It is, I think, probably generally accepted that the words 'follow the event' refer to the event of the claim or counter claim. However, it may be noted that in other contexts similar words have been held to refer to the event of distinct issues with the result that the general costs went to the party who on the whole succeeded in the action but that the other party got the costs of separate issues on which he succeeded.
29 His Honour's decision in Windsurfing has been taken (see for example Lavender View v North Sydney Council (No 2) [1999] NSWSC 775, per Rolfe J; Uniline Australia Ltd (ACN 010 752 057) v Sbriggs Pty Ltd (ACN 007 415 518) and Another (No 2) [2009] FCA 920; (2009) 82 IPR 56, per Greenwood J; Leallee v the Commissioner of the NSW Department of Corrective Services [2009] NSWSC 518, per Price J; Sahab Holdings Pty Ltd v Registrar-General and Anor [No 3] [2010] NSWSC 403, per Slattery J, at [36]) to be that in an appropriate case a costs order may be moulded to reflect the degree of success on distinct issues. Here, the question is not whether an apportionment should be made in respect of the costs on separate issues; rather, what is being urged upon me is to address the question of costs by reference to whether the OMB parties had obtained an unconditional order rather than (as they did) obtaining the relief they had sought only on a conditional basis.
30 However, the general principle in the above cases that one looks to the substance of who has succeeded on what in the proceedings is applicable in the exercise of my discretion as to costs in the current scenario.
31 In Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20, at 22, Young J, as his Honour then was, noted in the context of a costs application that "one does not look at issues as if they were pleader's issues, but approaches the matter with a broad brush".
32 The English Court of Appeal in Roache v News Group Newspapers [1992} TLR 551, as cited by the Queensland Court of Appeal in Timms v Clift [1998] 2 Qd R 100 posed the question as to who is to be seen as the successful party "in the event" as being a question as to "[w]ho, as a matter of substance and reality, had won? Had the plaintiff won anything of value or anything he could not have won without fighting the action through to a finish? Had the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?".
33 When that question is posed in relation to the cross-vesting applications before Hamilton J, the answer it seems to me is clear - the OMB parties obtained the relief they sought and there is no suggestion that had they not pursued that application the relief the matters would have been cross-vested to this Court to be heard with the Traderight proceedings already before this Court at that time.
34 In Corbett Court Pty Limited v Quasar Constructions (NSW) Pty Limited [2008] NSWSC 1423 Hammerschlag J gave examples of instances where the general costs rule may be displaced (see [30]-[31]). It does not seem to me that the present case falls within any of those instances.
35 The suggestion that the OMB parties were not successful on the relevant event because there was a stay on the operation of the cross-vesting orders made by his Honour seems to me to fail to give adequate weight to the fact that the BOQ parties had opposed the making of the cross-vesting orders and had (unsuccessfully) contended that they were premature.
36 It is submitted by Mr Cotman that the exercise of the court's broad discretion as to costs cannot operate only to award applicants their costs if they can foresee the exact costs orders that the court will ultimately grant. Mr Cotman submits that the OMB parties were required to approach the court having regard to the overall position of the BOQ on the cross vesting they should have their costs given that no compromise or substantively similar outcome to the orders ultimately made was made available outside of court.
37 The fact that the BOQ parties were successful in persuading his Honour that the orders should be stayed (and if it be the case, as was submitted, that in so doing had acted not only reasonably in so doing by drawing to the court's attention the necessity for the conciliation process to be completed before any cross-vesting of the proceedings but also in the public interest in preventing a cross-vesting order wrongly to be made) is not in my view sufficient to displace the general rule that costs should follow the event - that event being that the cross-vesting orders that the BOQ parties had opposed were made (albeit that they did not operate until certain other events had occurred).
38 It is said for the BOQ parties that the OMB parties had not been put to any unreasonable expense as the matters at that stage had not been cross-vested from the Federal Court (a submission that, as I apprehend it, is to the effect that had the OMB parties waited for the matter to be dealt with in the Federal Court no contest as to the application for cross-vesting might have arisen or, perhaps, that there might have been no need for such an application before Hamilton J). That seems to me to be no more than reflective of the fact that the parties (as they are today on a different issue) were in dispute as to the particular forum in which the various disputes between them should be heard. The fact remains that the OMB parties brought their cross-vesting applications in this Court and Hamilton J found that it was not premature for them to do so and made orders in substance granting them the relief sought.
39 I consider that the BOQ parties should pay the OMB parties' costs of the cross-vesting applications before Hamilton J and I will so order.
40 The question then is as to the basis on which costs should be ordered and whether they should be assessed and payable forthwith. For the OMB parties, Mr Cotman's principal costs submission was that the OMB parties should have their costs of the cross vesting motion 8 August 2007 on indemnity basis as agreed or assessed and that the costs should be paid forthwith. Reference was made to Oshlack; Harrison v Schipp [2001] NSWCA 13; NMSM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77; 187 ALR 654 for the proposition that an award of indemnity costs is permissible under the court's incidental power to control its proceedings, though noting that this presupposes either a party's special entitlement or some relevant unreasonable action in connection with the conduct of the proceedings by the party against whom the order is sought.
41 It is submitted by Mr Cotman that the BOQ parties have acted unreasonably and have put the OMB parties to unreasonable expense by opposing the orders for transfer of the Industrial Relations Commission proceedings. Mr Cotman submitted that the BOQ parties' only (and continued) resistance was premised on the cross-vesting application being premature - a submission rejected by his Honour. In that regard, I do not see the fact that his Honour rejected the BOQ parties' argument as warranting an order for indemnity costs. There is nothing to suggest that it was an argument put without any foundation. Furthermore, the BOQ parties' conduct thereafter (in refusing to participate in a conciliation conference), which is also relied upon by the OMB parties in support of the indemnity costs application, is not a matter which goes to the question of its conduct in resisting the cross-vesting applications before his Honour. Mr Cotman submits that the matter ought to have been dealt with by the consent of the parties, given the history of the proceedings at the time and particularly since the Traderight proceedings which involved similar circumstances had been cross vested to the Supreme Court of New South Wales by the consent of the parties. (That, however, appears to be no more than an argument that the BOQ parties should in some way be penalised for their temerity in taking a different view as to the cross-vesting applications and it is by no means apparent to me that, even having adopted a particular course in relation to the Traderight proceedings, they should have maintained such a course in other and separate proceedings.)
42 I do not consider that those costs should be ordered on an indemnity basis. (There was no reliance, for example, on any compromise unreasonably rejected by the BOQ parties in this regard - simply that the BOQ parties had not acceded to the OMB parties' suggestion as to the cross-vesting of the proceedings and had maintained the stance that it was premature.)
43 As to whether the costs should be assessed or agreed and payable forthwith, Mr Cotman relies on what was said in Fiduciary v Morningstar Research Pty Ltd (2002) 55 NSWLR 1. It is submitted that this is a case in which it is appropriate to make such an order as the costs of the proceedings will be significant and the time for payment long postponed (having regard to the fact that even though the matters have now been listed for hearing that hearing will not take place until the latter half of next year and will be for a lengthy period). It is further said, and I accept that this is the case, that these orders will be related to a separate and discrete aspect of the overall proceedings. (Reference was made to Wentworth v Wentworth (NSWCA 21 February 1996, unreported) and Jazabas v Haddad [2006] NSWSC 880 as instances where costs orders were made in relation to interlocutory applications in advance of the determination of the substantive proceedings.)
44 Although Mr Cotman notes that at the time the motion was heard the substantive proceedings were in their infancy (and hence there was a likelihood that there would be a considerable time to hearing), it seems to me that I should consider the question of costs as at today's date and not as his Honour might have determined them had he not reserved the question back in 2007.
45 It is said that the OMB parties have sued the BOQ parties in connection with alleged 'failed' businesses and have, in connection with operating that failed business, suffered serious and significant financial loss and damage in circumstances where the BOQ parties "are in a unique position of being fully aware of the financial hardship and difficulty faced by the OMB parties as they were required to disclose their full financial history and affairs in the context of operating the business". While the financial position of the parties is a factor to take into account, there is no direct evidence before me. Further, insofar as that seems to require an assessment to be made of the allegations made in the substantive proceedings, that is not a matter I can properly take into account, even if there were material before me on which I could form a view. The fact is that various allegations have been made in the substantive proceedings and they may or may not ultimately be sustained. The financial position of the OMB parties was not directly put before me and it is not a matter on which I can come to any view beyond the inference I might draw from the fact that litigation funding is now in place that there may have been a question as to the financial resources of the OMB parties.
46 Mr Cotman also submits that, absent a costs order payable forthwith, there is no incentive for the BOQ parties to refrain from opposing other interlocutory applications with the purpose of extending the limited financial resources of the OMB parties and delaying the progress of the substantive hearing. I do not see that it is appropriate for me to draw any inference as to the purpose of the BOQ parties in resisting the cross-vesting application before his Honour, nor do I consider that the making of a costs order of this kind will necessarily have any deterrent effect if that were to be the BOQ parties' purpose.
47 That said, I accept that the issues on the cross vesting application before Hamilton J were discrete issues and have now been determined for some time. There are still some 8 months before the hearing of the trial will commence and if it runs for the estimated time it would not be until late next year that the Existing BOQ matters could first be expected to be determined on their merits. I consider that it is appropriate that the costs as ordered to be paid by the BOQ parties should be assessed or agreed and payable forthwith.
48 (For completeness, I note that insofar as the BOQ parties relied upon extracts of selected passages from the transcripts [paras 6, 7, 10 and 11 on 2 November 2007, para 13 on 25 November 2008 and paras 11, 13 and 14 on the application before me on 19 December 2008] the OMB parties took issue with the fact that the BOQ parties had not filed any evidence in that regard within the terms of the directions made namely that evidence be filed by 4 August 2010 and submitted that if the BOQ parties intended to rely upon the transcripts, they should have been filed by way of affidavit in the court or a copy ought to have them made available to the OMB parties prior to the OMB parties filing reply submissions. In that regard, the transcript of the very proceedings on which the present costs application is brought is a matter of court record and I do not accept that there was a need for further costs to be incurred in appending it to an affidavit before reliance could be placed on what had been said when the matter was before his Honour.)
49 It is my view that the appropriate decision is that the BOQ parties pay the costs of the OMB parties of the application before Hamilton J and that those costs be assessed and payable forthwith. I do not consider that an order for indemnity costs should be made.
(ii) Security for costs
50 By notice of motion dated 12 December 2010, the BOQ parties seek orders: