Bufalo Corporation Pty Ltd v Leone (Costs)

[2001] VSC 520

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7270 of 2000

BUFALO CORPORATION PTY LTD (ACN 107 122 296) (Receiver and Manager Appointed) (In Liquidation)	Plaintiff
v
MARIE LEONE	Defendant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	22, 27, 28, 29, 30 November and 3, 12 and 13 December 2001
DATE OF JUDGMENT:	21 December 2001
CASE MAY BE CITED AS:	Bufalo Corporation Pty Ltd v Leone (Costs)
MEDIUM NEUTRAL CITATION:	[2001] VSC 520

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Costs, discretion of court, conduct of defence on trial to frustrate and delay determination of plaintiff's claim; plaintiff successful; cost of trial ordered as between solicitor and client, otherwise costs of proceedings ordered against defendant as between party and party.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Ian Jones	Holding Redlich
For the Defendant	Not Represented

HIS HONOUR:

1. On 20 December 2001 I delivered my judgment in these proceedings and made a number of orders.  As is seen from my judgment, I determined that the plaintiff was entitled to recover against the defendant, damages in the nature of interest on the damages recovered by the plaintiff in the proceedings. 

1. The solicitor for the plaintiff requested that the question of damages in the nature of interest and costs of the plaintiff be put over to this day.  I adjourned those questions to this day.  The solicitor for the plaintiff indicated yesterday that the plaintiff sought an order that the costs be paid by the defendant in these proceedings, be indemnity costs or as between solicitor and client. 

1. I have had the advantage of reading the outline of submissions prepared by the solicitor for the plaintiff and have also had the advantage of hearing the plaintiff's counsel on these matters this morning.  I have this morning, previously dealt with and made orders relevant to the question of damages in the nature of interest.  Accordingly, I do not need to turn to that matter today. 

1. This day the application that has been specifically made by counsel on behalf of the plaintiff as to costs, is that it be ordered that the defendant pay the plaintiff's costs of the proceedings, such costs be indemnity costs or as between solicitor and client. The power of the court to make an order for costs of the nature now sought in these proceedings is vested in the court by s.24(1) of the Supreme Court Act 1986. By that statutory provision the court has vested in it a wide discretion as to costs. That discretion must be exercised judicially.

1. It is generally the settled practice that a successful party should receive it or his or her costs of the proceedings and that special circumstances should exist for the court in exercise of its discretion as to costs to not award a successful party, it, his or her costs.  Donald Campbell and Co Ltd v Pollack (1927) A.C. 732, Viscount Cave, L.C. at 809; Babette Pty Ltd v Hanna (1976) V.R. 385 at 388, D. Phillips Construction Vic Pty Ltd v R.F. Move-Mallaby (1980) V.R. 171.

1. In the circumstances of this case there is no reason why the plaintiff being the successful party in the proceedings should not have its costs of the proceedings against the defendant.

1. It is the usual practice of the court to order that costs be paid to a successful party on a party and party basis.  That this is the practice is also to be seen from Rule 63.31.

1. In exercise of its discretion to award costs against a party to proceedings, the court may order costs on a measure higher than on a party and party basis if there exists circumstances which warrant the court from departing from the ordinary rule as to costs.  The question that must be addressed in each case, where costs are sought other than on a party and party basis, is whether in the circumstances existing justice requires that an order for costs be made other than on a party and party basis, Spencer v Dowling (1997) 2 V.R. 127, Winneke P. at 147. In Colgate-Palmolive Co v Cussons (1993) 46 F.C.R. 225, Shepherd J. at p.233, after noting that the categories of circumstances in which the discretion of the court, to award costs on a measure higher than a party and party basis, was not closed, set out a number of circumstances which have been thought to warrant a court, in the exercise of its discretion, departing from the ordinary rule or practice as to costs.

1. In Czerwinski v Syrena Royal Pty Ltd (No.2) [2000] V.S.C 135 (Unreported), Warren J., after reviewing a number of authorities set out in pp.1 and 2 of her judgment, a number of grounds which had appeared to courts in the past, to warrant the granting of costs on a higher scale than as between party and party. I do not in the circumstances of this case set out each of those categories referred to.

1. It must be realised however, that there can be no closed category of cases or set of rules with respect to cases in which costs should be awarded on a higher basis than as between party and party, for to do so would by its very self restrict the wide discretion that the court has to costs in each particular case that comes before it.

1. It was submitted on behalf of the plaintiff that the court should make an order that the defendant pay the plaintiff's costs on an indemnity basis or as between solicitor and client as there exists in this case special circumstances when regard is had to the following matters -

(a)That although the defendant denied that she occupied the property, the subject of these proceedings as a licensee, when her evidence and that of her witness, Tony Bufalo, was analysed, the relationship between her and the plaintiff as to her occupation of the property was that of licensee/licensor and not otherwise; 

(b)That one of the bases on which the defendant sought an adjournment of the trial on the day that the trial was listed to commence, was that as said to the court by her counsel, and no doubt on her instructions, that she had entered an agreement with the mortgagee of the property, which had an order against her for possession of the property, that she could continue in possession of the property and it was desired that she amend her defence, whereas at trial no evidence was called to support that assertion and in fact the evidence of the defendant was that since July 2001 she had not entered into any agreement with any person for her to continue in possession of the property;

(c)That the application of the defendant to adjourn the trial and to amend her defence prolonged the period of the trial and took up time with respect to those matters which should have been attended to before the day on which the trial was listed to commence;

(d)That although the defendant commenced the trial being represented by counsel and a solicitor, during the course of the trial she determined not to continue to defend the plaintiff's claim and terminated the retainer of her counsel and solicitors;

(e)That the defendant in the course of her cross-examination declined to answer a question and when directed to do so by the court she further declined to do so but notwithstanding that, she failed to appear at court the following day to enable her cross-examination to be completed;

(f)That in course of the cross-examination of the process server who had left at the subject premises, on 12 August 2000, a notice terminating the defendant's licence to occupy the premises, it was put in issue whether the notice was signed, when, in evidence, the defendant produced the notice which she had received which was in fact, duly signed;

(g)That the defence undertaken by the defendant until she withdrew from the proceedings and terminated the retainer of her solicitors and counsel, greatly extended the trial of the proceedings beyond the estimated period of the trial.

1. In my view the facts and the basis on which the plaintiff relies on with respect to each of those matters identified, are in themselves supported by evidence which has established each fact.  The question that must be addressed is when regard is had to each of those matters or when taken into a combination, does there exist special circumstances that warrant the court, in the exercise of its discretion, making an order for costs other than as between party and party or on a basis that is now sought.

1. In Spencer v Dowling at p.147, Winneke P. referred to a number of cases in which statements had been made by a number of judges recognising that the margin between party and party costs and solicitor and client costs is becoming greater in modern practice.  Although that fact may be well recognised, it is not reason for a court to more readily order costs to be paid to a successful party on a basis other than as between party and party.

1. Although there exists a number of cases in which it has been found that special circumstances exist that warrant an order for costs being made for the benefit of the successful party on a higher scale than party and party costs, each case must be looked at and had regard to on its own particular facts.

1. As I have found and referred to in my judgment, it became apparent during the course of the evidence of the defendant in these proceedings that she was continuing to live in the premises on the property, the subject of these proceedings, to frustrate the claim of the plaintiff as brought and prosecuted by the receiver and manager.  She was prepared to do what she could to support Tony Bufalo and the Bufalo family, the former of whom was considerably upset with and bitter towards the chargee which had appointed the receiver and manager.

1. The defendant has a very close friendship and relationship with Tony Bufalo, in particular, and with the Bufalo family.  The defendant pursued this case until she declined, during the course of her cross-examination, to answer a question which was directed to her.  The next day she did not appear at court and never appeared again. She then terminated the retainer of her counsel and solicitors. 

1. Her defence up to that time, to my view, was such as to seek to frustrate the receiver and manager in the conduct of these proceedings.  In my view, she did that quite intentionally and thereby caused the trial to take longer than had been estimated and set aside for its conduct.

1. In my view in the circumstances of the case, the matters referred to by me and in particular the conduct of the defendant in these proceedings and that which she sought to do in the proceedings, give rise to special circumstances why an order for costs should be made in favour of the plaintiff against the defendant on a higher scale than as between party and party. 

1. In my view it should be ordered in these proceedings that the costs of the trial on 27, 28, 29, 30 November 2000 and 3 December 2001, ought to be paid by the defendant on a higher scale than as between party and party.

1. I am not prepared to and do not make findings which would otherwise cause me to order costs on a higher scale relevant to other parts of the proceedings or steps taken in the proceedings.

1. Accordingly, I propose to order and do order that the defendant pay the plaintiff's costs of the proceedings including reserve costs, such costs to be as between party and party except for the days of trial on 27, 28, 29, 30 November 2001 and 3 December 2001 in respect of which days such costs be as between solicitor and client.

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