Chia v Chia - [2007] SASC 457

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
CHIA v CHIA
[2007] SASC 457
Reasons of Judge Burley a Master of the Supreme Court
20 December 2007
PROCEDURE - COSTS
Costs of application for permission to amend statement of claim - amendment not opposed but order sought that costs be payable immediately - major changes to claim - abandonment of claim relating to caveats - whether immediate taxation of costs should be ordered.
Supreme Court Rules 1987 Rule 101.01(7), referred to.
S, D J v Channel Seven Adelaide Pty Ltd & Anor (2007) 97 SASR 118, applied.

CHIA v CHIA
[2007] SASC 457

JUDGE BURLEY: When these proceedings were commenced, the plaintiff sought relief in the statement of claim annexed to the summons in relation to two caveats lodged for registration by the plaintiff in respect of land contained in Certificate of Title Register Book Vol 5004 Folio 317 (the land). The plaintiff sues as executor of the estate of the late Soo Suan Chia (the deceased). The statement of claim was brief and did not set out the material facts supporting the plaintiff’s claim to be entitled to “an equitable interest in the land”.
The summons was issued on 21 December 2005. The plaintiff’s interlocutory applications which sought various orders in relation to the caveats lodged for registration, came before the Court on 22 December 2005. On that occasion, orders were not made in relation to the caveat, but the Registrar-General, who was then a defendant to the proceedings, was restrained from endorsing on the Certificate of Title an application to note the death of the deceased. As I understand it, this order was made without opposition from the defendant, Hector Chia. It was made in the context that the deceased and Hector Chia, then referred to as the 2^nd defendant, were registered on the title to the land as joint tenants. The injunction is still in force.
In due course, with the leave of the Court, the plaintiff filed an amended statement of claim on 30 May 2006.
On 13 September 2007, at a Directions Hearing, the plaintiff’s solicitor announced that a further version of the statement of claim had been prepared and leave was sought to file the same. A copy of that document was handed up to me and I initialled it for the purpose of identification. It has apparently been processed in the Registry as a filed document, but, because leave has not yet been given to file the amended statement of claim, the current statement of claim on the file is that filed on 30 May 2006 (FDN 9) and the document initialled by me on 13 September 2007 is a proposed statement of claim.
There is now only one defendant to these proceedings, the plaintiff having discontinued against the Registrar-General. At the hearing on 13 September 2007, the defendant’s solicitor informed me that his client had no objection to the proposed statement of claim being filed, but it was contended that a condition should be imposed in relation to the grant of permission to file the amended document, namely that the plaintiff pay to the defendant the defendant’s costs of action to date by an order pursuant to Rule 101.01(7) of the 1987 Rules that the costs be taxed or agreed and paid forthwith. This involves not so much the imposition of a condition, but, rather, an exercise of the discretion to make an order under Rule 101.01(7).
In order to hear the parties’ respective submissions on that contention, I adjourned the application for leave to amend to 24 September 2007 when Mr S Roder appeared for the defendant and Mr I Robertson appeared for the plaintiff.
At the hearing of the application, Mr Roder sought a more limited order than that referred to by the defendant’s solicitor on 13 September. He said that the defendant should recover the costs thrown away in relation to the amendment as opposed to the entire costs of action of the defendant to date. The costs should be paid immediately. Mr Robertson did not dispute that the defendant was entitled to an order for costs thrown away. His argument was limited to opposing the directions sought pursuant to Rule 101.01(7) that the costs be taxed or agreed and paid forthwith.
It was the defendant’s contention that the costs should be payable forthwith because, by the new amendment, the plaintiff had effectively abandoned most of the basis of his claim as set out in the original and current statements of claim. To that extent, the position was similar to a party who discontinues an action, the consequence of which is that the discontinuing party must pay the other party’s costs of action unless the Court orders to the contrary.
In order to test this assertion, it is necessary to compare the amended statement of claim of May 2006 with the proposed statement of claim. In the former, the plaintiff asserts in paragraph 4 that on 15 September 1998 the deceased purchased the land for the sum of $165,000. The purchase was effected by a contract dated 11 March 1988 and provided a deposit in the sum of $51,289. In paragraph 7 the plaintiff acknowledges that notwithstanding the alleged purchase of the land by the deceased, a Certificate of Title records that the deceased and the defendant are joint tenants of the land.
In Part 2 of the statement of claim the plaintiff seeks various relief in relation to the caveats that were lodged and, by paragraph 6, a declaration that the deceased is the sole registered proprietor of the land. Paragraph 7 of the prayer for relief seeks an order that the Registrar-General correct the Register to give effect to the declaration that the deceased is the sole registered proprietor of the land.
The proposed amended statement of claim asserts by paragraph 4 that the deceased purchased the land by way of a contract in writing dated 3 May 1988 “and signed by the deceased on behalf of the ‘purchaser’ including Hector (“the contract”)”. In paragraphs 4.4 and 5 of the statement of claim, reference is made to a special condition concerning the inclusion of the defendant as a co-purchaser An addendum to the written contract provided that if the relevant special condition was not fulfilled, then the name of the defendant would be removed from the contract note as purchaser.
Next the plaintiff pleads a number of paragraphs regarding the obtaining of finance by the deceased, the payment of a deposit, the making of the mortgage repayments and the fact that the title records the deceased and the defendant as joint tenants of the land.
By paragraph 21 of the statement of claim the plaintiff pleads that in the absence of the fulfilment of the condition previously referred to, the deceased was the sole registered proprietor of the land or, alternatively, the deceased and the defendant were “tenants in common” in equity.
In the prayer for relief the plaintiff seeks a declaration that the deceased is the sole registered proprietor of the land and rectification of the Register accordingly. Alternatively, by paragraph 4, declarations are sought that the deceased and the defendant are in equity tenants in common.
I turn now to the cases relating to the exercise of discretion under Rule 101.01(7). This Rule was thoroughly reviewed by Debelle J in Astom Power Limited v Nakagawa Australia Limited and Ors (No 2) (2006) 244 LSJS 65. That decision in turn was considered by the Full Court in S, D J v Channel Seven Pty Ltd & Anor (2007) 97 SASR 118. Both parties accepted these decisions as setting out the principles relating to the exercise of the discretion confirmed by Rule 101.01(7). The Rule is as follows:
An order for costs on 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.
The discussion which follows is taken from the judgments of Debelle J in the two cases referred to. The discretion is unfettered. It is not subject to the gloss that it may only be exercised in rare or exceptional circumstances. The policy underlying the Rule is to discourage interlocutory applications and to avoid the disadvantages that may arise from multiple taxations. It takes into account that it is usually inappropriate to require immediate payment because the party against whom the order is made might not ultimately succeed in the subsequent proceedings. In my opinion, the latter point also takes into account that there may be successive interlocutory proceedings prior to trial where costs are awarded to different parties and the time for calculating what is due and to whom is best undertaken at the conclusion of the substantive proceedings.
The governing principle stated in general language is that the discretion should be exercised in favour of the party who establishes that the demands of justice require a departure from the general practice. The factors affecting the exercise of the discretion include the situation where an interlocutory proceeding involves a discrete issue which is resolved by the application. In that regard, where the application is one which relates to pleadings, an order for immediate payment will not usually be made.
If it is likely that the proceedings will not be resolved for some time, thus delaying the payment of costs for the successful party, an order for an immediate payment may be appropriate. If the interlocutory application has the effect of removing one of several causes of action in its entirety, a favourable order should be considered.
The Court must have regard to the financial resources of the parties to the litigation. If, by the requirement that costs be paid forthwith, litigants may be excluded from the proceedings, the prejudice to the litigant is a factor against a favourable exercise of the discretion. By the same token, if an impecunious litigant is awarded costs and the resolution of the proceedings is still some distance in the future, that is a factor which supports the granting of an order for immediate payment.
Unreasonable conduct on the part of the party ordered to pay costs could give rise to an order for immediate payment. The only mention of the financial disadvantage to the defendant made by Mr Roder was that the plaintiff sues in his capacity as executor. Therefore any costs order obtained by the defendant against the plaintiff is not the personal responsibility of the plaintiff. The only assets to which recourse may be had to satisfy the order are the assets in the estate. That is an unknown quantity. In my opinion, the answer to that contention is that it is open to the defendant to apply for an order for security for costs.
I understand that the defendant’s argument that as the plaintiff has abandoned his original claim, he must therefore pay the costs relating to same as the cost of his permission to proceed with his new claim. It is substantially the same as reliance upon the contention that, if the application has had the effect of removing one or several causes of action in its entirety, an order for immediate payment of costs is indicated. This seems to me to be the only principle involved which supports the defendant. There has been no suggestion that any delays, both past and future, would support the favourable exercise of the discretion. It cannot be suggested that the plaintiff’s conduct has been unreasonable.
I am not persuaded that the change in the nature of the plaintiff’s claim is such that an order for immediate payment ought to be made. An order for immediate taxation of costs leads to an immediate requirement to pay. Within that process, I allow for the fact that within an order for immediate taxation made, it is still open to the parties to agree the costs. If they do agree the costs then the order requires the payment of same.
Notwithstanding the extent of the change to the plaintiff’s case, the essentials are still in place. The plaintiff claims an entitlement to the land contrary to the legal interests disclosed on the title. The present claim raises the question as to whether or not the deceased, at the date of death, was, in equity, the sole owner of the property or whether or not she and the defendant were, in equity, tenants in common. The latter was not raised in the statement of claim of May 2006, but I do not consider that that makes any appreciable difference. The contesting parties remain the same, namely the plaintiff and the defendant, and the subject matter of the claim has at all material time been the land.
In these circumstances, I consider it is inappropriate to make an order that an immediate taxation of the costs be awarded to the defendant.
My orders on the application are:
1That the plaintiff have leave to file and serve the further amended statement of claim initialled by me on 13 September 2007.
2That the plaintiff pay the defendant’s costs of the application to amend including costs thrown away consequent upon the amendment.
3That the defendant pay the plaintiff’s costs in relation to the hearing on 24 September 2007.
4Leave to the defendant to file an amended defence to the further amended statement of claim within 21 days of the date of publication of these reasons.
5Adjourned to a Directions Hearing on 31 January 2008 at 11.10 am.