Lambourne v Baker

Costs generally

1. On 13 December 2019, the Equity Division ordered that the plaintiffs (the appellants in this Court) pay the defendants (the respondents in this Court) their costs of the proceedings. It was implicit in this Court's conclusion that there be no costs in respect of the proceedings in the Equity Division that order (2) was set aside. The Court did not make that order expressly and should have done. Accordingly the orders should be amended by the addition of order 1A: "Set aside the orders made in the Equity Division on 13 December 2019."

Costs in this Court

1. The motion seeks an order setting aside order three dated 24 September 2021.
2. Unhelpfully, the Court made two orders identified as 3. They were as follows. "3. The appellants further amended notice of motion filed on 23 June 2021 be dismissed. 3. There be no order as to costs in respect of the appeal and the proceedings below."
3. The first order 3 should be amended so that the typographical error is corrected and it refers to the "appellants' further amended notice of motion…." The second order should be numbered 3A. It is the latter order which the respondents seek to set aside. The first order related to a notice of motion filed by the appellants and described in the joint reasons in this Court in the following terms: "[29] By a further amended notice of motion efiled on 23 June 2021, Mr Lambourne sought a number of orders, most of which were unnecessary or fell away in the course of the hearing. However, in part the orders sought to rely on further evidence. That application was rejected and the motion dismissed. Emmett AJA has explained the reasons for that order."
4. The orders sought in the notice of motion in place of order 3A made on 24 September 2021 were as follows: "3 The appellants to pay the first respondent's costs of the proceedings at first instance and of the appeal other than the costs associated with the improper withdrawals claim. 4 The first respondent to pay the third appellant the costs of the proceedings at first instance and of the appeal associated with the improper withdrawals claim. 5 The appellants to pay the second to fifth respondents' costs of the proceedings at first instance and of the appeal other than the costs associated with the money claim."
5. The "improper withdrawals claim" resulted in a judgment in favour of The Punters Show against Mr Baker in this Court. The "money claim" involved a claim by Mr Lambourne against Mr Buckingham and Betmakers Technology Group Limited. The consent judgment settling that claim was entered against Betmarkers Technology Group.
6. While the logic of such orders is apparent, as reflecting the principle that costs follow the event, the practical consequences of giving effect to such orders would involve a level of complexity and uncertainty. As the affidavit of Ms Craven filed by the respondents on the motion indicated, Mr Baker was separately represented from the other respondents at the trial, with the other respondents being jointly represented. Further, there was a complex interlocutory history in the Equity Division, the details of which are not fully known to this Court. The first appellant, Mr Lambourne, has had a degree of success in overturning that part of the judgment which dismissed his claim against Betmakers Technology Group; Punters Show has had some success in relation to its claim against Mr Baker. Accordingly there would need to be some distribution of costs. Although the primary claims made by the appellants both at trial and on appeal in relation to breach of fiduciary duties involved a significant sum of money, the matters on which they succeeded involved relatively small amounts. On the other hand, the respondents called no evidence at the trial, a fact which might limit the amount they could recover as party and party costs with respect to the preparation for the trial.
7. Given the inadequate understanding of this Court as to the steps taken, the chronology, the sharing of representation and the interlocutory judgments in the Equity Division, it would not be appropriate for this Court to make an order as to the costs in that Division. If the respondents seek an order as to those costs, they may do so in the Division.

Costs of the appeal

1. Because the respondents had joint representation in this Court, there would be real difficulties in distinguishing between the costs of one respondent and another, as the proposed orders require. Further, an order that one of the respondents pay the costs of The Punters Show, which was not legally represented, could not result in a substantial recovery. However, the possibility of a complex taxation in respect of a two-day appeal resulting in relatively small judgments is unattractive. However, the respondents having successfully resisted the primary claims made by the appellants on the appeal, they are entitled to some, but not all of their costs. Rather than provide a basis for further expensive disputation, with the potential to increase the costs disproportionately to the amount in issue, the better course is to make a global order as to the costs of the appeal. That can be done by awarding the respondents 65% of their costs of the appeal, for which the appellants must be jointly and severally liable.

Interest on costs

1. Section 101(4) of the Civil Procedure Act 2005 (NSW) states that unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs. Interest is payable from the date the order was made unless the court fixes another date: s 101(5). Relying on the earlier judgment of this Court in Drummond & Rosen Pty Ltd v Easey (No 2) [2009] NSWCA 331, the respondents submitted that an order for interest on costs to be calculated from the date of payment was to be made absent any countervailing discretionary consideration.
2. As Handley AJA noted in a minority judgment in Drummond, the rules with respect to interest on costs have varied over many years. Section 101(5) has been redrafted since the judgment in Drummond. The form of s 101(5) provides a default date, namely the date the order was made, in the absence of the court specifying a different date. The statutory language provides no justification for a presumption limiting the court's discretion.
3. Further, costs are not in the same category as damages, although their purpose is compensatory. An order for costs to be assessed on a party and party basis means that there is no entitlement to be indemnified. Nor will the amount of costs be known until they have been assessed, if not agreed. Accordingly, the effect of the order is not known at the date of judgment.
4. The Court is not satisfied that the result prescribed in s 101(5) should be altered.

Stay on consent judgment

1. The proposition that this Court should stay the obligation of the third respondent to pay a consent judgment because it is feared that the party to which the payment is due may be unable to meet its liability for costs should not be accepted. The Court did not deal with the subject matter of the consent judgment because it was informed, as recorded in Ms Craven's affidavit that the claim "was settled by way of full and final, all inclusive settlement". It must be inferred from the submissions, although it is not stated as a fact, that no payment has been made. Why that is so and whether the time for payment was the subject of agreement is not known to the Court. It would be entirely inappropriate for the Court to make an order staying the effect of a consent judgment made in accordance with the terms of an agreement which are not known. The order must be refused.

Orders

1. Having regard to the conclusions reached by the majority, the Court should make the following orders: 1. In addition to the orders made on 24 September 2021, order: 1A Set aside the orders made in the Equity Division on 13 December 2019. 1. Vary the two orders numbered 3 made on 24 September 2021 so that they read: 3 The appellants' further amended notice of motion filed on 23 June 2021 be dismissed. 3A There be no order as to costs in respect of the appeal and the proceedings below. 1. Set aside order 3A made on 24 September 2021 and in place thereof make the following orders: 3A (1) Order that the appellants pay 65% of the respondents' costs of the appeal; (2) Remit the question of costs of the proceedings in the Equity Division to the Equity Division. 1. Otherwise dismiss the notice of motion dated 8 October 2021.

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: 19 November 2021