New South Wales Supreme Court CITATION : Carter v NSW Netball Association (No 2) [2004] NSWSC 778 HEARING DATE(S) : 24 August, 2004 JUDGMENT DATE : 25 August 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Defendant to pay Plaintiff's cost on indemnity basis. CATCHWORDS : INDEMNITY COSTS - Whether the Defendant, properly advised, should have known that Defence would fail. CASES CITED : - Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 - Rosniak v GIO (1997) 41 NSWLR 608 PARTIES : Sandra Viola Carter - Plaintiff The New South Wales Netball Association - Defendant FILE NUMBER(S) : SC 1679/04 COUNSEL : J.E. Armfield - Plaintiff R.E. Montgomery, J. Watson - Defendant SOLICITORS : Coode & Corry - Plaintiff Sparke Helmore - Defendant JUDGMENT – Ex tempore 1 In these proceedings I delivered judgment on 17 August 2004 and stood the proceedings over to yesterday for submissions as to the form of the orders to be made and as to costs. 2 When the matter was called on yesterday, there was some short debate as to the form of the undertakings to be given by the Defendant. However, I think that Mr Montgomery, who appeared with Mr Watson for the Defendant, very soon conceded that the form of the words in paragraph 4 of the Plaintiff's Draft Short Minutes is appropriate with the addition of the inverted commas where I suggested. I will accept an undertaking in terms of paragraph 4 of the Plaintiff's Short Minutes of Order. 3 The substantial debate yesterday was as to whether the Defendant should pay the Plaintiff's costs of the proceedings on the indemnity basis. Counsel for both parties prepared written submissions, which I have found most helpful. 4 Mr Armfield, who appeared for the Plaintiff, says that this is a case in which the Defendant, properly advised, should have known that its persistence in the litigation was without any prospect of success. He relies upon the considerations discussed by Mason P in Rosniak v GIO (1997) 41 NSWLR 608 at 615 to 616. 5 Mr Montgomery submits that an indemnity costs order will not be made in the present case because the Defendant cannot be shown to have been guilty of relevant delinquencies or unreasonable conduct of a serious kind. He refers to cases such Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. 6 In my opinion, I should exercise the discretion as to costs according to the following general observations made by Mason P in Rosniak at 616: "Later cases have emphasised that the discretion to depart from the usual 'party and party' basis for costs is not confined to the situation of what Gummow J described as the 'ethically or morally delinquent party' ( Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 at 415): see Baltic Shipping Co v Dillon, "Mikhail Lermontov" (1991) 22 NSWLR 1 at 34; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234. Nevertheless the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation." 7 In the present case I have regard to the following considerations. 8 On 22 January 2004 the Plaintiff's solicitor wrote to the Defendant pointing out the flaws in the disciplinary proceedings which the Defendant had conducted. Many of the flaws asserted in that letter have been found to have occurred. The most glaring flaw pointed out in the letter was that Miss Fraser had declined to interview any of the witnesses proffered by the Plaintiff. In effect, she had conducted a one-sided investigation. I think that whatever else might have been thought of the other points raised in that solicitor's letter, the point made that the decision had been founded upon a one sided investigation must have been recognised by a competent legal adviser as a fatal denial of natural justice. 9 The Defendant's response, however, was to deny any breach of the requirements of natural justice. 10 On 15 June 2004, two days before the proceedings were to commence, the Plaintiff's solicitor wrote to the Defendant enclosing the Statement of Claim which they proposed to file and drawing attention to the following matters: "1. The complaint received by you on 6 August, 2003 from the No Excuse for Abuse Committee attached a petition purportedly signed by several persons. If you have regard to the second last page (which is the commencement of the petition), no reference is made at the top of the page to any complainant about our client. We have made inquiries of several persons who signed the petition and they have informed us that they were not shown the letter attached to the petition or informed in any way that it related to a complaint about our client. We have two Affidavits from persons who signed the petition to this effect. 2. Clearly, you ought be concerned that a complaint was lodged and acted upon in circumstances where at least some of the persons who signed it were not shown the covering letter or informed that it related to our client. This is in the context of a woman who has given years of loyal service to the sport, a serious allegation of 'child abuse' was made against her, it now transpires that the letter of complaint you received was not a valid letter (in the sense that the persons signing were not aware of the specific complaints or that they related to our client) with serious doubts now cast on the bona fides of the person signing the complaint and the No Excuse for Abuse Committee. 3. It ought further concern you that Vicki Fraser, your appointed investigator, did not become aware of this. Coupled with her failure to interview any witness supportive of our client or even to consider any exculpatory evidence sought to be provided to her, shows that she exhibited the most blatant bias against our client. She even purported to put allegations to our client which were never even in the original letter of complaint." 11 That letter gave express notice that the complaints against the Plaintiff by the persons calling themselves "The No Excuse for Abuse Committee" were tainted by deception. However, the Defendant did not resile from its position. 12 When the Plaintiff filed affidavits by four witnesses who deposed to the deception practised in relation to the letter of complaint against the Plaintiff, the Defendant filed no affidavit in response nor did it seek to challenge that evidence. It did not resile from its Defence, even when expressly invited to do so in a letter from the Plaintiff's solicitor sent the day before the trial commenced. 13 It seems that the Defendant took the view that no denial of natural justice could have occurred, even when the complaint against the Plaintiff had been tainted by deception and where the Plaintiff had been denied the opportunity of testing that complaint in a hearing or even of presenting her own case in opposition by having her own witnesses interviewed. 14 I do not think that the Defendant, properly advised, could reasonably have held the view that the Defence had a reasonable prospect of success. I do not go so far as to say that the Defendant's conduct in defending the proceedings was vexatious. As Mason P has said in Rosniak , one does not need to go that far. However, bearing in mind that the Defendant did not have a personal and vested interest in the outcome of these proceedings, that its concern should have been to protect its young players only from harassment properly proved, and that its concern should have been to achieve a fair and just outcome of the disciplinary proceedings, I think that its conduct in defending this case to the end, after notice of the deficiencies in the process, was unreasonable to such a degree as to warrant the making of an indemnity costs order. 15 I mean no discourtesy to Mr Montgomery in not dealing with all the arguments set out in the twelve pages of his written submissions. 16 Mr Montgomery submits the pleadings and the judgment to close analysis in a way which, in the particular circumstances of this case, I do not consider necessary to the exercise of the broad discretion as to costs. It is sufficient to note that Mr Montgomery does not submit that the case was decided on issues not raised in the pleading. 17 Further, while the Plaintiff's submissions did not succeed on every point, it is fair to say that the Plaintiff was successful on the major points which had been raised by her solicitors from the very outset. 18 For these reasons, I make declarations in accordance with paragraphs 1 and 2 of the Short Minutes of Order dated today, initialled by me and placed with the papers. I make an order in terms of paragraph 3 of the Short Minutes. I note the undertaking of the Defendant given to the Court by its Counsel in terms of paragraph 4 of the Short Minutes. 19 I order that the Defendant pay the Plaintiff's costs of these proceedings on an indemnity basis. – oOo – Last Modified: 08/27/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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