This judgment addresses the issue of costs, which was reserved to be dealt with in chambers on the papers when my judgment was given on 19 July 2024: Big Un Limited (in liquidation) v Evertz (No 2) [2024] NSWSC 878 (Principal Judgment) at [69]. This judgment assumes familiarity with, and adopts the shorthand expressions and defined terms used in, the Principal Judgment.
The Principal Judgment determined an application by the fourth defendant, Andrew Corner, seeking dispensation from the procedural requirements in the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and Practice Note SC Eq 3 - Commercial List and Technology and Construction List in relation to filing a response, providing pleadings and particulars, serving lay evidence and providing disclosure.
Mr Corner's application was the subject of proposed consent orders by the plaintiff, Big Un, including that there be no orders as to costs between Mr Corner and Big Un. I made that order in the Principal Judgment at [69(4)].
The first defendant, Brandon Evertz, and the third defendant, Sonia Thurston, took different positions on Mr Corner's application. As I noted in the Principal Judgment at [4], Mr Evertz consented to the orders sought save insofar as they concerned disclosure and costs, whereas Ms Thurston opposed those orders in relation to disclosure and costs and otherwise neither consented to nor opposed the balance of the orders sought.
In the Principal Judgment at [56]-[69], I found that Mr Corner should be relieved of the procedural requirements in the UCPR and Practice Note. I granted Mr Corner liberty to apply to make any application to seek relief from any requirement to serve expert or lay evidence from persons other than him and concerning the trial of these proceedings. I also granted Mr Evertz and Ms Thurston liberty to apply on three days' notice seeking disclosure from Mr Corner of any document or thing clearly identified in the notice to produce and relevant to a fact in issue, provided that such documents are not the books or records of Big Un or Big Review and are not in the possession, custody or control of Big Un, Big Review or their liquidators.
The parties' respective positions on the question of costs of the proceedings can be summarised as follows:
1. Mr Corner submits that Mr Evertz and Ms Thurston should be ordered to pay his costs, as he was successful in being relieved of the obligations to comply with various procedural requirements, principally that of providing disclosure, which was the central issue in dispute at the hearing.
2. Mr Evertz submits that the parties should bear their own costs, because the only issue between them was that of Mr Corner providing disclosure, which was the subject of an important qualification at the hearing of the type sought by Mr Evertz.
3. Ms Thurston similarly submits that the parties should bear their own costs and, alternatively, that costs should only be awarded in favour of Mr Corner from 11 June 2024, the day Ms Thurston filed her notice of objection.
In this judgment, I have determined the issue of costs in chambers, having regard to the parties' respective written submissions and evidence on which they each relied.
For the reasons set out below, I have concluded that Mr Corner should receive the costs of his application with some percentage reduction to reflect the mixed outcome of it.
[2]
RELEVANT FACTS
In addition to the relevant facts stated in the Principal Judgment at [5]-[31], the following matters are also relevant to the exercise of my discretion on the issue of costs.
On 18 April 2024, Mr Corner filed the notice of motion seeking a stay of proceedings against him or, alternatively an order dispensing with any obligation under the UCPR and Practice Note to file a list response, plead and provide particulars, serve any evidence or provide any disclosure. This was the application dealt with in the Principal Judgment.
On 10 May 2024, Ball J made orders, among other things, directing any party that opposed the relief sought in the notice of motion to serve a note setting out the bases of their opposition by 31 May 2024.
On 20 May 2024, Mr Evertz and Ms Thurston each issued Mr Corner a notice to produce, relevantly seeking by 24 May 2024:
1 The Statement of Facts (SOF) by ASIC referred to in paragraph 9 of the Affidavit of Kristyl Burnett sworn on 9 May 2024.
2 Any documents attached or referred to in the SOF.
With the consent of Mr Corner, the time by which Mr Evertz and Ms Thurston were permitted to serve their notes of opposition was extended to 11 June 2024.
On 11 June 2024, Mr Evertz and Ms Thurston each served their note of opposition stating the same position, namely that they opposed order 2(e) (that Mr Corner be relieved of the requirements under the UCPR and Practice Note to "provide any disclosure") and order 5 (costs).
On 13 June 2024, Big Un and Mr Corner agreed on a form of short minutes of order for disposing of the notice of motion. Relevantly, Mr Corner no longer sought a stay in relation to the civil proceedings and a carve out was agreed to be included in order 1(e) in relation to Mr Corner's relief from the requirement of disclosure "except the books of the plaintiff or Big Review TV Ltd". The agreed form of short minutes was in the following form:
1. Order that the fourth defendant, Andrew Scott Corner, be relieved of the requirements of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and Practice Note SC EQ Commercial List and Technology and Construction List (Practice Note) to:
a. file and serve any commercial list response or other defence to the plaintiff's commercial list statement filed on 7 November 2023 pursuant to paragraphs 10 and 11 of the Practice Note and/or rule 14.3 of the UCPR;
b. plead matters specifically pursuant to paragraph 11 of the Practice Note and/or rule 14.14 of the UCPR;
c. provide particulars pursuant to paragraph 11 of the Practice Note and/or rule 15.1 of the UCPR;
d. serve any evidence (other than expert evidence or evidence from persons other than the fourth defendant); and
e. provide any disclosure except the books of the plaintiff or Big Review TV Ltd.
2. The fourth defendant is granted liberty to make any application:
a. to be relieved from any requirement to serve expert evidence, or lay evidence from persons other than the fourth defendant, after the plaintiff has served any evidence on which it wishes to rely; and
b. concerning the trial of this proceeding.
3. The Notice of Motion filed on 18 April 2024 is dismissed insofar as it concerns the plaintiff with no order as to costs.
On 28 June 2024, Mr Evertz provided Mr Corner with a set of proposed short minutes of order, stating as follows:
…
1. The fourth defendant, Andrew Scott Corner, be relieved of the requirements of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and Practice Note SC EQ Commercial List and Technology and Construction List (Practice Note) to:
a. file and serve any commercial list response or other defence to the plaintiff's commercial list statement filed on 7 November 2023 pursuant to paragraphs 10 and 11 of the Practice Note and/or rule 14.3 of the UCPR;
b. plead matters specifically pursuant to paragraph 11 of the Practice Note and/or rule 14.14 of the UCPR;
c. provide particulars pursuant to paragraph 11 of the Practice Note and/or rule 15.1 of the UCPR; and
d. serve any evidence (other than expert evidence or evidence from persons other than the fourth defendant).
2. The fourth defendant is granted liberty to make any application:
a. to be relie[ved] from any requirement to serve expert evidence, or lay evidence from persons other than the fourth defendant, after the plaintiff has served any evidence on which it wishes to rely; and
b. concerning the trial of this proceeding.
3. The Notice of Motion filed on 18 April 2024 is dismissed insofar as it concerns the first defendant with no order as to costs.
4. The Court notes that should the first defendant issue a notice to produce or seek orders in respect of discovery from the fourth defendant, nothing contained in these orders prevents the fourth defendant from making an application to set aside any such notice to produce or oppose discovery at that time.
5. Liberty to apply to vary these orders is granted.
On 12 July 2024, the solicitor for Mr Corner, Kristyl Burnett of KB Legals, filed an affidavit in these proceedings (Burnett affidavit).
Also on 12 July 2024, the hearing of the notice of motion took place, at which time the Burnett affidavit was read.
On 19 July 2024, I delivered the Principal Judgment and made orders at [69], summarised as follows:
1. Mr Corner be relieved of the requirements of the UCPR and Practice Note to file and serve any list response, plead matters, provide particulars, serve any evidence (other than expert evidence) and provide any disclosure except the books of Big Un or Big Review, which are not otherwise in the possession, custody or control of Big Un or Big Review or their liquidators.
2. Mr Corner has liberty to apply to be relieved from any requirement to serve expert or lay evidence after Big Un has served its evidence and to make any application concerning the trial of the proceeding.
3. Mr Evertz and Ms Thurston have liberty to apply for disclosure from Mr Corner of any specific document or thing that is clearly identified in the notice to produce and is relevant to a fact in issue, provided that such documents are not the books or records of Big Un or Big Review and otherwise not in the possession, custody or control of Big Un or Big Review or their liquidators.
4. The notice of motion filed 18 April 2024 is otherwise dismissed insofar as it concerns Big Un with no order as to costs.
5. The notice of motion filed 18 April 2024 is otherwise dismissed insofar as it concerns Mr Evertz and Ms Thurston.
6. The issue of costs as between Mr Corner, and Mr Evertz and Ms Thurston, is reserved to be dealt with in chambers on the papers.
On 26 July 2024, Mr Evertz, Ms Thurston and Mr Corner each filed their written submissions on the issue of costs.
[3]
Submissions of Mr Corner
In summary, Mr Corner made the following submissions:
1. Mr Evertz and Ms Thurston should pay Mr Corner's costs of the motion, as Mr Corner succeeded in his application to secure the dispensation sought, despite Mr Evertz and Ms Thurston's opposition at the hearing. This is the "event" that costs should follow in accordance with r 42.1 of the UCPR.
2. Mr Evertz and Ms Thurston submitted that the court should not accede to Mr Corner's application for in limine dispensation from obligations of disclosure. Contrary to those submissions, the court found that Mr Corner "should be relieved in limine of all of the requirements upon him imposed by the court processes to … give disclosure": Principal Judgment at [59].
3. Mr Evertz and Ms Thurston challenged the degree of overlap between these proceedings and the Criminal proceedings. The court accepted Mr Corner's submission that there was a general and specific overlap between the two proceedings and that in any event, there is no requirement for a complete overlap: Principal Judgment at [58], [60].
4. Mr Evertz and Ms Thurston submitted that Mr Corner's application for dispensation from obligations of disclosure was premature. Mr Corner also succeeded on that issue, with the court finding, contrary to their submissions, that the application was not premature or too broad: Principal Judgment at [63].
5. In those circumstances, Mr Corner has prevailed and should have his costs.
[4]
Submissions of Mr Evertz
In summary, Mr Evertz made the following submissions:
1. The proposed short minutes provided on 28 June 2024 by Mr Evertz to Mr Corner were in the terms agreed with Big Un, subject to the removal of order 1(e) and the introduction of a notation that Mr Corner was at liberty to seek to set aside any notice to produce or application for discovery by Mr Evertz. These short minutes confirm that the only issue ever in dispute with Mr Evertz was the question of disclosure, as Mr Evertz sought to ensure that he was not shut out from seeking documents from Mr Corner if needed.
2. Mr Corner's case for dispensation from disclosure was clearly articulated for the first time on the date of the hearing, 12 July 2024, by the Burnett affidavit and oral submissions of his counsel. The issue of prejudice arising from disclosure was, before that time, the subject of one paragraph of Mr Corner's written submissions and no specific evidence.
3. This court made orders dispensing with any requirement for Mr Corner to give disclosure subject to two qualifications: that it did not extend to the books of Big Un or Big Review; and Mr Evertz and Ms Thurston have liberty to apply for disclosure from Mr Corner of specific documents or things not in the possession of Big Un.
4. The first qualification was agreed, in substance, between Mr Corner and Big Un on 13 June 2024, but Mr Corner's position in relation to extending that concession to Mr Evertz and Ms Thurston fluctuated during the hearing (T34.37-39.8).
5. The second qualification was not agreed, as it was only at the hearing that Mr Corner accepted that Mr Evertz and Ms Thurston should have liberty to apply as an appropriate qualification to his dispensation from disclosure. This qualification protects, albeit in a narrow form, Mr Evertz's concern and reason for opposing order 1(e).
6. The dispute between Mr Evertz and Mr Corner crystallised for the first time on 11 June 2024 and was limited to the issue of dispensation from any disclosure obligations and was resolved subject to a significant qualification to protect Mr Evertz's position that was not conceded by Mr Corner until the hearing.
7. The parties should bear their own costs. On any view, there could be no question of Mr Evertz's liability for Mr Corner's costs incurred prior to 11 June 2024.
[5]
Submissions of Ms Thurston
In summary, Ms Thurston made the following submissions:
1. The parties should bear their own costs for three reasons.
2. First, Mr Corner only had partial success on the notice of motion. The original form of the notice of motion sought, as its primary relief, a stay of the proceedings and only in the alternative dispensation from various procedural obligations. Mr Corner subsequently agreed with Big Un on proposed consent orders on 13 June 2024, so that he no longer pressed a stay and the disclosure obligation in order 2(e) was modified to a highly caveated version. The orders made in the Principal Judgment further qualified that dispensation by granting Ms Thurston and Mr Evertz liberty to apply to seek disclosure of specified documents, which was sought in Ms Thurston's written submissions on the notice of motion and only conceded by counsel for Mr Corner at the hearing itself (T13.49, 14.43, 40.30). The procedural history shows that the scope of eventual dispute was relatively minor and the final form of orders contained a compromise position.
3. Secondly, there was a key contradiction in Mr Corner's position in relation to the proffered carveout for disclosure of the books and records of Big Un and Big Review. The concession was pressed in Mr Corner's written submissions, but withdrawn by his counsel during the hearing, so that Mr Corner's position shifted back to seeking unqualified relief from any disclosure (T38.35-50), which was ultimately not ordered by this court.
4. Thirdly, one of the bases of Ms Thurston's notice of objection to order 2(e) was that Mr Corner had not provided any good reason to justify why he should be relieved from the obligation to provide disclosure and no evidence "specifically" addressed why a disclosure obligation in the future would be contrary to his right to silence and privilege against self-incrimination. This gap was only resolved the day of the hearing by the late service of the Burnett affidavit on 12 July 2024, weeks after the deadline for any reply evidence of 7 June 2024 and hours before the hearing. The "essential problem for Mr Corner" that I considered in the Principal Judgment at [64] - being that responding in any way to a request for documents would put him at risk in the criminal proceedings by exposing his knowledge - was only articulated in Mr Corner's evidence for the first time by the Burnett affidavit.
5. If I am not minded to make an order that the parties bear their own costs, then alternatively, costs should only be awarded in favour of Mr Corner from 11 June 2024, being the date of Ms Thurston's notice of objection. Prior to 11 June 2024, Ms Thurston had communicated no position on the notice of motion, the main contradictor was Big Un (until the service of the short minutes of order on 13 June 2024) and Mr Corner's primary relief sought by the notice of motion was a stay of the proceedings against him (which was not ultimately ordered).
[6]
LEGAL PRINCIPLES
Section 98(1) of the Civil Procedure Act 2005 (NSW) (CPA) provides:
(1) Subject to rules of court and to this or any other Act -
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
The discretion to award costs under s 98 of the CPA is broad and the section itself is to be construed liberally: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, Gaudron and Gummow JJ at [21]. The discretion is, however, subject to the rules of court, being the UCPR. It is therefore necessary to consider whether there are any rules that would impact on the exercise of that discretion.
Rule 42.1 of the UCPR states:
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs 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.
Recently, in Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21, the Court of Appeal of this court (constituted by Gleeson, Leeming and Adamson JJA) gave an explanation of the normal rule, stating at [11]-[12]:
[11] Costs are in the broad discretion of the Court with the general rule being that they should follow the "event": Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1. Generally, the "event" refers to the event of the claim and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15].
[12] Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs: Commonwealth Bank of Australia v Gretton [2008] NSWCA 117 at [121] (Hodgson JA, Mason P and Beazley JA agreeing).
In Croc's Franchising Pty Ltd v Alamdo Holdings Pty Ltd (No 3) [2023] NSWCA 316, Basten AJA, and Payne and Stern JJA, observed similarly at [7]:
… Under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the "general rule" is that the court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA). …
Their Honours also addressed the approach to be taken in "mixed outcome" cases, stating at [7]:
Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22; Mahaffey v Mahaffey (2018) 97 NSWLR 119; [2018] NSWCA 42 at [275].
In Loureiro v Mac Aus Unit Pty Ltd (No 3) [2022] NSWSC 358, Gleeson J at [19]-[20] considered the "essential issue" of how mixed success should be reflected in an order for costs:
[19] The Court does not usually award costs on an issue-by-issue basis. However, some adjustment may be made if an otherwise successful party fails on an issue which is clearly dominant or separable, or there is otherwise good reason to make some adjustment to the costs order. The principles are stated in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] . See also: Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [10]-[14] .
[20] Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [19], citing James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22 .
In Galati v Deans (No 2) [2019] NSWSC 1714, Ward CJ in Eq (as the President then was) at [41]-[42] drew a distinction between the principles applicable in relation to the exercise of the discretion as to costs where there are multiple issues and a mixed outcome on the same issue, eventually concluding that the same approach should be taken in the face of either, saying:
[41] Where there are multiple issues, then it may be appropriate to make costs orders apportioning costs as between the various issues though (as noted in Galati v Deans (No 3)) there are a number of authorities that advocate caution before so doing. Here, the situation is not one of a multitude of issues, but rather a mixed outcome on the only substantive issue in dispute by the time of the hearing of the notice of motion…
[42] As I have noted in Galati v Deans (No 3), where there is a mixed outcome in proceedings the question of apportionment is very much a matter of discretion and mathematical precision is illusory; it being dependent on matters of impression and evaluation (see Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 (at [38])), per Gummow, French and Hill JJ at [272]) (as cited by the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [36]) and again in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 )). I would adopt the same approach to the assessment of costs where there has been a mixed outcome albeit on the same issue.
[7]
CONSIDERATION
On one view, this would appear to be a case in which Mr Corner has made a successful application to be relieved of the procedural requirements in the UCPR and the Practice Note for filing a response, providing pleadings and particulars, serving lay evidence and providing disclosure. But that is a simplistic view of what has occurred.
The only real opposition to the application was that of Mr Evertz and Ms Thurston in relation to disclosure. On that issue, Mr Corner was not wholly successful because of the qualifications to it which were finally ordered. Those qualifications were first introduced in the proposed consent orders agreed with Big Un on 13 June 2024, which made an exception to disclosure for the books of Big Un and Big Review. Then the final form of orders in the Principal Judgment included a further qualification by granting Mr Evertz and Ms Thurston liberty to apply for disclosure from Mr Corner of any specific document or thing that is clearly identified in the notice to produce and is relevant to a fact in issue, provided that such documents are not the books or records of Big Un or Big Review and otherwise not in the possession, custody or control of Big Un or Big Review or their liquidators.
The latter qualification did not emerge until the hearing on 12 July 2024.
Like in Galati, this is a situation involving mixed success on one substantive issue in dispute, being whether Mr Corner should be relieved from the procedural requirement of disclosure.
While Mr Corner has had success in being relieved from complying with the procedural requirements in these proceedings, it was not complete success. I consider that in the exercise of my discretion, I must weigh matters of impression and evaluation. I should recognise that Mr Corner successfully argued substantive issues which were raised by Mr Evertz and Ms Thurston in opposition to the application for relief from disclosure other than the qualifications which I allowed. The substantive "event" was the relief from disclosure which I granted in favour of Mr Corner, which entitles him to a costs award in his favour, but that award should be tempered by a percentage reduction to recognise that Mr Corner did not obtain the complete relief which he sought.
In my assessment, the extent of Mr Corner's success can be dealt with in a broad-brush way by ordering that each of Mr Evertz and Ms Thurston should pay 80% of Mr Corner's costs of the notice of motion.
[8]
ORDERS
For the reasons expressed above, I propose to make the following order:
1. The first and third defendants are to pay 80% of the fourth defendant's costs of the notice of motion filed 18 April 2024.
[9]
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 August 2024