New South Wales Supreme Court CITATION : Levy v Bablis & Anor [2009] NSWSC 768 HEARING DATE(S) : 30 July 2009 JUDGMENT DATE : 31 July 2009 JURISDICTION : Equity JUDGMENT OF : Slattery J at 1 EX TEMPORE JUDGMENT DATE : 31 July 2009 DECISION : An order for costs in favour of the first defendant against both the plaintiff and the second defendant to be borne by them jointly and severally in respect of an application for the plaintiff to have leave to discontinue against the second defendant. CATCHWORDS : COSTS - First defendant entitled to order for costs of a failed application for discontinuance of proceedings during hearing - whether the issue of costs should be reserved until the end of the proceedings - there is nothing in the position as between the first defendant and second defendant which requires costs to be reserved LEGISLATION CITED : Uniform Civil Procedure Act 2005 CATEGORY : Principal judgment CASES CITED : Sanderson v Blythe Theatre Company [1903] 2 KB 533 Julian Emmanuel Levy (Plaintiff) PARTIES : Peter Bablis (First Defendant) United Producers & Associates Pty Limited ACN 114 655 417 FILE NUMBER(S) : SC 6289/06 Mr S J Stanton (Plaintiff) Mr M Holmes (Plaintiff) Mr J Simpkins SC (First Defendant) COUNSEL : Mr M Condon (First Defendant) Ms P McEniery (First Defendant) Mr A Street SC (Second Defendant) Ms D Hawkins (Second Defendant) McLachlan Thorpe Partners (Plaintiff) SOLICITORS : Minter Ellison (First Defendant) Slattery Thompson (Second Defendant) - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION SLATTERY J WEDNESDAY 5 AUGUST 2009 6289/06 JULIAN EMMANUEL LEVY v PETER BABLIS AND UNITED PRODUCERS & ASSOCIATES PTY LIMITED ACN 114 655 417 JUDGMENT [Reasons for decision on Costs Judgment given 30 July 2009] 1 HIS HONOUR: In a judgment delivered 29 July 2009 I declined to grant the leave jointly sought by the plaintiff and the second defendant to permit the plaintiff to discontinue these proceedings against the second defendant. My reasons for refusing leave are published separately: [2009] NSWSC 740. On behalf of the first defendant, Mr Simpkins SC now seeks an order for costs against the plaintiff and the second defendant. Mr Simpkins submits that as the first defendant was successful in opposing the grant of leave to discontinue under r12.1 of the Uniform Civil Procedure Act 2005, there is no reason why a costs order should not be made now against both the plaintiff and the second defendant who each took an active part in promoting the application for discontinuance. Mr Street SC, on behalf of the second defendant, and Mr Stanton, on behalf of the plaintiff, oppose the making of an order for costs. I do not agree with Mr Street's and Mr Stanton's submissions and on 30 July 2009 I made orders for costs on the leave application against the plaintiff and the second defendant. I indicated on 30 July that I would publish reasons for my decision later. These are those reasons. 2 Mr Street's principal argument is that I should reserve the issue of costs and not decide it now because of the significance of this step and because reservation would give the Court the advantage of seeing at the end of the proceedings whether or not additional costs have been created by the second defendant being kept in the proceedings. It is said that can best be evaluated at the conclusion of the proceedings, not now. Mr Stanton supported this argument describing it as having "a seductive sensibility" and adding that there is nothing incumbent on the Court to make the determination at this stage. Mr Stanton says, the trial has some way to go and that an order for costs should "await the normal course". 3 The difficulty for Mr Street's and Mr Stanton's argument is that it does not distinguish between the scope of the contest about whether or not the plaintiff should be given leave to discontinue against the second defendant and the scope of the final contest between the plaintiff and the second defendant in these proceedings. Mr Street might be right that the plaintiff may eventually fail against the second defendant. Costs orders may in due course be made in favour of the plaintiff against the first defendant. The plaintiff's proceeding against the second defendant may occupy a great deal of time and resources. That all these consequences might result from the refusal to grant leave can be accepted. The real question here is that the first defendant who seeks costs has been put to the additional expense of opposing the leave which was sought. This expenditure would have been unnecessary if the plaintiff and the second defendant had not sought the leave which has now been refused. Had the plaintiff and the first defendant not sought leave to discontinue the second defendant would still be in the position that Mr Street says that it now is, namely facing an extended hearing in which it claims it will ultimately be successful. If the second defendant and the plaintiff had not taken the unsuccessful course of seeking leave to discontinue, the second defendant would be in exactly the same position that it is now except that the first defendant would not have wasted its costs on the second defendant's and the plaintiff's unsuccessful application. 4 If the second defendant is ultimately successful against the plaintiff and gets a costs order in its favour it is difficult to see why a decision now to order costs in the first defendant's favour against the second defendant would need to be adjusted. The second defendant could have achieved that simply by defending the proceedings without taking the risk of pursuing an application for leave for the plaintiff to discontinue. Mr Street submits that the Court should not be distracted by making orders that it may have to revisit. He says that the appropriate course therefore is for costs to be reserved. It is not obvious why this costs order will have to be revisited. The present situation is not analogous to the reservation of costs that occurs when a plaintiff obtains an interlocutory injunction against a defendant in two party litigation. In that situation costs are often reserved because the plaintiff's interlocutory success may end up being short lived if a defendant ultimately succeeds in the proceedings. Here though it is the first defendant who seeks costs against the second defendant and the plaintiff. There is no cross-claim between the first defendant and the second defendant. There is nothing contingent in the position as between the first defendant and the second defendant which would require me to reserve costs. Even if Mr Street were able to persuade me that if the first defendant was unsuccessful and second defendant successful and that a rare Sanderson Order (Sanderson v Blythe Theatre Company [1903] 2 KB 533 at 539) should be made in favour of the second defendant against the first defendant, such an order would not obviously warrant a reassessment of the costs consequences of the first defendants' successful decision to oppose leave to the plaintiff to discontinue against the second defendant. 5 Neither Mr Street nor Mr Stanton seem seriously to oppose the result that any cost order that I do make, should be made against both the plaintiff and the second defendant jointly and severally. Leave for the plaintiff to discontinue against the first defendant was supported equally by the plaintiff and the second defendant and in my view costs should be awarded against them both. 6 Accordingly, on the plaintiff and the second defendant's application for the plaintiff for leave to discontinue against the second defendant I make an order for costs in favour of the first defendant against both the plaintiff and the second defendant to be borne by them jointly and severally. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.