Solarus Projects v Vero Insurance [No 4] [2013] NSWSC 1012

Supreme Court New South Wales

Medium Neutral Citation: Solarus Projects v Vero Insurance [No 4] [2013] NSWSC 1012 Hearing dates: 19 July 2013 Decision date: 19 July 2013 Jurisdiction: Common Law Before: Campbell J Decision: 1) The second plaintiff's notice of motion filed on 17 May 2013 be dismissed by consent. 2) The second plaintiff to pay the costs of the defendant and the first plaintiff of and incidental to the notice of motion filed on 17 May 2013 forthwith after they have been agreed or assessed. Catchwords: PRACTICE & PROCEDURE - notice of motion seeking an extension of time for second plaintiff to provide security for costs dismissed by consent COSTS - whether the costs the subject of the agreement should be payable forthwith Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Fiduciary Limited v Morningstar Research Pty Limited [2002] NSWSC 432 Category: Interlocutory applications Parties: Solarus Projects Pty Ltd (plaintiff) G.A.P. Constructions Pty Ltd (second plaintiff) Vero Insurance Limited (defendant) Representation: Counsel: A Kelly, solicitor (first plaintiff) I.R. Pike SC (second plaintiff) A.S. Martin SC, J. Hynes (defendant) Solicitors: DLA Piper Australia (first plaintiff) Sarvaas Ciappara Lawyers (second plaintiff) Carter Newell (defendant) File Number(s): 2011/154276

EX TEMPORE Judgment 1CAMPBELL J: An application for an extension of the time fixed by Button J for the second plaintiff to provide security for costs is listed for hearing today. I made an order enabling that to occur on 17 May last. Since then, the second plaintiff has indicated that it wishes to withdraw its motion and the parties are agreed that the motion filed in court on 17 May 2013 should be dismissed with an order that the second plaintiff pay the costs of both the defendant and the first plaintiff of and incidental to it. 2In dispute between the second plaintiff and the defendant is whether I should order, in accordance with of r 42.7 (2) Uniform Civil Procedure Rules 2005 (NSW) that the costs the subject of the agreement should be payable forthwith. 3In support of the defendant's application that costs should be payable forthwith, Mr Martin SC, who appears with Mr Hynes for the defendant, has read the affidavit of his instructing solicitor, Mr Mollinger, sworn on 18 July 2013. Mr Pike SC, who appears for the second plaintiff, does not dispute the contents of Mr Mollinger's affidavit. 4The first plaintiff is represented by its solicitor, Ms A Kelly, who adopts a position of neutrality in relation to the dispute between the other parties. Neither senior counsel disputes the considerations generally said to be relevant to the exercise of the discretion conferred by subrule 2. Both agree that the relevant principles, with respect, are accurately stated by Barrett J, as his Honour then was, in Fiduciary Limited v Morningstar Research Pty Limited [2002] NSWSC 432; 55 ALR 1. I will not quote from his Honour's judgment, but he identifies three relevant factors which may be summarised as: (1)the subject matter of the interlocutory application is discrete and self-contained making it a suitable vehicle for a separate order for costs; (2)whether some of the conduct of the unsuccessful party to the motion may be seen as being unreasonable; and (3)that there is still some considerable distance to go in the litigation so that it may be appropriate that the successful party obtain the fruits of its costs order now. 5Barrett J made it clear he did not intend to compile an exhaustive list of the considerations which may be relevant to this question. 6The defendant says that all three of These considerations are engaged in its favour in the circumstances of this case. In particular, the defendant submits that the conduct of the second plaintiff in relation to this application can be seen to be relevantly unreasonable. 7The relevant considerations from the standpoint of the defendant in that regard are that Button J made orders after a contested hearing for security at which the second plaintiff was represented by its then solicitor. The second plaintiff failed to comply with the order, but at the very last minute when the matter was before the Court for the disposition of a quite different application then made by the first plaintiff, the second plaintiff, without much notice, showed up with a motion seeking various relief including an extension of time to comply with Button J's orders. This was after the time for compliance had expired. Its late intervention was resisted unsuccessfully in the event, and directions were made for the filing of evidence on behalf of the defendant to resist the application for the extension of time for compliance with Button J's orders. 8Although the second plaintiff, very soon after 17th May, indicated to the opposing parties that it no longer persisted in its application, costs had been incurred as the defendant diligently went about complying with the orders I had made in relation to filing its evidence in answer to the application. 9Mr Pike acknowledges that the matter is relevantly discrete and that there must be some distance to go before finalisation of the proceedings. He argues however that his client's conduct is not relevantly unreasonable. 10He points out a number of things. First, that effectively carriage of the matter had been in the hands of the first plaintiff. Secondly, that the solicitor who had acted on behalf of both parties for a considerable period of time who had received a large sum of money on account of costs. On one view of the available evidence, the solicitor seems to have expended that money on not much forensic effort. I think, as Mr Pike more accurately puts it, there is a real concern about his conduct of the proceedings. Thirdly, the solicitor who stepped in at short notice to assist Button J, stepped out again and it was not until after the orders were made by Button J that the current solicitors were appointed. Since then, through them, the second plaintiff has been acting diligently in an attempt to raise the money that would satisfy the order. 11Mr Pike also says, and I do not understand there to be any contradiction of this, as was made clear on the evidence before me on 17 May, that the main avenue for raising the funds was a proposed claim against the Solicitors' Fidelity Fund. It became apparent soon after 17 May that the expedition that the second plaintiff hoped could be brought to bear in resolving that issue was unrealistic. It is now unlikely that claim could be resolved in the short-term. I infer that there is no other viable means of raising the money quickly. The second plaintiff says rather than unreasonable, its conduct should be seen as reasonable because it concluded expeditiously that it could not inform the Court that its difficulty would be resolved quickly. Soon after it informed the other parties of its intention to withdraw the application. 12In view of its difficulties, and I refer to the evidence of Mr Mollinger, the second plaintiff sought the consent of the defendant for the discontinuance of its claim. The defendant, quite reasonably, was disinclined to consent, lest the second plaintiff re-commence in the future, as it would be entitled to do if there was a mere discontinuance, subject to considerations of limitation of actions. Mr Pike submits that, looked at from that stand point, the position of the second plaintiff, especially given the recent appointment of its current legal representation, should not be seen as being unreasonable. 13I am persuaded by Mr Pike that his client's conduct in regard to this particular motion has not been unreasonable and I accept the arguments he has advanced as I have summarised them above. It seems to me that the urgency with which the matter was brought before the Court at the first available opportunity was appropriate, and it was also appropriate that, once it was realised that the second plaintiff's hopes in regards to raising security would not be realised, the other parties were informed forthwith. 14However, in my judgment, that takes care of one only of Barrett J's considerations, the other two favour the defendant. There is also another question here. That is this: that because the second plaintiff has been unable to comply with Button J's order, and I cast no judgment upon it in that regard, the proceedings against it are stayed. The proceedings will move on from here. In fact, the first plaintiff and the defendant have agreed upon Short Minutes of Order to take the proceedings to the next stage of preparartion, and I have made those orders this morning. There is a real chance that the costs payable properly to the defendant, as occurs from time to time, will get lost in the mix, or the circumstances of the second plaintiff might materially change between in the future before this case is finalised. That consideration pointing in favour of the defendant, in my judgment, is not displaced by the real possibility, if not probability, that the second plaintiff will make an application to extricate itself from these proceedings on some basis or another. As Mr Pike says, if that occurs, any order the Court would make would obviously be accompanied by an order for costs, and those costs would be payable forthwith of necessity because the second plaintiff's involvement in the proceedings would be brought to an end whatever form the order took. 15I think it more appropriate to let the future take care of itself, and in my judgment, the defendant has made good its case for an order that the costs of the motion be payable forthwith. 16As I have indicated, Ms Kelly has adopted a position of neutrality, and I do not criticise her for that. But it seems to me that if the defendant is to be in a position to pursue the fruits of a costs order now, it would be in the interests of all parties if the second plaintiff had that option available to it, if advised to take it. This, in a sense, would save the second plaintiff from being vexed twice with the same order for costs. I understood Ms Kelly's position to be, although she should not actively seek such an order, she would not resist it if it imposed as an exercise of discretion on the part of the Court. 17For those reasons I make the following orders: (1)The second plaintiff's notice of motion filed on 17 May 2013 is dismissed, by consent. (2)The second plaintiff to pay the costs of the defendant and the first plaintiff of and incidental to the notice of motion filed on 17 May 2013 forthwith after they have been agreed or assessed.