Gwinnett v Day (No 2)
[2012] SASC 61
•17 April 2012
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
GWINNETT v DAY (NO 2)
[2012] SASC 61
Reasons for Decision of The Honourable Justice Stanley
17 April 2012
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - POWERS OF COURT
Both plaintiff and defendants seek orders for costs – where the defendants successfully resisted the plaintiff’s application for return of cattle – where defendants’ position as to ownership of cattle changed at trial of the action – whether the court should exercise discretion to award costs in favour of an unsuccessful party – whether 6SCR263 fetters the operation of s 40 of the Supreme Court Act 1935 (SA).
Held: 6SCR263 does not limit the Court’s unfettered discretion conferred by s 40 – circumstances justify departure from general rule that costs should follow the event – award half plaintiff’s costs.
Supreme Court Civil Rules 2006 (SA) r 263; Supreme Court Act 1935 (SA) s 40; Supreme Court Rules 1987 (SA) r 101.02, referred to.
Cretazzo v Lombardi (1975) 13 SASR 4; Copping v ANZ McCaughan Ltd (1995) 63 SASR 523; Settlement Wine Co Pty Ltd v National & General Insurance Co Ltd (No 3) (1997) 190 LSJS 101; Re Gillie; Ex parte Cornell (1996) 70 FCR 254, discussed.
GWINNETT v DAY (NO 2)
[2012] SASC 61
STANLEY J: On 22 March 2012 the Court delivered judgment in this matter.
In essence the Court refused the orders sought by the plaintiff for the return of the cattle the subject matter of the proceedings but made preservation orders, in respect of the cattle, directed to the defendant.
Both the plaintiff and the defendants sought orders for costs. The Court reserved the question of costs after hearing the parties’ submissions.
Having considered the matter I am of the view that Nigel Day should pay the plaintiff 50 per cent of the costs of the proceedings. I make no order for costs in respect of Malcolm Day. These are my reasons for doing so.
The defendants at trial successfully resisted the plaintiff’s application for orders requiring them to return cattle that had been removed by them from the Warwick Hills property owned by the plaintiff.
Mr McCarthy, counsel for the defendants, applies for costs in accordance with the provisions of 6SCR263(1) of the Supreme Court Civil Rules 2006 (SA) on the basis that costs should follow the event.
Mr Cudmore, counsel for the plaintiff, opposes an order for costs in favour of the defendants and, in the circumstances, seeks an order for costs in favour of the plaintiff. He submits that this is an appropriate case where the Court, in the exercise of its discretion, should award costs in favour of an unsuccessful party. He calls in aid the principle enunciated by Bray CJ in an oft cited passage from Cretazzo v Lombardi:[1]
[T]here was once an idea that a successful party, though he might be deprived of his costs, could not be ordered to pay his opponent’s costs. As a matter of fact, the so-called rule never applied to successful plaintiffs. There was a time, however, when it did apply to wholly successful defendants … It has now been held, however, that the rule when it existed was founded on the practice of the old Court of Chancery and that its existence disappeared in England after the enactment of s 5 of the Supreme Court of Judicature Act 1890 … The South Australian counterpart of that section is s 40 of the Supreme Court Act 1935-1974…
…
It follows, therefore, that there is now jurisdiction to order a successful party, even a wholly successful party and whether plaintiff or defendant, to pay his opponent’s costs in part or in whole. Of course, it by no means follows that it would be a judicial exercise of the discretion to do so and it may well be that in many cases it would not, since there must be some reason for departing from the settled practice whereby the successful party receives his costs from his opponent …
(Citations omitted)
[1] (1975) 13 SASR 4 at 11-12.
The plaintiff submits that there are three reasons why he should recover costs, notwithstanding he was unsuccessful at trial in attaining the relief sought. They are:
(1) the defendants removed the cattle from Warwick Hills without the knowledge, far less agreement, of the plaintiff and then refused to tell the plaintiff the location of the removed cattle until after the proceedings had been commenced and an order had been made requiring them to do so;
(2) at all times, up to and including the trial, the defendants asserted an entitlement to retain possession of the removed cattle adverse to the interests of the plaintiff, which assertion was only conceded by counsel for the defendants after counsel for the plaintiff had addressed the Court;
(3) the concession made by counsel for the defendants led to the Court concluding that there was no conversion.
The defendants oppose any costs order being made in favour of the plaintiff on the basis, inter alia, that 6SCR263 requires as a general rule costs should follow the event but makes the general rule subject to express exceptions in 6SCR263(2). They contend that the basis upon which the claim for costs is propounded by the plaintiff does not fall into any of the express exceptions in 6SCR263(2).
6SCR263 is as follows:
263—Court’s discretion as to costs
(1)As a general rule, costs follow the event.
(2)The general rule is, however, subject to specific rules to the contrary1 and also to the following exceptions (which apply subject to the Court's order to the contrary)—
(a) the costs of an amendment are to be awarded against the party making the amendment;
(b) the costs of an application to extend time fixed by or under these rules are to be awarded against the applicant;
(c) the costs of an application that should have been (but was not) made at an earlier stage of the proceedings are to be awarded against the applicant;
(d) the costs of an adjournment arising from a party's default are to be awarded against the party in default;
(e) the costs of proving a fact or document that a party has unreasonably failed to admit are to be awarded against that party;
(f) in an action founded on a motor accident claim, general costs of action are not to be awarded in favour of a successful plaintiff unless the damages exceed $150 000;
(g) in an action founded on a claim for defamation, general costs of action are not to be awarded in favour of the successful plaintiff unless the damages exceed $25 000;
(h) in an action founded on a claim for damages or any other monetary sum (other than a motor accident claim or a claim for defamation), general costs of action are not to be awarded in favour of the successful plaintiff unless the amount awarded exceeds $75 000.
Example—
1For example, the special provisions as to costs where a party fails to accept an offer of settlement and the amount obtained by judgment does not exceed the amount of the offer (see rule 188).
(3)In exercising its discretion, the Court may (subject to any other relevant rule) have regard to any offer to consent to judgment or other attempt to settle the action or an issue involved in the action.
(4)In exercising its discretion with regard to counsel fees, the Court will have regard to the importance of the case, its difficulty and the time reasonably occupied by counsel.
(5)If an action is transferred or removed into the Court, the Court will not disturb orders for costs made in the other court or tribunal unless there is good reason to do so.
In my view the terms of 6SCR263 do not prevent the Court, in the exercise of its discretion, from making an award of costs in favour of an unsuccessful party in circumstances which do not fall within the ambit of 6SCR263(2).
The Court’s discretion with respect to costs is conferred by s 40 of the Supreme Court Act 1935 (SA) which, so far as material, is as follows:
40—Power of court with regard to costs
(1)Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.
In Copping v ANZ McCaughan Ltd,[2] King CJ rejected an argument that r 101.02 of the 1987 Rules, the predecessor to 6SCR263, fettered the operation of s 40. King CJ, with whom Mohr and Nyland JJ agreed, said of s 40:
… the legislative intention is plainly to confer on courts and judges an unfettered discretion as to costs. A construction of a rule of court which practically negates the statutory provision is not lightly to be adopted.
The Chief Justice went on to contemplate that a rule which purported to limit the Court’s unfettered discretion as to costs might be invalid as it would be repugnant to s 40.
[2] (1995) 63 SASR 523 at 527.
In my view, 6SCR263 should be construed so as not to limit the Court’s unfettered discretion as to costs conferred by s 40. 6SCR263 is to be construed as identifying the general approach to awarding costs and identifying specific exceptions to the general approach but it is not to be construed as defining the exceptions to the general rule exhaustively.
In this context I note the judgment of Perry J in Settlement Wine Co Pty Ltd v National & General Insurance Co Ltd (No 3)[3] where his Honour held that because s 40(1) is expressed to be subject, inter alia, to the rules of court, this means that the breadth of the discretion conferred by s 40 is confined to that defined by the rules. Curiously, Perry J did not refer to the Full Court’s judgment in Copping. In any event, I am satisfied that the approach of Perry J can be reconciled with the Full Court’s judgment in Copping on the basis that I have explained.
[3] (1997) 190 LSJS 101 at 105.
I accept the argument for the plaintiff that the facts and circumstances of this case justify a departure from the general rule that costs should follow the event.
The plaintiff and the defendants had arranged a meeting on 8 February 2012 to discuss the termination of a share farming arrangement between them and the distribution of the cattle. Notwithstanding that arrangement, the defendants, without the knowledge or agreement of the plaintiff, removed the cattle from the plaintiff’s property prior to the meeting. The defendants then refused to disclose to the plaintiff the place where the cattle had been transported. The defendants’ refusal to do so only shifted in the wake of a Court order. To use the language of Finn J in Re Gillie,[4] the defendants resorted to ‘self-help’ in the face of the dispute with the plaintiff. Their actions in removing the cattle were at the very least suggestive of an intention to deal with the cattle in a manner inconsistent with the rights of the plaintiff by excluding him from possession and preventing him from exercising his rights.
[4] Re Gillie; Ex parte Cornell (1996) 70 FCR 254 at 257.
That position was disavowed by the submission put by counsel for the defendants at the trial of the action. This occurred after the plaintiff had put his case.
The submission by the defendants at trial that neither they, nor more particularly, Nigel Day, claimed ultimate dominion or ownership over the cattle, was a critical factor in the Court’s conclusion that the claim in conversion must fail and with it the claim in detinue.
I accept the submission of the plaintiff that the position adopted by the defendants at trial constituted a change of position.
In my view the plaintiff was justified in commencing the proceedings and prosecuting them until the point at which the defendants made clear that the cattle removed from Warwick Hills were co-owned by the plaintiff and Nigel Day.
These factors justify an award of costs in favour of the plaintiff.
In the exercise of my discretion however I would only award the plaintiff 50 per cent of his costs.
I do so because the plaintiff nonetheless persisted with the action after the defendants’ “concession” and in the face of it. Moreover, as Mr McCarthy contends, the relief sought by the plaintiff was an order for the return of the cattle. He has failed to obtain the relief sought. Partly he has done so because of discretionary considerations set out in the Court’s reasons for judgment. However, those discretionary considerations may not have proved conclusive in the way in which the Court decided the matter absent the acknowledgement by the defendants at trial that Nigel Day was not entitled to deal exclusively with the cattle in a way inconsistent with the rights of co-ownership by the plaintiff. Had the plaintiff made out the action in conversion and detinue it is probable the result would have been different.
In the circumstances I consider an award of half the plaintiff’s costs of the action fairly does justice between the parties.
I decline to make an order against Malcolm Day for the plaintiff’s costs. He was not guilty of treating the cattle as his own. The removal of the cattle was done to protect or advance the interests of Nigel Day. On the other hand, he is not entitled to recover any costs as he was, at the very least, complicit in Nigel Day’s conduct and in the removal of the cattle from Warwick Hill.
Conclusion
I order as follows:
1. Nigel Day is to pay the plaintiff one half of his costs of action to be taxed.
2. No order as to the costs of Malcolm Day.
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