OXS Pty Ltd v Sydney Harbour Foreshore Authority and Minister for Planning and Environment

Judgment 1By Summons filed on 21 February 2014, the plaintiff, OXS Pty Ltd ("OXS"), sought a range of relief in respect of premises situated in The Rocks, Sydney, including a declaration that there was a binding and enforceable agreement for lease of the premises between it and Sydney Harbour Foreshore Authority ("SHFA"), or alternatively relief in estoppel, and also brought claims under the Australian Consumer Law and the Retail Leases Act 1994 (NSW) for, inter alia, misleading or deceptive conduct against SHFA. OXS also joined the Minister for Planning and Environment ("Minister") as Second Defendant in the proceedings, and sought judicial review of any decision of the Minister to decline consent to the alleged lease between OXS and SHFA. 2The proceedings were heard over five days in July 2014 and I delivered judgment on 26 August 2014 ([2014] NSWSC 1174). I ordered that OXS's claim against the Minister should be dismissed and that OXS should pay the Minister's costs of the proceedings as agreed or as assessed. I observed, at paragraph 154 of my judgment, that a large part of OXS's claim against SHFA had also failed, although OXS succeeded in a claim that two representations made by SHFA (namely, the Ministerial Decision Representation and the Further Ministerial Decision Representation, as defined in the judgment) were misleading or deceptive or likely to mislead or deceive, which I observed would support a claim for damages in respect of wasted expenditures to a maximum of approximately $14,000. I indicated that I would hear the parties as to that claim and as to costs, as between OXS and SHFA, following the delivery of judgment. 3On 19 September 2014, I delivered a further judgment, in chambers, making orders in respect of the proceedings ([2014] NSWSC 1284), partly by consent, including an order that: "All claims for relief within the Statement of Claim are dismissed except for the relief claimed in paragraphs 21, 22 , 23 and 25 and damages under paragraphs 11 and 15 (but only under s 62D of the Retail Leases Act 1994 (NSW)) in a sum less than $14,038." The question of the quantum of damages recoverable by OXS has now been resolved by agreement between the parties, without admission by SHFA, on the basis that the Court noted that SHFA had agreed to pay OXS the sum of $8000. The remaining issue in dispute is the costs of the proceedings as between OXS and SHFA. OXS's costs of the proceedings 4It is common ground that costs are in the Court's discretion, under s 98 of the Civil Procedure Act 2005 (NSW) and that r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") provide that costs should follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. OXS submits, and I accept, that a court would ordinarily award costs of proceedings to a successful party without attempting to differentiate between the issues on which the party succeeded and any issues on which the party failed: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]; Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423 at [28]-[31]; King v Benecke [2014] NSWSC 957 at [10]. Both parties refer to the numerous authorities dealing with that question, which I recently reviewed in my decision in Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 1509. It is not necessary to repeat that review here. 5OXS seeks an order that SHFA pay its costs of the proceedings, or a significant portion of its costs of the proceedings. OXS submits that it was "successful" in its claim for misleading or deceptive conduct in respect of representations alleged to have been made by SHFA, albeit that success resulted in no more than the payment to be made, without admission, by SHFA in an amount of $8000 in respect of certain wasted expenses. OXS accepts, as it must, that it did not succeed in respect of several other claims against SHFA and, in particular, it did not succeed in claims for specific performance (or, I interpolate, in establishing the contract for which it contended), estoppel or unconscionable conduct. SHFA responds, and my principal judgment demonstrates, that not only were OXS's claims for specific performance, estoppel and unconscionable conduct unsuccessful, but the large part of its claims for misleading or deceptive conduct were also unsuccessful. OXS submits that there was a significant overlap in the evidence so far as it related to the relevant claims. OXS also submits that, although the amount which SHFA has agreed to pay, without admission, of $8000 is a "small amount", that is not a reason for depriving it of its costs. The use of the word "depriving" in that submission does not properly identify the question, which is whether OXS can be characterised as a successful party such that it should be ordered all or most of its costs, or whether the "event" was in its favour, not whether it should be "deprived" of something to which it had an existing entitlement. OXS submits that it would not be an appropriate exercise of discretion for OXS to be ordered to pay any of SHFA's costs, on the basis that the Court has found in favour of OXS in respect of its misleading or deceptive conduct claim. 6On the other hand, SHFA submits that, to the extent that OXS's claims of been dismissed, OXS should be ordered to pay SHFA's costs, including the costs of a separate hearing as to legal professional privilege before White J on 16 July 2014 and the contested argument as to relief on 9 September 2014. SHFA submits that, where nominal or relatively trivial damages are awarded to a plaintiff, then costs may be awarded in favour of the defendant: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873; Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685 at 691-692. In Anglo - Cyprian Trade Agencies Ltd above, Devlin J recognised (at 874) the ordinary rule that a successful plaintiff would not to be deprived of its costs but observed that: "In applying that rule, however, it is necessary to decide whether the plaintiff really has been successful, and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a 'successful' plaintiff." His Honour recognised that there may be a qualification to that position where, for example, the object of an action is to establish a legal right, irrespective of whether a substantial remedy is obtained. This was not such a case. In Alltrans Express Ltd v CVA Holdings Ltd above, Stephenson LJ (with whom Griffiths and Purchas LJ agreed) observed that, where a party was aiming at damages in excess of £80,000, an award of £2 was not the event at which it was aiming, and: "the mere fact that they ultimately got something, token or nominal damages, does not enable me to regard them as remaining successful plaintiffs." 7The reasoning in Anglo - Cyprian Trade Agencies above and Alltrans Express above was approved in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [70] per McHugh J and again by Campbell JA in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 at [685], where his Honour observed that: "If a plaintiff sues for breach of contract and obtains an award of nominal damages, that empty victory usually does not bring with it an entitlement to costs, as the plaintiff usually is not to be regarded as the successful party in the action." In Re Cheal Industries Pty Ltd; Fitzpatrick v Cheal [2012] NSWSC 932 at [190], Ward J (as her Honour then was) applied the same principle where there was a large gap between the amount recovered and the costs of the proceedings, and made costs orders that reflected the fact that the plaintiff had recovered much less than the amount claimed. 8SHFA also points out, and I accept, that the "event" of a payment of $8000, without admission, was not the event at which the OXS was aiming. SHFA submits that costs should be ordered in its favour, rather than in favour of OXS, on the basis that OXS has, in substance, failed in its claims and SHFA has been substantially successful in the proceedings and that the costs that OXS should pay SHFA should not be reduced, having regard to its "very minor success" on only a small part of its misleading or deceptive conduct case. SHFA relies on my finding that OXS could only have succeeded as to its remaining claim for a maximum of approximately $14,000, and that claim has now been compromised on a no admissions basis. SHFA also submits that, realistically, only the amount of $3000 was in issue had the proceeding proceeded to a hearing for damages. I do not consider it necessary to determine that matter, which the parties have compromised without admissions, given the finding that I will reach on other grounds. 9It seems to me that OXS's claim against SHFA substantially failed, and that result is not affected either by the fact that it has succeeded in part of its misleading or deceptive conduct case, in a manner which at its highest would have resulted in an award of damages in the order of $14,000 and, in the event, will result in a payment without admissions of $8000. It seems to me that, on any view, the costs of these proceedings would not have been warranted by the maximum amount of damages which OXS could have recovered in respect of the misleading or deceptive conduct claim on which it succeeded, in the order of $14,000, or the amount which they will recover by agreement with SHFA, without admission, of $8000. In these circumstances, it seems to me that an order for costs to follow the event would require that OXS pay SHFA's costs of the proceedings, or at least a substantial part of them. 10SHFA submits that the extent of success obtained by OXS is so limited, in respect of the narrow issues on which it succeeded and the small amount that it will recover, that there is no basis for a differentiation of the issues in the case, and no adjustment should be made to the costs order which would otherwise follow in favour of SHFA from its substantial success in its defence of the proceedings. As I noted above, OXS also submits - albeit in support of an order for costs in its favour - that a court would ordinarily award costs of proceedings to a successful party without attempting to differentiate between the issues on which the party succeeded and any issues on which the party failed. I do not consider that OXS's very limited success, to which I have referred above, in the context of its substantive failure on the large range of issues in the case and its failure to recover substantive damages, warrants a departure from the normal position, and the common ground between the parties, that there should be no such differentiation between the issues in the case in the order for costs. 11SHFA also relies on UCPR r 42.20 which deals with the position where the Court makes an order for dismissal of the proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, and provides that, unless the Court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed. SHFA submits that that rule is relevant to the Court's exercise of its discretion. The parties did not draw my attention to any case where that rule had been relied upon to support an order for costs where part of a case was dismissed after a hearing on the merits. It does not seem to me that that rule would require that I adopt a different process than would be adopted under s 98 of the Civil Procedure Act and UCPR r 42.1 in any event, or lead to a different result to that which I have reached above on other grounds. 12In an appropriate case, a plaintiff's entitlement to costs may be affected by UCPR r 42.34 where, in proceedings in this Court, other than defamation proceedings, it has obtained a judgment against a defendant in an amount of less than $500,000. OXS submits that these proceedings were properly brought in this Court, so far as it involved a claim for specific performance of a lease as to which the District Court has a limited jurisdiction. SHFA makes clear that it does not take any point as to this rule and it is not necessary to address that rule further. Bullock order 13OXS also seeks a Bullock order such that SHFA indemnify OXS for costs that it has been ordered to pay in respect of its unsuccessful claim against the Minister. By my judgement delivered on 26 August 2014, I ordered that OXS's claims against the Minister be dismissed and that OXS pay the Minister's costs of the proceedings, as agreed or as assessed. A Bullock order may be made if the Court is satisfied that OXS acted reasonably in bringing its claim against the Minister and that the conduct of SHFA is such as to make it appropriate to impose liability on it for the costs of the successful defendant, relevantly, the Minister: Bullock v London General Omnibus Company [1907] 1 KB 264 at 272; Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215 at 229, 247; Re Lorie Najjar & Sons Pty Ltd (in liq) (No 9) [2014] NSWSC 56 at [46]. 14SHFA submits that the Court should not make a Bullock order, where it has previously declined to make a Sanderson order that SHFA pay the Minister's costs, and OXS has not sought to reopen that question. That submission refers to my observation in paragraph 156 of my principal judgment, as between OXS and the Minister, as follows: "OXS submits that SHFA should pay the Minister's costs of the proceedings since it was "wholly responsible" for the Minister's participation in the proceedings, because the Minister's Defence and Statement of Reasons had only emerged after the commencement of the proceedings and SHFA had not admitted OXS's pleading that no decision was made by the Minister. I do not accept that submission. OXS, not SHFA, joined the Minister as party to the proceedings; the Minister's position and its basis was apparent for several months prior to the trial; and OXS pursued its alternative case to trial after the relevant facts had emerged and pursued that case at the trial although no-one, including OXS, sought to establish its basis. That case was not required by SHFA's non-admission of OXS's pleading that no decision was made, since OXS could have discontinued its case against the Minister after the absence of a basis for it emerged and simply relied on the ministerial briefing note to establish that the Minister made no relevant decision. Although it is not necessary to my decision as to costs as between OXS and the Minister, I would add SHFA's non-admission does not seem to me to have been unreasonable, so far as it was seeking to preserve a case (which was properly open to it, although it has not succeeded) that the Minister's involvement in the briefing note supported the advice given in the August 2011 Letter. That is a matter that may be relevant to the position as to costs between OXS and SHFA, but does not seem to me to support an order that SHFA pay the Minister's costs of an unsuccessful claim by OXS against the Minister as to which it had no substantive involvement." 15SHFA submits that the making of a Bullock order would involve a judgment that would, in substance, be inconsistent with the reasons previously given by the Court for refusing a Sanderson order. While there is force in this submission, I consider that it remains open to OXS to seek a Bullock order, where the question whether such an order has been made has not previously been the subject of submissions or been determined. However, OXS will only succeed in obtaining such an order if it could now persuade the Court to take a different view of the relevant issues, as between OXS and SHFA, than it took in respect of those issues as between OXS and the Minister as set out above. 16OXS submits it acted reasonably in bringing proceedings against the Minister and that SHFA's conduct was such as to make it appropriate to impose liability on it for the Minister's costs, because SHFA had communicated to OXS that the Minister had made a decision not to consent to the lease to OXS that was in issue in the proceedings. OXS points to my findings that representations made by SHFA to OXS in letters dated 23 August 2011 and 2 August 2012 that the Minister had made a decision not to consent to the proposed new lease were misleading or deceptive or likely to mislead or deceive, at least in the sense that OXS had not requested the Minister's consent to the lease and the Minister had therefore not made a decision whether or not to consent to it. OXS submits that, by reason of these matters, it acted reasonably in commencing proceedings against the Minister, by filing its Summons on 21 February 2014 which joined the Minister as Second Defendant and sought judicial review of the suggested decision of the Minister. 17OXS acknowledges in its submissions that, at least by 20 March 2014, the Minister had filed and served his Response to Summons and a document entitled "Statement of Reasons for Decision". Contrary to OXS's submission, it was clear from those documents that the Minister's position was that he had made no such decision, and that position was very likely to be well-founded. SHFA also points out that OXS's Statement of Claim filed on 1 April 2014 itself alleged that, as at 23 August 2011, the Minister had not made a decision to decline consent to the grant of a new lease to OXS in respect of the relevant premises, and that the claim maintained by OXS against SHFA did not support its claim against the Minister. By that time, it seems to me that OXS's continuance of the proceedings against the Minister was inconsistent not only with the factual position, as it had emerged from the Minster's Statement of Reasons for Decision (which, I recognise, OXS was not bound to accept as correct) but, more significantly, with its own case that the Minister had not made such a decision. 18OXS submits that my finding that SHFA had represented to it that the Minister had made a decision would itself be sufficient to support the making of a Bullock order, and the conduct of the proceedings by SHFA up to closing submissions when it expressly conceded that the Minister had not made a decision also supports an order for the imposition of the Minister's costs upon SHFA. On the other hand, SHFA points out that it did not file its Defence, which did not admit that the Minister had not made such a decision, until somewhat later, and submits that the qualified position that it took did not contribute to OXS maintaining a claim against the Minister in terms that was not supported by OXS's own pleading. It does not seem to me that it was unreasonable for SHFA to have maintained a somewhat qualified position in that regard, and it was a matter for OXS to assess whether it wished to continue proceedings against the Minister, against the contingency that a claim against the Minister might be established notwithstanding that no party sought to support it. It seems to me that OXS took upon itself the risk of continuing the proceedings against the Minister, when it was not only plain the Minister's position was that he had made no such decision, but where that was also OXS's position in the proceedings. It seems to me that, having taken the risk of doing so, there is not a proper basis now to shift the costs of that risk from OXS to SHFA. 19Accordingly, I order that the Plaintiff pay the First Defendant's costs of the proceedings, as agreed or as assessed.