Diakovasili & Anor v Order of AHEPA NSW Incorporated

By a Further Amended Originating Process filed on 22 June 2023, the Plaintiffs, Ms Diakovasili and Mr Antonakos, sought a declaration that they were entitled to commence or continue proceedings in the name of the Defendant, Order of AHEPA NSW Incorporated (“AHEPA NSW”), against ten persons named in a draft Statement of Claim, or alternative relief.

I delivered judgment in the proceedings on 31 October 2023 ([2023] NSWSC 1282). I determined that I should not make the orders sought by the Plaintiffs and I also observed (at [244]) that:

The Plaintiffs submit that the primary judgment has the consequence that the proceedings should be dismissed and resist my tentative view that the Court should make a declaration to the negative of that which they had sought. It seems to me that a declaration of a negative character is appropriate, where it would be inconsistent with the proper administration of justice for the Plaintiffs, after I had found that they were not entitled to commence proceedings in a particular form, nonetheless to proceed to do so. That would put the Defendant, Order of AHEPA NSW Inc, in the invidious position that, notwithstanding its success in these proceedings, it would then need to take further steps to summarily dismiss or strike out those proceedings, relying on the findings in my principal judgment to do so.

The Plaintiffs submit that a declaration of this kind would “create uncertainty, ambiguity and potential prejudice”. I do not accept that submission. Where there is no suggestion that the positive form of declaration sought in the Plaintiffs’ Further Amended Originating Process, that they were entitled to commence or continue the proceedings on the specified basis, would have created any “uncertainty, ambiguity and potential prejudice”, it seems to me that there is no room to contend that a negative declaration to substantially the same effect would have those results. I will, however, adopt a narrower formulation of that order than AHEPA NSW proposed, so that it goes no further than the matters determined by my judgment.

The applicable principles as to an order for costs are well-established. Section 98 of the Civil Procedure Act 2005 (NSW) confers a discretionary power to determine costs on the Court and requires that that discretion be exercised judicially: Ballam & Ors v Ferro & Anor (No 2) [2022] NSWSC 1358 at [54]. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) in turn provides that:

A successful party has a “reasonable expectation” of being awarded costs against an unsuccessful party, unless there is good reason for that presumption to be displaced: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22], [134]. In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA (with whom Mason P agreed) observed that:

In Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [7]–[14], McColl JA summarised the applicable principles as follows:

The Plaintiffs here accept that they should pay the Defendants’ costs of the proceedings, as agreed or as assessed, other than the costs of and incidental to a hearing vacated by Darke J on 27 April 2023 which they submit should be excluded from the costs order against them. They refer to the circumstances in which Darke J vacated that hearing, on the basis that it would not be completed within the parties’ previous one day estimate, and where a dispute had arisen between the parties as to whether evidence that the Plaintiffs had filed was properly evidence in reply or was late evidence in chief.

Mr Rizk, for AHEPA NSW, responds that a successful party will ordinarily be allowed its costs against an unsuccessful party, and submits that there is no good reason that AHEPA NSW should not be awarded costs in respect of the hearing on 27 April 2023 or costs thrown away by reason of the vacation of the hearing date originally listed for 28 April 2023, where Darke J had reserved the costs of those matters. Mr Rizk also submits that the hearing was vacated by reason of an interlocutory application made by the Plaintiffs on 26 April 2023, by which the Second Plaintiff was joined as party to the proceedings and the Plaintiffs were given leave to rely on evidence served on 24 April 2023. It is not necessary for me to determine the causal proposition in that submission in order to determine the question of the costs of these proceedings.

It seems to me that the hearing date vacated on 27 April 2023 was an incident of the conduct of these proceedings, where Darke J did not reach a finding that either party was at fault in that regard. The costs of and incidental to that hearing date should be treated in the same way as the costs of the proceedings generally and an order that the Plaintiffs pay them is consistent with the compensatory function of an order for costs.

Accordingly, I make the following orders: