Excelsior Land Holdings Pty Ltd v Alan Sheppard Constructions Pty Ltd

[2012] SASCFC 119

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Civil)

EXCELSIOR LAND HOLDINGS PTY LTD & ORS v ALAN SHEPPARD CONSTRUCTIONS PTY LTD

[2012] SASCFC 119

Judgment of The Full Court

(The Honourable Justice Gray, The Honourable Justice David and The Honourable Justice Stanley)

29 October 2012

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - OTHER CASES - FAILURE IN PORTION OF A CASE

Parties unable to agree on appropriate order as to costs - matter came on appeal to the Full Court by permission from a single judge of the Supreme Court who heard an appeal from a judgment of the District Court - parties agreed that no order should be made as to costs of the appeal to the Full Court, the notice of alternative contentions and the interlocutory applications filed 30 May 2011 and 1 June 2011.

Consideration given to the basis upon which the trial and the appeal was decided - second respondent was not successful on primary submission but on alternate submission.

Held: Appellant to pay respondent 50 percent of its costs of and incidental to the District Court application - appellants are to pay respondent 50 percent of its costs of and incidental to the appeal to the single judge of the Supreme Court - general rule is that costs follow the event. 

The respondent was successful on the basis set out in the notice of alternative contentions, and not on its primary submission - significant time and resources were devoted to pursuing the primary submission - justice is therefore served by the order made by this Court.

Steele Ford and Newton v Crown Prosecution Service (No. 2) [1994] 1 AC 22; Advance Resources Services v Charlton (2008) 100 SASR 388; In Re Elgindata Ltd (No. 2) [1993] 1 All ER 232; Myers v Defries (1888) 5 Ex D 180; Slatford v Erlebach [1912] 3 KB 155; Colbert v Beard [1992] 1 Qd R 26, considered.

EXCELSIOR LAND HOLDINGS PTY LTD & ORS v ALAN SHEPPARD CONSTRUCTIONS PTY LTD
[2012] SASCFC 119

Full Court:  Gray, David and Stanley JJ

THE COURT:

Introduction

1. On 13 July 2012, the Court published its reasons in this matter. On appeal the Court granted an extension of time to the respondent for the issue of enforcement proceedings, and granted permission for the lodging of a further notice of lien reflecting the monetary claim now pursued by the respondent in respect of the land over which the lien was claimed pursuant to s 191(k) of the Real Property Act 1886 (SA) (the Real Property Act). The Court indicated it would hear the parties as to costs and to the terms of the order that had been made.

2. The parties have been unable to agree the appropriate order in relation to costs. 

3. While the parties agree that there be no order as to the costs of the appeal to the Full Court, the notice of alternative contentions, the interlocutory applications filed on 30 May 2011 and 1 June 2011 respectively, they cannot agree on the question of the consequential costs orders that should follow in respect of the proceedings below. 

4. This matter came on appeal to the Full Court by permission from a judgment of a judge of this Court who heard an appeal from a judgment of the District Court.

5. The District Court ordered the appellants to pay the respondent’s costs of the trial.  On appeal, the learned judge of this Court, in dismissing the appeal, ordered the appellants to pay the respondent’s costs of that appeal. 

6. Before us, the respondent sought to hold those costs orders below.  In contrast, the appellants sought an order that the respondent pay their costs of the District Court trial and the appeal to the single judge of this Court.

   Relevant principles

7. The discretion to award costs is unfettered.  It is a discretion which must be exercised judicially.  That will usually result in an order that the costs of both a trial and an appeal follow the event.[1]

   [1]    Donald Campbell & Co v Pollak [1927] AC 732; Steele Ford and Newton v Crown Prosecution Service (No. 2) [1994] 1 AC 22 per Lord Bridge at 39 – 40; Oshlack v Richmond River Council (1998) 193 CLR 72 at 96 – 98; Advance Resource Services v Charlton (2008) 100 SASR 388 at 397.

8. In exercising the discretion judicially, the court decides costs in accordance with established principle and factors directly connected with the litigation.[2]  The traditional exceptions to the usual orders as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion.  In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd[3] Devlin J explained the relevant principle as follows:[4]

   No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct. 

   [2]    In Re Elgindata Ltd (No. 2) [1993] 1 All ER 232.

   [3] [1951] 1 All ER 873 at 874.

   [4] [1951] 1 All ER 873 at 874.

9. In Oshlack v Richmond River Council[5] McHugh J said that “misconduct” in this context means misconduct relating to the litigation or the circumstances leading up to the litigation.[6]  Thus, the Court may properly depart from the usual orders as to costs when the successful party, by its lax conduct, effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.[7]

   [5] (1998) 193 CLR 72.

   [6]    Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 – 98.

   [7]    McHugh J was in dissent as to the ultimate disposition of the appeal but his exposition of the principle attracted the support of a majority of the Court.  See Brennan CJ at 75 and Kirby J at 122.

10. In exercising the discretion as to costs, it is well recognised that there may be more than one event.  Where there are separate issues the court can treat those issues as discrete events.  Where this occurs, costs on each such issue will follow its event.[8] 

    [8]    Myers v Defries (1888) 5 Ex D 180; Slatford v Erlebach [1912] 3 KB 155; Colbert v Beard [1992] 2 Qd R 67; Interchase Corp Ltd (In Liq) v Grosvenor Hill (Queensland) Pty Ltd (No. 3) [2003] 1 Qd R 26.

    Consideration

11. In order to determine the appropriate basis upon which to exercise the Court’s discretion in relation to the costs of the proceedings below, it is necessary to have regard to the basis upon which the trial and the appeal to the single judge of this Court was decided. 

12. The respondent building company brought proceedings in the District Court to enforce its lien in respect of unpaid invoices for work it had performed for the appellants. It had originally issued a lien for an incorrect amount, and over two titles, when the work had only related to one title. It issued a fresh lien and brought the proceedings in respect of that subsequent lien. The District Court held that a notice of lien is deemed to be a caveat and, accordingly, s 191(k) of the Real Property Act empowered the Court to authorise the lodgement of a second lien, and the justice of the case made it proper to exercise that power in the respondent’s favour.

13. The appeal to a single judge of this Court was dismissed.  The Court held that it was open to the District Court to authorise a person to lodge a second lien under the Workers’ Liens Act 1893 (SA) (the Workers’ Liens Act) when the first lapsed because of the lienee’s failure to commence enforcement proceedings within the 14-day period prescribed by the Workers’ Liens Act.  The learned judge found that the first lien was invalid because the notice of demand on which it was founded had not been executed by the respondent personally.  Accordingly, there was no impediment to the lodging of a further lien based on any argument that it was impermissible to lodge more than one lien in relation to the same matter. 

14. Importantly, at trial in the District Court[9] and on appeal to the single judge of this Court,[10] the respondent contended that it was also entitled to an extension of time in which to enforce the first lien, and to the amendment of that lien, which reflected the true position.  The District Court Judge did not address this argument, presumably because he felt it unnecessary given the conclusion he reached.  On appeal to the single judge of this Court, his Honour found it unnecessary to consider the issue given his conclusion that the decision of the District Court Judge was correct.

    [9]    See affidavit of Alexander Charles Antic declared 22 April 2010 appeal case book p 38 – 39.

    [10]   See notice of alternative contention appeal case book p 180 – 181.

15. On appeal, the Full Court held that the original lien had ceased in accordance with the provisions of s 15 of the Workers’ Liens Act by reason of the failure to enforce it within the prescribed time and, accordingly, the District Court lacked power to enforce the second lien. The Court rejected the proposition that the first lien was invalid by reason of the failure of the respondent to sign the notice of demand personally. Nonetheless, the Full Court found in favour of the respondent on the basis set out in the notice of alternative contention. The Full Court granted an extension of time in which to issue proceedings in respect of the first lien pursuant to s 48 of the Limitation of Actions Act 1936 (SA) and granted permission pursuant to s 191(k) of the Real Property Act for the lodging of a further notice of lien. 

16. Accordingly, the basis upon which the respondent ultimately succeeded was not the basis upon which the respondent had succeeded at trial in the District Court or on appeal to the single judge of this Court. 

17. Nonetheless, the respondent has succeeded.  Moreover, it has succeeded on a basis that it had always argued, although the argument was put as an alternative to its primary submission.  Its primary submission ultimately failed.  Much time and considerable resources were devoted to pursuing the primary submission.  In the circumstances, we consider that justice will be served by an order that the appellants pay the respondent 50 percent of the costs of the trial and the appeal to the single judge of this Court.

    Conclusion

18. The appellants are to pay the respondent 50 percent of its costs of and incidental to the District Court application.  The appellants are to pay the respondent 50 percent of its costs of and incidental to the appeal to the single judge of this Court.  There is no order as to the costs of the appeal to the Full Court, the notice of alternative contention, and the interlocutory applications filed on 30 May 2011 and 1 June 2011 respectively.