Ballast Stone Estate Wines v Wine Solutions Australia PL (No 3)

[2007] SADC 131

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

BALLAST STONE ESTATE WINES v WINE SOLUTIONS AUSTRALIA PL (NO 3)

[2007] SADC 131

Judgment of His Honour Judge Tilmouth

24 December 2007

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT

Discretion conferred by s42 of the District Court Act 1991 (SA) - depriving a successful party of some costs.

Cretazzo v Lombardi (1995) 13 SASR 4; District Court Rule  101.02(1), applied.

BALLAST STONE ESTATE WINES v WINE SOLUTIONS AUSTRALIA PL (NO 3)
[2007] SADC 131

1. There are two previous judgments in relation to this matter delivered on 6 December 2007 and 18 December 2007,[1] leaving only the question of costs for final resolution.  On 18 December this year, the Court entered judgment as follows (varied slightly by consent with respect to Order No. 2 from that proposed in the judgment of December 18):

   [1] Ballast Stone Estate Wines v Wine Solutions Australia PL [2007] SADC 129 and [2007] SADC 134, respectively.

   1.Judgment be entered for the plaintiff Ballast Stone Estate Wines (Reg), in the sum of $91,352.85, inclusive of interest.

   2.Judgment be entered for the defendant Wine Solutions Australia Pty Ltd on the “samples claim” in the sum of $1,124.86, inclusive of interest.

   3.Judgment be entered for the defendant Wine Solutions Australia Pty Ltd on the “loss of profits” claim in the sum of $8,130.80, inclusive of interest.

   4.Order that the defendant Wine Solutions Australia Pty Ltd may set-off the judgment sums referred to in paragraphs 2 and 3 above, against that referred to in paragraph 1 (the Court notes this leaves a net figure of $82,097.09).

   5.     The order of the Master of 31 March 2006 granting a stay be lifted.

   6.Order that Wine Solutions Australia Pty Ltd pay into Court before 20 January 2008 the sum of $25,000, or alternatively that it do cause the guarantee with the ANZ Bank in favour of Ballast Stone Estate Wines to be extended to 20 January 2008.

   7.The Court notes that the parties agree that the time in which respective appeals commence to run is 20 January 2008.

   8.     Liberty to both parties to apply on short notice.

   9.     The question of costs is reserved for judgment.

2. This judgment deals wholly with the outstanding issue of costs as contemplated by order 9.  This matter commenced with Ballast Stone, claiming a total of $85,770.11 on unpaid invoices for wines delivered by it to the defendant.  Following a defence in which Wine Solutions made substantial admissions as to most of the sum owing, a judgment was entered by order of a Master of this Court on 3 November 2005 for $80,349.39, in favour of the plaintiff based on those admissions under District Court Rules 51.07. Later a stay of execution of that judgment was made under s17 of the Enforcement of Judgments Act 1991 (SA). The balance of the plaintiff’s claim of just over $5,000 was abandoned towards the commencement of the trial.

3. The case went to trial then, on the various heads of claim raised by way of counter-claim as detailed in the earlier judgments of the Court.  The net effect of those was that the plaintiff was largely successful in resisting claims by Wine Solutions, originally calculated at over $400,000.  The claims on which it did succeed were relatively minor, as expressed in dollar terms.  In the result the plaintiff was more successful than not.

4. It was correctly pointed out by Mr McCarthy for the plaintiff, that whether Rule 263(2)(h) of District Court Rules 2006 or District Court Rules 1992 101.02A(e) applies, the defendant failed to secure a judgment of more than $15,000 and is therefore not entitled to a costs order in its favour “unless the Court orders otherwise”.  Accordingly, the plaintiff seeks orders for costs of successfully defending the counter-claim, and resists an order giving Wine Solutions costs to the extent that it was successful.  An application for costs personally against a director of Wine Solutions, Mr Beaven, was made but later abandoned.

5. Although as expressed in dollar amounts this submission is correct, it fails to recognise that Wine Solutions did succeed in successfully persuading the Court on two major issues.  First, it established in the proven circumstances of the case, that it was appropriate to imply a term requiring reasonable notice to be given of termination of the distribution agreement between the parties.  Second it was also successful in persuading the Court that in the circumstances, three months notice was appropriate.  The plaintiff strongly contested both issues. 

6. The trial spanned some fourteen days.  A good deal of the evidence related to issues upon which the defendant was wholly unsuccessful.  The most time consumed over any single issue was with the “royalties” and the “export” claims.  The defendant succeeded on the “samples” and the “loss of profits” claims, but in the case of the latter, only to the extent of roughly 10% of its original claim.  These two issues occupied only a small fraction of trial time – no more than 5%.

7. It is however, inescapable that a not insignificant portion of the evidence given in the proceedings was relevant and admissible as to the issues of the implied term and the appropriate length thereof.  Moreover it was not possible to completely sever them from other issues in the case, as they were to varying degrees, interrelated.   Still further, the evidence in general terms detailing the entire course of dealings between the parties was relevant as going to the nature and terms of the contract and hence the appropriateness of implying a term and the length of that term.

8. In those circumstances the Court finds it appropriate to make an order “otherwise than as provided for” by the Rules of Court, simply because Wine Solutions succeeded on two important issues which are not capable of being translated into monetary terms and which occupied a not insubstantial portion of the trial.

9. Both parties accepted that when making an order for costs, one single order reflecting the overall outcome, was appropriate.  As best the Court can assess, no less than 25% of trial time involved evidence and submissions related to or relevant in one way or another, the discrete issues on which Wine Solutions succeeded.  It is true that the award of damages in respect of the “loss of profits” limb was relatively small, but that was because the proof it put forward on that particular head was particularly thin,[2] however that consideration is quite unrelated to the need to establish liability in the first place.

   [2] See reasons [2007] SADC 134

10. Section 42(1) of the District Court Act 1991 (SA) vests a wide unfettered discretion to award costs. District Court Rule 101.02 (1) provides that costs should ordinarily follow the event “unless otherwise ordered”. Nevertheless that rule does not fetter the discretion vested by section 42 (1): Copping and Ors v ANZ McCaughan and Anor.[3]  In that event it is open to fix costs divided between issues that are separately identifiable, as they are in this case: Cretazzo v Lombardi.[4]

    [3] (1994) 63 SASR 523

    [4] (1995) 13 SASR 4 at 12.

11. In these circumstances, it is proposed to make one order encompassing the entire proceedings, reflecting the relative degrees of success or failure of both parties, related to issues identified above.  In this particular situation there will be an order in favour of Ballast Stone Estate Wines (reg), for 75% of the costs of the action.  It should have an order for 100% of costs on the question of security for costs reserved by the Master and of the appearances on 19 and 26 October 2007 with respect to that issue.  In both instances costs are to be agreed or taxed on a party/party basis.