Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd (No 2) [2024] NSWCA 13 Hearing dates: On the papers Date of orders: 06 February 2024 Decision date: 06 February 2024 Before: Bell CJ; Mitchelmore JA; Adamson JA Decision: (1) The notice of motion filed 19 October 2023 is dismissed with costs. Catchwords: COSTS – application to vary costs order – UCPR, r 36.16(3A) – where question of costs addressed in submissions on appeal – whether basis for variation made out Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 42.21 Cases Cited: Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47 Autodesk v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue (No 2) [2014] NSWCA 128 Dickson v Commissioner of the Australian Federal Police (No 2) [2023] NSWCA 111 Majak v Rose (No 5) [2017] NSWCA 238 Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 Sims v The Commonwealth (No 2) [2023] NSWCA 30 State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283 Thumbiran v Silver Chef Rentals Pty Ltd (No 2) [2022] NSWCA 178 Category: Costs Parties: Ranclose Investments Pty Ltd (First Appellant) Wayne Williamson (Second Appellant) Leda Management Services Pty Ltd (First Respondent) Leda Holdings Pty Ltd (Second Respondent) Representation: Counsel: M Robinson SC / J Lucy (Appellants) A Casselden SC / M Connor (Respondents) Solicitors: Clancy Lawyers (Appellants) Bartier Perry Lawyers (Respondents) File Number(s): 2022/00000341 Publication restriction: Nil Decision under appeal Court or tribunal: District Court Jurisdiction: Civil Citation: [2021] NSWDC 651 Date of Decision: 02 December 2021 Before: Gibson DCJ File Number(s): 2019/00142783 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] JUDGMENT 1. THE COURT: The Court delivered judgment in this appeal on 5 October 2023: Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd [2023] NSWCA 233 (the principal judgment). By notice of motion filed on 19 October 2023, the appellants, Ranclose Investments Pty Ltd and Wayne Williamson (collectively, Ranclose), seek to vary the decision of the Court, expressed in Order 4 of the orders, that there be no order as to the costs of the appeal. 2. The appeal concerned the decision of Gibson DCJ in the District Court to dismiss proceedings that Ranclose brought against Leda Management Services Pty Ltd (Leda Management) and Leda Holdings Pty Ltd (Leda Holdings), Ranclose having failed to comply with an order for security for costs obtained by Leda Management alone. The Court allowed the appeal on the basis that r 42.21(3) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) does not authorise a court to make an order dismissing proceedings as against a defendant who has not applied for, and does not have the benefit of, an order for security for costs under r 42.21(1). These reasons assume familiarity with the principal judgment. 3. In addressing the question of the costs at first instance and on the appeal, Mitchelmore JA said the following: "[59] By way of relief, the appellants sought that the appeal be allowed (Order 3) and that Gibson DCJ's order of dismissal, and the order that Ranclose pay the costs of the claim and the cross-claim, be set aside (Order 4). While I would allow the appeal, I do not consider that the orders should be set aside in their entirety, in circumstances where those orders were properly made as against Leda Management, which had the benefit of an order for security for costs which Ranclose had not satisfied. The appellants accepted as much in their written submissions, submitting that Gibson DCJ erred in ordering Ranclose to pay the costs of the claim and the cross-claim as agreed or assessed, as some of the costs were incurred after the joinder of Leda Holdings and in respect of the respondents' application for dismissal. At worst, they submitted, the costs order should have been limited to an order to pay Leda Management's costs only. [60] In considering costs, both at first instance and on appeal, it is also necessary to bring to account what occurred before Gibson DCJ. As I have noted above, at the hearing before Gibson DCJ the parties proceeded on the basis that both Leda Management and Leda Holdings had the benefit of an order for security. That was wrong. When the issue was raised, Ranclose and the respondents were invited to consider the correctness of the position that Gibson DCJ put to them, namely, that Order 6 made by Abadee DCJ was in favour of both defendants. Counsel for the respondents before Gibson DCJ, who had also appeared before Abadee DCJ, confirmed (wrongly) that her Honour's understanding was correct. Counsel for the appellants before Gibson DCJ was not briefed in the hearing before Abadee DCJ; he was invited to check with his instructing solicitor and, having done so, he did not contend for a contrary view on behalf of the appellants. [61] In my view, insofar as the order for costs that Gibson DCJ made below relates to Leda Management, it should not be disturbed. Insofar as the application for dismissal of the statement of claim was joined in by Leda Holdings, I would make no order as to costs. Leda Holdings was not a party to the cross-claim and thus the costs of the cross-claim should concern only Leda Management and not Leda Holdings. [62] As to the costs of the appeal, the appellants have succeeded on a ground they did not raise below. In the circumstances, I do not consider it appropriate to make any order as to the costs of the appeal. However, the respondents should pay the appellants' costs of the notice of contention." 1. Relying on rr 36.16(1) and (3A) of the UCPR, Ranclose seeks an order that the respondents (or the second respondent only) pay all (or, in the alternative, half) of the appellants' costs of the appeal. In support of the application, Ranclose read an affidavit of Christopher Clancy, solicitor, filed on 3 November 2023, to which there was no objection, and relied on written submissions dated 27 November 2023 and written submissions in reply dated 20 December 2023. The respondents read an affidavit of Breitil Sulaiman sworn 18 December 2023 and relied on written submissions of the same date, which were double the five-page limit set by direction. 2. The principles that apply to an application under r 36.16 of the UCPR are well settled and were recently summarised in State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283 ("Hollingsworth") at [17]-[22]. Relevantly for present purposes: 1. The power conferred by UCPR, r 36.16 is to be exercised "sparingly and with caution" having regard to the importance of the finality of litigation, and "does not give a licence to disgruntled litigants to re-agitate, in the hope of obtaining a more favourable outcome, issues that have been determined against them": Majak v Rose (No 5) [2017] NSWCA 238 at [12]-[13] (Leeming and Simpson JJA, Emmett AJA), quoted in Hollingsworth at [17]. 2. In order to enliven the exercise of the jurisdiction, what must emerge "is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing": Autodesk v Dyason (No 2) (1993) 176 CLR 300 at 302-303 (Mason CJ); [1993] HCA 6, quoted in Hollingsworth at [18]. 3. The reference to misapprehension in this context "is concerned with matters of oversight and inadvertence, and not with deliberate decisions which are said to be incorrect": Hollingsworth at [20], citing Dickson v Commissioner of the Australian Federal Police (No 2) [2023] NSWCA 111 at [4] (Meagher and Brereton JJA). 4. Ordinarily, questions of costs should be raised and addressed at the appeal hearing rather than by parties making separate and subsequent applications: Hollingsworth at [22], citing Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47 ("Aktas") at [5]-[7]. The Court in Hollingsworth extracted the following from Fuller v Albert (No 2) [2021] NSWCA 183 at [31]: "If [parties] wish to make submissions on costs, they should either do so at the hearing of the appeal, addressing the foreseeable possible outcomes, or in special circumstances seek leave to make costs submissions after the outcome is known." 1. The last point is of particular significance in the present case. In granting leave to appeal, Brereton JA stated that it was "only fair to the primary judge to observe that her Honour was not only not assisted by reference to authority on this point, but Ranclose's counsel abandoned the argument that Leda Holdings was not a beneficiary of the order"; and that those circumstances may ultimately have costs consequences: Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd [2022] NSWCA 206 (the leave judgment) at [5]. In the respondents' written submissions on the appeal, they referred to this paragraph of the leave judgment in support of a submission that Ranclose should not be awarded costs in the event the appeal succeeded. In the written reply on the appeal, Ranclose submitted that the common law rule, that a successful appellant should not be entitled to costs where the point was not taken in the court below, was not reflected in r 42.1 of the UCPR. Ranclose also cited Thumbiran v Silver Chef Rentals Pty Ltd (No 2) [2022] NSWCA 178, in which the Court stated at [5] that there are occasions when a successful appellant's failure to take a point is a proper basis for departing from the usual rule, but that each case turns on its own facts. Ranclose submitted that application of the general rule in r 42.1 was just "in circumstances where the respondents applied for the dismissal of the proceedings against both of them and have defended the courts' power to make the impugned order on appeal". 2. Contrary to Ranclose's reply submission on the notice of motion, to the effect that the Court overlooked the submissions it made about costs in writing on the appeal, the Court was well aware that the parties were in issue on the question of costs, the focus of which was what occurred in the hearing before Gibson DCJ in the District Court. It is apparent from the reasoning on costs in the principal judgment, extracted in [3] above, that it was the circumstances in which the ground of appeal came before the Court that prompted departing from the ordinary rule. That this outcome was in prospect was raised during the hearing of the appeal, with the Chief Justice raising the issue with Senior Counsel for Ranclose (Tcpt, 4 May 2023, p 7(46)-8(35)): "ROBINSON: The Court can't and shouldn't be led into a misconception as to what's happening. BELL CJ: But her Honour had the orders that were made. Mr Donnellan thought he was onto a good point, and on one view, he was. But then your instructor confirmed that the orders were made in favour of both defendants, and Mr Donnellan withdrew the point. ROBINSON: Sorry, I'm cutting out. BELL CJ: That has to at least have some cost consequences, doesn't it, if you're otherwise successful on the appeal? ROBINSON: Just a moment. It's cutting out. It's back on now. Yes, your Honour? BELL CJ: What I was putting to [you] was that that has to at least have some costs consequences if you are otherwise successful in this appeal. ROBINSON: Yes. That was suggested by the two justices in the leave application decision. I hear your Honour. I don't know that that's necessarily the import of what has happened. Your Honours heard what I just said in submission. The District Court's in charge of its own files and the District Court just can't proceed on an incorrect basis based on orders made by the Court itself. ADAMSON JA: In fairness to the judge, her Honour was misled by the apostrophe, and also perhaps by Mr Connor's assurance that 'Both defendants', that it was right. ROBINSON: And, also there's the rogue apostrophe and it was at issue here. The orders that were made were essentially not correct. That could've informed the decision that was made on the spot on the day. But I hear what your Honour says. BELL CJ: All right. I just wanted to hear what you had to say about the costs question. ROBINSON: I don't think there's any more I can say. My learned junior reminds me, of course, that both barristers agreed below. Both, not just ours." 1. The focus of Ranclose's submissions in support of the notice of motion to vary the Court's decision to make no costs order in its favour sought to reagitate the very issue that the Court raised in the hearing: 1. Ranclose submitted that it was primarily the conduct of the respondents which made it necessary for Ranclose to appeal the decision of Gibson DCJ in order to preserve the right to proceed with the claim against Leda Holdings. Ranclose alleged a lack of clarity in the application for summary dismissal, relying on the absence of a notice of motion and the lack of assistance in the written submissions as to whether the application was made on behalf of both respondents and whether the Court had the power to dismiss the proceedings. Ranclose also sought to rely on its own written submissions before Gibson DCJ, which did not proceed on the basis that both Leda Management and Leda Holdings had the benefit of security. 2. Ranclose accepted that a concession was made to the contrary during the hearing before Gibson DCJ, but emphasised the conduct of the respondents in confirming, wrongly, the view that her Honour took of the orders of Abadee DCJ. It submitted that the respondents should reasonably have been aware that there was a typographical error, in terms of the placement of the apostrophe, and were obliged to explain the correct position. 3. Ranclose also submitted that its conduct before Gibson DCJ, in acknowledging the terms of Abadee DCJ's order, and in failing to raise the construction of r 42.21(3) of the UCPR which was contended for on appeal, should not properly be regarded as disentitling conduct. It contended that it was in the interests of justice for the appellants to be compensated for their costs of running the appeal, having regard to the principle that costs orders are compensatory. Relying by analogy on Bondi Beachside Pty Ltd v Chief Commissioner of State Revenue (No 2) [2014] NSWCA 128 ("Bondi Beachside"), Ranclose submitted that if it had raised the construction of r 42.21(3) before Gibson DCJ, it would not have shortened that hearing, forestalled an appeal, or otherwise saved costs, noting that the respondents submitted on the appeal that the rule permitted dismissal of proceedings against a party which had not sought security for costs. 1. The submissions that Ranclose has made on this application could have been made orally or in writing on the appeal, noting that the question of costs was foreshadowed in the leave judgment. Senior Counsel was invited to make submissions on the very issue during the appeal hearing, at the conclusion of which he indicated that there was nothing more he could say. An application under r 36.16 is not an occasion to permit a party in the position of Ranclose to make additional submissions on an issue that not only the respondents, but the Court, squarely raised with it on the appeal. Further, Ranclose's submissions do not demonstrate that the Court was under any relevant misapprehension as to the circumstances that it considered in deciding to make no order as to costs. 2. Ranclose's reliance on Bondi Beachside does not call for a contrary conclusion: so far as is apparent from the reasons of Ward JA (Bathurst CJ and Tobias JA agreeing), it did not involve an application in which a party was reagitating an issue that was raised with it directly in the course of the appeal hearing (the appellant in that case submitted that the respondent should have raised the costs issue in submissions on the appeal, relying on Aktas). In any event, as the Court remarked in Thumbiran, each case will turn on its own facts, consistently with the Court's broad discretion as to costs: Sims v The Commonwealth (No 2) [2023] NSWCA 30 at [6]; Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 at [6]. Conclusion 1. The notice of motion should be dismissed with costs. In the reply submissions, Ranclose took issue with the length of the respondents' submissions, which as noted above were double the length that the Court had directed. It submitted that some allowance should be made in the order as to costs for the respondents' non-compliance. Acknowledging the difficulty of identifying an appropriate allowance if the motion is dismissed, Ranclose submitted that the respondents should pay the appellants' costs of the reply, and the appellants should pay for only half the costs of the respondents' preparation of the submissions. The Court is not prepared to descend into that level of detail in making orders as to costs. Nonetheless, the respondents' non-compliance with the Court's directions should not go unremarked upon. It was unexplained and inappropriate, and it should not be repeated. ********** 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: 06 February 2024