Benson v Seven Network (Operations) Limited - [2015] SASC 185

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
BENSON v SEVEN NETWORK (OPERATIONS) LIMITED
[2015] SASC 185
Judgment of The Honourable Justice Stanley
23 November 2015
PROCEDURE - COSTS - INTERLOCUTORY PROCEEDINGS
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS
Application for costs.
The plaintiff was granted an interim injunction restraining the defendant from broadcasting any video or audio of the plaintiff relevant to particular subject matter. The plaintiff now seeks an order for payment of her costs of the application for the interim injunction to be taxed and paid immediately. The defendant opposes that order. It submits that the appropriate order is that the costs of the application should be costs in the cause.
Held per Stanley J:
1. The exercise of the court’s discretion and the justice of this case warrants an order that the plaintiff have her costs of the application for an interim injunction in any event (at [11]).
2. The interests of justice require that the plaintiff be permitted to recover her costs at this stage (at [17]).
3. The defendant is to pay the plaintiff’s costs of and incidental to the application for an interim injunction. Those costs are to be taxed and paid immediately (at [19]).
Supreme Court Civil Rules 2006 (SA) r 263(1), r 263(2), r 265; Supreme Court Act 1935 (SA) s 40(1); Supreme Court Rules 1987 (SA) r 101.01, referred to.
Copping v ANZ McCaughan (1995) 63 SASR 523; Gwinnett v Day (No. 2) [2012] SASC 61; Donald Campbell & Co v Pollak [1927] AC 732; Cretazzo v Lombardi (1975) 13 SASR 4; Australian Securities and Investments Commission v Krecichwost & Ors (2008) 72 NSWLR 498; His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporation & Anor (No. 2) [2007] NSWCA 142; Kickers International SA v Paul Kettle Agencies Ltd & Anor [1990] FSR 436; S, DJ v Channel Seven Adelaide Pty Ltd & Anor (2007) 97 SASR 118, considered.

BENSON v SEVEN NETWORK (OPERATIONS) LIMITED
[2015] SASC 185
Civil
STANLEY J:
Introduction

In this matter I granted the plaintiff an interim injunction restraining the defendant from broadcasting any video or audio of the plaintiff relevant to particular subject matter.
The plaintiff has sought an order for payment of her costs of the application for the interim injunction. The defendant opposes that order. It submits that the appropriate order is that the costs of the application should be costs in the cause.
6SCR 263(1) provides that, as a general rule, costs follow the event. That general rule is qualified by 6SCR 263(2) which provides that the general rule is subject to specific rules to the contrary and to prescribed exceptions, none of which are relevant to this case.
Section 40(1) of the Supreme Court Act 1935 (SA) provides:
(1) Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.
The general discretion on costs conferred by s 40 is not fettered by 6SCR 263(1).[1] Costs are in the discretion of the court. The general discretion is absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and it cannot be exercised on grounds unconnected with the litigation.[2]
[1] Copping v ANZ McCaughan (1995) 63 SASR 523; Gwinnett v Day (No. 2) [2012] SASC 61.
[2] Donald Campbell & Co v Pollak [1927] AC 732; Cretazzo v Lombardi (1975) 13 SASR 4 per Bray CJ at 11.
In support of its submission that the costs of the application for an interim injunction should be costs in the cause, the defendant relies upon the authority of Australian Securities and Investments Commission v Krecichwost & Ors[3] where Young CJ in Equity said:[4]
In an interlocutory application for injunction, the usual consequence as to costs is that if the plaintiff succeeds, then costs are costs in the cause or sometimes plaintiff’s costs in the cause; if the plaintiff loses, then the plaintiff pays costs. This is because all the success of the plaintiff in the interlocutory application means is that the plaintiff has demonstrated a case for preserving the status quo, not that it is necessarily successful in the litigation and that it is fair to wait to see the success in the litigation before dealing with the costs of the interlocutory application.
[3] [2008] NSWSC 855, (2008) 72 NSWLR 498.
[4] [2008] NSWSC 855 at [16], (2008) 72 NSWLR 498 at 500 – 501.
As was said by the New South Wales Court of Appeal in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporation & Anor (No. 2):[5]
The rationale for making an order that costs be costs in the cause is that, at the stage of granting an interlocutory injunction, the court is not in a position to adjudicate on the ultimate outcome of the proceedings. Rather, provided there is a reasonable case to be tried, the Court’s focus in deciding whether to grant the application for interlocutory relief is on other considerations and, in particular, on determining whether, on the balance of convenience, an injunction ought to be granted. Accordingly, if a plaintiff who applies for an interlocutory injunction is not ultimately successful in the proceedings, that plaintiff should not receive the costs of the application for an injunction which, when the matter is considered in overview cannot be sustained. However, as already explained, each case must depend upon its own facts.
[5] [2007] NSWCA 142 at [21].
The circumstances in which it might be appropriate to order the payment of costs on an interlocutory application were considered in Kickers International SA v Paul Kettle Agencies Ltd & Anor[6] where Hoffmann J (as he then was) said:[7]
… [T]he fact that the merits have not been investigated, or not fully investigated, does not necessarily mean that the court cannot dispose finally of interlocutory costs. The question cannot be settled simply by reference to the practice: it must be answered on the facts of the individual case. Would it be unfair in this case for the defendants to have the costs of the motion even if they lost at the trial? On balance I do not think that it would. Although I cannot decide the merits, I can form a view on whether the plaintiff, on the material that is produced and what it must have known about the defendants, was justified in launching the motion… Thus it seems to me that in making a costs order at the interlocutory stage, there are two risks of injustice which have to be balanced against each other. On the one hand, a final order might award a party costs which, upon full consideration at the trial, he would not have been given. On the other hand, failure to make a final order might have the practical effect of depriving a party of some or all of the costs which he should in fairness have recovered. I think it is possible that in the past the courts may have been more impressed by the first risk than by the second.
[6] [1990] FSR 436.
[7] [1990] FSR 436 at 438 - 439.
In Kickers International the court made an order for the costs of an unsuccessful interlocutory injunction application to be paid by the plaintiff to the defendant in any event. The court did so, in part, on the basis that while the plaintiff said it was not abandoning the action for breach of copyright and intended to pursue a claim for damages to trial, nevertheless the court thought the order for costs should be made at that stage taking into account the possibility that the matter would not proceed to trial and the effect that a contingent order for costs would have had upon any settlement negotiation.
In this matter the defendant submits that it intends to defend the action at trial. It submits that it will seek to challenge the credit of the plaintiff in relation to whether she was aware that it was filming her and why, and whether she had granted informed consent to the use by it of the film and audio that it had recorded of her for use in the production of the television program “Border Security”. It submits that in these circumstances the court can have no confidence that the plaintiff will ultimately succeed at trial and in those circumstances the plaintiff should not receive the costs of the application for an interlocutory injunction unless she is ultimately successful in the action.
I do not accept this submission. Notwithstanding the contention of the defendant, I entertain real doubt as to whether this matter will proceed to a trial. Moreover, I am satisfied that the plaintiff has established not only that the balance of convenience favoured the grant of the relief she sought but that, on the evidence before me, she had a strong case for breach of confidence. In these circumstances, I am satisfied that the exercise of the court’s discretion and the justice of this case warrants an order that the plaintiff have her costs of the application for an interim injunction in any event.
The next issue is whether those costs should be taxed and paid immediately. 6SCR 265 provides:
(1)The Court may deal with costs at any stage of proceedings (before or after final judgment has been given).
(2)However, subject to any order of the Court to the contrary—
(a) a Schedule of costs is not to be adjudicated upon until after the principal proceedings have been concluded; and
(b) an order for costs is not to be enforced until after the principal proceedings have been concluded.
In S, DJ v Channel Seven Adelaide Pty Ltd & Anor[8] the Full Court considered the principles relevant to the making of an order for the immediate payment of costs pursuant to the predecessor to 6SCR 265, namely, r 101.01. As was noted by Debelle J, with whom Anderson J agreed, the terms of r 101.01 are in very similar terms to 6SCR 265.[9]
[8] [2007] SASC 80; (2007) 97 SASR 118.
[9] [2007] SASC 80 at [9]; (2007) 97 SASR 118 at 121.
Debelle J explained the principles relevant to the exercise of the court’s power as follows:[10]
[10] [2007] SASC 80 at [11] – [13]; (2007) 97 SASR 118 at 121 – 124.
All parties accept as accurate my summary of the nature of the discretion in Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 2) (2006) 244 LSJS 65 at [4]-[8]:
4 The discretion with which r 101.01(7) invests the court is unfettered. The rule is expressed in terms which make it clear that the general rule is that a taxation of costs will occur at the conclusion of the proceedings, unless the court makes an order to the contrary. It is not appropriate to state that the order for costs shall be paid forthwith will be made in “rare” or in “exceptional” circumstances. The rule clearly states the general position so that to add epithets such as “rare” or “exceptional” is to add words to the rule in an impermissible manner, which may cause the exercise of the court’s discretion to be improperly fettered.
5 As far as the research of counsel and my own research disclose, the rule has not been the subject of consideration by this Court in any reported decision. However, the rule is in the same terms as O 62, r 3(3) of the Rules of the Federal Court of Australia which has received quite a degree of judicial notice.
The Underlying Policy
6 The policy reasons underlying O 62, r 3(3) were noted by Sackville J in Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347. They include:
1.      discouraging interlocutory applications: Stack v Brisbane City Council (1996) 71 FCR 523 at 534;
2.      avoiding the inconvenience and possible oppression involved in a series of taxations where there are successive interlocutory applications: Vasyli v AOL International Pty Ltd [1996] FCA 804; and
3.      the fact that it is usually inappropriate to require the unsuccessful party to interlocutory proceedings to pay costs immediately, since that party might ultimately succeed in the substantive proceedings and set-offs can be made in light of the ultimate orders as to costs: Brasington v Overton Investments Pty Ltd [2001] FCA 571 at 13; Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 145.
Those policy considerations apply with equal force to costs orders made in this Court. Those policy reasons inform the factors to be considered when this Court is deciding whether to depart from the general rule.
7 In the Federal Court O 62, r 3(3) has been generally interpreted as conferring a discretion which should be exercised in favour of a party who establishes that the demands of justice require a departure from the general practice: Thunderdome Racetiming & Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312; Stack v Brisbane City Council (supra) at 535; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (2000) 191 ALR 579 at 594. Some judges in the Federal Court have expressed the view that a departure from the general rule should be countenanced only in “rare cases”: Vasyli (supra). Others have suggested that the power might be somewhat under-utilised: Allstate Life Insurance Co v Australia and New Zealand Banking Corporation Ltd (No 14) [1995] FCA 660; Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545; McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [41]. I do not believe that anything is to be gained by considering whether or not the power should be rarely used. The question for consideration is whether it is in the interests of justice to make an order in the individual case, having regard to the fact that the general rule is that costs are not payable until the conclusion of the principal proceeding.
Relevant Factors
8 The factors identified by the Federal Court as justifying a departure from the general rule include the following.
1.      Where an interlocutory proceeding involving a discrete issue has been resolved: Australian Flight Services v Minister for Industry Science & Technology [1996] FCA 288; Courtney v Medtel Pty Ltd (No 3). However, where the interlocutory proceeding concerns pleadings, especially pleadings in a complex action, such an order will not usually be made: All Services Australia Pty Ltd v Telstra (2001) 171 ALR 330 at 333; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (supra).
2.      Where the principal proceedings are not likely to be resolved for some time so that, in the absence of an order, the successful party will not enjoy the fruits of the interlocutory order for a long period: Life Airbag (supra); Allstate Life Insurance Co v Australia and New Zealand Banking Corporation Ltd (No 13) [1995] FCA 626.
3.      Where the interlocutory application has had the effect of removing one of several causes of action in its entirety: Mitanis v Pioneer Concrete (Vic) Pty Ltd (1998) ATPR 41-623.
4.      Where the application is an unsuccessful application for leave to appeal on an interlocutory matter of practice and procedure given the strong public policy against the proliferation of such applications: Bailey v Beagle Management Pty Ltd (supra) at 145.
These principles are equally applicable to an application under r 101.01(7). There are further matters for consideration. The court will, as a general rule, set its face against multiple applications for costs to be taxed and payable forthwith as the interlocutory proceedings unfold. That proposition does no more than reflect the terms of the rule and the policy reasons underlying it.
In addition to these factors, regard must be had to the financial resources of parties to litigation. In Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 at 145, the Full Court of the Federal Court of Australia said, when dealing with a claim for costs against a private individual:
Impecunious litigants who have a meritorious claim or defence would not be forced out of court because of inability to meet interlocutory costs orders.
It is a corollary of that principle that impecunious litigants who have a meritorious claim or defence should be able to be paid what is due on an interlocutory costs order if the interlocutory proceedings concern a discrete issue and that issue has been resolved especially where the principal proceedings are not likely to be resolved for some considerable time: Australian Flight Test Services Pty Ltd v Minister for Industry, Science and Technology [1996] FCA 288; Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545; Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (1995) 58 FCR 26.
That conclusion is consistent with the remarks of Priestley JA in Horrobin v Australia & New Zealand Banking Group Ltd (unreported, Court of Appeal, NSW, Priestley JA, 6 June 1997) at 9:
None of the cases is on all fours with the present one; indeed, a reading of them emphasises the need for cases to be considered by reference to their own particular facts. Nevertheless, those relied on by counsel for H and S show there is a tendency for costs orders to be made payable forthwith and without waiting for the conclusion of further proceedings when the proceedings in respect of which the costs orders have been made are regarded as sufficiently self-contained and detached or detachable from proceedings yet to be heard, whether between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime.
The Rule on which Priestley JA commented was r 9 of Pt 52A of the Supreme Court Rules 1970 (NSW). Rule 9 relevantly provided:
(1) Where before the conclusion of any proceedings … the Court makes an order for the payment of costs or a motion is refused with costs, the costs shall not, unless the Court otherwise orders, be payable until the conclusion of the proceedings.
…
(3) Where in any proceedings:
(a)     it appears to the Court that:
(i) a party has been subject to unreasonable delay or default on the part of any other party;
(ii) the proceedings are unreasonably protracted; or
(b)      a costs order is made under r 43 or r 43A,
the Court may order that costs, or a specified amount on account of costs, be payable forthwith.
In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1, Barrett J held that subr (3) did not represent an exhaustive catalogue of the circumstances in which the court may order that costs be payable forthwith. He said that the starting point was the decision of Priestley JA in Horrobin to which I have already referred. From that starting point Barrett J identified three cases where it might be appropriate to depart from the general rules, namely:
1. where the interlocutory proceeding represents the determination of a separately identifiable matter or may be viewed as a completion of a discrete aspect of the action: see, for example, Charlie Brown Pty Ltd v Green (unreported, Supreme Court, NSW, McLelland CJ in Eq, No 4074 and 4136 of 1994, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830;
2. where there has been unreasonable conduct on the part of the party against whom costs have been ordered: Gattelleri v Meagher [1999] NSWSC 1279; and
3. a considerable time remains before the proceedings will ultimately be determined: Doran Constructions Pty Ltd v University of Newcastle (unreported, Supreme Court, NSW, Giles J, No 55081 of 1994, 16 December 1994) at 21.
There is an obvious correspondence between these principles and those expressed by judges in the Federal Court of Australia. The New South Wales rule has been replaced by r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW) in that Court which provides:
Unless the court orders otherwise, costs referred to in subrule (2) do not become payable until the conclusion of the proceedings.
Plainly, the new rule does not affect the principles enunciated in respect of the former rule. These principles apply with equal force to an application for taxation of costs before the conclusion of the proceedings under both r 101.01(7) and r 265 of the 2006 Rules. While the court has an unfettered discretion to make an order and that discretion must not be fettered by epithets such as “exceptional”, the applicant for taxation of costs before the conclusion of the proceedings must satisfy the court that there are reasons to depart from the general rule.

I am satisfied that it is appropriate to make an order that the plaintiff’s costs be taxed and paid immediately.
While I have no evidence of the amount of the costs I am satisfied that there were significant costs incurred in prosecuting the application for an interim injunction.
The plaintiff now faces at least the possibility of this matter proceeding to trial. She is employed as a carer. The defendant is a substantial corporation. It is well able to afford to pay the costs sought by the plaintiff. It will not in any respect be placed at any disadvantage in the action by having to pay the costs as taxed. There is an obvious and considerable disparity between the financial resources of the plaintiff and the defendant. If this matter were to proceed to trial the disparity between the financial resources of the parties has the capacity to exhaust the means of the plaintiff to prosecute this action and seek to vindicate her rights. That disparity should not cause the plaintiff to have to abandon the proceedings because she can no longer afford to prosecute them if that should be necessary. The interests of justice require that the plaintiff be permitted to recover her costs at this stage.
The defendant accepts that costs should be paid on the basis that the matter was fit for senior counsel.
Conclusion
I order the defendant pay the plaintiff’s costs of and incidental to the application for an interim injunction. Those costs are to be taxed and paid immediately. I certify the matter fit for senior counsel.