Courtney and Jackson v Howell
[2016] VMC 17
•12 OCTOBER 2016
| IN THE MAGISTRATES COURT OF VICTORIA |
AT BAIRNSDALE
CIVIL DIVISION
Case No.E12961424
| THOMAS JOSEPH COURTNEY & MEGAN JACKSON | Plaintiffs |
| v | |
| PETER MAXWELL HOWELL & SALLY ANNE HOWELL | Defendants |
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MAGISTRATE: | S GARNETT |
WHERE HELD: | BAIRNSDALE |
DATE OF HEARING: | Written Submissions Filed regarding Costs Order |
DATE OF DECISION: | 12 OCTOBER 2016 |
CASE MAY BE CITED AS: | COURTNEY & JACKSON v HOWELL |
MEDIUM NEUTRAL CITATION: | [2016] VMC017 |
REASONS FOR DECISION
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Catchwords: Costs: Magistrates Court Act 1989 – Magistrates Court General Civil Procedure Rules 2010: Defendants successful at Hearing – whether defendants entitled to indemnity costs or ‘standard’ costs order on party/party basis. Exercise of Discretion.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Hancock | COMLAW |
| For the Defendant | Mr Magowan | Macpherson Kelley |
HIS HONOUR:
1 On 26 July 2016, reasons for judgment were delivered dismissing the plaintiffs’ claims for injunctive relief and damages arising out of an action in nuisance.[1]
[1] [2016] VMC 11.
2 The defendants now seek an order for indemnity costs of and incidental to the proceeding which is opposed by the plaintiffs.
3 The jurisdiction of the court in relation to costs is governed by s 131(1) of the Magistrates Court Act 1989 and Rule 63 of the Magistrates Court General Civil Procedure Rules 2010. The usual or standard order is that the unsuccessful party bears the liability for the costs of the unsuccessful litigation on a party/party basis. The court has a discretion to award costs other than on the usual or standard basis. There have been numerous decisions which establish the principles to apply when a court, in the exercise of its discretion, decides to depart from making the usual or standard order.[2] In the very recent case of Rees v Rees[3], McMillan J noted, after referring to many of these decisions, that ‘a special costs order will only be made where the proceeding exhibits a special or unusual feature or special circumstances and each proceeding must be considered on its own facts to ascertain whether those facts support the making of a special order for costs’.
[2] Some of which include: Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536, Heike Jindra & Ors v Tech-Rentals Pty Ltd & Anor [2000] VSC 132, Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, Sunland Waterfront Ltd v Prudentia Investments Pty Ltd (No.3) [2012] VSC 399.
[3] [2016] VSC 579 (27 September 2016).
4 McMillan J stated that the categories of circumstances that warrant a special costs order are not closed but examples of circumstances where a special costs order has been made include:
a. the making of an allegation, known to be false, that the opposite party is guilty of fraud;
b. the making of an irrelevant allegation of fraud;
c. conduct which causes loss of time to the court and to other parties;
d. the commencement or continuation of proceedings for an ulterior motive;
e. conduct which amounts to a contempt of court;
f. the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law; and
g. the failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial.
5 It was also noted that a contravention of an overarching obligation under the Civil Procedure Act 2010 may affect the exercise of a court’s discretion in relation to costs as referred to in s 28 of that Act.
6 In support of their application for indemnity costs the defendants submit that; the plaintiffs engaged in unmeritorious or deliberately improper conduct; the plaintiffs breached the overarching obligations imposed on them under the Civil Procedure Act; the court made adverse findings as to their credit; and, the court refused to accept the validity of the allegations they made against the first defendant regarding the ‘alleged turn down’ of the ABD.
7 The defendant also submits that the findings made by the court demonstrates that the proceeding was commenced for an improper purpose, namely malice, which was confirmed by their conduct before and during the litigation process. The defendants filed an Affidavit sworn by Mr McKellar dated 13 September 2016, the solicitor acting for them throughout the proceeding, in support of its submission which details the efforts made by the defendants to resolve the issues between the parties and to ensure the proceedings were ready to proceed at the earliest opportunity, which, it submits, supports an order for indemnity costs against the plaintiffs as their conduct caused or substantially contributed to the escalation of costs involved and delay in the proceeding.
8 The contents of the Affidavit highlighted the matters relied on which included; issues regarding discovery and the plaintiffs failure to comply with their discovery obligations and court orders relating to discovery; the plaintiffs lack of co-operation in making discoverable documents in the form of audio and video tapes and photographs available; a substantial delay in providing copies of letters of instruction to expert witnesses and providing a legible copy of an expert report; delay in the preparation of the evidence necessary to prosecute the claim and prevarication over the necessity for oral evidence to be given by an expert witness.
9 In response, the plaintiffs submitted that there is no valid reason why the court should depart from the usual costs order and that pursuant to Rule 63.31 it should order that the plaintiffs pay the defendants costs on Scale G and for those costs to be taxed in default of agreement.
10 The plaintiffs noted that a standard costs order serves the important curial and societal concern of imposing a ‘degree of restraint on the accumulation of costs of litigation’[4] and referred to the statement made by Keith J in Vanderclay Development Co Ltd v Inducon Engineering Ltd[5] where he said; ‘if [the party and party] basis were departed from, other than in exceptional circumstances, it is not difficult to visualise the indirect harm that could well be done by inhibiting prospective litigants from bringing to the attention of the court matters which they have every right to have put into litigation. At the same time the existence of the jurisdiction [to make special orders] does afford a real deterrent to persons who may be disposed to make wonton, scandalous and vicious charges against persons with whom they are in conflict’.
[4] As per Kirby P (as he then was) in Huntsman Chemical Company Australia Limited v International Pools Australia Ltd (1995) 36 NSWLR 242 at 248.
[5] (1968) 1 DLR (3d) 337 at 344 (HC Ont)
11 In their submissions, the plaintiffs also referred to numerous decisions where the courts have considered the ordering of indemnity costs and submitted that those cases are generally limited to issues such as delinquency, abuse of process, ulterior purpose or unreasonableness and is reserved for cases where the court wishes to indicate its disapproval in the conduct of the litigation of that party.
12 In answer to the defendants submissions, the plaintiffs noted that one of the grounds relied on in the application for indemnity costs is based on the adverse findings made by the court as to credit and that the defendants should not be left ‘out of pocket’ by reason of the plaintiffs conduct. The plaintiffs take issue that the findings made support a conclusion that the proceedings were initiated for a malicious purpose and refer to paragraph 118 of the written reasons and the fact that Mr Courtney was in fact troubled by the ABD and had approached the Council, EPA and Ombudsman prior to the issue of proceedings. The plaintiffs also noted that a finding of ‘exaggeration’ by Ms Jackson (paragraph 114 of the reasons) does not equate to fabrication. It further submits that there was a proper basis for the claim in nuisance and the proceeding was not hopeless or lacking in merit and noted that after the first ‘view’ was conducted by the court, the defendants application for summary dismissal of the proceeding pursuant to s 63 of the Civil Procedure Act was unsuccessful.
13 The plaintiffs also submit that any allegation of pre-litigation conduct is not a relevant factor when considering whether a special costs order should be made and rely on the comments made by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd[6]. The plaintiffs filed an Affidavit sworn by Mr Leonidas, solicitor acting for them, dated 28 September 2016, in response to the matters referred to in the Affidavit sworn by Mr McKellar regarding the plaintiffs pre and post litigation conduct. The matters referred to include; steps taken by the plaintiffs to resolve the issues with the defendants via the Council, EPA and the court mediation process; the issues surrounding discovery including the alleged breach of court orders; and, the conduct of the litigation and hearing in general.
[6] [2010] NSWSC 1479 at paras 15-19.
14 Whilst noting that delay, error or prolongation of proceedings are relevant matters in the exercise of a courts discretion regarding indemnity costs, it disputes that these are applicable in this case. The plaintiffs dispute, by reliance on the content of the Affidavit of Mr Leonidas, that the issues relating to discovery, expert evidence and provision of discoverable documents amount to inordinate delay on their behalf and assert that the defendants were also ‘guilty’ of some delay in the litigation process themselves. The defendants submit that the matters raised in the Affidavit of Mr McKellar did not result in a substantial disruption of the hearing, or prejudice to the defendants so as to warrant an indemnity costs order.
15 After considering the written submissions and affidavit material, I am not satisfied that the very high threshold required for departing from the ordinary rules in relation to costs has been met. As stated in the reasons for decision, this proceeding was hard fought, somewhat acrimonious, protracted and involved numerous interlocutory applications before the court. The court heard evidence from a number of witnesses, including expert evidence. Although the plaintiffs were unsuccessful and I made adverse findings in relation to their credit, the action was not frivolous or without some basis. It was not commenced or continued for fraudulent reasons or based purely on ulterior motives. Some of the delays that occurred as highlighted in the affidavit material, whilst unfortunate and open to criticism, are to be expected in litigation of this nature and do not of themselves warrant an indemnity costs order.
16 Accordingly, I will order that the plaintiffs pay the defendants costs of the proceeding, including all reserved costs (which includes the costs reserved on 22 April 2015 and 13 July 2015), on Scale G to be taxed in the Costs Court as between party/party in the absence of agreement.
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