New South Wales Supreme Court CITATION : WELDON & CO SERVICES PTY LTD v. HARBINSON [2000] NSWSC 389 revised - 18/05/2000 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2094/99 HEARING DATE(S) : 11/5/00 JUDGMENT DATE : 15 May 2000 PARTIES : Weldon & Co Services Pty Ltd (Plaintiff) Christine Harbinson (Defendant) JUDGMENT OF : Bryson J at 1 COUNSEL : R. Beasley - Pltf. R. Moore - Dft. SOLICITORS : Dickson Fisher MacAnsh - Pltf. MBA Lawyers - Dft. CATCHWORDS : COSTS - against successful party - plaintiff succeeded for $500 but failed on all substantial claims in 7-day hearing - plaintiff was ordered to pay defendant's costs on indemnity basis. CASES CITED : Oshlack v. Richmond River Council (1998) 193 CLR 72 DECISION : See para 14 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRYSON J. MONDAY 15 MAY 2000 2094/99 WELDON & CO SERVICES PTY LTD v. CHRISTINE HARBINSON JUDGMENT 1 HIS HONOUR: On 7 April 2000 for reasons then published I gave judgment for the plaintiff for $500 and reserved costs. On 11 May counsel for the defendant applied orally for orders for costs as follows: (1) Order that the plaintiff pay the defendant's costs of the proceedings; (2) Order that the plaintiff pay the defendant's costs reserved on 22 April, 23 May, 11 June, 20 July and 6 August 1999; (3) Order that the order of 30 April 1999 that the defendant pay the plaintiff's costs of the proceedings on 27 April, 28 April and 30 April 1999 be vacated and in lieu thereof order that the plaintiff pay the defendant's costs of those days; (4) Order that costs payable under these orders be assessed on the indemnity basis. 2 Counsel for the plaintiff contended that the Court should order that each party pay its or her own costs of the proceedings. 3 The plaintiff and its counsel did not at any time during preparation of the hearing or during the lengthy hearing give particulars or any matter of detail which would quantify the plaintiff's claim for damages, but it was clear that the claim was extensive. The recovery of $500 was no more than a nominal success, and related to a very small part of the matters complained of by the plaintiff and under debate at the hearing. The plaintiff could not recover costs of proceedings in which only $500 was recovered. Although the provisions of Pt 32A r 33 do not apply to these proceedings, they would have been applied by analogy, if the plaintiff had asked for costs. The hearing occupied seven days and was directed to many other issues and claims, relating to matters of far greater value than $500. In the context of the matters debated, and of the trouble and expense of the hearing to the parties, recovery of $500 is all but irrelevant, and the defendant has achieved complete success with only the faintest qualification. 4 The great volume of material in evidence and the length of the hearing arose largely from attempts by the plaintiff to establish complex and groundless allegations and grievances about removal by the defendant from the plaintiff's office, without its authority or knowledge, of papers belonging to clients which had been lodged in the plaintiff's office so that work could be done on them, and the removal copying, deletion and concealment of lists of clients, with addresses and other contact references. These grievances were pursued in great detail; they were the main subject of the Anton Pillar order executed in the proceedings and the later chain of interlocutory applications relating to inspection of the defendant's computer, and they were not shown to have any substance whatever. Quite to the contrary, it was established clearly that the defendant had not removed any clients' papers from the plaintiff's office, and that she had the authority of clients to hold the papers of clients which were found on execution of the Anton Pillar order, and had received the papers after leaving the plaintiff's employment. 5 Cross-examination of Mr Weldon, the principal of the plaintiff established clearly, although without frank concession on his part, that he had no real basis for alleging that clients' papers had been removed from his office to be later found on execution of the Anton Pillar order, and no reasonable basis for taking papers from the defendant's office and retaining them. In the case of one client a very large volume of papers were retained for six months and only returned during the hearing. On 30 April an undertaking was given to the Court to return the papers to the defendant by 4 May 1999. This was not done and they were returned on or about 19 November 1999. An aspect of my dissatisfaction with their not being returned at the proper time is that there was no good reason why they were ever removed. After full examination at the hearing it became clear that there was no substance in suggestions that the defendant had mishandled clients' papers or behaved evasively with respect to the production of copies of lists of clients. Those suggestions were the basis of the Anton Pillar procedure and the rigorous and urgent pursuit of inspection of the defendant's computer by an expert, rather than following the ordinary and appropriate processes of discovery and inspection. 6 At several points in my judgment I made observations which show the adverse views which I formed of the employment by the plaintiff of these interlocutory remedies, and the disruptive impact produced on the defendant's establishing her new practice. The basis for concluding that the defendant had removed the Copping documents with some object of giving herself the opportunity to work for the Coppings was exploded even before the application was made for an Anton Pillar order, and there was no other basis for contending that she had wrongly removed clients' papers. 7 There were also contentions, which were pursued at great length without success, that the defendant had deliberately deleted documents from her computer for the purpose of concealing misconduct. In my judgment I observed (para 83) "The Anton Pillar order was greatly abused with very disruptive effects" and (para 84) "The conduct of the plaintiff and its solicitor in this respect throw them under the strong suspicion of having deliberately acted to disrupt the new enterprise." 8 Defendant's counsel referred me to authorities in which plaintiffs who have achieved some limited success have been ordered to pay costs. In Oshlack v. Richmond River Council (1998) 193 CLR 72 at 97 McHugh J at paras 69 and 70 said: "The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874, Devlin J formulated the relevant principle as follows: 'No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.' 'Misconduct' in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute. Apart from anomalous examples in the equity jurisdiction, there are very few, if any, exceptions to the usual order as to costs outside the area of disentitling conduct. The Court may award costs in favour of a defendant where the plaintiff has obtained only nominal damages. However, this practice can be justified on the basis that, in reality, the successful party lost the litigation and the unsuccessful party won." 9 There was serious misconduct by and on behalf of the plaintiff. With the advantage of evidence given at the hearing it can be seen that there was an abuse of the Anton Pillar process as there was no real basis on which to contend that the defendant had taken clients' documents or concealed them, that the lists of clients which were found in the defendant's possession on execution of the Anton Pillar order did not give a real basis for alleging that she had made copies of or deliberately memorised any list maintained by the plaintiff, or for further investigating that claim by unusually rigorous measures. I have the advantage not available to the judges who made the interlocutory orders of hearing the plaintiff's case when there was a full opportunity to test it, and of seeing, with retrospection, that there was both serious misconduct and abuse of process, with effects which were likely to disrupt the defendant in establishing her new practice. In reality the defendant won the litigation and repelled every allegation and every claim which could seriously warrant litigation. The plaintiff lost. 10 At a number of interlocutory stages, costs were reserved. In my view the defendant's success in the proceedings should carry with it costs at these interlocutory stages. 11 On 30 April 1999 the Court (Bergin J) for reasons then stated orally, rejected an application by the defendant to discharge the Anton Pillar order and ordered the defendant to pay the plaintiff's costs of the application, with attendances on 27, 28 and 30 April. The defendant's counsel contended that I should reconsider that costs order and vacate it having regard to findings made in my judgment. With the advantage of retrospection, the circumstances in which the Anton Pillar order was made and in which the Court adhered to the order when asked to set it aside appear very differently. It has now been established that no clients' papers or other papers had been removed by the defendant from the plaintiff's office, that she had not engaged in any dishonest conduct or concealment which could warrant departing from ordinary interlocutory measures, nothing was found which she should not have had, and papers which it was quite appropriate for her to have were removed and retained. When they were fully examined at the hearing it appeared that the lists which she was found to have in her possession were not copied from or based on deliberate memorisation of any records of the plaintiff, and when her computer was inspected to the fullest extent the plaintiff required, there was no proof that she had erased any document for motives of concealment, and no significant basis for considering that she might have. 12 The Anton Pillar order and the Court's decision not to set it aside were based a prima facie showing of how the defendant had behaved, or appeared to have behaved, now known to have been entirely wrong. The defendant's application to set aside the Anton Pillar order can now be seen to have been reasonable and appropriate. In the circumstances, where the order for costs has not been entered or enforced and the plaintiff's misconduct in relation to it has become known I am of the view that the order should be reconsidered and vacated, and that each party should be ordered to pay its or her own costs of her unsuccessful application. 13 As the plaintiff's conduct of the proceedings has been characterised by misconduct and abuse of process this is an appropriate case for costs to be ordered on the indemnity basis. 14 My Orders are: (1) Order that the plaintiff pay the defendant's costs of the proceedings. (2) Defendant's costs of the proceedings are to include costs reserved. (3) The order for costs of 30 April 1999 is vacated and in lieu thereof, order that each party pay its or her own costs of proceedings on 27, 28 and 30 April 1999. (4) Order that the defendant's costs payable under these orders be assessed on the indemnity basis. 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