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…

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.

Keep reading for free

Create a free CaseChat account to read Goldus Pty Ltd v Australian Mining Pty Ltd (No 2) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] SASCFC 35
Decision Date: 1 April 2016

CaseChat Overview and Summary

This matter concerned an application for costs following an unsuccessful appeal by Goldus Pty Ltd (the appellant) against Australian Mining Pty Ltd (the first respondent) and Australian Corporate Holdings Pty Ltd (the second respondent). The parties had been joint venturers, and the dispute arose from the second respondent's sale of its shareholding in the first respondent to a third party. The appellant's claim for breach of and unlawful interference with the joint venture agreement was dismissed at trial. The appellant sought an extension of time to appeal, which was refused by the Full Court of the Supreme Court of South Australia, consequently dismissing the appeal.

The primary legal issue before the Full Court was the appropriate order for costs of the appeal, given the appellant's unsuccessful attempt to appeal and the respondents' separate representation. The appellant sought to limit its liability for costs, proposing either to pay only the first respondent's costs or 50 per cent of each respondent's costs. The respondents sought their full costs of the appeal. The Court was required to exercise its discretion regarding costs, considering the general rule that costs follow the event, but also the specific circumstances of the representation and the alignment of interests between the respondents.

The Court reasoned that while separate representation for the respondents was appropriate, the extent of their active participation and the duplication of legal resources were excessive. Although the interests of the first and second respondents diverged significantly after the sale of shares, the Court found that the collective representation by four counsel (two senior and two junior) was unnecessary due to the substantial commonality in their submissions and the strong representation of the first respondent. The Court concluded that a lesser degree of resourcing for the second respondent would have been sufficient, particularly given the first respondent's robust legal team.

Consequently, the Court ordered that the first respondent should have its costs of the appeal, taxed on a party and party basis. For the second respondent, the Court ordered that it recover 50 per cent of its costs of the appeal, also to be taxed on a party and party basis. This reflected the Court's view that while separate representation was warranted, the level of resourcing and active participation by the second respondent was not entirely justified by the circumstances.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GRAY J

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.

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

Full text does not contain this section.