Abbott Australasia Pty Ltd v Simcit Pty Ltd & Anor No. Scciv-01-745

ABBOTT AUSTRALASIA PTY LTD v SIMCIT PTY LTD (AS TRUSTEE OF THE SIMPSON FAMILY TRUST) AND SIMPSON PACKING PTY LTD
[2001] SASC 298
Full Court: Mullighan, Lander and Wicks JJ

MULLIGHAN J: I agree that the appeal should be dismissed for the reasons given by Lander J.
LANDER J: The appellant was the defendant in proceedings brought by the two respondents for damages in the District Court. The proceedings were brought by the respondents jointly.
The respondents obtained verdicts against the appellant. The first respondent obtained a judgment which included interest in the sum of $224,919 and the second respondent obtained a judgment including interest in the sum of $85,113. Judgment was entered accordingly.
The trial commenced on 19 July 1999 and completed on 3 May 2000. Whilst the trial took nine months to complete, there were only 35 sitting days during that period. The trial was interrupted for long periods of time. The Trial Judge reserved his decision. He handed down his decision on 2 March 2001.
The appellant filed offers to consent to judgment in respect of both respondents’ claims on 2 July 1999. In respect to the first respondent’s claim, the appellant filed an offer to consent to judgment in the sum of $250,000 plus costs of action to be agreed or taxed. In respect to the second respondent’s claim, the appellant filed an offer in the sum of $50,000 plus its costs of action to be taxed or agreed.
The offers were not made more than 21 days prior to trial as required by District Court Rule 40.01. However the parties agreed that compliance with that Rule should be waived. They also agreed that the respondents could accept the offers at any time after they were filed and delivered and indeed after the trial commenced, notwithstanding the provisions of DCR 40.02. Because the trial commenced on 19 July 1999, that meant that the respondents had some 17 days to accept the offers.
It can be seen that the judgment entered for the first respondent was less than the amount offered by the appellant, but the judgment entered for the second respondent was greater than the amount offered by the appellant.
The respondents applied for costs. The appellant sought its costs from the commencement of trial.
The sealed order shows that the Trial Judge made the following orders:
“1. The (respondents) have their costs to the first day of trial.
2.The (respondents) have from the defendant 80% of their costs of the action.
3.That there be no order as to the costs thrown away occasioned by the ‘Davenport adjournment’.”
The order is imprecise. It is not clear from the order, as to what costs the respondents were entitled.
The parties have treated the order made by the Trial Judge as entitling the respondents to their costs to the first day of trial and thereafter entitling the respondents to 80% of their costs of trial.
I think that treatment of the order does reflect the Judge’s intention but I have to say the order as sealed is by no means clear.
The litigation was both complex and difficult. The respondents sought damages from the appellant in relation to advice given by employees of the appellant in regard to the application of chemicals on a fruit crop owned by the first respondent. The second respondent packed and distributed the crop. The same persons control both respondents. However, because of the structure of the respondents and their discreet roles it was necessary that both be parties. They are controlled by the same persons, represented by the same solicitors and counsel, joined in the one proceedings and acted jointly in all respects during all aspects of the litigation. Both respondents claim that they suffered damage by reason of the advice given.
The litigation involved a number of complex issues. It gave rise to a number of experts’ reports from different experts, many of whom were called in the trial.
The respondents amended their pleadings on a number of occasions. On the first day of trial, the respondents sought leave to claim further losses. Leave was given on 30 July which was the eleventh day of trial. In due course the respondents succeeded in part on those amendments. The appellant argued on this appeal that that was a matter which should have been taken into account on the question of costs.
There may be circumstances where an amendment made after the trial might prejudice a party who has filed an offer pursuant to DCR 40. The party who had filed the offer would be precluded from advising the trial judge of the offer: DCR40.06. Moreover, no further offer could be filed: DCR 40.01. It could be that the amendment would create an injustice. However, this is not one of those cases. The appellant does not claim that it would have increased its offer to the second respondent. Of course, its original offer to the first respondent was still adequate even after the amendment.
However, the fact that the second respondent’s damages only exceeded the offer made before trial because it received damages in respect of an amendment made after the trial is a factor which would weigh in the balance in the exercise of the discretion on costs.
The appellant altered the focus of its defence on one occasion which led to a further delay in the trial and subsequently the calling of a number of experts and the recalling of witnesses. In due course, the appellant failed on that issue. That issue has been described in the order and in the submissions as “the Davenport issue”. (Dr Davenport was the author of a report which the appellant relied upon on that issue).
On this appeal, Mr Anderson QC, who appeared for the respondents suggested that something in the order of five days had been lost by reason of the Davenport issue. He also claimed that the respondents were put to the cost of re-interviewing and re-proofing witnesses and engaging further experts, one of whom was resident overseas.
I think it could be said that the Davenport issue gave rise to a substantial increase in the costs occasioned by the parties. Mr Anderson suggested, and Mr Lovell, who appeared for the appellant, did not disagree, that the Davenport issue itself might have comprised something between 15 and 20% of the respondents’ costs. There can be no doubt that the respondents would have been entitled to those costs in any event. The appellant conceded before the Trial Judge and on the appeal that it would have to bear the costs of that amendment.
The trial occupied 35 days. It continued over a period of time. There were, as I say, delays due to adjournments caused by amendments to the pleadings.
It is very difficult upon appeal, without being provided with all the material before the Trial Judge including the pleadings, the evidence and the exhibits, to properly understand the issues which needed to be resolved.
This Court has been, of course, provided with the Judge’s reasons for judgment, but those reasons are difficult to understand without any understanding of the evidence upon which the reasons were based.
Moreover, although written submissions on the question of costs were placed before the Judge by both the appellant and the respondents, and those submissions were supplemented by those parties’ oral submissions, the Judge has given no formal reasons for his decision on costs.
Section 42 of the District Court Act 1991 (SA) gives an unfettered discretion to the Court to award costs against any person, whether a party to the proceedings or not. That Section is supplemented by Rule 101 of the District Court Rules which provides that costs should follow the event unless the Court otherwise orders.
There is no doubt that the respondents were entitled to their costs up to the first day of trial. The appellant’s counsel did not argue otherwise, either before the trial judge or before this Court.
The question is whether the Judge’s exercise of his discretion in awarding the respondents 80% of their costs thereafter, miscarried in light of the fact that the appellant had filed the two offers to which I have referred. It is to be remembered that the respondents should have received, whatever else the merits of the appellant’s argument, 15 to 20 per cent of their costs to reflect the Davenport issue. The question is whether they should have received the further percentage awarded and/or whether the appellant should have received any of its costs.
The District Court Judge was confronted with two arguments. On the one hand, the appellant maintained that the first respondent received damages less than that offered and the respondent therefore must suffer the consequences provided in DCR 40.05. That Rule provides:
“Where a plaintiff has not accepted a payment into Court or an offer to consent to judgment and:
(a)the sum recovered, or as the case may be, the proportion of the debt, the damages or the relief recovered by the plaintiff, is no greater than that offered or paid into Court; or
(b)the Court is of the opinion that the amount, percentage or relief offered was adequate the Court, unless it thinks proper to order otherwise shall order:
(i) that the plaintiff recover against the defendant his costs incurred until 14 days after the service of the offer or the notice of the payment into Court.
(ii) that the defendant making such offer, recover against the plaintiff his costs incurred 14 days after the service of the offer, or the notice of the payment into Court.”
The Rule provides that unless the Court thinks it is proper otherwise to order, the defendant should, on making an offer greater than the amount awarded by damages, receive its costs incurred 14 days after the service of the offer.
The appellant claimed therefore that it was entitled to costs before the District Court Judge in respect of the first respondent’s claim from 14 days after service of that offer. It also claimed that the second respondent received damages including interest only marginally more than that offered.
In those circumstances, it says, after allowance for the Davenport amendment, it should have its costs or, if not all of its costs, some substantial proportion of them.
On the other hand, the respondents argued that there was one set of proceedings and the amount which was recovered jointly by the respondents exceeded the amount of the two offers made by the appellant.
Rule 40.05 was but a guide in a case such as this. It does not directly address circumstances where one plaintiff’s damages exceed an offer and the other plaintiff’s damages do not. It does not address circumstances where, because of their structures, both plaintiffs had to be joined. Of course the offers had to be taken into account in determining the appropriate order for costs. Clearly enough they were. There is no other reason why the respondents did not receive all of their costs including the costs on the Davenport issue.
In this case the Trial Judge had to determine, having regard to the history of the matter, the course of the trial, and the parties relative successes on the issues, the appropriate order for costs.
In my opinion, it is not possible for the appellant to say on appeal that the Judge’s exercise of discretion in respect of costs miscarried.
The appellant cannot point to any relevant material to which the Trial Judge did not have regard, or any irrelevant material to which he had regard. There is no suggestion that he overlooked or misapplied the principles to be applied.
Six factors were suggested as being particularly relevant to the exercise of the Trial Judge’s discretion on costs. However, it was not suggested that he failed to have regard to these factors, only that he failed to give those factors sufficient weight.
This was a judgment based upon material which has not and could not be made available to this Court. This was a case which had so many facts and circumstances within the case which were relevant to the exercise of the discretion that it would be impossible for this Court to interfere with the exercise of that discretion.
I would dismiss the appeal.
WICKS J: I agree.

[2001] SASC 298

9 November 2001