Supreme Court New South Wales Medium Neutral Citation: Coshott v Spencer [2019] NSWSC 644 Hearing dates: 3 June 2019 Date of orders: 03 June 2019 Decision date: 03 June 2019 Jurisdiction: Common Law Before: Davies J Decision: 1. The costs of the defendants' notice of motion filed 4 December 2018 are to be paid by the plaintiffs on the ordinary basis. 2. The costs of the first plaintiff's notice of motion filed 15 April 2019 are to be paid by the first plaintiff on an indemnity basis. 3. The first plaintiff is to pay the costs thrown away by reason of the amendments to the statement of claim. Catchwords: COSTS - party/party - bases of quantification -indemnity basis – defectively pleaded statement of claim – multiple defective iterations of the statement of claim Legislation Cited: Legal Profession Act 2004 (NSW) Uniform Civil Procedure Rules 2005 (NSW) rr 13.4, 14.28, 19.5 Cases Cited: Nil Texts Cited: Nil Category: Costs Parties: Ljiljana Coshott (First Plaintiff) Ronald Michael Coshott (Second Plaintiff) Keith Robert Spencer (First Defendant) David Adams (Second Defendant) Representation: Counsel: J Lyons (Plaintiffs) R Perla (Defendants) Solicitors: Murphy Lyons (Plaintiffs) Gilchrist Connell (Defendants) File Number(s): 2018/203967 Publication restriction: Nil Judgment 1. These proceedings commenced on 3 July 2018. They claimed damages against the defendants, who were solicitors, for negligence and breach of contractual duties for acting in two separate matters for the first plaintiff. The second plaintiff was joined to the proceedings on the basis that he was a third party payer under the Legal Profession Act 2004 (NSW). 2. Correspondence ensued between those acting for the defendants and those acting for the plaintiffs about the form of the statement of claim. The complaints made by the defendants' solicitors not only concerned the presence of the second plaintiff as a party to the proceedings, but also challenged the form of the pleading, which was said not to comply with the Uniform Civil Procedure Rules 2005 (NSW) and proper pleading practices. The correspondence did not result in any changes to the statement of claim being foreshadowed or made. 3. On 4 December, 2018, the defendants filed a notice of motion seeking that the proceedings be dismissed pursuant to UCPR r 13.4, alternatively, that the pleading be struck out pursuant to UCPR r 14.28, and an order that the second plaintiff be removed from the proceedings. 4. I heard the proceedings on 22 February 2019. I did not deliver reasons for the orders I made. That was because it was agreed that the debate between counsel and the Court had identified the problems with the statement of claim as filed. The orders that I made were these; 1. An order pursuant to UCPR r 6.29(a) that the second plaintiff be removed as a party. 2. Pursuant to UCPR r 14.28, paragraphs 3, 7, 8 and 10 of the amended statement of claim be struck out with leave to re-plead those paragraphs. Although the second plaintiff was removed as a party by those orders, costs in relation to all parties, including the second plaintiff, were reserved. In these reasons, I have distinguished the positions of the first plaintiff and the plaintiffs jointly. 1. I made consequential directions for the service of a proposed amended statement of claim, giving to the defendants' solicitors the right to object to such a proposed amended document being filed. The proceedings came back before me on 18 April 2019. Correspondence had ensued between the parties in the meantime where the defendants' solicitors pointed out what were said to be further defects in the pleadings and failures to comply with the matters which I had indicated during the course of the hearing on 22 February. That resulted in further iterations of the proposed amended statement of claim being served. 2. Because the defendants, ultimately, would not agree to the filing of the final version of the proposed amended statement of claim, the plaintiff filed a notice of motion on 15 April 2019, seeking leave to file the form of the amended statement of claim that was annexed to that notice of motion. 3. At the hearing on 18 April 2019, further defects were identified, with the result that it became necessary for further amendments to be made and, ultimately, a further amended statement of claim was filed on 26 April, 2019. 4. I reserved the question of costs both on 22 February, and 18 April, in respect not only of the defendants' motion of December 2018, but also in respect of the plaintiff's motion of 15 April, 2019. 5. The defendants seek that the plaintiff should pay the defendants' costs of both motions on an indemnity basis for a number of reasons. First, it is said that there was an eleventh hour decision by the plaintiffs to remove the second plaintiff as a party to the proceedings, notwithstanding that the matter had been raised at least twice in correspondence with the plaintiffs' solicitors before the defendants' motion was filed. So much is borne out by the correspondence. In a letter dated 19 October 2018 the defendants' solicitors addressed, in two paragraphs, why it was inappropriate for the second plaintiff to remain a party to the proceedings. A response to that letter by the plaintiffs' solicitors of 23 October 2018 ignored that aspect of the letter from the defendants' solicitors. The defendants' solicitors again raised the matter in a further letter of 6 November 2018, but that was not responded to prior to the filing of the defendants' motion. 6. The second basis upon which the defendants seek indemnity costs is that they were successful in having four paragraphs of the statement of claim struck out. 7. The third basis was that the plaintiff failed to plead adequately the material facts that gave rise to the asserted duty of care and breach thereof. Those matters were identified during the 22 February hearing, but also in relation to the form of the statement of claim considered in April 2019. In some respects the plaintiff's response to matters omitted was to say that particulars of the matters could be provided, presumably in correspondence. However, the Rules require adequate particulars to be provided in any pleading filed. 8. A further matter upon which the defendants rely is the fact that the proposed amended forms of the statement of claim did not comply with r 19.5, so that the defendants' solicitors, and the Court, were not able to see, at a glance, what amendments had been made to the pleadings. 9. The plaintiffs submitted that they should not have to pay the defendants' costs of the motion at all, although they accepted the first plaintiff should pay any costs thrown away by reason of the amendments made. That concession was properly made. The plaintiffs' principal submission was that they should have their costs of the defendants' motion. Alternatively, the plaintiffs submitted, the costs of the defendants' motion should be costs in the cause. 10. In my opinion it was necessary for the defendants to file the motion in December 2018, because of the form of the pleading. The second plaintiff should never have been a party to the proceedings and the statement of claim was not properly pleaded. 11. In my opinion that is sufficient to justify an order that the plaintiffs should pay the defendants' costs of the defendants' motion on the ordinary basis. 12. I do not accept, as the plaintiffs have submitted, that there should be a weighing up of individual matters on which each of the parties succeeded on the motion. The fact is that the pleading was bad and needed to be amended. The proposed amended statement of claim was similarly not in an appropriate state for filing when the matter came back before me on 18 April 2019. 13. I do not, however, consider that the plaintiff should be required to pay the costs on an indemnity basis. Although the defendants went to a great deal of trouble in correspondence to point out to the solicitors for the plaintiffs the defects in the pleading, including the inclusion of the second plaintiff as a party, up until the commencement of the hearing of the defendants' notice of motion, the defendants were seeking that the proceedings be dismissed under r 13.4. That prayer for relief was only abandoned at the outset of the hearing of the motion. In my opinion there was never a basis for that prayer to be included in the notice of motion. The dispute here was always about the form of the pleading. 14. I do not consider that an order seeking summary dismissal with its late abandonment is an inconsequential matter for inclusion in the notice of motion. Different considerations apply to dismissal under such a rule from those with which r 14.28 is concerned. Given that it was only abandoned at the outset of the hearing in February 2019, I do not consider it appropriate to make an order that costs should be paid on an indemnity basis for the defendants' motion. 15. However, I consider the matter to be different as far as the plaintiff's notice of motion was concerned. The affidavit of Alexander Boyd Haslam, sworn, 17 April 2019, shows the extent of the correspondence and the various iterations of the form of the amended statement of claim that were served by the first plaintiff after the February hearing. It was no surprise that the defendants' solicitors refused to consent to the forms of the amended statement of claim that were served on them. In that regard I determined, at the April 2019 hearing, that further amendments needed to be made to the statement of claim. 16. In my opinion the defects were made clear in the debate between the Court and counsel at the February hearing. The matter should never have reached the stage where the first plaintiff needed to file a notice of motion for leave to file the form of an amended statement of claim which, even then, was not accepted by me as having been properly pleaded. In that respect, the first plaintiff's conduct in relation to the pleading was unreasonable. 17. Accordingly, it is appropriate, in those circumstances, that the plaintiff should pay the defendants' costs of the plaintiff's notice of motion on an indemnity basis. 18. The orders I make, therefore are: (1) The costs of the defendants' notice of motion filed 4 December 2018 are to be paid by the plaintiffs on the ordinary basis. (2) The costs of the first plaintiff's notice of motion filed 15 April 2019 are to be paid by the first plaintiff on an indemnity basis. (3) The first plaintiff is to pay the costs thrown away by reason of the amendments to the statement of claim. ********** 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: 04 June 2019