Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd

[2009] NSWSC 698

CITATION:	Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2009] NSWSC 698
HEARING DATE(S):	10/06/09, 11/06/09 Judgment on application for security for costs: 18/06/09 Written submissions on costs: 10/07/09
JUDGMENT DATE :	23 July 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Defendant to pay first plaintiff's costs of motion for security for costs assessed on the ordinary basis up to 29 May 2009 and on the indemnity basis thereafter.
CATCHWORDS:	PROCEDURE - costs - costs of defendant's motion for security for costs - where defendant substantially unsuccessful - where defendant did not accept offer of compromise on a basis at least equivalent and arguably superior to the outcome
CATEGORY:	Consequential orders
CASES CITED:	Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2009] NSWSC 563
PARTIES:	Tim Barr Pty Limited - First Plaintiff Timothy James Barr - Second Plaintiff Narui Gold Coast Pty Limited - Defendant
FILE NUMBER(S):	SC 2762/02
COUNSEL:	Mr J E Lazarus - Plaintiffs Mr I M Neil SC/Mr A C Harding - Defendant
SOLICITORS:	Tzovaras Legal - Plaintiffs Verekers - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY 23 JULY 2009

2762/02 TIM BARR PTY LIMITED v NARUI GOLD COAST PTY LIMITED

JUDGMENT

1 I am dealing with the question of costs consequent upon my judgment of 18 June 2009 on the question of security for costs: Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2009] NSWSC 563.

2 The defendant sought an order that the first plaintiff (“TBPL”) provide security in the sum of $325,000 for the defendant’s costs for the period commencing 6 May 2009 and an order that TBPL provide security in the sum of $2,400,00 for the defendant’s costs up to and including 5 May 2009.

3 Upon Mr and Mrs Chow (the individuals now standing behind TBPL) giving to the court an undertaking to satisfy any adverse costs order that might be made against TBPL up to an amount of $120,000, the court dismissed the defendant’s security for costs application.

4 TBPL contends that, on the basis that costs follow the event, it should be ordered that the defendant pay its costs. TBPL goes further and says that those costs should be assessed on the ordinary basis up to 27 May 2009 and on the indemnity basis thereafter.

5 The submission with respect to indemnity costs has regard to a letter of 27 May 2009 from TBPL’s solicitors to the defendant’s solicitors offering, on behalf of Mr Chow, to procure the issue of a bank guarantee for $120,000 by way of security for the defendant’s costs since 13 May 2009 (being the date of the defendant’s notice of motion), which offer the defendant did not accept.

6 The defendant submits that it was partially successful in its application because it achieved the undertaking given by Mr and Mrs Chow to the court. That being so, the defendant says, the appropriate order is that TBPL pay the defendant’s costs up to 26 May 2009 (the day immediately before a substantially equivalent position was offered by Mr and Mrs Chow) and that the defendant pay TBPL’s costs on and after 27 May 2009, with costs, in each case, being as agreed or assessed. This implies that the defendant should be found to have succeeded up to the point where the security of $120,000 was offered in the correspondence between solicitors.

7 The alternative submission on behalf of the defendant is that the costs of the security for costs application should be the defendant’s costs in the proceedings. That submission is based on Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405.

8 The report of the case just mentioned does not appear to explain the basis on which the particular order was made. In the present context, the order would mean that, if the defendant eventually obtains an order for the costs of the whole proceedings, the defendant would also have the costs of the motion for security; but if TBPL and its co-plaintiff are eventually awarded the costs of the action, the defendant will not recover the costs of the motion for security. That outcome with respect to costs of an interlocutory application would imply that determination of the security motion was, as it were, part and parcel of the overall controversy upon which the court is yet to adjudicate. I do not accept that is so. The motion for security for costs initiated by the defendant was a matter quite unrelated to the overall controversy. It should be dealt with, from a costs perspective, as a separate matter.

9 When the question of the correct order as to costs is approached in that way, the predominating consideration is that the defendant failed to obtain any order for security. Against that, however, stands the point that, with respect to the question of security for future costs, the court accepted the undertaking of Mr and Mrs Chow. But then again, that undertaking might be regarded as an approximate equivalent of what TBPL had offered on 27 May 2009 and the defendant had not seen fit to accept.

10 In these circumstances, I am satisfied that the defendant must be regarded as having pressed to an unsuccessful conclusion (including over two hearing days) an application that would have been avoided had it accepted the offer of 27 May 2009. That offer would have put the defendant in a position at least equivalent to that which it achieved by pursuing the application and arguably a better position, having regard to the fact that the offer entailed a bank guarantee.

11 The offer was expressed to be open until noon on 29 May 2009. It was in no way a complex offer. In addition, it represented a true compromise. It was unreasonable of the defendant not to have accepted it.

12 The appropriate order is therefore that for which TBPL contends, as referred to at paragraph [4] above, but with 29 May 2009 substituted for 27 May 2009.

13 The orders of the court are accordingly as follows:

1. Order that the defendant pay the first plaintiff’s costs of the security for costs application determined on 18 June 2009.
2. Order that those costs be assessed on the ordinary basis up to 29 May 2009 and on the indemnity basis thereafter.
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