Supreme Court New South Wales Medium Neutral Citation: John Hudak & Anor v Rhys Adams & Anor (No 2) [2013] NSWSC 1501 Hearing dates: 2 October 2013 Decision date: 02 October 2013 Jurisdiction: Equity Division Before: Rein J Decision: Orders the first defendant to pay the plaintiff's costs of the whole of the proceedings, as agreed or assessed, on an indemnity basis. Catchwords: COSTS - whether an order should be made that the first defendant pay the plaintiff's costs on an indemnity basis Cases Cited: Elfar v Registrar General of New South Wales [2010] NSWSC 539 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Harrison v Schipp [2001] NSWCA 13 Sande v Metsara Pty Limited No 2 [2004] NSWSC 262 Sewell v Zelden [2010] NSWSC 1180 Category: Costs Parties: Mr John Hudak (first plaintiff) J.H. Enterprises Pty Ltd (second plaintiff) Mr Rhy Adams (first defendant/ cross defendant) Registrar General of NSW (second defendant/ cross claimant) Representation: Counsel: Mr Bartos (plaintiff) Mr Bye (first defendant/ cross defendant) Mr E. Mooney (second defendant/ cross claimant) Solicitors: Edita Berntsen Solicitor & Attorney (first and second plaintiff)) Kells The Lawyers (first defendant/ cross defendant) Lands and Property Management Authority (second defendant/ cross claimant) File Number(s): 2013/153338 Ex Tempore Judgment 1REIN J: In this matter, I handed down reasons for judgment on Friday 27 September 2013. I stood the matter over until today to deal with issues relating to the form of orders to be made and also on the issue of costs. I have dealt, this morning, with the various issues relating to the form of orders, but the remaining matter is the issue of costs. 2The plaintiff seeks an order for costs on the indemnity basis against the first defendant. The first defendant does not dispute that there should be an order for costs against him, but disputes that the order should be made on the indemnity basis. The plaintiff and the Registrar General have agreed between themselves as to how costs are to be dealt with. 3I must now deal then with this issue of indemnity costs as against the first defendant. It is clear on the authorities that the successful party must establish a basis for departing from the usual order if an order for indemnity costs is to be made. It has been held in Harrison v Schipp [2001] NSWCA 13, see particularly paras 132-133 per Giles JA with whom Handley JA agreed, that for an order for indemnity costs to be made, the conduct giving rise to the proceedings does not entitle the successful party to an indemnity costs order. What is required is some delinquency in the conduct of the proceedings. There are other categories in which orders can be made (see the enumeration of matters in the case of Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397) but the present focus is on the plaintiff's claim that the defence maintained by Mr Adams was hopeless. 4In this case, the plaintiff says that Mr Adams has persisted in his defence by asserting that Mr Hudak signed the pre-testamentary disposition document and that Mr Hudak and JHE (the second plaintiff) intended to transfer the Maroubra semis to him. 5The handwriting expert appointed jointly by the parties has demonstrated that Mr Hudak's signature was forged on all but the signature page of the pre-testamentary disposition document and forged on other documents including, importantly, transfers of the properties lodged with the Land Property Information Office and also on the application to the ANZ Bank to discharge the mortgage then registered on the title. I have found that Mr Adams is the person who forged Mr Hudak's signature and carried out a detailed plan to defraud Mr Hudak. 6Mr Adams put Mr Hudak and JHE to proof of their claims and asserted that Mr Hudak's evidence was unreliable and could not support a finding against him, when all the objective evidence demonstrated convincingly that a fraud had been perpetrated by Mr Adams on JHE and on Mr Hudak. The maintenance by him in these proceedings of what, in my view, was a hopeless defence constitutes the relevant delinquent conduct: see Sande v Metsara Pty Limited No 2 [2004] NSWSC 262 and the cases there cited and Sewell v Zelden [2010] NSWSC 1180 a decision of mine. 7Mr Bye, who appears for the defendant today, contended that there were some mitigating factors which would dissuade the court from concluding that there should be an order for indemnity costs. One is that the expert had found that the signatures were genuine on the signature page. He also submitted that there was a relevant authority, namely Elfar v Registrar General of New South Wales [2010] NSWSC 539, which was pleaded in aid by the defendant in submissions. 8I should say that I indicated in the reasons for judgment that I did not regard Elfar v Registrar General of New South Wales as of any relevance to this case. There was no evidence whatsoever that Mr Hudak had agreed to or consented, to the documents being signed in his name, or having his signature forged. 9So far as the first point is concerned, it was only one matter in the case which I took into account in concluding that, on the very substantial evidence presented by the plaintiff, a fraud had indeed been committed by Mr Adams. 10Neither of these matters alter my view that the appropriate order in this case is that the first defendant pay the plaintiff's costs on an indemnity basis. ********** 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: 14 October 2013