Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Limited [2006] NSWSC 241

New South Wales Supreme Court

CITATION : Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Limited [2006] NSWSC 241 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 9 March 2006

JUDGMENT DATE : 5 April 2006

JUDGMENT OF : Bergin J

DECISION : The respondent is to pay the second defendant's costs thrown away in respect of the appearances on 26 October 2005, 28 October 2005 and 1 November 2005. Each party is to pay its own costs of the appearance on 4 November 2005.

CATCHWORDS : [COSTS] No matters of principle

PARTIES : Jeffrey & Katauskas Pty Limited (Second Defendant/ Applicant) SST Consulting Services Pty Limited (Respondent)

FILE NUMBER(S) : SC 55027/00

COUNSEL : J Steele (Second Defendant/ Applicant) TGR Parker SC (Respondent)

SOLICITORS : Colin Biggers & Paisley (Second Defendant/ Applicant) J Biady & Associates (Respondent)

- 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY & CONSTRUCTION LIST

BERGIN J

5 APRIL 2006

55027/00 RICKARD CONSTRUCTIONS PTY LIMITED v RICKARD HAILS MORETTI PTY LIMITED JUDGMENT 1 The second defendant, Jeffrey and Katauskis Pty Ltd, by Amended Notice of Motion seeks an order that SST Consulting Services Pty Limited (SST), (the plaintiff's funder in the litigation, but not a party to the proceedings) pay the second defendant's costs of appearances at Court on 26 October 2005, 28 October 2005, 1 November 2005 and 4 November 2005 in respect of a Notice to Produce dated 7 October 2005 served on SST. The Motion was heard on 9 March 2006, immediately after the hearing of the Motion in relation to the challenge to the plaintiff's privilege claim in which judgment has also been delivered today: Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234. Ms J Steele, of counsel, appeared for the second defendant/applicant and Mr TGR Parker SC appeared for the SST, the respondent to the Motion. 2 The Notice to Produce was served prior to a proposed hearing of a Notice of Motion for third party costs against SST. A Notice to Admit Facts was also served. An earlier Notice to Produce dated 28 September 2005 was served on SST on 6 October 2005. SST advised that no leave had been sought to issue the Notice to Produce and the Notice to Admit Facts and that it regarded the Notices as invalid. 3 The second defendant served a second Notice to Produce dated 7 October 2005 without prejudice to any rights in respect of the earlier Notice to Produce. The second Notice to Produce called for documents including those in the following category: 3. For the period from 1 January 2004 to 5 November 2004 communications or records of communications between the solicitors for the plaintiff and SST Consulting Services Pty Limited, Peter Sweeney or Denys Truman (or any of them) which seek or convey instructions to those solicitors as to the conduct of these proceedings with the exception that the call does not extend to such communications which relate solely to the subject of the security for costs. 4 On 17 October 2005, the first return date of the Notice to produce dated 7 October 2005, SST's representative advised the Court that there was "nothing to produce". It is apparent that further discussion between the legal representatives exposed a possible misunderstanding and on 19 October 2005 the solicitor for SST, J Biady & Associates (JBA) wrote to the solicitors for the second defendant, Colin Biggers & Paisley (CBP) in terms that included the following: (a) No documents were produced to the Court on 17 October 2005 as we thought we had made it clear that we did not accept the validity of the Notices to Produce … (b) As a matter of record, we confirm you were informed that we disputed the validity of the Notice to Produce and that our client intended not to comply with that Notice. (c) There appears to be a misunderstanding – there may well be documents that do come within the terms of your client's Notice to Produce. Before the matter was called by the Registrar on Monday, we had been informed by Ms Steele, the counsel who appeared on your client's behalf, that as we had no documents available she intended to adjourn the Notice to Produce until this morning. Accordingly, we informed the Court that we had no documents, meaning that we had none in our possession. We expected that any arguments about the validity of the Notice would either occur before the next listing of the matter, or else there would need to be argument before the Court about the issue. 5 On 26 October 2005, although the matter did not appear in the published list, the second defendant appeared in respect of the Notice to Produce and called upon it. There was no appearance for SST. Mr Parker SC conceded that there is no proper explanation for the failure of SST to appear on that day and also conceded that SST could not properly resist an order as to costs thrown away on that day. 6 After SST's failure to appear on 26 October 2005, the second defendant listed the Notice to Produce in the Technology & Construction List on Friday 28 October 2005. On that day the Court noted that on 1 November 2005 documents would be produced in response to the Notice to Produce dated 7 October 2005 subject to a claim for privilege over some or all of the documents. 7 On 1 November 2005 Ms Khoo appeared for SST and Ms Steele appeared for the second defendant. Ms Khoo advised the Registrar that there were documents to produce but that there was a claim for privilege. Ms Steele then sought the production of the documents to the Court with first access being granted to the plaintiff to determine which documents were to be the subject of any privilege claims. Ms Khoo then advised the Court that there was nothing to produce. The Notice to Produce was then stood over to 2 November 2005. 8 On 1 November 2005 CBP wrote to JBA and advised that it had listed the matter again before the Court on 2 November 2005 because Ms Khoo failed to produce any documents to the Court. That letter alleged that SST's failure to answer the Notice to Produce "on yet another occasion and to offer no explanation for such failure" was "unacceptable". That evening JBA wrote to CBP arguing that because the plaintiff needed to inspect the documents to establish whether a claim for privilege ought be made and that the matter was already listed the following day, it was entirely reasonable for the Notice to Produce to stand over to the following day. That letter answered some of the allegations made by CBP in respect of the history of the appearances before the Court and concluded: The prior events that you insist on re-hashing are not as you record them, but there is little to be gained from revisiting this issue again – those aspects were resolved by discussions between counsel and are no longer relevant. 9 JBA wrote to CBP again on 1 November 2005 referring to the hearing the following day. They advised that any documents in category 1 of the Notice to Produce had already been seen by the second defendant, that there were no documents falling within category 2 and that there may be a small number of documents falling within category 3. By this time Allianz, the third defendant, had served a Notice to Produce on SST and JBA advised the second defendant that it intended to produce the small number of documents in category 3 "as part of the documents produced" in answer to the Allianz Notice to Produce. 10 On 2 November 2005 SST produced three packets of documents to the Court which apparently included documents in answer to both the second defendant's Notice to Produce and Allianz' Notice to Produce. On 2 November 2005 CBP wrote to JBA asking for confirmation that they had separated the documents sought under the second defendant's Notice to Produce from the documents produced pursuant to the Allianz Notice to Produce.