Hancock v Rinehart

Supreme Court of NSW|2021-01-06|Before: Ward CJ

Judgment

HER HONOUR: On 17 December 2020, I published reasons for judgment (Hancock v Rinehart [2020] NSWSC 1853 (Motions Judgment)) on a number of interlocutory motions relating to applications made by Bianca for production of documents (see as outlined at [4]-[8] of the Motions Judgment). I here use the same abbreviations as in the Motions Judgment and do so, again, without intending any disrespect.
Relevantly, I dismissed the application by Bianca for delivery up of the Bankruptcy Transcripts, other than in respect of any Bankruptcy Transcripts presently in the actual possession of Gina (see Order 1), ordered the delivery up to Bianca by Gina of the Sceales Files and any Bankruptcy Transcripts referred to in Order 1, but stayed the execution of this order pending determination of the Martin Arbitration (see Order 2), to the extent necessary, dispensed with the requirement for production by Gina of the Sceales Files and any Bankruptcy Transcripts referred to in Order 1 until after the determination of the Martin Arbitration (see Order 3) and dismissed the application for an injunction to restrain Bianca from taking steps to pursue the WA Access Application (see Order 4).
I directed the parties to file brief written submissions within seven days as to costs, with a view to dealing with that issue on the papers. I also gave liberty to apply on seven days' notice.
Since then, each of the parties has filed (admirably brief) submissions on costs. Gina has also exercised the liberty to apply by filing a notice of motion seeking a variation of the order as to the delivery up of any Bankruptcy Transcripts in her possession. I have caused this to be listed for directions in the new law term. As I understand it, that notice of motion seeks to limit the delivery up order only to Bankruptcy Transcripts that came into her possession otherwise than in connection with the present motions, although that no doubt will become apparent when I come to hear the latest notice of motion, assuming that the motion is contested.

Bianca's submissions on costs

Bianca's position is that the appropriate costs order is that there be no order as to costs in respect of the various applications on the basis that each of the parties had success in relation to their position.
In that regard, Bianca says as follows: that she essentially succeeded in establishing that the two categories of documents the subject of her notice of motion (those being the Bankruptcy Transcripts and the Sceales Files) are Trust documents (see the Motions Judgment at [144]ff), noting that, in respect of the Bankruptcy Transcripts, at least the copies contained within the Sceales Files are to be so characterised, as well as any copies of the Bankruptcy Transcripts received by Gina as trustee of the HMH Trust; that she obtained an order in her favour that the Sceales Files and any Bankruptcy Transcripts presently in the actual possession of Gina be delivered up in accordance with the delivery up order of Brereton J, as his Honour then was; that she was successful in having the application for an injunction to restrain her from taking steps to pursue the WA Access Application dismissed; and she also successfully resisted the serious finding sought against her by Gina that she was seeking to obtain the Bankruptcy Transcripts and the Sceales Files for an improper purpose (see Motions Judgment at [231]).
In those circumstances, Bianca says that there is no basis for any costs orders against her and, indeed, at least an arguable basis, though she is not pressing this, that Bianca should have her costs in respect of the injunction sought to restrain her from pursuing the WA Access Application.
It is next convenient to consider HPPL's submissions.

HPPL's submissions on costs

HPPL submits that it should receive its costs, on the ordinary basis, of Bianca's amended motion dated 29 May 2020 (in which Bianca sought orders for the delivery up of Bankruptcy Transcripts and Sceales Folders), noting that the motion was substantially dismissed in respect of the Bankruptcy Transcripts (see Order 1) and that the delivery-up order made in respect of the Sceales Files was stayed (see Order 2).
It is said that the practical outcome was that Bianca has not received delivery up of either the Bankruptcy Transcripts or the Sceales Folders and it is submitted that costs should follow that event.
In the alternative, HPPL submits that the appropriate order is that there be no order as to costs
With reference to s 98(1) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) and the principles in r 42.1 of the Uniform Civil Procedure Rules NSW (2005) (UCPR) (namely, that an order as to costs should follow "the event" unless some other order is warranted), HPPL says that the relevant "event" in the present case (which must be determined having regard to the practical outcome of the proceedings - i.e., by reference to who the successful party in the proceedings was, having in mind the matters over which the parties joined issue and who succeeded on them) was whether, as a practical matter, Bianca was to obtain physical copies of the Bankruptcy Transcripts and the Sceales Files. On this analysis, HPPL says that it was the successful party because HPPL was not required to deliver up either category of documents at this point.
HPPL says that it is not to the point that Bianca obtained an order for delivery up of the Sceales Files, or that the delivery-up order was stayed on the application of another party (Gina); rather, it says, the practical outcome of the application was in HPPL's favour.
In this connection, HPPL says that the relevant event (or events) was not limited to the question of ownership of the Bankruptcy Transcripts and the Sceales Files, noting that the basis of Bianca's application was not limited to ownership but extended to an application for delivery up pursuant to case management principles. It is said that, in relation to the Bankruptcy Transcripts, HPPL was successful on both points and thus successfully resisted delivery up; and that, in relation to the Sceales Files, the position is more complex in that Bianca successfully obtained a delivery up order but that order was stayed. Thus, it is said that resolution of the ownership issue alone was not dispositive of the practical outcome of the application and it is submitted that it is the practical outcome that ultimately is relevant to determining the "event" from the perspective of costs.
In the alternative, if the practical outcome of Bianca's motion is considered to be that HPPL was successful in respect of the Bankruptcy Transcripts, HPPL was unsuccessful in respect of the Sceales Files and HPPL is not entitled to the practical benefit of the stay application brought by Gina, then HPPL submits that the appropriate order is that there be no order as to costs.
I also here note that in the Motions Judgment (at [22]) reference was made to the fact that HPPL had in its possession copies of a "small number" of pages of transcript from the bankruptcy examinations. HPPL, by way of correction of any misapprehension of the position in relation to the Bankruptcy Transcripts, has confirmed in submissions that what was there meant to be conveyed was that 28 out of the total of 388 pages comprising the Bankruptcy Transcripts had been included in the Sceales Files, but that HPPL has the full 388 pages of the Bankruptcy Transcripts. I accept that I misapprehended what was said in the course of the submissions to that effect and, in due course, will amend the reasons to clarify that issue. It is not apparent to me that there is any necessary variation to the orders in that regard.
Finally, I turn to consider Gina's submissions.

Gina's submissions on costs

Gina says, and I accept, that, save for the restraint application concerning the WA Access Application, the relief sought in the three motions was interconnected, in that Bianca in essence sought the production of the Bankruptcy Transcripts and Sceales Folders and Gina opposed such production (principally, it is said, seeking to stay the issue pending the determination of the Martin Arbitration).
Following, Gina says that, as she was ultimately successful in obtaining a stay of the order for production until the Martin Arbitration has been resolved (see at [234]), costs should follow that event.
It is submitted that it would not be appropriate to make different cost orders for the various issues arising in the three motions (save for the restraint application concerning the WA Access Application) because the issues were interconnected, not severable, and, although Bianca enjoyed some success in establishing that the Sceales Files were Trust documents, Bianca substantially failed in relation to the Bankruptcy Transcripts and ultimately failed in that production of all documents was stayed pending the resolution of the Martin Arbitration, with Gina succeeding on her stay motion (again, see at [234]) and alternative prayer for dispensation (see at [253]). In this regard, Gina here refers to Hawkesbursy District Health Service Ltd v Chaker (No 2) [2011] NSWCA 30 (see at [13]-[14] per Allsop P, as his Honour then was, Beazley JA, as Her Excellency then was, and Hoeben J, as his Honour then was). Indeed, Gina submits that, as a matter of substance and reality, Gina was successful (citing the test applied in Quest Rose Hill Pty Ltd v White [2010] NSWSC 1190 at [67], applying Roache v News Group Newspapers [1992] TLR 551).
As to Gina's unsuccessful application to restrain Bianca from prosecuting her WA Access Application (see particularly at [290]-[291]), Gina says that this was a severable issue and she accepts that costs should follow that event (and that she should pay Bianca's costs in this regard).
Therefore, Gina contends for orders as follows: first, that Bianca pay Gina's costs of Bianca's amended notice of motion filed on 29 May 2020, prayer 1 of Gina's notice of motion filed on 2 April 2020 and Gina's notice of motion filed on 30 June 2020; and, second, that Gina should pay Bianca's costs of prayer 2 of Gina's notice of motion filed on 2 April 2020.
Alternatively, rather than making separate cost orders, it is submitted that, if a single costs order were to be made, then, taking into account the parties' degrees of success and noting that the majority of written and oral submissions concentrated upon the document production issue, an appropriate order may be for Bianca to pay 80% of Gina's costs of the motions, as agreed or assessed.
In either event, it is said that the costs should be payable on the ordinary basis.

Determination

The applicable costs principles are well known and I do not propose here to revisit them.
There is no doubt that Bianca succeeded on the WA Access Application and ordinarily costs would follow that event (and thus Gina would pay Bianca's costs of that application). However, Bianca is content with an order that each party pay its own costs, on the basis, as I understand it, that she was successful in a number of aspects of her motion for delivery up of the Bankruptcy Transcripts and the Sceales Files (namely, establishing that they are Trust documents and obtaining an order for the delivery up of those files, albeit that the order was stayed) and in defending the allegation that she was seeking to obtain the Bankruptcy Transcripts and the Sceales Files for an improper purpose.
There is force to the submission by HPPL that the relevant "event" was the delivery up of the documents sought by Bianca and that, in that event, Bianca was not successful in obtaining an order for delivery up that could be enforced pending the Martin Arbitration. However, that to my mind does not take sufficiently into account the finding that the documents are Trust documents (an issue ardently contested and one the determination of which should ultimately result in the production of the documents to Bianca in accordance with orders previously made by Brereton J). Therefore, I see that aspect of the motions, in effect, as very much a draw.
Insofar as Gina has estimated that 80% of the submissions and argument focussed on the delivery up motions and not the WA Access Application, on a broad brush impressionistic basis, I consider that to be a reasonable estimate.
In those circumstances, I consider that the appropriate costs orders are as follows and I will so order: 1. Gina pay Bianca's costs of the Gina's application to restrain the WA Access Application by Bianca, such costs to be on the ordinary basis. 2. Each party to bear its or her own costs of Bianca's amended notice of motion seeking delivery up of the Sceales Files and Bankruptcy Transcripts and of Gina's applications to stay the delivery up of those documents or for dispensation in relation thereto.

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: 06 January 2021

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