JOHNSON J: On 5 December 2018, I gave judgment on an application by the Defendants for an order under s.67 Civil Procedure Act 2005 that determination of these proceedings be stayed on grounds that the Supreme Court of New South Wales was an inappropriate forum for the determination of the proceedings. The Defendants' Notice of Motion was dismissed and an order was made that the Defendants are to pay the costs of the Plaintiffs with respect to the Notice of Motion: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor [2018] NSWSC 1863 ("the principal judgment").
By Notice of Motion filed on 30 May 2019, the Plaintiffs sought an order under Rule 42.7(2) Uniform Civil Procedure Rules 2005 ("UCPR") that the costs which the Court ordered on 5 December 2018 be paid forthwith. In due course, the Plaintiffs' Notice of Motion was referred to me by the Common Law Registrar and directions were given for the filing of written submissions to progress the application.
Written submissions dated 12 August 2019 were filed for the Plaintiffs and written submissions dated 16 August 2019 were filed for the First Defendant. The legal representatives for the First Defendant did not appear for the Second Defendant, Jim Bete, on the present application.
[2]
The Principal Judgment
The brief factual background to the application determined on 5 December 2018 appeared in the principal judgment at [14]-[16]:
"14 On 12 May 2014, the Hardaker family arrived at Mana Island Resort to commence a holiday scheduled to conclude on 18 May 2014.
15 On 15 May 2014, Mr Hardaker went on a recreational fishing cruise aboard a vessel named the 'Korilagi Flyer' offshore from the Mana Island Resort.
16 The 'Korilagi Flyer' collided with another vessel, 'MV Gaunavou', a rescue boat said to be owned by Mana Island Resort and driven by Mr Bete, an employee of Mana Island Resort. Mr Hardaker died as a result of injuries sustained in the collision."
Having considered the matters raised, I expressed the following conclusion at [110]-[112] of the principal judgment:
"110 It is for Mana Island Resort and Mr Bete to discharge the onus and establish that New South Wales is a clearly inappropriate forum for these proceedings, and that it would be oppressive (seriously and unfairly burdensome, prejudicial or damaging) and vexatious (productive of serious or unjustifiable trouble and harassment) for them if the proceedings remain in New South Wales.
111 It is not sufficient that Mana Island Resort and Mr Bete point to the desirability of the proceedings being heard in Fiji for practical reasons. It is not for the Plaintiffs to establish that it is appropriate that the proceedings be heard in New South Wales.
112 Having considered the various issues raised on the present application, Mana Island Resort and Mr Bete have failed to demonstrate that New South Wales is a wholly inappropriate forum for this litigation, and that it would be oppressive and vexatious for the proceedings to remain in this jurisdiction."
Costs followed the event in circumstances where the Defendants' Notice of Motion was dismissed, leading to an order that the Defendants pay the Plaintiffs' costs of the Notice of Motion.
[3]
The Present Application
On this application, counsel for the Plaintiffs has read the affidavit of Daniel Delfino, solicitor, affirmed 30 May 2019. Correspondence is attached to that affidavit which discloses that the Plaintiffs sought to progress the costs issue with the solicitors for the First Defendant, but that it was necessary to apply to the Court for orders as sought in the Notice of Motion filed on 30 May 2019.
As mentioned, written submissions were provided with respect to the present application. Counsel made further oral submissions today. It is not necessary to set out those submissions in any detail in this judgment.
Put shortly, counsel for the Plaintiffs acknowledged that the ordinary rule is that costs do not become payable until the conclusion of the proceedings unless the Court otherwise orders: Rule 42.7 UCPR. It was submitted that the circumstances of this case called for the exercise of discretion to direct that the costs be payable forthwith by the Defendants. It was said that this was a discrete or self-contained question and there is likely to be significant delay before the principal proceedings are determined. Reference was made, as well, to the financial position of Mrs Hardaker and her children and their health and wellbeing. It was submitted for the Plaintiffs that this is not an ordinary case and that the Court should make an order under Rule 42.7 UCPR payable forthwith.
Counsel for the First Defendant opposed the making of the order sought in the Plaintiffs' Notice of Motion. Put shortly, it was submitted that there must be good reason to depart from the ordinary rule and that good reason had not been demonstrated in this case. It was submitted that the Plaintiffs were seeking to vacate the costs order made on 5 December 2018 and to replace it with a new costs order. It was submitted that there was no evidence that the Plaintiffs are impecunious. Counsel for the First Defendant submitted that there was evidence that the Second Defendant, Mr Bete, had modest means and that the First Defendant's insurance cover did not extend to the conduct of proceedings outside Fiji. Relying upon In the Matter of Elsmore Resources Ltd [2014] NSWSC 1390 ("Elsmore") at [4]-[6], it was submitted that the present application should be rejected as it would otherwise give rise to the prospect of multiple assessments concerning costs rather than a single costs assessment at the conclusion of the proceedings.
In written submission in reply, counsel for the Plaintiffs referred to Northern Territory of Australia v Sangare [2019] HCA 25 in support of the proposition that impecuniosity of an unsuccessful party should generally not bear upon the exercise of discretion concerning costs.
[4]
Decision
The Court may entertain the present application after the costs order of 5 December 2018 was made. The present application does not seek to disturb the costs order, but rather to direct when that costs order may be enforced by the Plaintiffs against the Defendants.
Rule 42.7(2) UCPR confers a general discretion on the Court to make "some other order" than the rule otherwise prescribes. The proper exercise of discretion depends upon a consideration of all the circumstances of the case having regard to the interests of justice: Pavlovic v Universal Music Australia Pty Limited (No. 2) [2016] NSWCA 31 ("Pavlovic").
In Pavlovic, the Court (Bathurst CJ, Beazley P and Meagher JA) (at [15], [17], [19]ff) endorsed the approach of Barrett J in Fiduciary Limited v Morningstar Research Pty Limited (2002) 55 NSWLR 1; [2002] NSWSC 432 ("Fiduciary v Morningstar") concerning the identification of relevant factors on an application under Rule 42.7(2) UCPR. Three factors identified by Barrett J were:
1. that the interlocutory decision represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect of the case;
2. that some conduct of the unsuccessful party may be seen as being unreasonable;
3. that there was still some considerable distance to go in the litigation so that it may be appropriate that the successful party obtain the fruits of its costs order now.
Beyond these three factors, in making a determination under Rule 42.7(2) UCPR, the Court is exercising a discretion otherwise unconfined by the conferring statute, so that the Court is required to have regard to the interests of justice: Pavlovic at [18].
I approach this application with those considerations in mind.
The costs order made on 5 December 2018 related to a discrete or self-contained question raised by the Defendants as a threshold issue in the proceedings. The Defendants failed in their application to effectively have the proceedings progress in Fiji and not New South Wales.
An unusual feature of these proceedings is that counsel appearing for the First Defendant appeared for the Second Defendant, Mr Bete, only on the application determined on 5 December 2018: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor at [4]. The written submissions filed for the First Defendant noted that the Second Defendant had not made any submissions with respect to the present application and that it might reasonably be inferred that was because of his financial position. It was submitted for the Plaintiffs that the position of the Second Defendant assisted the Plaintiffs on the present application so that, unless the Court orders that the costs be paid forthwith, the widow Plaintiff will lose the means of ever recovering costs from the Second Defendant who was only ever represented by a New South Wales solicitor for the purpose of the separate and discrete application determined on 5 December 2018.
The written submissions of counsel referred to authorities, including Hargood v OHTL Public Company Ltd (No. 2) [2015] NSWSC 511, Elsmore and Fiduciary v Morningstar. I have had regard to these authorities and the submissions made with respect to them. Elsmore is a different case given the multiple interlocutory applications in that case which bore upon the Court's approach to Rule 42.7(2) UCPR. The present case involves a single interlocutory application which was determined favourably to the Plaintiffs.
The Court has a discretion to make an order permitting immediate enforcement of the costs order under Rule 42.7 UCPR. The Defendants' Notice of Motion determined on 5 December 2018 was a form of threshold application in which the Plaintiffs succeeded. I accept that a substantial period of time will pass before the Plaintiffs' claim for final relief is determined in this Court. To allow the usual costs rule to stand would see a significant delay before the Plaintiffs could recover the costs pursuant to the order made on 5 December 2018.
The Defendants have not sought to appeal from the decision of the Court on 5 December 2018. That decision stands and the costs order made stands as well, so that the Plaintiffs ought be entitled to these costs irrespective of the outcome of the principal proceedings.
The present case is somewhat unusual as well because of the legal representation in this Court for the First Defendant not extending for the balance of the proceedings to the Second Defendant, whose conduct will be criticised by the First Defendant and relied upon in its defence of the proceedings. In these circumstances, there is force in the submissions made for the Plaintiffs with respect to the capacity to recover costs under the Court's order of 5 December 2018.
Like Barrett J in Fiduciary v Morningstar at 6 [17]-[18], I consider that the interlocutory issue determined by me on 5 December 2018 should be regarded as a separate and completed phase of the proceedings. The Court should have regard to the delay before the principal proceedings are determined.
Mr Mark Hardaker was the primary bread winner for his family: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor at [71]. It was not submitted for the Defendants that Mrs Hardaker, the First Plaintiff, was a person of substantial means: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor at [101]. The First Defendant may not have the benefit of insurance cover for proceedings heard and determined in New South Wales: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor at [104]. Mr Bete, the Second Defendant, is a man of modest means: Hardaker and Ors v Manu Island Resort (Fiji) Limited and Anor at [43], [55].
The limited resources of any party may bear upon the question whether an order should be made that costs be payable forthwith under Rule 42.7(2) UCPR: Royal Australian Naval Reserve Rifle Club Inc v New South Wales Rifle Association Inc [2010] NSWSC 351 at [29]. I have kept in mind, as well, the recent decision of the High Court in Northern Territory of Australia v Sangare concerning impecuniosity. The High Court emphasised the significance of compensation to a successful party when a costs power is being exercised.
There is no feature of the present case which activates the second factor in Fiduciary v Morningstar, being unreasonable conduct by the Defendants.
The nature of the present claim by the Plaintiffs is such that there is a significant and legitimate interest in the Plaintiffs recovering under the costs order made on 5 December 2018 without further delay. I am satisfied that it is in the interests of justice that such an order should be made in this case.
I am satisfied that it is appropriate in these proceedings to depart from the ordinary rule. A proper foundation has been established for the Court to make orders as sought by the Plaintiffs.
[5]
Costs of the Present Application
As the present application has been contested and the Plaintiffs have succeeded on it, it is appropriate that costs follow the event on this application and that an order be made that the Defendants pay the Plaintiffs' costs of the Notice of Motion filed on 30 May 2019. Counsel for the Plaintiffs seeks an order that these costs also be payable forthwith. As the present Notice of Motion is limited to the costs order made on 5 December 2018, I am satisfied that the costs of the present Notice of Motion should also be payable forthwith under Rule 42.7(2) UCPR.
I make the following orders:
1. an order under Rule 42.7(2) UCPR that the costs ordered by the Court on 5 December 2018 are payable by the Defendants forthwith;
2. the Defendants are to pay the Plaintiffs' costs of the Notice of Motion filed on 30 May 2019, with those costs to be payable forthwith under Rule 42.7(2) UCPR.
[6]
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Decision last updated: 28 August 2019