Supreme Court New South Wales

• Medium Neutral Citation: In the matter of Tricon Group Pty Limited [2014] NSWSC 1237
• Hearing dates: Wednesday, 3 September 2014
• Decision date: 03 September 2014
• Jurisdiction: Equity Division - Corporations List
• Before: Brereton J

Decision

(1) The defendant pay the plaintiff's costs of the proceedings fixed in the sum of $30,000;

(2) All other costs orders previously made in the proceedings be set aside.

• Catchwords: COSTS - where defendant consents to relief sought and costs of the application to set aside creditor's statutory demand on basis of genuine dispute - whether further proceedings (to resolve said dispute) should be stayed pending payment of costs
• Legislation Cited: (NSW) Civil Procedure Act 2005, s 67; Uniform Civil Procedure Rules r 12.4
• Category: Interlocutory applications
• Parties: Tricon Group Pty Limited ACN 073 792 908 (plaintiff); EDT Projects Pty Limited ACN 147 110 398 (defendant)
• Representation: Counsel: H Stitt (plaintiff); P Gambin (solicitor) defendant); Solicitors: Hunter Lawyers (plaintiff); Source Legal Pty Ltd (defendant)
• File Number(s): 2014/148847

Judgment (ex tempore)

1 HIS HONOUR: By originating process filed on 16 May 2014 the plaintiff Tricon Group Pty Limited sought an order that a statutory demand served on it by the defendant EDT Projects Pty Limited dated 24 April 2014 be set aside, essentially on the ground that there was a genuine dispute as to the debt the subject of the demand. The matter first came before the Registrar on 22 May 2014, when directions were made for the service of evidence by the defendant and then by the plaintiff in reply, and the proceedings were adjourned to 7 July with a view to referral for fixture of a hearing date. On 7 July, a further direction was made for service of the defendant's evidence, and the proceedings adjourned to 21 July with an order that the defendant pay the plaintiff's costs of that day. On 21 July, the proceedings were referred to me and an order was made further extending time for service of the defendant's affidavit evidence, adjourning the proceedings to 4 August, and ordering that the defendant pay the plaintiff's costs of that day, assessed in the sum of $1000. On 4 August, the proceedings were set down for hearing today.

2 The plaintiffs have prepared and served a substantial amount of affidavit evidence in support of the application, in order to demonstrate the existence of a genuine dispute. As will be apparent from the history I have recited, the proceedings have been before the Court on a number of occasions and that has largely been due to the defendant's delinquence in complying with directions. On two of those occasions, costs orders have been made. However, I propose to discharge them and take them into account in the overall order that I will make in this proceeding.

3 Yesterday, the defendant indicated that it proposed to withdraw the statutory demand, and today it has consented to an order that the statutory demand be set aside. The defendant does not oppose a costs order against it and asks that the Court assess those costs.

4 The plaintiff says that the total costs of the proceedings incurred by its solicitors and counsel, including advice from Senior Counsel, amount to approximately $50,000. Senior Counsel has never appeared in the proceedings, and obtaining senior counsel's advice in a matter of this kind ought to be regarded as a solicitor/client cost, not recoverable on a party/party basis.

5 The complexity of the plaintiff's affidavit evidence justifies an order at the higher end of the scale that I normally allow for proceedings of this kind. To my mind, that is in the order of $30,000, which represents approximately two-thirds of the sum of $45,000, after senior counsel's fees are disallowed.

6 However, as I understand it, the estimate that I was given includes the whole of the costs for the proceedings, including those in respect of which costs orders have previously been made, and so the order I make will encompass the orders made on the previous occasions.

7 I therefore propose to order that the defendant pay the plaintiff's costs assessed in the sum of $30,000, and to set aside the earlier costs orders.

8 The plaintiff also seeks an order staying any other proceedings instituted by the defendant against the plaintiff until those costs have been paid. (NSW) Civil Procedure Act 2005, s 67, gives the Court power to stay any proceedings before it either permanently, or until a specified day. There are no other proceedings before this Court at the moment that could be the subject of a stay under s 67. What the plaintiff effectively seeks is an anti-suit injunction preventing the defendant from instituting proceedings against it in any court until the costs have been paid. I am not aware of any precedent for such an order.

9 Uniform Civil Procedure Rules, r 12.4, applies if, as a consequence of the discontinuance of proceedings, a plaintiff is liable to pay the costs of another party in relation to those proceedings and, before paying those costs, commences further proceedings against the other party on the same, or substantially the same, cause of action. It provides that in such circumstances the Court may stay the further proceedings until those costs are paid, and may make such consequential orders as it thinks fit.

10 In this case, the proceedings have not been discontinued. To the contrary, the order sought in the originating process has been made. The plaintiff is not liable to pay the costs of another party, but the defendant is liable to pay the plaintiff's costs. The rule is not attracted.

11 UCPR r 12.10, similarly, provides that if, as a consequence of the dismissal of proceedings, a party is liable to pay the costs of another and before payment of those costs commences further proceedings against the other party on substantially the same cause of action, the Court may stay the further proceedings until those costs are paid. Again, the rule is not attracted because the proceedings have not been dismissed.

12 Both those Rules are directed to the situation where a plaintiff unsuccessfully brings proceedings, is ordered to pay costs and then commences fresh proceedings on substantially the same cause of action. Though both are founded on the concept that it is an abuse of process to commence a second proceeding claiming the same relief without paying the costs ordered to be paid of the first, they are inapplicable to a situation where the present plaintiff has, effectively, succeeded on the basis that there is a genuine dispute, which ought to be litigated in a regular proceeding, rather than on a winding-up application.

13 If proceedings be instituted in this Court, or in another court, then a stay might be available under s 67 on an application made in those proceedings, but it is not one which is contemplated by the Rules and would depend on the particular circumstances of the individual case. In any event, there is no basis for this Court to grant a stay, or to restrain the institution of proceedings that have not yet been instituted by the unsuccessful defendant.

14 Accordingly, the Court's further orders are that:

(1) The defendant pay the plaintiff's costs of the proceedings fixed in the sum of $30,000;

(2) All other costs orders previously made in the proceedings be set aside.

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Decision last updated: 28 October 2014