Supreme Court New South Wales Medium Neutral Citation: Zhang v State of New South Wales; Liao v State of New South Wales (No 2) [2012] NSWSC 1018 Hearing dates: Written submissions Decision date: 31 August 2012 Jurisdiction: Common Law Before: Schmidt J Decision: The costs of the motions should be costs in the cause. Catchwords: PROCEDURE - costs - costs of motion Legislation Cited: Civil Procedure Act 2005 Limitation Act 1969 Uniform Civil Procedure Rules 2005 Cases Cited: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Zhang v State of New South Wales; Liao v State of New South Wales [2012] NSWSC 606 Category: Procedural and other rulings Parties: Matter Number 2005/269552 Mames Zhao Ming Zhang (Plaintiff) State of New South Wales (Defendant) Matter Number 2006/267005 Shao Qiang Liao (Plaintiff) State of New South Wales (Defendant) Representation: Counsel: Mr R McKeand SC with Mr J Clifton (Plaintiffs) Mr M Windsor SC (Defendant) Solicitors: Raymond Lee & Co (Plaintiffs) IV Knight, Crown Solicitor (Defendant) File Number(s): 2005/269552 2006/267005 Publication restriction: None Judgment 1By judgment given on 23 April 2012, I dismissed motions filed by the defendants in March 2012, seeking the dismissal of the proceedings on the basis that they were statute barred (see Zhang v State of New South Wales; Liao v State of New South Wales [2012] NSWSC 606.) This judgment deals with costs. 2The defendant seeks a departure from the usual order that costs follow the event. It submits that in the circumstances, the plaintiffs should be ordered to bear its costs of the motions. In the alternative the costs of the motions should be costs in the cause. 3The defendant relied on the tortured history of the proceedings, to submit that it was consistant with the requirements of s 56 of the Civil Procedure Act 2005, for it to have had the Limitation Act 1969 issues determined prior to the final hearing. The plaintiffs' overall delay in the conduct of the proceedings and their constantly changing cases, had unnecessarily lengthened the proceedings and increased costs. It was relevant that even in relation to the motions, after the hearing the plaintiffs abandoned their resistance to their determination on an interlocutory basis. 4As to Mr Liao, consideration had to be given to his abandonment of all but one of his causes of action, after the hearing of the motion, notwithstanding submissions earlier put that the defendant was estopped from relying on the Limitation Act defences and that any limitation point had been waived. 5The defendant submitted that in the circumstances, the plaintiffs' success on the motions was not justly determinative of the question of costs. 6The plaintiffs urged that there would be no departure from the usual order, given that they succeeded in resisting the Limitation Act point on which the defendant had relied. While the proceedings have had a long history, it was relevant that the costs of the various issues which had arisen from time to time had been dealt with. The costs of these motions should be determined on their merits alone. 7It was also submitted that after the plaintiffs had amended their statements of claim in March 2012, the defendant could have abandoned its Limitation Act defence. It chose to maintain the defence and to pursue it by way of motion, on which it failed in both cases. The plaintiffs' initial resistance to the hearing of the motions had minimal effect on costs, as did their initial reliance on questions of estoppel and waiver. They were properly abandoned after receipt of the defendant's further written submissions after the hearing. It was also relevant that no delay had resulted from the conduct of the hearing of the motions, given other steps being pursued in the proceedings. 8As to Mr Liao's withdrawal of certain claims, it was submitted to be relevant that he had succeeded in resisting the motion in respect of the claim which he pressed. Given the way in which the case was argued, it could not be said that time would have been saved, had the concession been earlier made. 9There is no question that the Court has a discretion under s 98 of the Civil Procedure Act and Rule 42.1 of the Uniform Civil Procedure Rules 2005, to depart from the usual order, if that is what justice demands in the circumstances. An order for costs is compensatory in nature, reflecting the vindication of a successful claim, not punitive (see Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534). The conduct of a party who unreasonably pursues or persists with points which have no merit, will be relevant to the question of costs, even where that party is generally successful (see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 122). 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." 10It seems to me that in the circumstances of this case, while the plaintiffs' final success in defending the motions may not be overlooked, two considerations warrant a departure from the usual order. The first is the plaintiffs' abandonment of the stance taken at the hearing, that the Limitation Act issue should not then be determined. That reflected an acceptance of the impact of their earlier alterations to the claims which they sought to advance in the proceedings, as well as an acceptance that the defendant had not earlier abandoned the pursuit of its Limitation Act defence, prior to the final hearing. The alteration in their position as to this issue, after the hearing, meant that the costs associated with the pursuit of those questions were simply wasted. 11Also to be considered is that as the result of the case advanced by the defendant at the hearing, Mr Liao abandoned a substantial part of his case. That reflects an acceptance of that part of the defendant's Limitation Act case, in respect of which it plainly had success. Order 12In the result weighing all of these considerations in the balance, I am satisfied that justice requires that the costs of the motions should be costs in the cause. I order accordingly. ********** 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: 31 August 2012