Supreme Court New South Wales Medium Neutral Citation: Perpetual Trustees Victoria Limited v Belcastro (No 3) [2014] NSWSC 1324 Hearing dates: On the papers Decision date: 26 September 2014 Jurisdiction: Common Law Before: Adams J Decision: 1. The plaintiff is to pay the costs of Mrs Belcastro for counsel and solicitor for two hours of and incidental to the submissions made on 19 and 20 November 2012. 2. Otherwise, Mrs Belcastro is to pay the plaintiff's costs of its action and her cross-action. 3. Mrs Belcastro is to pay Mr O'Shannessy's costs as cross-defendant. Catchwords: COSTS - usual order as to costs Legislation Cited: Uniform Civil Procedure Rules 2005 Category: Costs Parties: Perpetual Trustees Victoria Limited ACN 004 027 258 (Plaintiff/ First Cross-Defendant) Domenci Belcastro (First Defendant) Maria Teresa Belcastro (Second Defendant/ Cross-Claimant) Mawson Securities Pty Ltd (Second Cross-Defendant) Ted O'Shannessy (Third Cross-Defendant) File Number(s): 2008/288187 Judgment 1On 30 August 2013, following my judgment on the principal claims in favour of Perpetual Trustees Victoria Limited and Mr O'Shannessy against Mrs Belcastro, I made the following orders as to costs - The question of costs to be determined on written submissions as directed: (i) The plaintiff is to make submissions within seven days on costs (if the plaintiff seeks costs differently to costs as set out in the mortgage.) If the plaintiff wants to seek costs in accordance with the mortgage documents please e-mail my Associate, indicating that costs are not sought. (ii) Mr O'Shannessy is to make submissions on costs within seven days. (iii) The second defendant is to respond within seven days. (iv) Parties who do not seek to make submissions are to e-mail my Associate to that effect. 2On 6 September 2013 I received written submissions from Mr Docker of counsel for Perpetual, attaching an affidavit of his instructing solicitor Ms Christina Fraser sworn 19 November 2013 relating to communications between Perpetual's legal advisors and those acting for the third cross-defendant with Mrs Belcastro's legal advisors. On 6 September 2013 I also received a submission from Mr O'Shannessy's solicitors. On 11 October 2013 Mr Evatt of counsel for Mrs Belcastro sought the matter to be listed before me for directions for costs. I did not consider that a hearing was warranted and informed the parties that the issue of costs would be determined on written submissions, to be provided within 14 days. On 15 November 2013 I informed Mr Evatt that, if no submissions were received within 7 days, I would decide the question on costs based on submissions received on behalf of the Perpetual and Mr O'Shannessy. There has been no response to this communication and no submissions have been filed on Mrs Belcastro's behalf. Accordingly, as indicated, I propose to determine the question on the basis of the submissions made on behalf of Perpetual and Mr O'Shannessy. Submissions 3Perpetual seeks an order that Mrs Belcastro should pay its costs of the proceedings, both in respect of its action and her cross action upon the basis, in substance, that there is no reason why costs should not follow the event as provided in r 42.1 of the Uniform Civil Procedure Rules. The only matter which might lead to a variation of the conventional order arises out of an adjournment on 2 December 2012 to permit the second defendant to respond to the Perpetual's handwriting evidence, which was served late. A crucial question in the case between Perpetual and Mrs Belcastro was whether she had authorised the payment of the loan proceeds into the account of Great Western Fences Pty Limited, a company which was half owned (one way or another) by the Belcastros. 4The initial case which appeared to be made by Mrs Belcastro was that, when she received the relevant security documents from Perpetual and executed them they were returned to First State Securities which acted for Perpetual in completing the transaction. As the case was then reasonably understood by the Perpetual's advisor, the suggestion that Mrs Belcastro had not written the direction in the relevant document or had not authorised the direction could be resolved by calling evidence that the direction was not placed there by any person who, on Perpetual's side, had access to the document. Mrs Belcastro's affidavit and that of Mr Belcastro, which stated that the documents had not been posted but, rather, had been given to Mr Belcastro to take to work at Mrs Astley's suggestion for Mrs Astley to pass them on to a friend who would deliver them, were sworn on 26 September 2012 and served on 27 or 28 September 2012. The affidavits were passed on to Mr Docker shortly after they were received by his instructing solicitors but, as Mr Docker candidly disclosed, it was not until 1 November 2012 that he advised (because the chain of custody was not as it had previously been understood) expert opinion regarding the handwriting on the direction to pay should be obtained. Ms Fraser, in her affidavit, gives an account of what ensued, resulting in obtaining the expert report of Ms Michelle Novotny on 15 November 2012, when it was immediately forwarded to Mr Evatt of counsel for Mrs Belcastro and also by express mail directly to her. On the following day, Perpetual's solicitors sent the report to Mrs Belcastro's solicitors. 5For reasons which do not need to be detailed here - they sufficiently appear from the transcript of the trial - I allowed Perpetual to rely on Ms Novotny's report and call evidence from her over objection, essentially based on delay, by Mr Evatt. It was clear that it followed from the grant of leave that Mrs Belcastro should have sufficient time to consult her own expert and have the opportunity to respond to Ms Novotny's evidence. The hearing proceeded with the balance of the evidence being taken and the trial was adjourned on 22 November 2012 to 18 February 2013 for the handwriting evidence and final submissions, which were completed on that day. 6I accept that it was reasonable for Perpetual to seek handwriting evidence in response to the late affidavits of Mrs and Mr Belcastro. Although the question of authorisation of the payment of the loan proceeds was a live issue at a much earlier stage, Perpetual's decision, as the evidence then stood, to rely on the chain of custody to prove authorisation was a sensible one. At the same time, the additional costs, if any, incurred by reason of the late reliance on the expert evidence would, in the usual case, be borne by the party seeking to rely on it. However, Mr Docker submitted that either there should be no order as to costs arising from the delayed reliance or the amount of costs should be qualified by the fact that the need to rely on handwriting evidence only became clear on perusal of the 26 September affidavits, which were provided very much later than the timetable required. At the time of the submissions, I indicated that in my view the appropriate order was that Perpetual should pay the costs, if any, thrown away by the late service of the expert's report, subject to a qualification to acknowledge Mrs Belcastro's contribution to the delay by virtue of the late service of the affidavits. 7As I have mentioned, no submissions on behalf of the Belcastros on costs have been received. 8It is difficult to see how any costs were thrown away by the adjournment. The only costs, as I think, which were unnecessarily incurred were those applicable to the need to make submissions which arose because of late service. In the circumstances, and to avoid further controversy about this matter I order that the Perpetual pay Mrs Belcastro's costs for counsel and solicitor for two hours in respect of the submissions made on 19 and 20 November 2012. I understand that Mr O'Shannessy makes no application for costs against Perpetual in this regard. Conclusion 9Except in relation to the costs relating to the tender of Perpetual's handwriting evidence, Mrs Belcastro is to pay Perpetual's costs of its action and her cross-action. Perpetual is to pay the costs of Mrs Belcastro for counsel and solicitor for two hours of and incidental to the submissions made on 19 and 20 November 2012. In respect of Mr O'Shannessy, there is no reason to depart from the usual order that costs follow the event and, accordingly, I order Mrs Belcastro to pay Mr O'Shannessy's costs as cross-defendant. ********** 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: 29 September 2014