| .,... | W.". | *"....I .... | . | ...v. |
| A | P | ) | JUDGMENT NO .LLZ"../ 2 2 . |
| J |
| NEW SOUTH WALES DISTRICT REGISTRY | ) | No.G918 of 1993 |
| ) |
| GENERAL DIVISION | 1 |
APPEAL FROM A JUDGE OF THE F E D E W COURT
QF AUSTRALIA
BETWEEN:
| LIBRARY U | AND: | ALYP | ENTERPRISES | PTY |
LIMITED
Respondent
| Lx!!u 8 | SHEPPARD, BEAUMONT AND EINFELD JJ. |
| -: | 16 MAY 1994 |
REASONS FOR JUDGMENT
| SHEPPARD J. | I will ask Mr. Justice Beaumont to give the first |
| judgment. |
| BEAUMONT J. |
This is an appeal from a costs order made by Davies J. after the dismissal, by consent, of an application to wind up a corporation. His Honour ordered that the applicant for -,
| the winding up order, the present appellant, pay the | 4 |
| respondent corporation's costs of the proceedings. |
| to pay the sum of $20,177.43 for services provided. Thereafter, correspondence took place between the solicitors for the parties. In that correspondence, the respondent (1) | -- |
The history of the matter may be shortly stated as
follows. By a notice given under s.460 of the Coruorations
Law dated 9 June 1992, the appellant required the respondent
disputed liability; (2) contended that it had a cross-claim
against the appellant; and (3) asserted that it was solvent,"
| In January 1993, the appellant instituted,winding-up. | ., |
| proceedings. | The proceedings were opposed. 'L pursuant to |
| directions given by the Court, af f | idavit evidence w,as"' | f~il!&&' An | " | : | . |
behalf of both parties. Although the respondent admitt*
of the debt claimed, it also, as foreshadowed, sought to set
up a cross-claim. Further, the respondent contended that it
was solvent. On 29 July 1993, the appellant indicated to the
Registrar that it wished to withdraw the application but asked
that costs be reserved. The Registrar ordered that the
proceedings be dismissed, with costs reserved. As has been
said, Davies J. was asked to deal with the question of costs.
In the first place, the appellant applied for part of its costs. In refusing the appellant's claim for costs, Davies J. said, ex tempore:
| " W e l l , | M r . | C a s t l e | [Counsel | for | the | a p p e l l a n t ] | I | am |
| not | going | t o g i v e you | a n y c o s t s o f the proceed ings , |
| whatever o t h e r judges | m igh t | think about | i t I | do |
| t h i n k | t h a t , | u n l e s s | there | i s some | i n d i c a t i o n | - | and |
| there was some i n d i c a t i o n here b u t there was not | a n y |
| g r ea t | i n d i c a t i o n | - | u n l e s s | there | i s some | i n d i c a t i o n |
| t h a t | a | company | r e a l l y | i s | i n s o l v e n t | and | i s | i n |
| d i f f i c u l t f i n a n c i a l | c i r cums tances , | t h e n | i f you | have |
| got | a | d e b t | which | i s | an | o r d i n a r y | t r a d e | d e b t | o f |
| something | l i k e | $20,000 | the | proper | c o u r s e | i s t o |
| o b t a i n | an | o r d e r | i n | the | m a g i s t r a t e ' s | c o u r t , | o r |
| whatever | i s the a p p r o p r i a t e c o u r t , | and | I | have a | f i r m |
| v i e w | t h a t | c l i e n t s | shou ld | n o t | g e t | i n t o | the | p o s i t i o n |
| o f | a l l | the | c o s t s | o f | t h i s | c o u r t | b e i n g | i n v o l v e d | o v e r |
| what | was | b a s i c a l l y a | $20,000 | d e b t | t h a t shou ld | have |
| been | sued | for i n the m a g i s t r a t e ' s | c o u r t . |
| Now it i s how you | look a t these t h i n g s , b u t I | think |
| i f you | h a v e | g o t | s m a l l | d e b t s and | they a r e t r a d e d e b t s |
| then, | u n l e s s | there | i s p r e t t y | s t r o n g | e v i d e n c e | t h a t |
| the d e b t o r i s insolvent | i n the sense o f he | i s not |
| p a y i n g | it | b e c a u s e | he | c a n n o t | p a y | i t , | w e l l | then | it |
| seems | t o me | the | f irst | s t e p i s t o s u e | i n the |
| m a g i s t r a t e ' s c o u r t or even the D i s t r i c t C o u r t where the costs a r e very much less t h a n they a r e i n this c o u r t . S o I d o not think I w i l l g i v e you a n y o f the | costs. | I j u s t feel i n a sense embarrassed t h a t a l l |
| th is | costs | and | t h i s | b u l k y f i l e | h a s | been | i n v o l v e d . |
| Now, | i t w i l l be | charged | for a t Federa l | C o u r t r a t e s , |
| and | a l l | over | a | $20,000 | d e b t | wh ich | i s | s t i l l |
u n r e s o l v e d . "
The respondent then applied for its costs on an indemnity basis or, alternatively, on a solicitor and client basis.
In ordering that the respondent have its costs,
based on the ordinary basis, his Honour said:
| " A l l r i g h t . | W e l l , | I | w i l l not | g i v e you | costs on | a n |
| i n d e m n i t y b a s i s for | the | r e a s o n | t h a t | i t | seems | to me |
| t h a t | y o u r | company | was | r a t h e r | s l o w | i n m a k i n g | c l e a r |
| what | i t | was | - making c l e a r p r e c i s e l y what | i t s s t a n d |
| was | w i t h | r e s p e c t | t o | Amgrow's | c l a i m | and | s l o w | i n |
| m a k i n g | c l e a r | what | wa8 | the | c o u n t e r | c l a i m | wh ich | i t |
| a l l e g e d and | I | think | t h a t t h a t - | b e c a u s e i t was | s l o w |
| i n d o i n g t h a t , | I | think | t h a t l e d t o the | 460 notice |
| and | then | the f i l i n g o f the a p p l i c a t i o n and | so | i n a |
| way | y o u r | client | c o n t r i b u t e d | t o | what | came | a b o u t |
| b e c a u s e i t | was | a | l i t t l e s l o w a b o u t | t h a t . | B u t | I | w i l l |
| g i v e you | the costs | on | the o r d i n a r y b a s i s . v |
Before us, it was submitted on behalf of the appellant that the appeal raised important questions of principle and that his Honour's discretion had miscarried.
I have difficulty in accepting either of these
arguments.
In the first place, this is a case where an unsuccessful moving party seeks to deprive a successful respondent of its costs. Even if the matter were to be considered at the first instance level, it is well settled that this should only happen in special and exceptional circumstances. That is to say, even if we were looking at the matter de novo, there are not present here circumstances of the kind which are required to bring the present matter into the exception to the rule that costs should follow the event, in this case, the dismissal of the proceedings.
In the second place, not only are we being asked to interfere with the discretion of a trial Judge, it is here a special discretion - that of costs. It is also well settled that in this particular area, an appellate court should be particularly slow to interfere. In any event, having considered the material, I would agree with the way in which
| costs. | his Honour exercised his discretion. I would propose that the appeal be dismissed with |
| j3HEPPARD J. |
| I agree. The only thing I would add is that in my opinion this case raises no question of principle. It is simply an appeal against the exercise of a discretion which |
for the reasons given by Beaumont J. in my opinion has not
miscarried. |
| -. |
I agree with the judgments of the other members of
the bench.
SHEPPARD J.
In those circumstances the orders of the court are that the appeal be dismissed and that the appellant pay the costs of the respondent of the appeal.
(Counsel for the respondent applied for costs on the indemnity basis. Argument ensued.)
Mr. Dupree, there are many appeals that come to this
Court and many of them are lost, indeed the majority of them
are lost. There are all sorts of degrees that one could
| describe the prospect that they have of success but I myself | see nothing in this case to take it out of the ordinary rule. |
| BEAUMONT J. |
I agree
EINFELD J.
I agree.
SnEPPARDJ.
| Costs w i l l therefore be on the ordinary bas i s , | that |
| i s t o say, | a s between party and party. |
I c e r t i f y that t h i s and the preceding f i v e
( 5 ) pages are a true copy of the Reasons
for Judgment herein of the Court
s o i t e