Transfield Services (Australia) Pty Limited v James Gaha [2012] NSWSC 865

Supreme Court New South Wales

Medium Neutral Citation: Transfield Services (Australia) Pty Limited v James Gaha [2012] NSWSC 865 Hearing dates: 29 June 2012 Decision date: 03 August 2012 Jurisdiction: Equity Division Before: Ball J Decision: See paragraphs 38 and 39 of this judgment. Catchwords: PROCEDURE - costs - where no hearing on merits and proceedings resolved by consent - general principle that parties should bear their own costs - whether this general principle should be departed from - where defendant has effectively capitulated - whether plaintiff acted unreasonably in continuing proceedings after multiple offers of settlement in circumstances where extent of defendant's improper conduct unknown. Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333 Fire Containment Pty Ltd v Robins (No 2) [2011] NSWSC 547 Re Minister for Immigration and Ethnic Affairs (Cth); Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 Category: Costs Parties: Transfield Services (Australia) Pty Limited (Plaintiff) James Gaha (Defendant) Representation: AP Cheshire (Plaintiff) PC Moorhouse (Defendant) Minter Ellison (Plaintiff) Whittens Lawyers & Consultants (Defendant) File Number(s): 2011/106083

Judgment

Introduction 1The defendant, Mr Gaha, was formerly an employee and director of the plaintiff, Transfield Services. On 7 January 2011, he resigned from his position and indicated that he intended to take up a position with a competitor. He was placed on gardening leave until 6 April 2011, but remained an employee during that time. 2Following Mr Gaha's resignation, Transfield Services discovered evidence that suggested that Mr Gaha had copied onto various electronic devices, including his home computer, extensive information regarding the business of Transfield Services. Transfield Services then commenced these proceedings ex parte on 1 April 2011 seeking various orders preventing the use or dissemination of that information and also seeking interlocutory orders preserving all electronic devices for the purpose of a forensic examination. 3The court granted ex parte orders in the terms sought by Transfield Services. Those orders were varied by consent on 14 April 2011. On 20 April 2011, again by consent, a number of the orders made on 1 April 2011 were extended until further order either in their original or in a varied form and further orders were made for the examination of various electronic devices belonging to Mr Gaha. Following examination of those devices by an expert, directions were made on 1 September 2011 for the proceedings to continue on pleadings. Transfield Services filed a statement of claim on 7 November 2011. In the meantime, there was without prejudice correspondence between the parties in an attempt to settle the proceedings. Ultimately, the proceedings were settled on the basis of consent orders. Paragraph 8 of the consent orders provided: Any party which seeks to make an application in relation to the costs of the proceedings is to file such application along with any supporting evidence within 21 days of the date of these orders. 4Both Transfield Services and Mr Gaha have filed motions in accordance with paragraph 8 of the consent orders. By its motion filed on 3 April 2012, Transfield Services seeks its costs on an indemnity basis or alternatively on the ordinary basis. It submits that it was substantially successful in the proceedings and should have its costs for that reason. By his motion filed on 4 April 2012, Mr Gaha seeks his costs on the basis that it was unreasonable for Transfield Services to commence and to pursue the proceedings. Mr Gaha's primary position is that he should be entitled to all his costs on the basis that the proceedings should never have been commenced. Mr Gaha makes various alternative submissions that it was unreasonable of Transfield Services to persist with the proceedings beyond certain specified times. 5It is those competing claims that is the subject of this judgment.