Hughes v Fong (No 2) [2016] NSWSC 1468

Supreme Court New South Wales

Medium Neutral Citation: Hughes v Fong (No 2) [2016] NSWSC 1468 Hearing dates: 13 October 2016 Date of orders: 13 October 2016 Decision date: 13 October 2016 Jurisdiction: Common Law Before: Campbell J Decision: Costs of all parties of and incidental to the hearing before me and in relation to the second defendant's application generally are costs in the cause Catchwords: Costs – interlocutory proceedings – all costs are costs in the cause – no question of principle Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 6.19 Cases Cited: Hughes v Fong [2016] NSWSC 1451 Category: Costs Parties: Mark Hughes & 16 Ors (Plaintiff) Richard Michael Fong (First Defendant) Maguy Bernadette Nakhl (Second Defendant) Representation: I E Davidson SC (Plaintiff) T L Hollo (First Defendant); C Colquhoun (Second Defendant) File Number(s): 2016/00029923

EX TEMPORE judgment - Revised 1. I have today handed down judgment resolving an outstanding interlocutory issue between the parties about whether the plaintiffs were properly joined in one proceeding in conformity with Rule 6.19 Uniform Civil Procedure Rules 2005 (NSW). I ruled that they were properly joined. 2. I made that decision as my reasons ([2016] NSWSC 1451) make clear on the assumption that notwithstanding that ruling, the statement of claim would need to be re-pleaded to comply with the general provisions of the rules concerned with proper pleading practice or principle. And indeed, I have proceeded on the basis that Mr Davidson SC, who appears for the plaintiff, conceded as much and that it was unnecessary on that basis for Mr Colquhoun of counsel, who appears for the second defendant, to address that issue in any detail beyond what was necessary for the purpose of his argument about r 6.19. 3. While ruling in the plaintiffs' favour on the substantial issue in dispute, I did express some views about why the pleading fell short of what would be required in a case like this to properly inform the defendants of the nature of the cases they need to meet in the proceedings which involve losses allegedly suffered by nine self-managed superannuation funds. 4. I now have to resolve the question of costs, and counsel, having had the opportunity of at least reading my judgment, if not considering it, have advanced submissions in conformity with what they understand to be the thrust of my reasons. Mr Davidson seeks costs in general terms, of the motion and on an indemnity basis relying upon an exchange of correspondence styled, ambitiously in the circumstances, as Calderbank letters detailing attempts by the parties to reach agreement about all issues before the hearing on Monday. Mr Colquhoun having considered the judgment, I think, has ameliorated his position somewhat and suggests that the proper order, given that he and Mr Davidson both enjoyed a measure of success, is that the costs of each of them be costs in the cause. 5. Mr Hollo of counsel, who appears for the first defendant, had reached an agreement in relation to his motion and appeared on Monday to see that the short minutes of order, all agreed between him and Mr Davidson, passed into orders of the Court. I declined to make those orders until I had decided the outstanding issue between the second defendant and the plaintiff on the basis that orders for the future management of the case should be harmonious amongst all of the parties. I indicated then that if I found in favour of Mr Colquhoun's argument, I may have been disinclined to make some of the orders agreed between the plaintiffs and the first defendant because they would have been necessarily inconsistent with other orders I would have made. That eventuality has not arisen. 6. In the event it was necessary for Mr Hollo to remain at Court to protect his client's interests, although he was not an active contradictor, and he has appeared today to take judgment and advance argument in relation to costs. 7. So far as the first plaintiff and the first defendant are concerned, they had reached an agreement in relation to the costs of the first defendant's motion, which is set out in proposed order 7 in MFI 1. I see no reason why that agreement should be disturbed and the further short minutes of order, which will be brought in, to give effect to my earlier decision, should reflect that. 8. Dealing with the costs of the second defendant's motion, there is much to be said for each of the arguments advanced. However, I am of the view that given that this was an interlocutory dispute, I should take a broad brush to resolving the question of costs. It seems to me it would not do to take too fine a comb to the various issues that could arise about costs if one were to focus on them long enough. 9. Taking that broad brush, it seems to me that as between Mr Colquhoun and Mr Davidson, they have each enjoyed a measure of success. It is very early days in the proceedings and certainly far too early to tell who might ultimately have better prospects of success in the litigation. That being so, I think the interests of their clients are sufficiently protected, and their shared success is sufficiently acknowledged, by an order such as is now proposed by Mr Colquhoun that their costs of the proceedings before me be costs in the cause. 10. Although initially resistant to Mr Hollo's position that there should be an order in respect of his client's costs of Monday and today, he has persuaded me that it was necessary for him to be here to protect his client's position. I am not persuaded that I should visit the costs of that on the plaintiffs at this stage but it seems to me that there is no good reason why his costs too should not be the first defendant's costs in the cause. I am affirmatively satisfied that should be the order. 11. My order then is the costs of all parties of and incidental to the hearing before me and in relation to the second defendant's application generally are costs in the cause.