Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 4) [2014] NSWSC 1037

Supreme Court New South Wales

Medium Neutral Citation: Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 4) [2014] NSWSC 1037 Hearing dates: 31 July 2014 Decision date: 31 July 2014 Jurisdiction: Equity Division Before: Slattery J Decision: See paragraph 17. Catchwords: COSTS - general rule that costs follow the event - exception to the general rule - plaintiff partially successful in the proceedings - order that the plaintiff pay the defendant's costs of the Saree proceedings on the ordinary basis - order that the defendant pay the plaintiff's costs in respect of those issues on which the plaintiff was successful. Cases Cited: Avery v Saree Holdings Ltd; Lava Ltd v Avery [2012] NSWSC 463 Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 2) [2012] NSWSC 938 Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 3) [2013] NSWSC 1032 Category: Consequential orders Parties: Plaintiff- Leanne Maree Avery Defendant- Saree Holdings Limited Representation: Solicitors:

Ms Avery in person Mr John Sorensen for Saree Holdings Limited File Number(s): (09/288104) Publication restriction: No

EX TEMPORE Judgment 1This is my fourth judgment in these proceedings. The Court's findings and conclusions in the proceedings are set out in the Court's three previous judgments on 9 May 2012, the principal judgment, [2012] NSWSC 463; the 10 August 2012 second judgment, [2012] NSWSC 938; and the third judgment on 2 August 2013, [2013] NSWSC 1032. Events, matters and things are referred to in this fourth judgment in the same way as they were in the earlier judgments. 2The Court, again, continues to describe these two related sets of proceedings, which were heard together as "the Lava proceedings" and "the Saree proceedings", as has been explained in the previous judgments. 3Again, this judgment assumes a prior reading of the earlier two judgments and does not re-explain the background to these complex proceedings. 4The short issue that brings the matter back before the Court today is a motion by Ms Avery to finalise costs issues in the Saree proceedings. Ms Avery, by motion dated 25 June 2014, seeks orders in the following terms. "1. That his Honour makes a final costs order as contemplated in his Honour's judgment of 10 August 2012 and that I, the plaintiff, consent to those orders being awarded against me; and 2. Directions". 5In support of that motion, Ms Avery filed a brief affidavit, which contains one substantive paragraph, which says as follows: "I kindly request that his Honour a make a final order for costs and directions, as contemplated in his Honour's judgment of 10 August 2012 and that I, the plaintiff, consent to those costs being awarded against me in order to finalise this matter". 6The relevant history is sufficiently summarised by going back to the judgment of the Court 10 August 2012 that Ms Avery refers to, which was varied by the Court's judgment of 2 August 2013. 7In the Court's judgment of 10 August 2012 the Court did not make final costs orders because there were two other issues remaining to be determined, that have been described in all judgments as "the overpayment issue" and "the issue as to the benefit of the Saree mortgage". 8In short summary, in the Court's second judgment of 10 August 2012, Saree claimed its costs of the Saree proceedings on the indemnity basis as moneys owing under the mortgage. Saree presented an HLB Mann Judd calculation of all the costs it claimed to have incurred and sought the Court's assistance in the entry of judgment for that calculation against Ms Avery (Avery v Saree Holdings Ltd; Lava Ltd v Avery (No. 2) [2012] NSWSC 938, at [39] - [47]). 9But as the Court's second judgment shows, the Court declined to accept that submission, for a number of reasons: (1) Ms Avery had a right to have Saree's legal costs assessed, after they were claimed on an indemnity basis under the mortgage; (2) Ms Avery had not been given, on the evidence, a bill prepared in assessable form, nor had she therefore been able to avail herself of her rights to seek further information before exercising her rights as to costs assessment; and, (3) the evidence as to the full amount of and explanation for the costs allegedly incurred were not complete. 10The Court, therefore, decided that Ms Avery should have an opportunity to exercise her statutory rights to have the costs assessed before indemnity costs could be awarded against her. Ms Avery then submitted, and the Court accepted, that a final costs order should not be made in the Saree proceedings until the Court had determined all remaining issues. The Court did determine the remaining issues, apart from any accounting that no party seems to be claiming. But the Court's judgment of 2 August 2013 determined the two remaining questions for decision: (1) the question of whether Saree overpaid Ms Avery using funds that it did not hold on behalf of Mr Donahue's interests, and (2) the question, which would have only arisen if the first question were answered in the affirmative, whether Lava has any interest in any sums so overpaid. 11In the result, in the third judgment, the Court concluded, at [75], that there was no overpayment of NZ$309,500 as Saree alleged. Ms Avery was entirely successful in resisting the contention that there was an overpayment, although, she had been unsuccessful in the earlier aspects of the Saree proceedings. 12Because of that conclusion, it was not necessary for the Court to decide who had the benefit of the Saree mortgage. 13The question then is what should now happen to the costs of the proceedings. Ms Avery is not legally represented in these proceedings today; she appears herself. Mr Sorenson has appeared on behalf Saree, with the Court's leave. Saree also does not have legal representation today. 14It seems to me from the submissions that have been put today that Ms Avery's motion and her affidavit indicate that she is prepared to consent to a final costs order in the Saree proceedings against herself. Her concession is based, to some extent, upon a misapprehension that she has been entirely unsuccessful in the proceedings. The reality is that she was successful on the two issues that were reserved for the third judgment. It would be unjust to make a costs order against her in respect of those issues. I will not do so. 15But it is in everyone's interests, as is implicit in her motion, that the proceedings otherwise be finalised now. That leaves the question also open as to what should happen to Saree's costs under the mortgage. It seems to me that the issue should lie where it falls: Saree has not established in these proceedings that it is entitled to indemnity costs under the mortgage because it has not pursued that issue any further as a result of the Court's second judgment. Should it wish to seek indemnity costs, it is a matter for it to take its own advice at a future time. 16Mr Sorenson appeared today, as I indicated, by the Court's leave on behalf of Saree. He was invited to put any submissions he wished contrary to the course now being taken by the Court. He did not wish to put any submissions on behalf of Saree. In particular neither he nor Ms Avery sought any other relief. So the proceeding should now be dismissed. 17The appropriate orders, therefore, in my view, are these: 1. Subject to order 2, order that the plaintiff, Ms Avery, should pay the defendant's, Saree's, costs of the Saree proceedings on the ordinary basis. 2. Order that Saree pay Ms Avery's costs of the Saree proceedings incurred with respect to both the overpayment issue and the issue of the benefit of the Saree mortgage, as those issues are defined in the Court's judgments of 10 August 2012 - 2012 NSWSC 938; and 2 August 2013 - 2013 NSWSC 132. 3. The proceedings are otherwise dismissed.