XPlore Technologies Corporation of America v Tough Corp Pty Ltd (No 2) [2008] NSWSC 1392

New South Wales Supreme Court

CITATION : XPlore Technologies Corporation of America v Tough Corp Pty Ltd (No 2) [2008] NSWSC 1392

HEARING DATE(S) : Written submissions

JUDGMENT DATE : 23 December 2008

JURISDICTION : Common Law

JUDGMENT OF : Rothman J

DECISION : No further order as to costs.

CATCHWORDS : COSTS – enforcement of foreign judgment – proceedings stayed to await foreign appeal – costs of motion for stay to be costs in the cause

LEGISLATION CITED : Civil Procedure Act 2005

CATEGORY : Consequential orders

Arian v Nguyen [2001] NSWCA 5 Hooker v Gilling (No 2) [2007] NSWCA 214 CASES CITED : NSW v Stanley [2007] NSWCA 330 XPlore Technologies Corporation of America v Tough Corp Pty Ltd [2008] NSWSC 1267 Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306

PARTIES : XPlore Technologies Corporation of America (Plaintiff) Tough Corp Pty Ltd (Defendant)

FILE NUMBER(S) : SC 14063/2008

COUNSEL : Dr C S Ward (Plaintiff) J Stevenson SC / J Williams (Defendant)

SOLICITORS : Henry Davis York Lawyers (Plaintiff) Clayton Utz Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

ROTHMAN J

23 DECEMBER 2008

14063/2008 XPlore Technologies Corporation of America v Tough Corp Pty Ltd (No 2)

JUDGMENT 1 HIS HONOUR: On 28 November 2008, the Court, as presently constituted, issued orders staying proceedings for the enforcement of the determination of proceedings in the District Court of Texas, Travis County, until a particular date or the determination of appeal proceedings and issued reasons therefore: XPlore Technologies Corporation of America v Tough Corp Pty Ltd [2008] NSWSC 1267, "the earlier judgment". This judgment must be read in conjunction with the earlier judgment. 2 By order (iii) issued as a result of the earlier judgment, the Court granted liberty to seek a different order as to costs. The defendant, pursuant to that leave, has sought an order that the plaintiff pay the defendant's costs of the motion. Principles 3 The Court, as a superior court of record with general jurisdiction as to both law and equity, has inherent power to order costs. Further, the terms of s 98 of the Civil Procedure Act 2005 is a grant of broad discretion, to be construed liberally, to make orders as to costs including the determination by whom, to whom and to what extent costs should be paid, and whether they should be paid on an ordinary basis or on an indemnity basis. 4 The discretion conferred on the Court must be exercised judicially. The Uniform Civil Procedure Rules, in particular Rule 42.1, makes it a general rule that costs will follow the event. The foregoing proposition is trite. Ordinarily, this means that the successful party will have its costs paid, unless some misconduct in the litigation by that party has occasioned those costs or some part of those costs: Hooker v Gilling (No 2) [2007] NSWCA 214, citing Arian v Nguyen [2001] NSWCA 5; NSW v Stanley [2007] NSWCA 330; Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306. 5 The difficulty is often, if not always, whether a party has been successful, what is "the event", and to what extent, if any, has the party been successful, and what event, if any, should costs follow. This is such a case. Application of the Principles 6 Ordinarily, a party seeking the enforcement of an overseas judgment is entitled to proceed without delay and ought to be entitled to proceed, and is entitled to proceed, under the common law, without an examination of the merits of the overseas proceedings. This is an unusual case. 7 Without determining the merits of the claim, the Court accepted that there was an arguable defence to the enforcement, namely, that the Texas judgment was issued in denial of natural justice and, again arguably only, that the foreign court was misled in a manner which resulted in the judgment issuing, which misleading statement may arguably amount to fraud. Each of the matters in the arguable defence were matters that were to be agitated in the appeal proceedings in Texas that had been instituted and were, at the time of the enforcement proceedings, before the Appeal Court in Texas. 8 As a matter of an application of the principles associated with foreign judgments, and as a matter of case management, the Court took the view that, rather than allow the defence to be agitated in the enforcement proceedings in this State, those enforcement proceedings should await the outcome of proceedings in the Appeal Court in Texas. That was the fundamental basis for the grant of the stay for a limited period. 9 The balancing of the interests of both the plaintiff and defendant in these proceedings resulted in the grant of the stay. The same balance of the interests of both the plaintiff and the defendant caused the Court to take a preliminary view that costs of the motion would be costs in the cause. 10 It would be quite inappropriate for the plaintiff, who, if it were to have an enforceable right arising from a foreign judgment in Texas, ought to be able to enforce that right without penalty, to be forced to pay the costs of a proceeding, which did no more than stay the enforcement, until such time as the appeal has concluded. By the same token, it would be inappropriate for the defendant, if the foreign judgment were obtained on any basis which gives rise to those defences, to be forced to pay the costs of the plaintiff, at least at this stage of the proceedings. 11 In those circumstances, the preliminary view that the Court came to was that "the event" that would determine which of the parties would pay the costs, would be the ultimate conclusion of the enforcement proceedings. 12 The matters raised by the parties, in subsequent written submissions, are matters, which, frankly, are relatively obvious, and are matters to which the Court had some regard in arriving at a preliminary conclusion. Nothing that has been put has altered the preliminary view to which the Court arrived. 13 Bearing in mind that the defendant substantially obtained the relief it sought, but bearing in mind, also, that the proceedings are for the enforcement of a foreign judgment and that the merits of any defence relate to issues that will determine the success or otherwise of the appeal in Texas, the Court continues to take the view that costs of the motion ought, properly, be costs in the cause. As a consequence the Court will not alter or vary the orders issued on 28 November 2008. **********