Supreme Court New South Wales Medium Neutral Citation: Royal Guardian Mortgage Management Pty Limited v Nguyen [2012] NSWSC 874 Hearing dates: 11 July 2012 Decision date: 03 August 2012 Jurisdiction: Common Law Before: Schmidt J Decision: 1. The 2011 proceedings are dismissed. 2. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the 2011 proceedings, as agreed or assessed. 3. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the motion in the 2010 proceedings seeking an extension of time to bring a cross-claim. 4. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the motion brought in the 2010 proceedings for partial discharge from its implied undertaking, except in relation to the further hearing of that application on 2 July 2012 Catchwords: PROCEDURE - claim in 2011 proceedings no longer pursued - 2011 proceedings dismissed COSTS - costs of four motions - orders made Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005 Cases Cited: Royal Guardian Mortgage Management Pty Limited v Nguyen [2012] NSWSC 605 Category: Procedural and other rulings Parties: Matter Number 105936 of 2010 Royal Guardian Mortgage Management Pty Limited (Plaintiff) Beth Ngoc Nguyen (First Defendant) Ian Stolyar (Second Defendant) Matter Number 183430 of 2011 Beth Ngoc Nguyen (First Plaintiff) Ian Stolyar (Second Plaintiff) Royal Guardian Mortgage Management Pty Limited (First Defendant) Anthony Tomazin (Second Defendant) Representation: Counsel: Mr MW Young (Plaintiffs) Mr DE Baran (Defendant) Solicitors: Matter Number 105936 of 2010 Bransgroves Lawyers (Plaintiffs) Gilbert & Tobin (Defendant) Matter Number 183430 of 2011 Gilbert & Tobin (Plaintiffs) Bransgroves Lawyers (Defendants) File Number(s): 2010/105936 2011/183430 Publication restriction: None Judgment 1This judgment deals with the costs of four motions dealt with in Royal Guardian Mortgage Management Pty Limited v Nguyen [2012] NSWSC 605 and other matters. 2The usual order under the Uniform Civil Procure Rules 2005 is that costs follow the event. The Court has a discretion to depart from the usual order under s 98 of the Civil Procedure Act 2005. 3In this case the two motions pressed by Ms Nguyen and Mr Stolyar were for an extension of time to bring a cross-claim in proceedings brought against them in 2010 by Royal Guardian Mortgage Management Pty Ltd ("Royal Guardian") and in relation to the proceedings which they brought in 2011 against it, an order that the proceedings be joined with the 2010 proceedings. The claims were pressed in the alternative, with their preferred position being that they be permitted to pursue their claims by way of cross-claim and that they not proceed with the 2011 proceedings. Royal Guardian opposed the leave sought. 4By its motions, Royal Guardian sought orders striking out the 2011 statement of claim as inadequately pleaded and partial discharge of the implied undertaking in respect of certain documents produced to the Court by third parties under subpoena. 5The orders made were: "1. Grant Ms Nguyen and Mr Stolyar an extension of time to bring a cross-claim in the 2010 proceedings, but refuse Ms Nguyen and Mr Stolyar leave to proceed on the proposed cross-claim. 2. Dismiss Ms Nguyen and Mr Stolyar's joinder motion. 3. Grant Ms Nguyen and Mr Stolyar leave to file an amended cross-claim within 14 days of this judgment. 4. Grant Royal Guardian leave to further press its application for release from its implied undertaking in relation to documents produced to the Court under subpoena, after service of its motion upon those who have produced the documents in question to the Court. 5. List the matter for directions before me at 9.30 am on 2 July 2012." 6The third parties were given notice of the application in relation to the implied undertaking and did not oppose the orders sought. After further consideration Ms Nguyen and Mr Stolyar also advanced no further submissions to oppose the order sought and it was made. 7There is an issue between the parties as to whether the 2011 proceedings should be dismissed, or Ms Nguyen and Mr Stolyar given leave to discontinue. Ms Nguyen and Mr Stolyar no longer wish to pursue the case which they advanced by the institution of those proceedings. They were brought not only against Royal Guardian, but also another party not involved in the 2010 proceedings. There has been no explanation as to why the cross-claim which Ms Nguyen and Mr Stolyar wish to pursue in the 2010 proceedings advances no claim against that party. 8In the circumstances the proceedings ought to be dismissed, with an order for costs against Ms Nguyen and Mr Stolyar. It is evident that there will be costs thrown away as the result of their change in approach, which Royal Guardian ought not to have to bear. That includes the costs of the joinder motion, which they pressed in the alternative to their application for an extension of time to bring a cross-claim. There is no just basis upon which Royal Guardian should have to bear these costs. 9Royal Guardian opposed Ms Nguyen and Mr Stolyar's applications on two bases. The first, on the basis that the claims advanced in the two proceedings ought not to be heard together, whether by cross-claim or joinder; and the second, on the basis that the proposed pleadings were inadequate. It failed on the first argument, but succeeded on the pleading point. In the circumstances, it seems to me, that the just order is that Ms Nguyen and Mr Stolyar should bear Royal Guardian's costs of their motion seeking an extension of time to bring a cross-claim. They have been granted an indulgence, in circumstances where their proposed cross-claim was inadequately pleaded. They have been granted an opportunity to address that difficulty. The cost of these indulgences are not ones which Royal Guardian should justly bear. 10The explanation for not bringing a cross-claim in the 2010 proceedings, in terms of the statement of claim on which Ms Nguyen and Mr Stolyar proceeded in the 2011 proceedings was explained to have been different legal advice. I have concluded that their claims had sufficient commonality with the case advanced against them by Royal Guardian, that the competing claims should be heard together, and that they should be permitted to bring a cross-claim in the 2010 proceedings. Royal Guardian's original position was that the claims which Ms Nguyen and Mr Stolyar pursued in the 2011 proceedings should have been advanced by way of cross-claim. Had that then been accepted by Ms Nguyen and Mr Stolyar, much time and cost would have been saved. Royal Guardian's opposition to the motions recently pursued by Ms Nguyen and Mr Stolyar, rested in large part on the inadequacy of their pleadings, both the statement of claim and the proposed cross-claim and the delays which would be caused in the hearing of Royal Guardian's case, if they succeeded on either of their applications, given the need for pleading amendment on their part, whether their case was to be pursued by way of cross-claim or joinder of the 2011 proceedings. 11I accepted the inadequacy of the pleadings and despite the delay which would result in the hearing of Royal Guardian's case, Ms Nguyen and Mr Stolyar were given an opportunity to replead their proposed cross-claim. As a matter of justice, they should also bear the costs of that indulgence. Without being given leave to further amend their pleadings, they could not have advanced their claims in either the 2010 or 2011 proceedings. Royal Guardian should not have to bear the resulting costs. 12Royal Guardian succeeded on its motion for partial discharge of the implied undertaking. The usual order is that it would have an order in its favour in respect of that order which Ms Nguyen and Mr Stolyar opposed. Orders were not initially made in its favour, because of the view which I took that the third parties involved had to be given notice of the application and an opportunity to be heard. That is something which Royal Guardian ought to have attended to, before the hearing of its motion. Had it done so there would have been no need for a further hearing in respect of its motion. The need to hear Royal Guardian further on that application was the result of its failure to serve the motion before the hearing. That is not a cost which Ms Nguyen and Mr Stolyar in fairness ought to bear. 13In the result, I make the following orders: 1. The 2011 proceedings are dismissed. 2. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the 2011 proceedings, as agreed or assessed. 3. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the motion in the 2010 proceedings seeking an extension of time to bring a cross-claim. 4. Ms Nguyen and Mr Stolyar are to bear Royal Guardian's costs of the motion brought in the 2010 proceedings for partial discharge from its implied undertaking, except in relation to the further hearing of that application on 2 July 2012. ********** 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: 13 August 2012