Baronglow Pty Ltd v Willing and Thomas - [2010] SADC 163

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application for Review)
BARONGLOW PTY LTD v WILLING AND THOMAS
[2010] SADC 163
Decision of His Honour Judge Barrett
17 December 2010
PROCEDURE - COSTS - SECURITY FOR COSTS
The intervener applied for a stay of a review of a Master's decision on costs until the plaintiff pays a sum for security for costs and a sum being the difference between the disputed allocatur and the sum being held in the Suitor's Fund. The plaintiff says that the intervener is not entitled to profit costs which comprise much of the costs the subject of the review.
Held: Against a history of unpaid costs and unpaid securities for costs, the stay should be ordered. The stay on the Master's decision should be lifted and the plaintiff should pay the costs of the application for the stay.
District Court Civil Rules 2006 r 192 and r 194, referred to.
Baronglow Pty Ltd v Willing & Thomas (Intervener) (No 3) [2006] SASC 326; Baronglow Pty Ltd v Willing and Anor [2007] SASC 299; Baronglow Pty Ltd (ACN 081 472 102) & Jordan v Willing & Thomas [2008] SASC 184; Jordan v Baronglow Pty Ltd & Ors [2009] HCASL 88; Jordan v Baronglow Pty Ltd & Ors [2010] HCASL; Rice v Henley (1915) 32 WN(NSW) 54; Baronglow Pty Ltd v Willing & Thomas (Intervener) (No 3) [2006] SASC 326; Baronglow Pty Ltd v Willing & Anor [2007] SASC 299, considered.

BARONGLOW PTY LTD v WILLING AND THOMAS
[2010] SADC 163
Introduction

This is an interlocutory application by the intervener, Mr Thomas, for inter alia, a conditional stay of a review of a Master’s decision sought by the plaintiff. Mr Jordan is the principal of the plaintiff company. The intervener, Mr Thomas, once acted for the plaintiff. This action is about his costs. The matter has a long and complex history some of which bears on the determination of this application.
Background
The proceedings between the plaintiff and the defendant were concluded long ago. Since 2001 the dispute has been between the plaintiff (or effectively Mr Jordan, the principal of the plaintiff) and the intervener, Mr Thomas, about costs. Mr Thomas is a legal practitioner. Mr Jordan was a legal practitioner. The genesis of the costs dispute is costs incurred while Mr Thomas was acting for Mr Jordan in the substantive matter. Master Norman has had the carriage of the matter for many years. In his Reasons for Decision posted to the parties on 1 February 2010, he sets out the history of the matter which I will not replicate. The matter has been the subject of numerous rulings by Master Norman, the last of which was made on 14 April 2010[1]. It is that ruling which is the subject of the plaintiff’s application for review. In turn the intervener’s application for a stay relates to that application for review.
[1] This is the day on which the Reasons were posted to the parties.
Of particular significance in the history are decisions of Master Norman and Master Lunn (most recently 1 November 2006[2]) Justice Debelle on 9 August 2007[3], Justice Bleby on 30 January 2008, The Full Court on 8 July 2008[4] and 2 June 2009[5] and two High Court applications for Special Leave, the first on 29 April 2009[6] and the second on 11 March 2010[7].
[2]    Baronglow Pty Ltd v Willing & Thomas (Intervener) (No 3) [2006] SASC 326.
[3]    Baronglow Pty Ltd v Willing & Anor [2007] SASC 299.
[4]    Baronglow Pty Ltd (ACN 081 472 102) & Jordan v Willing & Thomas [2008] SASC 184.
[5]    Transcript only.
[6]    Jordan v Baronglow Pty Ltd CAN 081 472 102 & Ors [2009] HCASL 88.
[7]    Jordan v Baronglow Pty Ltd & Ors [2010] HCASL 33.
As a perusal of those judgments demonstrates there are several other costs decisions made by other single judges of the Supreme Court and by Master Lunn. Four of the published reasons of Master Norman have been drawn to my attention, those of 15 August, 29 July 2008, 1 February 2010 and 14 February 2010.
The orders sought on the interlocutory application
1.     A stay of the plaintiff’s review of Master Norman’s costs order of 14 April 2010 until the plaintiff has paid into court two sums:
(i)     $40,345.91 being the difference between the disputed allocator and the sum being held in the Suitors Fund to the credit of this action, and,
(ii)    A sum by way of security for costs of the review.
2. The lifting of the stay of the order of Master Norman of 14 April 2010 which I made on 11 May 2010 pending the outcome of this interlocutory application.
Mr Thomas also seeks the costs of this application.
Issues
1. Is it just to order a stay pending the payment by the plaintiff of the sums sought?
2. Should there remain a stay of the Master’s order pending the review?
Case for the Intervener
Mr Thomas submits that it is just to order a stay of the review pending payment of monies by the plaintiff on the following bases:
1.     The plaintiff company is impecunious. Mr Jordan is the only person behind the company.
2.     The plaintiff has failed to pay into court monies associated with a stay order made by Debelle J on 9 August 2007. His Honour ordered the payment of $11,429.70, the subject of the disputed allocator, and $4,000 by way of security for costs.
3.     The plaintiff has failed to pay into court monies associated with a stay order made by Bleby J on 30 January 2008. His Honour ordered the payment of $2,889 the subject of the then disputed allocator. Bleby J was critical of what he described as a “… a blatant attempt to outflank the orders of Debelle J to achieve what is effectively the same review but without Baronglow having to pay the amounts into court as directed by Debelle J”[8].
4.     There are costs orders made against the plaintiff in favour of Mr Thomas which have not been paid.
5.     The plaintiff has engaged in unnecessary disputation causing relatively simple questions of costs to be dragged out over a number of years. On several occasions Master Norman has been critical of the plaintiff’s approach. In his judgment published on 15 August 2007, Master Norman said:
Mr Jordan has, in my view, taken a particularly unreasonable and unrealistic approach to the reconsideration. He objected to virtually every single item claimed by Mr Thomas. He argued many quite minor amounts at extraordinary length and quite unnecessarily in my view [35].
Collectively, the result of Mr Jordan’s contesting virtually every item in Mr Thomas’s accounts and the presentation of numerous largely unsuccessful objections, has been to considerably prolong the reconsideration, such that it has taken several years to resolve [37].
[8]    Bleby J Reasons delivered ex tempore on 30 January 2008, reproduced in Full Court judgment Baronglow Pty Ltd & Jordan v Willing & Thomas [2008] SASC 184 at [11].
Further His Honour said that Mr Jordan’s approach:
has been to transform the reasonably simple exercise of arguing the terms of the retainer and objecting to a discrete number of items, into a lengthy, prolonged and complex process spanning several years [63].
In his reasons published on 29 July 2008 the Master said:
The process of fixing these costs could have been undertaken, one might expect, in a simple and straight forward manner. In the usual course, this might have involved, at the least, a few hours, or a day at most of hearing time [111].
Instead, however, the plaintiff elected to oppose the intervener’s costs claim as if there were no end to the argument. Leaving aside one issue (which was of importance) it failed in virtually all of its complaints [112].
The Master concluded:
… [W]here a party relentlessly pursues issue after issue, which are by and large unsuccessful, then inevitably there will be a costs consequence for that party … If, in the result, the plaintiff finds itself in the position of paying a large sum for costs, when the subject matter for the dispute was relatively small in quantum, it will have no one but itself to blame [118].
6. The issue which the plaintiff seeks to re-ventilate on this review of Master Norman’s decision is the same that he has been seeking to ventilate for years, one which should have been ventilated in the Full Court after Debelle J referred the question to that court in 2007.
The case for the plaintiff
At the heart of the case for the plaintiff is the contention that it would be unjust to require him to pay any monies to the intervener because the whole point of the review is that the intervener was never entitled to profit costs. Mr Thomas is not entitled as a legal practitioner to receive court ordered costs when he is representing himself. Most of the costs the subject of this review, and most of the costs ever awarded to the intervener, suffer from this defect.
I reproduce paragraph 5 of Mr Jordan’s affidavit of 28 April 2010 which sets out the bases for the plaintiff’s application for a review of Master Norman’s order:
The plaintiff contends, on three principles of law, that such awards are unlawful. The grounds are:
5.1That as a result of the decision in Cachia v Haines, and Dobree v Hoffman, solicitor/own client costs are not awardable in South Australia.
5.2That in a merged professional jurisdiction, there is no authority for solicitor/own client costs.
5.3That as a result of constitutional enactments producing universal adult suffrage in South Australia, and Australia, and the relationship of the judicial power to those enactments and equality before the law, that the privileged and discriminatory entitlement of solicitors to legal costs when acting for themselves as parties in litigation, is unconstitutional.
5.4The point of paragraph 5.1 has been argued before Master Norman, with master ruling for solicitor/own client costs. The point in paragraph 5.2 has been referred to but not argued. Both points have been agitated in the High Court, with the Court saying the application is premature, rather than inappropriate. The paragraph 5.3 point has not previously been agitated.
Discussion
The District Court Rules empower the court to make the orders sought by the intervener. 6R 192 provides:
The court may stay proceedings if the justice of the case so requires.
One circumstance in which it has been held appropriate to order a stay is the non payment of costs in earlier proceedings[9].
[9] Rice v Henley (1915) 32 WN (NSW) 54.
Rule 194(1) empowers the court to make orders for security for costs. The discretion to make such an order is a wide one. Rule 194(1)(e) enables the court to make an order where it “is necessary in the interest of justice”.
Rule 194(3) says “If the court orders security for costs, the action may be stayed until the security is given”.
To arrive at a just result in this application it is necessary to trace some of the complex history of the litigation instigated by the plaintiff in the last 4 years. While this exercise represents only a part of the longer history of the litigation, it is instructive. A pattern emerges.
The starting point in this recent history is the judgment of Judge Lunn delivered on 1 November 2006. His Honour ordered the plaintiff to pay the intervener certain costs[10]. His Honour referred to one of his earlier judgments in which he had set out the long history of the litigation to that point. I will not recapitulate that history but it is lengthy.
[10] Baronglow Pty Ltd v Willing & Thomas (Intervener) (No 3) [2006] SASC 326 at [12].
The first step the plaintiff took thereafter was to seek a review of Judge Lunn’s decision. The review was heard by Debelle J who delivered an oral judgment on 9 August 2007[11]. His Honour accepted that there was a division of judicial opinion on the question of whether the intervener was entitled to profit costs. Accordingly he referred that question to the Full Court for determination. However, having considered the history of the plaintiff’s failure to pay court ordered costs, His Honour made the prosecution of the review conditional upon the plaintiff first paying into court $11,427.70, the subject of the disputed allocaturs and $4,000 by way of security for costs. In addition, His Honour ordered the plaintiff and Mr Jordan to pay the costs of that application. This was the plaintiff’s opportunity to present his profit costs argument to the Full Court. However it was conditional upon his paying monies into court. The plaintiff never appealed against that decision. Nor did he ever pay the monies Debelle J had ordered. He did not pay the two sums referred to above and he did not pay the costs.
[11] Baronglow Pty Ltd v Willing and Anor [2007] SASC 299.
The second step was more of a side step. Rather than taking up the opportunity to argue his profit costs point in the Full Court, the plaintiff sought another review of the same allocators. He changed slightly the grounds for the review, but essentially it was the same profit costs point. That was what Bleby J concluded in his oral judgment on the review when it came before him on 30 January 2008. I have already referred to Bleby J’s criticisms in which he described the review as “a blatant attempt to outflank the orders of Debelle J”. His Honour adjourned the review until after the completion of the review that had been before Debelle J. In addition His Honour ordered that the plaintiff not be permitted to prosecute the subject review until it had paid into court $2,889.81. His Honour ordered costs against the plaintiff. The monies were not paid into court and the costs were not paid.
The third step the plaintiff took was to appeal to the Full Court against Bleby J’s decision. That appeal was the subject of a joint judgment of Duggan, Vanstone and David JJ delivered on 8 July 2008[12]. The appeal was only against the payment conditions which Bleby J had fixed. The Full Court refused permission to appeal.
[12] Baronglow Pty Ltd (ACN 081 472 102) & Jordan v Willing and Thomas [2008] SASC 184.
The fourth step taken by the plaintiff was to seek Special Leave to appeal to the High Court against the Full Court’s orders. On 29 April 2009 Hayne and Crennan JJ refused leave[13]. The plaintiff had gone as far as he could along that route.
[13] Baronglow Pty Ltd (CAN 081 472 102) & Jordan v Willing & Thomas [2009] HCASL 88.
The fifth step was along a different route. That route involved costs applications by the intervener before three Supreme Court judges – Bleby J on 21 February 2008, Gray J on 28 March 2008 and Sulan J on 9 May 2008. These matters had been left in abeyance by the Full Court in July 2008. On 2 June 2009 the Full Court, consisting again of Duggan, Vanstone and David JJ, ordered the plaintiff to pay the costs of those applications but expressly said that it was not deciding the profit costs point because the pre-conditions to that issue being argued in the Full Court had not been met[14]. In other words, the monies ordered by Debelle J to be paid had not been paid. Notwithstanding that the Full Court had clearly declined to determine the profit costs point, the plaintiff sought again to ventilate the point in the High Court.
[14] Transcript of 2 June 2009 only.
The sixth step was to seek Special Leave to appeal to the High Court from that Full Court decision. On 11 March 2010, Gummow and Kiefel JJ refused leave. That was as far as the plaintiff could go along that route.
The seventh step the plaintiff has taken is to embark upon a new route beginning with the current application to review Master Norman’s decision of 14 April 2010.
Like Judge Lunn in 2006, Master Norman recounts a long history of costs litigation. His own history of presiding in such litigation begins in 2000. Again the review raises the profit costs question. I have set out the grounds upon which the plaintiff seeks the review. The plaintiff submits that the novel, and as yet unventilated argument, is that an order for profit costs is unconstitutional. While that argument does have some novel aspects it is just another means of arguing the same point.
The pattern that appears from this history is that the plaintiff has sought by various devices to circumvent paying into court monies he has been ordered to pay. When one route to presenting his argument fails, he tries another. Along the way courts make costs orders which he does not pay. The criticisms made of the plaintiff by Bleby J on 30 January 2008 appear to me to apply aptly to this latest application. Since then however, Master Norman has delivered three judgments, three single Supreme Court judges have heard applications, a Full Court has sat twice and members of the High Court have twice refused applications for Special Leave. All this litigation is about costs of a substantive action which finished a decade ago.
Against this background I think it is just that I should do not less than Debelle J did in 2007. In fact, to do otherwise would be to assist in a process which appears to be yet another attempt to outflank the orders of Debelle J. I will grant the orders sought. There is no reason why the review should act as a stay of execution of Master Norman’s order of 14 April 2010. I will lift the stay I imposed pending the outcome of the interlocutory application.
Orders
I order:
1.That the plaintiff not be permitted to prosecute its review of the varied provisional costs order made by Master Norman on 13 April 2010, and posted to the parties on 14 April 2010, and sought by FDN 177, until it has first paid into court:
a) the sum of $40,345.91, being the difference between the disputed allocator and the sum held in the suitors fund to the credit of this action;
and
b) the sum of $2,000 by way of security for costs.
2.The stay of the order of Master Norman of 14 April 2010 be lifted.
3.The plaintiff and Neville Jordan pay the costs of and incidental to this application