HIH Insurance Limited (in liquidation) & Anor v Rodney Stephen Adler & Ors

A reserved judgment [2007] NSWSC 633 was delivered on the strike out applications on 22 June 2007. Costs were reserved. This decision deals with those costs. The eighth defendant does not oppose an order that it pay the plaintiffs costs of its strike out motion.

In terms of the principles which obtain it is unnecessary to do otherwise than: i. to note that Court’s power to award costs is conferred by s.98 of the Civil Procedure Act 2005 (NSW), the requirement being that the discretion to award costs be exercised in accordance with Rule 42 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). ii. to refer to the decision in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (Formerly GIO Insurance Ltd) and Ors [2006] NSWSC 583 where the following observations were made: [10] The effect of UCPR Pt 42 r 42.1 is that an unsuccessful party may be ordered to pay the entirety of the costs of a successful party, even though the successful party did not succeed on all issues. Special circumstances are generally required to justify some other order being made. [11] Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those in which it failed: Waters v PC Henderson (Aust) Pty Ltd (Unreported, New South Wales Court of Appeal, Kirby P, Mahoney JA, Priestley JA, 6 July 1994). See also Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 423 at [4]-[7]. iii. to note that the touchstone in the exercise of the costs discretion is the achievement of substantial justice between the parties: Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc (No 2) [2002] FCA 967: hence the costs order must be fair and reasonable in all of the circumstances: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 24. The circumstances

There is no doubt but that the plaintiffs were successful in resisting all challenges to the FASOC which were pressed at the hearing. Likewise it is true that during the run-up to the hearing certain claims were abandoned by the plaintiffs and certain further particulars were provided.

To be more precise: i. the plaintiffs abandoned the so-called "joint enterprise" allegations which had been used in support of the accessorial liability contentions so far as the plaintiffs sought to rely on the conspiracy limb of s 75B of the TPA and s 79 of the Law; ii. the further particulars were provided in relation to certain causation allegations. The respective stances

Broadly speaking: i. the defendants [otherwise than the eighth defendant] contend that the present circumstances clearly show that the defendants succeeded on discrete issues; namely the above described abandonment of the joint enterprise allegations and the securing of the above-described further particulars; ii. the plaintiffs contend that: a) an attempt to draw a distinction between the conduct before the hearing and the plaintiffs' success at the hearing is artificial; b) the issues that were "clearly dominant" between the parties were the three issues ventilated at the hearing: knowledge and accessorial liability, indirect reliance, and damages; c) the plaintiffs were successful in relation to all of those issues; d) the plaintiffs' conduct before the hearing in withdrawing a limb of its accessorial liability claim related to one of those clearly dominant issues on which the plaintiff was successful; e) the provision of further "particulars" regarding causation is an ancillary matter and not a special circumstance; f) the reason why a departure from the usual order is justified where a plaintiff is unsuccessful on a "clearly dominant or separable" issue is that a defendant has occasioned additional cost or expense in fighting that issue: that is said not to be the situation here because the plaintiffs' conduct in the lead up to the hearing is said to have been aimed squarely at minimising cost and expense. Decision

I accept that mathematical precision is not required in determining costs orders and that a court will not attempt to be too technical or exacting in allocating costs: NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 at [25], Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 and Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 423 at [4].

In truth the plaintiffs succeeded on all the issues which remained live at the hearing: cf NRMA Ltd v Morgan (No 3) [1999] NSWSC 768, Gilsan (International) Ltd v Optus Networks Pty Ltd (No 4) [2005] NSWSC 1073.

In my view neither the plaintiff's conduct before the hearing in respect of its withdrawal of a limb of its accessorial liability claim nor its having furnished the further particulars referred to above serve to remove the case from one in respect of which it is appropriate to award the costs of the motions to the plaintiffs. The withdrawal of the limb of its accessorial liability claim related to one of those clearly dominant issues on which the plaintiff was successful. Nor does the matter of the provision of the further particulars, albeit representing a concession by the plaintiffs, constitute special circumstances of the kind appropriate to disentitle the plaintiffs from costs of the strike out motions. Order

The order is that the defendant applicants on the strike out motions pay the plaintiffs costs of and occasioned in relation to those motions.