Supreme Court New South Wales Medium Neutral Citation: Edward Moses Obeid Snr v David Andrew Ipp [2017] NSWSC 271 Hearing dates: 20 March 2017 Decision date: 20 March 2017 Jurisdiction: Common Law Before: Hammerschlag J Decision: The Plaintiffs are to pay the First Defendant's costs of the proceedings on the indemnity basis. The Plaintiffs are to pay the Second, Third, Fourth, Sixth and Seventh Defendants' costs of the proceedings (as assessed or agreed) on the ordinary basis. Catchwords: COSTS – indemnity costs – basis for ordering – where Plaintiffs made grave allegations of misconduct which were either abandoned without explanation or held to be without merit – indemnity costs warranted. Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Edward Moses Obeid Snr v David Andrew Ipp [2016] NSWSC 1376 Category: Costs Parties: Edward Moses Obeid Snr - First Plaintiff Moses Edward Obeid - Second Plaintiff Paul Edward Obeid - Third Plaintiff Edward Joseph Obeid Jnr - Fourth Plaintiff David Andrew Ipp - First Defendant Geoffrey Maurice Watson - Second Defendant Grant Lockley - Third Defendant Paul Anthony Grainger - Fourth Defendant The State of New South Wales - Sixth Defendant The Independent Commission Against Corruption - Seventh Defendant Representation: Counsel: C R C Newlinds SC with D R Sulan and A J O'Brien - Plaintiffs B Walker SC with S Free and P Herzfeld - First Defendant D A McLure SC with P G Sharp - Second Defendant P Braham SC with R Scruby - Third Defendant E Cheeseman SC with J Hutton and Ms S Patterson - Fourth and Sixth Defendants J K Kirk SC with A M Mitchelmore and C E Winnett - Seventh Defendant Solicitors: Deutsch Partners - Plaintiffs Corrs Chambers Westgarth - First Defendant HWL Ebsworth - Second Defendant Henry William Lawyers - Third Defendant Crown Solicitors Office - Fourth and Sixth Defendants Ashurst Australia - Seventh Defendant File Number(s): 2015/201089 Judgment 1. HIS HONOUR: On 27 September 2016, I delivered the principal judgment in this matter: Edward Moses Obeid Snr v David Andrew Ipp [2016] NSWSC 1376. Definitions there apply here. 2. Only questions of costs remain. 3. Costs are in the discretion of the Court, which has full power to determine by whom, to whom and to what extent they are to be paid. The Court may order that costs be awarded on the ordinary basis or an indemnity basis: s 98(1) of the Civil Procedure Act 2005 (NSW). 4. Costs are to follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Part 42, Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW). 5. Each Plaintiff wholly failed in every claim against each Defendant. 6. The Plaintiffs had originally joined the State of New South Wales as the Sixth Defendant. On 9 August 2016, the Plaintiffs filed their Second Further Amended Statement of Claim. The State of New South Wales was deleted as a party, and I ordered that the proceedings against it be dismissed. 7. There is no reason why costs should not follow the event, and every good reason why they should. 8. The Plaintiffs have agreed costs orders with each of the Defendants except the Commissioner, which I propose to make. They all provide for an award of costs on the ordinary basis against the Plaintiffs, and some provide for orders for the payment of interest on the award. 9. On 16 December 2016, to suit the convenience of all parties, I fixed 20 March 2017 as the date for any argument on costs. On 13 March 2017, the Plaintiffs made a groundless application for an adjournment on the footing that they had changed solicitors. 10. The Plaintiffs' position on the Commissioner's application for indemnity costs is disclosed in a letter which the Plaintiffs' solicitors wrote to the Commissioner's solicitors on 15 March 2017. They said: We refer to the application listed for hearing on 20 March 2017. Our clients oppose the orders sought however do not wish to be heard on the application and we do not hold instructions to appear on the application. We would be grateful if you would bring this letter to the Court's attention on the application. 1. The Commissioner moves for an order for indemnity costs. In support of the application, he read the affidavit of his solicitor, Brian James Whittaker, sworn 6 March 2017. 2. I received written submissions on behalf of the Commissioner, which will be marked for identification and retained on the court file. 3. The Court's discretion as to costs is at large. The categories in which indemnity costs are properly ordered are not closed. 4. They may properly be ordered where there has been unreasonable, inappropriate or otherwise unjustifiable behaviour of significance in connection with the conduct of proceedings. The conduct of the Plaintiffs in this case satisfies all three of those descriptions. 5. The Plaintiffs made allegations against the Commissioner, in his capacity as the holder of significant public office, of misconduct of the gravest kind. 6. These included that he knew that the evidence before him did not disclose the seizure of the maps but nevertheless put, or allowed to be put to Paul Obeid, the contrary, and that he knew about the Stockley statement and deliberately held it back. The audio-visual recording of Paul Obeid's compulsory examination showed that the Commissioner did not make the assertion complained of. Although the Stockley statement was not uploaded to ICAC's website, it was in fact marked as an exhibit and apparently tendered at the public hearing on 7 March 2013, a fact entirely inimical to the suggestion of it being deliberately held back. 7. In their first Statement of Claim filed 9 July 2015, the Plaintiffs alleged that the Commissioner had engaged in conduct which was malicious, designed to cause irreparable damage, contrary to his obligations to exercise his functions and duties honestly and ethically, and intended to cause injury, reputational and financial harm to the Plaintiffs. 8. In their Amended Statement of Claim filed 11 December 2015, they alleged that the Commissioner knew that assertions made by Watson were false and misleading, that his conduct was actually biased and involved the exercise of his powers of inquiry in bad faith and for an improper purpose unknown to them. 9. These allegations were abandoned without explanation. They were unmaintainable and irresponsibly made. The Plaintiffs have not seen fit to come to Court to defend their behaviour. 10. At trial, the only complaint motivated against the Commissioner was a claim of misfeasance that he made the suppression order with respect of the Heads of Agreement, knowing that he had no power to do so, and reckless as to the possibility that by doing so the Plaintiffs would suffer damage. That claim was exposed as being entirely lacking in merit. 11. This is a clear case in which indemnity costs are appropriate, indeed necessary. 12. I make the following orders: 1. The Plaintiffs are to pay the First Defendant's costs of the proceedings on the indemnity basis. Interest is to accrue on such costs (as assessed or agreed) pursuant to this order at the rate prescribed under Part 36 Rule 36.7 of the Uniform Civil Procedure Rules 2005 (NSW) from the date of this order. 2. The Plaintiffs are to pay the Second Defendant's costs of the proceedings (as assessed or agreed) on the ordinary basis. The Plaintiffs are to pay to the Second Defendant interest on costs and disbursements, at the rates set out in Uniform Civil Procedure Rules 2005 (NSW), on the Allowed Percentage of each amount of costs and disbursements actually paid by the Second Defendant, from the date of payment to the Second Defendant of each such amount of costs and disbursements until the first to occur of: 1. such time as the Plaintiffs have paid the costs due to the Second Defendant under any order made in these proceedings, or 2. the assessment of the costs to which the Second Defendant is entitled pursuant to the costs orders in his favour. In this order: 1. X equals the total amount of costs and disbursements which the Second Defendant has paid or is liable to pay to his legal advisors in connection with these proceedings. 2. Y equals the total amount of costs and disbursements allowed on assessment to the Second Defendant in connection with these proceedings. 3. the Allowed Percentage equals ((Y/X) x 100)%. 1. The Plaintiffs are to pay the Third Defendant's costs of the proceedings (as agreed or assessed) on the ordinary basis. 2. The Plaintiffs are to pay the Fourth Defendant's costs of the proceedings on the ordinary basis. 3. The Plaintiffs are to pay the Sixth Defendant's (the State of New South Wales) costs of the proceedings on the ordinary basis. 4. The Plaintiffs are to pay the Seventh Defendant's costs of the proceedings. Interest is to accrue on any costs as assessed or agreed pursuant to this order at the rate prescribed under Part 36 Rule 36.7 of the Uniform Civil Procedure Rules 2005 (NSW) from the date of this order. ********** 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 March 2017