Bank of Western Australia v Seventy Pty Ltd (No 2) [2012] NSWSC 1017

Supreme Court New South Wales

Medium Neutral Citation: Bank of Western Australia v Seventy Pty Ltd (No 2) [2012] NSWSC 1017 Hearing dates: Written submissions Decision date: 31 August 2012 Jurisdiction: Common Law Before: Schmidt J Decision: 1. Mr Furnari is to bear the Bank's costs of and incidental to the motion of 8 May 2012, in relation to the application for an order for separate determination. 2. Otherwise, the costs of the motion are to be costs in the cause. Catchwords: PROCEDURE - costs - costs of motion - orders Legislation Cited: Civil Procedure Act 2005 Cases Cited: Bank of Western Australia v Seventy Pty Ltd [2012] NSWSC 772 McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 30 Category: Costs Parties: Bank of Western Australia Limited ACN 050 494 454 (Plaintiff) Seventy Pty Limited (First Defendant) Gregory John Totten (Second Defendant) Anthony John Totten (Third Defendant) Ross John Furnari (Fourth Defendant) Representation: Counsel: Mr H Altan (Plaintiff) Mr T Brennan (Fourth Defendant) Solicitors: Gadens Lawyers (Plaintiff) unrepresented (Second Defendant) SBA Lawyers (Fourth Defendant) File Number(s): 2012/100144 Publication restriction: None

Judgment 1By judgment given on 11 July 2012, I conditionally granted orders sought by the fourth defendant, Mr Furnari, in his motion of 8 May 2012 (see Bank of Western Australia v Seventy Pty Ltd [2012] NSWSC 772). This judgment is concerned with the costs of that motion. 2The Bank of Western Australia seeks to recover money owing under a loan facility of which Mr Furnari is a guarantor. By the 8 May motion, he pressed an order staying the proceedings, in circumstances where the Bank was pursuing a default judgment against the other defendants, who were not then active in the proceedings. The motion also sought orders for the separate determination of a number of questions concerning the construction of the loan facility. This application was not pressed at the hearing. 3The Bank's case was that this aspect of the motion had taken up the bulk of the preparation for the hearing of the motion and that time and the costs incurred were wasted, when that part of the application was not pressed. Also to be considered was that while Mr Furnari had succeeded in obtaining a stay, it had never had any practical operation, in the events which unfolded after the hearing. 4The Bank filed for default judgment against the other defendants on 25 February. Mr Furnari was informed of this on 27 February, the morning of the hearing. That was what Mr Furnari largely relied on, to support the stay. Later that day, the other defendants filed a defence, with the result that default judgment was not entered in the Bank's favour. That was a potential event on which the Bank had relied, to resist the stay sought. At [19] of the judgment it was accepted that a stay would not be granted in those circumstances. The filing of the defence was not known prior to judgment being given, with the result that the orders made contemplated an event which had already occurred. 5I granted the stay until the time at which the first, second or third defendants took steps in the proceedings to defend the claims brought against them, or until further order. I said in the judgment at [19] - [20]: "19 The position will be different if the Totten brothers do take the steps Mr Gregory Totten foreshadowed in his affidavit. In that event, it seems to me that the Bank ought not to be further precluded from pursuing its case against Mr Furnari, at the same time as it pursues its claims against the other defendants. To adopt a different course would then be likely to result in a multiplicity of proceedings arising from the same factual matrix. That would be unnecessarily costly and involve an avoidable waste of judicial and administrative resources as well as unnecessary costs to witnesses, inconsistent with the requirements of the Civil Procedure Act. 20 In that event, all of the issues lying between the parties, arising as they clearly have out of the same factual matrix, ought to be heard and determined in the same proceedings." 6Upon delivery of the judgment, it was revealed that the first, second and third defendants had filed a defence on the afternoon of the hearing, which had not reached the file and had not been drawn to my attention by any of the parties. 7The usual order as to costs is that they follow the event. As Ward J discussed in McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306: "22 The exercise of the court's discretion as to costs ultimately requires an assessment of what is fair in all the circumstances. Mr Priestley referred to what was said in Bowen Investments Pty Limited v TAB Corp Holdings Limited (No 2) [2008] FCAFC 107 by Finkelstein and Gordon JJ in this regard (at [5]): Costs are in the court's discretion. Fairness should dictate how that discretion is to be exercised. So, if an issue by issue approach will produce a result that is fairer than the traditional rule, it should be applied. citing also Hodge v TCN Channel 9 (No 2) [2006] NSWSC 1272 and Standard Commodities Pty Limited v Societe Cocinter Department Centragel [2005] NSWSC 493; (2005) 54 ACSR 496." 8It seems to me in this case, consistently with the requirements of the Civil Procedure Act 2005, including the overriding purpose and the obligations imposed upon the parties, by s 56, that it must be concluded that there must be a departure from the usual order. The Bank must have an order in its favour, in relation to the costs thrown away in relation to those aspects of the motion which Mr Furnari did not press. 9As to the costs of the stay, it may not be overlooked that in the result, Mr Furnari enjoyed no practical success on his motion, given the terms on which it wad granted. Neither party had control over what the other defendants did in the proceedings. While Mr Furnari successfully relied on what the defendants had not done prior to the hearing, he was also bound by the consequences, when they took a different course. In the circumstances, it follows that he may not justly have an order in his favour, in respect of this part of the motion. 10I do not accept, however, that he should now be ordered to bear the plaintiff's costs of this aspect of the motion. That he achieved some measure of success, may not justly to be overlooked. In the circumstances, it was apparent that the Bank could reasonably have stayed its pursuit of Mr Furnari, while it pursued a default judgment against the other defendants. Had it done so, the costs of the motion which were overtaken by the filing of a defence by the other defendants, would have been avoided. 11In all of those circumstances, the just order is that these costs should be costs in the cause.