White v Attwells (No 2) [2020] NSWSC 1837 (16 December 2020)

Last Updated: 16 December 2020

Supreme Court New South Wales

Case Name:	White v Attwells (No 2)
Medium Neutral Citation:	[2020] NSWSC 1837
Hearing Date(s):	On the papers
Decision Date:	16 December 2020
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) Subject to order (2) below, confirm that, in accordance with Uniform Civil Procedure Rules 2005 (NSW), r 42.19, the plaintiff must pay such of the defendant’s costs as, at 20 November (being the date on which the statement of claim was discontinued by the plaintiff), had been incurred by the defendant in relation to the claims in the statement of claim. (2) Order that the costs of the plaintiff’s notice of motion filed 31 March 2020, the costs of the defendant’s amended notice of motion filed 30 March 2020 and the costs of the cross-claim be excluded from order (1) above. (3) In respect of the plaintiff’s notice of motion filed 31 March 2020 and the defendant’s amended notice of motion filed 30 March 2020, order the plaintiff to pay half the defendant’s costs of the motions.
Catchwords:	COSTS — Party/Party — Where one party successful — Where successful party prolonged proceedings — Whether costs awarded to successful party ought be discounted COSTS — Party/Party — Where proceedings discontinued by plaintiff — Where discontinuance not a result of settlement — Whether plaintiff ought pay costs of defendant
Legislation Cited:	Civil Procedure Act 2005 (NSW), ss 56, 98 Uniform Civil Procedure Rules 2005 (NSW), rr 42.1, 42.19
Cases Cited:	White v Attwells [2020] NSWSC 1520 Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270
Category:	Costs
Parties:	Gary Alan White (Plaintiff / Cross-defendant) Noel Bruce Attwells (Defendant / Cross-claimant)
Representation:	Counsel: J K Raftery (Plaintiff / Cross-defendant) R D Newell (Defendant/Cross-claimant) Solicitors: Not applicable (Plaintiff / Cross-defendant) L C Muriniti & Associates (Defendant / Cross-claimant)
File Number(s):	2017/239938

JUDGMENT

Introduction

1. On 28 and 29 October 2020 I heard the notice of motion filed by the plaintiff, Gary White, on 31 March 2020, and an amended notice of motion filed by Noel Attwells, the defendant, on 30 March 2020. On 30 October 2020 I made orders dismissing the plaintiff’s notice of motion and declaring that the parties have not entered into a binding agreement to settle the proceedings: White v Attwells [2020] NSWSC 1520 (the principal judgment). I ordered that the plaintiff pay the defendant’s costs unless an application for a different order was made. Such an application was made within the period specified in the order.
2. I have been provided with the following written submissions on costs:

(1) Mr White’s submissions dated 27 November 2020;

(2) Mr Attwells’ submissions dated 27 November 2020;

(3) Mr White’s submissions in response dated 4 December 2020;

(4) Mr Attwells’ submissions in response dated 8 December 2020; and

(5) Mr White’s submissions dated 11 December 2020.

3. The parties relied on the following evidence:

(1) Affidavits of Mr White affirmed 15 May 2020 and 27 November 2020;

(2) Affidavit of Leonardo Muriniti (Mr Attwells’ solicitor) sworn 8 December 2020;

(3) Identified portions of an affidavit of Mr Muriniti sworn 16 March 2020.

Summary of the orders for which each party contended

The costs of Mr White’s notice of motion

4. Mr Newell, who appeared on behalf of Mr Attwells, submitted that there was no reason why costs of Mr White’s notice of motion ought not follow the event in accordance with the general rule in Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1.
5. Mr Raftery, who appeared on behalf of Mr White, sought an order that Mr White pay Mr Attwells costs on the ordinary basis apart from the costs thrown away by reason of the adjournment on 18 May 2020 and that Mr Attwells pay Mr White’s costs of one day of the hearing.

The costs of Mr Attwells’ amended notice of motion

6. Mr Attwells submitted that Mr White ought be ordered to pay his costs of his amended notice of motion on the basis that the only relief that occupied the time of the Court was his application for a declaration that the proceedings had not settled and that he was successful in obtaining that order.
7. Mr White submitted that there ought be no order as to the costs in respect of prayers 1 and 3 (described as “Issue 1”); and that Mr Attwells ought pay Mr White’s costs in respect of prayers 2, 4, 5, 6, 7 and 8 (described as Issue 2).

The costs of Mr White’s application for leave to discontinue the proceedings

8. Mr White submitted that there ought be no order as to costs following from his discontinuance of the proceedings. In the alternative, he contended that the order should be that the costs of the statement of claim be costs in the cause of the cross-claim.
9. Mr Attwells submitted that Mr White ought pay Mr Attwells’ costs thrown away by the discontinuance as there was no reason to displace the usual rule.

Background to the costs application

10. The principal judgment is to be read with these reasons.
11. For present purposes, it is sufficient to record that in his notice of motion filed on 31 March 2020, Mr White sought a declaration that the proceedings had been settled. In the alternative, he sought an order that the cross-claim be dismissed.
12. In Mr Attwells’ amended notice of motion filed on 30 March 2020, he sought: dismissal of the statement of claim (prayer 1), summary judgment on the cross-claim (prayer 2), a declaration that the direction to pay signed by him dated “February 2020” was null and void (prayer 3), an order that Mr White deliver up an account to him in the sum of $34,133.24 (prayer 4), a declaration that Mr White is not entitled to legal fees from Mr Attwells for proceedings brought by him against Jackson Lalic Lawyers (prayer 5), an order that Mr White account to him for all monies received by him from Mr Attwells (prayer 6), an order for preparation of an account by Mr White for Mr Attwells (prayer 7), an order that Mr White be restrained from disposing of real property at Moobi in the State of New South Wales (prayer 8), indemnity costs (prayer 9) and a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

Consideration

The costs of Mr White’s notice of motion

13. In respect of Mr White’s notice of motion the principal issue is whether any costs ought be excepted from the general rule that costs follow the event. The two exceptions for which Mr Raftery contended on behalf of Mr White were, as set out above, the costs thrown away by the adjournment on 18 May 2020 and the costs of the second day of the hearing. These matters will be addressed in turn.

The costs of the adjournment on 18 May 2020

14. Mr Raftery submitted that Mr White incurred costs of the hearing on 18 May 2020 and that, had Mr Attwells provided particulars of the basis on which he alleged that the matter had not settled, the matter could have gone ahead on that day. I note that on 16 April 2020 and 30 April 2020 the Court directed the defendant to provide particulars sought by the plaintiff.
15. I am not persuaded that the matter could have gone ahead on 18 May 2020, even if particulars had been provided in accordance with the Court’s directions. Up until 18 May 2020 the matter was in the Registrar’s list. It was allocated to me for hearing on 18 May 2020. On that occasion, Mr Raftery raised the issue of the outstanding particulars. I raised the prospect of directions being made that the issues be defined by pleadings. Both Mr Newell and Mr Raftery agreed that this course was appropriate and directions were made accordingly. In these circumstances, I consider that the costs of the adjournment on 18 May 2020 ought properly form part of the costs of the notices of motion and should not be specifically excepted from the general rule. However, the delay by Mr Attwells in providing particulars increased the costs of the motions and will be taken into account as a matter of discretion.

The costs of the second day of hearing

16. Mr Raftery submitted that the costs of the hearing ought be limited to a single day. He contended that Mr Attwells’ legal representatives had conducted the hearing in an inefficient way which led to the matter not being able to be completed in a single day. He submitted that Mr Attwells had sought to tender a large quantity of irrelevant or duplicate material, much of which was rejected and that, had Mr Attwells sought to tender only relevant, admissible material, the time of the Court and of the parties could have been saved and the hearing would probably have been concluded within a day. He relied on the circumstance that objections to documentary evidence took much of the first half of the first day. He also contended that Mr White’s legal representatives had been obliged to go through documents which were rejected and that some allowance ought be made for this process which was brought about by the inefficient conduct of the matter on behalf of Mr Attwells.
17. Mr Newell argued that it was futile to speculate on why the hearing concluded in a day and a half or to try to work out whether, and in what circumstances, it could ever have finished in one day. He also relied on the fact that it had been listed for two days in the expectation that the time would be required.
18. The hearing of the notices of motion was prolonged by an unnecessarily voluminous tender bundle. It soon became apparent that the vast bulk of what was sought to be tendered on behalf of Mr Attwells constituted multiple copies of single documents or was entirely irrelevant or barely relevant to the issues to be determined. The process of hearing and determining objections was time-consuming.
19. Section s 56(3) of the Civil Procedure Act imposes a duty on parties to legal proceedings to assist the court to further the overriding purpose in s 56(1) to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Where parties are represented, it is the obligation of legal practitioners to fulfil this duty on behalf of their clients. It is antithetical to the efficient conduct of proceedings for solicitors to simply require every document to be photocopied without regard to its relevance. Such indiscriminate inclusion of documents inevitably increases costs. Mr Raftery would have had to spend considerable time reviewing the tender bundle, identifying duplicate documents and formulating the lengthy objections to the tender of irrelevant documents or documents which were inadmissible for other reasons.
20. Although it cannot be determined with any precision that the hearing of the motions could have been concluded in a single day, some allowance ought be made for the voluminous tender bundle, which had the effect of increasing costs and made it impossible for the matter to be completed within a day. For this reason, I consider that the costs Mr White ought be ordered to pay in respect of the motions should be discounted to make allowance for the increased costs occasioned by Mr Attwells’ conduct with respect to the notice of motion, including the voluminous tender bundle and his delay in providing particulars referred to above. I regard this course as preferable to making a separate order that Mr Attwells pay Mr White’s costs of reviewing those parts of the tender bundle which were rejected since such an order would unduly complicate the costs assessment process and necessitate an exercise the costs of which would be likely to be disproportionate to the benefit gained.

The costs of Mr White’s discontinuance of the proceedings

21. Mr White brought these proceedings to recover legal fees said to be owing to him by Mr Attwells. He sought and was granted leave to discontinue the proceedings. The question of costs was reserved for further argument.
22. In the ordinary course, the price of a party obtaining leave to discontinue proceedings is that the party will have to pay the costs of the other parties: UCPR r 42.19. However, the Court has a power to order otherwise: UCPR, r 42.19(2).
23. Mr White has deposed in an affidavit affirmed on 27 November 2020 as follows:

“24 On 21 January 2020 and 18 February 2020 respectively, I received the sums of $18,142.75 and $34,133.24 from Sparke Helmore Lawyers for the costs incurred in the Jackson Lalic proceedings in the separate question and the New South Wales Court of Appeal. I assume that Noel Attwells received his share of the money from the Jackson Lalic proceedings on or about the same dates.
25 As the funds were distributed pursuant to the costs order, I believe it is highly unlikely that Noel Attwells has funds to pay any order made in my favour in these proceedings.
26 On 13 March 2020, Noel Attwells swore an affidavit which stated at paragraph 14:

‘... I’m in difficult financial circumstances ...’

27 It is my view that even if I am successful in obtaining judgment against Noel Attwells in these proceedings, he would be unable to satisfy the order.
28 Whilst I remain of the view that I have good prospects of success against Noel Attwells in these proceedings, I do not wish to continue as I am of the view that any order in my favour will be unpaid and, in my view, the proceedings are futile.
29 I wish to continue my defence of the Cross-Claim. My defence of the Cross-Claim is essentially identical to the claim I could have made against Noel Attwells.”

24. Mr White submitted that he only sought to discontinue the proceedings to avoid duplication because the matters he wishes to press could be dealt with by way of his defence to Mr Attwells’ cross-claim. He also contended that he discontinued the proceedings to avoid wasted costs because he has formed the view that he would not be able to recover any money from Mr Attwells because of the latter’s suspected impecuniosity. Mr Raftery also argued, on behalf of Mr White, that the cause of the discontinuance was the part-payment from Jackson Lalic’s insurers and that this constituted a supervening event which rendered it unnecessary to maintain the proceedings, which had been properly commenced.
25. Mr Newell did not seek to cross-examine Mr White. However, he contended in his written submissions that Mr White’s evidence ought not be accepted. He submitted that a more likely explanation for Mr White’s preparedness to discontinue the proceedings was that he appreciated that the proceedings were hopeless. Mr Newell relied on the admission made by Mr White in the submissions filed on his behalf dated 15 May 2020 (in respect of the notices of motion) that the 28 October 2015 Costs Agreement was void as it provided for the payment of an uplift fee. Mr Newell also relied on his cross-examination of Mr White on this topic (as to why he discontinued the proceedings) at the hearing of the motions.
26. The present case is to be distinguished from a case which has been resolved by agreement without a hearing on the merits: One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 at [6]- [7] (Burchett J). In the case of a settlement, it is well established that a court ought not try a “hypothetical action between the parties” for the purposes of determining issues of costs: Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 622 (McHugh J); [1997] HCA 6. In the present case, the proceedings were not resolved. Although the payments from Sparke Helmore may have been relevant factors in Mr White’s decision to discontinue the proceedings, I do not regard them as a supervening factor sufficient to displace the general rule. In these circumstances, UCPR, r 42.19 applies and Mr Attwells is entitled to the costs of the proceedings unless there is a reason to otherwise order: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [53]- [54] (Bryson JA, McColl JA agreeing).
27. I am not persuaded that I should “otherwise order”. Accordingly, subject to the matter referred to below, Mr Attwells is entitled to the costs thrown away by the discontinuance: UCPR, r 42.19.

The costs of Mr Attwells’ notice of motion

28. Mr Attwells’ amended notice of motion was, in some respects, the mirror image of Mr White’s notice of motion since Mr White contended that the proceedings had settled and Mr Attwells maintained that they had not. Mr Attwells’ notice of motion sought additional relief which, to some extent, expanded the issues before the Court. However, the issues at the hearing of the notices of motion largely turned on whether the matter had settled. Mr Attwells ought, accordingly, be regarded as the successful party.

Correspondence on the issue of costs

29. I note that in the substantive hearing of the notices of motion, correspondence was tendered which indicated the level of costs said to have been incurred by Mr Attwells. In a letter to Mr White dated 12 February 2020, Mr Muriniti wrote:

“Your proceedings against our client, Mr Noel Attwells have been listed for directions at 9.00am on 13 February 2020. For the very reasons that your application to amend could not succeed, your proceedings against our client are doomed to fail. Allowing your Statement of Claim to stand is only going to incur extra costs. To date we estimate that our client's costs of having to contend with your proceedings are in the vicinity of $80,000.00 - $100,000.00.
The longer you allow the matter to continue, the more the costs will increase. Whilst it is entirely a matter for you whether you decide to discontinue your proceedings against our client or continue, nevertheless, it is appropriate that we should place you on notice that you will be liable for indemnity costs at the conclusion of the proceedings.
We note that you alluded to the fact that you are a man of modest means and that your primary asset is a unit worth approximately $400,000.00. If you persist with what we respectfully submit is a misguided action you will undoubtably [sic] end up with a costs order that may exceed the value of your unit and would result in your bankruptcy.”

30. While it is not inappropriate for the solicitor for one party to indicate to the other party (directly, if that party is unrepresented) what the level of costs is so that the other party can appreciate the risks associated with continuing to conduct proceedings, it is important that such correspondence not be worded such that it could be construed as a threat. The question whether the costs incurred by Mr Attwells are recoverable from Mr White is a matter for the costs assessor, if the costs cannot be agreed.

Conclusion

31. Mr Attwells is the successful party. The general rule is that costs ought follow the event: UCPR, r 42.1. For the reasons given above, I consider that the costs associated with the motions should be discounted.

Orders

32. For the reasons given above, I make the following orders:

(1) Subject to order (2) below, confirm that, in accordance with Uniform Civil Procedure Rules 2005 (NSW), r 42.19, the plaintiff must pay such of the defendant’s costs as, at 20 November (being the date on which the statement of claim was discontinued by the plaintiff), had been incurred by the defendant in relation to the claims in the statement of claim.

(2) Order that the costs of the plaintiff’s notice of motion filed 31 March 2020, the costs of the defendant’s amended notice of motion filed 30 March 2020 and the costs of the cross-claim be excluded from order (1) above.

(3) In respect of the plaintiff’s notice of motion filed 31 March 2020 and the defendant’s amended notice of motion filed 30 March 2020, order the plaintiff to pay half the defendant’s costs of the motions.

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