Gunns Ltd v Marr (No 3) - [2006] VSC 386

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 9575 of 2004

GUNNS LIMITED & ORS (ACCORDING TO SCHEDULE ATTACHED)	Plaintiff
V
ALEXANDER MARR & ORS (ACCORDING TO SCHEDULE ATTACHED)	Defendant

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JUDGE:	BONGIORNO J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 October 2006
DATE OF JUDGMENT:	20 October 2006
CASE MAY BE CITED AS:	Gunns v Marr (No. 3)
MEDIUM NEUTRAL CITATION:	[2006] VSC 386

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Costs – indemnity costs – strike out of third version of statement of claim – no misconduct demonstrated – no unreasonable behaviour of plaintiffs warranting order other than on general basis – RSC 63.29, 63.31.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P. Santamaria SC with Mr I. Waller	Clayton Utz
For the First, Third, Fourth and Fifth Defendants	Mr P Bornstein	Phillips Fox
For the Second and Sixth Defendants	Mr D. Beach SC, with Mr S. O’Meara	Maurice Blackburn Cashman
For the Seventh, Eighth, Ninth, Fourteenth, Fifteenth, Sixteenth and Seventeenth Defendants	Mr M. Gronow and Mr C. Thomson	Herbert Geer and Rundle
For the Tenth and Eleventh Defendants	Mr L. Maher	Fitzgerald & Browne, Hobart
For the Twelfth Defendant	Mr T. Mitchell	Fitzgerald & Browne, Hobart
For the Thirteenth and Eighteenth Defendants	Mr K. Farouque	Maurice Blackburn Cashman
For the Nineteenth Defendant	Ms J. Benson	Norton White
For the Twentieth Defendant	Mr N. Russell	Coadys

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HIS HONOUR:

On 18 July 2005, the Court determined a pleading application adversely to the plaintiffs. It ordered that the defendants’ costs of that application be paid by the plaintiffs; such costs to be taxed on a party and party basis.[1] Pursuant to leave reserved to the plaintiffs in the judgment of 18 July 2005 they filed a further version of their statement of claim, designated V3, which version itself was struck out by the Court on 28 August 2006.[2] The defendants have now sought their costs on an indemnity basis or, at least on a solicitor and client basis. The plaintiffs have not resisted the defendants’ application for costs but maintain that those costs should be taxed only on a party and party basis.
[1][2005] VSC 251.
[2][2006] VSC 329.

The discretion to order costs is now conferred by s 24 of the Supreme Court Act 1986. It is in the widest terms both as to the party or parties against whom a costs order may be made and as to the extent of that costs order. RSC r 63.28 provides three nominated bases for the taxation of costs and permits the Court itself to specify any other basis for taxation in the exercise of its discretion.

The reasons for which V3 was struck out may be summarised as being because of its prolixity, its complexity, the conclusionary nature of many of its allegations leading to ambiguity and uncertainty and the fact that it was embarrassing in the legal sense of that word. It was an improvement on V2. It was not per se

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 Gunns Ltd v Marr (No 3)

Details

AGLC: Gunns Ltd v Marr (No 3) [2006] VSC 386
Case: [2006] VSC 386
Decision Date: 20 October 2006

CaseChat Overview and Summary

Gunns Limited, an entity involved in various business ventures, filed an action against Marr and others, seeking relief related to alleged breaches of contract and other related claims. The dispute centred around the validity and enforceability of certain contractual agreements and the conduct of the defendants. The matter was heard in the Supreme Court of Victoria. The plaintiffs sought an order for indemnity costs following the striking out of the third version of their statement of claim. They argued that the defendants' actions warranted such an order due to the perceived misconduct and unreasonable behaviour of the plaintiffs.

The court was required to determine whether the defendants' actions warranted an order for indemnity costs under the Supreme Court Rules. Specifically, it needed to assess whether the plaintiffs had engaged in any misconduct or unreasonable behaviour that would justify an order under RSC 63.29 and 63.31. The court examined the conduct of the plaintiffs and the circumstances surrounding the striking out of the third version of the statement of claim. It considered whether the plaintiffs' actions were egregious enough to warrant a departure from the usual cost consequences of a party failing in their litigation.

The court found that there was no demonstrated misconduct by the plaintiffs. While the third version of the statement of claim was struck out, the court did not find any unreasonable behaviour that would warrant an order for indemnity costs beyond the general basis. The plaintiffs' conduct, while not ideal, did not reach the threshold necessary to justify such a severe penalty. Therefore, the court declined to make an indemnity costs order against the plaintiffs. The reasoning of the court focused on the absence of significant misconduct or unreasonable behaviour, leading to the conclusion that the usual cost consequences should apply.

As a result, the court did not grant the indemnity costs order sought by the plaintiffs. The defendants were not required to pay the plaintiffs' costs beyond the standard cost consequences of their failure in the litigation. The court's decision emphasised the importance of assessing each case on its merits and ensuring that any order for indemnity costs is warranted by clear evidence of misconduct or unreasonable behaviour.

Orders