ABL Nominees Pty Ltd v Warmings Commercial Services Pty Ltd - [2013] SASC 147

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Civil)
ABL NOMINEES PTY LTD v WARMINGS COMMERCIAL SERVICES PTY LTD & ORS
[2013] SASC 147
Judgment of The Honourable Justice Anderson
13 September 2013
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA
PROCEDURE - COSTS - INTERLOCUTORY PROCEEDINGS - ADJOURNMENT AND AMENDMENT
The appellants in this matter initially appealed a master's decision. In this decision the master refused the appellants' application for disclosure of further documents from the respondent. The appellants sought to file an amended fourth defence and cross claim as a result of additional documents in their possession and to abandon the appeal. The respondent seeks the costs associated with the abandonment of the appeal and the substitution of the fourth amended defence and cross claim. The respondent seeks its costs on a solicitor/client basis to be paid forthwith. The respondent only concedes it should have its costs thrown away for the amendment of the defence.
Held: Appellants to pay respondent's costs thrown away, including all costs associated with the appeal from the master and all costs in relation to the amendment. Costs to be paid on a solicitor/client basis and to be paid forthwith.
All Services Australia Pty Ltd v Telstra Corporation Ltd (2000) 171 ALR 330, applied.

ABL NOMINEES PTY LTD v WARMINGS COMMERCIAL SERVICES PTY LTD & ORS
[2013] SASC 147
Civil
Miscellaneous Appeal (Costs)

ANDERSON J. In this matter Warmings Commercial Services Pty Ltd as trustee for Warmings Consultants Service Trust and others (together called the Warming defendants) appealed from a decision of a master in which the master refused an application by the Warming defendants for disclosure by ABL Nominees Pty Ltd (“ABL”).
Earlier it was the Warming defendants’ case that they needed further documents to enable them to plead a new defence and cross claim. It would have been the fourth amended defence and cross claim. The master dismissed the application for disclosure because he was not satisfied that, even with the further documents, there might be a good counterclaim.
After the appeal was lodged and before it was due to be heard before me the Warming defendants came into possession of documents which they said enabled them to plead what would be the fourth amended defence and cross claim. These documents were not obtained in the discovery process but came into the possession of the Warming defendants by some other means.
As a result, when the appeal commenced, I questioned whether there was any utility in proceeding with the appeal. Mr Dal Cin advised the Court that the Warming defendants were seeking to file an amended fourth defence and cross claim as a result of the additional documents now in their possession.
I therefore adjourned the hearing of the appeal and ordered that the Warming defendants prepare and exchange with ABL the proposed fourth amended defence and cross claim so that argument could proceed on the merits of allowing this amendment.
It should be said that this matter has a chequered history as a result of ineffective case management by the Warming defendants. ABL consented to an order that the Warming defendants have leave to file the proposed fourth amended defence and cross claim. However, it reserved its rights to take out an application to strike it out following disclosure. ABL submitted that it was merely attempting to facilitate the advancement of this matter and to avoid the further delays and associated costs of interlocutory arguments, given the long history of delays in this matter on the part of the Warming defendants.
The question of the costs associated with the abandonment of the appeal and the substitution of the fourth amended defence and cross claim is contested. ABL submits that it is entitled to its costs thrown away by the amendment including its costs of the appeal rendered nugatory as a result of the action taken by the Warming defendants. It seeks its costs on a solicitor/client basis and further seeks an order that the costs be payable forthwith.
Mr Besanko who appeared for ABL referred me to several decisions on costs in similar circumstances. As the question of costs is completely discretionary, the significance of previous decisions is limited but the sentiments expressed by Kiefel J in All Services Australia Pty Ltd v Telstra Corporation Ltd & Ors (2000) 171 ALR 330 are instructive. In relation to whether costs should be paid forthwith, Her Honour held that it was appropriate in that matter because there was a substantial delay in the proceedings. Her Honour said that this most commonly arose when an appellant attempted a number of versions of a statement of claim with the result that extra unnecessary directions hearings were required, that interlocutory applications were needed and that substantial delays were incurred. In those circumstances Her Honour said that a party in whose favour costs had been awarded should not be required to wait until the proceedings were finalised to obtain the payment of costs. I refer to Her Honour’s reasons at [11].
Mr Dal Cin only conceded that ABL should have its costs thrown away by reason of the amendment of the defence. He submitted that the Warming defendants in fact have succeeded in their application by virtuse of the consent of ABL. I reject that submission. The consent was the result of a practical decision taken by ABL to avoid further delay and costs for which they should be commended rather than penalised. Mr Dal Cin made the point that since the present solicitors for the Warming defendants have commenced to act there has not been delay. He conceded delay up until Christmas of 2012 but says that delay since that time was caused by the failure of ABL to make disclosure. I reject that argument. I agree with Mr Besanko’s submission that it is not incumbent on any party to give what he described as “wide ranging disclosure” to another party before there is any valid pleading before the court.
It seems to me that the question of the payment of costs forthwith and the question as to whether they should be solicitor/client costs are guided by the same considerations. In the circumstances before me it was necessary to have a fourth attempt at putting a proper defence and cross action before the court, the Warming defendants failed to comply with previous orders by the master and did not seek an extension of time to comply with those orders, ABL brought a summary judgment application in an attempt to finalise this matter and it was then that the application was made by the Warming defendants for disclosure. After the Warming defendants obtained the further material, which they maintain enabled them to draft the fourth amended defence and cross claim, they nevertheless still proceeded with their appeal from the master’s decision. It was only after the appeal had commenced that Mr Dal Cin, at my suggestion, decided to proceed in a different manner. The defence now filed is significantly different from the earlier versions of the defence. It has been acknowledged by Mr Warming of the Warming defendants that the conduct by the Warming defendants has been inappropriate.
I therefore make the following orders:
1.The Warming defendants pay ABL’s costs thrown away by reason of the latest amendment and including all costs associated with the Warming defendants’ appeal from the order of the master.
2.These costs be paid on a solicitor/client basis.
3.That costs be payable forthwith.
I will hear the parties but it is my view that to save further expense ABL should present within 14 days a short form version of the costs which they claim. The Warming defendants should have a further 7 days to respond to the amount of those costs, to see if agreement can be reached.
If costs cannot be agreed I will then make an order for payment of the costs as a lump sum pursuant to the rules of court.