New South Wales Supreme Court CITATION : Permanent Custodians Limited and Anor v King and Ors [2010] NSWSC 554 HEARING DATE(S) : 25 May 2010 JUDGMENT DATE : 28 May 2010 JUDGMENT OF : Schmidt J DECISION : Mr Vertzayas to bear Mr King's costs of the motion on an indemnity basis. CATCHWORDS : PROCEDURE - costs - departing from the general rule - order for costs on indemnity basis LEGISLATION CITED : Civil Liability Act 2002 CATEGORY : Principal judgment Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12 CASES CITED : Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Permanent Custodians Limited and Anor v King and Ors [2010] NSWSC 509 Re Wilcox, Ex parte Venture Industries Pty Ltd and Others (1996) 141 ALR 727 Plaintiff - Permanent Custodians Limited First Defendant - Paul David King Second Defendant - Charles Stuart King Cross Claimant - Charles Stuart King PARTIES : First Cross Defendant - Permanent Custodians Limited Second Cross Defendant - Pepper Finance Corporation Ltd Third Cross Defendant - Bill Laskaris trading as Able Finance Fourth Cross Defendant - Dion Vertzayas, Vertzayas Lawyers Pty Ltd Fifth Cross Defendant - Paul King FILE NUMBER(S) : SC 2006/265811 Hicksons - Plaintiff SOLICITORS : Legal Aid NSW - First Cross Claimant Colin Biggers & Paisley - Fourth Cross Defendant - 3 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION SCHMIDT J FRIDAY, 28 MAY 2010 2006/265811 PERMANENT CUSTODIANS LIMITED AND ANOR v KING AND ORS JUDGMENT 1 HER HONOUR: In a judgment given earlier this week (Permanent Custodians Limited and Anor v King and Ors [2010] NSWSC 509), I concluded, amongst other things, that Mr Vertzayas' motion, seeking leave to amend his defence had to be dismissed. The relevant facts and conclusions reached appear in that judgment. 2 Mr King sought an indemnity costs order in relation to the motion, relying on correspondence sent in April 2010, outlining the basis on which the motion would be resisted. Reliance was placed on Re Wilcox, Ex parte Venture Industries Pty Ltd and Others (1996) 141 ALR 727, where delay in making an application was accepted as a basis for an indemnity costs order and Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12, where such an order was refused in a case where it had been argued that the claim was doomed to fail. 3 It was submitted for Mr Vertzayas that it would not here be concluded that the case advanced in reliance on Part 4 of the Civil Liability Act 2002 was so lacking in merit as to warrant an indemnity costs order. Here judgment was reserved on the matters argued and reasons given before the application was dismissed. It followed that the appropriate order was costs on the ordinary basis. 4 On balance, I have concluded that while Mr Vertzayas' motion had to be dismissed, it may not be concluded that the case advanced was so lacking in merit, that an indemnity costs order must be made as a matter of justice between these parties on that basis. 5 The more difficult question is whether the Court's discretion to depart from the usual costs order should be exercised, given the inordinate delay in raising reliance on Part 4 of the Civil Liability Act, a provision which it was concluded did not in any event apply to Mr King's claims and even if it did, had been raised at too late a point in the proceedings, to warrant the leave sought to be granted. If, as was argued for Mr Vertzayas, the cross claim itself had raised the provisions of this Act, there can realistically have been no proper explanation for the delay in raising reliance on those provisions, until the late point of the proceedings at which it was first advanced for Mr Vertzayas. 6 In the earlier judgment, I concluded that those provisions did not in fact apply to Mr King's case and that if they did, a defendant had an obligation to plead reliance on these provisions; that there was no proper explanation for the failure to do so; and that the delay and the consequences of granting the relief sought, precluded the exercise of the discretion sought in Mr Vertzayas' favour. 7 An indemnity costs order will be made in cases where it is concluded that there has been some relevant misconduct in the proceedings (See Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72). Unreasonable delay has been accepted as a proper basis for the exercise of that discretion. 8 In the circumstances of this case I have concluded that the delay in bringing forward reliance on Part 4 of the Civil Liability Act was such that these are proper circumstances for the conclusion that justice demands a departure from the usual rule, in Mr King's favour. Order 9 For those reasons, I order that Mr Vertzayas bear Mr King's costs of the motion on an indemnity basis. ********** 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.