Director of Public Prosecutions v Tadase
[2023] VCC 441
•28 March 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised (Not) Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-22-01322
| MANCINI MADE PTY LTD | Plaintiff |
| V | |
| LGS SOLUTIONS PTY LTD | Defendant |
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JUDGE: | HER HONOUR JUDGE BURCHELL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 28 March 2023 | |
CASE MAY BE CITED AS: | Mancini Made Pty Ltd and LGS Solutions Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 441 | |
RULING
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Subject:COSTS
Catchwords: Whether costs should be the parties’ costs in the proceeding – Whether parties should be entitled to costs thrown away – Whether should be taxed immediately or at the conclusion of the proceeding
Legislation Cited: County Court Civil Procedure Rules 2018 rr63A.17 and 63A.20.1; Civil Procedure Act 2010
Cases Cited:Edelman v Badower [2010] VSC 427; Burke v Ash Sounds Pty Ltd (No 2) [2019] VSC 290; Cassimatis v Australian Securities and Investments Commission (ASIC) (2016) 334 ALR 350; Ziliotto v Hakim (No 2) [2012] NSWSC 1079; Dale v Clayton Utz (No 3) [2013] VSC 593; Stanley v Layne Christensen Company [2006] WASCA 50.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | - | Lamplugh McIntosh Lawyers |
| For the Defendant | - | Ward & Co Legal Consultants |
HER HONOUR:
Summary and outcome
1On 27 February 2023, I made orders in this proceeding including granting leave to the plaintiff (“Mancini”) to amend its writ and statement of claim and vacating the trial date listed for 17 April 2023.
2The defendant (“LGS”) seeks its costs thrown away by reason of the amendments and of and incidental to Mancini’s summons and applications to be paid immediately as follows:
(a) $10,955.60 in respect of costs thrown away by reason of the amendments to the statement of claim and the adjournment of trial;[1]
(b) $11,120.08 in respect of costs of and incidental to Mancini’s application to amend its statement of claim and adduce expert evidence;[2] and
(c) $1,638.68 in respect of costs of and incidental to this application for costs.[3]
[1] See pages 5 to 7 of the Bundle of Documents, being email correspondence dated 14 February 2023 (without attachments).
[2] See pages 10 to 17 of the Bundle of Documents, being correspondence dated 9 to 14 September 2022, and dated 6 to 8 February 2023.
[3] See pages 18 to 22 of the Bundle of Documents, being the calculation of LGS’s costs of and incidental to Mancini’s applications.
3Mancini opposes LGS’s submission and seeks that costs be ordered in the cause (now known as costs in the proceeding).
4For the reasons set out below, I order that Mancini must pay LGS’s costs thrown away by reason of the amended statement of claim fixed in the amount of $4,955.60 and the costs in respect of the applications to amend and adduce expert evidence and the costs application are the parties’ costs in the proceeding.
Legal Context
5Rule 63A.17 of the County Court Civil Procedure Rules 2018 (Vic) (“the Rules”) provides that:
Where a pleading is amended (whether with or without leave) the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties' costs in the proceeding, unless the Court otherwise orders.
6In Edelman v Badower[4], Mukhtar AsJ considered the meaning of the phrase ‘costs of and occasioned by the amendment’ in r63.17 of the Supreme Court Rules 2015 (the equivalent to r63A.17). His Honour held that this phrase does not include costs incurred prior to the date of an amendment. Rather, r63.17 is concerned with prospective or consequential costs. The conclusions of Mukhtar AsJ were more recently affirmed by McDonald J in Burke v Ash Sounds Pty Ltd (No 2)[5] and Edelman J in Cassimatis v Australian Securities and Investments Commission (ASIC)[6].
[4] [2010] VSC 427 at [29] – [30].
[5] [2019] VSC 290 at [11].
[6] (2016) 334 ALR 350 at [56] – [57].
7As approved by Edelman J in Cassimatis v Australian Securities and Investments Commission (ASIC)[7], it is well established that ‘costs thrown away’ are those costs that “have been reasonably incurred that relate to work done and wasted”.[8]
[7] Ibid.
[8] Sobey v Commissioner of Taxation [2008] FCA 1621 at [21] (Kenny J).
8The question of whether costs are thrown away involves a causal enquiry. It is necessary to ask whether costs that were incurred would not have been incurred but for the relevant event, here the amendment. In Ziliotto v Hakim (No 2)[9] Davies J expressed it in this way:[10]
The enquiry must be directed to what costs were expended which would not have been expended had it not been for the adjournment and what prompted the need for the adjournment. I agree with Mukhtar AsJ’s analysis that “costs thrown away” is looking to past costs — compensation for work already done and wasted because of the adjournment, or amendment or error. It does not refer to costs which have not yet been incurred even though they would not have been incurred but for the adjournment.
[9] [2012] NSWSC 1079 at [47].
[10] The judgment of Davies J was overturned in part on appeal in Zilliotto v Hakim [2013] NSWCA 359 however not on this point.
9Further, costs are ordinarily taxed at the conclusion of proceedings, as set out in r 63A.20.1:
If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.
10As reasoned by Hollingworth J in Dale v Clayton Utz (No 3),[11] given the fact that interlocutory applications usually do not conclude a proceeding, the Court is not generally in a position to determine where costs should fall between the parties. However, the Court does maintain its discretion in respect of taxation of costs.
[11] [2013] VSC 593 at [13].
Issues
11There are four issues for determination being whether Mancini ought to pay LGS’s costs:
(a) thrown away by reason of the amendments to the statement of claim;
(b) thrown away by reason of the adjournment of trial;
(c) of and incidental to Mancini’s application to amend its statement of claim and adduce expert evidence; and
(d) of and incidental to this application for costs.
Costs thrown away by reason of the amendments to the statement of claim and adjournment of trial
12LGS seeks costs by reason of the amendments to the statement of claim and the adjournment of trial fixed in the sum of $10,955.60.
13LGS submits that the ordinary rule in r63.A17 does not apply to an application for costs thrown away. It cites the judgment of Mukhtar AsJ in Edelman v Badower to support the “ordinary case” that an amending party is responsible for costs thrown away.[12]
[12] [2010] VSC 427 at [33].
14Whilst LGS’s position is that its costs thrown away are in excess of the sum of $22,000.000, if the Court were to fix the costs payable to avoid the need for taxation, LGS submits that it is willing to accept the sum of $10,955.60.
15LGS submits that the Court should exercise its discretion under r63A.20.1 to order that these costs be taxed immediately as the interlocutory application involved a separate or discrete issue and caused delay to the finalisation of the proceeding.
16Citing Dale v Clayton Utz (No 3)[13], LGS relies on three broad non exhaustive reasons upon which the Court may make an order for immediate taxation under r63A.20.1.[14] These include:
(a) because of the conduct of the unsuccessful party;
(b) the likely delay before the final completion of the proceeding; and
(c) where the interlocutory application involves a separate or discrete issues.
[13] [2013] VSC 593 at [65].
[14] Ibid.
17LGS argues that costs should be taxable immediately on the basis that:
(a) the interlocutory application involves a separate or discrete issue; and
(b) there has been a delay before the final completion of the proceeding, given the vacation of the trial date and refixing of trial to 5 February 2024.
18Mancini submits that costs ought to be ordered in the proceeding on the basis that this is the default position as set out in r63A.17, with such costs ordinarily taxed at the conclusion of proceedings per r63A.20.1. It argues that there is no reason why the ordinary rules should be departed from, particularly in circumstances where LGS has not adequately supported the basis upon which it claims costs thrown away or incidental to Mancini’s application.
19Mancini submits that the costs sought to be recovered on the basis that they were thrown away and occasioned by the amended statement of claim are inadequately particularised or explained by LGS to support an award of costs. It argues this on the basis that there is no casual connection demonstrated between the costs sought be LGS and the amended statement of claim, and further, that the quantum of costs sought are grossly disproportionate in respect of the minor pleadings amendments.
20Mancini submits that the amendments clarified liquidated damages and otherwise were as follows:
(a) stylistic changes, pleading express terms of two contracts already previously pleaded and particularised in the original statement of claim: at paragraph [4] and [10].
(b) clarification that GST is not sought on liquidated damages sums: at paragraph [8] and A.
(c) clarification as to the date on which defective shop drawings were provided and further particulars provided: at paragraph [12].
(d) further information regarding the particulars of breach and repudiation, as now set out in witness statements dated 21 December 2021, which were not available at the time of the original statement of claim: at paragraph [13].
(e) clarification as to the dates when Mancini accepted LGS’s repudiation and appointed an alternative contractor: at paragraph [14]-[14a].
(f) further information and particulars about the impacts of LGS’s delay on Mancini’s construction project: at paragraph [14b].
(g) clarification that the retention of the deposit paid to LGS by Mancini (claimed previously under the initial statement of claim) is recoverable under common law or, in the alternative, based on relief against forfeiture: at paragraph [16] and D.
21Citing Wheeler JA in Stanley v Layne Christensen Company,[15] Mancini argues that, where amendments are not substantial or where they are simply to further clarify an otherwise broadly satisfactory pleading, it may be appropriate simply to order costs in the proceeding. It says that an order that costs be in the proceeding is appropriate in the present case given the amendments were set out in draft form on 23 December 2022, months ahead of the scheduled trial date of 17 April 2023 and the amendments ought to be properly characterised as minimal.
[15] [2006] WASCA 50 at [55].
22Mancini submits that the primary reason for the amendments was to correct what would have otherwise been a misleading pleading if maintained, being that liquidated damages sought in the original statement of claim were said to be owing at the time of that pleading. They state that all other amendments are minor, technical, or merely corrective.
23Mancini further submits that the costs sought extend beyond costs ordinarily recoverable as costs thrown away and, given the nature of these amendments, it is difficult to see how LGS can sustain an overall quantum of $10,955.60 by virtue of costs thrown away. However, it should be noted, as set out in Mancini’s submissions that it would not oppose an order on this basis , however, significant issues arise in relation to the quantum and basis of the costs sought by LGS.
24McDonald J in Burke v Ash[16] and Mukhtar AsJ in Edelman v Badower, observe that the costs rule contained in the equivalent r63A.17 does not confer power on the Court to award ‘costs thrown away’ by reason of an amendment of a parties’ pleading. Instead, costs ‘of and occasioned by the amendment’ are prospective or forward looking. In turn, the general course that would be adopted in such an application, is that the costs application should be determined in accordance with the ordinary rule in r63A.17.
[16] [2019] VSC 290 at [12].
25In agreeance with Davies J in Ziliotto v Hakim (No 2)[17] and Mukhtar AsJ in Edelman v Badower[18], ‘costs thrown away’ considers looking to past costs and compensation for work already done and wasted because of Mancini’s amendment to its statement of claim. This would exclude costs that have not yet been incurred even though they would not have been incurred but for Mancini being given leave of the Court to amend its statement of claim.
[17] [2012] NSWSC 1079 at [47].
[18] [2010] VSC 427 at [29] – [30].
26However, Mancini has previously indicated to LGS and the Court that it would not oppose an order on the basis of paying LGS’s costs thrown away by reason of the amendment. LGS submitted that it is willing to accept the fixed sum of $10,955.60. The rule in r63A.17 has been displaced by the specific costs order contemplated by the parties and which can be the subject of court order.[19] I agree with Mancini that the costs sought by LGS extend beyond costs thrown away. For example, line 19 of the bill of costs provided by LGS are cost sought for LGS perusing Mancini’s witness statement, reviewing and drafting LGS’s witness statements in the sum of $6,000.00. I do not accept that this item falls within costs thrown away arising from the amendments but rather go to costs thrown away by reason of the adjournment (which I deal with below).
[19] See Edelman at [35]
27Justice Riordan in Titcher v Marcelis[20] made observations regarding the desirability of fixing fees to avoid the inconvenience and expense of taxation. If an amount claimed is modest, it is in the interests of the administration of justice and the just, efficient, timely and cost effective resolution of the issues in dispute to have costs fixed than subject to taxation. The Court will fix costs under r63A.07 of the Rules to avoid the inconvenience and expense of having costs formally taxed.
[20] [2015] VSC 578.
28I, therefore, am of the view that an appropriate amount for the award of costs thrown away by reason of the amendment be fixed in the sum of $4,955.60.
29Applying Hollingworth J’s observations in Dale v Clayton Utz (No 3)[21] there is reason to depart from the ordinary position against immediate taxation in circumstances where the issue is discrete and there is a delay in the conclusion of the proceeding. Here, there has been a delay to the finalisation of the proceeding given the trial has now been refixed to 5 February 2023 from its previous trial date of 17 February 2022. Further, Mancini did not oppose such an order, it did, however, oppose the issue of quantum sought by LGS.
[21] [2013] VSC 593.
Costs thrown away by reason of the adjournment of trial
30Following on from my earlier reasoning, Mancini rejects LGS’s submissions in respect of its delay as a reason for the vacation of the trial date. Citing Justice Davies in Zilliotto v Hakim (No 2)[22], who referred to the decision of Mukhtar AsJ in Edelman v Badower, the enquiry must be directed to what costs were expended had it not been for the adjournment and what prompted the need for the adjournment.
[22] [2012] NSWSC 1079 at [47].
31In respect of the adjournment of the trial date, Mancini submits that the need for adjournment must be understood in light of the minor nature of the amendments to the statement of claim which did not require the trial date to be vacated. Further, that it was ultimately LGS’s objections to the amended statement of claim and failure to respond in a timely manner to Mancini’s communications which contributed to the delay.
32Affirming the reasoning of Davies J in Zilliotto v Hakim (No 2)[23] in which he referred to Mukhtar AsJ in Edelman v Badower[24], the need for adjournment must be understood in light of the nature of the amendments to Mancini’s amended statement of claim which did not require the trial date be vacated.
[23] [2012] NSWSC 1079 at [47].
[24] [2010] VSC 427 at [29] – [30].
33The amendments were set out in draft form by Mancini on 23 December 2022, several months before the listed trial date of 17 April 2023. The purported amendments were not significant and sought to clarify timing and provide further particulars about the nature and source of liquidated damages. Relevantly, LGS’s liability to indemnify Mancini was already clearly pleaded in the original statement of claim.
34It is also apparent that there were significant failures to respond to Mancini on LGS’s part which, in my view, materially contributed to any delay or adjournment of the trial date.
35Mancini’s amended application, together with supporting material was sent to the parties and the Court on 23 December 2022, in response to which the Court provided a return date on 17 January 2023. LGS only responded on 6 February 2023, despite repeated inquiries from Mancini.
36Further, LGS maintained its objections to the amended statement of claim on the basis that it insisted Mancini pay its costs upfront in the amount of $22,130.16. This was in circumstances where Mancini had already indicated it would not oppose an order for costs thrown away. I agree that the amendments were unreasonable to refuse primarily on the basis of costs recovery alone, the maintenance of which contributed to further delay in the proceeding.
37Accordingly, I am of the view that the award of the costs ought to be limited to those thrown away by reason of the amendment alone and not extend to those by reason of the adjournment of trial.
Costs of and incidental to Mancini’s application to amend its statement of claim and adduce expert evidence
38LGS seeks the sum of $11,120.08 for costs of and incidental to Mancini’s application to amend its statement of claim and adduce expert evidence.
39In relation to the expert evidence, Mancini concedes that the lack of provision for expert witnesses in the original procedural orders was an oversight of the parties. LGS’s failed to file its witness statements on 13 February 2023. However, in anticipation of LGS’s responsive witness statements, on 8 February 2023 Mancini wrote to LGS and indicated it was likely to adduce expert evidence at trial and whether LGS intended the same. Having received no response from LGS, Mancini sought a direction for the provision of expert reports from the Court on 10 February 2023.
40Mancini further submits that, given the timing of when it sought the amendments to its statement of claim with a summons, supporting affidavit and draft pleading emailed to the parties and the Court on 23 December 2022, seeking directions in relation to expert reports on 8 February 2023 that the trial date of 17 April 2023 could have been maintained had LGS responded in a timely fashion and cooperated to consented consent to routine procedural requests. In turn, Mancini submits that the Court should take into account LGS’s contraventions of the Civil Procedure Act 2010 (Vic) (“CPA”)[25] when determining costs pursuant to s28(2).
[25]See CPA ss20, 22 and 25.
41In agreeance with Mancini, LGS should not be awarded any further costs in respect of Mancini’s application to amend its statement of claim, the adjournment of the trial and for adducing expert evidence.
42LGS made reference to delay as a result of Mancini seeking a direction for expert witnesses and more generally amendments to its statement of claim. Mancini in response raised issues with LGS’s conduct which it argues enliven CPA obligations in respect of the parties conduct in civil proceedings.
43The overarching purpose of the CPA in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[26] The CPA imposes “overarching obligations” on parties to proceedings and their legal practitioners. Relevant obligations include the requirements to cooperate in the conduct of civil proceedings (s20) and use reasonable endeavours to minimise delay (s25). Section 28(2) provides that a Court may take into account any contravention of the overarching obligation when exercising its discretion as to costs.
[26] See s7 CPA.
44The parties had not made provision for delivery of expert reports in the procedural orders made on 26 May 2022. On 8 February 2023, Mancini wrote to LGS indicating that it was likely to adduce expert evidence and questioned whether LGS intended to do the same. Having received no response from LGS, Mancini sought a direction from the Court.
45On 1 February 2023, LGS responded that it intended to rely on expert evidence. Discussion between the parties counsel resulted in Mancini advising that it was content with whatever form of expert evidence, including the appointment of a joint expert. It was further confirmed that given the confined nature of expert evidence sought it could be accommodated within the existing procedural timeframe and the trial date could be maintained.
46In my view, in agreeance with Mancini, had LGS responded more efficiently and cooperated with Mancini in respect of the expert direction and amendments to the statement of claim, it is possible that the trial date would have been maintained.
47I agree that Mancini’s conduct does enliven contraventions to obligations under the CPA to co-operate and minimise delay and, therefore, must be take into consideration when determining costs. Consistent and supporting my earlier findings, LGS ought not to be awarded any costs in respect of those of and incidental to Mancini’s applications and in respect of delay, expert evidence. Instead, in the circumstances, the appropriate order is that the costs are the parties’ costs in the proceeding.
Costs of and incidental to this application for costs
48In addition, LGS seeks costs of and incidental to this application for costs, being the preparation of submissions, in the sum of $1,683.68.
49Mancini submits that any costs arising from LGS preparing its submissions are not recoverable as they are deficient. Further, Mancini indicated to LGS that submissions on costs thrown away were not necessary at that stage of the interlocutory juncture and also indicated at all times it would not oppose an order for costs thrown away by reason of the amendment to its statement of claim, however, only objected to the quantum of costs made by LGS.
50In respect of costs of and incidental to the current application for costs, namely those arising from LGS preparing its submissions, I agree that there is no proper basis for LGS to be awarded a costs order in its favour. Indeed, as detailed earlier, Mancini indicated that at all material times that it would not oppose an order for costs thrown away and further submissions on costs were unnecessary at this point of the proceeding.
51This is particularly the case when on the material before the Court, the ‘delay’ and adjournment was largely due to LGS’s own failure to adequately communicate with Mancini. Therefore, LGS should not benefit from its own contributions to delay by an award of costs of the costs application nor an immediate taxation in its favour at this time.
Conclusion
52For the reasons outlined above, I order that the plaintiff pay the defendant’s costs by reason of the amendment fixed in the sum of $4,955.60 and the parties’ costs of the summons and application are their costs in the proceeding.
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Certificate
I certify that these 13 pages are a true copy of the judgment of Her Honour Judge Burchell delivered on 28 March 2023
Dated: 28 March 2023
Nikki Thomson
Associate to Her Honour Judge Burchell
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