Supreme Court New South Wales Medium Neutral Citation: Damien v Combined Home Loans Pty Limited (No 2) [2016] NSWSC 825 Hearing dates: On the papers Date of orders: 20 June 2016 Decision date: 20 June 2016 Jurisdiction: Equity Before: Darke J Decision: Order that each party bear its own costs of the proceedings. Catchwords: COSTS – rectification ordered but not in form sought by plaintiff – defendants neither consented to nor opposed rectification – defendants nonetheless chose to appear by counsel, adduce evidence and make submissions – not a case where plaintiff triumphed over opposition of defendants – extent of involvement by defendants a matter of choice – appropriate that each party bear its own costs. Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Damien v Combined Home Loans Pty Limited [2016] NSWSC 559 Category: Costs Parties: Timothy Mark Damien (Plaintiff) Combined Home Loans Pty Limited (in liquidation) (First Defendant) Stephen John Michell as liquidator of Combined Home Loans Pty Limited (Second Defendant) Representation: Counsel: HMW Stitt (Plaintiff) I Leong (Defendants) Solicitors: WKA Legal Pty Limited (Plaintiff) Piper Alderman (Defendants) File Number(s): 2016/124731 Publication restriction: None Judgment 1. The principal judgment in this matter was delivered on 28 April 2016 (see Damien v Combined Home Loans Pty Limited [2016] NSWSC 559). The central issue concerned a claim for rectification of a deed entered into between the plaintiff and Combined Home Loans Pty Limited, whereby the company assigned a chose in action to the plaintiff. The Court gave the plaintiff leave to proceed against the company and concluded that the deed should be rectified, but not in the manner proposed by the plaintiff (see the principal judgment at [29], [33] and [35]). 2. The question of costs of the proceedings remains to be determined. The parties were directed to provide written submissions on the question. The plaintiff provided submissions dated 6 May 2016, together with an affidavit; the defendants responded with submissions dated 20 May 2016, together with two affidavits; and the plaintiff provided submissions in reply dated 3 June 2016, together with yet another affidavit. The defendants provided a short note on 16 June 2016 in relation to that affidavit. As envisaged by the directions, and in the absence of any application for an oral hearing, the matter has been dealt with on the papers. 3. The plaintiff submits that its costs should be paid by the company (which is in liquidation) and that such liability for costs should be met by its liquidator, the second defendant. The defendants submit that the liquidator's costs should be paid by the plaintiff. For the reasons which follow, it is my opinion that the appropriate order for costs in this case is that each party bear its own costs of the proceedings, including in relation to these costs applications. 4. The plaintiff succeeded in obtaining an order for rectification. However, as mentioned earlier, this was not the rectification sought. The plaintiff maintained throughout that a different form or different forms of rectification should be ordered, although in final submissions the plaintiff indicated that it would seek the rectification that was ultimately ordered if the Court was of the view that it was the only rectification available (see the principal judgment at [33]). At no stage did the plaintiff seek the consent of the company or its liquidator to the making of an amendment to the deed in that more limited form. 5. Moreover, the defendants took the formal position that both the grant of leave to proceed against the company and rectification itself were neither consented to or opposed (see the principal judgment at [5]). It cannot be said that the plaintiff triumphed over the opposition of the defendants. Rather, the plaintiff succeeded in demonstrating that the evidence it adduced justified an order that the deed be rectified in a particular manner. 6. It is also relevant to note that the company, as a party to the deed, was a necessary party to the rectification suit, yet was only added as a party (without any opposition from the defendants) when the hearing commenced (see the principal judgment at [3]). Until that time, the liquidator was the only defendant. 7. I do not accept the plaintiff's submission that it was unreasonable for the defendants not to consent to the rectification the plaintiff sought. The Court found that the evidence adduced by the plaintiff did not justify rectification in that form. As already noted, the defendants were not asked to consent to a rectification in the form that was ultimately ordered. 8. The plaintiff is on firmer ground in submitting that whilst the defendants took the formal position of neither consenting nor opposing, they in fact took a somewhat active role. Nevertheless, the submissions made to the Court by the defendants were of assistance to the Court and did not significantly add to the hearing time. Regardless of the position of the defendants, it was always incumbent upon the plaintiff to demonstrate that rectification was warranted on the evidence it adduced. 9. In these circumstances, I do not think that the plaintiff's costs of the proceedings should be borne by either or both of the defendants. 10. As for the costs of the defendants, it is my view that it would not be appropriate to make any order that these be borne by the plaintiff. It ought to have been plain that the relevant entity involved in the rectification issue was the company, not the liquidator personally. No additional costs of any significance should have been incurred due to the plaintiff's mistake in initially suing only the liquidator. Further, the nature and extent of involvement by the defendants in the hearing was a matter of their choice. Submitting appearances (save as to costs) could have been filed. I do not accept the submission that the liquidator was "forced to deal with the rectification application" because the outcome was relevant to a foreshadowed application for costs against the liquidator personally. The defendants, whilst maintaining their formal positions of neither consenting to nor opposing the relief sought, chose to appear by counsel throughout the hearing. They adduced some evidence and made written and oral submissions. The submissions were of assistance to the Court, but that circumstance is not sufficient to warrant an order against the plaintiff. 11. Finally, I should record my concern about the manner in which these applications for costs were pursued. The costs applications arose in the course of a proceeding which raised a relatively straightforward issue of rectification. The proceedings were commenced in circumstances of perceived urgency on 22 April 2016 and determined on 28 April 2016 following a hearing in the Duty List. Arguments about costs, particularly where the amount of the costs is (or ought to be) relatively small, should be advanced by submissions that are concise and to the point. In this case, however, the submissions were in my view of undue length and complexity, and unnecessarily argumentative. A number of contentions were advanced, particularly by the defendants, which in my view were of little or no relevance. The further affidavits contained very little of significance. Overall, the parties appeared to expend an inordinate amount of effort in pursuing these applications. Parties to civil proceedings have a duty to assist the Court to further the overriding purpose of the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules. This duty does not seem to have been properly discharged in relation to these applications for costs. 12. The Court orders that each party bear its own costs of the proceedings. ********** 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: 20 June 2016