China Shipping (Aust) Agency Co Pty Ltd v D V Kelly Pty Ltd (No 2)

[2010] NSWSC 1557

CITATION:	China Shipping (Australia) Agency Co Pty Limited v D V Kelly Pty Limited (No 2) [2010] NSWSC 1557
HEARING DATE(S):	14 December 2010
JURISDICTION:	Equity Division Admiralty List
JUDGMENT OF:	Rein J
EX TEMPORE JUDGMENT DATE:	14 December 2010
DECISION:	All parties to bear their own costs.
CATCHWORDS:	PROCEDURE – costs – departing from the general rule that costs follow the event – considerations where a party has filed a submitting appearance save as to costs
LEGISLATION CITED:	Admiralty Act 1988 (Cth) Uniform Civil Procedure Rules 2005 (NSW)
CATEGORY:	Consequential orders
CASES CITED:	Australian Securities and Investments Commission v Rich [2004] NSWSC 836; (2004) 50 ACSR 500; (2004) 22 ACLC 1232 Autistic Association of New South Wales v Dodson [1999] FCA 715 Corporate Affairs Commission of New South Wales v Transphere Pty Limited (1988) 15 NSWLR 596 Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 Develtor Property Group Pty Limited v Newcastle City Council [2001] NSWLEC 47 Mahenthirarasa v State Rail Authority of New South Wales [2008] NSWCA 101; (2008) 6 DDCR 61 Mahenthirarasa v State Rail Authority of New South Wales (No 2) [2008] NSWCA 201; (2008) 72 NSWLR 273 Metzger v Department of Health and Social Security [1977] 3 All ER 444 Territory Insurance Office v Kerin (1986) 84 FLR 1
PARTIES:	China Shipping (Australia) Agency Co Pty Limited (Plaintiff) D V Kelly Pty Limited (First Defendant) Consumer Trader and Tenancy Tribunal (Second Defendant)
FILE NUMBER(S):	SC 2010/119420
COUNSEL:	PLAINTIFF: Ms B Nolan FIRST DEFENDANT: Mr J Law (solicitor)
SOLICITORS:	PLAINTIFF: Holman Fenwick Willan Lawyers FIRST DEFENDANT: Bennelong Legal

1 The plaintiff seeks an order for costs against D V Kelly Pty Limited. I gave judgment in this matter this morning and I concluded that the Tribunal's decision had to be set aside by reason of the fact that the Tribunal did not have jurisdiction to deal with what is a maritime claim. The plaintiff does not seek any order for costs against the second defendant, that is, the Tribunal or the third defendant, the State of New South Wales.

2 D V Kelly, on the first occasion that the matter was listed for directions by its managing director, advised the Court that it would be filing a submitting appearance and on 15 June this year it did just that, although with the notation "subject to costs" which is the usual form of a submitting appearance. Mr Law, solicitor for D V Kelly, has, unusually, appeared on a number of occasions but has always stated that his position is a continuation of the position of submission to the orders of the Court.

3 As I have noted in the principal judgment, although the plaintiff did, before the Tribunal, raise a question of jurisdiction which the Tribunal determined adversely to the plaintiff, it did not do so on the basis upon which the plaintiff has succeeded today. Indeed, the maritime claim point was only advanced by the plaintiff in these proceedings after I had raised it with the parties on 21 September.

4 The plaintiff claims that, having succeeded on its claims to set aside the Tribunal's decision, it should obtain an order for costs against the first defendant. The plaintiff submits first that it had to bring the proceedings to set aside the decision of the Tribunal and that obtaining the orders was not simply a matter of agreement between the parties; secondly, that my conclusion was that the Tribunal had no jurisdiction and that means that the application by D V Kelly was always misconceived. Further, the plaintiff argues that it was for the Tribunal to determine whether or not it had jurisdiction and the fact that China Shipping did not put forward the Admiralty Act 1988 (Cth) as a reason for a lack of jurisdiction is irrelevant. The costs are to compensate the successful party and not to punish the defendant and that the plaintiff has been successful.

5 In Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [13], Biscoe J summarised the general principles:

“A successful litigant is usually entitled to an award of costs unless it has engaged in some sort of disentitling conduct relating or leading up to the litigation: Oshlack v Richmond River Council (1998) 193 CLR 72 at 97-98, 96 LGERA 173 at 192-194 per McHugh J. The object of a costs order is to compensate the party in whose favour it is made against the expense to which it has been put by reason of the legal proceedings, not to punish the party against whom it is made: Latoudis v Casey (1990) 170 CLR 534 at 542-543, 547.”

6 The defendant resists, on a number of bases put forward by Mr Laws, this claim for costs. First, it has, via a submitting appearance, not sought to uphold the Tribunal's decision. Secondly, the Tribunal is a jurisdiction in which costs are not awarded and D V Kelly, in bringing a claim in the Tribunal, would have been entitled to understand that no costs award would be awarded against it in the event it was unsuccessful. The plaintiff now seeks a costs order that would, in effect, result in D V Kelly having to pay an amount in the order of $15,000, an estimate given by the plaintiff's solicitor on a party-and-party basis, almost twice the amount that was in issue in the Tribunal proceedings.

7 Mr Laws also puts forward the point that the plaintiff had reasons far wider than the outcome in this particular case for bringing the claim. There are, both sides agree, many other container cases or potentially many other container cases in the wings. It is not appropriate, he says, to visit the costs of a matter of wider commercial significance to the plaintiff on the first defendant. A further point made by Mr Laws is that it was the Tribunal that made the error in relation to jurisdiction, not D V Kelly, and there is no suggestion on the part of the plaintiff that D V Kelly has in any way been responsible for the failure of the Tribunal to discern that it did not have jurisdiction.

8 In my view, D V Kelly should not be required to pay any of the plaintiff's costs for the following reasons. Ms Nolan, in her submissions, noted that prima facie a defendant who files a submitting appearance except as to costs is prima facie only liable for costs up to the time of service of the submitting appearance and not thereafter: see Develtor Property Group Pty Limited v Newcastle City Council [2001] NSWLEC 47 at [38] . In that case, his Honour Bignold J made reference to that principle and referred, in support of it, to the case of Autistic Association of New South Wales v Dodson [1999] FCA 715. Ms Nolan submitted that it was proper to depart from the prima facie approach in this case by nature of the fact that the relief sought was declaratory, and was thereby of wider public importance such that it would affect the right of persons not parties to the litigation. In my view there is nothing in those facts which would lead to a party who had filed a submitting appearance being held liable for costs. Indeed, in my view, it only highlights that the plaintiff had reasons extraneous to the defendant to seek the relief that it sought.

9 Secondly, I think there is much in Mr Law's point that it would be unfair to hold the first defendant liable for the plaintiff's costs in circumstances where not only has it filed a submitting appearance but the proceedings that were commenced were in a Tribunal which had no power to impose costs and it would, in effect, be paying for the Tribunal's failure to recognise that it did not have jurisdiction.

10 In Cutcliffe , costs were awarded against the council but it actively defended the proceedings, had only filed a submitting appearance at a late stage and it was the Council’s errors which has led to approval being wrongly granted to a developer: see [23].

11 In Cutcliffe , Biscoe J did make some observations about the general equitable principle that declaratory relief ought not be granted without a proper contradictor, although he noted that the rule was discretionary and that in Territory Insurance Office v Kerin (1986) 84 FLR 1 orders were made notwithstanding the absence of a contradictor; see also Corporate Affairs Commission of New South Wales v Transphere Pty Limited (1988) 15 NSWLR 596 at 605-606. I accept that the Court will not generally grant declaratory relief without some evidence being provided to support the appropriateness of the declaratory relief: see Metzger v Department of Health and Social Security [1977] 3 All ER 444 at 451; and particularly where public rights or rights analogous to public rights are involved: see Australian Securities and Investments Commission v Rich [2004] NSWSC 836; (2004) 50 ACSR 500; (2004) 22 ACLC 1232 at [10]. However I do not think this provides support for the plaintiff's claim that an order for costs should be made against the party that has filed a submitting appearance, and the declaratory relief relevantly (at this hearing) relates to the jurisdiction of the Tribunal.

12 Mahenthirarasa v State Rail Authority of New South Wales (No 2) [2008] NSWCA 201; (2008) 72 NSWLR 273 is authority for the proposition that the Court's general costs discretion under rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) may be exercised even against a party that has formally entered a submitting appearance depending on “the role adopted by [that party] in the proceedings”: see [7]. An important factor in the Court’s decision in Mahenthirarasa (No 2) was the fact that the SRA was required to act as a model litigant in accordance with the principles enunciated and had appeared not to have applied those principles and that it had put submissions to the Registrar of the Workers Compensation Commission that the statute’s preconditions for an appeal in respect of the levies had not been met which was held to be an erroneous decision: see [12]-[13] and [21]-[23] of Mahenthirarasa (No 2) , and Mahenthirarasa v State Rail Authority of New South Wales [2008] NSWCA 101; (2008) 6 DDCR 61.

13 I think Mahenthirarasa (No 2) is a case far removed from the present circumstances. In considering whether D V Kelly has had a responsibility for the outcome in this case, I think it is clear that it has had no involvement in trying to persuade the Tribunal that the Admiralty Act did not prevent the Tribunal from hearing the matter. Indeed, it was put by the plaintiff that the Tribunal had the authority and the sole authority to decide whether or not jurisdiction was available to it notwithstanding the failure of the plaintiff to raise the issue.

14 In my view, in all the circumstances, it would be unjust and unreasonable to impose any costs order against the first defendant and I decline to do so. Accordingly, the order which should be made is that each party should pay its own costs, that is, as between the plaintiff and the defendant. There is an agreement between the plaintiff and the second and third defendants, as I have indicated, and accordingly the order will be for all parties to bear their own costs in these proceedings.


**********