Frost v Reid Smith (No 2) - [2006] SADC 129

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
FROST v REID SMITH & ORS (No 2)
[2006] SADC 129
Judgment of Her Honour Judge Shaw
3 November 2006
PROCEDURE - COSTS
Claim by plaintiffs for sums owing by the defendant pursuant to a contract for the sale of the plaintiffs’ shares in the company Samsean Pty Ltd. Plaintiffs successful in proceedings – plaintiffs seek order for costs of action on party/party basis – Defendants by counterclaim seek indemnity costs on issues raised and subsequently abandoned by plaintiffs by counterclaim – discussion of general rule that costs be ordered on party/party basis – consideration of principles concerning order for indemnity costs. In exercise of discretion no warrant for order for costs on indemnity basis.
Held – defendant ordered to pay the plaintiffs’ costs on a party/party basis. Further the plaintiffs by counterclaim to pay the costs of the defendants by counterclaim on a party/party basis.
District Court Act 1991 s.42(1); District Court Rules 101.01 and 101.02, referred to.
Sunburst Properties Pty Ltd (in Liq) v Agwater pty Ltd (No. 2) [2005] SASC 393; Shanamere Pty Ltd v Litigation Support Services Pty Ltd [2006] SASC 120; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Re Wilcox; Exparte Venture Industries Pty Ltd (No. 2) (1996) 72 FCR 151, considered.

PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - DECLARATIONS - APPROPRIATE FORM OF RELIEF -- DISCRETION OF COURT
None of the parties pleaded by way of relief, orders for declaratory relief. Strictly unnecessary to plead relief. All parties however submitted that a declaration ought to be made as to the proprietary rights to certain chattels.
Held: Orders in the nature of declaratory relief made in favour of the defendant by counterclaim Gloss Australia Pty Ltd.
The plaintiffs have judgment against the defendant in the principal sum of $193,171.50 and interest in the sum of $56,800; and the claim of the plaintiffs by counterlcaim dismissed.
District Court Act 1991 s.37; District Court Rules 84.01, referred to.
Battye & Anor v Shammall [2005] 91 SASR 315; Forstaff Adelaide Pty Ltd v Hills Industries [2006] SASC 88, considered.

FROST v REID SMITH & ORS (No 2)
[2006] SADC 129

On 27 June 2006, I delivered my reasons with respect to the terms of the contract between the plaintiffs and the defendant, and then adjourned the matter for further submissions as to quantum, interest, costs and the form of relief to be granted in consequence of the findings expressed in my reasons.
In paragraph 45 of my reasons I set out the terms of the contract which I concluded governed the contractual relations between the plaintiffs and the defendant.
The express terms of the contract obliged the defendant, inter alia, to pay to the plaintiffs:
(a) The sum of $100,000 on or before 1 May 2001.
This sum was paid by the defendant.
(b)The sum of $104,000 being 104 payments of $1,000 each, per week commencing on 4 February 2001.
As to each of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Frost v Reid Smith (No 2)

Details

AGLC: Frost v Reid Smith (No 2) [2006] SADC 129
Case: [2006] SADC 129
Decision Date: 3 November 2006

CaseChat Overview and Summary

The case of Frost v Reid Smith (No 2) involved a legal dispute between the plaintiffs, Frost, and the defendants, Reid Smith. The plaintiffs sought to recover sums they claimed were owed by the defendants under a contract for the sale of shares in the company Samsean Pty Ltd. The matter was heard and determined in a relevant Australian court.

The central legal issues before the court were whether the plaintiffs were entitled to costs on a party/party basis, and if the defendants could be ordered to pay indemnity costs due to the plaintiffs abandoning certain issues raised in their counterclaim. The court had to balance the general principle that costs should be awarded on a party/party basis against the specific circumstances that might justify an order for indemnity costs.

The court, after careful consideration, found that the general rule favouring party/party costs was applicable in this case. It held that there was no basis to depart from this rule and order indemnity costs. The court exercised its discretion and ruled that the defendants should pay the plaintiffs' costs on a party/party basis. Additionally, the plaintiffs, through their counterclaim, were ordered to pay the defendants' costs on the same basis.

In conclusion, the court's decision was that the defendants were to pay the plaintiffs' costs, and the plaintiffs were to pay the defendants' costs, both on a party/party basis. The court did not find any circumstances that would warrant an order for indemnity costs, adhering to the general principle in such matters.

Orders