Goldus Pty Ltd v Australian Mining Pty Ltd (No 2) - [2016] SASCFC 35

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Application)
GOLDUS PTY LTD v AUSTRALIAN MINING PTY LTD & ANOR (No 2)
[2016] SASCFC 35
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Blue and The Honourable Justice Nicholson)
1 April 2016
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
Application for costs.
Reasons for judgment previously delivered dismissing application for extension of time in which to appeal.
Application by each respondent for order that appellant pay its costs of appeal. The appellant contends that the respondents had a common interest and pursuant to rule 269 of the Supreme Court Civil Rules 2006 it should only pay one set of costs.
Held by Blue and Nicholson J:
1.       It was appropriate for the respondents to have separate representation on the appeal (at [17]).
2.       The costs of the respondents should be reduced by 20 per cent each to reflect the extent of unnecessary over-representation (at [18] - [19]).
3.        Order that the appellant pay 80 per cent of each respondent's costs of appeal and of the application for an extension of time (at [20]).
Held by Gray J:
1.       It was appropriate for the respondents to have separate representation on the appeal.
2.       The appellant should pay the first respondent's costs of appeal and 50 per cent of the second respondent's costs of appeal.
Schuller v S J Webb Nominees Pty Ltd (No 2) [2015] SASCFC 190; Acquista Investments Pty Ltd & ANor v The Urban Renewal Authority & Ors (No 2) [2015] SASCFC 117, considered.

GOLDUS PTY LTD v AUSTRALIAN MINING PTY LTD & ANOR (No 2)
[2016] SASCFC 35
GRAY J.

This is an application for costs.
Background
The appellant, Goldus Pty Ltd, and the first respondent, Australian Mining Pty Ltd, have been joint venturers since November 2012. In November 2014, the second respondent, Australian Corporate Holdings Pty Ltd, which was the holding company of the first respondent, contracted to sell its shareholding in the first respondent to a third party, Teetulpa Minerals Pty Ltd.
The appellant commenced proceedings in this Court against the first and second respondents for breach of, and unlawful interference with, the joint venture agreement, respectively. The appellant was unsuccessful at trial. The trial Judge made an order dismissing the appellant’s claim on 6 February 2015 and published his reasons on 27 February 2015.[1]
[1] Goldus Pty Ltd v Australian Mining Pty Ltd & Anor [2015] SASC 32.
Following the trial Judge’s decision, the appellant received legal advice and made an informed decision not to lodge an appeal within the required time on the basis that it lacked sufficient funds. Some attempts by the appellant were made to raise funds for the running of the company generally. The respondents proceeded to conduct their business dealings on the understanding that the Judge’s decision would not be appealed against and the second respondent entered into a new, unconditional share sale agreement. On 17 August 2015, the appellant gave notice of its intention to appeal, after the second respondent had entered into the new share sale agreement and two days before settlement of that agreement. The notice of appeal was filed on 20 August 2015, after settlement of the agreement. The appeal was more than five months out of time.
A Judge of the Court ordered that the application for an extension of time and the hearing of the appeal be referred to the Full Court to be heard together, if the Court deemed it to be appropriate. As a consequence, the parties were prepared to argue both the application for an extension of time and the substantive appeal before this Court. At the hearing of the appeal, this Court determined to first address the question of the extension of time. On 18 December 2015, this Court refused to extend time for the appellant to bring its appeal and, as a consequence, dismissed the appeal.[2]
[2] Goldus Pty Ltd v Australian Mining Pty Ltd [2015] SASCFC 193.
The appellant seeks an order that it pay only the costs of the first respondent, with no order as to the costs of the second respondent. Alternatively, the appellant seeks an order that it pay 50 per cent of the costs of each of the first and second respondents. The respondents each seek an order that they have their costs of the appeal.
The Application
In Schuller v S J Webb Nominees Pty Ltd (No 2), this Court summarised the principles concerning the Court’s power to award costs in the following terms:[3]
The award of costs is in the discretion of the court and the court may award costs on any basis it considers appropriate.[4] As a general rule, costs follow the event.[5]   That general rule is subject to specific rules to the contrary and to prescribed exceptions, none of which are relevant to this case.[6] The court’s discretion as to costs is absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and it cannot be exercised on grounds unconnected with the litigation.[7]
[3]    Schuller v S J Webb Nominees Pty Ltd (No 2) [2015] SASCFC 190, [2].
[4]    Supreme Court Act 1935 (SA) s 40(1).
[5] 6SCR 263(1).
[6] 6SCR 263(2).
[7]    Cretazzo v Lombardi (1975) 13 SASR 4, per Bray CJ at 11.
Rule 269 of the Supreme Court Civil Rules 2006 (SA) provides:[8]
Over-representation of parties with common interest
If two or more parties have identical or similar interests but are separately represented and, in the Court's opinion, unnecessarily so, the Court may exercise either or both of the following powers—
(a) the Court may order that costs to which the parties are entitled be determined on a basis that would be appropriate if they had common legal representation;
(b) the Court may order the over-represented parties to compensate other parties to the action for additional costs incurred by them as a result of the over-representation.
[8] See also Acquista Investments Pty Ltd & Anor v The Urban Renewal Authority & Ors (No 2) [2015] SASCFC 117, [18].
The appellant submitted that it was not necessary for the second respondent to have separate representation on the hearing of the appeal. It was pointed out that the respondents had shared representation at trial. It was argued that none of the substantive orders sought by the appellant on appeal would affect the second respondent. The basis for joining the second respondents was that, if successful on the appeal, the appellant would have sought to reverse a costs order against it and in favour of the second respondent made by the trial Judge. It was argued that the terms of the share sale agreement precluded any claim by Teetulpa against the second respondent on the basis of a breach of warranty if the appeal had been allowed. In any event, insofar that the consequences of the appeal being allowed might have differed as between the respondents, their interest in defending the appeal, and the basis on which they defended it, was the same. It was pointed out that the appellant gave notice to the second respondent that it did not consider that the second respondent should have separate representation, or actively participate on the appeal.
The first respondent claimed its costs on the basis that it was wholly successful on appeal. The first respondent submitted that it was appropriate for it to defend and be represented on the appeal. It is a party to the joint venture agreement the subject of the appeal and could be required to dispose of its participating interest in the joint venture if the appeal was allowed.
The second respondent submitted that, by the time of the appeal, its interests were different from those of the first respondent. It had transferred ownership of the first respondent to another company. It was argued that the second respondent could only maintain the costs order made by the trial Judge in its favour if this Court upheld the trial Judge’s conclusions about a particular clause in the joint venture agreement, namely clause 13.7. It was further argued that there were a number of orders that this Court could have made on the appeal which would have protected the interests of the first respondent, but not the second respondent. In these circumstances, it was argued that it was necessary for the second respondent to be represented on the appeal. It was said that the second respondent on the hearing of the appeal played no greater role in the appeal than was necessary to ensure that its interests were protected.
The respondents were each represented by senior and junior counsel on the hearing of the appeal. They advanced similar submissions and at different times relied expressly on each other’s written or oral submissions. Each had a shared interest in this Court refusing the application for an extension of time and dismissing the appeal. It may be accepted that the second respondent had a more peripheral role in the appeal than the first respondent. However, as this Court noted in its primary reasons, each party was in a different position with respect to the prejudice that would be suffered if the appeal were allowed. By the time of the hearing of the appeal, the first respondent was no longer a wholly owned subsidiary of the second respondent. Their interests, and the particular arguments that could be advanced to protect their interests, were in some respects distinct. In these circumstances, and having been joined as a party to the appeal by the appellant, it is readily understandable that the second respondent would want representation to ensure that submissions relevant to its particular interests were advanced, to the extent that the first respondent did not take those points or address them, having regard to the second respondent’s particular circumstances.
In my view, it was appropriate for the respondents to have separate representation on the appeal. However, the extent to which their interests were aligned, and the commonality in the submissions advanced to protect their interests, made it unnecessary for the second respondent to participate as actively in the appeal as it did, for example, by filing a lengthy, 25 page outline of argument and being represented by senior and junior counsel. The second respondent could have, and, to my mind, should have, played a lesser role in the appeal – relying more heavily on the first respondents and only addressing arguments which concerned its particular interests if those arguments were not relied upon or pressed by the first respondent. It is to be recalled that the first respondent was represented by experienced senior counsel and junior counsel on the appeal. The first respondent had instructed a large commercial law firm. There was no suggestion that the first respondent’s legal representation was in any way lacking or under-resourced so as to warrant the level of duplication and resourcing of the second respondent.
Conclusion
I would order that the first respondent have its costs of the appeal to be taxed or agreed on a party and party basis. I would order that the second respondent have 50 per cent of its costs of the appeal to be taxed on agreed on a party and party basis.

BLUE AND NICHOLSON JJ:
This is an application for costs.
The relevant facts and contentions are set out in the reasons for judgment of Gray J.
We agree, for the reasons given by Gray J, that it was appropriate for the respondents to have separate representation on the appeal. We observe in addition that the appellant prosecuted the appeal in the knowledge that on 19 August 2015 ownership and control of the first respondent had passed from the second respondent to Teetulpa Metals and that from the belated institution of the appeal on 20 August 2015 the first and second respondents had very different interests. In this respect, the position was quite different from that at trial when the first respondent was a wholly owned subsidiary of the second respondent and the respondents had joint legal representation.
We also agree with Gray J’s conclusion that it is appropriate for this Court to exercise a discretion to award in favour of the respondents something less than the full costs of appeal of both respondents. We accept that it was necessary for each respondent to be represented by a different solicitor and for a solicitor for each respondent to attend at the hearing of the application for an extension of time and of the appeal. We accept that it was necessary for each respondent to be represented by different counsel at the hearing. However, due to the extent of the commonality of the interests between the respondents, it was unnecessary for the respondents to be represented collectively by four counsel being two senior counsel and two junior counsel. The respondents agreed between themselves that the first respondent would focus on the application for an extension of time, the second respondent would focus on the merits of the appeal and each would make supplementary submissions on the other’s area of focus. In those circumstances, it would have been sufficient for the respondents collectively to have been represented by two counsel. We accept that in the circumstances it was appropriate for both such counsel to be senior counsel.
Wielding a broad axe, it is appropriate to reduce the costs awarded in favour of the respondents by 20% each to reflect the extent of the unnecessary over-representation.
Conclusion
We would order that the appellant pay 80% of each respondent’s costs of the appeal and of the application for an extension of time to be adjudicated if not agreed.