The motion by Bingo Group Pty Limited
11I have earlier recorded that Bingo Group sought an order that it be removed from the proceedings. That order was sought pursuant to the provisions of Pt 6, r 6.29 of the Uniform Civil Procedure Rules 2005 (UCPR). In substance, the first order sought in the Council's notice of motion filed on 19 March last accedes to Bingo Group's application, albeit that the Council seeks discontinuance of its proceedings against that company pursuant to Pt 12, r 12.1 of the UCPR. Mr I Hemmings, who appeared for Bingo Group, accepts that leave to discontinue the proceedings against his client is appropriate in sufficient discharge of the order that his client sought. As a consequence, I will give leave to the Council to discontinue its proceedings against Bingo Group, subject to complying with r 12.1 which requires that a notice of discontinuance be filed in the Registry.
12The consequence of granting that leave would ordinarily carry with it a liability on the part of the Council to pay the costs of Bingo Group: Pt 42, r 42.19(2) of the UCPR. Such a consequence follows "[u]nless the court orders otherwise". Mr Hemmings, on behalf of his client, seeks an "otherwise" order. In the circumstances that he identifies, he submits that the Council should be ordered to pay his client's costs on an indemnity basis. That application is opposed by Mr P Tomasetti SC who appeared on behalf of the Council.
13I have already referred to my earlier judgment in Gosford City Council v Verde Terra Pty Ltd. That judgment was delivered when, for the second time, it was necessary to adjourn Bingo Group's motion for removal. The circumstances in which each adjournment was ordered are set out in that judgment and I do not intend to repeat the detail there set out. It is sufficient to record that on each of 14 December 2012 and 19 February 2013 when the notice of motion was listed before me for determination, Bingo Group was ready to proceed with the hearing. However, on each occasion an adjournment was ultimately necessary, notwithstanding lengthy argument over the course of each day, by reason of the Council having failed to provide evidence or amending its points of claim in a manner that it had earlier foreshadowed it proposed to do. Importantly, on each occasion, lengthy argument was advanced on behalf of the Council seeking to establish that it would be able to identify a basis upon which Bingo Group was properly joined in the proceedings as a respondent.
14Although the original points of claim filed by the Council in November 2012 alleged that Bingo Group was a subcontractor to Verde Terra, with a consequent potential liability for breach of the EPA Act, Mr Tomasetti candidly acknowledged on behalf of the Council at the hearing on 14 December that there was no evidence then available to the Council upon which to sustain such an allegation. At the hearing on 19 February, the Council sought to rely upon amended points of claim in which it pleaded breach by Bingo Group on the basis that the Club had given permission either to Verde Terra or to Bingo Group to carry out relevant works on the land but that the Council was unable to indicate which of those two companies was undertaking those works. The Council acknowledged that further evidence and, more particularly, an amended pleading was required in order properly to plead its claim against Bingo Group.
15The attempts to implicate Bingo Group, strenuously undertaken on each of the hearings in December and February last, were made in the face of correspondence and material provided by the Company's solicitors shortly after service of the summons in September 2012, seeking to demonstrate the absence of the Company's involvement in the impugned work. The Council was also served with affidavits sworn in support of Bingo Group's notice of motion deposing to the absence of involvement of the Company with works or activities on the subject land.
16The deponents of those affidavits were not required for cross examination at the hearing on 14 December, at which time the evidence led on behalf of Bingo Group in support of its notice of motion concluded. There was a belated attempt made by the Council to have those deponents called at the February hearing but I declined that request.
17I should add that prior to the notice of motion being filed on behalf of Bingo Group in November last, the motion together with the supporting affidavits were provided, in draft, to the Council's solicitors, affording the Council a further opportunity to consider removing Bingo Group as a respondent to the proceedings. The Council did not take advantage of that opportunity.
18The first intimation that the Council was giving consideration to removal of Bingo Group from the proceedings came in the form of a letter from the Council's solicitors dated 21 February 2013. The letter stated that the prospect of removal was being considered but did so in terms that circumscribed the result of that consideration. The letter sought to comment upon the affidavit material that had been filed on behalf of Bingo Group in support of its motion and raised questions about documents that had been produced by it in response to a notice to produce issued only earlier that month. In my earlier judgment, I had referred to the delay on the part of the Council in seeking to gather evidence by use of such a notice in support of the contentions that it was then propounding. Ultimately, the letter concluded by stating that the consideration that it would give to removing Bingo Group as a respondent depended upon matters raised in its letter being "properly and satisfactorily explained." The information sought in the Council's letter was provided by letter from Bingo Group's solicitors on 13 March 2013.
19The power of the Court to award indemnity costs is expressed in s 98(1)(c) of the Civil Procedure Act 2005. Although the chapeau to the subsection expresses the power as being subject to rules of court, the only relevant rule is that found in Pt 42, r 42.2 of the UCPR which does not impinge upon the discretion to award indemnity costs. Nonetheless, it is recognised that an order for costs on that basis is not one that is ordinarily made. Making such an order necessitates that there be particular circumstances present beyond those ordinarily considered appropriate to justify an order in favour of a successful party other than "on the ordinary basis".
20The principles to be applied to the making of an indemnity costs order are helpfully summarised by Pain J in Glaser v Poole (No 2) [2010] NSWLEC 232. Although I do not suggest that considerations relevant to the exercise of discretion to award costs on an indemnity basis are closed, those relevant include:
(i) that the justice of the case so requires;
(ii) that there are special or unusual features of the case justifying an order; or
(iii) that proceedings were commenced or continued in circumstances where a plaintiff or applicant, properly advised, should have known that there was no chance of success.
21In the circumstances pertaining to the conduct of proceedings by the Council against Bingo Group, as I have briefly outlined them, all three of these considerations would seem apt to justify the making of the order sought, with particular emphasis on the first two. The vigour with which the Council resisted the motion for removal, both in December 2012 and in February 2013, maintaining its intention, by further evidence and amendment of pleadings, to implicate Bingo Group as a proper respondent, only to capitulate one month after the second "fight", seems to me to identify circumstances rendering it unjust that Bingo Group be compensated for its costs only on the ordinary basis. Compensation to the level of indemnity costs would, in the circumstances, seem to me a just order. These same circumstances also identify "a special or unusual feature of the case". That "feature" involves the persistence in resisting Bingo Group's application in circumstances which necessitated argument and an adjournment on two occasions, each for the purpose of supporting its resistance, followed by the capitulation to which I have referred.
22In opposing an order for indemnity costs, the Council sought, in substance, to rely upon two arguments. First, it submitted that there was material available to the Council upon which it reasonably could have contemplated that Bingo Group was possibly implicated in those breaches of the EPA Act upon which it relied. It referred to business cards and email correspondence from persons apparently associated with works being undertaken on the land together with corporate searches obtained from the Australian Securities and Investments Commission (ASIC). These showed an apparent association with Bingo Group because "Bingo" was included in the company name. The difficulty with the submission is that any doubt cast by the business cards held by the Council prior to commencement of proceedings were explained in the affidavit evidence provided in support of Bingo Group's notice of motion filed in November last. Moreover, the ASIC searches upon which reliance was placed were received in November 2012, two months after commencement of the proceedings and when explanations as to the operation of different corporate entities had been given both in correspondence from Bingo Group's solicitor and the affidavit evidence to which I have referred.
23The second matter upon which the Council relies in opposing the order for indemnity costs is the letter from its solicitors dated 21 February 2013 to which I have referred. This letter identified only a prospect that the proceedings may be discontinued against Bingo Group with the qualifications that I have earlier identified. I do not regard that circumstance to outweigh all other circumstances that otherwise warrant the making an indemnity order.
24I have earlier referred to the hearing before me on 19 February last. For reasons explained in my judgment of that day I made an order that the Council pay the respondents' costs of the day. I had made a similar order on 7 February when the Council had made an unsuccessful application to me to vacate the hearing of Bingo Group's notice of motion then fixed for 19 February. Bingo Group seeks an order that each of those orders, being for the payment of costs of each of the two days in question, be vacated and that the overall order that I make operate so that all costs payable by the Council to the Company are to be paid on an indemnity basis.
25My power to vacate those two earlier orders is said to arise by operation of r 36.16(3) of the UCPR which relevantly provides:
"(3) In addition to its powers under subrules (1) and (2), the Court may set aside or vary any judgment or order except so far as it:
(a) determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief, or
(b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief."
Although the Council submits that the exclusory paragraph (a) of subrule (3) applied, so as to deny power to set aside the costs orders earlier made, I do not accept that submission. It seems to me that paragraph (a) is directed to the circumstance where a final determination has been made in the proceedings of a substantive nature. The orders for costs that I earlier made did not determine any claim for relief nor did they determine a question of fact or law arising from any claim for relief. They were orders made in response to procedural applications. In exercise of the power available to me I propose to set aside those orders.
26In summary, I propose to make an order that the costs of Bingo Group be paid by the Council on an indemnity basis. I will set aside the orders made on 7 and 19 February respectively, so far as they relate to Bingo Group, to the intent that all costs payable to Bingo Group are on the same basis.
27Given that the proceedings are to be discontinued against it, Bingo Group seeks an order that its costs be assessed and payable immediately. The power to make such an order is found in Pt 42, r 42.7 of the UCPR. The Council does not oppose such an order, given that Bingo Group has no further involvement in the proceedings, and as a consequence I propose to make it.