Cosenza v Roy Morgan Interviewing Services Pty Ltd (No 2) - [2019] SASC 110

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
COSENZA v ROY MORGAN INTERVIEWING SERVICES PTY LTD (No 2)
[2019] SASC 110
Judgment of The Honourable Justice Parker
28 June 2019
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE
This judgment concerns the costs of an appeal.
The appellant appealed against an order of the Magistrates Court setting aside a default judgment which had been issued in favour of the respondent in an action for trespass. The appeal was dismissed on all grounds.
The appellant concedes that the Court should order that he pay the respondent’s costs of the appeal, but resists the respondent’s application for costs to be awarded on a solicitor/client basis.
Held, per Parker J, awarding costs of and incidental to the appeal to the respondent on a party/party basis:
1. To depart from the general rule in r 264(2) of the Supreme Court Civil Rules 2006 (SA) and award costs on a solicitor/client or indemnity basis under r 264(5), the Court must be satisfied of some unreasonable conduct by the party ordered to pay costs, albeit that the impugned conduct need not necessarily rise as high as vexation (at [14]).
2. The unreasonable conduct by the party ordered to pay costs may relate to the refusal of a settlement offer (at [14]).
3. If the Magistrates Court found that the claim was vexatious, and/or that the claim was not properly served upon the respondent, those matters would be relevant considerations in the exercise of the costs discretion in that Court, but are not relevant to the costs of the appeal to this Court (at [16]).
4. The action of warning of an intention to seek indemnity costs is not of itself so unreasonable as to justify departure from the general rule as to party/party costs (at [17]).
5. The appellant’s decision to reject a settlement offer was not so unreasonable as to justify departure from the general rule as to party/party costs, as although his appeal was unsuccessful it was not devoid of merit nor clearly unarguable (at [19]-[21]).
6. It is not appropriate to make any order as to the costs incurred in arguing the basis upon which the costs of the appeal should be determined (at [23], [24]).
Supreme Court Civil Rules 2006 (SA) rr 263, 264, referred to.
Rosniak v Government Insurance Office (1997) 41 NSWLR 608, applied.
Cosenza v Roy Morgan Interviewing Services Pty Ltd [2019] SASC 95, considered.

COSENZA v ROY MORGAN INTERVIEWING SERVICES PTY LTD (No 2)
[2019] SASC 110

PARKER J: This judgment concerns the costs of an appeal.
For the reasons that follow, I order that the appellant pay the respondent’s costs of and incidental to the appeal, on a party/party basis.
Background
The appellant appealed against an order of the Magistrates…

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: [2019] SASC 110
Decision Date: 28 June 2019

CaseChat Overview and Summary

In Cosenza v Roy Morgan Interviewing Services Pty Ltd (No 2), the appellant sought to appeal a decision of the Magistrates Court, which had set aside a default judgment in favour of the respondent in an action for trespass. The appellant was ordered to pay the respondent’s costs of the appeal on a party/party basis. The primary dispute between the parties was the basis upon which the costs should be awarded, with the respondent arguing for solicitor/client costs and the appellant contending for party/party costs. The respondent contended that the costs should be awarded on a solicitor/client basis due to the appellant’s vexatious claim, issues with the service of the Magistrates Court claim, threats to seek indemnity costs, and rejection of a settlement offer. The appellant, on the other hand, argued that there was no cogent basis for departing from the usual rule that costs are payable on a party/party basis.

The court found that while the respondent was entitled to costs of the appeal, the matters raised by the respondent did not justify a departure from the general rule that costs be awarded on a party/party basis. The court held that the first two grounds raised by the respondent were not relevant to the costs of the appeal. The appellant's threats to seek indemnity costs, while relevant, were not of themselves unreasonable enough to warrant a departure from the general rule. The court concluded that neither party should pay the other's costs incurred in arguing the basis upon which the costs of the appeal should be determined. Therefore, each party was to bear its own costs in relation to this aspect of the matter.

The court ordered that the appellant pay the respondent’s costs of and incidental to the appeal, on a party/party basis. Each party was to bear its own costs of and incidental to the dispute about the basis upon which the costs of the appeal should be awarded. The court found that the respondent's submissions regarding its rejection of the offer to settle were irrelevant to the costs of the appeal, as the offer was to resolve the proceedings as a whole and not merely the appeal. Additionally, the offer was that each party should “walk away” and bear their own costs, which was not a reasonable offer to resolve the proceedings as a whole.

Orders

Orders of the court

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Background

Background to the litigation

For the reasons that follow, I order that the appellant pay the respondent’s costs of and incidental to the appeal, on a party/party basis.Background The appellant appealed against an order of the Magistrates Court setting aside a default judgment which had been issued in favour of the respondent in an action for trespass. On 6 June 2019, I dismissed the appeal on all grounds.[1] I published the judgment administratively in Chambers and granted both parties leave to make written submissions as to costs. [2][1] Cosenza v Roy Morgan Interviewing Services Pty Ltd [2019] SASC 95 at [51] (Parker J).[2] At the hearing of the appeal, I indicated that because counsel and solicitor for the respondent had travelled from Melbourne and so as to avoid exposing the respondent to unnecessary expense, judgment would be delivered administratively in Chambers. Both parties accept that the respondent is entitled to an order that the appellant pay the costs of the appeal.[3] However, the parties disagree as to the basis upon which costs should be awarded.[3] Supreme Court Civil Rules 2006 (SA) r 263(1).The respondent’s submissions The respondent submits that the costs of the appeal should be awarded against the appellant on a solicitor/client basis. The respondent advances that submission on four grounds:1The appellant’s claim is inherently vexatious, in that it is a claim for $100,000 for a brief alleged trespass, a sum which bears no resemblance to any actual damage or loss;2There is a real question as to whether the respondent was actually served with the Magistrates Court claim;3The appellant has made numerous threats to the respondent that he would seek indemnity costs if successful;4The appellant unreasonably rejected a settlement offer made by the respondent the day prior to the hearing of the appeal. In light of these matters, the respondent submits that costs should be awarded on a solicitor/client basis from 5 February 2019, being the day on which the settlement offer was made. The respondent suggests that its overall costs are likely to be modest as its in-house counsel acted as the instructing solicitor for the appeal.The appellant’s submissions The appellant concedes that the respondent should be awarded the costs of the appeal. However, he also submits that the respondent should not be awarded costs in respect of the present dispute as to the basis upon which costs are to be determined. He submits that the respondent should pay his costs of the argument as to costs. The appellant notes that he had already, prior to the respondent preparing its submissions as to costs, consented to an order to pay the costs of the appeal (to be agreed or taxed). This was rejected by the respondent, who proceeded with the preparation of its submissions as to costs. The appellant suggests that the respondent has put him to the expense of preparing submissions as to costs out of “revenge” or “spite”. The appellant further submits that there is no cogent basis for departing from the usual rule that costs are payable on a party/party basis.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Notwithstanding that finding, I do not consider it appropriate that either party should pay the other’s costs incurred in arguing the basis upon which the costs of the appeal should be determined. My reasons are, first, while the respondent succeeded on the appeal, it failed in its claim for solicitor/client costs. Secondly, I consider that there was very little substance in the claim for solicitor/client costs on the appeal, as the matters raised were largely only relevant to the costs of the claim in the Magistrates Court. Thirdly, because of the two preceding considerations, I do not consider it just that the appellant should be required to pay the costs incurred by the respondent in arguing the basis upon which the costs of the appeal should be awarded. However, because the appellant failed in his appeal, I do not consider it equitable that the respondent should be required to pay any part of his costs. Thus, each party is to bear its own costs in relation to this aspect of the matter. Conclusion I order:1Subject to Order 2 below, the appellant is to pay the respondent’s costs of and incidental to the appeal, on a party/party basis.2Each party is to bear its own costs of and incidental to the dispute about the basis upon which the costs of the appeal should be awarded.

Ratio Decidendi

Legal Principle Established

The appellant submits that the respondent’s submissions regarding its rejection of the offer to settle are irrelevant to the costs of the appeal. The offer was to resolve the proceedings as a whole, not merely the appeal. Additionally, the offer was that each party should “walk away” and bear their own costs. That is not a reasonable offer to resolve the proceedings as a whole.Consideration The appellant concedes that the Court should order that he pay the respondent’s costs of the appeal, but resists the respondent’s application for costs to be awarded on a solicitor/client basis. Rule 264(2) of the Supreme Court Civil Rules 2006 (SA) provides that:As a general rule, however, costs are awarded as between party and party (that is, on the basis that the party entitled to the costs will be reimbursed for costs reasonably incurred by the party in the conduct of the litigation to an extent determined by reference to the scale of costs in force, under these Rules or the old rules, when the costs were incurred). To depart from that rule and award costs on a solicitor/client or indemnity basis under r 264(5), the Court must be satisfied of some unreasonable conduct by the party ordered to pay costs, albeit that the impugned conduct need not necessarily rise as high as vexation.[4] The unreasonable conduct may relate to the refusal of a settlement offer. [4] Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 (Mason P). For the reasons that follow, I do not consider that the matters raised by the respondent justify a departure from the general rule that costs be awarded on a party/party basis, insofar as the costs of the appeal are concerned. The first two of the four matters raised by the respondent (see [5] above) are not relevant considerations in so far as the costs of the appeal are concerned. If the Magistrates Court found that the claim was vexatious, and/or that the claim was not properly served upon the respondent, those matters would be relevant considerations when that Court exercised its discretion as to the costs of the claim. However, these two matters are not relevant to the costs of the appeal to this Court. As to the matter of the appellant’s threats to seek indemnity costs if successful on the appeal, the respondent relies upon three emails sent by the appellant to James Yeatman, in-house counsel for the respondent. In each email, the appellant indicated an intention to seek indemnity costs if successful. The first of the three emails was sent on 27 September 2018, prior to the Magistrates Court setting aside the default judgment and the subsequent lodgement of the appeal against that decision. The email is therefore not relevant to the costs of the appeal. The latter two emails, dated 19 December 2018 and 16 January 2019, were sent after the commencement of the appeal. Those messages specifically refer to the appellant’s intention to seek indemnity costs should he succeed in the appeal. Although the issue raised in the messages is relevant to this Court’s discretion as to costs, the action of warning of an intention to seek indemnity costs is not of itself so unreasonable as to justify departure from the general rule as to party/party costs.