CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd (No 2)

[2013] TASFC 10

[2013] TASFC 10

COURT:  SUPREME COURT OF TASMANIA (FULL COURT)

CITATION:CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd (No 2) [2013] TASFC 10

PARTIES:  CMA RECYCLING VICTORIA PTY LTD
  v
  DOUBT FREE INVESTMENTS PTY LTD

FILE NO:  FCA 44/2012
DELIVERED ON:  8 October 2013
DELIVERED AT:  Hobart
HEARING DATE:  30 September 2013
JUDGMENT OF:  Blow CJ, Tennent and Porter JJ

CATCHWORDS:

Appeal and New Trial – Appeal – Practice and procedure – Tasmania – Powers of court – Other matters – Refund of bond money paid as condition of interlocutory injunction – Costs to date of unfinished proceedings at first instance – Departure from prescribed scale – Application for certificate for senior and junior counsel.

Supreme Court Civil Procedure Act 1932 (Tas), ss47(1), 201(1).

Supreme Court Rules 2000 (Tas), rr57(1), 837(1), (2), (9), 863(2).

Aust Dig Appeal and New Trial [392]

Procedure – Costs – Departing from the general rule – Other cases – Other cases – Successful appeal from order determining preliminary issue in action – Costs of first instance proceedings to date – Departure from prescribed scale – Application for certificate for senior and junior counsel.

Supreme Court Rules 2000 (Tas), rr57(1), 837(1), (2), (9), 863(2).

Aust Dig Procedure [601]

REPRESENTATION:

Counsel:
             Appellant:  J C Giles
             Respondent:  J R C Zeeman
Solicitors:
             Appellant:  Minter Ellison
             Respondent:  Madgwicks

Judgment Number:  [2013] TASFC 10
Number of paragraphs:  31

Serial No 10/2013

File No FCA 44/2012

CMA RECYCLING VICTORIA PTY LTD v
DOUBT FREE INVESTMENTS PTY LTD (No 2)

REASONS FOR JUDGMENT  FULL COURT

BLOW CJ
TENNENT J
PORTER J
8 October 2013

Orders of the Court

1. That the interlocutory injunction granted on 18 May 2011 in action number 350/2011 be dissolved.

1. That the appellant be released from the undertakings given by it to the Court in that action as to damages, and as to not doing structural or concreting work on the respondent's premises.

1. That the monies paid into Court by the appellant as security for the costs of that action, together with any interest thereon, be paid out to the appellant.

1. That the bond monies paid into Court by the appellant in relation to that action, amounting to $76,725, together with any interest thereon, be paid out to the appellant.

1. That the respondent pay the appellant's costs of and incidental to the appeal.

1. That the respondent/defendant pay the appellant/plaintiff's costs of and incidental to action 350/2011 to date, including reserved costs, forthwith.

1. That an indemnity certificate pursuant to the Appeal Costs Fund Act 1968 be granted to the respondent in respect of the appeal.

Serial No 10/2013
File No FCA 44/2012

CMA RECYCLING VICTORIA PTY LTD v
DOUBT FREE INVESTMENTS PTY LTD (No 2)

REASONS FOR JUDGMENT  FULL COURT

BLOW CJ
TENNENT J
PORTER J
8 October 2013

1. On 24 December last, this Court allowed this appeal, set aside the principal orders of the learned trial judge (Crawford CJ), made a declaration that the appellant's lease of certain premises from the respondent continued in force, and granted liberty to apply as to costs and consequential orders: CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2012] TASFC 7. Counsel have now sought a number of consequential orders, and a number of orders as to costs. Some of the orders sought are not in dispute, but others are in dispute. We will deal first with the consequential orders.

1. Counsel for the appellant informed us that the appellant company has been placed into administration under Pt5.3A of the Corporations Act 2001 (Cth), and drew our attention to s440D(1) of that Act. That sub-section provides that, during the administration of a company, a proceeding in a court "against the company or in relation to any of its property" may not be begun or proceeded with except with the administrator's written consent or with the leave of the Court. This appeal concerned a lease which is the property of the appellant company. However it is clear that s440D(1) should not be construed as applying to proceedings begun or proceeded with by the company: Uvanna Pty Ltd v Tsang (1997) 72 FCR 502; M G Corrosion Consultants Pty Ltd v Gilmour (2012) 88 ACSR 170 at pars[19] – [21]; Arogen v Leighton [2013] NSWSC 1099 at pars[53] – [58].

The interlocutory injunction

1. The respondent owns the premises to which these proceedings relate.  It leased them to the appellant.  It purported to terminate the lease on 16 May 2011.  The appellant's employees were locked out.  The appellant sought an interlocutory injunction allowing it to resume occupation of the premises, where it conducted a business.  Wood J granted such an injunction on 18 May 2011.  The appellant gave the usual undertaking as to damages, as well as an undertaking not to do any structural work, including concreting, on the premises.

1. The appellant now seeks orders that that injunction be dissolved, and that it be released from those undertakings.  Those orders are not opposed, and will be made.

Security for costs

1. Wood J ordered the appellant to make a payment into court as security for the costs of the proceedings at first instance.  The appellant has been substantially successful in those proceedings since we have held that the lease was not validly terminated.  Those proceedings are not completed.  A claim for damages by the appellant and a counterclaim for damages by the respondent have yet to be determined.  The appellant is seeking an order that the monies paid into court as security for costs, together with any interest thereon, be paid out to it.  That order is not opposed, and will be made.

Bond monies in court

1. In connection with the granting of the interlocutory injunction, Wood J made an order requiring the appellant to pay money into court as a bond to secure its performance of the lease.  A sum of $76,725 was paid into court.  The appellant is now seeking an order that that money, together with any interest thereon, be paid out to it.  That order is opposed.

1. Counsel for the respondent told us that the respondent company was externally administered until 19 August 2013; that it had only recently had its books and records returned to it; and that the respondent wanted time to investigate the facts relating to the bond.  That submission missed some fundamental points concerning the circumstances that led to this payment into court.  The respondent unlawfully terminated the lease.  The appellant was entitled to possession of the premises.  Wood J was not in a position to decide whether that was so.  She therefore granted an interlocutory injunction, and imposed a condition that the bond money be paid into court.  That condition was imposed solely for the purpose of supporting the appellant's undertaking as to damages.  But for the respondent's unlawful acts, there would have been no injunction and no payment into court.  Now that this Court has held that the lease was not lawfully terminated and that it has always continued in force, there is no reason for the bond money to remain in court.  It should be refunded to the appellant. 

1. Counsel for the respondent submitted that any such order should be made by Wood J, not the Full Court.  He pointed out that there is nothing in the Supreme Court Civil Procedure Act 1932 or the Supreme Court Rules 2000 as to the procedure to be followed when a litigant wishes to seek a refund of such monies. That is certainly the situation. But a number of provisions in the Supreme Court Civil Procedure Act allow us to proceed as we think appropriate.

1. First of all there is s47(1), which concludes with a provision that allows this Court "to make such further or other order as the case may require". The full subsection reads as follows:

"(1) Subject to the provisions of this Act, a Full Court, on the hearing of every appeal, shall have and may exercise all the jurisdiction, powers, and duties of the Court, whether as to amendment or otherwise, and shall have power to draw inferences of fact not inconsistent with the findings of the jury, if any, and to affirm, reverse, or vary, as to all or some or any one of the parties, any judgment, order, or determination appealed from, and to give any judgment or make any order or determination which ought to have been given or made, and to grant a new trial in any cause or matter in which there has been a trial (whether with or without a jury), and to make such further or other order as the case may require."

1. There is also s201(1), which allows us to "make such order … as may be necessary to meet the case". The full wording of that subsection is as follows:

   "(1) In any case in which no form or manner of procedure is provided for by this Act or the Rules of Court, or in which any difficulty arises or doubt exists as to the procedure or practice to be followed in, or with respect to, any proceeding in the Court, or about to be instituted therein, the Court or a judge, if satisfied that such case is unprovided for, or that there is any such difficulty or doubt, shall have jurisdiction to make such order and give such directions as to the institution or prosecution of the proceeding as may be necessary to meet the case, and any proceeding or step in a proceeding taken in accordance with any such order or direction, shall be deemed to be regular and sufficient. Any such order or direction made or given by a judge may be varied or discharged by a Full Court, but the variation or discharge of the order or direction shall not invalidate or affect the regularity or sufficiency of any proceeding or step in a proceeding taken pursuant to any such order or direction."

2. Each of these provisions should be given a purposive interpretation: Acts Interpretation Act 1931, s8A. In particular, s47(1) should be interpreted as conferring on the Full Court the power to make any consequential orders that it considers appropriate when it reverses or varies a judgment or order. There is no need for a separate hearing in relation to the money in question. There is no reason why it should not be paid out to the appellant at this stage. We will make the order sought.

Appellant's damages claim

1. On 29 June 2011, Wood J made an order that the plaintiff's claim for damages and the defendant's claim for damages be tried separately to and after all other issues in the proceedings.  The trial before Crawford CJ therefore concerned the other issues in the case, particularly whether the lease had been validly terminated. 

1. The appellant contends that, as a result of the appeal succeeding, it must now be entitled to judgment against the respondent for damages to be assessed (a) in respect of the respondent breaching the lease by purporting to terminate it on 16 May 2011, and (b) for trespass in respect of the period from 6.15am on 16 May 2011 to 4pm on 20 May 2011.  Counsel for the appellant sought an order that judgment be entered accordingly.  That order was opposed.

1. It may very well be that the appellant is entitled to judgment for damages to be assessed as asserted.  However counsel for the respondent neither conceded that there was such an entitlement nor argued to the contrary.  We think the preferable course is for us not to determine this point, not to make the order sought, and to leave the question of the appellant's entitlements for determination in the action.  There is no need for us to take the time to review the relevant pleadings and evidence when that can be done, if need be, by the judge who determines the damages claims.

Costs of the appeal

1. The appellant is seeking an order that the respondent pay the costs of the appeal.  The respondent does not oppose making the usual order requiring the payment of party/party costs, but the appellant is asking for more.  There are three matters in contention in relation to the costs of the appeal:

· The appellant is seeking an order that its costs are not to be limited to the costs prescribed by Sch1 to the Supreme Court Rules.  That is opposed.

·     The appellant has asked this Court to certify that costs should be allowed for senior and junior counsel.  That is opposed.

·     The appellant contends that this Court should make an order whereby the costs are payable forthwith, but the respondent contends that we should make an order that cannot be enforced until after the determination of the proceedings at first instance.

1. Similar arguments were advanced to us in relation to the costs of the trial before Crawford CJ and the interlocutory proceedings before Wood J.  We will deal with those costs later in these reasons.

1. There is no doubt that this Court has a discretion to make any order as to the costs that it considers just in the circumstances of the case: Supreme Court Rules, rr57(1), 837(9). As a general rule, when an order for costs is made, the costs recoverable for a solicitor's work are as prescribed by Sch1 to the Supreme Court Rules: r837(1). Counsel for the appellant submitted that the taxing officer should be given a discretion to tax the appellant's costs without reference to that scale. He made written submissions as to the size and complexity of the case. It was not suggested that there was any conduct on the part of the respondent or its representatives that warranted an order for costs on a solicitor/client basis or an indemnity basis. The argument essentially was that (a) the prescribed scale is niggardly, and (b) this was a big case.

1. It may be that the scale of costs prescribed by Sch1 does not reflect the reasonable costs of Tasmanian litigious solicitors' work. However this was by no means an extraordinary case. We are not persuaded that it was of such size and complexity as to warrant a departure from the ordinary practice whereby, when costs follow the event, the successful litigant becomes entitled to party/party costs in accordance with the prescribed scale. Rule 837(2) provides that, in special circumstances, instead of the fee prescribed for any item in Sch1, the taxing officer may allow a greater or lesser fee in respect of that item. It will therefore ordinarily be a matter for the taxing officer to decide whether there are special circumstances warranting a departure from the prescribed scale.

1. The Supreme Court Rules make provision for certificates for counsel in r863(2), which relates to proceedings "before a judge in chambers".  Judges routinely certify that matters dealt with "in chambers" were proper for the attendance of counsel.  Without such a certificate, a counsel's fee will not be allowed on a taxation of costs.  (There is an exception of no present relevance in r863(2)(b) in relation to appeals from inferior courts and statutory tribunals.)  However there is no practice whereby judges of this Court certify that a matter was proper for the attendance of both senior and junior counsel.  No doubt, because we have an unfettered discretion, we could order that the fees of senior and junior counsel are to be allowed on taxation.  However such orders are unheard of in Tasmania.  Taxing officers routinely decide whether fees should be allowed for senior and junior counsel, or for two juniors, or for only one counsel, and what fees should be allowed.  It is ordinarily the role of a taxing officer, not a judge, to decide whether a particular fee should be recoverable on taxation.  Taxing officers are well placed to make such decisions.  See Dal Pont, Law of Costs, 2^nd ed, LexisNexis Butterworths, par[15.33].  We see no reason why, in this case, we should take on the role of deciding whether representation by senior and junior counsel was appropriate.  For all we know, there may be no controversy as to that. 

1. An appeal is a separate proceeding from an action.  When an appeal succeeds and costs follow the event, the Full Court ordinarily orders only that the respondent pay the appellant's costs.  Unless the Full Court otherwise orders, the successful appellant can immediately file a bill of costs, proceed to taxation, and enforce the order.  We therefore need to consider whether to take a different course in this case.

1. Counsel for the respondent submitted that this appeal was, in substance, an appeal from an interlocutory order.  He argued that the appellant should not be permitted to enforce its order for the costs of the appeal until after the determination of the damages claims at first instance.

1. When judges determine interlocutory applications and make costs orders in relation to them, they often have to decide whether the costs should be payable forthwith or after the conclusion of the proceedings.  The factors to be taken into account in making such a decision were listed by Porter J in Woods v Deputy Commissioner of Taxation (No 2) [2012] TASSC 11 at par[15] as follows:

"•   where the interlocutory proceedings are sufficiently self-contained and detached, or a discrete issue has been resolved;

·     where the principal proceedings are not likely to be resolved for some time, thus denying the successful party access to the costs;

·     where the interlocutory proceeding has had the effect of resolving a substantive part of the principal proceedings;

·     where the financial position of the party in whose favour the order is made is such that their ability to continue in the litigation may be affected ( and the same effect on the party liable is not likely as a result of paying immediately);

·     where there appears no real likelihood of multiple applications for costs to be taxed and payable forthwith as the interlocutory proceedings unfold;

·     where there has been some unreasonable conduct by the party against whom the costs have been awarded."

1. The hearing before Crawford CJ and the appeal to the Full Court concerned a discrete issue, namely the question whether the lease was validly terminated or whether it continued in force.  Those proceedings were essentially self-contained.  The damages proceedings are not likely to be resolved for some time since the defendant's counterclaim in respect of damage to its property is quite complicated.  The proceedings to date have had the effect of resolving a substantive part of the principal proceedings.  The appellant's financial position seems not to be ideal.  There does not appear to be any real likelihood of further applications for costs before the determination of the damages proceedings.  There is no suggestion of unreasonable conduct.  In the circumstances, we are not persuaded that we should depart from the usual course and make an order for the payment of the appeal costs to be delayed.

1. We will therefore make an order in the usual terms, namely that the respondent pay the appellant's costs of and incidental to the appeal.

Costs of the proceedings at first instance

1. Counsel for the appellant submitted that we should make orders requiring the respondent to pay the costs of the proceedings before Wood J, and the other costs of the proceedings at first instance. As with the costs of the appeal, he argued that we should order that the costs be paid forthwith; that we should order that the Sch1 scale is not to apply; and we should certify for senior and junior counsel.

1. Counsel for the respondent submitted, at least in relation to some of the first instance costs, that this Court had no power to make the orders sought. We disagree. We have that power by virtue of the concluding words of s47(1) of the Supreme Court Civil Procedure Act, which is quoted above.  That is to say, we have the power "to make such further or other order as the case may require". 

1. Having regard to the factors listed by Porter J in Woods, quoted above, we think it appropriate to make an order for the immediate payment by the respondent of the appellant's costs at first instance, including the costs of the proceedings before Wood J, which related to the issue as to the purported termination of the lease.  On 29 June 2011, Wood J ordered that the costs of the various proceedings before her be reserved.

1. In the course of the proceedings before her, Wood J certified for counsel on six occasions – on 20 May 2011, 27 May 2011, 7 June 2011, 8 June 2011, 17 June 2011 and 29 June 2011.  No doubt she did so for the purposes of r863(2).  For the reasons stated above in relation to appeal costs, we do not think it appropriate to determine one way or the other whether fees should be allowed for both senior and junior counsel in respect of the proceedings before Wood J and Crawford CJ.  We think any such questions should be left for the taxing officer.

1. For the reasons stated above in relation to appeal costs, we do not think it appropriate to order that the Sch1 scale is not to apply to the taxation of the first instance costs.

1. For these reasons we have decided to order that the respondent pay the appellant's costs to date of the first instance proceedings, including reserved costs, forthwith.

Appeal Costs Fund Act 1968

1. The respondent has sought an indemnity certificate pursuant to s8(1)(b) of the Appeal Costs Fund Act 1968. This appeal was necessary because of an error of a trial judge. We therefore consider it appropriate that the respondent be granted such a certificate in respect of the appeal.