Submissions of Stonewall and Presdate
50 Like Byatt, Stonewall and Presdate submit that the plaintiffs should be jointly and severally responsible for the costs of the proceedings. I have already indicated in relation to Byatt my reasons for rejecting that submission.
51 Presdate seeks a special order for costs against all the plaintiffs from 13 October 2009. The basis for this submission is that a single firm of solicitors commenced to represent both Stonewall and Presdate on that date. The pleadings were thereafter amended so that Stonewall admitted the occupation and conduct of a hotel on the site, whereas Presdate's involvement was restricted to ownership. Presdate submits that this change of position should have made it clear to the plaintiffs that Presdate had no involvement in the running of the hotel and consequently the plaintiffs should have discontinued against Presdate from that point in time.
52 Presdate also relies upon the comments by senior counsel for the lead plaintiff during his opening when he said:
"COUNSEL: Yes your Honour. Presdate, as I say, is the owner of the building. They are now represented by the same solicitor following the withdrawal of the cross-claim and we don't have much to say about them and I don't think we can on the present evidence propose a case against them …
COUNSEL: Yes, but we don't know exactly what might come out of the factual dispute between the other defendants." (T.20.22)
53 Presdate submits that when making submissions as to liability, senior counsel for the lead plaintiff made no submissions in relation to the liability of Presdate.
54 I have found this issue difficult to resolve. Until the withdrawal of the cross-claim and the amendment of Stonewall's defence on 13 October 2009 Stonewall, both in correspondence and in its pleadings, had not admitted that it occupied and conducted a hotel business on the site. Importantly, in its cross-claim against Presdate Stonewall had positively asserted that Presdate was operating the hotel.
55 The dilemma faced by the plaintiffs is clearly illustrated in the correspondence annexed to the affidavit of Mr McHardy, the solicitor for Alanna Calluaud. In that correspondence as early as May 2006 Mr McHardy advised the solicitors for Presdate that his client was prepared to release their client from the proceedings provided Stonewall admitted that it was the entity which was conducting the hotel business. Stonewall was not prepared to make that admission until its change of position in October 2009.
56 After the change of position by Stonewall in October 2009, the plaintiffs had a dilemma. For over four years Stonewall had been asserting that Presdate was an active participant in the running of the hotel and despite requests, had refused to admit that it played any part in the running of the hotel. Was this change of position a tactical move now that both Presdate and Stonewall were represented by the same solicitors, or did the change in pleadings represent the true state of affairs?
57 I can well understand why the solicitors for the plaintiffs would be reluctant to abandon the claim against Presdate unless and until they were provided with clear evidence that Presdate played no active part in the conduct of the hotel.
58 It is significant that after 13 October 2009 there was no attempt by Presdate by way of correspondence with any of the plaintiffs to persuade them to discontinue against it, nor was there any attempt to place evidence before the plaintiffs to indicate that Presdate played no active part in the events which gave rise to the claim.
59 There is another consideration. Following the discontinuance of Stonewall's cross-claim against Presdate in November 2009, Presdate appears to have played little if any active part in the conduct of the proceedings. All of the evidence subsequently adduced was directed towards Stonewall and Byatt. Accordingly, in view of the common representation on behalf of Presdate and Stonewall in the trial, even if Presdate obtains a special order for its costs against the plaintiffs, those costs are likely to be minimal.
60 Those considerations have to be balanced against the frank admission by senior counsel at the commencement of the trial that, at that point in time, he had no evidence against Presdate. Presdate was left as a defendant in the proceedings in the hope that some evidence might emerge which would implicate it.
61 I have already referred to sections 345 and 348 LPA in the context of Byatt's claim against Keddies. In the course of that analysis I referred to such decisions as Lemoto v Able Technical Pty Limited and Firth v Latham & Ors. To those decisions can be added European Hire Cars Pty Limited v Beilby Poulden Costello [2009] NSWSC 526 (Bryson AJ).
62 Those cases make it clear that continuing proceedings against a party when there is no evidence to establish liability against that party in the hope that something might turn up in the course of the trial, is not acceptable in the conduct of present day litigation. Those cases and the legislative provisions upon which they are based, make it clear that value judgments have to be made by the profession so that court time and legal costs are not wasted. Moreover, there was sufficient time between October 2009 and the commencement of the trial in February 2010 for inquiries to be made to clarify the position of Presdate. None were made by any of the plaintiffs.
63 I have concluded that Presdate is entitled to a special costs order, such costs order to take effect from 1 November 2009. For the guidance of any costs assessor who may be required to make an assessment in this matter, I once again stress my perception as trial judge that in view of the joint representation on behalf of Presdate and Stonewall, the costs incurred by Presdate after 1 November 2009 were minimal. At most they would have involved the amendment of some pleadings
64 Stonewall and Presdate submit that because Ms Dodds became tutor for the lead plaintiff on 30 July 2009 she should be responsible for all costs orders made against him. I have already indicated why I accept that submission.
65 Stonewall seeks a special costs order against Daryl Shute. It does so on the basis of offers which it made to Mr Shute to settle his claim on 4 and 9 November 2005. The offers made by Stonewall were made before the commencement of proceedings by Mr Shute in the amount of $17,500, inclusive of costs, and then $20,000 inclusive of costs. Both those offers were said to be open for seven days from the date when they were made, i.e. 4 and 9 November 2005.
66 The solicitors for Mr Shute rejected those offers and by facsimile dated 10 November 2005 made a final offer of $55,000 inclusive of costs. That offer was not accepted by Stonewall and on 21 November 2005 Mr Shute commenced proceedings in the District Court against Stonewall.
67 I do not regard that exchange of correspondence as entitling Stonewall to a special costs order against Mr Shute. The offers were not made in the form of Calderbank offers. Moreover, at the time when these offers were made, proceedings had not even been commenced so that it was not unreasonable for Mr Shute's legal advisers to refuse those offers. The evidentiary position of Mr Shute and that of the defendants was not known at the time.
68 Subject to the qualifications I have expressed above, Stonewall and Presdate are, of course, entitled to their costs on a party/party basis against all of the plaintiffs.