Elmawey v ADL Mosque Islamic STY of SA Inc No. Scgrg-95-2716

[2000] SASC 192

ELMAWEY & ORS v ADL MOSQUE ISLAMIC STY OF SA INC
[2000] SASC  192

WILLIAMS J. 

1. On 3 December 1997 I gave judgment on an issue arising in this action and delivered reasons (Williams J, 3 December 1997, unreported).  The issue concerned the standing of the three plaintiffs to bring this action.  The matter then proceeded to mediation before the Hon Mr RG Matheson QC.  As a result of mediation the action was settled.

2. The terms of settlement involved alterations being made to the constitution of the defendant association.  There was a stumbling block.  The rules required the support of 90% of the members of the defendant association to a change to the constitution.  Such a requirement seemed to me to be onerous and I exercised power under the Associations Incorporation Act 1985 (SA) (“the Act”) to reduce the requirement to 75% and I also made orders for the alterations which had emerged from the successful mediation. These orders were required to be notified to the Corporate Affairs Commission in accordance with s 61(6) of the Act.

3. Notwithstanding the success of the mediation the parties were unable to reach agreement with respect to the costs of the action leading to my order of 3 December 1997.  Accordingly the question of costs came before me for argument on 19 June 2000.  My formal order on 3 December 1997 was as follows:

   “Upon the issue raised by the Master’s order I determine that the first Plaintiff (Mr Elmawey) and the third Plaintiff (Mr Mohammadi) were members of the Defendant Association at the date of commencement of this action and have standing as members for the purposes of proceedings pursuant to s61 of the Associations Incorporation Act.  I further determine that it has not been proved that the second Plaintiff, Mr Khalic has such standing.  Orders will be made accordingly.  I will hear the parties upon the question of costs.”

4. The first and third plaintiffs now seek costs against the defendant to 3 December 1997 and the defendant similarly seeks costs against the plaintiffs.

5. The three plaintiffs were represented by the same counsel and solicitor.  The matter was conducted essentially as a two sided dispute.

6. The successful plaintiffs argue that Mr Khalic’s instructions were merely tacked onto the successful claims although he was personally unsuccessful in establishing his own standing.  I see the matter in a different light.  The claims of the plaintiff were raised by affidavits and the question of membership was identified as an issue.  Statements in lieu of pleadings on this issue were exchanged in terms of a Master’s order dated 5 July 1996.

7. The plaintiffs argue that they were essentially successful on all issues except the membership of Mr Khalic and the submission and evidence to support the proposition that the association had an “open” form of membership.  The plaintiffs sought unsuccessfully to establish that by acts of associating themselves with the affairs of the defendant they became entitled to be regarded as members.

8. Relying on the statement of principle as expressed by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 16 the plaintiffs assert that they should be entitled to advance the unsuccessful arguments as part of their case without disadvantage in terms of the ultimate costs order.

9. I will not assume that the negotiated outcome would necessarily have reflected the rights of the parties if the matter proceeded.

10. In my view the parties have acted reasonably in bringing the proceedings and in defending them. I have examined the conduct of the parties prior to the commencement of proceedings.  I have looked at their conduct during the case.  I have brought to account the success of two plaintiffs and the criticisms made against them as to the extent of the evidence called on their behalf (which is reflected in their particulars of pleading).  I have had regard to the evidence called from Mr Khalic and that which was common to the cases of all three plaintiffs.

11. Whichever way I look at the matter there appears to be an opposing argument to match any which is advanced.

12. I have looked at the relief claimed in the summons and with some reservations I have compared that with the orders which I was eventually asked to make.

13. I have brought into account the written submissions on each side in support of the applications for costs and I have considered the oral arguments of counsel.

14. There is no doubt that a court will be ready to facilitate the making of a costs order in order to bring a matter to a conclusion.  However, the Court will rarely attempt to determine for itself as part of this exercise the outcome of a hypothetical trial.  I have had regard to the principles discussed in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201, Stratford and Son v Lindley (No2) [1969] 1 WLR 1547 at 1553 and Booth v Helensvale Golf Club Ltd (1997) 2 Qd R 141 at 142. Each case will turn on its own facts but often the outcome will be that the appropriate order is that each party should bear its own costs.

15. In Boscaini Investments Pty Ltd & Ors v Corporation of the City of Kensington and Norwood [1999] SASC 327 Debelle J dealt with an application for costs in circumstances having some similarities to the present. The facts appear from His Honour’s judgment:

    “Issues Become Moot
    The parties proceeded to get this application ready for trial.  By this time, the Full Court had by its decision published on 12 February 1998 upheld the development consent granted to Boscaini and Tohspil had consented to an order quashing its grant of development consent.  A date was fixed for the hearing of this application.  It was 21 September 1998.  On 18 September 1998 the Court was informed that the Council had rescinded its resolutions of 12 and 17 March 1997.  Given that the application sought set aside those resolutions, the rescission of the resolutions removed all issues for determination.  By consent, the hearing date was vacated.  The plaintiff withdrew its application subject to the question of costs.

    An Application for Costs

    Mr Walsh QC submitted that Boscaini had succeeded in this application in that it had achieved what it set out to obtain, namely, the rescission of the resolutions the subject of these proceedings.  He submitted that, although no final order had been made by the court, it was proper for Boscaini to recover its costs.  Mr Roder, for the Council, submitted that it was not possible to make an order for that would require the court to assess the prospects of the plaintiff’s success in the application.  Furthermore, he submitted, the assertion of the existence of a charitable trust was entirely misconceived and the plaintiff would have failed on that issue.”

16. Debelle J has provided a useful survey of the relevant principles.  He observes that the Court has a discretion whether to order costs and that discretion must be exercised judicially.  His Honour noted that in cases where the issues have become moot, where the plaintiff has effectively achieved his or her goals and it is reasonable to conclude that the plaintiff’s success is attributable to the commencement of the proceedings and that the plaintiff had reasonable prospects of success, then the plaintiff might recover costs.  His Honour cites R v Gold Coast City Council; ex parte Raysun Pty Ltd (1971) QWN case 13 at 28 which turns on its own facts.  In the present case it is not possible for me to form a clear view as to the ultimate merits of the case without a trial.  Although the outcome may be a victory for common sense it is not necessarily the outcome which a court would have imposed.

17. The present case is further complicated by the hearing before me at which each side was partially successful.

18. In the circumstances I do not consider that it is appropriate to make any order as to costs.  The applications by the first and third plaintiffs and by the defendant for costs are dismissed.  There will be no order for the costs of the argument on 19 June 2000 or in respect of the attendance today.