New South Wales Court of Appeal CITATION: Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd) v Barr; Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd) v Tim Barr Pty Ltd & Ors [No 2] [2005] NSWCA 420 HEARING DATE(S): On written submissions JUDGMENT DATE: 2 December 2005 JUDGMENT OF: Hodgson JA at 1; Ipp JA at 2; Campbell AJA at 19 DECISION: The application by Project 28 Pty Ltd and the application by Tim Barr Pty Ltd and Mr Barr are both dismissed with costs. LEGISLATION CITED: Uniform Civil Procedure Rules 2005 (NSW), Pt 36 r 36.11(2) CA 41018/04 Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd) (Claimant) Timothy James Barr (Opponent) CA 41019/04 PARTIES: Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd) (Claimant) Tim Barr Pty Ltd (First Opponent) Timothy James Barr (Second Opponent) Shigeo Narui (Third Opponent) FILE NUMBER(S): CA 41018/04; 41019/04 CA 41018/04 & CA 41019/04 M Einfeld QC/R E Dubler SC/A Harding (Claimants) COUNSEL: R G McHugh/J E Lazarus (First & Second Opponents) CA 41019/04 No Appearance (Third Opponent) CA 41018/04 & CA 41019/04 Verekers (Claimants) SOLICITORS: Corrs Chambers Westgarth (First & Second Opponents) CA 41019/04 No Appearance (Third Opponent) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): ED 4564/02; ED 2762/02 LOWER COURT JUDICIAL OFFICER: Palmer J IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41018/04 CA 41019/04 ED 4564/02 ED 2762/02 HODGSON JA IPP JA M W CAMPBELL AJA Friday, 2 December 2005 PROJECT 28 PTY LTD (Formerly Narui Gold Coast Pty Ltd ) v BARR; PROJECT 28 PTY LTD (Formerly Narui Gold Coast Pty Ltd ) v TIM BARR PTY LTD & ORS Judgment (No 2) 1 HODGSON JA: I agree with Ipp JA. 2 IPP JA: On 25 July 2005 this Court upheld the appeal of Project 28 Pty Ltd (formerly Narui Gold Coast Pty Ltd and described as "Narui" in the proceedings). Tim Barr Pty Ltd ("TBPL") and Mr Barr were respondents in the appeal. 3 In paragraph [123] of my reasons (with which Hodgson JA and Campbell AJA agreed) I proposed the following order: "The Lease Proceedings are stayed until Austcorp provides TBPL and Mr Barr with an indemnity against any costs that they might be ordered to pay Narui." 4 The "Lease Proceedings" were proceedings between TBPL and Mr Barr as plaintiffs and Narui was the defendant. Austcorp (Austcorp Group Ltd) was not a party to those proceedings but funded TBPL and Mr Barr in that litigation. 5 By notice of motion filed on 15 September 2005 (nearly two months after delivery of judgment) Narui applied to vary order (d) of the judgment by deleting the words "TBPL and Mr Barr" and "they" and inserting in lieu thereof the words "Narui" and "TBPL and Barr". Order (d) would then read: "The Lease Proceedings are stayed until Austcorp provides Narui with an indemnity against any costs that TBPL and Barr respectively might be ordered to pay Narui." 6 By notice of motion filed on 5 October 2005, TBPL and Barr sought an order that the order as to costs made by this court on 25 July 2005 be varied so as to read: "TBPL and Mr Barr to pay 50% of the costs of the application for leave to appeal and the appeal in the Lease Proceedings as well as 50% of the costs of the application for a stay of the Lease Proceedings before Palmer J." 7 On 25 July 2005 this Court ordered that TBPL and Mr Barr pay the costs of the application for leave to appeal and the appeal in the Lease Proceedings as well as the costs of the application for a stay of the Lease Proceedings before Palmer J. It is this order that is the subject of the application by TBPL and Barr. 8 The parties filed written submissions in each of the two applications and each has been referred to the court for determination in chambers. 9 I turn firstly to the application by Narui. 10 Narui points out that the orders made on 25 July 2005 have not been entered pursuant to Pt 36 r 36.11(2) of the Uniform Civil Procedure Rules 2005 (NSW) and it would be open to this court to vary them. The effect of the variation Narui proposes would be that the Lease Proceedings would be stayed until Austcorp provides Narui with an indemnity against any costs that TBPL and Barr might be ordered to pay Narui. 11 The grounds on which Narui seeks to have the order varied are: (a) In the appeal, Narui made no submissions as to the form of the order. (b) If the existing order (d) stands, and a costs order is eventually made in favour of Narui, TBPL and Barr might never call on the indemnity ordered to be provided by Austcorp. (c) If TBPL and Barr were to call on the indemnity, and were it to be met by Austcorp, there would be no compulsion upon TBPL and Barr to pay the fruits of the indemnity to Narui. TBPL and Barr might dissipate the funds or become insolvent, thereby denying Narui the benefit of the judgment. (d) Austcorp might deny that it has any obligation to indemnify TBPL and Barr on the grounds that it has a set-off or right of discharge against TBPL and Barr. 12 I do not accept the submission that Narui was denied the opportunity to be heard on the issue relevant to the application for variation. As TBPL and Mr Barr point out, "the Court specifically and repeatedly raised with senior counsel for Narui whether he embraced, as a fallback position, that there should be a stay unless Austcorp made itself liable for costs". Senior counsel accepted that, if Narui's primary argument failed, there should be a stay unless Austcorp indemnified TBPL and Barr against their costs. 13 I agree with the submission of TBPL and Barr that Narui had every opportunity to make submissions as to the appropriate form of any terms of the stay. Narui made no such submissions. 14 Further, in my view, the application now made is premature. None of the hypotheses on which Narui's arguments are based have been established and there is no evidence that any might materialise. Should any of the situations that Narui fears do in fact occur, it would be open to Narui then to make an application for variation of the order, or a fresh application, on the basis that the facts then existing give rise to an abuse. 15 I do not think it appropriate that this court vary order (d). I would dismiss Narui's application with costs. 16 I turn now to the application of TBPL and Mr Barr. 17 The basis of this application is that there were multiple issues before the Court on appeal, Narui had been successful on some but not on others, and TBPL and Mr Barr had succeeded on an issue which had occupied the bulk of the time taken by the proceedings, namely, whether the proceedings should be dismissed. TBPL and Mr Barr submitted that the latter issue was "clearly the dominant issue". 18 Narui was substantially successful in its appeal and I see no reason why this court should alter the costs order it made after due deliberation. I would dismiss the application by TBPL and Mr Barr with costs. 19 M W CAMPBELL AJA: I agree with Ipp JA. ********** 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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