Bromhead v Graham (No 2) [2007] NSWSC 710

New South Wales Supreme Court

CITATION : Bromhead v Graham (No 2) [2007] NSWSC 710

HEARING DATE(S) : 22/06/07 JUDGMENT OF : Gzell J

EX TEMPORE JUDGMENT DATE : 22 June 2007

DECISION : Defendant to pay plaintiffs' costs to date forthwith.

CATCHWORDS : PROCEDURE - Costs - Discrete aspect of case concluded - Damages to be determined by an Associate Justice - Whether costs should be paid forthwith or reserved until judgment entered

LEGISLATION CITED : Uniform Civil Procedure Rules 2005

CASES CITED : Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1 Charlie Brown Pty Ltd & Anor v Green & Ors, NSWSC, 3 July 1995, unreported

Stephen Bruce Bromhead - First Plaintiff PARTIES : John William Walker - Second Plaintiff Michael Noel Crozier Third Plaintiff Ian James Graham - Defendant

FILE NUMBER(S) : SC 2352/07

COUNSEL : Mr R Margo SC/ Ms T Leibman - Plaintiffs Mr R Newlinds SC/ Mr J Johnson - Defendant

SOLICITORS : Walker Smith Solicitors - Plaintiffs Stacks/Forster Solicitors - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

FRIDAY 22 JUNE 2007

2352/07 STEPHEN BRUCE BROMHEAD & ORS v IAN JAMES GRAHAM (NO 2) EX TEMPORE JUDGMENT 1 The Plaintiffs have made an application that I amend paragraph 67 of my reasons for judgment. What I said was: "But the partners do not seek retainers from their clients with respect to new matters and new work done on existing files is to the account of the individual performing the services. Mr Bromhead and Mr Walker have set up new firms to take that business and Mr Crozier has taken over some partnership files. What remains to the partnership when it is dissolved, which is expected to follow the conclusion of these proceedings, will be the winding down of the former business of the partnership by the resolution of existing files." 2 The Plaintiffs sought to substitute for the words "to the account of" the words "being billed by" and for the words "to take that business" the words "which are managing that business" and for the words "has taken over" the words "is managing." 3 The wording of paragraph 67 was deliberate. It was based on the deed of dissolution. I do not intend to make the alterations under the slip rule in the Uniform Civil Procedure Rules 2005, r 36.17 or otherwise. The application is one for the Court of Appeal. 4 The parties have produced rival sets of orders that they submit should be made. 5 The first issue under them is whether, in making an order that an Associate Judge determine the quantum of damages, I should also order that he determine any associated questions, any order for costs, including any application to vary any costs order now made to an order for costs on an indemnity basis, and that I should order the Defendant pay any amount determined by the Associate Judge. 6 I decline to take that course. The Associate Judge will make inquiry as to damages but in the end it is for the court to enter judgment. If associated questions arise during the Associate Judge's inquiry, the court may have to decide them. 7 The second issue concerned costs. The Plaintiffs sought an order that the Defendant forthwith pay the costs to date. The Defendant submitted that they should be reserved until the damages have been determined and judgment can be entered. 8 Notwithstanding that the matter is still alive until the quantum of damages has been determined, the issues that were fought before me have been substantially won by the Plaintiffs. The issue upon which they failed was whether they were entitled to injunctive relief. In respect of the other arguments that were raised by the Defendant in opposition to the relief sought, the Plaintiffs were successful. 9 In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1 at 4 [11], Barrett J said that one situation in which a court could depart from the ordinary rule that costs are payable at the conclusion of the proceedings is where there is a determination of a separately identifiable matter or the completion of a discrete aspect. 10 In Charlie Brown Pty Ltd & Anor v Green & Ors, NSWSC, 3 July 1995, unreported, McLelland CJ in Eq made an order that costs be assessed and paid forthwith after determining, as a preliminary point, that a partnership had been dissolved. His Honour took the view that the matters canvassed in separate questions were fundamental to the relationship of the parties and raised issues that were discrete from any other relief claimed in the proceedings. 11 In this case, it seems to me that the conclusion of a discrete aspect of the matter has occurred. Also, the matters canvassed in the separate issues raised by the Defendant were fundamental to the relationship of the parties and were discrete from the relief claimed in the proceedings. There is some similarity to the situation in Charlie Brown. 12 In those circumstances, in the exercise of my discretion in relation to costs, I take the view that it is inappropriate to reserve them until the question of damages has been determined and I propose to make an order in terms of the draft orders proposed by the Plaintiffs that the Defendant forthwith pay the Plaintiffs' costs up to the entry of orders as agreed or assessed.