In the matter of Tiaro Coal Limited (in liquidation) (ACN 127 936 412)

By my judgment delivered on 5 June 2018 ([2018] NSWSC 828), I dismissed an application brought by several Defendants in these proceedings seeking orders setting aside the Originating Process filed by the Plaintiff, for service of that Originating Process and consequential orders dismissing the proceedings. I there expressed the view that that the several Defendants should pay the Plaintiff’s costs of the application and should also pay the costs of and incidental to a Further Amended Interlocutory Process filed by the Plaintiff on 9 May 2018.

Since the Plaintiff indicated that it wished to be heard further as to the basis of such a costs order, I allowed the parties a further opportunity for written submissions and delivered a further judgment as to costs on 6 July 2018 ([2018] NSWSC 1043) (“Costs Judgment”) and ordered that the several Defendants pay the costs of their application forthwith on the ordinary basis. I also gave the parties leave to make submissions as to whether costs payable by each Defendant should be reduced by a set-off of costs that were payable by the Plaintiff to that Defendant in respect of an earlier application to set aside a notice to produce. I directed the parties to bring in agreed orders to give effect to the Costs Judgment, and any submissions as to that set-off. There is now only limited agreement as to the form of an order as to costs.

In its further submissions as to the orders to be made to give effect to the Costs Judgment (as distinct from its earlier submissions as to costs), the Plaintiff seeks to have its costs quantified in a gross sum basis, and seeks to have directions as to that application included in the orders to be made by the Court. The several Defendants opposed directions being made in respect of an application for gross sum costs, on the basis that such orders would not give effect to the Costs Judgment, where no issue concerning gross sum costs had previously been raised or was addressed in that judgment. I will make a direction for the Plaintiff to file and serve any application for such an order by a specified date, but will not make further orders where they would not reflect any matter raised in or addressed by the earlier judgments.

The several Defendants also seek to have the orders make clear that they do not extend to questions of costs of matters previously heard before Brereton J, or any order for costs in respect of the parties’ previous submissions as to costs. I will include an order making that clear, for good order’s sake, except so far as I make a further order necessary to facilitate the set-off to which I refer below.

The third order that I make below is directed to the question of set-off, where I noted in the Costs Judgment (at [18]) that:

The Plaintiff indicated that it did not, in principle, oppose a set-off of the costs payable by the Plaintiff to the several Defendants under order 1 made by Brereton J on 12 March 2018 against the costs payable by the several Defendants to the Plaintiff by reason of the Costs Judgment. The Plaintiff indicated that it was concerned that the quantification of such a set-off could have the practical effect of delaying the payment of costs to the Plaintiff forthwith, particularly if the several Defendants wished to avail themselves of the ordinary assessment regime where the Plaintiff sought its costs on a gross sum basis. The several Defendants responded that, as they had noted in their earlier submissions as to costs, there would be practical injustice if the Plaintiff could enforce its costs orders forthwith and the several Defendants could not enforce or set-off the costs orders made in their favour and against the Plaintiff. They point out that no question of set-off would arise if they were to delay in assessing their costs, under the form of order proposed by the Costs Judgment.

I do not consider that any issue as to delay arises, because the form of order that I will make permits a set-off if, and only if, an amount has been assessed or determined (for example, by a gross sum costs order) in favour of a Defendant when the Plaintiff is entitled to and demands payment of its costs. If that Defendant’s claim for costs has not been assessed or determined by that point, then no question of set-off arises, and it will be entitled to pursue payment of its costs in the ordinary way. I also note that the third order below provides for set-off of the costs payable by the Plaintiff to each Defendant separately since the several Defendants brought separate applications and not a single application to set aside the Originating Process.

The several Defendants proposed a reciprocal order that would allow the Plaintiff to set-off costs payable by it against costs payable to the several Defendants. I do not make that additional order, since the Plaintiff did not seek it, those costs did not arise in the hearing before me and that order may have a potential for double-counting in respect of the set-off order that I have made in the third order. I will reserve liberty to apply on 2 business days’ notice if the need for such an order arises.

Accordingly, I make the following orders: