Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Rinehart v Welker (No 3) [2012] NSWCA 228
• Hearing dates: 13 January 2012
• Decision date: 30 July 2012
• Before: Bathurst CJ at [1]; Beazley JA at [25]; McColl JA [26]

Decision

The applicants pay the costs of the respondents and the media interests in respect of the motions filed by the applicants on 6 January 2012 and 9 January 2012.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: COSTS - costs of interlocutory applications - general rule that costs follow the event; COSTS - whether costs payable forthwith
• Legislation Cited: Court Suppression and Non-publication Orders Act 2010 s 7; Supreme Court Act 1970 s 46; Uniform Civil Procedure Rules 2005 r 42.7
• Cases Cited: Fiduciary Ltd v Morningstar Research Pty Limited [2002] NSWSC 432; (2002) 55 NSWLR 1; Hamod v State of New South Wales [2007] NSWSC 707; Royal Australian Naval Reserve Rifle Club Inc v NSW Rifle Association Inc [2010] NSWSC 351
• Category: Costs
• Parties: Gina Hope Rinehart (First Applicant); Ginia Hope Francis Rinehart (Second Applicant); Hope Rinehart Welker (First Respondent); John Langley Hancock (Second Respondent); Bianca Hope Rinehart (Third Respondent); Australian Broadcasting Corporation (Media Interests); Fairfax Media Publications Pty Ltd (Media Interests); Nationwide News Pty Ltd (Media Interests)
• Representation: Counsel: M Walton SC and P Kulevski (First Applicant); M Holmes QC and M Allars (Second Applicant); A S Bell SC and D F C Thomas (First, Second and Third Respondents); A T S Dawson and F T Roughley (Media Interests); Solicitors: Corrs Chambers Westgarth (First Applicant); Gadens Lawyers (Second Applicant); Johnson Winter & Slattery (First, Second and Third Respondents); Addisons Lawyers (Media Interests)
• File Number(s): CA 2011/344306; 2011/344307
• Publication restriction: None

Decision under appeal

• Citation: Rinehart v Welker [2011] NSWCA 403
• Date of Decision: 2011-10-31 00:00:00
• Before: Bathurst CJ, McColl JA, Young JA
• File Number(s): CA 2011/344306; 2011/344307

Judgment

1 BATHURST CJ: By proceedings commenced on 5 September 2011 the respondents (the plaintiff beneficiaries) sought orders removing Mrs Gina Rinehart as trustee of a trust constituted by deed dated 27 December 1988, and varying the trust deed. Ms Ginia Rinehart was a beneficiary under that trust but joined with Mrs Gina Rinehart in opposing the relief sought.

2 Mrs Gina Rinehart and Ms Ginia Rinehart (the applicants) sought a stay of these proceedings relying on an arbitration provision in a deed of settlement entered into between the parties in August 2006. In addition, the applicants sought various orders under s 7 of the Court Suppression and Non-publication Orders Act 2010, restricting publication of various details of the proceedings. The precise orders are not relevant for present purposes. Various media companies, the Australian Broadcasting Commission, Fairfax Media Publications Ltd, Nine Network Limited and Nationwide News Limited (the media interests) intervened in the proceedings to oppose the making of suppression orders. On 13 September 2011, Mrs Gina Rinehart obtained certain suppression orders under the Act in reliance on s 8(1)(a) and (e) thereof: Welker & Ors v Rinehart [2011] NSWSC 1094.

3 The primary judge subsequently refused the stay of the proceedings sought by the applicants. However, on 14 October 2011 he made a further interim suppression order pending the determination of any application for leave to appeal from his decision refusing the stay: Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238.

4 The media interests subsequently unsuccessfully sought to set aside that interim suppression order: Welker & Ors v Rinehart & Anor (No 4) [2011] NSWSC 1636.

5 On 28 October 2011 the applicants filed summonses seeking leave to appeal to this Court from the orders made by Brereton J dismissing their application for a stay of the proceedings. They also filed applications seeking an order suppressing the publication of material filed or to be relied on in the proceedings before the Court of Appeal. On 31 October 2011 Tobias AJA made certain suppression orders, generally in the terms sought by the applicants: Rinehart v Welker and Ors [2011] NSWCA 345.

6 The plaintiff beneficiaries made an application to review the decision of Tobias AJA pursuant to the Supreme Court Act 1970 s 46. On 19 December 2011 the Court of Appeal, comprising McColl and Young JJA and myself, discharged the orders of Tobias AJA: Rinehart v Welker [2011] NSWCA 403.

7 Thereafter the applicants applied for a stay of the orders made by the Court of Appeal on 19 December 2011 until the determination of an application for special leave to appeal to the High Court from the Court of Appeal decision of that date. This application was heard by this Court on 13 January 2012: Rinehart v Welker [2012] NSWCA 1. The Court concluded that the stay sought should not be granted. However, it stated (at [71]) that having regard to the nature of the issues raised and the fact that the matter was heard in vacation when some of the parties' primary legal representatives were unavailable it was appropriate to grant a short stay. In those circumstances a stay was granted up to and including 3 February 2012.

8 The plaintiff beneficiaries now seek costs of the application determined by the Court on 13 January 2012. The media interests also seek their costs of that application together with their costs of the applications before the primary judge referred to in pars [2] to [3] of this judgment.

9 A number of additional matters should be noted. First, on 6 January 2012 and 9 January 2012 the applicants filed applications for special leave to appeal to the High Court from the judgment of 19 December 2011. No further steps had been taken in relation to that application up to 13 January 2012. Following the judgment of 13 January 2012, the applicants sought expedition of the special leave application and sought from the High Court a stay of the orders of 19 December 2011 pending the determination of the application for special leave. That application was heard by Crennan J, who granted the stay: [2012] HCATrans 10; [2012] HCATrans 11.

10 The application for special leave to appeal from the judgment of 19 December 2011 was subsequently dismissed: [2012] HCATrans 57.

11 Further, on 8 February 2012 the Court of Appeal, comprising McColl and Young JJA and myself, granted leave to the applicants to appeal against the judgment of the primary judge refusing a stay of the proceedings, but subsequently dismissed the appeal: Rinehart v Welker [2012] NSWCA 95.

The costs of the application to stay the Court of Appeal's orders of 19 December 2011 determined by this Court on 13 January 2012

12 Each of the plaintiff beneficiaries and the media interests seek their costs of this application. Ms Ginia Rinehart does not oppose such an order. It is opposed by Mrs Gina Rinehart.

13 Mrs Gina Rinehart submits that there should be no order for costs for four reasons. The first was that she was successful in achieving a limited stay.

14 Whilst it is correct that a stay of proceedings was granted by this Court until 3 February 2012, this was not the order sought by Ms Rinehart and the reason for it was expressly set out in par [71] of the judgment in question (see [7] above). This limited success, obtained in circumstances where the arguments made on behalf of Mrs Gina Rinehart were generally rejected, does not, in my view, provide a basis for refusing costs to the successful party.

15 The second reason was that the question before the Court was of great importance, given the divergence of authority on the proper tests to be applied in granting a stay in circumstances such as those before the Court in this case. Whilst it is true that there was a divergence of authority, the fact remains that the arguments brought on behalf of Mrs Gina Rinehart were unsuccessful. The importance of the matter does not, in my view, provide a basis for refusing costs to the successful party in private litigation in the nature of that in question here.

16 The third and fourth reasons were that the applicants acted reasonably in seeking the stay and the plaintiff beneficiaries and media interests unreasonably in declining to accede to it. In this regard, the applicants place particular reliance on the judgment of Crennan J in the High Court granting a stay and particularly her view that if a stay was not granted the applications for special leave would be rendered nugatory. However, it must be remembered that by that time the applicants had filed their Summary of Argument in the High Court and consented to the special leave application being dealt with on 9 March 2012. Their situation was quite different to that which was before this Court on 13 January 2012 where, although an application had been prepared, the final form of Summary of Argument before the High Court was not available, no application for expedition had been made and the special leave application had not been set down for hearing.

17 This is not to say that the applicants did not act reasonably in seeking the stay nor for that matter that the plaintiff beneficiaries or the media interests acted unreasonably in seeking to preserve the success they had had in the litigation. The fact remains that the applicants were not successful before this Court and there is no reason why costs should not follow the event.

18 In these circumstances the applicants should pay the plaintiff beneficiaries and the media interests' costs of the Notices of Motion filed by the applicants on 6 January 2012 and 9 January 2012, which were determined by this Court on 13 January 2012.

Should these costs be payable forthwith

19 The plaintiff beneficiaries seek orders that their costs of the Notices of Motion of 6 January 2012 and 9 January 2012 be payable forthwith.

20 In this context, r 42.7(2) of the Uniform Civil Procedure Rules 2005 provides that the costs of any application in proceedings are not payable until the conclusion of the proceedings unless the court otherwise orders.

21 One of the grounds on which such an order is commonly made is that the application related to a discrete and separately identifiable aspect of the proceedings: Hamod v State of New South Wales [2007] NSWSC 707 at [5]; Fiduciary Ltd v Morningstar Research Pty Limited [2002] NSWSC 432; (2002) 55 NSWLR 1 at [11]; Royal Australian Naval Reserve Rifle Club Inc v NSW Rifle Association Inc [2010] NSWSC 351 at [19]. In the present case it was argued by the applicants that the applications did not form a discrete part of the proceedings but were like any other interlocutory application. This is in part correct although, in my view, it would be more accurate to treat them as ancillary to the application for a stay in reliance on the arbitration clause in the deed of settlement, which was unsuccessful both before the primary judge and this Court. Those stay proceedings have now been determined (Rinehart v Welker [2012] NSWCA 95) and whilst the application was dismissed with costs, no order that the costs of that application be paid forthwith was sought or made. In these circumstances there seems to me to be no reason to make one in respect of the application determined on 13 January 2012.

22 Further, in those circumstances, the fact that the underlying proceedings for the removal of Mrs Gina Rinehart as trustee make take some time to conclude does not provide the basis for making such an order.

The costs of the proceedings before the primary judge

23 The media interests seek their costs of the applications before Brereton J referred to in pars [2] and [3] above. These applications related to the conduct of the proceedings, either at first instance or involved a stay pending the matter being considered by this Court. The applicants were successful on these applications and the orders of Brereton J were not overturned. In these circumstances, it does not seem to me appropriate to make any order for costs against the applicants.

Conclusion

24 In these circumstances the only order which should be made is:

(1) The applicants pay the costs of the plaintiff beneficiaries and the media interests in respect of the motions filed by the applicants on 6 January 2012 and 9 January 2012.

25 BEAZLEY JA: I agree with Bathurst CJ.

26 McCOLL JA: I agree with Bathurst CJ.

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Decision last updated: 30 July 2012