Baronglow Pty Ltd v Willing

[2006] SASC 140

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

BARONGLOW PTY LTD v WILLING & ANOR

[2006] SASC 140

Reasons of Judge Lunn a Master of the Supreme Court

15 May 2006

PROCEDURE - COSTS

Whether not payable immediately under R 101.01(7) - proceeding in the Supreme Court was application for leave to appeal against a District Court interlocutory order - held proceeding in the Supreme Court was not interlocutory as the refusal of the leave disposed of the proceeding and thus R 101.01(7) did not apply to the Supreme Court costs order.

PROCEDURE - COSTS

Respondent served short form bill, then withdrew it and served an amended short form bill - held respondent entitled to lodge a long form bill under R 101A.02 and if there was any default in compliance by the respondent with the Rules it did not make this bill void as the applicant did not apply under R 3.05 to set aside.

PROCEDURE - COSTS

Application to set aside default allocatur - no bona fide and plausible grounds to challenge the whole of the bill, but only some items - allocatur set aside conditionally on whole of costs being paid into Court.

BARONGLOW PTY LTD v WILLING & ANOR
[2006] SASC 140

Reasons on Plaintiff’s application to set aside a default allocatur.

1. JUDGE LUNN:                   This litigation has a long, and continuing, history in District Court action 107/95.  In that action on 27 February 2004 Judge Lee dismissed an appeal against a decision of a District Court Master declining to set aside a charging order made in favour of the intervener, David Thomas.  On 11 March 2004, Baronglow Pty Ltd (“the plaintiff”) instituted this proceeding in the Supreme Court, seeking leave under R 96A.02 to appeal against the District Court interlocutory order of 27 February 2004.  Vanstone J directed that the application be heard inter partes.  David Thomas (“the intervener”) attended by counsel before Vanstone J on 2 April 2004.  Leave to appeal was refused and the plaintiff was ordered to pay the intervener’s costs.  The plaintiff then sought to obtain leave to appeal to the Full Court.  This was refused ex parte.

2. On 25 July 2005 the intervener served a short form bill of costs on the plaintiff pursuant to R 101A.02 for the costs payable under the order of 2 April 2004.  On 12 August 2005 the plaintiff filed and served a reply to that short form bill disputing that any costs were then due and payable under the order of Vanstone J and contesting its liability for various items.  After serving this short form bill the intervener received an invoice from his counsel, Mr C McCarthy, for counsel fees which had not been included in the short form bill.  On 31 August he sent a letter to the plaintiff withdrawing the earlier short form bill and serving a further bill which was the same as the earlier bill except that it included a counsel fee for Mr McCarthy of $1,375.  That further short form bill totalled $2,760.  On 14 September the plaintiff wrote to the intervener disputing that there was any right to withdraw the earlier short form bill and raising a number of grounds disputing its liability for any costs and for the counsel fee of Mr McCarthy.  On 16 September the intervener wrote to the plaintiff joining issue with the matters raised in the intervener’s letter.  It concluded:

   I will expect to be served with your response to my Short Form Bill, complying with the Rules, within the time allowed by the Rules, otherwise I will proceed without further notice.

   The plaintiff did not give any response to the further short form bill or otherwise reply to that letter.

3. The intervener unsuccessfully sought a default allocatur from the Registrar based on the plaintiff’s failure to respond to the further short form bill.  On 3 November 2005 the intervener lodged and served a long form bill of costs pursuant to R 101.09.  As required by R 101.09(4)(b) that bill had endorsed on it:

   Take Notice that under Rule 101.09(7) you are required within 14 days of the service of this Bill upon you to file and serve a Notice of Dispute setting out each of the items which you contest.  If you fail to do so, you may be deemed to have admitted liability for any item upon which you have not given such Notice of Dispute.

   The plaintiff did not file any notice of dispute or otherwise respond to the service of this long form bill.  On 14 December 2005 the Registrar provisionally taxed that bill in default of a Notice of Dispute under R 101.09(8) and invoiced the intervener for a taxing fee of $146.  That fee was paid on 10 February 2006 and on 13 February the Registrar issued an allocatur for $3,077.70. 

4. On 24 February 2006 the plaintiff issued an application to set aside the allocatur.  As the intervener did not object I allowed Mr N Jordan, a former solicitor and a director of the plaintiff, to appear for the plaintiff at the hearing.  Although many grounds of dispute had been raised by the plaintiff in the correspondence, Mr Jordan confined his submissions to three points which he submitted were individually sufficient to require that the allocatur be set aside.

5. The first submission was that the costs ordered by Vanstone J were not yet taxable or due for payment by virtue of R 101.01(7), which states:

   (7)An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.

   Mr Jordan submitted that as the order which was the subject of the leave was only an interlocutory order of the District Court, and as the District Court action was still proceeding, R 101.01(7) postponed any taxation until the conclusion of the District Court proceedings.  I do not accept that submission.  In its context “proceeding” in subr (7) is confined to a proceeding in the Supreme Court and does not extend to a proceeding in any other Court.  This Supreme Court action, 272/04, is separate and distinct from the District Court action, 107/95.  There was no transfer of the District Court action into the Supreme Court action to be continued in this proceeding.  This proceeding was confined to seeking leave to for appeal against what was an interlocutory order in the context of the District Court action.  However, once leave to appeal had been refused there was no other relief sought in this action which had to be disposed of by this Court, except the ancillary matter of taxing the costs.  The right of the plaintiff to appeal against the order of the District Court of 27 February 2004 had been finally disposed of.  Thus the order of Vanstone J was not an interlocutory, but a final, order:  see the authorities in Civil Procedure SA para [R94.01.15(2)].  Hence R 101.01(7) does not bar the costs ordered being taxed and payable immediately.

6. The plaintiff’s second submission was that there were irregularities in the procedures adopted by the intervener in complying with R 101A.02 concerning his short form bill which precluded him from lodging a long form bill for taxation.  I do not accept that the intervener was in breach of the Rules or in any way mislead the Registrar, but the short answer to the point is that even if there was a default by the intervener, it did not make the long form bill of costs void or a nullity.  Any such default could be no more than an irregularity:  see Civil Procedure SA paras [R 3.05.1] and [R 3.05.5] on what constitute nullities and irregularities.  If there was an irregularity, the onus was on the plaintiff to apply under R 3.05 to set aside the bill of costs.  It did not do so and so the bill remained an effectual step in the action.  (Even if it had so applied, I can see no basis upon which the Court would have set it aside.) 

7. In a letter dated 10 January 2006 the plaintiff wrote to the intervener:

   …..

   We expect you will be looking to proceed for a default allocator (sic) on these costs regardless of the shortcomings of your conduct.  You have not complied with the rules and we dispute your entitlement to make application in the circumstances for an allocator (sic).  We further dispute your entitlement to file and serve a Long Form Bill given the deficiencies of your conduct in relation to your obligations regarding the Short Form Bill.  You set out in your letter of the 20^th December that an application for allocator (sic) is an ex parte step.  That is the case where there is no response.  In this case the position is different.  Your conduct in relation to the Short Form Bill is defective and you are not in the position to proceed with a Long Form Bill.

   Provide an express indication of your intentions.  If you intend to make application for an allocator (sic), we will make an application to the Court for directions regarding the deficiencies in the steps taken by you in the Sho0rt Form Bill process and in relation to this taxation at large.  In the event that you misinform the Court as to the circumstances, we will rely on this and other correspondence and instances to seek to reverse any step you take.  We are not prepared to respond to your Long Form Bill, thereby abandoning our contentions regarding the inadequacy of your conduct regarding the 2 Short Form Bills filed by you.

   …..

   The long form bill was explicit in its requirement for a notice of dispute to be filed.  Because of  R 3.05 the plaintiff acted at its peril in refusing to respond to it.

8. The last contention of the plaintiff was that the intervener was required to give notice to it of its application for the issue a default allocatur which it did not do.  There is no requirement in the Rules to this effect.  Mr Jordan contended that the Rules required that any document filed by the intervener to obtain the default judgment had to be served on him under R 102.04  No such document was filed, and therefore there was no obligation to serve anything.  In the previous correspondence the intervener had made it clear that he required a response to the long form bill in accordance with the Rules.  There was no unfairness to the plaintiff in the circumstances in the intervener obtaining the allocatur without further notice to the plaintiff.

9. An application to set aside an allocatur obtained under R 101.09(8) is to be treated as the equivalent of an application to set aside a default judgment:  Strachan v Clough Full Court, 12 February 1998, Judgment No S6536, unreported.  As the default allocatur was regularly obtained, it will only be set aside if the plaintiff makes out a bona fide and plausible ground of defence:  Watson v Anderson (1976) 13 SASR 329. I have already rejected the contentions of the plaintiff that it has no liability at present to pay any costs under the order of 2 April 2004. In the reply filed to the first short form bill and in the letter of 14 September 2005, referred to above, some possible grounds of objection to some items in the bill are raised. At the best for the plaintiff they only go to matters which would be likely to reduce the allocatur of $3,077.20 by a few hundred dollars. Considerable costs have been incurred by the intervener in this application to set aside the allocatur which will certainly have to be paid by the plaintiff. As Mullighan J said in the Full Court, in refusing leave to appeal against the order of Vanstone J (19 August 2004 Judgment [2004] SASC 245):

   On the application for leave to appeal, the Judge of this Court held that there was no matter of “general importance” in issue between the applicant and Mr Thomas.  She observed that the amount of money secured by the charging order has already been “swamped” by the cost of these proceedings.  I agree with those observations.

   The further costs which have been incurred are out of all proportion to what is at stake, which is a fund of $12,000 in the District Court.  There is a strong indication in the papers before me that neither the allocatur of 13 February 2006 nor the costs of this present application can be met out of the moneys held in the District Court.  For these reasons, I consider this is one of the rare cases where there are sufficient special circumstances which justify that an order that the allocatur should only set aside upon payment into Court of its amount plus an amount of $1,000 on account of the costs of the plaintiff’s application (FDN 10): Pezzano v Perre (1980) 32 SASR 336; Edwards v Wallace (1986) 42 SASR 308. There are only limited issues which could be the subject of genuine dispute. The plaintiff deliberately took the unjustified position which it did not to file a notice of dispute, and has thus delayed the intervener in recovering his costs and put him to considerably more expense. If these moneys are paid into Court, I will then consider payment out of a substantial portion of them to the intervener and only retaining in Court an amount appropriate to represent the items which could properly be disputed on a taxation.

   Today I have made the following orders:

   1That the default allocatur of 13 February 2006 be set aside only upon condition that the plaintiff pays into Court to the credit of this action the sum of $4,077 within 21 days, and failing such payment into Court that the application (FDN 10) be dismissed.

   2The plaintiff is to pay to the intervener his costs of FDN 10 as agreed or taxed.

   3Time for any appeal against this order is extended to 14 days from today.

   4Liberty to apply.