Rubino v Pineview Properties Pty Ltd

Rubino v Pineview Properties Pty Ltd - [2019] NSWSC 1031 - NSWSC 2019 case summary — Zoe

Background and Notice of Motion

The disputes between the Applicants and the Respondents to the Notice of Motion have a long history. There have been at least seven sets of reasons published in these proceedings and there are other proceedings in this Court which involve some of them as parties.
The first of the reasons in these proceedings was published on 30 June 2016, when White J gave his decision on the claims made, including on the cross-claim brought by the Respondents against the Applicants: Rubino v Pineview Properties Pty Ltd [2016] NSWSC 904. The Respondents' cross-claim was successful and judgments were entered against the Applicants in favour of Pineview in the sum of $1,276,389.29 plus interest and in favour of Ms Huybers in the sum of approximately $535,000 plus interest (the judgments).
The Notice of Motion was filed by the Applicants on 13 December 2018. It seeks the following orders: 1. an order that the judgments be stayed until the Notice of Motion is heard and determined and/or until further order of the Court; 2. an order that Ms Huybers is liable to indemnify the Applicants for loss and damage suffered as a result of her allegedly dispersing of the proceeds of sale of certain properties in Galston; 3. an order that Applicants are entitled to a claim for equitable set-off against the judgment obtained by Pineview; and 4. an order that Pineview is indebted to the Applicants in the sum of $18,895.38.
Pausing there, I note that this is the third notice of motion filed by the Applicants seeking a stay of execution of the judgments. On 9 December 2016, Brereton J published his reasons in relation to the Applicants' first notice of motion seeking a stay of enforcement of the judgments: Rubino v Pineview Properties Pty Ltd (No 4) [2016] NSWSC 1780. His Honour made an order that, upon the Applicants delivering a charge over their assets as security, execution of the judgments be stayed. The stay did not become effective as no charge was delivered by the Applicants. On 19 March 2018, Parker J published his reasons for dismissing the Applicants' second notice of motion seeking a stay of execution of the judgments: Rubino v Pineview Properties Pty Ltd (No 6) [2018] NSWSC 340.
Accompanying the Notice of Motion is an affidavit of Mr Dimitriou sworn 13 December 2018 which stated, at [15], that Mr Dimitriou intended to supplement the affidavit with further materials in accordance with further orders as the Court may make or determine.
On 11 March 2018, the Equity Registrar listed the Notice of Motion for hearing before me on 8 August 2019 and made the usual order for hearing in relation to interlocutory applications.
As no papers had been received from the Applicants in accordance with the usual order for hearing, my associate contacted the parties and requested the Applicants deliver a court book and any submissions to my chambers on 6 August 2019.
At around 6pm on 6 August 2019, Respondents' counsel sent an outline of written submissions in relation to the orders sought in the Notice of Motion.
At 10:53pm on 6 August, Mr Dimitriou, on behalf the Applicants, sent an email to my chambers requesting an adjournment of the hearing of the Notice of Motion for reasons including that the Applicants had briefed new solicitors and counsel who were unable to appear at the hearing and because it would be preferable to have the Notice of Motion heard with other proceedings in this Court which involve the parties.
On 7 August 2019, the Respondents served submissions in respect of the Applicants' adjournment application identifying reasons both for and against the grant of the adjournment. The Respondents consented to the Court dealing with the adjournment application on the papers and asked the Court to give short reasons if the adjournment was granted. They also sought a lump sum order in respect of their costs thrown away by reason of the adjournment (if granted), with such costs to be payable forthwith.
On 7 August 2019, I made an order adjourning the hearing of the Notice of Motion and re-listed the Notice of Motion for directions before Ward CJ in Eq on 27 August 2019.
The parties were content for me to deal with the Respondents' application for costs on the papers. I have done so based on the matters raised in Mr Dimitriou's email dated 6 August 2019, the Respondent's submissions on the adjournment application dated 7 August 2019 and the further materials received on behalf the Applicants in respect of costs, being the email from Mr Dimitriou dated 7 August 2019 and submissions dated 9 August 2019.

[4]

Reasons for grant of adjournment

The Court's power to grant an adjournment should be exercised having regard to the principles set out in ss 56 - 58 of the Civil Procedure Act 2005 (NSW).
Having considered the matters raised by the parties, I was satisfied that it was consistent with the just, quick and cheap resolution of the real issues in the proceedings, the efficient disposal of the business of the Court and the use of available judicial and administrative resources to grant the adjournment sought by the Applicants and to relist the Notice of Motion for directions before Ward CJ in Eq on 27 August 2019.
This was the first adjournment application made in relation to this Notice of Motion. While it was made very late in the day and well after the Notice of Motion was set down for hearing, the adjournment was for a relatively short period of time (approximately three weeks) and for reasons which may assist in the efficient disposal of the Notice of Motion, assuming it ultimately proceeds to final determination.
As the Respondents accept in their written submissions, the Applicants being represented by solicitors and counsel will assist both the Court and the Respondents going forward and at any hearing of the Notice of Motion, and is preferable to Mr Dimitriou continuing to represent the Applicants himself. This is particularly in the context where, as Parker J noted in Rubino v Pineview Properties Pty Ltd (No 6) [2018] NSWSC 340 at [20], the Applicant's submissions in relation to the notice of motion before the Court on that occasion had been difficult to follow in circumstances where Mr Dimitriou had represented himself and the companies he had controlled, and had no solicitor or barrister to assist him.
The adjournment will also allow a consideration of the next steps in respect of the Notice of Motion to be made at the same time as the Court deals with two notices of motions seeking default judgement and a strikeout in Equity Division proceedings number 2019/173683. Those other proceedings involve the same parties and, based on the Applicants' submissions, might raise similar evidence to that relied upon in support of the Notice of Motion and overlapping issues for the Court's consideration. While it is not possible for me to properly test that submission, it is to be expected that there may be some efficiencies to be gained if the matters are case managed together, including because the same counsel will be representing the parties across the matters.
There is also a question as to whether the Notice of Motion will ultimately be pursued and, if so, by which party. Wyse & Young International Pty Ltd is already in liquidation and not taking any role in the pursuit of the Notice of Motion. Wigney J, sitting in the Federal Court, is hearing bankruptcy proceedings in respect of Mr Dimitriou on 21 August 2019 and applications for the winding up of related companies, including Wyse Partners Pty Ltd and Wyse & Young Pty Ltd, are to resume part-heard before Rees J on 15 August 2019. Those matters may render the Notice of Motion obsolete, and there seemed little to be gained in proceeding with the hearing on 8 August 2019 in that circumstance.
I accept that the Applicants' delay in seeking an adjournment until after the Respondents had served their submissions has caused prejudice to them, but an appropriate costs order can deal with the impact of any such prejudice. I also accept the Respondents' submission that an inference could be drawn that the Applicants may not have been ready to proceed and, in the context of the overall history of these proceedings, there may have been some basis to push on with the hearing of the Notice of Motion on 8 August 2019. On balance, however, it seemed to me that it was not an appropriate use of the Court's resources to do so and the matters referred to earlier justified the grant of an adjournment on this occasion.
That said, now that the Applicants have new legal representation (although no notice of appearance has yet been filed), they should be prepared to proceed on the next occasion without further delay and on the basis of the evidence they have filed and upon which they have given notice that they intend to rely. The Court cannot be expected to entertain multiple applications for adjournments in this case.

[5]

Should the Respondents have a gross sum forthwith costs order for their costs thrown away by reason of the adjournment?

I see no reason not to make an order that the Applicants should pay the Respondents' costs thrown away by reason of the adjournment. That is the usual approach of this Court, and is particularly appropriate in this case given the Applicants' delay in making their application and the history of these proceedings. I am not persuaded by the Applicants' submissions to the contrary.
The question is whether those costs should be paid on a gross sum and forthwith basis.
The Court has power to make an order that a party to whom costs are to be paid be entitled to a specified gross sum rather than assessed costs: s 98(4)(c) of the Civil Procedure Act.
The discretion to order gross sum costs is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [813]; Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213. A factor that merits particular consideration when exercising the discretion to make a gross sum costs order is whether it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from a costs assessment: Harrison v Schipp (2002) 52 NSWLR 738; [2002] NSWCA 213 at [21] - [22]; Beach Petroleum NL v Johnson (1995) 57 FCR 119; Hadid v Lenfest Communications Inc [2000] FCA 628; Fewin Pty Ltd v Burke (No 3) [2017] FCA 693 at [49].
That factor is present in this case. One of the Applicants, Mr Dimitriou, is subject to bankruptcy proceedings and another, Wyse International Pty Ltd, is in liquidation. There is also evidence that the Applicants have failed to pay any sums towards the judgments (which have been outstanding since 2016) or any costs, and gross sum costs orders have been made in other proceedings involving Mr Dimitriou: at [5] and [6] affidavit of Ben Thomas affirmed 7 August 2019.
I do not accept that Applicants' submission that the Court should not make a gross sum costs order because the Respondents have not established that they have paid the relevant costs claimed to have been wasted by reason of the adjournment. Gross sum costs orders are commonly awarded on the basis of cost estimates or bills: Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [820]. While the documentation provided to the Court must be sufficiently detailed to make a fair and proper determination of the costs to be awarded, the authorities do not indicate that the party seeking a gross sum costs order must in fact demonstrate that they have paid those costs before any order is made in their favour: Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213; Hamod v State of New South Wales and Anor [2011] NSWCA 375. The Applicants did not point the Court to any authority in support of this submission.
As to whether the costs should be paid forthwith, the usual rule is that the costs of an interlocutory application follow the outcome of the case and do not become payable until the conclusion of the proceedings: r 42.7 Uniform Civil Procedure Rules 2005 (NSW). The Courts have, however, identified a number of relevant considerations that may be taken into account to justify an order for costs payable forthwith. These include whether the interlocutory decision relates to or is a discrete, separately identifiable aspect of the proceeding, and whether there has been some unreasonable conduct on the part of the party against whom the costs have been ordered. See generally Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; Hamod v New South Wales [2007] NSWSC 707; Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503; Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd (No 2) [2010] FCA 1347.
I am satisfied that the adjournment application and costs thrown away by reason of the grant of an adjournment are sufficiently discrete and separately identifiable aspects of the proceedings to enable the Court to make an appropriate order. The affidavit of Ben Thomas affirmed 7 August 2019, on which the Respondents rely, identifies that the Respondents have incurred costs in respect of the adjournment of the Notice of Motion and the wasted costs are easily identifiable from that material.
The Applicants' conduct in seeking an adjournment less than 36 hours before the hearing was scheduled to commence in circumstances where it had been set down for hearing over 5 months earlier and where one of the orders sought in the Notice of Motion has been subject to two earlier notices of motion is, in my view, sufficiently unreasonable to warrant departure from the usual rule and justifies an order that costs in a gross sum be paid forthwith.
I do not accept the Applicants' submission that a gross sum order on a forthwith basis should not be made because the Applicants have "suffered the consequences of having to maintain and prosecute multiplicity of proceedings". The Applicants chose to file their Notice of Motion and subsequently sought an adjournment of the hearing of their Notice of Motion. As I note at [20] above, the Respondents have suffered prejudice due to the Court granting the Applicants the indulgence of an adjournment. In the circumstances of this case, it is appropriate to address that prejudice by way of an order for costs payable on a gross sum forthwith basis.
As to the submission that the Applicants had put the Respondents on notice that the proceedings ought to be dealt with by Ward CJ in Eq, no evidence has been put before me to support that submission other than the adjournment application itself which, as previously noted, was made at a very late stage and after the Respondents had served written submissions regarding the substantive issues raised by the Notice of Motion.
I am also satisfied that Mr Thomas' affidavit enables me to arrive at an appropriate sum for the costs which were incurred and thrown away due to the adjournment on a logical, fair and reasonable basis: Harrison v Schipp (2002) 52 NSWLR 738; [2002] NSWCA 213 at [22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at [123]; Bobb v Wombat Securities Pty Ltd (No 2) [2013] NSWSC 863 at [8].
The affidavit of Mr Thomas identifies that costs in the amount of $9,421.50, comprising counsel's fees of $6,500 (excl GST) and solicitor's costs of $2,065 (excl GST), have been incurred by the Respondents in respect of the adjournment of the Notice of Motion. The costs are itemised by reference to the work done by the relevant solicitor and identifies the rates and basis of the calculations. Contrary to the submission made by the Applicants, the material includes an invoice from the Respondents' counsel, Mr Allen.
The costs claimed should, in my opinion, be reduced in a number of ways for the purposes of a gross sum cost order. First, I would deduct 50% from the items for work which, based on the descriptions, I am not satisfied is work completely wasted because of the adjournment: see, $700 relating to the preparation of a court book, $700 for an affidavit exhibiting judgments and $1,500 for reading the brief and preparing submissions. It seems to me that a proportion of that work would be of utility if and when the Notice of Motion is heard in due course and is not all wasted. Second, I would discount the solicitor's costs by 20% to reflect that they should be ordered on an ordinary basis. Third, I would reduce the costs by an additional 15% to reflect the broad-brush approach to the quantification of costs on a gross sum basis and to allow for some imprecision.
Taking those matters into account, I calculate the costs to be $5,757.69 and, in the exercise of my discretion, consider that it is reasonable to order that the Applicants pay the Respondents costs in a gross sum amount of $5,500 forthwith.

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