Findex Group Pty Ltd v McKay (No 2)
[2023] ACTCA 43
•29 November 2023
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Findex Group Pty Ltd v McKay (No 2) |
Citation: | [2023] ACTCA 43 |
Hearing Date: | Decided on the papers |
Decision Date: | 29 November 2023 |
Before: | Mossop, McWilliam and Taylor JJ |
Decision: | 1. Order 8 made on 22 September 2023 is discharged. 2. The costs the subject of order 7 made on 22 September 2023 are not to be assessed until the proceedings in the Supreme Court end. 3. In any assessment of the costs the subject of order 7 made on 22 September 2023, the registrar is directed, pursuant to r 1754(2) of the Court Procedures Rules 2006 (ACT), to consider the draft Notice of Appeal, amended draft Notice of Appeal and Notice of Appeal and completely or partly disallow the costs of those documents if the registrar considers that the documents or any of them are unnecessarily lengthy or otherwise within the scope of r 1754(2)(b). |
Catchwords: | COSTS – Whether costs should be withheld from successful party – whether award of solicitor/client or indemnity costs should be awarded to successful party – excessively long Notice of Appeal – party/party costs awarded – costs to be assessed following finalisation of first instance proceedings |
Legislation Cited: | Court Procedures Rules 2006 (ACT), rr 1701(2), 1705, 1721, 1726, 1754(2), 5001, Pt 2.17 |
Cases Cited: | Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 Kone Elevators Pty Ltd v Shipton [2021] ACTCA 33 Findex Group Pty Ltd v McKay [2023] ACTCA 36 Latoudis v Casey (1990) 170 CLR 534 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 |
Parties: | Findex Group Ltd ( First Appellant) Findex Services Pty Ltd (Second Appellant) Financial Index Australia Pty Ltd (Third Appellant) Spiro Paule (Fourth Appellant) Danielle Bartholomeusz nee Ludbey (Fifth Appellant) Phillip Hart (Sixth Appellant) David McKay ( Respondent) |
Representation: | Counsel M A Friedgut ( Appellants) B Webster ( Respondent) |
| Solicitors Harmers Workplace Lawyers ( Appellants) Just Dispute Resolution ( Respondent) | |
File Number: | ACTCA 19 of 2023 |
Decision Under Appeal: | Court: Supreme Court of the ACT Before: McCallum CJ Date of Decision: 12 May 2023 Case Title: Findex Group Limited v McKay (No 3) Citation: [2023] ACTSC 108 |
THE COURT:
Introduction
On 22 September 2023 the Court of Appeal allowed an appeal against interlocutory orders made by a judge of the Supreme Court: Findex Group Pty Ltd v McKay [2023] ACTCA 36. The matter was remitted to the Supreme Court to be determined according to law. An order was made that the respondent (Mr McKay) pay the appellants’ (Findex) costs of the application for leave to appeal, appeal and notice of contention. That order was made subject to the entitlement of either party to seek different costs orders within seven days. Mr McKay sought a different costs order.
The orders sought by Mr McKay were that he pay only 60 percent of Findex’s costs, that Findex bear its own costs of the amendment to the draft Notice of Appeal and application to adduce further evidence, that Findex pay Mr McKay’s costs thrown away as a result of the amendment to the draft Notice of Appeal and that any costs order not be enforced until the conclusion of the Supreme Court proceedings. In response to Mr McKay’s submissions, Findex submitted that it should be awarded costs on an indemnity or solicitor/client basis.
In these reasons the judgment of the Court of Appeal on 22 September 2023 is referred to as the Judgment. The parties are referred to in the same manner as in the Judgment.
General approach
The rules in Pt 2.17 of the Court Procedures Rules 2006 (ACT) applicable to civil proceedings in the Supreme Court are applied with any necessary changes to civil appellate proceedings: r 5001. As a consequence, costs of appeals are in the discretion of the court: r 1721. The court’s power to apportion costs is expressly provided in r 1705.
The general rule is that a substantially successful party is entitled to recover its costs from the opposing party. It is, however, only a general rule relating to the exercise of a statutory discretion which has “escaped arterial hardening”: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [38], [40]. The rationale for the general rule is that the party who caused the other party to incur the costs should reimburse that party for the liability incurred: Latoudis v Casey (1990) 170 CLR 534 at 567. That is usually the case even if the successful party has failed on particular issues.
Where there are multiple issues in the proceedings, the court will generally not differentiate between those on which the successful party won and those on which it lost: Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 at [10]. As a consequence, costs are usually awarded to the substantially successful party without such differentiation. Apportionment is only appropriate in the clearest of cases where the successful party has wholly failed on an issue or group of issues which are “separate and discrete”: Kone Elevators Pty Ltd v Shipton [2021] ACTCA 33 at [294] or “dominant or separable”: Clarkson at [10]. In an appeal, the decision as to whether to make such a differentiation will involve matters of impression, evaluation and consideration of whether a substantial part of the appeal hearing was devoted to the matter upon which the appellant was unsuccessful.
Submissions
Mr McKay relies upon three email chains annexed to his submissions. He made a variety of discrete submissions:
(a)He submitted that it is unclear whether there was any benefit to Findex pursuing the appeal.
(b)He submitted that there is no guarantee that leave will be granted to file the latest draft version of the Further Amended Statement of Claim.
(c)He relied upon an email relating to the conduct of the application for leave to appeal in which reference was made to the potential for Findex to replead the struck out paragraph 110 and to apply for costs of the proceedings in the usual manner. He described this as reflecting a “practical approach”.
(d)He submitted that any costs order should not be enforced until the end of the final hearing.
(e)He submitted that, contrary to the relevant practice direction, the application for leave to appeal was supported by 2000 pages of evidence and, as a consequence, there should be no order as to costs with respect to the application for leave to appeal. He pointed out that this non-compliance was noted in correspondence.
(f)He submitted that the success of Findex in setting aside the reopening decision made by the primary judge “did not justify the 37 page long amended notice of appeal” and that Findex was “successful on very few of the issues raised”.
(g)He submitted that the costs of amendments made to the draft Notice of Appeal should be governed by the usual rule for amendments in r 1726.
(h)He submitted that the very late application to adduce further evidence on appeal should not result in any adverse costs order against him.
(i)So far as the appeal related to the dismissal by the primary judge of the application for order 3 (see Judgment at [215]-[218]), Mr McKay submitted that he “did not seek to gain any unfair advantage” and pointed to correspondence that indicated that the position that he took was that Findex was not shut out from bringing the application for such an order at a later stage.
(j)Mr McKay submitted that his “opposition to the application for leave to appeal and the appeal was well founded”.
Findex made a detailed response to the submissions made on behalf of Mr McKay. It is unnecessary to recite those submissions in detail. However, it is necessary to note that Findex relied upon the correspondence at tabs 10-16 of its “Revised Folder of the Applicants additional materials” because it says that the proposals contained in that correspondence were reasonable ones which were peremptorily rejected by Mr McKay. It submitted that the rejection of those proposals is a ground for awarding indemnity costs. Findex also points to those aspects of the Court of Appeal’s judgment referring to submissions made by Mr McKay to the primary judge in support of the contention that the errors that gave rise to the appeal were caused by Mr McKay. The ultimate submission was that costs awarded to Findex should be assessed on an indemnity or solicitor/client basis.
Consideration and decision
The level of disputation over the question of costs is consistent with the manner in which other aspects of the proceedings in the Supreme Court have been conducted.
The additional evidence relied upon for the purposes of the question of costs should be admitted. The following will be admitted into evidence:
(a)the annexures A, B and C to the written submissions filed on behalf of Mr McKay; and
(b)tabs 10-16 of the Revised Folder of the Applicants additional materials.
For the reasons that follow, save in two respects, the order in relation to costs made at the conclusion of the court’s original judgment should not be disturbed.
Findex was clearly successful on the appeal. Its principal contentions related to factual errors made by the primary judge and a denial of procedural fairness. It was successful in establishing those contentions and obtaining a grant of leave to appeal notwithstanding that the decision appealed from was a discretionary decision on a matter of practice and procedure. It achieved a substantial success over the opposition of Mr McKay who sought to maintain the forensic benefits that he perceived to exist as a result of the orders that were ultimately set aside.
The aggregation of matters put forward on behalf of Mr McKay are not sufficient, either individually or collectively, to make it appropriate to award only a proportion of the costs to Findex.
The substantial amount of material put forward in support of the application for leave to appeal is not a reason to award only a proportion of Findex’s costs. That material was put forward in order to demonstrate the long and tortured procedural history of the proceedings, a matter significant for the purposes of the application and a matter which Findex would reasonably assume, in the context of this case, that it may be required to formally prove.
So far as the amendment of the draft Notice of Appeal is concerned, if, as Mr McKay contends, r 1726 applies to the amendment of the draft Notice of Appeal, which was merely a piece of evidence on the application for leave to appeal, an issue that it is not necessary to decide, we would make no order varying its application. If the rule does not apply then, having regard to the history of the preparation of the application and appeal, the filing of the amended document is not a matter of significance which would lead, by itself or in combination with other factors, to any reduction in the costs entitlement of Findex.
The same is true of what is described as a “late application to adduce further evidence”. The evidence sought to be adduced was that in the “Revised Folder of the Applicants additional materials”. Findex was partially successful in that application and the issue took up little time at the hearing. Additional parts of that material referred to above have been admitted in relation to costs.
Mr McKay’s articulated position in relation to order 3 sought before the primary judge does not provide a basis for apportionment or reduction in Findex’s entitlement to costs. He maintained his opposition to the appeal insofar as it was directed to order 3.
It is, however, appropriate that there be some qualification on Findex’s entitlement to costs in relation to the excessively long Notice of Appeal. That issue is referred to in the Judgment at [23]. It is obviously not clear at this stage what costs were incurred or will be claimed in relation to the drafting of that Notice of Appeal. The appropriate course to adopt is to direct the registrar, on any assessment of the costs of the appeal, to consider that document and to take the steps in relation to costs permitted under r 1754(2) if the registrar considers that the document was unnecessarily lengthy or otherwise within r 1754(2).
Further, it is appropriate that the costs of the appeal not be assessed until the proceedings in the Supreme Court end. This is a variation on the type of order contemplated by r 1701(2) but made applicable by reference to the end of the underlying proceedings. The intention of making such an order is to allow the parties to focus on getting the substantive proceedings ready for hearing rather than being diverted by the opening of another front in their larger war.
So far as Findex’s application for costs on an indemnity or solicitor/client basis is concerned, the circumstances are not such as to warrant a better than usual order in favour of Findex. The conduct of Mr McKay either in rejecting the proposals that would have avoided a contest over reopening the 23 March 2023 decision or in the conduct of the proceedings before the primary judge are not such as to warrant a better than usual costs order. While it is correct to say that Mr McKay did not seek to dissuade the primary judge from adopting a course which was found to involve a denial of procedural fairness and sought to maintain any perceived procedural advantage that he might obtain as a result of the manner in which the primary judge had dealt with the matter, having regard to the very significant freedom accorded to single judges in the course of case management, that conduct was not sufficient to require a greater degree of costs compensation than is available under a party and party costs order.
The orders of the Court are:
1.Order 8 made on 22 September 2023 is discharged.
2.The costs the subject of order 7 made on 22 September 2023 are not to be assessed until the proceedings in the Supreme Court end.
3.In any assessment of the costs the subject of order 7 made on 22 September 2023, the registrar is directed, pursuant to r 1754(2) of the Court Procedures Rules 2004 (ACT), to consider the draft Notice of Appeal, amended draft Notice of Appeal and Notice of Appeal and completely or partly disallow the costs of those documents if the registrar considers that the documents or any of them are unnecessarily lengthy or otherwise within the scope of r 1754(2)(b).
| I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of the Court Associate: Date: 29 November 2023d |
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