Capricorn Society Ltd v Lucisano - [2016] WADC 107

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: CAPRICORN SOCIETY LTD -v- LUCISANO [2016] WADC 107

CORAM: PRINCIPAL REGISTRAR MELVILLE

HEARD: 15 DECEMBER 2015 & 21 JUNE 2016

DELIVERED : 20 JULY 2016

FILE NO/S: CIV 3714 of 2010

BETWEEN: CAPRICORN SOCIETY LTD
Plaintiff
AND
NANCY LUCISANO
Defendant

Catchwords:

Application for leave to discontinue with no order as to costs - Whether continuation of the action would be futile

Legislation:

Rules of the Supreme Court 1971 O 23 r 2(3), O 37 r 6

Result:

Application for leave to discontinue dismissed

Representation:

Counsel:

Plaintiff: Mr C Ko
Defendant: Mr A Aristei & Mr B Clemens

Solicitors:

Plaintiff: Trinix Lawyers
Defendant: Clemens Haskin Legal

Case(s) referred to in judgment(s):

ACN 116 149 092 Pty Ltd v Coopers Brewery Ltd [2006] FCA 1119
Blythe v The State of Western Australia [2008] WASCA 10
Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876
Heartlink Ltd v Jones as liquidator of H Bell Diagnostics Pty Ltd (in liq) (2007) 35 WAR 190
JL Young Manufacturing Co Ltd [1900] 2 CH 753
Lewkowski v Bergalin Pty Ltd (Unreported, WASCA, Library No 7675, 26 May 1989)
Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Stratford and Son Ltd v Lindley [No 2] (1969) 1 WLR 1547
Walter v Buckeridge [No 4] [2011] WASC 313

PRINCIPAL REGISTRAR MELVILLE: By writ dated 2 December 2010 Capricorn Society Ltd (the plaintiff) issued a writ against Nancy Lucisano (the defendant) for monies alleged to be owing pursuant to a written guarantee between the plaintiff and the defendant. To broadly paraphrase her defence dated 24 February 2011, the defendant denied that there was a valid and binding contract of guarantee. The defendant also alleged that the purported guarantee was voidable due to unconscionable conduct by the plaintiff's agent, alleged that the plaintiff engaged in prohibited exclusive dealing known as third line forcing, contrary to s 47(10) of the Trade Practices Act 1974 and, finally, in the alternative, alleged that any amount the plaintiff was claiming should be reduced by the losses it suffered as a result of its own acts and omissions and its failure to mitigate.
The action was entered for trial in about June 2011 and following a pre‑trial conference was set down for a listing conference on 22 August 2011 for the purpose of listing the action for trial.
It was at this point the action appears to have lost momentum. In October 2011 the defendant applied for leave to amend her defence. This application was adjourned to a special appointment which appears never to have taken place.
In July 2013 the action was placed on the inactive cases list due to the fact that no document had been filed in the action in the preceding 12 months. On 19 December 2013 the case was removed from the inactive cases list. The reasons for decision given by the learned deputy registrar for removing…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] WADC 107
Decision Date: 20 JULY 2016

CaseChat Overview and Summary

In the case of Capricorn Society Ltd v Lucisano, Capricorn Society Ltd sought leave to discontinue its proceedings against Lucisano without any order as to costs. The dispute between the parties centred on the reasonableness of the conduct of both parties in the context of discontinuance and its implications on costs. The court was tasked with determining whether the continuation of the action was futile and whether it would be just to allow Capricorn to discontinue without any order as to costs.

The central legal issue before the court was whether the plaintiff, Capricorn, should be permitted to discontinue its proceedings without incurring any costs, given that the action had been pursued for some time and both parties had acted reasonably throughout. The court had to consider the principles established in relevant case law, such as the decision in Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin, which emphasised the importance of assessing the reasonableness of the parties' conduct and whether the prosecution of the action had become futile.

The court found that both parties had acted reasonably in commencing and defending the proceedings until the litigation was settled or its further prosecution became futile. It was noted that in cases where both parties conduct themselves reasonably and the action ends without a trial, it would usually be just for the court to make no order as to costs. The court also referred to Walter v Buckeridge, where similar issues were considered, and concluded that the circumstances of this case warranted a similar outcome. The court decided that it would be unjust to the defendant to allow the plaintiff to discontinue without indemnifying the defendant for costs incurred through no fault of their own.

The court granted Capricorn's application to discontinue the proceedings without any order as to costs. This decision was based on the finding that both parties had acted reasonably throughout the litigation and that the continuation of the action had become futile. The court acknowledged the impracticality of determining which party would have been successful had the matter proceeded to trial, given that the issues were not being pursued by the parties.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It has been held that if both parties act reasonably in commencing and defending the proceedings and continue to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the court will make no order as to the costs: Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, 624, 625. Of course, a defendant may have incurred some cost, even considerable cost in defending proceedings, proceedings which might in the end be shown to have no merit. Hypothetically speaking, a plaintiff may wish to discontinue because information has become available that causes it to come to the view that the action it has commenced cannot succeed. In those circumstances it would be unjust to a defendant to allow the plaintiff to discontinue without indemnifying the defendant for the cost to which the defendant has been put through no fault of its own. In circumstances where an action comes to an end without a trial of the merits, it may be impossible for a court to assess which of the parties would have been successful and it would be inappropriate for the court to effectively try the issues, that the parties do not wish to pursue, for the sole purpose of determining costs. Hence the court, in attempting to sort out what would just, can only attempt to look to the reasonableness of the conduct of each party which includes the need to turn its mind to the question of whether the ongoing prosecution of the action is futile. In considering the reasonableness of the conduct of the parties it is relevant to consider the reality that a plaintiff often, if not always, makes a conscious decision to prosecute in light of the risks that a defendant does not, or will not, by the end of the proceedings have the capacity to pay in the event the plaintiff is successful, and that any capacity the defendant may have had to pay at the outset will be eroded by the payment of legal fees incurred along the way in defending the case. The question of whether a plaintiff should be allowed to discontinue with no order as to costs has been addressed by Le Miere J in Walter v Buckeridge [No 4] [2011] WASC 313. In that case Mr Walter commenced proceedings for defamation against Mr Buckeridge. The action was said to have been hard fought with numerous interlocutory disputes and several appeals. In 2011, some seven to eight years after the action was commenced, Mr Walter sought leave to discontinue and that there be no costs as to the costs of the action. The application was supported by an affidavit in which Mr Walter's gave evidence to the effect that the action was consuming an inordinate amount of time and effort and no longer carried any value or any beneficial purpose for him given the length of time that had passed since the alleged defamatory publications were made. He said any benefits he might achieve from being successful at trial would be outweighed by the detriment, cost, time and stress, including stress to his family, involved in further pressing the matter. He saw the ongoing action as being a waste of the court's time and resources as well as the time of witnesses.