Supreme Court New South Wales Medium Neutral Citation: Leighton v Arogen; Arogen v Leighton [2013] NSWSC 1129 Hearing dates: 01/08/2013 Decision date: 01 August 2013 Jurisdiction: Equity Division - Technology and Construction List Before: McDougall J Decision: Once certain conditions are met, declaration to be made, that cross-claim in other proceedings does not stand dismissed. Catchwords: ORDERS & DIRECTIONS - where conflicting orders proposed by the parties to give effect to the courts reasons - no question of principle Category: Procedural and other rulings Parties: Leighton Contractors Pty Limited (Plaintiff in 2012/342559 / Defendant in 2013/223127) Arogen Pty Limited (Administrator Appointed) (Defendant in 2012/342559 / Plaintiff in 2013/223127) Representation: Counsel: M G Rudge SC (Plaintiff in 2012/342559 / Defendant in 2013/223127) N A Nicholls / R Bianchi (Defendant in 2012/342559 / Plaintiff in 2013/223127) Solicitors: Gadens Lawyers (Plaintiff in 2012/342559 / Defendant in 2013/223127) Moray & Agnew Lawyers (Defendant in 2012/342559 / Plaintiff in 2013/223127) File Number(s): 2012/342559 and 2013/223127 Judgment (EX TEMPORE - REVISED 1 AUGUST 2013) 1HIS HONOUR: I am concerned with the making of orders to give effect to reasons that I gave a little time ago in relation to the dismissal, for non-compliance with the Court's orders, of the defendant's cross-claim in what I called the principal proceedings. My earlier reasons may be found at [2013] NSWSC 1099. 2In very general terms, the parties are agreed that for the principal proceedings to move forward, the defendant (as I shall continue to call Arogen, although it was the plaintiff in the proceedings in respect of which I gave the reasons just mentioned) should pay into court, pursuant to one of the conditions that I indicated I was minded to impose, the sum of $25,000. That is to stand as security for the various costs orders that I said I was minded to make in favour of the plaintiff (as I shall call Leighton). Those costs orders should be made, and again, their wording has been agreed. 3The parties are agreed also on a general timetable for the steps to happen: amendment of the of list response and of the cross-claim in the principal proceedings, and amended reply and response respectively to those documents. 4Before the cross-claim was dismissed, and indeed before the defendant went into administration, Leighton had filed a notice of motion for security for costs of the cross-claim that was then propounded. In view of the administration of the defendant and the dismissal of its cross-claim, nothing has happened about that notice of motion. The plaintiff's position is that if the cross-claim is to be revived, then its motion for security for the costs of that cross-claim should be dealt with. 5The defendant proposes separate determination of questions that will arise on the cross-claim. It is I think essential to the success of the cross-claim that the defendant establish that the contract that it made with the plaintiff on 8 March 2011 was varied on 15 December 2011, not just in accordance with a document executed on that date but, further, to agree additional terms said to have been negotiated orally and pleaded (to use the common term) or to be pleaded in its proposed cross-claim list statement. 6It is I think reasonably clear that if the defendant does not establish that the varied agreement included those further alleged terms then its cross-claim faces very substantial difficulties. 7Mr Nicholls of counsel, for the defendant, submits that the question of separate determination should be dealt with before the question of the security for costs is dealt with. That is necessary, he submits, so that the judge hearing the application for security for costs will know on what basis the matter is to move forward and can tailor any order for security accordingly. 8I do not think that this is appropriate. First, although this is very much a second order reason, I would not have thought that the question, of whether the variation agreement should be rectified in the manner suggested, is susceptible of a separate determination. If that were to be ordered, there would be very real possibility of witnesses being called and recalled, and of inconsistent findings on credibility being made. 9That problem could be avoided if all questions other than quantum of any damages in respect of the claim and in respect of the cross-claims (for contractual payments or damages, and extension of time) are dealt with after the determination of all other issues. That is why I said it is a second order problem. 10That, however, exposes what I see is being the real difficulty with Mr Nicholls' proposal. The reality is that when the notice of motion for security for costs is heard, if any order for security is made, the judge will take into account the likely staging of the proceedings, and will be likely to order that any security be given by instalments or tranches. Indeed, Mr Rudge of Senior Counsel, who appears for the plaintiff, said that the plaintiff would not oppose that course. 11Thus, it seems to me that the point sought to be achieved by having the motion for separate determination dealt with first is likely to be achieved, at least at a practical level, in any event. 12There are two other considerations which seem to me to be of importance. The first is that the plaintiff's motion for security for costs has been around for some time. It should be dealt with as quickly as possible if the cross-claim is to be resuscitated. 13Secondly, it seems to me inherently unjust, in view of what I have just said, that the plaintiff should be put to the additional expense of preparing for and conducting a hearing on the motion for separate determination, in circumstances where its entitlement for security for costs (if any) has not been established. I acknowledge that Mr Nicholls suggested that both motions could be heard on the one day, with the one judge dealing with both. That is theoretically possible. But it means that what is otherwise likely to be a motion of relatively short duration, able to be heard on a Friday, would require a special fixture with additional preparation and all the additional costs that, I can take into account, that would involve. 14In the circumstances, it does seem to me that the balance favours proceeding in the staged way that I have indicated: first, by dealing with the application for security for costs; and, thereafter (should it be necessary), dealing with the question of separate determination. 15I have no doubt that if this happens, the judge who deals with the question of security for costs will be reminded of what I have said in these reasons as to the likelihood of any security that is ordered being payable by instalments. 16Otherwise, the parties are in broad agreement on what should be done to give effect to my earlier reasons. The only matter that remains to be dealt with is the actual hearing date to be given for the notice of motion for the security for costs, which will also be the return date for the motion for separate determination and the date for further directions. 17In those circumstances, once the parties are agreed on the date, I will make the following orders: 1. In proceedings 2013/223262, conditional upon and subject to the plaintiff in those proceedings paying into court in proceedings 2012/342559, the sum of $25,000 by 5 August 2013, such sum to be held on account of costs ordered to be payable by the defendant in those proceedings to the plaintiff in those proceedings: declare that the cross-claim filed in proceedings 2012/342559 does not stand dismissed. 2. In proceedings 2012/342559, conditional upon and subject to the payment earlier referred to, orders in accordance with paragraphs 1 to 11 as amended of the short minutes of order, initialled by me and dated today's date. 3. In any event, orders in accordance with paragraphs 12 to 15 of that document. 4. I note paragraphs 16. ********** 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: 16 August 2013