Lexcray Pty Limited v Northern Territory of Australia

Lexcray Pty Limited v Northern Territory of Australia (No 3)

[2015] NTSC 41

[1] The defendant seeks an order for the costs of successfully defending the plaintiff's application for discovery of specific categories of documents which, the plaintiff argued, might have shed light on alternative possible reasons for defendant's delay in prosecuting a major costs recovery against the plaintiff.

[2] The plaintiff's discovery application failed, for the reasons explained in Lexcray Pty Limited v Northern Territory of Australia (No 2),[1] at [45]:

[45] The present plaintiff, in an effort to make a case which it is presently unable to make, seeks discovery to explore the possibility that the reason for the defendant's delay might be otherwise than that deposed to in the affidavit evidence. The precise basis in law for the case sought to be made by the plaintiff is unclear, but, as mentioned in [25], the plaintiff seeks to attribute legal significance to a decision which the plaintiff suspects Cabinet might have made. The level of speculation is high.

[46] In my judgment, the application for discovery of the documents or categories of documents in the schedule to the summons is fishing. Accordingly, the application should be refused.

[3] The defendant acknowledges that rule 63.18 provides that each party is to bear its own costs of interlocutory application unless the Court otherwise orders. However, the defendant contends that the present case fits within two identified categories of exception to that general rule: (1) the plaintiff's application was a major application, run over two days (albeit with other pre-trial issues requiring resolution) and in that sense was "exceptional", not "run-of-the-mill",[2] and (2) the plaintiff's application was without real merit and thus the plaintiff was acting unreasonably in pursuing it.[3]

[4] The plaintiff contends that the application was a stock-standard "run-of-the-mill" application for discovery of documents. Mr Wyvill, senior counsel for the plaintiff, submits that it was open to the plaintiff to hypothesise the possibility that the missing file, file 30, had been archived as a result of a conscious decision by someone (in authority) not to pursue costs recovery against the plaintiff. However, had such a decision been made, it would not have resulted in a legal bar to costs recovery by the defendant. For example, in the absence of communication to the judgment debtor, it could not have created an estoppel. Nonetheless, on the plaintiff's argument, if such a decision had been made, it would have damaged the defendant's credit and thus put the defendant in a less favourable position in responding to the plaintiff's strike-out application.

[5] In my assessment, the plaintiff's application was not run-of-the-mill. Nor is the current proceeding run-of-the-mill; it involves the hearing of an application post-judgment to strike out or dismiss the defendant's summonses for taxation of costs on account of the defendant's very significant delay. The issues in this post-judgment proceeding are not ascertainable by reference to pleadings, but clearly include the nature and extent of prejudice suffered by the plaintiff as a result of the defendant's delay. I would have thought that was the most significant issue. However, the issues also include the defendant's explanation for delay.

[6] There is always a difficulty in identifying the scope of permissible evidence in a proceeding without the structure of pleadings, and the difficulty extends to identifying the permissible limits of discovery and 'pre-trial' procedures. Logically, therefore, I should allow some leeway to the unsuccessful plaintiff because the post-judgment proceeding is not run-of-the-mill.

[7] If the plaintiff's application was made for the ultimate purpose explained in [4], it was made to unearth documents to discredit the deponents who had sworn affidavits explaining, and accepting responsibility for, the defendant's delay. It is clear that the plaintiff's application was speculative. It was also made or at least pursued in the context that the speculation was contrary to the available affidavit evidence. The only matter which might have given some reasonable encouragement to the plaintiff was the somewhat unusual situation where there was no evidence of any response communications by way of query or instructions from the Cabinet Secretariat over a period of some years.

[8] The fact that the plaintiff's application failed does not mean that, in prospect, the application was bound to fail. However, in circumstances where there was no application to cross examine the deponents referred to in [7], and in the absence of anything to suggest that the evidence of those deponents might be rejected on the hearing of the interlocutory application for discovery, the plaintiff must be taken to have known that the affidavit evidence would most probably prevail. That indicates that the application was brought and/or persisted with unreasonably. I note in this context that the plaintiff's solicitors were informed of the defendant's response to their discovery request, as follows, prior to filing the plaintiff's application:

The documents requested ... are not relevant to any question arising on your client's application. The delay in reaching and implementing the Cabinet decision has been explained in the affidavit material filed by the Territory. The reason for the Cabinet decision is irrelevant and documents revealing Cabinet deliberations will attract public interest immunity.

Similarly, any documents relating to the consideration of GERS reports are irrelevant in circumstances in which Mr Lisson (and Mr Timney) has deposed in his affidavit to the fact that the Cabinet decision of 20 February 2006 did not change.

As such, the requests for documents are considered to be a fishing expedition on the part of your client and are refused.

[9] I accept Mr Young's submission that the defendant's solicitor's reasons for refusal "broadly anticipated" the Court's reasons set out in [2] above.

[10] In the circumstances, it seems unjust in principle for the defendant to have to bear its costs of and incidental to the application. However, there are some practical considerations which I have not yet referred to. I accept Mr Wyvill's submission that the costs of the application would not be significant in relation to the overall costs of the plaintiff's strike-out application. Whatever injustice in principle may exist, it would not be a gross injustice. Moreover, the defendant's costs of the application and of the involvement of Mr Young of counsel for the defendant might prove difficult to sever from the costs of other pre-trial issues with which this Court was concerned at or about the same time, and continuing to the time when the issue of costs was argued. Finally, a matter of principle, there is the possibility that, after cross-examination of the defendant's witnesses at trial, findings might be made contrary to the findings made by me on the basis of the uncontested affidavit evidence of those witnesses on the hearing of the interlocutory application. If that were to happen, it would be regrettable.

[11] I considered making an order reserving the costs of the application for the consideration of the trial judge. However, I determined that I should deal with the matter, whatever might be the shortcomings of the present situation. I also considered making an order that the costs of the application be "defendant's costs in the proceeding", within the meaning of that term in rule 63.02. The actual order would be to the effect that the plaintiff pay the defendant's costs of the application in the event that the defendant ultimately succeeds, but that the plaintiff not have its costs of the application if the plaintiff ultimately succeeds. However, such an order could ultimately prove difficult in the event that the plaintiff and the defendant were each partially successful in the ultimate result.

[12] In the end, albeit with some misgivings, I have decided that r 63.18 should not be displaced by an 'order otherwise'. Accordingly, I order that each party should bear its own costs of the application.

[1] [2015] NTSC 27.

[2] Johnson v Northern Territory of Australia [2015] NTSC 15 at [6] - [8].

[3] TTE Pty Ltd v Ken Day Pty Ltd (1992) 2 NTLR 143 at 145.5.