Supreme Court New South Wales Medium Neutral Citation: Chapel Road Pty Limited v Australian Securities Investments Commission (No 8) [2012] NSWSC 737 Hearing dates: 21 May 2012 Decision date: 11 July 2012 Jurisdiction: Common Law Before: Schmidt J Decision: 1. The defendant is to pay the plaintiff's costs of the security motion, as agreed or assessed. 2. The costs of the amendment motion and the costs thrown away as the result of the amendment to be the plaintiff's costs in the proceedings. Catchwords: PROCEDURE - costs - security motion - amendment motion - orders made Legislation Cited: Civil Procedure Act 2005 Cases Cited: Chapel Road Pty Limited v Australian Securities Investments Commission (No 2) [2012] NSWSC 511 Chapel Road Pty Limited v Australian Securities Investments Commission (No 3) [2012] NSWSC 584 Category: Procedural and other rulings Parties: Chapel Road Pty Limited (Plaintiff) Australian Securities Investments Commission (Defendant) Representation: Counsel: Mr B Toomey QC (Plaintiff) Mr J Clarke (Defendant) Solicitors: Creagh & Creagh (Plaintiff) Ashurst Australia (Defendant) File Number(s): 2006/266784 Publication restriction: None Decision under appeal Jurisdiction: 9101 Judgment 1By judgment given on 17 May 2012, I dismissed a motion brought by the defendant seeking orders for further security, concluding that an undertaking as to security offered should be accepted (see Chapel Road Pty Limited v Australian Securities Investments Commission (No 2) [2012] NSWSC 511). By further judgment of 1 June 2012, I gave the plaintiff leave to amend its statement of claim, over the defendant's objections (see Chapel Road Pty Limited v Australian Securities Investments Commission (No 3) [2012] NSWSC 584). 2The parties did not agree as to the appropriate orders as to costs in either case. The security motion 3The motion was filed in February 2012, after Mr Bennett undertook to be personally liable for the plaintiff's costs. That offer was not accepted, on the plaintiff's submissions because the defendant was not prepared to accept an undertaking from him at all, not because they could not agree as to its terms. At the hearing of the motion the defendant pressed for orders as to security in relation to both past and future costs, either by payment into Court, or provision of bank security. Having required Mr Bennett to be present, he was not required for cross examination. The motion was unsuccessful and Mr Bennett's undertaking was accepted. It was argued by the plaintiff that in those circumstances, the defendant should be required to pay the plaintiff's costs of the motion. 4The defendant's position was that it was relevant that the form of the undertaking offered by Mr Bennett was not provided until the hearing of the motion. There was no response to its request of 8 February 2012, that it be provided with a draft of his proposed undertaking, as well as evidence to establish that his undertaking was not worthless. Prior to the hearing, what undertaking was being offered was not made clear. In those circumstances, it was argued that it had not been unreasonable for the defendant to pursue the application for security. 5The terms of the undertaking were only made clear in submissions advanced at the hearing. It was not accepted by the defendant, who then unsuccessfully pressed its motion. In those circumstances the defendant accepted that it should bear the costs incurred after the refusal of the undertaking, but argued that it should not have to bear the costs of the motion to that point. 6It was also submitted not to be relevant that Mr Bennett had not been cross examined, that decision reflecting rulings made at the hearing in relation to objections to his affidavit evidence. It was also relevant that this decision reduced the length of the hearing. 7In my view this question must be resolved against the defendant. The usual order is that costs follow the event. The plaintiff succeeded in resisting the orders sought on the motion. I came to the view in the circumstances in which the application for further security was pressed, that no order as to further security in respect of past costs could be made and that the application pressed by the defendant should be refused and Mr Bennett's undertaking accepted. 8True it is that the precise form of the undertaking was only clarified at the hearing. However, Mr Bennett had sworn an affidavit on 8 March 2012 in which information was provided as to his circumstances. That did not generate any positive response from the defendant. Mr Bennett was not cross-examined on his affidavit and despite what was there revealed, the application for further security in respect of past and future costs was pressed. 9In the result I accepted that the evidence had established a proper basis for acceptance of Mr Bennett's undertaking, rather than the making of a further order as to security for costs. In those circumstances, it seems to me that there is no just basis for any departure from the usual order, that the defendant should bear the plaintiff's costs of the motion on which it failed. The amendment motion 10The defendant sought what was submitted to be the usual orders, namely that the plaintiff bear costs thrown away by the amendment, as well as the costs of the motion, because it had not unreasonably opposed the leave sought. What the defendant had drawn attention to at the hearing, was the potential prejudice which would arise from the amendments, in terms of delay and costs, resulting from a longer final hearing, because of additional evidence required to be led. They were proper matters to be drawn to the Court's attention, having in mind the requirements of the Civil Procedure Act 2005 and the circumstances in which the application came forward. 11The plaintiff accepted that the usual order was that it should bear the defendant's costs thrown away by reason of the amendment. In this case, however, it was submitted to be relevant that the amendments referred to matters wholly within the defendant's knowledge, until discovery was provided. It was submitted that if the plaintiff ultimately succeeded in establishing misfeasance in public office, it would be unjust that it had to bear the cost of pleading matters of which it only became aware after the defendant gave discovery. 12It accepted, however, that the defendant should not bear any costs of the amendment, unless the plaintiff proved its case at trial. The appropriate order in the circumstances was that the costs of the amendment, including costs thrown away, be the plaintiff's costs in the proceedings, on the basis that the effect of such an order would be that the plaintiff would only be entitled to recover those costs, if it obtains a favourable order at the final hearing. 13It seems to me, in all of the circumstances, that this is the just order. The amendments reflected information which only came to light when the defendant gave discovery. It could then have consented to the amendments, but did not. In the circumstances the order which the plaintiff proposed should be made, so that the costs will only be recoverable in the event that it succeeds. In the circumstances that is a just resolution of the costs incurred in respect of the amendment of the pleadings. Orders 14I make the following orders: 1. The defendant is to pay the plaintiff's costs of the security motion, as agreed or assessed. 2. The costs of the amendment motion and the costs thrown away as the result of the amendment to be the plaintiff's costs in the proceedings. ********** 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. Decision last updated: 15 November 2013