Supreme Court New South Wales Medium Neutral Citation: In the matter of Platypus Impact Housing Australia Limited (No 2) [2024] NSWSC 1070 Hearing dates: On the papers, submissions dated 25 and 30 July 2024 Date of orders: 22 August 2024 Decision date: 22 August 2024 Jurisdiction: Equity - Corporations List Before: McGrath J (in chambers) Decision: The defendant is to pay the plaintiff's costs (see [78]) Catchwords: COSTS — party/party — general rule that costs follow the event — consideration of Beoco principle — relevance of party's decision not to adjourn — submissions as to "mixed outcome" — where plaintiff not required to elect between forms of relief until trial — where such election did not meaningfully alter case to be answered by defendant — where defendant would not have adopted different approach — decision not to adjourn treated as a neutral factor — no reasoned basis for departing from general rule — s 459M conditioning order not a dominant or separable issue — HELD — general rule prevails — defendant to pay plaintiff's costs. Legislation Cited: Civil Procedure Act 2005 (NSW) ss 56, 98 Corporations Act 2001 (Cth), ss 183(1), 459H(3), 459M, 459N Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Australian Prudential Regulation Authority v Holloway (2000) 35 ACSR 276 Barry Edward and Thelma June Harrington v Greenwood Grove Estate Pty Ltd (No. 2) [2011] NSWSC 1598 Bonic v Pacific General Security Limited [2009] NSWSC 1221 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21 Croc's Franchising Pty Ltd v Alamdo Holdings Pty Ltd (No 3) [2023] NSWCA 316 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454; [1998] FCA 824 Golden v Vlandys (No 2) [2016] NSWCA 350 GOWAY Travel Pty Limited v Critchley & Anor [2024] NSWSC 2 GOWAY Travel Pty Ltd v Critchley (No 2) [2024] NSWSC 810 Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd (2019) 99 NSWLR 397; [2019] NSWCA 60 Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452; [1996] FCA 822 Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd (2012) 91 ACSR 170; [2012] NSWSC 943 Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Phillips v James (No 2) [2014] NSWCA 135 Re Platypus Impact Housing Australia Limited [2024] NSWSC 753 Riechelmann v McCabe (No 2) [2024] NSWCA 62 Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 Vadori v AAV Plumbing (2010) 77 ACSR 616; [2010] NSWSC 274 Vero Insurance Ltd v Australian Prestressing Services Pty Ltd (No 2) [2014] NSWCA 8 Category: Costs Parties: Platypus Impact Housing Australia Limited (ACN 654 195 445) (Plaintiff) Jack Elsegood (Defendant) Representation: Counsel: E Ball (Plaintiff) B Hord (Defendant) Solicitors: McLachlan Thorpe (Plaintiff) Legacy Legal (Defendant) File Number(s): 2023/00336359 Publication restriction: Nil JUDGMENT INTRODUCTION 1. This judgment addresses the issue of costs following my judgment in Re Platypus Impact Housing Australia Limited [2024] NSWSC 753 (Principal Judgment). 2. In the Principal Judgment, I made a conditional order under ss 459H(3) and 459M of the Corporations Act 2001 (Cth) setting aside a statutory demand that had been issued by the defendant, Jack Elsegood, to the plaintiff, Platypus Impact Housing Australia Ltd (PIHA). The order was made subject to PIHA commencing proceedings to prosecute its offsetting claim against Mr Elsegood on or before 18 July 2024. PIHA duly commenced proceedings in this court on 1 July 2024. 3. On the publication of my reasons in the Principal Judgment at the hearing on 20 June 2024, Mr Elsegood indicated that he wished to be heard on the question of costs. Mr Elsegood proposed a compressed timetable for the provision of short written submissions by the parties, to which PIHA agreed, with the matter to be determined by me on the papers. I made case management orders giving effect to that timetable at the close of the hearing on 20 June 2024. 4. The parties' respective positions on the question of costs in these proceedings can be summarised as follows: 1. Mr Elsegood seeks that there be no order as to costs in the proceedings or, in the alternative, that the amount of PIHA's costs payable by Mr Elsegood be reduced to reflect the respective successes of each party and/or how those successes were achieved; and 2. PIHA submits that the order made by me on 20 June 2024 requiring Mr Elsegood to pay PIHA's costs of these proceedings (Principal Judgment at [181(2)]) should stand, and accordingly that there should be no departure from the ordinary rule that costs follow the event. 1. This judgment determines Mr Elsegood's costs application based on his written submissions and PIHA's written submissions in reply. 2. This judgment assumes familiarity with, and adopts the shorthand expressions and defined terms used in, the Principal Judgment. PRINCIPAL JUDGMENT 1. In the Principal Judgment, the basis for my decision to set aside the statutory demand issued by Mr Elsegood to PIHA, in respect of a debt the existence and amount of which was admitted by PIHA, was s 459H(1)(b) of the Corporations Act, namely the establishment by PIHA of a genuine offsetting claim exceeding the value of the subject debt. 2. In short, PIHA's offsetting claim arose out of a development opportunity in the form of the Christensen Ridge development land in Nikenbah, Queensland, of which PIHA contended (and I accepted at [164] of the Principal Judgment): 1. PIHA had taken steps to avail itself between March 2022 and late April 2023 by entering into call option deeds, exchanging contracts of sale, and obtaining funding approval; 2. Mr Elsegood became aware in or around March 2022 while he was, and by virtue of his being, a director of PIHA; 3. Mr Elsegood subsequently took advantage for his own benefit through his involvement in various commercial arrangements with Nikenbah Developments Pty Ltd, a company in which Mr Elsegood, through his role as director, secretary and shareholder of Elsegood Holdings Australia Pty Ltd, held an interest; and 4. Nikenbah Developments availed itself on or about 18 August 2023 when Nikenbah Developments acquired title to part of the Christensen Ridge development land. 1. At the hearing on 22 April 2024, PIHA framed its offsetting claim in terms of a claim for breach of fiduciary duties owed by Mr Elsegood to PIHA, engaging the well-established principles concerning the liability of a fiduciary to account for profits and/or benefits obtained by reason of their fiduciary position (see Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21, French CJ and Keane J at [33]), as well as the statutory counterpart of those principles in s 183(1) of the Corporations Act (Principal Judgment at [165]–[166]). 2. In the Principal Judgment, I found, inter alia, that (Principal Judgment at [168]–[175]): 1. Applying, and noting the low threshold fixed by, the relevant tests (as expressed in Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd (2019) 99 NSWLR 397; [2019] NSWCA 60 at [61]–[65]), PIHA's proposed offsetting claim was genuine in the sense of being seriously arguable, bona fide, sufficiently particularised, objectively demonstrable independently of the statutory demand, and a plausible contention warranting investigation. 2. On the issue of genuineness, PIHA's delay in raising the claim for an account of profits was explicable and therefore not fatal. 3. By the time Mr Elsegood acted on the knowledge of the opportunity he had in respect of the Christensen development land he had resigned as a director of PIHA but this did not absolve him of liability to account for the profits he subsequently accumulated (consistently with Streeter v Western Areas Exploration Pty Ltd (No 2) (2011) 278 ALR 291; [2011] WASCA 17 at Murphy JA, (McLure P and Buss JA agreeing) at [370]–[371]). 4. The fact that PIHA ultimately did not take up the Christensen development land opportunity was irrelevant vis-à-vis Mr Elsegood's liability pursuant to the no conflict and no profit rules (in line with Vadori v AAV Plumbing (2010) 77 ACSR 616; [2010] NSWSC 274, Ward J (as the President then was) at [200]). 1. A preliminary issue at the hearing concerned the admissibility of a chain of emails dated 26 May 2023 exchanged between persons associated with Nikenbah Developments and persons associated with CCD Developments Pty Ltd, who was the original holder of call options to purchase the Christensen Ridge development land (26 May emails). PIHA submitted that the 26 May emails evidenced the receipt by Mr Elsegood of profits in connection with Nikenbah Developments' acquisition of the Christensen Ridge development land opportunity in breach of his director's duties to PIHA. The 26 May emails had been provided to PIHA by Mr Elsegood on 1 February 2024 in compliance with a subpoena to produce served by PIHA upon CCD Developments on 16 January 2024. I found, however, that the 26 May emails fell within the categories of documents that were required to be produced by Mr Elsegood to PIHA in response to an earlier notice to produce dated 22 November 2023, which had been served by PIHA upon Mr Elsegood (Principal Judgment at [114]–[115]). 2. The 26 May emails were provided to Mr Elsegood as an annexure to an affidavit by PIHA three days prior to the hearing. At the hearing, PIHA sought leave to rely on the 26 May emails, which was required to be done by virtue of a notation made by Black J on 4 March 2024 indicating that no further evidence in the proceedings was to be relied on by the parties except with leave of the court. 3. I eventually rejected the arguments put to me by Mr Elsegood (summarised at [110] of the Principal Judgment), including that the admission of the 26 May emails would be counter to the Graywinter principle, and concluded that they should be received into evidence. At the hearing, I did, however, give Mr Elsegood an opportunity to cure any prejudice to him occasioned by the admission of the 26 May emails into evidence by seeking an adjournment of the hearing on terms that PIHA pay the costs incurred in doing so. Mr Elsegood elected to press ahead with the hearing whilst maintaining that the only way to cure the prejudice against him was to reject the tender of the 26 May emails. 4. Given PIHA's uncertain financial position and doubts about its capacity to fund proceedings in pursuit of its offsetting claim, I agreed with Mr Elsegood that this was an appropriate case in which to make an order under s 459M of the Corporations Act that the order setting aside the statutory demand under s 459H(1)(b) should be made conditional on PIHA commencing proceedings against Mr Elsegood within 28 days (Principal Judgment at [175]–[180]). SUBMISSIONS ON COSTS Submissions of Mr Elsegood 1. In his submissions, Mr Elsegood places emphasis on the manner in which PIHA conducted the proceedings, from the time PIHA filed its originating process on 23 October 2023 to the date of the hearing before me on 22 April 2024. Mr Elsegood draws particular attention to the following factors: 1. PIHA's late amendment of its case and reliance on evidence that was served on Mr Elsegood on 19 April 2024 and tendered on 22 April 2024 (the day of the hearing), on the basis of which PIHA ultimately succeeded. 2. PIHA's abandonment in its written submissions dated 18 April 2024 of key arguments that appeared from the affidavit of Colin Curran affirmed 23 October 2023 (supporting affidavit) to undergird its application to set aside the statutory demand, being the wasted expenses and loss of profits limbs of its asserted offsetting claim (under s 459H(1)(b) of the Corporations Act) and assertions of procedural deficiencies in the statutory demand (under s 459J(1)(a)). 1. Mr Elsegood submits that the apparent grounds for PIHA's application, as set out in the supporting affidavit, were as follows (four grounds): 1. PIHA had a genuine offsetting claim for wasted expenses of $225,913.08 that PIHA purportedly incurred in connection with alleged breaches of fiduciary duties by Mr Elsegood. 2. PIHA had a genuine offsetting claim for loss of profits arising from PIHA's loss of opportunity to pursue the Christensen Ridge development land by reason of alleged breaches of fiduciary duties by Mr Elsegood. 3. There was a procedural deficiency in the statutory demand relating to the specification of an interstate address for service. 4. There was a procedural deficiency in the affidavit in support of the statutory demand because the affidavit was both sworn and affirmed. 1. Mr Elsegood submits that he proceeded, and incurred significant costs in preparing for the hearing, on the basis that the four grounds constituted the case he had to answer. He points to his written submissions filed 18 April 2024 which, he says, disclose the "key plank" of his case: the refutation of PIHA's offsetting claim(s) on the basis that PIHA had failed to produce evidence sufficient to demonstrate its purported loss. 2. Further to this, Mr Elsegood raises the following matters: 1. PIHA did not press any of the four grounds at the hearing on 22 April 2024. 2. Mr Elsegood was not put on notice of PIHA's intention to abandon the four grounds until 18 April 2024 (one clear business day before the hearing), at which time he received PIHA's written submissions. 3. PIHA essentially conceded at the hearing that its two loss-based offsetting claims could not succeed due to a gap in the evidence relating to the point in time at which the Christensen Ridge development land contract between CCD Developments and PIHA was terminated and the arrival on the scene of Nikenbah Developments; 4. In its written and oral submissions, PIHA framed its case exclusively in terms of a claim for an account of profits. So-framed, this was the case on which PIHA ultimately succeeded, notwithstanding it was not identified in the supporting affidavit except in an oblique and opaque manner. 5. Despite having in its possession the principal evidence on which it relied in support of its claim for an account of profits (the 26 May emails) since 1 February 2024, PIHA neglected to notify Mr Elsegood of its intention to adduce and rely on that evidence until one business day before the hearing, a forensic choice which led to significant wasted costs. 1. Mr Elsegood submits that the above circumstances, going to the way in which PIHA ran its case, were such as to occasion prejudice to Mr Elsegood; cause him to incur substantial costs in preparing for the hearing that were ultimately thrown away; deprive him of knowing the case that would be put against him; and in turn meant that he was in no position to negotiate a settlement or consent orders. Mr Elsegood says that by the time he became aware of PIHA's intention to adduce the 26 May emails, he was effectively committed to proceeding with the hearing on 20 June 2024. 2. Noting my finding at [138] of the Principal Judgment where I determined that the supporting affidavit (filed within the statutory period) sufficiently raised PIHA's offsetting claim in satisfaction of the Graywinter principle (as expressed in Infratel Networks Pty Ltd v Gundry's Telco & Rigging Pty Ltd (2012) 91 ACSR 170; [2012] NSWSC 943, Black J at [29]) so as to permit PIHA to lead further evidence in the form of a supplementary affidavit outside of the statutory period, Mr Elsegood contends that the attachment of costs consequences to PIHA's late amendment of its case and delay in tendering material evidence upon which its case hinged would not be incoherent with or detract from that finding. 3. In support of his position that I should make no order as to costs or an order of no order as to costs up until the date on which PIHA amended its case, Mr Elsegood refers to the general rule, known as the Beoco principle, that where a plaintiff makes a late amendment and thereby substantially alters the case to be met by the defendant, without which the action would fail, the defendant is entitled to the costs of the proceedings down to the date of the amendment (Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568, Bergin J at [13]). 4. Mr Elsegood also adverts to the interaction between the Beoco principle and the Graywinter principle, pointing to the outcome in Graywinter Properties Pty Ltd v Gas & Fuel Corp Superannuation Fund (1996) 70 FCR 452; [1996] FCA 822 where Sundberg J, finding that the supporting affidavit in question was ambiguous and unsatisfactory in form but nonetheless sufficient to show a genuine dispute between the parties, made no order as to costs (at 460–461). Mr Elsegood says that Graywinter is on all fours with the present case. In the same vein, he contends that whether a claim is precluded on account of the Graywinter principle, on the one hand, and whether the manner in which a party has conducted its case (including by advancing substantive arguments which it subsequently abandons) should have cost consequences, on the other, are discrete inquiries. 5. In relation to Mr Elsegood's refusal of my invitation to consider an adjournment in the interests of obviating any prejudice to him resulting from the late tender of the 26 May emails, Mr Elsegood maintains that he should not be precluded from recovering costs on that account. In the circumstances, his decision to proceed with the hearing, he says, is consistent with the overriding purpose articulated in s 56 of the Civil Procedure Act 2005 (NSW) and should, far from being "held against him", be commended (citing Slattery J in Sydney Markets Credit Services Co-Operative Ltd v Taylor (No 3) [2015] NSWSC 1236 at [27] and Barry Edward and Thelma June Harrington v Greenwood Grove Estate Pty Ltd (No. 2) [2011] NSWSC 1598 at [10]). 6. Finally, Mr Elsegood submits that at least an apportionable costs order is appropriate because he was partially successful insofar as I made a conditioning order under s 459M of the Corporations Act in recognition of uncertainties relating to the quantification of PIHA's offsetting claim and the financial capability of PIHA to bring the proceedings. In this connection, Mr Elsegood refers to Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454 at 462; [1998] FCA 824, where Emmett J determined that notwithstanding the plaintiff company succeeded in securing an order (subject to conditions) that the statutory demand be set aside, the plaintiff company should pay the defendant's costs due to the defendant's substantial success in resisting the application. Submissions of PIHA 1. PIHA raises the following four main reasons why Mr Elsegood's costs arguments should fail: 1. Mr Elsegood's submissions mischaracterise both the offsetting claim advanced by PIHA and the bases of PIHA's success in establishing that claim. 2. Mr Elsegood's submissions ignore the court's findings as to and give undue weight to the purported prejudice he faced on account of PIHA's late tender of and reliance on the 24 May emails. 3. Mr Elsegood's submission that he was partially successful in that the court made a conditioning order lacks cogency, and the analogy sought to be drawn with Eumina is misplaced. 4. Mr Elsegood does not engage in any meaningful way with the established principles informing the exercise of the court's discretion to award costs, including the court's discretion to depart from the usual rule that costs follow the event. 1. In respect of the first reason, PIHA notes that its offsetting claim was not, as Mr Elsegood in his submissions suggests, merely for an account of profits, but rather encompassed "breaches of fiduciary duties and statutory directors' duties owed by Mr Elsegood to PIHA, giving rise to many remedies (constructive trust, equitable compensation, account or inquiry) and for statutory compensation under s 1317H of the Corporations Act" (quoting the Principal Judgment at [149]). PIHA submits, further, that Mr Elsegood's suggestion that PIHA disclosed its case in the supporting affidavit in an "opaque" manner and that PIHA's success in the proceedings was down to a late amendment of its case insufficiently accounts for my conclusion, at [132] of the Principal Judgment, that the supporting affidavit "makes it very clear that the offsetting claim against Mr Elsegood is alleged to be that Mr Elsegood breached his director's duties and his fiduciary obligations owed to PIHA." 2. Turning to the second reason, PIHA contends that Mr Elsegood leans too heavily on the supposed prejudice he suffered by reason of the late tender of the 24 May emails, in circumstances where the court has made the following findings: 1. The 26 May emails should have been produced by Mr Elsegood to PIHA in November 2023 pursuant to the notice to produce dated 22 November 2023, but instead were not brought to PIHA's attention until February 2024 (Principal Judgment at [113]–[114]). 2. This went some way towards explaining PIHA's delay in indicating that the 26 May emails were sought to be relied upon as evidence in the proceedings (Principal Judgment at [114]). 3. PIHA's failure to so indicate up until 19 April 2024 (when the 26 May emails were provided to Mr Elsegood) did not prejudice Mr Elsegood, especially given that the 26 May emails formed part of Mr Elsegood's own document (Principal Judgment at [115]). 4. Mr Elsegood, having made the forensic choice not to go into evidence at the hearing, presented no reasoned argument or basis for his suggestion that he might have adopted a different approach in his evidence had he known that the 26 May emails would be relied upon (Principal Judgment at [115]). 1. PIHA says that the upshot of these findings is that the court has already rejected the submission that Mr Elsegood was prejudiced in the way he now claims for the purposes of his costs submissions. 2. In response to Mr Elsegood's contention that the manner in which PIHA conducted its case meant that Mr Elsegood was in no position to negotiate a settlement or consent orders setting aside the statutory demand, PIHA points out that there is no evidence of any attempt or inclination by Mr Elsegood to settle the proceedings, nor as to how his position in any hypothetical negotiation would have been impacted by the late tender of the 26 May emails and/or the late amendment of PIHA's case. 3. PIHA also submits that Mr Elsegood's submissions regarding the 26 May emails appear to be premised on the assumption that a party must give advance notice of its intention to deploy documents produced under subpoena at trial, noting that there is no such requirement. PIHA argues that in any event, Mr Elsegood was in fact alerted to PIHA's concerns in respect of the 26 May emails as early as 26 February 2024, when PIHA's solicitors wrote to the solicitors for Mr Elsegood and observed that Constantinos Vorkas (a director of CCD Developments) had produced on subpoena one of the 26 May emails, leading them to suspect that Mr Elsegood's production in answer to their notice to produce dated 22 November 2023 was incomplete. 4. In relation to the third reason, PIHA answers Mr Elsegood's "partial success" argument in respect of the conditioning order by highlighting its incongruity. PIHA submits that the "success" in the proceedings which Mr Elsegood appears to be claiming for himself, and on the basis of which he seeks an apportionable costs order, is practically-speaking, the commencement of fresh proceedings against him. It is unclear, PIHA says, how this can properly be said to constitute a success. PIHA also notes that Mr Elsegood did not obtain an order requiring (by condition or otherwise) that PIHA pay money into court, which was material to the costs outcome in Eumina and an important basis upon which the present case can be distinguished. 5. Lastly, PIHA notes that nowhere does Mr Elsegood refer to the principles relevant to the court's discretion as to costs, and in particular he fails to tether his case to the established bases for departing from the ordinary rule as to costs and for apportioning costs in accordance with the parties' respective successes on discrete issues in the proceedings. These principles, PIHA submits, require the clear identification of dominant and separable issues, referring to Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15, and Mr Elsegood has not and cannot clear this threshold, having put no material before the court capable of informing the exercise of the discretion in the manner he now seeks. 6. For these reasons, PIHA claims that my original ruling as to costs in the Principal Judgment, requiring Mr Elsegood to pay PIHA's costs of the proceedings, should remain undisturbed. LEGAL PRINCIPLES Statutory provisions and rules 1. Section 459N of the Corporations Act provides that where a company, having brought an application under s 459G of the Act, is successful in having a statutory demand issued against it set aside, the court may order the person who served that demand to pay the company's costs in relation to the application. 2. The source of the court's general power as to costs is s 98 of the Civil Procedure Act 2005 (NSW) (CPA). Section 98(1) and (4) of the CPA provide: (1) 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. … (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to— (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount. 1. The discretion to award costs under s 98 of the CPA is broad and the section itself is to be construed liberally: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, Gaudron and Gummow JJ at [21]. The discretion is, however, subject to the rules of court, being the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). 2. Rule 42.1 of the UCPR states: Subject to this Part, if the court makes any order as to costs, the court is to order that the 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. 1. Recently, the Court of Appeal of this court (constituted by Gleeson, Leeming and Adamson JJA) in Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21, articulated the general rule as follows (at [11]–[12]): Costs are in the broad discretion of the Court with the general rule being that they should follow the "event": Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1. Generally, the "event" refers to the event of the claim and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]. Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs: Commonwealth Bank of Australia v Gretton [2008] NSWCA 117 at [121] (Hodgson JA, Mason P and Beazley JA agreeing). 1. In Croc's Franchising Pty Ltd v Alamdo Holdings Pty Ltd (No 3) [2023] NSWCA 316, Basten AJA, and Payne and Stern JJA, observed similarly at [7]: … Under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the "general rule" is that the court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA). … The Beoco principle 1. Particular costs consequences may flow where the claim upon which a plaintiff finally succeeds was not pleaded until a late stage in the proceedings. This is captured by the Beoco principle, derived from Beoco Ltd v Alfa Laval Co Ltd (1995) QB 137, which has been accepted and applied by this court (Leading Edge Events, Bergin J (as the former CJ in Eq then was) at [13]; Harrington, Slattery J at [4]–[5] and the cases cited there) and the Court of Appeal of this court (see Vero Insurance Ltd v Australian Prestressing Services Pty Ltd (No 2) [2014] NSWCA 8 at [7]; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [40]). 2. The oft-cited passage in Beoco is the following statement of Stuart-Smith LJ at 154: As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to costs of the action down to the date of the amendment. 1. Stuart-Smith LJ went on to qualify this, also saying at 154: There may, of course, be special reasons why this general rule should not be applied. An example of this is to be found in Kaines (U. K.) Ltd. v. Osterreichische Warrenhandelsgesellschaft (formerly C. G.L. Handelsgesellschaft m.b.H.) [1993] 2 Lloyd's Rep. 1, 9, where the judge was satisfied that, even if the amendment had been made earlier, the action would have been vigorously resisted. … 1. In terms of the scope and function of the Beoco principle, the Court of Appeal of this court, constituted by Mitchelmore, Kirk and Stern JJA, in Riechelmann v McCabe (No 2) [2024] NSWCA 62 recently clarified at [10] that: … The "general rule" referred to in Beoco is perhaps more accurately described as a principle which may guide the exercise of the discretion under [UCPR] r 42.1. It is always necessary to consider each case on its merits, cognisant of the flexibility that r 42.1 allows. 1. In Beoco, the plaintiff originally sought damages for breach of contractual warranty against the first defendant in respect of a faulty heat exchanger that had been installed at the plaintiff's seed oil plant. At trial, the plaintiff was granted leave to amend its statement of claim to make an alternative claim for damages for breach of warranty in respect of the costs of repairing the defective heat exchanger and consequential loss of profits. The alternative claim was the claim upon which the plaintiff succeeded, and the trial judge ordered the first defendant to pay the plaintiff's costs. The Court of Appeal reversed the trial judge's decision on costs, awarding the first defendant its costs of the action down to the date of the amendment (being the date on which the trial commenced). Stuart-Smith LJ, with whom Gibson and Balcombe LLJ agreed, considered that it would be manifestly unfair to deprive the first defendant of its costs, holding that the "judicial" exercise of the costs discretion would see the first defendant receive its costs of the action down to the date of the amendment (at 154). 2. The Beoco principle was the subject of consideration by this court in Leading Edge Events. In that case, the plaintiff failed in respect of several of its claims (for breach of contract, equitable estoppel, and misleading and deceptive conduct), but succeeded against the fourth defendant on its quantum meruit claim, which it had never formally pleaded. The fourth defendant contended that the interests of justice required that the costs to which the plaintiff was entitled against the fourth defendant be reduced to reflect the fact that the plaintiff did not advance the cause of action on which it succeeded until the very last moment, namely on the eve of the trial. The fourth defendant pointed to significant costs incurred by it — unnecessarily, as it turned out — in preparing for the trial and in particular in preparing to meet the plaintiff's claims for loss of profit damages, which were ultimately unsuccessful. These costs were increased, the fourth defendant submitted, as a result of the manner in which the plaintiff conducted the proceedings, including "the plaintiff's approach in putting all facts in issue across events and communications spanning one year" and the "looseness of the plaintiff's case" (at [21]). 3. At [24], Bergin J concluded that despite the quantum meruit claim not having been pleaded, the plaintiff had made plain the nature of the case it was pursuing, including in its opening submissions, and observed that while there was some ambiguity, the plaintiff had been consistent in framing part of its loss as wasted expenditure (at [23]). Bergin J also considered that the majority of the material relied upon by the plaintiff in respect of all its causes of action, voluminous as it was, needed to be reviewed to determine the matters in issue, which, her Honour observed, the fourth defendant maintained as issues to the end of the trial. Bergin J was satisfied, having regard to the fourth defendant's attitude, that if the plaintiff had amended its pleadings at an earlier point, the fourth defendant would not have altered its approach to the matter in any event. 4. In the result, Bergin J nonetheless considered that it was appropriate and just to reduce the amount of the plaintiff's costs by 20% to reflect the cost issues between the plaintiff and the fourth defendant, but did so without dissecting costs in respect of each cause of action (at [26]). (I discuss this further below under the sub-heading "Apportioning costs based on parties' respective successes"). 5. In Vero Insurance, the Court of Appeal of this court (comprising Beazley P, Meagher JA and Simpson J) determined that the Beoco principle had no application in that appeal. The circumstances involved reliance by the respondents, in support of their claim to an indemnity, on a "Temporary Protection" clause in an insurance policy, which the respondents did not formally raise as an issue in the appeal until the close of oral argument. Noting that the issue had in fact been dealt with by the primary judge and was raised by the appellant's notice of appeal, their Honours concluded at [7] that the amendment to the respondents' case did not have the effect of altering the case which the appellant had prepared and sought to meet in arguing the appeal (distinguishing Beoco at 154 and Leading Edge Events at [13]). 6. The Court of Appeal arrived at a similar conclusion in Cellarit. In that case, the litigation arose out of a long-standing commercial relationship between the parties and involved a complex matrix of issues. The appellant submitted, inter alia, that because the respondent had succeeded in the principal proceedings on the basis of two alternative claims (referred to as the "reversals" and "overcharging" claims) that were only pleaded in reply, the court should depart from the ordinary rule that costs follow the event. The appellant expressly raised the general rule in Beoco and also sought to portray the respondent's belated invocation of the alternative claims as conduct disentitling it to a costs orders in its favour. For its part, the respondent submitted that the ultimate "event" in the trial was decided in its favour, and in accordance with UCPR r 42.1 it should receive its costs. The respondent also highlighted the court's finding in the principal judgment that at least one of the two alternative claims (the reversals issue) was clearly agitated both on the pleadings and in the evidence at trial. 7. McColl JA, with whom both Macfarlan and Leeming JJA agreed on this issue, determined in Cellarit that the Beoco principle did not apply (at [41]). In support of this conclusion, McColl JA pointed to the following factors at [41]–[49]: 1. Pre-trial correspondence (including without prejudice communications) between the parties revealed that the reversals issue was the subject of contest even before the matter proceeded to hearing. 2. The reversals issue did not take the appellant by surprise because it had already made its position clear on that matter in its defence. That matter was also addressed in the appellant's affidavit evidence. To that extent, the reversals claim was already "in play". 3. The overcharging claim likewise could not have caught the appellant unawares, having regard to the counsel for the appellant's statement to the primary judge at the hearing to the effect that nothing in the respondent's reply, which was filed with leave of the court on the third day of the trial, took him by surprise. This was reinforced by the reference to the overcharging claim in the appellant's amended outline of oral closing submissions. 4. The overcharging claim could not be said to have "substantially altered" the case the appellant had to meet. (Relevantly, Leeming JA at [87] remarked that the respondent had ventilated a number of claims at the hearing, all of which were to the effect that the appellant was wrongly withholding money that it owed to the respondent). 5. It was apparent from the pre-trial correspondence between the parties that even if the respondent had pleaded the reversals and overcharging claims at an earlier juncture, the appellant would still have vigorously resisted the respondent's claim. 1. Reichelmann is a further case in which the Beoco principle was held not to apply. There, the Court of Appeal found that it was unlikely that the respondent would have acted any differently in resisting the appellant's cross-claim in the principal proceedings had the appellant pleaded the version of events that it was, following a successful amendment application filed on the fourteenth day of the trial, permitted to plead and on which basis it succeeded, from the beginning of the proceedings. In those circumstances, the court determined that the Beoco principle was not engaged so as to entitle the respondent to his costs up until the date of the subject amendment. 2. GOWAY Travel Pty Ltd v Critchley (No 2) [2024] NSWSC 810 (GOWAY No 2) is a recent decision of this court where Slattery J made a special costs order in favour of the defendant. In the principal proceedings (GOWAY Travel Pty Limited v Critchley & Anor [2024] NSWSC 2 (GOWAY No 1)), the plaintiff succeeded on a cause of action that it had been granted leave to plead alongside its existing claims at a pre-trial directions hearing in December 2023, ahead of the trial in February 2023. The court concluded that the defendant had sufficient time to prepare to answer the plaintiff's additional amended claim based on the same evidence and that the trial was ultimately conducted satisfactorily on the plaintiff's amended statement of claim without unfairness to the defendants (GOWAY No 1 at [506]). In GOWAY No 2, however, Slattery J determined that this was an appropriate case in which to apply the Beoco principle (which he referred to as the principle in Leading Edge Events: [4]). The fact that the plaintiff succeeded on its amended claim but failed on all of its other pleaded claims, in circumstances where it could be predicted that the plaintiff ultimately would have failed in the proceedings but for the amendment, was the basis for Slattery J's decision (GOWAY No 2 at [4]). 3. Contrary to Mr Elsegood's submitted characterisation of Harrington and of the orders made by Slattery J, Harrington involved a defendant who succeeded by a late amendment to its defence, as opposed to a plaintiff who succeeded by that same course (see Harrington at [7]). In Harrington, Slattery J did observe, however, that a principle similar to Beoco applies to the consequences of late amendments whereby a defendant raises new grounds of defence which supply the sole basis upon which that defendant eventually succeeds (at [6], citing Bonic v Pacific General Security Limited [2009] NSWSC 1221, White J (as his Honour then was) at [14]). 4. In Harrington, Slattery J found that the defendant succeeded solely due to a late amendment to its defence in the form of an additional plea that was only incorporated into its defence shortly before the hearing; foreshadowed to the plaintiff some three weeks before the hearing and nearly seven months after the close of pleadings; and proposed in final form (being the final form of the amended defence) 20 days prior to the commencement of the hearing. Slattery J noted that there was no real explanation for the full extent of the delay by the defendant in making the amendment; that the plaintiffs were, by the time the amendment was sought, in no position realistically to seek an adjournment or vacation of the hearing date; that the plaintiffs might well have reckoned with the defendant's case differently (or indeed have discontinued the action) if the amendment had been made earlier. Having weighed up these factors, Slattery J at [12] said: What then is the proper form of the order to be made? Were the Court to make an order of the kind contemplated by [Beoco] and Bonic v Pacific General Security Limited the parties would potentially be put to the expense of an assessment of costs up until the time of the amendment and then another assessment of costs thereafter for the hearing. It seems to me that the Court can take a broad but fair view and save both sides the expense of further costs assessments. Normally the heaviest costs of proceedings are incurred during the hearing. But in this case considerable costs were incurred in retaining experts well before the amendments were made. 1. In the result, Slattery J made no order as to costs, with the intention that each side should bear their own costs of the proceedings. It is clear from the passage quoted above that this determination was at least in part informed by his Honour's practical sense of the need to avoid further expense of the kind a costs assessment would involve. 2. Collecting together the principles which can be derived from the authorities outlined above, it is clear that the following considerations are relevant when determining the cost consequences of a successful party's "11th hour amendment" to its case: 1. Whether the late amendment was such as to substantially change the party's case and therefore the case to be met by its opponent (Leading Edge Events; Vero Insurance; Cellarit). 2. Whether the party's case, even if the amendment had been made at a much earlier stage, would nonetheless have been "vigorously resisted" or approached in the same manner by the losing party (Beoco; Leading Edge Events; Cellarit; Reichelmann; Harrington). 3. Whether the rationale for the late amendment principle is actually engaged — in other words, whether the losing party was genuinely deprived of the opportunity to know the case it had to meet (Vero Insurance; Cellarit). 4. Whether the successful party would have failed in the proceedings but for the late amendment to its case (GOWAY No 2). Relevance of party's decision not to adjourn 1. The decision in Harrington is also germane for present purposes for its illustration of the potential relevance to the question of costs of the losing party's decision not to adjourn where a late amendment by the successful party to its case might have meant such a course was open to it. In Harrington, Slattery J at [10] observed: … [O]nce the amendment was sought so late, the plaintiffs were put in a difficult position. They had already invested considerable monies in the action. If they had sought an adjournment and a vacation of the hearing date to further consider their position in light of the proposed amendment they may not have been successful. … Had the amendment been made earlier …, the plaintiffs may have been in a better position to elect to discontinue the proceedings. This option was not realistically open at the time the amendment was made. 1. Slattery J thus rejected any suggestion that the refusal by the plaintiffs of the defendant's offer of a stay of the proceedings and the plaintiffs' own choice not to seek an adjournment should be held against the plaintiff. 2. In Sydney Markets, the plaintiff had succeeded in its claim in circumstances where it had made an amendment to its pleadings on the first day of trial and had served evidence on which it eventually relied considerably late (one week prior to the hearing). The defendant referred to these elements of the pre-trial dynamic and contended, relying on the principle in Beoco, that it should receive its costs at least up to the time of the plaintiff's amendment. The plaintiff opposed any special costs order on account of the late amendment, pointing to what it described as countervailing factors (most of which Slattery J accorded very little weight), including the fact that the defendant did not apply for an adjournment of the proceedings on the basis of the late amendment. In response to this submission, Slattery J said at [27]: I do not find this argument persuasive. [Counsel for the defendant] says with some force that [the defendant] was already financially committed to the proceedings at that stage. Moreover, it was commendable on [the defendant's] part to attempt to hold the hearing date and deal with the amendments as it did without seeking an adjournment in a way which would reduce overall costs of all parties. [The defendant's] failure to seek an adjournment should not be held against it. 1. Slattery J considered that it was appropriate, in all the circumstances of the case, to make a percentage assessment of costs to reflect the issues the subject of debate rather than making separate costs orders before or after a particular date. Taking into account the parties' submissions, his Honour ordered that the defendant should pay a reduced proportion (40%) of the plaintiff's costs of the proceedings. Apportioning costs based on parties' respective successes ("mixed outcome" cases) 1. The principles that apply in determining whether the party who was successful in the ultimate "event" in the proceedings should nonetheless be deprived of their costs in relation to an issue on which that successful party lost are expressed and applied in Monie. There, at [64]–[66], Campbell JA (with whom Mason P and Beazley JA for the most part agreed, including on this issue) stated: [64] The usual circumstance in which a court will deprive the successful party of the costs relating to an issue on which the successful party lost, is when that issue is clearly dominant or separable. In Waters v P C Henderson (Australia) Pty Ltd (NSW Court of Appeal, 6 July 1994, unreported) Mahoney JA said, at 4-5: "In my opinion the principles in this regard are properly stated in the Supreme Court Act and Rules. S76 of the Supreme Court Act provides that the Court has a discretion with full power to determine by whom and to what extent costs are to be paid. In the Rules, Pt52 r11 provides that: "If the Court makes any order as to costs, the Court shall, subject to this Part, order that the costs follow the event, except where it appears to the Court that some other order should be made as to the whole or any part of the costs." In the notes to the Rules, Pt52.11.2, the following appears: "Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed." [65] That principle has frequently been approved in this Court: eg James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [32]; Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]. [66] In the present case, the claim for significant economic loss was an important one, but not a dominant one. Nor do I regard it as a separable issue. Essentially what has happened is that [the plaintiffs] have succeeded in a claim that they suffered economic loss in consequence of the negligence of the Commonwealth, but have not made out as large a quantum of economic loss as they had claimed at the trial. In those circumstances, I see no reason to deprive them of any part of their costs of the trial. 1. The relevant argument put by the defendant (the Commonwealth) in Monie was that the plaintiffs (the Monies), who were successful in the proceedings overall, ultimately failed in their claim for damages for significant economic loss and as such the Commonwealth should receive its costs in connection with that issue. In the Court of Appeal's view, the issue constituted by that head of loss was important but neither dominant nor separable in the context of the case, where the essential outcome was that the Monies succeeded in their claim that they had suffered economic loss occasioned by the negligence of the Commonwealth. 2. Monie has been frequently applied or cited with approval on this point of law, including by the Court of Appeal of this court in Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 (Ward, Emmett and Gleeson JJA at [17]) and Golden v Vlandys (No 2) [2016] NSWCA 350 (McColl, Leeming and Payne JJA at [16]). 3. In Doppstadt, the following points were given emphasis (citing Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]): 1. Where there are multiple issues at play in a case the court generally will not attempt to differentiate between the issues on which a party was successful and those on which it failed. 2. The exception is where a particular issue or group of issues is clearly dominant or separable. In such a situation, it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. 3. Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). 4. Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation. 1. Like the present case, Eumina (to which both PIHA and Mr Elsegood referred in their submissions) involved a successful application by the plaintiff company to set aside a statutory demand. The Federal Court, however, ordered the plaintiff company to pay the defendant's costs of the application, Emmett J saying (at 462): … I propose to order the Company to pay [the defendant's] costs of the application before me since it is clear that [the defendant] has been substantially successful in resisting the application. In other words, although I propose to make an order pursuant to which the statutory demand could be set aside, I will do so only if the Company either pays a sum into Court or provides for security for that sum. No offer was made to that effect on behalf of the Company and a condition to that effect was resisted by the Company. For those reasons, I propose to order the Company to pay the costs of the application before me. 1. By way of context, the statutory demand in question in Eumina was for a debt being the amount of a costs order that had been made against the plaintiff company in related Federal Court proceedings. The basis for Emmett J's decision to set aside the statutory demand was not the primary ground pleaded by the plaintiff company, being the existence of a genuine offsetting claim in excess of the debt, a question that had already been the subject of a judicial determination against the plaintiff in earlier proceedings in this court, and which ground Emmett J rejected. Instead, the basis for Emmett J's decision was the presence of "some other reason" within the meaning of s 459J of the Corporations Act. Emmett J located the relevant s 459J reason in the fact that the plaintiff company had appealed the outcome in the Supreme Court proceedings all the way up to the High Court (where special leave was sought), and that this was a bona fide appeal based on reasonable and arguable grounds which, if successful, would result in there being a genuine offsetting claim. Emmett J considered that it would be unjust for the demand to stand where res judicata precluded a contention that there was a genuine dispute or offsetting demand but there was on foot a bona fide appeal from the judgment which gave rise to that res judicata. At 459, his Honour stated: In those circumstances, the Court may, if justice requires, and subject to the possibility of imposing conditions as contemplated by s 459M, set aside a demand which is based on the judgment or order which is subject to appeal or in respect of which, if an appeal succeeds, there would be an offsetting claim. 1. Notwithstanding the final result, the defendant in Eumina was largely successful in resisting the plaintiff company's application. Importantly, the defendant could properly be said to have "won" on the primary question before Emmett J, namely, whether the plaintiff company had a genuine claim against the defendant for the purposes of s 459H of the Corporations Act (at 457). Moreover, the plaintiff company was unsuccessful in resisting the imposition by the court of a conditioning order requiring it to provide a security or pay money into court. It was in recognition of these successes on the part of the defendant that Emmett J made the relevant costs order. CONSIDERATION 1. For the reasons stated below, having reviewed the parties' submissions and the applied the legal principles set out above, I am satisfied that the original costs order made by me in the Principal Judgment should stand. 2. This is not a case in which the general rule in Beoco intervenes so as to justify a departure from the ordinary position that costs follow the event. To begin with, I am mindful that, as recognised in Riechelmann, the Beoco principle is a principle that may guide the exercise by the court of its broad costs discretion and is to be applied, where appropriate, in the context of and with attention to the individual circumstances of each case. 3. With that in mind, I am not convinced that the conditions necessary to engage the Beoco principle apply here. In reaching this conclusion, I put store in the following factors. 4. First, PIHA's amendment of its case in its written and oral submissions, whereby it sought an account of profits as opposed to equitable compensation by way of relief, was not such as to substantially alter the case Mr Elsegood had to meet. The offsetting claims at all times were framed in terms of Mr Elsegood's breaches of fiduciary and statutory duties owed to PIHA, relating to the Christensen Ridge development land opportunity and giving rise to multiple possible remedies; indeed, this was the crux of two of the four grounds Mr Elsegood himself identified in his submissions as having been raised against him initially. This is also consistent with my finding in the Principal Judgment at [131] that the supporting affidavit clearly disclosed the nature of PIHA's alleged offsetting claim. I consider that PIHA's election to pursue an account of profits instead of the form of relief originally indicated (which election I determined was not untimely, noting that it need not be made by the plaintiff until the point at which judgment on liability is given: Principal Judgment at [137]) did not meaningfully reshape the dispute between the parties. 5. Secondly, the rationale underpinning the Beoco principle has no real application here; that is, Mr Elsegood was not, by reason of PIHA's amendment of its claim to pursue an account of profits or indeed by the late tender of the 26 May emails, deprived of knowing the case against him, or (to use the language in Cellarit) "taken by surprise". As I stated in the Principal Judgment at [115], Mr Elsegood was not prejudiced by the late tender of the 26 May emails, particularly given that those emails were contained in a document that was in his possession and where PIHA's delay in producing those emails was in part attributable to Mr Elsegood's failure to furnish them to PIHA on an earlier occasion. In addition, I am satisfied that Mr Elsegood knew or should have known PIHA was, pursuant to established principles (as set out by me in the Principal Judgment at [132]–[136]) not required to make the relevant election between an account of profits or equitable compensation until the time of judgment on liability. 6. Moreover, there is no evidence that Mr Elsegood would have approached the proceedings differently had PIHA earlier indicated its intention to seek an account of profits or earlier tendered the 26 May emails, and I am not satisfied that he would have done so. I agree with the submissions of PIHA on this point. 7. In terms of Mr Elsegood's decision not to seek an adjournment of the hearing on 22 April 2024, I have treated this as a neutral factor. While Mr Elsegood was given the opportunity at the hearing to adjourn at no expense to himself and declined that invitation, I accept that he may have considered himself practically bound to proceed with the hearing. In my view, with the benefit of hindsight, it was also proper for him not to adjourn, on account of my eventual finding that in any event, the late tender of the 26 May emails did not in fact cause him to suffer any prejudice. 8. Turning to the apportionment of costs argument, I do not think that Mr Elsegood should get his costs on the issue on which he encountered success (the conditioning order). As PIHA observed in its submissions, Mr Elsegood did not frame his argument by reference to the authorities on this point (the "mixed outcome" cases), and, even if he had fully argued this point, I would not be inclined to award him his costs on the discrete success he secured in the proceedings by virtue of the s 459M order. That is because: 1. The conditioning order cannot properly be characterised as a dominant or separable issue in the requisite sense. While the ramifications of PIHA's potential financial incapacity to actually pursue the offsetting claim against Mr Elsegood in the wake of the statutory demand being set aside was not an insignificant issue in the context of the proceedings, it was not dominant or particularly hard-fought. I note in this regard PIHA's preparedness at the hearing to give an undertaking to commence the proceedings against Mr Elsegood within 28 days, notwithstanding it did not consent to the imposition of the condition. 2. The issue of the s 459M order was not one to which substantial time was devoted at the hearing in the course of either evidence or argument. Coverage of this matter occupies approximately three pages of a hearing transcript totalling 75 pages (T68.16–T71.14). 3. The event or essential outcome in the proceedings, which were not unduly complex or issue-rich, was overwhelmingly favourable to PIHA. 1. I do not wholly agree with PIHA's submission that the characterisation of the conditioning order as a success for Mr Elsegood is artificial. That submission rests on an unduly narrow view of the purpose of that order, reducing its ultimate effect to the institution by PIHA of further proceedings against Mr Elsegood (an outcome which was not, as the very need for the conditioning order itself demonstrates, guaranteed). The submission ignores the extent to which the order worked in service of Mr Elsegood's interests. As I noted at [177] of the Principal Judgment, the conditioning order gave Mr Elsegood the practical advantage of having the statutory demand that he had issued against PIHA being effective if PIHA did not commence the proceedings against Mr Elsegood within the stipulated 28 day-period. 2. I do, however, agree with PIHA's assertion that the analogy with Eumina sought to be drawn by Mr Elsegood is misplaced. In Eumina, the circumstances were quite exceptional in that the defendant (who received a portion of its costs) could properly be said to have "won" on the primary issue in dispute, and also succeeded in securing an order that the plaintiff pay money into court or a sum by way of security. There is much to distinguish that case from the present. Mr Elsegood's success here is far less significant, and there are no compelling reasons for carving out and isolating that success as an issue on which Mr Elsegood should receive his costs. It also worth remembering that, as emphasised in Doppstadt and elsewhere, absent a clearly dominant or separable issue or group of issues, the court will not differentiate between the issues on which a party was successful and those on which it failed and will not deprive the successful party of a portion of its costs. The conditioning order does not constitute a clearly dominant or separable issue in the relevant sense. ORDERS 1. Accordingly, I do not propose to change the order in respect of costs which I made at the conclusion of the Principal Judgment, which is that the defendant (Mr Elsegood) pay the plaintiff's (PIHA's) costs of these proceedings. ********** 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: 22 August 2024