Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd (No 8)

1. [1]

   This judgment deals with an application by the defendant (the "Health District") for "costs of the appearance on 28 October 2015, including preparation therefor and correspondence appertaining thereto, on the indemnity basis and (alternately) on the ordinary basis". The plaintiff ("Macquarie") opposes the application and seeks its costs of this application. For the reasons which follow the Court has decided that Macquarie should pay those costs, and of this application, on the ordinary basis.

Facts

1. [2]

   This application arises as an indirect consequence of the judgment of Gleeson JA in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2015] NSWCA 323. Paragraphs 1 to 13 of that judgment set out the relevant background to what his Honour was dealing with. These reasons should be read with those paragraphs. Gleeson JA made the following orders:

   1. (1)

      Stay ordered by this Court by order 7(2) made on 13 December 2010, be discharged with effect from 9am on Monday 2 November 2015.

   2. (2)

      Respondent (Macquarie) to pay the applicant's costs of the notice of motion filed on 1 October 2015.

2. [3]

   When I became aware of that judgment my associate emailed the parties on Monday 19 October 2015 at 5.07pm:

3. [4]

   By email sent at 3.55pm on 21 October 2015 Mr Dubler SC (for Macquarie) responded, including:

4. [5]

   By email of 21 October 2015 sent at 4.22pm my associate responded:

5. [6]

   By email of 21 October 2015 at 5.01pm Mr Burton SC (for the Health District) emailed my associate and the parties:

6. [7]

   As a result of Mr Burton SC's email my associate emailed the parties at 10.05am on 22 October 2015 informing them that the matter would be listed for directions on Wednesday, 28 October 2015 at 9.30am.

7. [8]

   When the matter was relisted before me on 28 October 2015 I acknowledged to the parties that in the options for terminal date that I had originally circulated I had omitted 11 June 2011, being the date on which special leave to appeal to the High Court was refused. I asked the parties, "Why has this got complicated?". Mr Burton SC said it should not be. Mr Dubler SC indicated that he wanted the opportunity to put on short submissions and evidence, especially in relation to the retaking of possession of the car park and hospital sites.

8. [9]

   The parties presented me with competing short minutes. I ultimately made directions for the exchange of any evidence and submissions on the question of "the effect (if any) on issue 1 for Kunc J on the inquiry of the hearing before, and orders of Gleeson JA in the Court of Appeal on 15 October 2015".

9. [10]

   Later that same day, at 1.37pm, Mr Dubler SC emailed my associate and the parties, including:

10. [11]

    On 2 November 2015 by email sent at 2.03pm, Mr Burton SC indicated that he had instructions to make the application which is the subject of these reasons. I directed the parties to file written submissions. The parties agreed that this question could be dealt with by me on the papers.

Submissions

1. [12]

   The Health District's submissions were, with respect, short and to the point. The basic proposition was:

2. [13]

   The Health District also referred to the fact, made plain in Mr Dubler SC's email of 28 October 2015 at 1.37pm, that parts of the transcript which had ultimately moved Macquarie to accept the Health District's position had not previously been reviewed by Macquarie. The Health District submitted that circumstance, when added to what was described as the waste and lack of necessity in the exercise, warranted the making of an order for costs on the indemnity basis.

3. [14]

   Macquarie's submissions were some eight and a half pages in length. With no disrespect intended, they may be summarised as arguing that the issue which had been raised for the hearing on 28 October was a minor one in the context of a very long and complicated hearing. The usual principle was that costs should follow the event. The costs of the parties’ excursion in dealing with the question that had been raised by the Court should simply fall within the overall proceedings. Macquarie submitted that there was no reason to consider that application separately and certainly no basis to order indemnity costs. Macquarie also submitted that the appearance was at the insistence of the Health District for appropriate directions to be made.

4. [15]

   The burden of the balance of Macquarie’s submissions was that Macquarie was considering the question of whether Gleeson JA’s decision gave rise to an issue estoppel or res judicata as to when the original Court of Appeal stay had been lifted. As to that, Macquarie’s submissions concluded, “However, due in part to a further reflection on the transcript, the plaintiff has decided not to take the estoppel and res judicata point before the inquiry”.

5. [16]

   In reply, the Health District submitted that the application was a discrete issue and could be dealt with as such in relation to costs. It repeated its fundamental proposition that Macquarie had ultimately accepted the Health District’s proposed answer to the question which I had raised. Macquarie’s failure to consider the transcript of the hearing before Gleeson JA at which both Mr Dubler SC and Mr Kanagaratnam of Counsel were present was not an adequate explanation or excuse.

Resolution

1. [17]

   The Court accepts the Health District’s submission that this issue is discrete and can be dealt with separately insofar as costs are concerned. The Court’s initial email raised an issue which could have been resolved by a couple of emails between the parties and the Court. That did not occur. After some delay Macquarie accepted the Health District’s initial position, but in the meantime the appearance of 28 October and related correspondence and preparation had occurred. It would have been avoided if Macquarie had agreed in the first place to what, with respect, seems to me to be the only available view of the outcome of Gleeson JA’s judgment for the purposes of the issues which I have to determine.

2. [18]

   The Court has determined that Macquarie should pay the costs sought by the Health District because Macquarie’s explanation for why it took so long to agree with the Health District’s position is insufficient for two reasons. First, Messrs Dubler SC and Kanagaratnam appeared before Gleeson JA. I do not see why there was need to consult the transcript if there was a point to be made about it.

3. [19]

   Second, even if my first reason is incorrect, Macquarie had three clear business days and a weekend after I had fixed the hearing for 28 October to undertake any necessary review and to come up with a position. No explanation was proffered in Macquarie’s submissions as to why that period of time was insufficient for it to undertake a review of a relatively short transcript and the reasons of Gleeson JA.

4. [20]

   The costs of the appearance on 28 October 2015 and of the correspondence and preparation related thereto is to be paid by Macquarie. However, the Court is not satisfied that the circumstances even approach the seriousness or degree of delinquency that would justify an indemnity costs order. That part of the Health District’s application is rejected.

5. [21]

   The Court orders:

   1. (1)

      The plaintiff is to pay the defendant’s costs of the appearance on 28 October 2015 including preparation therefor and correspondence appertaining thereto and of the costs of this application on the ordinary basis.