Clarence Street Pty Ltd v ISIS Projects Pty Limited [2007] NSWSC 509

New South Wales Supreme Court

CITATION : Clarence Street Pty Ltd v ISIS Projects Pty Limited [2007] NSWSC 509

HEARING DATE(S) : 26/3/07, 30/3/07

JUDGMENT DATE : 23 May 2007

JURISDICTION : Technology & Construction List

JUDGMENT OF : McDougall J at [1]

DECISION : See para [24] of judgment

CATCHWORDS : COSTS - of application for further security for costs and other relief - no question of principle

PARTIES : Clarence Street Pty Limited (Plaintiff) ISIS Projects Pty Limited (Defendant)

FILE NUMBER(S) : SC 55075/04

COUNSEL : F C Corsaro SC/J Rose (Plaintiff) M R Elliott/C Henry (Defendant)

SOLICITORS : Watson Mangioni (Plaintiff) Turtons Lawyers (Defendant)

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

McDOUGALL J

23 May 2007

55075/04 CLARENCE STREET PTY LIMITED v ISIS PROJECTS PTY LIMITED JUDGMENT ON COSTS 1 HIS HONOUR: On 26 March 2007, I heard the defendant's notice of motion filed on 20 November 2006 seeking:

(1) Orders in relation to the plaintiff's contentions, and in relation to particulars; and

(2) Further security for costs. 2 I concluded that:

(1) In principle, the plaintiff should provide further security for costs;

(2) If the parties could not agree on the amount, manner of giving and timing of the further security, the question of quantification of the further security would be referred out and I would deal with those remaining questions with the benefit of the referee's report (the parties accepted that I should take this course); and

(3) The plaintiff should amend its summons (this was common ground, by the time of the hearing before me) and should file an amended Scott Schedule. 3 I reserved the question of costs, to see if the parties could deal with all matters outstanding under the notice of motion. In the event, they were unable to do so. They asked me to deal with the question of costs on the basis of written submissions. 4 The defendant submits that it has succeeded to date on its notice of motion and that, on the basis that costs follow the event, it should have its costs to date. The plaintiff accepts that generally costs should follow the event, but submits that this is subject to certain "limitations". I deal with each of the suggested limitations under the headings that follow. Time for assessment and payment 5 The effect of paragraph 46 of Practice Note SC Eq 3 is that, in the Commercial and Technology and Construction Lists, any costs ordered to be paid may be assessed forthwith unless the Court otherwise orders. The plaintiff notes that the question of security has not yet been finalised, because the question of quantification has not been resolved and the consequential questions of the time and manner of giving further security have therefore not been resolved. It submits that either the making of an order should be delayed, or alternatively the assessment of costs pursuant to any order should be delayed until all outstanding questions relating to the further security are resolved. 6 The defendant accepts that the assessment of costs should not take place until all outstanding questions relating to the further security have been resolved. 7 In my view, it is appropriate to make the order now, but to provide that assessment be stayed until the further order of the Court. The further steps to be taken, and whatever decisions are made thereafter in relation to further security for costs, will not reflect back, so as to inform the exercise of the discretion as to costs to date. The question of assessment can be revisited when the remaining matters for decision, in relation to the question of further security, are resolved; and any further costs questions can be dealt with at the same time. "Pleadings" and particulars 8 The plaintiff submits that this aspect of the notice of motion was "abandoned", and that the application was "ill conceived". Thus, it submits, the defendant should not have its costs relating to those matters. 9 I do not accept this submission. Firstly, as I have noted (and as I noted in my judgment given on 26 March 2007), by the time the notice of motion was heard the plaintiff accepted that it should file an amended summons. That has since been done. Secondly, I concluded that the plaintiff should file an amended Scott Schedule. I did that because the Scott Schedule in its form at the time was substantially out of date, and required amendment accordingly. Thus, I think, it is not correct to say that this aspect of the defendant's notice of motion failed, let alone that it was "ill conceived". 10 In any event, the notice of motion was dealt with within a day. The very great bulk of the evidence and hearing time related to the question of further security. It would be artificial and unproductive to attempt to isolate out some amount of costs referable only to the dispute relating to "pleadings" and particulars. Costs should be limited to the question of principle 11 The plaintiff submits that the only question determined to date (leaving aside the dispute as to the "pleadings" and particulars) is the one of principle: whether, in principle, further security should be given. Thus, it submits, any costs order at this time should be limited accordingly. 12 In principle, the defendant accepts this limitation. The order that it seeks is "limited to its costs of the filing and service of the motion and its costs of and incidental to the hearing on 26 March 2007" (written submissions in reply on costs, dated 11 April 2007). The defendant states further that "[i]t has no objection to it being noted that the costs would not include costs in respect of the preparation of evidence going to the questions [sic] of the quantum of any security to be awarded", and accepts that "the costs of quantum issues should be left until after those issues have been determined" (ibid). 13 The plaintiff's position is correct in principle. I think that the form of order proposed by the defendant is sufficient to deal with this "limitation"; indeed, the plaintiff did not submit otherwise. In case it is not plain from what I have said already, I note specifically that the costs that I propose to order to be paid do not include costs in respect of the preparation of evidence going to the question of the quantum of the security to be provided. Those particular costs will be the subject of further determination (if they are not agreed) once the outstanding issues relating to further security have been decided. Duplication of affidavits and evidence 14 The plaintiff submits that there has been substantial duplication and overlapping in the defendant's evidence, and that "[t]he number and scope of affidavits filed, served and relied on by [the defendant] in relation to the Motion is clearly unreasonable having regard to the nature and extent of the application." (written submissions on costs dated 10 April 2007, para 16). 15 The defendant's primary position is that the affidavits to which the plaintiff refers go to the quantum of the further security and are therefore of no present relevance (because of its position on the previous issue). Since I have accepted that the present costs order should be limited so as in effect to exclude any costs relating to the preparation of quantum evidence, that submission must be accepted. 16 The defendant nonetheless takes issue with the plaintiff's assertions of duplication, and its submissions in support of that assertion. I do not propose to deal with the competing submissions. Firstly, I see little point in deciding a dispute that has no present dispositive significance. Secondly, if the dispute remains live, its decision will be facilitated by a consideration of the referee's report. Rejected evidence 17 The plaintiff submits that the costs order should be moulded to take account of the fact that I rejected some paragraphs of the defendant's evidence, and directed the parties to seek to reach agreement on the extent to which the application of the principle underlying those rulings would affect other parts of the defendant's evidence. Thus, it says, the defendant should not have all its costs. 18 The evidence in question went to quantum issues. Further, in my view, to the extent that this submission should be accepted (as to which I express no concluded view), it can be taken up at the time of assessment if any order is made ultimately in respect of what for convenience may be called the quantum evidence. Interim conclusion 19 The plaintiff submits that, having regard to the limitations with which I have dealt so far, the defendant's costs should be limited to 50% of the costs on the notice of motion. It will be apparent from what I have said that I do not accept this evidence. Unreasonable representation 20 The plaintiff submits that "the number of legally qualified practitioners and legal support representing [the defendant] at the hearing on 26 March 2007 was unreasonable, and that the Court should include in its order a limitation on the amount recoverable … " (written submissions dated 10 April 2007, para 25). 21 The defendant sought in its written submissions to explain who the people in question were. If the identification of those people, and the reasons for and basis of their presence ever becomes relevant, it should be dealt with (on both sides) by evidence. 22 In any event, this is a matter for an assessor. I have no reason to think that an assessor would allow, in respect of a straightforward procedural notice of motion, the costs of unreasonably excessive representation (on the assumption, which I stress that I have not investigated and do not find to be made out) that the defendant's representation on the hearing of the notice of motion in fact could be so characterised. Overall conclusion and order 23 The defendant should have its costs to date of the notice of motion. Those costs should not include the costs of evidence going to the quantum of further security (which particular costs should be reserved) and should not be assessed until the further order of the Court. 24 I make the following orders: