Fisk v Gold

Plaintiff's submissions

1. Insofar as the defendant now asserts that she has only been able to produce the bank statements since the impacts of the COVID-19 pandemic have lessened, the plaintiff points to inconsistent "excuses" proffered by the defendant in the past, namely: a dispute as to the relevance of the documents sought (albeit without applying to set aside the notices or to seek leave to appeal from the order made for the production of the documents, which it is noted was made over the defendant's opposition); and the contention that the defendant had already complied with the order by producing the few documents physically in her possession (on the basis that she was not obliged to approach her bank to obtain her statements).
2. The plaintiff says that there was never any good reason for the defendant's failure to comply with the order for production of the documents other than obstinance and a misguided belief as to what "possession or control" meant. The plaintiff says that the position maintained by the defendant as to the latter was both unreasonable and untenable.
3. The plaintiff contends that he should never have had to incur the costs of preparing and filing the notice of motion. It is submitted that the conduct of the defendant in refusing to comply with the order for production (and arguing what are said to have been entirely meritless positions) has been antithetical to the overriding purpose mandated by s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) for the just, quick and cheap resolution of the real issues in dispute. The plaintiff notes that it has taken almost four months to resolve the issue as to production of the documents (at the cost of numerous appearances, preparation and filing of the notice of motion and supporting affidavit, and preparation for the hearing listed on 11 October 2021, including compliance with the usual interlocutory order for hearing).
4. The plaintiff says that the defendant ought to pay the plaintiff's costs on an indemnity basis due to the nature of the issue in dispute in the motion (a failure to comply with court orders), and the unreasonable conduct of the defendant up until she finally complied with those orders. The plaintiff says that those costs ought to be paid forthwith, on the basis that this was an entirely discrete and self-contained issue. It was not an ordinary application in the general course of proceedings. It is submitted that there is no reason to wait until the conclusion of the proceeding for the defendant to compensate the plaintiff for the expenditure she unreasonably forced upon him.
5. In reply to the defendant's submissions (see below), the plaintiff says the following.
6. First, that this is not a situation where the plaintiff seeks its costs having simply withdrawn its motion; rather, this is a case of capitulation by the defendant.
7. Second, that it is not the case that the defendant did not produce the documents due to any illness; rather, her solicitors repeatedly argued that the documents sought were not relevant (including after the matter had been articulated in Court and orders for production had been made). Additionally, it is said that the defendant had also repeatedly argued that there had already been compliance with the notices and orders and had nothing further that they were required to produce (the defendant having taken the position that she had no obligation to approach her banks to obtain documents not in her physical possession).
8. Third, that, in any event, there is no evidence to make good the proposition that the defendant was too ill to comply with the orders, simply a letter from a doctor, which the plaintiff says does not suggest that the defendant was incapable of telephoning a bank, providing a letter of authority, executing a power of attorney, or attending at a bank. (It is noted that the defendant was apparently well enough to prepare and execute a detailed affidavit in this proceeding on 16 June 2021, two weeks prior to the first notice to produce was issued.)
9. Fourth, that the defendant's submission, that she was unable to attend the banks to obtain the documents because they were closed, is incorrect. It is noted that Bendigo Bank has confirmed that the Coogee branch remained open throughout the entire lockdown (as advised in an email attached to the plaintiff's submissions) and that the defendant has failed to lead any real evidence of any weight to substantiate that the Coogee branch of the Commonwealth Bank of Australia (CBA) was closed during lockdown. The plaintiff points to a publication from that bank on 17 July 2021 to the effect that its branches "will remain available for our customers, with COVID-safe procedures in place" (a copy of which was also attached to the submissions). The plaintiff says that there is no explanation why the defendant could not attend at the Randwick CBA branch (only three minutes away) nor any of the CBA branches at Kingsford, Bondi Junction, Bondi Beach or Maroubra branches, each of which is within 10 minutes' drive of the defendant.
10. Finally, the plaintiff says that the defendant's submission that she could not "lawfully" attend a bank branch, or was complying "with State Government health directives" by not attending a bank branch is nonsense.
11. The plaintiff says that any suggestion that he ought to bear the costs of this application is disingenuous; that he has done nothing wrong; that he obtained the order for the production of documents following non-compliance with the notices to produce and that it was the failure of the defendant to comply with the order that forced him to file this motion. It is contended that the fact that the defendant has now, shortly prior to the hearing of the motion, produced the documents, highlights the fact that she ought to pay his costs of being forced to do so.
12. Reliance is also placed on an offer made by the plaintiff on 4 November 2021 to resolve the question of costs of the motion on the basis that the defendant pay those costs on an ordinary basis (as per the email attached to the submissions) which offer was not accepted. The plaintiff says that further unnecessary costs have since been incurred.

Defendant's Submissions

1. The defendant contends that she did not capitulate to the relief sought in the motion; rather, that she produced the documents requested "having been able to do so after the State Government's COVID lockdown restrictions were eased". The defendant does not concede that she had acted in contempt of court.
2. The defendant says that the documents sought by the plaintiff are sought, in large part, to enable the plaintiff to prove what payments he made to the defendant and that, having taken proceedings to enforce the claim he makes based on those payments, it might be expected that he would have his own records. (That, I interpose to note, is not to the point insofar as those documents would be relevant or potentially relevant to make good the plaintiff's case.) The defendant says that her bank records are otherwise irrelevant to the matters in issue, other than a possible claim by the plaintiff for a share of any rent received by the defendant (which it is said could only be made if the plaintiff's primary claim for a beneficial interest in the defendant's property is upheld). (However, the question of relevance has already sufficiently been addressed when the order was made for production of the documents and it is not appropriate now to revisit it.)
3. The defendant points to four reasons that she argues prevented ready compliance with the notices to produce. First, the defendant says that she was too ill to collect the records from the bank and cavils with the assertion that there is no evidence to support that proposition, pointing to the letter from her doctor as to her medical condition. Second, it is said that the defendant was proscribed by the COVID lockdown rules in that she was prevented from leaving her home (in Coogee) for non-essential purposes and that she was at risk of severe, if not fatal, consequences if she was infected with COVID-19. Third, it is asserted (though, as noted, the plaintiff cavils with this) that bank branches were closed to the public during the lockdown. Fourth, that the defendant did not have her own copies of the bank statements. It is asserted that the other suggested methods of production (such as a letter to the bank or a power of attorney) were not feasible. It is submitted that the bank would not send out copies of a person's bank statements to a given address simply on receipt of a letter supposedly from that person.
4. As to the reliance by the plaintiff on the CBA statement that "branches will remain available for our customers", the defendant says that this not the same as saying that branches "are open to people coming in off the street" but in any event that the defendant's inability to attend a bank in the period from July to late October also arose from the other problems that confronted her.
5. As to the defendant's reliance on government health directives, the defendant says that the effect of the health directives issued by the New South Wales Government during the last lockdown was that people should only leave home for essential purposes. (I interpose to note that, implicitly, the defendant seems here to suggest that compliance with court orders would not be an essential purpose.) The defendant says that, once that lockdown was lifted, the defendant was able to obtain and produce the documents.

Determination

1. The relevant costs principles that govern such an application are well known.
2. The Court has a broad discretion as to costs, which must be exercised judicially (s 98 of the Civil Procedure Act; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 (Oshlack)). The general rule is that costs follow the event (see r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW); and, where there has been no hearing on the merits, ordinarily in the proper exercise of the Court's discretion there will be no order as to costs (see Re Minister for Immigration and Ethnic Affairs (Cth); Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 (Lai Qin) at 624-625 per McHugh J). Here, of course, there has been no hearing on the merits as to the contempt application.
3. Relevantly, however, in Lai Qin, McHugh J stated that, although the court cannot try a hypothetical action, there may be some cases in which the court is able to conclude that one of the parties has acted "so unreasonably" that the other party should obtain a costs order; or where the court feels confident that, although both parties have acted reasonably, one party was almost certain to have succeeded had the matter been fully tried (at 624-625).
4. Further, there are cases where one party has effectively capitulated to the successful party (cf the position where there has been "some supervening event" - see the distinction drawn in One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 at [6] per Burchett J).
5. As to a claim for indemnity costs, again, the discretion to award indemnity costs must be exercised judicially (see Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133 at [8]) and with caution (see Leichhardt Municipal Council v Green [2004] NSWCA 341 at [47]; Ng v Chong [2005] NSWSC 385 at [13]). There is no fixed rule or rationale as to when an indemnity order might be made, except that it requires a "sufficient or unusual feature" (Harrison v Schipp [2001] NSWCA 13 at [139] referring to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 at 232-234). Such an order may be appropriate where a party wantonly or recklessly causes the other party to incur costs. It is recognised that this will often be the case where the party liable is guilty of some "relevant delinquency" (see Oshlack at [44] per Gaudron and Gummow JJ).
6. As to the claim for costs to be payable forthwith, such an order may appropriately be made where the determination relates to a "separately identifiable matter or may be viewed as the completion of a discrete aspect" and where the party ordered to pay costs has acted unreasonably (Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 at [10]-[13]).
7. In the present case, it is abundantly clear that, absent the steps taken by the plaintiff to enforce the notices to produce and the subsequent Court order for the production of the documents, the plaintiff would not have obtained the relief sought. The refusal to produce documents (even after the Court order was made) was in the first instance based on an assertion that the documents were not relevant to the issues in the proceeding (a difficult argument to sustain given the threshold test of relevance in this context) and then that the defendant was not obliged to produce anything other than what was in her physical possession (an untenable assertion in circumstances where the requirement was to produce documents in the defendant's possession or control).
8. Non-compliance with court orders is a serious matter. I accept that there has been no hearing on the contempt aspects of the motion and that the defendant does not concede that she has been guilty of contempt; and I make no finding in that regard. However, whether or not there was some lawful excuse for non-production of the documents, or some other basis on which the defendant could have resisted a finding of contempt, does not change the fact that the defendant was adamantly refusing to produce the documents that she had been ordered by the Court to produce (on what I consider to have been misguided and untenable grounds and without seeking to vary, or appeal from, the Court order); nor does it alter the fact that the plaintiff was forced to incur the costs of securing compliance with those orders by filing the notice of motion and preparing for its listed hearing. In my opinion, the defendant's conduct in this regard was unreasonable.
9. Insofar as the defendant now, belatedly and inconsistently with the stance previously taken, proffers the restrictions imposed during the recent COVID-19 lockdown in New South Wales as an excuse for non-compliance with the Court orders, I am not satisfied that the evidence establishes that the defendant was unable to comply with the orders for production for the reasons she has asserted. Accepting for present purposes that the defendant's medical condition precluded her from leaving her home and/or that she was reasonably concerned not to leave her home in order to find and attend a bank branch that was open so as to request provision of her own bank statements (and leaving aside the somewhat surprising suggestion that compliance with a court order would not be an essential purpose), I am not persuaded that there were not appropriate other means available to the defendant to procure those documents. For example, the suggestion that the defendant could not validly have authorised her banks to release the documents to her solicitors is not supported by any evidence. Indeed, if the defendant was so constrained that she could not have given an acceptable authorisation to the banks for the production of the documents to her solicitors, it was open to her to instruct her solicitors to list the matter in order to vary the order for production in some fashion (or to consent to an order for the banks directly to produce those documents to the court). The defendant's age and health do not counteract the fact that she has been represented throughout by legal practitioners who one would assume would have been well capable of assisting the defendant to comply with the orders for production.
10. In all the circumstances, it is appropriate that the defendant bear the plaintiff's costs of the notice of motion, those costs having been unnecessarily incurred due to the defendant's unreasonable stance in relation to the notices to produce and orders for production of the documents; and that those costs be borne on an indemnity basis. It is not necessary for me to resort to the 4 November 2021 offer as to costs in order to reach that conclusion but the rejection of that quite reasonable offer (albeit made within a short time of the listed hearing) reinforces my view that the stance adopted by the defendant throughout this interlocutory application has been unreasonable.
11. As to the application for costs on a forthwith basis, I am persuaded that such an order should be made. This was a discrete (and should have been entirely unnecessary) application; and it is not known how long the substantive proceeding will take to be heard and determined (indeed the stance taken by the defendant has led to at least some four months' delay).
12. For those reasons, I make the following order: 1. Order the defendant to pay the plaintiff's costs of the notice of motion filed on 6 September 2021 on the indemnity basis and that those costs be payable forthwith.

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