Gunns Ltd v Driveforce Pty Ltd
[2009] TASSC 4
•23 January 2009
[2009] TASSC 4
CITATION: Gunns Ltd v Driveforce Pty Ltd [2009] TASSC 4
PARTIES: GUNNS LTD
v
DRIVEFORCE PTY LTD
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 96/2007
DELIVERED ON: 23 January 2009
DELIVERED AT: Hobart
HEARING DATE: 4 December 2008
JUDGMENT OF: Tennent J
CATCHWORDS:
Procedure – Supreme Court procedure – Tasmania – Practice (Procedure) under Rules of Court – Amendments.
Aust Dig Procedure [276]
Procedure – Supreme Court procedure – Tasmania – Practice (Procedure) under Rules of Court – Appeals other than from judge of Supreme Court - Review of interlocutory order.
The State of Queensland v J L Holdings Limited (1996 – 1997) 189 CLR 146, referred to.
Aust Dig Procedure [282]
Procedure – Costs – Recovery of costs – Circumstances in which appropriate to order costs be paid "in any event".
Bull Nominees Pty Ltd Trading as Grassy Car Hire v Dr G R McElwee [1997] TASSC 148; McKellar v Container Terminal Management Services Ltd [1999] FCA 1639, referred to.
Aust Did Procedure [659]
REPRESENTATION:
Counsel:
Appellant: C J Gunson
Respondent: R A Browne
Solicitors:
Appellant: S B McElwaine
Respondent: Fitzgerald and Browne
Judgment Number: [2009] TASSC 4
Number of paragraphs: 25
Serial No 4/2009
File No 96/2007
GUNNS LTD v DRIVEFORCE PTY LTD
REASONS FOR JUDGMENT TENNENT J
23 January 2009
In or around 2001, Driveforce Pty Ltd and North Forest Products Pty Ltd entered into an agreement pursuant to which Driveforce was contracted to harvest wood from forests controlled by North Forest Products and supply the harvested wood to the company. At a later date, North Forest Products assigned its interest in the agreement to Gunns Ltd.
Pursuant to the agreement, Gunns was to "make available to the Contractor for harvesting and delivery the weekly quota" and Driveforce was to "harvest from the area its quota of wood." Clause 6 of the agreement contained what were described as the "Contractor's performance and quotas". It provided:
"6.1The Contractor is to harvest and deliver the weekly quota as advised by the Company from time to time. The Contractor must delivery [sic] the weekly quota in a constant flow throughout the operating days of the week.
6.2The Company may authorise the Contractor to harvest all or some of its weekly quota in a subsequent week if the Contractor's failure to harvest the weekly quota was caused by unforeseen and unavoidable circumstances.
6.3The Company may by notice in writing to the Contractor vary the Contractor's weekly quota. Provided that the Company will not reduce the week's quota in any week except in the event of a major downturn in business activity or reduction in the volumes required by the Company due to circumstances beyond the Company's control. Any reduction in a weekly quota may be made up in subsequent months at the discretion of the Company.
6.4The Company shall not be liable for any loss or damage suffered by the Contractor, its employees, agents and sub-contractors, as a result of a reduction in the weekly quota by the Company in accordance with sub-clause 6.3."
The terms "weekly quota" and "quota" were defined in the agreement to mean "the quantity of wood to be provided each week as advised by the Company from time to time" and "a quantity of wood measured in tonnes or cubic metres" respectively. The definition section of the agreement also defined the term "Base quota", although the term did not appear anywhere in the agreement apart from the definition section and the schedule referred to in it. "Base quota" was defined to mean "the quantity of wood specified in Part One of Schedule A which is to be harvested annually by the Contractor provided to the Delivery Contractor to destinations determined by the Company." Schedule A provided that "The Contractor's Annual Base Quota is:- 65,000 tonnes total which may be comprised of; supply from Western and Central Supply zones". The agreement contained no express provision which required Gunns to take from Driveforce either the Base quota or any other particular amount of wood in any 12 month period.
On 15 March 2007, Driveforce instituted proceedings against Gunns. By its statement of claim it asserted in par13 that, on and from about 11 July 2004, Gunns, in breach of the terms of the agreement, directed and required Driveforce to deliver "weekly quota" in amounts less than were capable of achieving the "base quota" of pulp wood that Driveforce was entitled to harvest and deliver under the agreement. It was asserted that Driveforce had suffered damage as a consequence of this breach.
By its defence, Gunns firstly denied that it was a term of the agreement that Driveforce deliver to it an annual base quota of 65,000 tonnes. Further, by its amended defence dated 7 August 2007, it raised in par16 a construction of the agreement different from that contended for by Driveforce. Then, in pars17 - 20, it raised a defence by reference to cl 6.3 of the agreement. Both before and on the same date as the amended defence, Gunns provided particulars of its defence. On 28 March 2008, Driveforce applied to strike out par17 of that amended defence. The application was listed for hearing on 23 April 2008. On 18 April 2008, Gunns made application by letter to amend the August 2007 defence to insert a new par17(f) and to delete the then par18. At the hearing before the Associate Judge on 23 April, counsel for Gunns handed up a different version of par17(f). After an hour and 39 minutes hearing, the applications of both parties were adjourned. On 15 May 2008, Gunn's counsel produced another redrafted proposed defence and indicated the company would apply to amend in accordance with it.
Driveforce's strike-out application and Gunns' application to amend were listed for hearing before the Associate Judge on 2 July 2008. A formal application to amend was filed on the morning of the hearing. After argument over a period of one and a quarter hours, the applications were again adjourned. A hearing was finally conducted on 25 August. The Associate Judge delivered his decision on 29 August 2008. The orders made by the Associate Judge on the application were as follows:
"(1)Paragraphs 17, 18, 19 and 20 of the defence dated 7 August 2007 are struck out.
(2)The defendant has leave to amend the defence by adding new paragraphs in terms of pars39, 40 and 41 of the proposed defence attached to the interlocutory application filed 2 July 2008."
The Associate Judge also made an order for costs, the effect of which was, not only that Gunns pay Driveforce's costs in relation to the applications, but also that they be paid straight away and not at the end of the proceedings. Gunns has appealed the decision of the Associate Judge. It does not contend that the Associate Judge erred in striking out paragraphs in the defence dated 7 August 2007. The appeal is concerned with the failure of the Associate Judge to grant leave to amend the defence to insert new pars17 - 38 as they appeared in the proposed defence attached to the interlocutory application, and the order for costs.
As to appellate intervention with a discretionary interlocutory order, Kirby J said in The State of Queensland v J L Holdings Limited (1996 – 1997) 189 CLR 146 at 173 - 174:
"The bases for appellate intervention to set aside a discretionary interlocutory order have been stated many times. They include the demonstration of an error in point of legal principle which is apparent on the face of the reasons or implicit in its result; misapprehension of a fact important to the decision; failure to give weight or sufficient weight, to a relevant fact; or reaching a result which is plainly unreasonable or unjust and which demands appellate intervention. The appellate court must be careful not to convert a conclusion that the order appears to it to be unjust into a conviction that it must therefore be based upon an error of the primary judge in assigning inadequate or excessive weight to particular circumstances of the case. Special restraint will be exercised where the interlocutory order challenged is one concerned with practice or procedure. But even such orders have a capacity to affect substantive rights. The appellate court will be slow to intervene. But if it is convinced that the primary judge's discretion has miscarried and that this has resulted in an injustice, it will be its duty to do so."
His Honour went on to say at 174:
"Whilst I agree with the closing comments of Whitlam and Sundberg JJ that respect for the advantages of the primary Judge and for efficiency and justice to others must go beyond pious generalities, the resulting confirmation of the order excluding the applicants from raising an arguable defence was manifestly unreasonable in the circumstances. … But whilst it remains in judicial hands it is a function which must be performed with flexibility and with an undiminished commitment to afford to all who come to the courts a manifestly just trial of their disputes."
To understand the appeal, it is necessary to set out pars16 - 20 of the defence dated 7 August 2007 and the terms of the new defence sought to be pursued. A combination of the two appears below, with those parts which represent the new provisions being underlined.
Defence dated 7 August 2007:
"16 Upon a proper construction of the provisions of the agreement;
(a)the obligation of the defendant was only to make available to the plaintiff for harvesting and delivery of the 'weekly quota' being the quantity of wood to be provided each week as advised by the defendant to the plaintiff from time to time;
(b)the plaintiff was obliged to harvest and deliver to the defendant the weekly quota advised by the defendant from time to time pursuant to clause 6.1 of the agreement;
(c)between December 2004 and September 2006 the defendant, by weekly notices in writing sent to the plaintiff titled 'Weekly Pulp Wood Quota Advice', the defendant advised the plaintiff of the weekly quota which it required the plaintiff to deliver to it pursuant to the agreement; and
(d)in acting in an [sic] accordance with such express provisions, the defendant did not breach the agreement.
17 Further, in answer to the whole of the statement of claim the defendant says;
(a)clause 5.1(a) of the agreement provides that the defendant is to, subject to the other provisions of the agreement, make available to the plaintiff for harvesting and delivering the weekly quota;
(b)clause 6.3 of the agreement provides that the defendant may by notice in writing to the plaintiff vary the weekly quota provided that the defendant will not reduce the weekly quota in any week except in the event of a major down turning [sic] business activity or a reduction in the volumes required by the defendant due to circumstances beyond it's [sic] control and any reduction in a weekly quota may be made up in subsequent months in the discretion of the defendant;
(c)clause 6.4 provides that the defendant shall not be liable for any loss or damage suffered by, inter alia, the plaintiff as a result of a reduction of the weekly quota by the defendant in accordance with clause 6.3;
(d)in December 2003 forest fires occurred in the western supply zone the subject of schedule A of the agreement which fires were started by natural causes;
(e)by reason of such fires, which occurred in the state forest, Forestry Tasmania was not able to construct a sufficient number of roads within the western supply zone in order to gain access to identified logging coups for the winter of 2004;
(f)such inability by Forestry Tasmania resulted in a reduced number of logging coupes in state forest which were allocated by Forestry Tasmania to the Defendant for winter logging during 2004 which constituted a circumstance beyond the control of the Defendant within the meaning of clause 6.3 of the agreement;
(g)as a consequence, the defendant exercised its powers pursuant to clause 6.3 of the agreement to vary the weekly quota for 2004; and
(h)as a consequence, the defendant is not liable to pay damages to the plaintiff for a reduction in weekly quotas during this period.
Proposed clause 17:
(a)as per 17(a) above;
(b)the weekly quota in accordance with clause 1.1 is defined to mean the quantity of wood to be provided each week as advised by the defendant from time to time;
(c)clause 6.1 of the agreement provides that the plaintiff is to harvest and deliver the weekly quota as advised by the defendant from time to time;
(d)as per 17(b) above;
(e)clause 6.4 of the agreement provides that the defendant shall not be liable for any loss or damage suffered by the plaintiff, its employees, agents and subcontractors, as a result of a reduction in the weekly quota by the defendant in accordance with clause 6.3.
Defence dated 7 August 2007:
18Further, for the period from December 2004 to and including September 2006, the defendant, due to circumstances beyond its control, no longer required the volumes of wood to be delivered to it pursuant to the contract and the weekly quota in accordance with clause 6.3.
Proposed new clause 18:
18If the agreement, properly construed as contended by the plaintiff, is that the defendant was obliged to advise the plaintiff of a weekly quota in amounts that were capable of achieving the base quota (which is denied) then the defendant says, correspondingly and upon a proper construction of the agreement, that;
(a)clauses 6.1 and 6.3 entitled the defendant to give a notice to the plaintiff of a reduced weekly quota from time to time such that the annual base quota would not or might not be achieved in any year subject to;
(b)the ability of the defendant to so vary the quota was limited to events which constituted a major downturn in business activity or a reduction in the volumes required by the defendant due to circumstances beyond its control.
Defence dated 7 August 2007:
19 As a consequence of the matters pleaded in paragraph 18, the defendant says;
(a)upon a proper construction of the provisions of the agreement the defendant was only, relevantly, contracted to make available to the plaintiff for harvesting and delivery the weekly quota in accordance with clause 5.1 (a) and as advised by the defendant to the plaintiff on a weekly basis in accordance with clause 6.1 of the agreement;
(b)between December 2004 and September 2006 the defendant by weekly notices in writing addressed to the plaintiff styled 'Weekly Pulp Wood Quota Advice' advised the plaintiff of the weekly quota which it required the plaintiff to deliver to it;
(c)at all material times between December 2004 and September 2006 the defendant received delivery from the plaintiff of all of the wood which the plaintiff was able to deliver to the defendant pursuant to the agreement; and
(d)as a consequence, the defendant has not breached the agreement.
20 Alternatively, the defendant says;
(a)pursuant to clause 6.3 of the agreement it had a right, by notice in writing to the plaintiff, to vary the weekly quota in the event that, upon a proper construction of the provisions of the agreement, the defendant was obliged to receive from the plaintiff 65,000 tonnes of quota per annum (which construction the defendant does not accept);
(b)as a result of the matters pleaded in paragraphs 17, 18 and 19, the defendant says that it was entitled to, by notice in writing to the plaintiff pursuant to the agreement vary weekly the quota pursuant to clause 6.3;
(c)by each of the notices referred to at paragraph 19 (a) the defendant did give notice in writing to the plaintiff of a variation in the weekly quota pursuant to clause 6.3; and
(d)as a consequence the defendant is not liable to pay damages to the plaintiff by reason of clause 6.4 of the agreement for any loss suffered by it as a result of any reduction or variation in the weekly quota.
Proposed clauses 19 – 38:
19In December 2003 forest fires occurred in the western supply zone the subject of schedule A of the agreement, which fires were started by natural causes.
PARTICULARS
The fires were in forestry coupes within the Murchison District CF017A, EN004A, TG007D, BF009E, BO0786A, BY010A, CH010C, IR056A, MB007B, ME003C, OL035C and SR047C.
20By reason of such fires, Forestry Tasmania was not able to construct a sufficient number of roads within the western supply zone in order to gain access to identified logging coupes for the winter of 2004.
21Such inability by Forestry Tasmania resulted in a reduced number of logging coupes in State Forest which were allocated by Forestry Tasmania to the defendant for winter logging during 2004.
22Each of the matters pleaded at paragraphs 19, 20 and 21 were circumstances beyond the control of the defendant within the meaning of clause 6.3.
23That such circumstances lead [sic] to a reduction in the volumes of weekly quota which the defendant required to be delivered to it pursuant to the agreement.
24As a consequence the defendant was entitled pursuant to the agreement to vary the weekly quota in accordance with clause 6.3.
25By written notices given by the defendant to the plaintiff between January 2004 and September 2004 the defendant varied the weekly quota in accordance with clause 6.3 of the agreement.
26The defendant did not in its discretion permit the plaintiff to make up in subsequent months, such reductions in the weekly quota pursuant to clause 6.3.
27As a consequence the defendant is not liable to the plaintiff for such reductions in the weekly quota by reason of clause 6.4 of the agreement.
28Further the agreement expressly provided that the plaintiff would harvest and deliver timber from the western and central supply zones which comprised native forests.
29Wood harvested from such zones was for processing into woodchips at Burnie and then for sale and export from Burnie to international customers of the defendant.
30Between 1 July 2003 and September 2006 the defendant's sales of export woodchips from Burnie to its international customers declined.
31Such decline was due to decreased and decreasing demand from three customers of the defendant namely, Nippon Paper, Mitsubishi Paper Mills and Oji Paper (the fall in demand)
32The fall in demand constituted a major downturn in business activity of the defendant within the meaning of clause 6.3 of the agreement.
33The agreement is to be construed as pleaded in paragraph 18.
34As a consequence the defendant was entitled to vary by reduction the weekly quota of the plaintiff pursuant to clauses 6.1 and 6.3 of the agreement.
35Between 1 July 2003 and September 2006 the defendant did reduce the weekly quota of the plaintiff by giving to it notice in writing of such reductions by the delivery of the weekly pulpwood quota advices.
36The defendant did not in its discretion permit the plaintiff to make up in subsequent months such reductions in accordance with clause 6.3.
37As a consequence the defendant is not liable to the plaintiff for such reductions in the weekly quota by reason of clause 6.4 of the agreement.
38Further by a deed in writing dated 1 September 2006 between the plaintiff assignor, Tas Mech Harvesting Pty Ltd as assignee and the defendant, the plaintiff, with the consent of the defendant, assigned all of its rights and liabilities pursuant to the agreement to Tas Mech Harvesting Pty Ltd."
Counsel for Gunns does not suggest the legal principle outlined by the Associate Judge was wrong. The basis of his argument is that the Associate Judge misunderstood the nature of the pleaded defence in the context of the case pleaded by Driveforce in the statement of claim, and, in those circumstances, misapplied the relevant principles.
The parties contend for different constructions of the relevant agreement. The construction of the agreement contended for by Gunns is that Driveforce was required to harvest and deliver a weekly quota as advised from time to time by Gunns. Gunns gave notice of those weekly quotas in the form of weekly pulpwood quota advices. There was no obligation on Gunns to ensure that the amounts covered by those notices, when aggregated over a particular period, would equal the base quota amount. On the other hand, Driveforce says that the agreement required it to harvest and deliver a weekly quota as advised from time to time by Gunns and that the aggregate of the amounts in the weekly advices over a 12 month period must equal the base quota. It received notices which, when aggregated, would be less than the base quota. Gunns says that, even if that is right, it was still entitled to give notices which would result in the aggregate of the amounts shown being less than the base quota by reference to cls 6.1 and 6.3 of the agreement and that it was entitled to do that prospectively from time to time by reference to triggering events.
Those differing contentions will need to be considered against a background of an agreement which is not well drawn and does not, for example, actually contain an express provision which would support Driveforce's case, that is an express provision requiring Gunns to take from Driveforce an amount of wood equal to the base quota in any given 12 month period. It will therefore be a matter for a trial judge to determine how the agreement should be interpreted. In that context the parties are each entitled to put before the Court a case based on an interpretation of the agreement, reasonably open having regard to its terms.
In the course of their submissions, both counsel referred, not only to the terms of the relevant agreement, but also to the terms of the pleadings. In particular, counsel for Gunns referred to what I describe as inadequacies in the statement of claim. Counsel for Driveforce complained that it was unusual for this to occur in circumstances where Gunns had been quite happy up until then to plead to the statement of claim as it stood, even with asserted deficiencies. With respect, the statement of claim, in my view, does lack precision. Counsel for Gunns described par13 of the claim as being a rolled-up plea and not one which specifically identified the basis of Driveforce's case. For example, there is no pleading of an express or implied term that Gunns was required to take in any specific 12 month period an amount of wood equal to the base quota and that, in a particular period, it failed to do so.
The fact of the matter, however, is that Gunns did not apparently take issue with any asserted deficiencies in the statement of claim. Instead it sought to plead in response to it.
Gunns, by those parts of the proposed defence which were not allowed, sought, in the event that the construction of the agreement contended for by Driveforce were upheld, to raise defences by reference to cl 6.3 in the agreement. The Associate Judge said at par9 of his reasons:
"It is essential in a contract case that a party relying upon a particular term must, after identifying the term, plead all of the facts necessary to bring himself, herself or itself within the operation of the term. If any one of these facts is omitted the plea is bad."
He then went on, in the following paragraphs, to identify what he perceived as the facts which should have been pleaded for Gunns to raise a defence by reference to cl 6.3, which had not been pleaded, and determined in effect the purported plea was bad in the form made.
It is useful to look at the wording of cl 6 of the agreement. It may be inferred from the wording of cl 6.1 that advice as to a weekly quota related to the quota for a period after the advice was given and that there was no obligation on Gunns to give such advice each week. It may also be inferred that once an advice was given, absent any ongoing further advices, the weekly quota would continue to be as advised in the last advice given. Clause 6.3 then gave Gunns an entitlement to vary a weekly quota but restricted its ability to vary it downwards by reference to particular circumstances. If Gunns proposed to vary a weekly quota from that in existence at any given time, it had to give notice of that.
If therefore Gunns seeks to rely on cl 6.3 as providing it with a defence to the claim by Driveforce, it would seem that, irrespective of any possible deficiencies in the statement of claim, it must plead facts to bring itself within cl 6.3. If Gunns reduced the weekly quota, either once or a number of times, by reference to a triggering event, then by reference to each of the times that it varied by reduction a weekly quota, it would need to plead the existence of a weekly quota, the advice to vary it, the triggering event, and sufficient facts to link the triggering event to the variation. It may very well be that the same facts are used to support more than one variation. While Gunns has, to an extent, identified triggering events in general terms, and flagged its intent as to what it seeks to raise by way of a defence, it has not, with respect, pleaded the balance of the matters with sufficient specificity.
The Associate Judge was correct in my view in rejecting the application to amend. As counsel for Driveforce pointed out, the Associate Judge has not by his ruling precluded Gunns from pursuing a defence by reference to cl 6.3. All he has done is say that it cannot be done in the manner proposed.
Appeal insofar as it relates to costs
On 29 August 2008, the Associate Judge published his reasons in relation to Gunns' application to amend, and then heard argument about costs. At the conclusion of that argument, he gave further reasons and made orders as to costs. The orders he made were that Gunns pay Driveforce's taxed costs of:
-Driveforce's application made by letter dated 26 March 2008 (the plaintiff's application to strike out).
- Gunns' application by letter dated 18 April 2008 (application to amend its defence).
-Gunns' application filed 2 July 2008 (that application ultimately pursued which resulted in the Associate Judge's reasons).
In respect of those orders, none were qualified by the words "in any event", thus allowing Driveforce to immediately tax and recover the costs. A further order was made as to costs of an amendment. While Gunns was ordered to pay them, that order was qualified by the words "in any event".
The notice of appeal filed by counsel for Gunns, insofar as it related to costs, simply asserted that the Associate Judge made an error "in making orders for costs as a consequence of such refusal", that is, the refusal to allow amendments pursuant to the interlocutory application filed 2 July 2008. The nature of the error was not identified. During the course of argument, counsel for Gunns conceded that costs were in the discretion of the Associate Judge and that he could not really argue that Gunns should be paying the costs ordered. The issue in dispute was the refusal of the Associate Judge to order that the costs be paid "in any event".
The reasons given by the Associate Judge for making the costs order in the form that he did were as follows:
"RULING - HIS HONOUR: I don’t need to hear from you Mr Browne. I accept the starting point is that as stated by Underwood J as he then was in Bull and McElwee Nominees and that the usual rule is that the costs of interlocutory applications await collection until the final outcome of the proceedings and I accept that the policy behind that is that it is not considered as a matter of policy in the good administration of justice that relatively small amounts of money as proceedings progress be taxed and paid by one side or the other; it’s normally expected that in the course of litigation there’ll be several interlocutory skirmishes, but the costs may go either way depending on which party wins which skirmishes and it’s best to leave it all to the conclusion of the action; that enables set offs and it avoids the possibility of a party obtaining or seeking to obtain tactical advantages by costs recoveries along the way. But as with all other rules of costs there is a broad discretion and each case has to be looked at on it’s own merits so adopting as the starting point the rule in Bull and McElwee Nominees but then considering the particular facts of this case I take into account the concession by counsel for the defendant that the cost of the arguments on the matters which I’ve just determined, will include about twenty hours in solicitors or counsels time. It also appears to me that what’s left in the litigation is a contract construction point which is unlikely to involve evidence going beyond the tendering of the contract and a point about whether or not a chose in action has been assigned which again it seems to me, is unlikely from an evidentiary point of view to go beyond the tendering of the deed of assignment. It was conceded – sorry, it was not suggested by counsel for the defendant that the trial on the assessment of quantum would occupy any significant period of time. Taking all that into account it seems to me that the six and a half hours or so of Court time spent on these proceedings is likely to be about that or even more than would be spent on the trial of the whole action. In those circumstances I do not- sorry – and it’s not the type of case where it can be expected that there’ll be several interlocutory proceedings along the way which might occupy similar amounts of time. In light of these matters I do not consider that this falls within the type of matters being considered by Underwood J in Bull and McElwee Nominees. I consider that the overall justice of the case here rests with allowing Driveforce to have taxed and recovered immediately the costs which it has expended on this application. Accordingly the costs order which I make will not be conditioned by the words in any event."
The case to which the Associate Judge referred was a decision of Underwood J (as he then was) in Bull Nominees Pty Ltd Trading as Grassy Car Hire v Dr G R McElwee [1997] TASSC 148. His Honour determined that it was only in exceptional circumstances that a successful party on an interlocutory application was entitled to recover costs without awaiting the outcome of the action. He went on to say:
"There are good reasons for this approach. The appellant may be unsuccessful in the ultimate outcome of these proceedings, in which case any amount of costs recoverable by it against the respondent will be set off against the costs that it has to pay the respondent. Application of the practice will reduce the administrative burden and costs of several taxations. During the course of litigation there may well be several orders for costs, some of which will be in favour of one party and some of which will be in favour of the other party. Common sense dictates that the final calculation of various orders for costs should await the outcome of the litigation. Interlocutory orders for costs usually involve relatively small sums of money which do not warrant the trouble and expense of several taxations and enforcement proceedings. Further, the enforcement of orders for costs of interlocutory proceedings should not be used as a 'lever' to persuade an impecunious party from prosecuting or defending the principal issues in the litigation. Of course, every case will turn upon its own facts, but in this case I see no reason to depart from what should be the ordinary exercise of the discretion in the making of an order for costs of interlocutory proceedings where it is appropriate that the successful party should have the costs of those proceedings viz, that they should be payable in any event."
Counsel for Gunns referred to a decision of Weinberg J in McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 where his Honour set out at pars13 - 20 the principles applicable in the Federal Court of Australia in an issue such as this. He identified a number of factors which might give rise to an order that costs be paid forthwith. Counsel for Gunns submitted those factors did not arise in the present case and, therefore, there was no justification for the type of order made by the Associate Judge.
The Associate Judge correctly identified as a starting point for the argument the decision in Bull Nominees. He then considered a number of factors peculiar to the present case, and determined, in the exercise of his discretion, that this case fell outside the parameters outlined in Bull Nominees such as to warrant an order that costs be paid forthwith. Counsel for Gunns did not identify any part of the Associate Judge's reasons which might indicate that the exercise of his discretion miscarried. He simply asserted that by reference to another decision, none of the factors identified in that decision appeared in this matter.
I am not persuaded the Associate Judge made any error.
Conclusion
The appeal in the circumstances is dismissed.
1
0