J T Interior Pty Ltd v Ozzy States Pty Ltd

HIS HONOUR: On 31 August 2018, I published reasons for judgment in this matter dealing with an application by the defendant to set aside an examination order upon the basis, generally speaking, that it was framed in unacceptably wide terms and did not demonstrate the existence of a legitimate forensic purpose: see J T Interior Pty Ltd v Ozzy States Pty Ltd [2018] NSWSC 1336. I declined to set the order aside but instead indicated that it was, in my opinion, capable of being amended so as properly to describe the documents to which the plaintiff genuinely sought access and thereby simultaneously to alleviate the defendant’s concerns. I directed that the parties bring in orders that gave effect to the concerns that had been raised. That occurred on 1 February 2019.

The parties were, however, unable to agree upon who should pay the costs of the application. These reasons deal with that issue.

It is clear that the defendant was unsuccessful in its attempt to have the order wholly set aside. By the same token, the orders as framed by the plaintiff contained infelicities that caused, or that had the potential to cause, confusion and uncertainty. The result of my decision was to provoke the parties to agree upon orders that varied the Examination Order dated 18 December 2017 so that the identified problems were eliminated. The relevant order that was framed after agreement between the parties now reads as follows:

It seems to me that both parties benefited from this outcome in fairly equal measure, so that any resort to the principle that costs should ordinarily follow the event is in this case of limited assistance. However, by letter dated 28 August 2018, after the defendant’s notice of motion had been filed, and well before the matter reached me, the solicitors for the plaintiff had in fact proposed that the Examination Order be varied. That letter was in the following relevant terms:

Although the proposed variation to the order made in that letter and the order upon which the parties have now agreed are not identical, there is little of substance between them that is different. The plaintiff’s proposal was made in the context of a letter that concluded with an express indication that the plaintiff intended to rely upon that letter and previous correspondence in relation to the question of costs of the defendant’s notice of motion, implicitly if the proposed draft was not accepted. If the solicitors for the defendant replied to that letter, or otherwise engaged in correspondence on the issue of costs that it raised, no such correspondence has been provided to me.

The letter of 28 August 2018 was not described as a Calderbank letter and did not purport to be a formal offer of compromise. That does not matter. It is reasonably apparent that the plaintiff was proposing a solution that would have or at least could have avoided the costs associated with a contested application. The solicitors for the defendant could not have been under any misapprehension about that. On the other hand, the very reason that the defendant felt constrained to challenge the wording of the examination order in the first place was because of the way it had been drawn by those acting for the plaintiff. There is in these circumstances what I consider to be a roughly equal contribution to the factors that generated the interlocutory proceedings before me.

In my opinion, having regard to these matters, it is appropriate that there should be no order as to the costs of the motion.