Dominic Iacullo and Lillian Iacullo v Luigi Iacullo & Ors

Judgment 1I have heard several applications in these proceedings relating, inter alia, to the form of the Amended Cross-Claim sought to be filed by the Cross-Claimants, Mr Dominic Iacullo and Mrs Lillian Iacullo. After a hearing on 4-6 September 2013, I delivered judgment in October 2013 and delivered my judgment as to the costs of that application on 27 November 2013. I resolved a further question as to the form of orders to be made, in respect of the costs orders sought by Homeline Building, by my judgment dated 23 December 2013. 2Mr and Mrs Iacullo then brought a further application to amend their Cross-Claim and I delivered a further judgment on 13 June 2014 ([2014] NSWSC 787) ("Judgment") dealing with that application. I indicated that certain paragraphs of the proposed Amended Cross-Claim should not be permitted. I expressed a preliminary view (in paragraph 119 of the Judgment) that each party had a measure of success and that there should be no order as to the costs of the application, other than the usual order that Mr and Mrs Iacullo should pay the costs thrown away by the proposed amendment, and directed that the parties seek to agree consent orders to give effect to the Judgment and, if no agreement was reached, they submit their respective drafts of such orders together with short submissions as to the differences between them. 3Mr and Mrs Iacullo on the one hand and the Third-Eighth Cross-Defendants on the other subsequently submitted draft orders with some differences, with the First and Second Cross-Defendants supporting the orders submitted by the Third-Eighth Cross-Defendants. I made orders on 4 July 2014 in Chambers, and gave reasons for those orders in a separate judgment. Mr and Mrs Iacullo then supported costs orders consistent with the preliminary views expressed in paragraph 119 of the Judgment. The Third - Eighth Cross-Defendants did not seek an oral hearing as to costs but proposed that the parties make further written submissions concerning costs, and I made directions permitting that course. 4The Cross-Claimants made brief submissions as to the question of costs on 11 July 2014. They submitted that they were "substantially successful" in respect of their application to amend the Cross-Claim and noted that, while there were grounds for a submission that a costs order should be made in their favour, they accepted the preliminary view expressed in the Judgment that, as each party had had a measure of success, there should be no order as to costs. They contended that there was no reasonable basis for any order for costs in favour of the Cross-Defendants, and accepted that they would be required to pay any costs thrown away by the amendments. 5The Third-Eighth Cross-Defendants made somewhat more detailed submissions as to the question of costs. They drew attention to the observation that I had made in an earlier judgment, on 18 October 2013, in which I had not granted leave to file the Cross-Claimants' then proposed Amended Statement of Cross-Claim that: "Given the history of this matter and the burdens that it is imposing on the Cross-Defendants ... it does not seem to me that there would be any reason to give the Cross-Claimants more than one relatively short further opportunity to make amendments so as to properly plead the case they seek to advance in a manner that would be consistent with its just, quick and cheap determination." The Third-Eighth Cross-Defendants' submissions reviewed the subsequent history of the matter, pointed to their proposal for any further amendment application to be determined on the papers and noted that the further amendment proposal ultimately required a three day hearing on 10, 11 and 15 April 2014. They submitted that they had objected to 49 of the 353 paragraphs in the proposed Amended Cross-Claim; that I ultimately did not permit 29 of those paragraphs and that other paragraphs were not pressed by the Cross-Claimants or were amended by reason of my judgment delivered on 13 June 2014. The Third-Eighth Cross-Defendants contend that the Cross-Claimant should pay at least a percentage of their costs of the amendment application, not just the costs thrown away by the proposed amendments. They submit that: "Whilst the Cross-Claimants have been granted leave to file a Further Amended Statement of Claim, this is of course subject to the important qualification that a significant number of paragraphs of proposed Cross-Claim II that make serious allegations against the Third-Eighth Cross-Defendants have been struck out ... or not pressed by the Cross-Claimants." 6The Third-Eighth Cross-Defendants submit that they had no alternative other than to oppose the filing of the proposed Amended Cross-Claim, in order to contest the paragraphs that the Cross-Claimants were ultimately not granted leave to include in that Cross-Claim, and they point out that the case was argued substantially by reference to the particular paragraphs to which they have made objections. They also submit that the hearing of the amendment application would not have been necessary had the Cross-Claimants not attempted to seek leave to file the further proposed Cross-Claim in a form which included the paragraphs that were not permitted. They also make submissions as to the basis on which such costs should be ordered and seek an order under s 101(4) of the Civil Procedure Act 2005 (NSW) for payment of interest on the costs or disbursements assessed or agreed pursuant to that order. 7Mr Luigi Iacullo, who represents himself and the Second Cross-Defendant, Badminton Pty Ltd ("Badminton"), adopted the submissions on costs lodged by the Third-Eighth Cross-Defendants, but proposed an amendment to their first proposed order to provide that the Cross-Claimants should pay the costs of the Cross-Defendants from March 2008. I do not propose to make an order in that form, not least because I have made costs orders in respect of previous applications in the matter in previous judgments, and the order sought by Mr Luigi Iacullo and Badminton is inconsistent with those orders. Luigi and Badminton repeat complaints, which have been made in previous amendment applications, as to the process by which an original Cross-Claim of 13 pages has grown to a much more complex and lengthy Cross-Claim, and submits that he has spent an enormous amount of money dealing with earlier Cross-Claims. I note, of course, that to the extent that costs have been wasted by reason of the amendments, and to the extent that Mr Luigi Iacullo and Badminton are entitled to recover costs as self-represented litigants (as to which I express no view), then those costs will be recoverable under the usual order as to costs thrown away by reason of the amendments. 8By submissions in reply filed on 18 July 2014, the Cross-Claimants point out that the costs of earlier amendment applications have previously been dealt with and that it is not necessary to reconsider the history of those applications. They submit that the fundamental principle is that costs follow the event, and the Cross-Claimants have received a grant of leave to amend, although not in respect of all aspects of the amendments which they sought. They submit that there is no obvious basis for the percentage figure adopted in the Cross-Defendants' submissions as to costs, even as a matter of impression. They also point out that the amendment application was brought after the Cross-Defendants had indicated more extensive objections to the amendments initially proposed by the Cross-Claimants than those which were ultimately pressed, and the Cross-Defendants were ultimately successful only in respect of a portion of their objections to the amendments. 9The parties did not address detailed submissions as to the applicable principles, which are well-established. Section 98 of the Civil Procedure Act relevantly provides that: "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." Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) in turn provides that, where the Court makes an order as to costs, the Court is to order that 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. 10Costs are awarded to compensate the successful party for the expense of being put to the necessity of litigation; a wholly successful defendant should ordinarily receive its costs unless good reason is shown to the contrary; and the discretion to order costs must be exercised judicially and not against the successful party except for some reason connected with the proceedings: Milne v Attorney-General (Tasmania) [1956] HCA 48; (1956) 95 CLR 460 at 477; Oschlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 97-98 per McHugh J, at 119-123 per Kirby J; Ruddock v Vardalis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at 234. In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38], the Court of Appeal noted that, where there are multiple issues in a case, the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. The Court may make no order as to costs in the case of a mixed result: Doppstadt Australia Pty Ltd v Lovick & Son Development Pty Ltd (No 2) [2014] NSWCA 219 at [17]. 11Having regard to the detailed submissions now put by the parties, I am reinforced in the preliminary view expressed in the Judgment that there should be no order for the costs of this amendment application. I do not accept that an order for indemnity costs should be made in favour of the Cross-Defendants. I have addressed the principles applicable to such an order in my earlier judgment dealing with an amendment application in this matter, when I declined to make an order for indemnity costs, and no aspect of this application would lead to a different result. In applying the principle that costs follow the "event" in the present case, it can properly be said, as I observed in my earlier judgment, that the parties had a mixed result. The Cross-Claimants were successful in their amendment application, although in respect of a narrower range of amendments than they had sought. The Cross-Defendants were successful in their opposition to some of the proposed amendments, which were of some significance, but for substantially less than the range of amendments they had opposed. In order to compensate the successful party for the costs incurred, namely, the Cross-Claimants in respect of the amendments which were permitted and the Cross-Defendants in respect of the amendments which were successfully opposed, it would strictly be necessary to seek to apportion costs to particular issues. The case law does not encourage that approach for good reason. The position is distinct from that in the earlier amendment application, where the Cross-Defendants had substantial success in opposing the amendment, and were awarded a proportion of their costs of that application on that basis. Accordingly, I will make no order as to the costs of this amendment application. 12While Mr Luigi Iacullo and Badminton sought an order that costs be assessed forthwith, no occasion for that order arises where I have not made an order for the costs of the amendment application. 13Accordingly, I order that: 1 There be no order as to the costs of the motion filed on 17 December 2013. 2 The Cross-Claimants pay any costs thrown away by reason of the amendments to the Cross-Claim made pursuant to leave granted on 4 July 2014.