Adam v Perpetual Trustees Australia Ltd (No 2) - [2006] SADC 90

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
ADAM v PERPETUAL TRUSTEES AUSTRALIA LTD & ORS (No 2)
[2006] SADC 90
Judgment of His Honour Judge Beazley
9 August 2006
PROCEDURE - COSTS
Costs - Action for damages for breach of contract and in tort - Plaintiff successful in proceedings but not on all issues pleaded against the defendants - Plaintiff seeks order for costs of action on party and party basis - Defendants submit that the plaintiff ought receive a proportion of her costs to reflect issues upon which the plaintiff failed - Plaintiff entitled to costs of action on party and party basis.
District Court Act 1991 s 42(1); Supreme Court Rules 101.01 and 101.02, referred to.
Cretazzo v Lombardi (1975) 13 SASR 4; Duke Group Ltd (In Liquidation) v Pilmer (No 8) (1998) SASC 6699; Robinson v Australian Association of Social Workers Limited (2000) 210 LSJS 73; Burnie Port Corporation Pty Ltd v Bank of Western Australia (No 3) (2003) 12 Tas LR 325, applied.

ADAM v PERPETUAL TRUSTEES AUSTRALIA LTD & ORS (No 2)
[2006] SADC 90

On 15 June 2006 I published my reasons with respect to the issues of liability and then adjourned the matter for further submissions as to quantum, interest and costs.
On 25 July 2006 I was informed by the parties that they had reached agreement as to the question of quantum. Accordingly, by consent, I entered judgment for the plaintiff against the defendants in the sum of $380,000 inclusive of interest.
The parties then addressed the question of costs and I reserved my decision in respect of the same. The plaintiff sought an order for costs. The defendants conceded that they were liable to pay some of the costs of the plaintiff, but submitted that she ought only obtain a limited order for costs. They also submitted that I ought to exclude some disbursements, in particular, relating to the report of the chartered accountant Mr Timothy Clifton; and relating to the report, and evidence generally of Mr Wesley McMaster.
Defendants submissions
Mr Coppola, counsel for the defendants, referred to the fact that there were some 17 advances pleaded in the plaintiff’s further amended Statement of Claim. He concentrated his submissions upon my findings that the defendants were liable in respect of only seven of those advances. Indeed, of those seven advances, five sounded in nominal damages only. Mr Coppola stressed the point that the plaintiff had failed in respect of 9 of the 17 advances. Further, in respect of some of them, such as advances 12 and 13, I had found that the claims were without merit. He submitted that a limited order for costs ought be made to reflect the time spent on issues upon which the plaintiff failed.
On specific issues, Mr Coppola submitted that the general order for costs ought reflect the fact that on 5 August 2005, and 15 August 2005 the plaintiff was given leave to file a second further amended Statement of Claim particularising the grounds for an order extending the time for the proceedings, in relation to the claims by the plaintiff for some of the advances.
Mr Coppola also submitted that an order ought be made to the effect that the plaintiff not be entitled to recover the disbursements with respect to the preparation of the report by Mr Timothy Clifton dated 21 January 2005; nor in respect of the evidence and report of Mr McMaster dated 14 March 2005.
If there were simply a dispute about the quantum of the respective disbursements, I would refer that to the Taxing Officer for determination. The question for me to decide, however, is more fundamental, namely whether it is unreasonable that the costs associated with those respective experts be borne by the defendants.
As to Mr Clifton’s report it was submitted that it was prepared prematurely and predicated upon an assumption that the plaintiff would succeed on every advance. In the event it was of little or no assistance because of the way in which the report had been prepared. It was submitted that, in consequence, the defendants should not have to bear the costs associated with that report.
Mr Coppola sought the costs of the attendance before me on 5 July 2006, when the matter was further adjourned. On that day Mr Clifton’s further calculations had not been made available, and therefore the question of the quantum could not be advanced at that time.
In respect of the report of Mr McMaster and his evidence generally, Mr Coppola referred to my assessment of his evidence, in paragraphs 203 to 207, respectively, of the reasons. I had indeed found that some of his evidence in his written expert report touched upon the ultimate issues to be decided; and, that, on occasions, his report and conclusions strayed across the line between what a reasonable, competent and careful professional would do, and that which the witness himself would have done had he been placed hypothetically in the position of the defendants. In consequence thereof I had ignored certain parts of the report, and did not accept Mr McMaster’s opinion in respect of the monitoring of payments from the personal cheque account. I did conclude that I could have determined the scope of the retainer without the assistance of Mr McMaster’s evidence.
The plaintiff’s submissions
Mr Abbott, who appeared for the plaintiff, submitted that only a minor portion of the trial was directed to the relatively small advances upon which the plaintiff failed. He submitted that in any event it was necessary for evidence about those advances to be adduced at the trial to properly describe the relationship between the plaintiff and her nephew. This evidence explained why it was that the plaintiff was seeking an increase in the quarterly payments received by her from the defendants, and why she requested additional payments generally at a time when she ought to have been receiving interest payments directly from the nephew. Mr Abbott submitted that this was not a case where there ought to be any limited order as to costs.
As to the question of costs associated with the amendments to the pleadings in relation to the extension of time issues, Mr Abbott submitted that those issues did not delay the trial at all. He further submitted that the amendments were made in consequence of further discovery being made by the defendants.
As to the disbursements in relation to Mr Clifton, and Mr McMaster, Mr Abbott submitted that those reports were properly obtained. As to Mr Clifton it was essential for the plaintiff to be aware of the parameters of her claim.
Finally as to the aborted hearing on 5 July 2006 there were various reasons as to why the submissions could not be completed on that day.
Consideration of submissions
In relation to the amendments to the Statement of Claim in respect of the extension of time point in my opinion the defendants are entitled to the costs of and incidental to the amendments to their Defence in consequence of the orders granting leave to the plaintiff to amend her Statement of Claim in that respect. The amendments to the pleadings did not cause any delay in the trial.
In respect of the general order for costs, this falls within the discretion of the court, which discretion must be exercised judicially. In Cretazzo v Lombardi (1995) 13 SASR 4 at [11], Bray CJ said:
“the general discretion is absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and that it cannot be exercised on grounds unconnected with the litigation”.
In Hughes v Western Australian Cricket Association [1986] at page 40-748, Toohey J. said as to the effect of the case law:
“1.Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47.
2.Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564.
3.A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s cost of them. In this sense, “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at 12”.
In Cretazzo v Lombardi, Jacobs at [16] said, in respect of circumstances where a plaintiff may succeed on some claims but not others:
“Trials occur daily in which the party who in the end is wholly or substantially successful nevertheless fails along the way on particular issues of fact or law. The ultimate end of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes, ought nevertheless, to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded based merely on his success in those particular issues”.
The dicta of Jacobs J was applied by Mullighan J in Duke Group (In Liquidation) v Pilmer (No 8) (1998) SASC 6699 and cited with approval by the Full Court of the Supreme Court in Robinson v Australian Association of Social Workers Limited (2000) SASC 239 and in Burnie Port Corporation Pty Ltd v Bank of Western Australia (No 3)(2003) 12 Tas LR 325.
In my opinion, the facts of this case indicate that it is the very sort of case, which Jacobs J had in contemplation. It is a case where it was necessary for the plaintiff to detail the history of her relationship with her nephew. It formed part of the bundle of evidence contained in the tender books, which were tendered by consent. This was not a case in which a great deal of oral evidence was given. In my opinion it is appropriate to award the costs of the proceedings to the plaintiff without attempting to differentiate between those advances upon which she was successful and those upon which she failed.
As to the disbursements of the experts, I am of the opinion that it was both reasonable and proper for the plaintiff to engage the services of Mr McMaster. The plaintiff quite properly saw the need to seek expert advice as to the extent of the duty of care of a financial adviser. The fact that in the end the report and the evidence was of limited assistance in reaching the conclusions which I did, does not lead to the consequence that the plaintiff not be permitted to recover the disbursements payable in respect of the preparation of Mr McMaster’s report nor the preparation for and the giving of his evidence. In my opinion the plaintiff is entitled to recover such disbursements as are reasonable.
As to Mr Clifton it would obviously, in hindsight have been better to await the determination of liability so that a proper assessment of the damages could be considered. At the time Mr Clifton was retained, there was no order for severance on the issues of liability and quantum and it was necessary for all expert reports in respect of both liability and quantum to be prepared prior to trial. In my view, there is no proper basis for an order that the plaintiff not recover the disbursements in respect of the preparation of the expert financial report of Mr Clifton. In this case, the defendants consented to the tender of the report by Mr Clifton and there was no other expert evidence called in respect of the issue of quantum.
If any issue arises as to the quantum of the respective expert reports and the preparation by Mr McMaster for giving evidence, they are matters which may be dealt with by the Taxing Officer, who will be provided with evidence as to the quantum of the respective disbursements.
Finally as to the aborted hearing on 5 July 2006, the major reason why the matter did not proceed was because of the delay in Mr Clifton’s response. This was not the sole reason for the adjournment however, and, in my opinion, an order should be made that each party ought bear its own costs of the attendance on 5 July 2006.
Conclusion
In my opinion the plaintiff is entitled to the costs of the action against the defendants to be taxed on a party and party basis. The orders for costs are:
1.That the defendants shall pay the plaintiff’s costs of action against them to be taxed on party and party basis.
2.That the plaintiff pay to the defendants the costs of and incidental to the amendments to their defence in consequence of the amendments to the plaintiff’s Statement of Claim in the month of August 2005.
3.That as to the attendance on 5 July 2006 each party should bear its own costs.