Nitopi, Cristina v Nitopi, Giuseppe

Defendant's submissions

1. It was contended in the defendant's written submissions that there were three bases for this Court to exercise its discretion to order costs on an indemnity basis: unexplained and substantial delay on the part of the plaintiff in prosecuting her claim against the defendant; the plaintiff's disobedience of court orders as to the filing of evidence and preparation of her case; and the fact that indemnity costs are not punitive but would compensate the defendant for the time, trouble and expense the plaintiff's actions have caused him.

Unexplained and substantial delay; disobedience of Court orders

1. Upon the hearing of the primary application I accepted the defendant's contention that there had been a "tortured history" to the matter with constant breaches of orders for the filing of evidence by specified dates and a lack of explanation for such failures.
2. Replicating submissions that were made at the hearing of that application, counsel for the defendant again pointed to the fact that since the proceedings were instituted in March 2015 the plaintiff had retained four different law firms and five different counsel to represent her. It was submitted that every time there was a change of law firms there was a request that the Court allow time for the new firm to obtain detailed instructions and to prepare the matter further, including preparing the plaintiff's evidence. This had the effect of constantly delaying the proceedings, but the indulgence of the Court was repeatedly sought and granted.
3. At the time the Notice of Motion was filed in relation to the present application the plaintiff had still not provided her evidence in chief within the time allowed. It was submitted that the delay had been "chronic and unexplained".
4. In addition to the persistent breaches of the Court's orders, there was the feature of the plaintiff not providing any satisfactory explanation for the orders being breached. An explanation was provided to Adamson J at a Show Cause hearing on 4 December 2015, but only after her Honour had ordered the plaintiff to show cause. It was contended by the defendant that the persistent breaches without explanation constituted a "contumelious disregard" for the orders of the Court.

Chronology

1. The judgment given on 5 April 2018 referred to the "tortured history" of the proceedings as set out in the chronology that was provided by counsel for the defendant. Brevity was necessary at that time due to the exigent circumstances of sitting as duty judge at Darlinghurst whilst having a jury in a complex murder trial deliberating. It is now possible to set out the chronology in some detail: The plaintiff's Statement of Claim was filed on 30 March 2015. The plaintiff failed to comply with orders that she put on her evidence in chief by 8 October 2015, 15 October 2015, 12 November 2015 and then 3 December 2015. At the sixth directions hearing on 4 December 2015 the Registrar referred the matter to the duty judge, Adamson J, for a Show Cause hearing. An affidavit by the plaintiff dated 3 December 2015 had been filed in court on 4 December but there was a question as whether it had been witnessed. Adamson J directed the plaintiff to re-swear an affidavit in identical terms and not, without leave of the Court, to rely on any further affidavit evidence in chief. At the eighth directions hearing on 15 April 2016 the plaintiff indicated a desire to amend the Statement of Claim. She filed a Notice of Motion on 5 May 2016. On 28 June 2016 she was granted leave to file an Amended Statement of Claim. On 26 August 2016 the plaintiff terminated the retainer of her first firm of solicitors and retained another. On 7 November 2016 the plaintiff was ordered to serve her evidence by 16 January 2017. On 11 January 2017 the plaintiff's solicitors communicated a request to the defendant's solicitors for an extension of time for the filing of her affidavit evidence. On 13 March 2017 the plaintiff was granted leave to file a Second Amended Statement of Claim by 3 April 2017. On 29 March 2017 the defendant received a request from the plaintiff's solicitors for an extension of time to file the Second Amended Statement of Claim. On 3 April 2017 the Registrar ordered that the Second Amended Statement of Claim be served by 1 May 2017. On 4 and 5 May 2017 there were further requests to the defendant's solicitors for an extension of time in relation to the Second Amended Statement of Claim. The Registrar made an order on 8 May that the Second Amended Statement of Claim be served by 29 May 2017. Another order was made on 5 June that it be served by 12 June 2017. The Second Amended Statement of Claim was filed on 9 June 2017. On 13 July 2017 the plaintiff's second firm of solicitors indicated an intention to file a Notice of Ceasing to Act. A third firm of solicitors was retained by the plaintiff at some time in August or September 2017. On 15 September 2017 the plaintiff was ordered to file any evidence on which she relied in respect of the Second Amended Statement of Claim by 30 October 2017. On 30 October 2017 the plaintiff's third firm of solicitors filed a Notice of Ceasing to Act. On 7 December 2017 the defendant filed a Notice of Motion seeking dismissal of the proceedings. Eleven days later he received a Notice of Appointment of Solicitors, indicating the appointment of the plaintiff's fourth firm of solicitors. The defendant's Notice of Motion came before the Registrar on 5 February 2018. He stood the matter over to 13 February and directed the plaintiff to file and serve any evidence in respect of the motion by 4.00pm on 8 February 2018. He also directed the plaintiff to file and serve evidence in the substantive proceedings by 26 March 2018. By 8 February 2018 the defendant had not been served with any evidence in accordance with the Registrar's order three days earlier. On 13 February 2018 the Registrar made the following orders: 1. Notice of Motion filed 7/12/17 dismissed. 2. Plaintiff to pay Defendant's costs of and incidental to Motion. 3. Stood over until 5 April 2018. The Plaintiff has until 26 March 2018 to file her evidence in the substantive proceedings. The plaintiff did not file her evidence by 26 March 2018. On 27 March 2017 the defendant filed the Notice of Motion seeking dismissal pursuant to r 12.7 of the UCPR. The plaintiff filed her affidavit (without annexures) on 29 March 2018. The annexures were served upon the defendant's solicitor on 4 April 2018, the day before the hearing of the Notice of Motion for dismissal.
2. The defendant submitted that he had endured considerable time, trouble and expense over three years in defending the matter. There had been 21 directions hearings. Three Notices of Motion had been filed by the defendant to try and keep the proceedings moving or to resolve them. There was also the Show Cause hearing on 4 December 2015 and the plaintiff's motion to amend the Statement of Claim on 26 June 2016. All of the proceedings had involved the defendant's solicitors and/or counsel.
3. It was submitted that the matters at issue are straightforward. The evidence required to be relied upon by the plaintiff was within her care, custody and control. There was no complexity or need for lengthy expert evidence. I pause to observe that this proposition was disputed and I was not provided with any real means of resolving the dispute.
4. It was also submitted that if the plaintiff had a genuine desire to seek recovery of the very large sum of money said to be in issue she would have prosecuted her claim promptly. Rather, she has pursued a course of punishing the defendant rather than pursuing the proof of her case. It was submitted that she had failed to comply with her obligations not to abuse the Court's processes or waste the Court's time and resources: ss 55, 56 and 59 of the Civil Procedure Act 2005 (NSW).
5. For these reasons, the defendant submitted that the plaintiff's conduct amounted to "relevant delinquency", which would justify the exercise of the discretion to order costs on an indemnity basis.

Determination

1. Section 98 of the Civil Procedure Act is, relevantly, to the effect that costs are in the Court's discretion and there may be an order that they be paid on the ordinary basis or an indemnity basis. Unless a court otherwise orders, the general rule is that costs are ordered to be paid on the ordinary basis: r 42.2 of the UCPR.
2. Both counsel helpfully set out the relevant principles in their written submissions with reference to the authorities. The principles are clear; it is only their application that is controversial between the parties.
3. In opposing an order for indemnity costs, one of the submissions of counsel for the plaintiff was that the defendant was asking the Court to revisit an order that had already been made. It was contended that the Court became functus officio upon announcing at the end of the judgment that "the plaintiff should pay the defendant's costs".
4. However, the order had not yet been reduced to writing, let alone entered up, such that the Court was not functus officio. The very next thing that I said was, "Are there any other orders that are sought?" In response, in the course of "thinking aloud" and after referring to some other aspects in relation to costs, counsel for the defendant said: "The only other application I was going to make - I don't know if I should make it now or speak to the other side and then make a further application - was whether your Honour would entertain the possibility of indemnity costs …"
5. Counsel for the plaintiff then sought time to respond, and suggested written submissions could be received.
6. Both counsel referred to Hamod v State of New South Wales (2002) 188 ALR 659; [2002] FCA 424 for the proposition that indemnity costs are compensatory rather than punitive. I accept that is a relevant consideration here.
7. I am not satisfied that there is a "special or unusual feature" of this case that would justify an award of indemnity costs. The defendant asserted a "relevant delinquency" in the plaintiff's conduct of the proceedings and I accept that in some circumstances that might give rise to the discretion being exercised to make such an award. Generally, see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11; and Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213.
8. Indemnity costs may be awarded in a wide variety of circumstances and the categories of cases in which such an award may be justified are not closed. Moreover, the principles provide a guide but each case must be determined on a discretionary basis upon their unique factual matrix. In short, prolonged delay and failure (often unexplained) to comply with procedural directions may in one case lead to an indemnity costs order but not in another.
9. In this case, I am not satisfied on the evidence that the plaintiff is responsible for an abuse of the processes of the Court (which is what the defendant's submissions allude to). I am not able to conclude that she has instituted or conducted the proceedings other than in good faith or for some ulterior or collateral purpose. Nor am I able to conclude that there has been anything deliberate in the plaintiff's extreme tardiness (to say the least) in prosecuting her claim. The defendant's contention of a sinister purpose cannot be sustained. Negligence, incompetence, a lack of diligence, or similar are also available inferences that could be drawn.
10. The fact of the matter is that although the defendant pointed to the features in the chronology of the proceedings set out above and, in effect, invited an inference as to deleterious effects they caused, he did not seek to place any further evidence before the Court that would justify the rather extreme contentions he raised in support of his indemnity costs application.

Order

1. The defendant's application that the plaintiff pay his costs on an indemnity rather than the ordinary basis is refused.

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