Court New South Wales Medium Neutral Citation: Frisken in his capacity as liquidator of ACN 610 031 224 (formerly known as Diamond Valley Puppy Sales Pty Ltd (in liq)) v DVK Farming Pty Ltd (formerly known as Diamond Valley Kennels Pty Ltd) [2022] NSWDC 590 Hearing dates: On the papers Date of orders: 28 November 2022 Decision date: 28 November 2022 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraph 18 Catchwords: COSTS – serial procedural applications – no issue of principle Legislation Cited: Uniform Civil Procedure Rues 2005 (NSW) r 42.1 Cases Cited: Frisken v DVK Farming Pty Ltd [2022] NSWDC 570 Category: Costs Parties: Mr D Frisken in his capacity as liquidator for ACN 610 031 224 Pty Ltd (formerly known as Diamond Valley Puppy Sales Pty Ltd) (plaintiff) DVK FARMING PTY LTD (formerly Diamond Valley Kennels Pty Ltd) (defendant) Representation: Counsel: Mr M Connor for the plaintiff Mr J Rose for the defendant Solicitors: Oakbridge Lawyers for the plaintiff Sewell & Kettle for the defendant File Number(s): 2022/00011979 Publication restriction: Nil REASONS FOR Judgment 1. On 21 November 2022 I delivered reasons for judgment on several procedural applications that came before me when sitting as the Civil List Judge on 16 November 2022. Those reasons have been published on Caselaw (Frisken v DVK Farming Pty Ltd [2022] NSWDC 570). 2. At paragraph 67 of those earlier reasons, I summarised the results of those applications. These stated that the Court: 1. dismissed the application for dismissal for want of due despatch; 2. granted leave to join the company as a second plaintiff; 3. granted leave to the plaintiff to amend the statement of claim as proposed; 4. dismissed the application for transfer of the proceeding to the Supreme Court; and 5. in circumstances where joinder has been allowed, the defendant's strike out application in relation to the original statement of claim, is otiose. 1. Opportunity was given to the parties to supply short written submissions on the question of costs of those applications. Such written submissions were received by Counsel the plaintiff (23 November 2022) and Counsel for the defendant (28 November 2022). 2. These reasons assume the reader's familiarity with my earlier reasons on 21 November 2022. The parties submissions The plaintiff's submissions 1. The plaintiff submitted that the ordinary rule (encapsulated in r 42.1 of the Uniform Civil Procedure Rues 2005 (NSW)) that costs follow the event should apply. He submitted that in addition to the applications in the defendant's notice of motion there was a 'pre-emptive' summary dismissal application. He essentially cited the above description of the results and counted up that the plaintiff had succeeded on all three of the defendants' applications and two of three of his applications. The only exception was the transfer application. That application, however, only took up limited time in comparison with the other applications. 2. Counsel for the plaintiff emphasised that most of the time was (unnecessarily) spent agitating legal and factual matters as if on a final hearing. Further, in relation to his application to amend, the liquidator argued that (save for minor amendments consequential from the joinder of the correct plaintiff for the existing cause of action) the other amendments – concerning the new causes of action – were responsive to matters that the defendant relied upon in its defence. 3. The defendant received the benefit of an order for costs consequential from the orders made for amendment (and, joinder). There was no reason for any other dispensation from the general rule. The defendant's submissions 1. The defendant's solicitor submitted that in addition to the order in the earlier judgment that the plaintiff pay the defendant's costs thrown away by the joinder of the second plaintiff and the amendments: 1. the plaintiff is entitled to its costs of the day of the hearing of motion, but excluding its costs of: 1. the affidavit of Mr Frisken which was relied upon at the hearing but rejected; and 2. its unsuccessful transfer application; 1. otherwise, the costs of the plaintiff's motion be costs in the cause; and 2. each party bear their own costs of the defendant's motion. 1. The defendant submitted that in the lead-up to the motion, there was a flurry of steps taken to gather evidentiary material ahead of the looming hearing of the motion, resulting in costs that were ultimately wasted. Further there had been a not insignificant period where the plaintiff had delayed in bringing applications for amendment and joinder. 2. The defendant submitted that its strike out application was only rendered moot following the joinder and (consequential) amendments to the pleading. But the reasoning underlying the strike out action was well founded: the proper plaintiff had not been joined to the proceeding. 3. The defendant also submitted that the orders for joinder and amendment have not resolved the merits of the case and were granted, in effect, to rectify past mistakes by the plaintiff (the wrong plaintiff for the existing action) or omission to add other relief (the inclusion of new actions). The general rule that costs follow the event should not apply in this case for the hearing at the interlocutory level, but, subject to a qualification, should be determined at the conclusion of the proceeding. Further, the plaintiff should not have his costs of his unsuccessful transfer application. 4. The qualification is that the defendant accepts that the plaintiff should have his costs of the day of the hearing, in which, the defendant acknowledged, the Court largely accepted arguments on joinder and amendment. Consideration 1. The Court has already made an order that the plaintiff pay the defendant's costs thrown away by the joinder of the second plaintiff and the amendments. What remains only are the costs of the applications. 2. The order for costs of the hearing of the interlocutory applications is of course shaped by general discretionary reasons. 3. There is force to the defendant's points about an effective carve out from any general costs order made in the plaintiff's favour by reason of the affidavit of Mr Frisken which the plaintiff relied upon, but the Court rejected, at the hearing, and also its unsuccessful transfer application. These points are accommodated in the order I make below. 4. Nevertheless, as was indicated in the earlier reasons, the main point of disputation concerned whether the defendant succeeded, as a matter of substance, in having the existing cause of action summarily dismissed and to pre-empt the plaintiff's capacity to bring new causes of action under the Corporations Act. That approach was unreasonable in the absence of any prejudice and where the defendant's approach was to effectively conduct a truncated hearing on the merits. This was no mere strike out application based on a defective pleading. Further, as indicated in my earlier reasons, the proper remedy for a concern about whether the proper plaintiff has been joined is the suggestion that the correct one be added. Unless that suggestion is met by recalcitrance from the plaintiff, a strike out application should not be necessary. 5. The defendant's approach to these motions was, in my view, unnecessarily aggressive and extended the scope of the hearing, in terms of its preparation and hearing, beyond which was warranted. It failed in its application for dismissal for want of due despatch (a matter not referred to in the defendant's submissions) and although technically, its application for strike out was rendered otiose, that was only because the Court accepted the plaintiff's arguments for amendment, in preference to the defendant's arguments, which were intertwined with the strike out application. Orders 1. The Court makes the following orders: 1. Subject to a qualification, the defendant is to pay 75% of the plaintiff's costs of and occasioned by the applications, being the plaintiff's motion dated 19 August 2022 and the defendant's motion dated 27 July 2022, on the ordinary basis. 2. The qualification is that the plaintiff is not entitled to the costs of preparing the affidavit of Daniel Frisken dated 14 November 2022. ********** 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: 28 November 2022