Australian Securities & Investments Commission v Cassimatis

Australian Securities & Investments Commission v Cassimatis - [2023] NSWSC 126 - NSWSC 2023 case summary — Zoe

Background

The plaintiffs' Amended Notice of Motion dated 2 November 2022 sought: 1. leave to file and serve a second further amended statement of claim; 2. leave to rely on further evidence addressing the matters raised by the proposed amendment; 3. procedural orders to allow the splitting of the issues raised by the proposed amendment from the other issues in the case; 4. leave to rely on a further expert report by one of the plaintiffs' experts dated 21 October 2022; 5. procedural orders for the four mining engineering and geology expert witnesses of the parties to hold a single joint conference of expert witnesses and prepare a single joint report; and 6. to set aside a notice to produce dated 31 October 2022 which had been issued by the New Hope defendants.
Following lengthy argument on the scope of the proposed amendments to the pleading on 4 and 11 November 2022, the plaintiffs were ultimately granted leave to amend their pleadings at the hearing on 21 November 2022 and timetabling orders were made for the filing of further evidence. The proposal to split the hearing was abandoned during argument.
The plaintiffs were unsuccessful on their application for leave to rely on further evidence, and for a joint conference and joint report of the mining engineering and geology experts. The issue regarding the notice to produce dropped away as it was not relied on by the New Hope defendants.
The New Hope defendants' Amended Notice of Motion dated 1 November 2022 sought: 1. further discovery from the plaintiffs of 15 categories of documents itemised in Annexure A to their amended notice of motion, only three of which were pressed at the hearing; and 2. orders that the fourth plaintiff, WICET, produce unredacted copies of certain documents in respect of which the New Hope defendants asserted legal professional privilege had been waived.
In relation to prayer 1, the New Hope defendants obtained, in substance, what had been sought by their notice of motion and resisted by the plaintiffs. Of the 15 categories of documents sought 10 (categories 1, 2, 5, 6, 7, 8, 12, 13, 14 and 15) were ultimately conceded by the plaintiffs prior to the hearing. Two (categories 3 and 4) were not pressed by the New Hope defendants on the basis of a concession made by the plaintiffs, two (categories 9 and 11) were partly allowed by the Court and only one (category 10) was refused on the grounds of relevance
In relation to prayer 2, the New Hope defendants were granted the orders sought, albeit in a revised form. The court found that the scope of prayer 2(a) was too broad and should be limited to "requests by WICET for legal advice from Ashurst relating to WICET's rights against a ToP Shipper, including Colton, arising from an apprehended or perceived breach by the ToP Shipper of its obligations under the provisions of the ToP Agreement referred to in [54(h)] of the FASOC, or the equivalent provisions in the ToP Agreement in relation to the other ToP Shippers".

[4]

Submissions

The parties agree that the plaintiffs should pay costs of the amendment to their pleading. The outstanding issue is whether the plaintiffs should pay the defendants' costs of the other aspects of the plaintiffs' notice of motion and whether the New Hope defendants should receive their costs of their own notice of motion.
The plaintiffs submitted that the appropriate order was that they should pay the costs of the proposed amendment to their pleading and that the other costs of both motions should be costs in the cause. The plaintiffs made four points. First, it was submitted that the respective parties each had a varying degree of success on the two motions: the plaintiffs were wholly successful in obtaining leave to amend their pleading; there was a mixed outcome with respect to the application for further discovery sought by the New Hope defendants in that of the categories that were in contest, categories 3 and 4 were withdrawn, category 10 was refused and only parts of categories 9 and 11 were permitted; the New Hope defendants succeeded in resisting the proposed combined conclave of all engineering and geological experts but that was only after the New Hope defendants resiled from an earlier position they had taken regarding the attendance of one expert at more than one conclave; and the notice to produce that the New Hope defendants served (and which the plaintiffs applied to set aside) was never called on. Second, the plaintiffs submitted that even where the New Hope defendants had a greater degree of success, that was qualified in one form or another. For example, with respect to the additional report of Mr McKibben, while leave was not formally granted to the plaintiffs to rely upon it, it was indicated by the Court that Mr McKibben could raise issues contained in the report in the course of the conclave between the experts and, with respect to the privilege documents, the order sought by the New Hope parties was not made as originally sought but in a narrower form. Third, the appearances at the hearing of the motions also dealt with other case management issues. Fourth, many of the issues canvassed on the motions were matters of practice and procedure in respect of which costs in the cause would usually be ordered.
In relation to the plaintiffs' notice of motion, the third and fourth defendants submitted that they should receive their costs of the motion. The plaintiffs should pay the defendants' cost of the application because, regardless of the plaintiffs' success, "the usual order where opposition to an application to amend is not unreasonable is that the party who applies to amend must pay the costs of the application for leave to amend and the costs occasioned by and thrown away as a consequence of the amendment" citing Media Ocean Ltd v Optus Mobile Pty Ltd (No 6) [2009] FCA 1319 at [34] (Jagot J) and Australian Securities & Investments Commission v Cassimatis (No 7) [2016] FCA 624 at [4] (Edelman J).
In so far as the other aspects of the plaintiffs' notice of motion are concerned, the New Hope defendants submitted that the plaintiffs failed on their application for leave to rely on further evidence and for a joint conference of the mining engineering and geology experts.
In relation to their notice of motion, the New Hope defendants submitted that they were largely or in substance successful and therefore costs should follow the event in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW). Further, they submitted that the costs of litigating these issues should not have been necessary in circumstances where the court had already ordered general discovery on 8 April 2022. Given the court's findings, the categories ought to have been discovered earlier. In the alternative, the New Hope defendants submitted that, due to their success (albeit mixed), the costs should be the New Hope defendants' costs in the cause.

[5]

Consideration

The Court has a discretion in relation to costs orders under s 98(1) of the Civil Procedure Act 2005 (NSW), which although broad must be exercised judicially. Under r 42.1 of the Uniform Civil Procedure Rules, the general rule is that subject to the other provisions of Pt 42, costs follow the event unless it appears to the court that some other order should be made.
In the case of interlocutory applications, another provision of Pt 42, being r 42.7 applies, under which costs of the application will be costs in the cause unless the court otherwise orders. An order of costs in the cause means that the successful party at the final hearing will also be entitled to their costs of the interlocutory application. Notwithstanding this, each case must depend on its own facts and. in some interlocutory disputes, an order different from costs in the cause may be appropriate. In particular, an order of costs in the cause may not be appropriate where the successful party on the interlocutory application fails at the final hearing: Global Investments Limited v Babcock & Brown Global Investments Management Pty Ltd [2017] NSWSC 1202 at [26]-[27]. Hence, it is relevant to consider whether it is appropriate in the circumstances of the interlocutory application that the successful party should obtain its costs irrespective of whether it is successful at the final hearing.
In my view, the plaintiffs should pay the costs of the defendants in respect of the plaintiffs' notice of motion. By far the most significant issue raised by the plaintiffs' notice of motion was the application to amend their pleading, and the consequential orders to give effect to the amendment if leave to amend was granted. The defendants' opposition to the amendment was reasonable. The plaintiffs do not dispute that they should pay the costs of the defendants on the amendment issue because that is the price they must pay for the late amendment. The same position should apply to the other matters raised by the plaintiffs' notice of motion for three reasons. First, the New Hope defendants had substantial success in relation to the other matters, none which took up substantial court time. Second, while the plaintiffs succeeded in relation to the issue concerning the notice to produce, in the sense that it went away prior to the hearing, this did not take up any court time and it is not suggested that it took up significant preparation time, having only arisen a short time before the hearing. Third, all of the defendants were required to attend court on the days when the plaintiffs' notice of motion was argued to deal with the plaintiffs' proposed amendment to the pleading and so the fact that the other matters were dealt with is unlikely to have increased the defendants' costs thrown away.
In relation to the New Hope defendants' notice of motion, the New Hope defendants obtained, in substance, what had been sought by the notice of motion and resisted by the plaintiffs: see [8] and [9] above. The overall outcome, therefore, was that the plaintiffs were ordered to produce documents which ought to have been produced pursuant to the earlier order for discovery. Further, those documents are necessary to enable the New Hope defendants to meet a case brought against them by the plaintiffs. For those reasons, in my view, it would not be a just outcome that the New Hope defendants only receive their costs of their motion if they are ultimately successful, and therefore it is appropriate that costs follow the event rather than be costs in the cause.
Accordingly, I make the following orders: 1. The plaintiffs to pay the costs of the defendants on the ordinary basis of the plaintiffs' Amended Notice of Motion dated 2 November 2022, including costs thrown away as a consequence of the amendment made in the Second Further Amended Statement of claim, as agreed or taxed. 2. The plaintiffs to pay the costs of the first and second defendants on the ordinary basis of the first and second defendants' Amended Notice of Motion dated 1 November 2022, as agreed or taxed.

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (2)

Cases Cited (3)