Dwyer & Varga v Berry (No 2) - [2016] SADC 126

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DWYER & VARGA v BERRY (NO 2)
[2016] SADC 126
Decision of His Honour Judge Stretton
14 October 2016
PROCEDURE - COSTS
The unrepresented defendant, while successful, un-necessarily protracted the case by her carriage of the matter.
Held:
Defendant to have 80% of her costs to be taxed or agreed.

DWYER & VARGA v BERRY (NO 2)
[2016] SADC 126

On 2 September the court delivered judgement in the matter of Dwyer & Varga v Berry [2016] SADC 110, dismissing the plaintiffs claim for breach of contract. I refer to without repeating the history and nature of the litigation and the course of trial as set out therein, together with the court’s reasons and findings.
The defendant has applied for costs. Whilst she was not represented at the trial, she incurred significant legal costs earlier in the proceedings when she was represented.
The court has regard to all parties’ oral and written submissions concerning the issue of costs without repeating or setting them out.
Costs are in the discretion of the court, however the discretion must be exercised judicially and in accordance with principle, authority and cognisant of the costs rules.
The starting point is that costs will ordinarily follow the event.
The unsuccessful plaintiffs initially submit that the defendant won the case as the Form 1 and the notice of termination were on subsequent close scrutiny found not technically sufficient and effective to either render the deposit payable or terminate the contract effectively, when at the time of the events in question there was no issue or concern as to their status or purported effect, and in that sense, the defendant won the case on ‘technical points’. That is all true, of course.
Against that it must be observed that the plaintiffs elected to throw the dice and sue in reliance upon these flawed documents.
On consideration, the fact that the plaintiff lost the case due to the technical inadequacy of the documents upon which they relied is in all the circumstances not a basis to depart from the normal rule that costs ought to follow the event.
Of more substance is the plaintiffs’ submission that they were successful on a number of issues and factual matters pursued by the defendant, that several of these had no merit whatsoever, and that the trial itself was greatly protracted due to the unrepresented defendant’s carriage of both these issues and the trial in general.
As mentioned, the plaintiffs’ claim was that the contract provided that if the defendant failed to pay the deposit by the date specified, the plaintiffs were entitled to terminate the contract without prior notice and sue the defendant for damages. They claimed that the defendant failed to pay the deposit and that as a result the plaintiffs were entitled to, and did, validly terminate the contract. The plaintiffs claimed that they then continued to try and sell the property, properly mitigated the defendant’s loss by actively and fully marketing the property, but eventually sold it at a considerable loss for $738,083.80.
The pled defence and reply raised the following matters in answer to the plaintiffs’ claim:
1.That the contractual requirement to provide a “$20,000 deposit guarantee” did not amount to an express term that a deposit guarantee was payable as claimed by the plaintiffs.
2.That the purported Form 1 Statement (“Form 1”) contained a material defect such that it did not constitute a vendor’s statement for the purpose of section 7 of the Land and Business (Sale and Conveyancing) Act 1994 (“the Act”). The material defect was constituted by the document wrongly stating that there was no Development Plan Amendment of a certain type released for public consultation, when in fact there was. As a consequence of there being no Form 1, it is argued that time for payment of the deposit never started to run, a deposit never became payable, and hence the plaintiffs were never entitled to terminate for breach on the basis that no deposit had been paid. At trial the defendant identified a further omission in the Form 1.
3.That the contract did not provide for the payment of a deposit and therefore a deposit was never due and payable, the defendant did not breach the contract by failing to pay one and the plaintiffs were not entitled to terminate for failing to provide a “deposit guarantee”, except pursuant to the general breach condition clause 9.2 which required the giving of 7 days’ notice.
4.That even if the plaintiffs were entitled to terminate the contract, the purported termination notice was not served in a manner authorised by the contract and was therefore ineffective.
5.That even if the plaintiffs were entitled to terminate the contract, their document did not amount to a unilateral termination contemplated by the contract as it was in the form of a proposed agreement with the defendant to terminate. It did not therefore terminate the contract.
6.That the plaintiffs had failed to mitigate their loss.
The defendant also argued at trial:
7.That a “deposit guarantee” was a product only obtainable after full finance was granted, could never have been provided prior to full finance, and that all parties were aware of that.
8.That she had in any event, by virtue of an email exchange with the plaintiffs’ agent and the agent’s subsequent conduct of proceeding on the basis that the contract was still on foot, been given more time to pay the deposit, and had then proceeded on that basis, only to be in effect surprised by the plaintiffs ultimate purported termination without notice on the basis that she had not paid the deposit and their subsequent claim for damages. This raised the issue of whether the plaintiffs had, subsequent to the defendant’s alleged breach of the term to pay the deposit by its due date, by the actions of their agent waived the breach and thereby affirmed the contract such that they could no longer terminate without notice for a failure to pay the deposit, and/or should be estopped from denying that they had waived the breach. While this defence was not initially pled, it was actively pursued throughout the trial, the defendant cross examined witnesses to that effect, and argued it in her closing address. The defendant applied to amend her defence part way through the trial and upon being satisfied that there was no material prejudice to the plaintiffs the court gave her leave to amend her defence to plead the email exchange and that she was granted more time to pay the deposit.
The defendant was successful in relation to issues 2 and 5, which was sufficient to resolve the case in her favour.
The plaintiffs were however, I find, successful in relation to issues 1, 3, 4, 6, 7 and 8. Insofar as it may not have been necessary to express them for the purposes of the judgement, I make such findings. Issues 1 and 3 were plainly not arguable.
The defendant also devoted significant time at trial, indeed calling evidence from SAPOL, directed towards attempting to prove that the plaintiffs’ agent had deleted material, primarily irrelevant headers and footers, from the contractual documentation he supplied to the plaintiffs’ lawyers for the purpose of the litigation. That was not pled, and was ultimately irrelevant to the litigation.
The defendant also spent extended periods cross-examining the plaintiffs and Mr Gwynn as to suggested conversations and communications that proved ultimately irrelevant to the real issues.
The court felt constrained to allow much of this activity in light of the defendant’s unrepresented status and on the basis that it may have led to or ultimately have been in some way at least peripherally related to relevant issues.
Indeed the court makes no criticism of the unrepresented defendant for her lack of legal knowledge, however the result is that the case was significantly prolonged and the plaintiffs incurred significantly increased trial costs on account of it.
Drawing all this together, and having regard to all the submissions made, doing the best I can, I think that while the defendant was successful and has an entitlement that costs should follow the event, there should be a modest reduction of those costs to reflect the significant prolongation of the trial occasioned by her pursuance of unsuccessful and irrelevant issues at trial.
There will be an order that the plaintiffs pay 80% of the defendant’s party/party costs to be agreed or taxed.