The Application for Costs
12In relation to costs, I have received, and read, an affidavit from the Plaintiff's solicitor, three affidavits on behalf of the Defendants, transcripts from each of four directions hearings that had occurred before the hearing of the notices of motion, as well as the transcript of the hearing, five pages of submissions from senior and junior counsel for The Plaintiff, fifteen pages of submissions from counsel for Mr Kabraji, hendersenhayes and Mr Bruckner, and three pages of submissions from counsel for the Owner's Corporation.
13After reading the evidence, counsel spoke to their, his or her, written submissions. As stated above, the hearing of the costs application took almost the whole day. It is unfortunate that the hearing of the notices of motion and the argument on costs, together, took almost as long as the time the parties estimate the hearing of substantive proceedings is likely to take.
14In summary, the Plaintiff submitted against all Defendants:
(a) It was wholly successful in opposing the Defendants' notices of motion, the Court refusing to grant the relief sought, on either of the two bases relied upon, namely Uniform Civil Procedure Rules ("UCPR") r 13.4 or UCPR r 14.28.
(b) All four Defendants deliberately chose to bring and pursue the notices of motion, well knowing, and fully accepting, that to succeed they would have to meet the "General Steel" test. All four simply failed to do so.
(c) The general rule is that costs follow the event: UCPR r 42.1. There is no reason for departing from the general rule.
15As against the third Defendant, the Plaintiff also submitted:
(a) Without prior notice to the Court or to the Plaintiff, at the commencement of the hearing on 28 June 2012, counsel announced that the third Defendant only wished to press its notice of motion in relation to the allegation in the Statement of Claim that certain proxies were invalid;
(b) Even on that belatedly much-limited issue, the third Defendant did not succeed;
(c) Vis-à-vis the third Defendant, the last minute abandonment of most of its notice of motion should tell against it on costs.
16The Plaintiff submitted not only that an order for costs in its favour should be made, but also that those costs should be payable forthwith.
17In respect of its claim that any costs ordered to be paid should be paid forthwith, after referring to UCPR r 42.7, and a number of propositions that it gleaned from the authorities, the Plaintiff submitted:
(a) What was determined adversely to the Defendants, was a discrete and self-contained issue, namely whether the proceedings were so untenable that they could not possibly succeed;
(b) There was "much to come in the proceedings", and a final hearing of the matter is unlikely to occur for some time: amongst other things, a timetable for further evidence (including the possibility of expert evidence) is yet to be established, and there are a number of outstanding notices to produce and subpoenas.
(c) The notices of motion were doomed to failure and should not have been brought.
(d) The "demands of justice" in this case also include another very significant factor. The Plaintiff does not bring the proceedings for its own benefit; rather, it brings the proceedings to defend and uphold the rights of the third Defendant (and thus of the lot owners), in circumstances where the third Defendant, itself, refuses to do so.
18Finally, the Plaintiff relied on s 229 of the Strata Schemes Management Act 1996, which provides:
"(1) This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).
(2) The court may order in proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to such lots and in such proportions as are specified in the order.
(3) If a court makes such an order the owners corporation must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy.
(4) Division 2 of Part 3 of Chapter 3 (section 78 (2) excepted) applies to and in respect of contributions levied under this section in the same way as it applies to contributions levied under that Division."
19The Plaintiff sought an order, under this section, that to the extent that costs are ordered to be paid by the third Defendant, they must be paid from contributions levied in relation to lots other than those owned by the Plaintiff in shares proportional to the unit entitlements of the respective lots other than those owned by it.
20Mr Kabraji, hendersenhayes and Mr Bruckner submitted that the appropriate order in respect of the costs of the two notices of motion is that all parties' costs be costs in the cause, because:
(a) The power of the Court to exercise the discretion with respect to costs is contained in s 98(1) of the Civil Procedure Act 2005 and in UCPR r 42.1 and the Act and rule apply, even though the notices of motion were interlocutory;
(b) The exercise of the Court's discretion as to costs, ultimately, requires an assessment of what is fair in all the circumstances. However, in addition to the concept of fairness, the approach to the question of costs should not be overly technical, and should adopt notions of impression and evaluation, whilst keeping in mind the mandatory overriding purpose of the Civil Procedure Act, s 56, and the UCPR.
(c) In relation to the Plaintiff's submission, that costs should follow the event, there were two events, namely the two notices of motion which were unsuccessful, and secondly, there is the "event" of the amendment of the Statement of Claim because it contained some claims which were inadequately pleaded and which require amendment and the filing of a Reply.
(d) In relation to the amendment of the Statement of Claim, the deficiencies were pointed out to the Plaintiff, at several stages, by the Defendants and by the Court and that it was invited to amend its pleading and file a Reply but did not do so. It was only after the hearing of the two notices of motion and the reasons for judgment that the Plaintiff determined to amend and to file a Reply.
In the amended pleading, the Plaintiff addressed the precise matters raised in correspondence prior to, and during the course of, the hearing. As well, in relation to the proper Plaintiff argument, it has added an entirely new section entitled "IV STANDING" comprised in the new paragraph 20 of the proposed Amended Statement of Claim in which it explicitly states the "interests of justice" exception to the proper Plaintiff rule on which it relies and, importantly, the facts on which it relies upon to assert that this exception applies. Other amendments were referred to.
In essence, the outcome of the two notices of motion has facilitated the resolution of the real issues in the proceedings, in a manner that is just, quick and cheap as required by s 56(1) of the Civil Procedure Act.
(e) The appropriate order is one that reflects the mixed outcome on the two "events". That order would also enable the party who is ultimately successful in the proceedings to recover all of its costs from the two notices of motion. Accordingly, the awarding of costs of the two notices of motion should effectively await that ultimate "event".
(f) The Plaintiff has now served a proposed Amended Statement of Claim. As a condition of any leave granted to it to file and serve the Amended Statement of Claim, pursuant to s 64(1) of the Civil Procedure Act, the court should order that it pay the Defendants' costs of and occasioned by the amendments, in accordance with the usual practice.
21The third Defendant submitted that the appropriate order in respect of the costs of the notice of motion was that they be costs in the cause because:
(i) an award of costs against the third Defendant in favour of the Plaintiff is premature, given the issue of standing. Ultimately, if the Plaintiff makes good "the standing point", then the action will have been brought for the benefit of the third Defendant and it will enjoy the fruits of the action. Until such a time, an award of costs against the third Defendant is premature.
(ii) In the alternative to (i), the third Defendant, in practical terms, has enjoyed the same measure of success and failure as Mr Kabraji, hendersenhayes and Mr Bruckner on the two relevant "events" (being the notices of motion and the identification of pleading deficiencies necessitating amendment and filing of a Reply).
(iii) of the submissions made by the other Defendants.