Zaaiter v Perpetual Trustees Victoria Ltd [2010] NSWSC 512

New South Wales Supreme Court

CITATION : Zaaiter v Perpetual Trustees Victoria Ltd [2010] NSWSC 512

HEARING DATE(S) : 19 April 2010, 12 May 2010

JUDGMENT DATE : 26 May 2010

JUDGMENT OF : Ball J

DECISION : Respondent to pay Plaintiff's costs on indemnity basis.

CATCHWORDS : COSTS - Contempt proceedings initiated but subsequently withdrawn - Respondent initially failed to comply with subpoena - Indemnity costs order in favour of Plaintiff.

LEGISLATION CITED : Uniform Civil Procedures (UCPR) r 42.27

CATEGORY : Procedural and other rulings

Markisic v Commonwealth of Australia [2007] NSWCA 92 Rosniak v Government Insurance Office (1997) 41 NSWLR 308 CASES CITED : Oshlack v Richmond River Council (1998) 193 CLR 72 Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (FCA, French J, 3 May 1991, unreported) Wildbeach Corporation Pty Ltd v Atkins [2008] WASC 29

Linda Zaaiter (Plaintiff) PARTIES : Perpetual Trustees Victoria Ltd (First Defendant) Susanne Nader (Second Defendant)

FILE NUMBER(S) : SC 2009/289144

COUNSEL : J S Tobin (Plaintiff) A T Martin (Respondent)

SOLICITORS : Thurlow Fisher Lawyers (Plaintiff) C E Jurd (Respondent)

- 4 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GENERAL LIST

BALL J

26 MAY 2010

2009/289144 LINDA ZAAITER v PERPETUAL TRUSTEES VICTORIA LTD & ANOR JUDGMENT 1 HIS HONOUR: The Plaintiff in these proceedings sues by her tutor, Ms Alina Biviano, who is her niece. The Plaintiff's claim relates to a loan made to her by the First Defendant in around October 2006 on security of two properties situated in Granville. 2 On 6 April 2010 the Plaintiff filed a motion in these proceedings seeking to have Mr Sayad El-Hawache, the Respondent to the motion, committed for contempt for failing to comply with a subpoena issued in these proceedings and served on him on 8 December 2009. 3 The Respondent to the motion previously acted for the Plaintiff as her solicitor. 4 Before commencing these proceedings the Plaintiff's tutor sought copies of the files held by the Respondent concerning the properties over which security was taken. Some files were provided covering the period May 1999 to December 2004. 5 After the Plaintiff commenced these proceedings it emerged from the Defendant's Defence and discovery that the Respondent to the motion may have given advice to the Plaintiff in relation to the mortgages taken by the Defendant to secure the loans. Consequently, the Plaintiff issued a subpoena for documents that it was thought may be in the possession of the Respondent. The subpoena was first made returnable on 17 December 2009. The subpoena was reasonable in scope and the documents sought were relevant to the principal proceedings. 6 The subpoena was served on the Respondent with $30 conduct money. The Respondent wrote to the Plaintiff's solicitors on 23 December 2009 saying that that amount was inadequate and requesting a further $120. That amount was paid on or about 7 January 2010. 7 The Respondent then appeared to do nothing for several months. He did not appear on any of the return dates for the subpoena and, for the most part, appeared to have ignored letters from the Plaintiff's solicitors informing him of new return dates and requesting with increasing force that he respond to the subpoena. It was in these circumstances that the Plaintiff filed the current motion. 8 On 19 April 2010, I ordered that the Respondent file and serve an affidavit explaining the searches he had made to locate the documents sought in the subpoena and to explain his conduct. I relisted the matter before me on 12 May 2010. 9 On 30 April 2010, the Respondent filed an affidavit in accordance with that order. Shortly before the hearing on 12 May 2010, the Respondent served two additional affidavits. He also produced some documents in response to the subpoena and it appears from his affidavits that he did make some efforts to comply with the subpoena before the motion was served. 10 At the hearing on 12 May 2010, the Plaintiff sought leave to withdraw the motion in light of the material provided by the Respondent. I granted that leave. However, the Plaintiff asked for an order that the Respondent pay the Plaintiff's costs of the motion on an indemnity basis. Mr Martin, who appeared for the Respondent on that day, said that he was not in a position to deal with that application. As a result, I made a direction that the parties provide me with written submissions and I indicated that I would be prepared to deal with the application on the papers. 11 The Respondent essentially gives two reasons for why an order for indemnity costs should not be made in this case. 12 First, he says that the evidence demonstrates that the motion for contempt would have failed because the Plaintiff would have been unable to establish beyond reasonable doubt that the Respondent's failure to comply with the subpoena was deliberate and not casual, accidental or unintentional: see Markisic v Commonwealth of Australia [2007] NSWCA 92 at [61]ff per Campbell JA. 13 Secondly, the Respondent says that I should not make an order for indemnity costs because that would involve making adverse findings or inferences about the conduct of the Respondent where there had not been a full hearing in relation to the application. 14 It is clear that the Court has power to order costs against a non-party for failure to comply with a subpoena: UCPR Rule 42.27. There are no fixed categories in which a Court will or will not make an order for indemnity costs: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, FCA, French J, 3 May 1991). All that is required is that there must be some unreasonableness or delinquency present in the behaviour of the party ordered to pay costs: Rosniak v Government Insurance Office (1997) 41 NSWLR 308 at 316 per Mason J; Oshlack v Richmond River Council (1998) 193 CLR 72 at [44] per Gaudron and Gummow JJ. Courts have been prepared to make orders for indemnity costs in connection with contempt proceedings which are discontinued because the contempt is later purged: see, for example, Wildbeach Corporation Pty Ltd v Atkins [2008] WASC 29. 15 In this case, the Respondent consistently ignored an order of the Court. He was given an opportunity to explain his conduct in an affidavit. Although, as I have said, I accept that the Respondent has now produced all the documents he still has which were caught by the subpoena, I do not think he has given an adequate explanation for why he did not do so until recently. The Plaintiff had little choice but to file a motion for contempt in order to secure compliance with the subpoena. In those circumstances, the fact that that motion would ultimately have failed if pressed seems to me to be besides the point. Consequently, I think it is appropriate that the Plaintiff recover her costs of the motion on an indemnity basis. **********