Nitopi v Translawcom Pty Ltd t/as Brander Smith McKnight (No 2)

These proceedings were commenced by summons in September 2016, when orders were sought requiring the defendant solicitors to provide Ms Nitopi with certain documents which they held, having acted for her in both Equity and Common Law proceedings brought in this Court in 2014, as well as a bill for outstanding costs, in circumstances where on her case, the costs of the Equity proceedings had been paid in full. An order for indemnity costs was also sought.

Now in issue are the costs orders which should be made, the proceedings otherwise having been resolved.

On 28 September 2016 Adamson J made ex-parte orders as to service and production of identified documents by 2pm on 30 September. On 30 September Adamson J ordered by consent:

Her Honour also noted:

On 28 October 2016 Ms Nitopi served a notice to produce. Documents were produced in November. On 8 November Ms Nitopi's solicitors advised that it was expected that she would not make a payment into court in accordance with order (2), but would await assessment of the costs.

On 18 November 2016 Ms Nitopi filed her motion and on 13 December 2016 the defendant solicitors filed theirs, it having been ordered on 24 November, that if a stay was sought regarding the common law files, a motion and supporting affidavit should be served.

The orders sought by Ms Nitopi were:

The orders sought by the defendant solicitors were:

On 21 March and 24 March 2017 the matter came before Rothman J, who ordered that:

A timetable for an argument as to costs, when the other outstanding issues were resolved by the parties was later fixed.

Ms Nitopi’s solicitor Mr Streeter swore an affidavit on 5 May 2017, in which he deposed to having been served with a bundle of documents on 29 March 2017, comprising some 5,000 pages, as well as a controlled money movement ledger dated 5 April and a brief to Ms Melbourne, relevant to the Equity Probate matters.

Mr Streeter deposed that perusal of those documents disclosed that other documents existed, which were in the defendant solicitors’ possession and control. Provision of those documents was pursued by emails sent on 30 March 2016. Further documents were then provided by hand and by email.

Perusal of those further documents revealed the existence of other missing documents. Provision of those documents was pursued on 7 April 2016. Additional documents were then purportedly provided, but instead, documents earlier provided were resent by email. Further documents were provided under cover of a letter of 11 April, which had not previously been provided. Perusal of those documents revealed that there were still further missing documents.

On 18 April further documents believed to comprise the Probate file were sought. Additional documents were provided on 21 April 2016. Mr Streeter was still unsure that the Probate file in its entirety had been provided. He also had doubts that the defendant solicitors could be relied on to produce the file in full at any time in the future.

Mr Streeter was not required for cross-examination, nor was Mr Smith, a director of the defendant solicitors who swore an affidavit on 15 May 2017, in which he referred to earlier affidavits he had sworn. It is not necessary, in those circumstances to attempt to resolve all that was advanced by the parties, as to the conduct of the proceedings, which included on the part of the defendant solicitors, a failure to appear at certain directions hearings in 2017.

In his affidavit Mr Smith deposed to the termination of the retainer in August 2016 by email; advice given in September as to outstanding costs and disbursements of some $63,801.91; and what was proposed as to the release of Ms Nitopi's documents and files relating to proceedings on foot in both the Common Law and Equity divisions, upon payment.

There was then a disagreement as to the defendant solicitors’ right to exercise any lien, given payments Ms Nitopi had already made. The result was the commencement of these proceedings in September.

Payments were made by Ms Nitopi on 28 March and on 29 March 2017 and documents “pertaining to” the estate file and the common law file were provided by the defendant solicitors. Documents were also provided in relation to the Probate file, which Mr Smith maintained had previously been provided in its entirety. The application for further production listed for hearing on 26 April was then resolved between the parties, without further hearing.

On 21 July 2017 the costs hearing was adjourned, Rothman J’s reasons for the orders made on 23 March still being awaited. They were delivered on 31 August: Nitopi v Translawcom Pty Ltd t/as Brander Smith McKnight [2017] NSWSC 1156. The parties later provided further written submissions.

The usual order under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) is that costs, as agreed or assessed, follow the event.

The costs orders initially sought by Ms Nitopi were that the defendant solicitors pay her costs of the proceedings. Those finally pressed were:

The orders pressed by the defendant solicitors were:

In his judgment Rothman J explained at [26] – [31]:

On this history it is apparent that the result of the proceedings Ms Nitopi brought, on the basis that the defendant solicitors never had any entitlement to assert a lien over the Equity proceeding documents, was that she succeeded in having the documents in issue produced. In not paying into Court the $63,801.91 referred to in order 2 of the orders made by Adamson J on 30 September 2016, in relation to the Common Law proceedings, Rothman J found that she had breached what had been agreed.

The defendant solicitors’ application to have the proceedings stayed failed, but Rothman J’s 24 March orders not only required Ms Nitopi to pay that sum into Court by 28 March, but also that the defendant solicitors produce the outstanding files and documents, which should have been produced in response to order 1 made by Adamson J in September 2016. The position then was that if any issue remained as to the production of other documents, a timetable for argument on that issue was imposed.

The result of Rothman J's orders was finally that the outstanding payment into Court was made by Ms Nitopi, further documents were produced by the defendant solicitors and the parties resolved what remained in issue between them, apart from costs.

There is no question that costs orders can reflect that a party may have succeeded on some issues and failed on others, including where a party has pursued an issue unreasonably: Oshlack v Richmond River Council (1998) 193 CLR 72 at 122; [1998] HCA 11. Further, costs orders may be made even in cases which are resolved by compromise, where “a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order: Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 at 624; [1997] HCA 6.

Thus while a court cannot try a hypothetical action, “in an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action”: Lai Qin at 624. If, for example, the court concludes that one of the parties has acted so unreasonably that the other party should obtain a costs order, or if it feels “confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried”: Lai Qin at 625.

In this case, given the documents finally produced by the defendant solicitors and the payment finally made into court by Ms Nitopi, after Rothman J’s orders, it seems that Ms Nitopi acted reasonably in bringing the proceedings, however she did not act reasonably when she failed to make the agreed payment into court. For their part, while the defendant solicitors acted reasonably in pursuing the agreed payment into court, their production of the documents Ms Nitopi sought did not occur as had been agreed and ordered by Adamson J in 2016. That resulted in the steps which Ms Nitopi successfully pursued, which finally achieved the production she was satisfied with.

As discussed by Hodgson JA in Turkmani v Visvalingam (No 2) [2009] NSWCA 279 at [13] whether there should be a departure from the ordinary costs rule should be:

I consider that the proper application of these principles in this case, so as to achieve justice between these parties, given what they respectively won and lost, is to order that: