New South Wales Supreme Court CITATION : PLAZA WEST PTY LIMITED v SIMON'S EARTHWORKS (NSW) PTY LIMITED (NO 2) [2010] NSWSC 1496 HEARING DATE(S) : 16 December 2010 JUDGMENT DATE : 16 December 2010 JUDGMENT OF : Tamberlin AJ at 1 EX TEMPORE JUDGMENT DATE : 16 December 2010 1. Judgment in favour of the plaintiff against the first defendant and the second defendant in the sum of $2,460,058.00 exclusive of GST. 2. Judgment in favour of the cross-claimant against the cross- defendant for the sum of $1,200.00 exclusive of GST. The cross-claim is otherwise dismissed. 3. Judgment be entered forthwith in favour of the plaintiff against the first defendant and the second defendant in the sum of $2,458,858.00 exclusive of GST together with interest pursuant to section 100 of the Civil Procedure Act 2005 of $784,263.76 to 9 December 2010 and interest thereafter at the prescribed rate applicable from time to time pursuant to section 101 of the Civil Procedure Act on any of the principal of $2,458,858 that is not paid within 28 days of the date of this judgment. 4. Subject to the costs orders made in interlocutory hearings, the first defendant and the second defendant to pay the plaintiff's costs of the proceedings on the plaintiff's claim as agreed or assessed on a party-party basis. DECISION : 5. The first defendant and the second defendant are jointly and severally liable for the payment to the plaintiff of the amounts (including interest and costs) payable to the plaintiff pursuant to this Judgment in respect of the plaintiff's claim. 6. The cross-claimant is liable to pay the first and second-cross defendants' costs of the cross-claim as agreed or as assessed on a party-party basis. 7. The sum of $150,000 plus accrued interest which has been paid into the Court by the cross-claimant as security for costs in respect of its cross-claim be released to the first cross- defendant forthwith. 8. The freezing orders which were made against the first defendant and the second defendant on 19 October 2009 and extended by the Court on 30 November 2009 and on 16 April 2010 until further order for the sum of $2,460,683 be extended until further order or until such time as this Judgment has been satisfied. 9. Grant liberty to apply on two days' notice. CATCHWORDS : COSTS – fraud – solicitor-client or party-party – conduct of proceeding – failure to produce documents – failure to call witnesses who had filed affidavits – late briefing of counsel – abandoned claims CATEGORY : Consequential orders CASES CITED : Harrison v Schipp; Cameron v Schipp [2001] NSWCA 13 Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd [1995] NSWSC 26 Plaza West Pty Limited (Plaintiff) PARTIES : Simon's Earthworks (NSW) Pty Limited (First Defendant) Simon Emerzidis (Second Defendant) FILE NUMBER(S) : SC 2009/298835 COUNSEL : S Goldstein (Plaintiffs) B Wilson (Solicitor) (Defendants) SOLICITORS : Adrian Batterby, Lawyer (Plaintiff) Mills Oakley Lawyers (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TAMBERLIN AJ 16 DECEMBER 2010 2009/298835 plaza West Pty Limited v Simon's earthworks (NSW) Pty Limited (NO 2) JUDGMENT 1 HIS HONOUR: In this matter the parties have presented me with Short Minutes of Order and submissions have been made in relation to several of the orders and the only remaining issue between the parties is whether costs on the cross-claim and/or on the principal claim should be ordered on an indemnity basis. 2 I have been directed to the relevant authorities and rules and, in particular, to the decision and observations in Harrison v Schipp; Cameron v Schipp [2001] NSWCA 13 at [135]-[138], and also to the decision of Full Court in Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd [1995] NSWSC 26. Those cases emphasise that the making of an order for indemnity costs is exceptional even in cases where there have been serious allegations made in relation to fraud and other delinquent conduct. In particular, the principles are set out by Giles JA in his judgment in Schipp at the above paragraphs. 3 In that case, the evidence of the party against whom the order was sought was not accepted and was found to have given false evidence and propounded false documents. Notwithstanding this the court expressed a view that that was not sufficient delinquency to justify a special order as to costs. 4 In the present case, powerful submissions have been made on behalf of the plaintiff/cross-defendant, particularly in relation to the issues of discovery. There has also been reference to the abandonment of evidence and the conduct of the matter in such a way that a great deal of the evidence and cross-examination became irrelevant. Counsel for the plaintiff also referred to the fact that there was a late briefing of counsel in the matter which caused some disruption in the orderly hearing of the case. However, this latter point does not, in my view, carry any significant weight. 5 The principal matter which concerned me on this application is the submission concerning discovery and the way in which fraudulent documents which were at the heart of the case were only discovered at a late period of the proceedings and as a consequence of the issue of a subpoena. 6 However, in all the circumstances and weighing the submissions made by the parties in relation to the matter, I am not persuaded that the conduct of this case warrants an order of costs on an indemnity basis in relation to either the claim or the cross-claim and accordingly I make the orders as to costs which are set out in the plaintiff's/cross-defendant's short minutes, along with the other orders in the short minutes except that orders 4 and 6 as to costs are on a party-party basis and in lieu of the reference to "$150,000" there will be substituted "$150,000 plus accrued interest". In addition to the orders set out in the short minutes, I reserve liberty to apply on two days' prior notice. ORDERS 7 The Court orders that: 1. Judgment in favour of the plaintiff against the first defendant and the second defendant in the sum of $2,460,058.00 exclusive of GST. 2. Judgment in favour of the cross-claimant against the cross defendant for the sum of $1,200.00 exclusive of GST. The cross claim is otherwise dismissed. 3. Judgment be entered forthwith in favour of the plaintiff against the first defendant and the second defendant in the sum of $2,458,858.00 exclusive of GST together with interest pursuant to section 100 of the Civil Procedure Act 2005 of $784,263.76 to 9 December 2010 and interest thereafter at the prescribed rate applicable from time to time pursuant to section 101 of the Civil Procedure Act on any of the principal of $2,458,858 that is not paid within 28 days of the date of this judgment. 4. Subject to the costs orders made in interlocutory hearings, the first defendant and the second defendant to pay the plaintiff's costs of the proceedings on the plaintiff's claim as agreed or assessed on a party-party basis. 5. The first defendant and the second defendant are jointly and severally liable for the payment to the plaintiff of the amounts (including interest and costs) payable to the plaintiff pursuant to this Judgment in respect of the plaintiff's claim. 6. The cross claimant is liable to pay the first and second cross defendants' costs of the cross claim as agreed or as assessed on a party-party basis. 7. The sum of $150,000 plus accrued interest which has been paid into the Court by the cross claimant as security for costs in respect of its cross-claim be released to the first cross defendant forthwith. 8. The freezing orders which were made against the first defendant and the second defendant on 19 October 2009 and extended by the Court on 30 November 2009 and on 16 April 2010 until further order for the sum of $2,460,683 be extended until further order or until such time as this Judgment has been satisfied. 9. Grant liberty to apply on two days' notice. ********** 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.