Traderight Pty Ltd v Bank of Queensland Ltd; Bank of Queensland Ltd v... [2011] NSWSC 260 | Case summary

Judgment 1HER HONOUR : On 22 December 2010, I handed down judgment on a number of applications which had been brought in relation to various proceedings which had either been under case management by me or which were related to those proceedings. I indicated on that occasion that I would hear submissions from the parties in relation to costs of the applications before me at a convenient time. It was not until March this year that the parties forwarded written submissions in relation to the costs of the applications I had determined in December last year. I have considered those submissions and have determined as follows. For convenience, I will adopt the same terminology for the respective parties and matters as set out in my reasons of 22 December 2010. 2The applications determined last December relate to three separate issues: first, the OMB parties' costs application in relation to a cross-vesting application that had been determined by Hamilton J in November 2007; secondly, the BOQ parties' security for costs application; and, thirdly, the related applications of the BOQ parties in relation to the strike-out or cross-vesting to Queensland of three particular Guarantor and of the OMB parties for all five New BOQ matters (including the Guarantor matters) to be heard with the Existing BOQ matters. The bulk of the time spent on 7 December 2010 was in the hearing of the applications in relation to this third issue. (i) Costs of cross-vesting application before Hamilton J 3This was an application by some of the Existing OMB parties for costs orders consequent upon the determination by Hamilton J in November 2007 of a cross-vesting application in relation to the Rossmick, SME and JFS proceedings then in the Industrial Relations Commission. Hamilton J had found that it was not premature for the OMB parties to have brought that application and made orders in substance granting them the relief they had sought. 4I considered that the BOQ parties should pay the Existing OMB parties' costs of the cross-vesting applications before Hamilton J and I so ordered. I did not consider that those costs should be ordered on an indemnity basis, as had been submitted by the Existing OMB parties. I did, however, accede to the Existing OMB parties' submissions that the costs should be assessed and payable forthwith and so ordered. 5The Existing OMB parties now seek their costs of that application before me and that those costs should also be assessed and payable forthwith, applying the submissions and reasoning set out at [43] and [47] of my December judgment. It was submitted that the issue of those costs is a separate and discrete issue and should not abide the end of the trial. 6The BOQ parties acknowledge that the Existing OMB parties are entitled to costs associated with obtaining the relief obtained on the costs application before me. However, the BOQ parties submit that in circumstances where the hearing on 7 December 2010 involved multiple issues (of which the costs application itself occupied very little time - T 56.22 - 58.25) and the OMB parties are said not to have been successful on other issues, this should result either in there being no costs awarded on this issue or the OMB parties should be awarded only a small percentage of their costs of appearance on this occasion in relation to the Hamilton J costs application. Reference is made to Waters v PC Henderson (Aust) Pty Ltd (unreported 6 July 1994); Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20; NRMA v Morgan (No 3) [1999] NSWSC 768. 7In my December reasons, I briefly set out the general principles applying to costs applications and noted that in Fexuto v Bosnjak Holdings 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". I accept that the argument on 7 December 2010 in relation to this matter was brief and to the point (and that the dominant issues on which the evidence and submissions were focussed were not the Hamilton J costs application). 8I think, on an admittedly broad brush basis, that the appropriate costs order (to dispose finally of this aspect of the litigious saga) would be for the BOQ parties pay 5% of the costs of the hearing on 7 December 2010 to reflect the OMB parties' success on this minor aspect of the matter. However, I do not propose to make any formal order to that effect, nor do I consider it appropriate to order that these costs be assessed and payable forthwith, having regard to the view I have taken as to the costs in relation to the other applications as set out below. (ii) Security for costs 9This was an application by the BOQ parties for the provision by the Existing OMB parties within 14 days of security for costs in relation to the Existing BOQ matters, consequent upon the discovery that litigation funding arrangements were by then in place in relation to those proceedings. The form of security sought was the provision of an undertaking from IMF (Australia) Ltd ("IMF") to the court to meet any costs order made in favour of the Bank of Queensland or any of the Bank's co-defendants or co-plaintiffs as the case may be, against any of the OMB parties. 10I considered the principles to be taken into account on applications for security for costs (as set out by Beazley JA in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; 13 ALC 437). 11As to past costs, I did not accept that the undertaking should so be extended. As to the form of the security provided by the OMB parties (in the form of Deed Polls dated 26 August 2010), I did not consider that the fact that it would seem to be open to IMF to choose later to withdraw from its funding agreement with the OMB parties and to avoid liability for costs thereafter was something that rendered the security so provided as inadequate. However, I accepted that (particularly in the context of the history of the disputes between the parties over the period in which I have case managed them) there would be some advantage to be gained by requiring an undertaking directly to the court so as to remove any doubt as to how the Deeds Polls might be construed in the future and to preserve the ability for the BOQ parties to seek (as they had foreshadowed they might wish to do) a contempt of court order if IMF were to fail to comply with its undertaking to the court. 12As noted at [93] of my December judgment, I was not satisfied that this was necessary but I concluded that there was some merit (in the context of this litigation) in putting any issue as to the construction of the Deed Polls to rest. That was done by an order that security be provided in the form of an undertaking to the court within a specified time. (In fact, the BOQ parties submit that the written undertaking was not provided within the time I had directed, but I understand that it has subsequently been provided.) 13The BOQ parties maintain that they were successful on this application (as indeed they were in one sense) and should be awarded their costs. However, the OMB parties (rightly) contend that this was not something I had seen as necessary and that I granted the relief sought by the BOQ parties (as noted above) solely with a view to foreclosing future disputes on the issues that had been raised by the BOQ parties. The OMB parties submit that this application was unnecessarily litigated; that the BOQ parties' arguments in relation to the Deed Polls and the security for past costs were rejected; and that the BOQ parties should therefore pay the OMB parties' costs on an indemnity basis and these should be assessed and payable forthwith. 14When the question is posed as to who, as a matter of substance and reality, has won on this issue, it seems to me to have been something of a draw: the BOQ parties, while they obtained the benefit of the undertaking, did so not because of any inadequacy I perceived in the security that had been proffered and not with the coverage for which they had contended (in effect obtaining an indulgence from the court); that said, the OMB parties had resisted the provision of such an undertaking, maintaining that the Deed Polls were adequate security without more. In the circumstances, I consider that each side having had a measure of success on this issue, they should bear their own costs of the application no order should be made in relation to the costs of this aspect of the hearing on 7 December (which I estimate occupied approximately 20% of the hearing time). (iii) Strike out/cross-vesting/application to hear proceedings together 15The issues in respect of which most time was spent (on my estimate somewhere around or in excess of 75% of the hearing time) were the applications by the BOQ parties to strike out as an abuse of process and/or cross-vest to the Supreme Court of Queensland the Guarantor proceedings (in which claims are raised by the individual guarantors that are the subject of the defences filed by them in the Qld proceedings) and the related application by the New OMB parties for orders to be made in relation to the conduct of the New BOQ matters (including the Guarantor proceedings) in this Court. 16For the reasons set out in my December judgment, I considered that the institution of proceedings in New South Wales by the individuals who had been sued by the Bank of Queensland in that state (which would, of necessity, involve a duplicity of proceedings) was prima facie an abuse of process. I did not accept that sufficient reason or explanation was proffered for that situation having arisen. 17Further, I was concerned that the present application might be seen as an attempt to re-agitate the issues which had been determined unfavourably to the OMB parties on the application heard by Jersey CJ in the Queensland Supreme Court (where the OMB parties had attempted to cross-vest Queensland proceedings to this Court). 18I also accepted the force of the submission for the BOQ parties that if the five New BOQ matters could not be ready to be heard with the existing proceedings commencing on 1 August 2011, then the underpinning of the position contended for by the OMB parties that the three Guarantor proceedings should remain in New South Wales would disappear. 19In essence, the dispute underlying these particular applications was a disagreement between the parties (not for the first time) as to where their disputes should be ventilated. 20I was of the view that it would make sense (from the point of view of the expeditious conduct of proceedings) that where there were proceedings with such commonality of issues and evidence, they should be heard together, but only if that could be managed without prejudice to the existing trial dates. It seemed to me that the guiding factor should be the need for the expeditious conduct of the respective proceedings. Accordingly, I made orders and directions for the purpose of allowing the proceedings to remain on foot in this Court for a further short period in order to see whether it was feasible for the hearings to be heard together. 21For that purpose, I made orders that would facilitate the matters to be cross-vested to Queensland should it transpire that the matters could not feasibly be heard together in August 2011 without prejudicing the ability of the BOQ parties to prepare for the hearing of those matters and the existing matters. I considered that ultimately the decision as to whether the matters could feasibly be heard together should be determined by the trial judge before whom they had been listed (Ball J). 22In the circumstances, the BOQ parties contend that their cross-vesting application was unsuccessfully resisted by the OMB parties and that the conditional cross-vesting order is enough to justify costs being awarded to the BOQ parties. The OMB parties, on the other hand, contend that neither party was entirely successful and that in those circumstances, the costs of the motions should be in the cause (drawing a distinction with the reasoning at [37] of my December judgment in relation to the conditional cross-vesting order that had been made by Hamilton J, on the basis that there the condition related to the timing of the cross-vesting not whether it would occur at all). 23In the circumstances, when posing the question as to who, in substance, has won on this issue, I consider that the result was a vindication of the position taken by the BOQ parties (namely that the commencement of the Guarantor proceedings in this court was an abuse of process). The outcome of the application had the effect that it was incumbent on the OMB parties to satisfy Ball J in due course that the matters could feasibly be heard in this jurisdiction without prejudice to the BOQ parties' preparation of the hearing of the existing matters (and, if they did so, then to convince the appropriate court to cross-vest the Queensland matters to this Court or to stay the Queensland proceedings). 24I consider that the appropriate order in respect of these applications is that the OMB parties should pay the costs of the BOQ parties in relation to the applications. On a broad brush basis again, I consider that the proportion of the costs referable to these applications would be 75% (and that any order would be made on a party/party basis and assessed and payable in the ordinary course at the end of the trial). However, the making of an order to that effect would sit uncomfortably with an order for the immediate assessment of costs in relation to the first application. Hence the conclusion I have reached below, treating costs of the hearing on 7 December 2010 as a global sum.

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