Harding v Essey
[2005] WASCA 30 (S)
•4 MARCH 2005
HARDING & ANOR -v- ESSEY & ANOR [2005] WASCA 30 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASCA 30 (S) | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:132/2002 | 17 NOVEMBER 2004 | |
| Coram: | STEYTLER J MCLURE J PULLIN J | 4/03/05 | |
| 30/06/05 | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Orders as to costs of trial and appeal | ||
| B | |||
| PDF Version |
| Parties: | MARLENE ANNE HARDING PINEGATE HOLDINGS PTY LTD FRED JOSEPH ESSEY ALL-FECT DISTRIBUTORS LTD |
Catchwords: | Practice and procedure Costs One plaintiff succeeds entirely at trial and on appeal One plaintiff fails entirely The defendants succeed entirely on the counterclaim on appeal No new point of principle |
Legislation: | Rules of the Supreme Court 1971 (WA), O 24A, O 66 r 2(b), (c) Supreme Court Act 1935 (WA), s 32 |
Case References: | Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567 Godden v Alford [1960] WAR 235 Harding & Anor v Essey & Anor [2005] WASCA 30 Hendrie v Rusli [2000] WASCA 420 Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569 Re Elgindata Ltd (No 2) [1993] 1 All ER 232 Sloane v McDonald & Sutherland, unreported; FCt SCt of WA; Library No 980012; 22 January 1998 Ottway v Jones [1955] 2 All ER 585 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : HARDING & ANOR -v- ESSEY & ANOR [2005] WASCA 30 (S) CORAM : STEYTLER J
- MCLURE J
PULLIN J
DECISION : 30 JUNE 2005 FILE NO/S : FUL 132 of 2002 BETWEEN : MARLENE ANNE HARDING
- First Appellant (First Defendant)
PINEGATE HOLDINGS PTY LTD
Second Appellant (Second Defendant)
AND
FRED JOSEPH ESSEY
First Respondent (First Plaintiff)
ALL-FECT DISTRIBUTORS LTD
Second Respondent (Second Plaintiff)
(Page 2)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : HASLUCK J
Citation : ESSEY & ANOR -v- HARDING & ANOR [2002] WASC 209
File No : CIV 1190 of 1998
Catchwords:
Practice and procedure - Costs - One plaintiff succeeds entirely at trial and on appeal - One plaintiff fails entirely - The defendants succeed entirely on the counterclaim on appeal - No new point of principle
Legislation:
Rules of the Supreme Court 1971 (WA), O 24A, O 66 r 2(b), (c)
Supreme Court Act 1935 (WA), s 32
Result:
Orders as to costs of trial and appeal
Category: B
Representation:
Counsel:
First Appellant (First Defendant) : Dr J T Schoombee
Second Appellant (Second Defendant) : Dr J T Schoombee
First Respondent (First Plaintiff) : Mr K L Christensen
Second Respondent (Second Plaintiff) : Mr K L Christensen
Solicitors:
First Appellant (First Defendant) : Phillips Fox
Second Appellant (Second Defendant) : Phillips Fox
First Respondent (First Plaintiff) : Christensen Vaughan
Second Respondent (Second Plaintiff) : Christensen Vaughan
(Page 3)
Case(s) referred to in judgment(s):
Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567
Godden v Alford [1960] WAR 235
Harding & Anor v Essey & Anor [2005] WASCA 30
Hendrie v Rusli [2000] WASCA 420
Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569
Re Elgindata Ltd (No 2) [1993] 1 All ER 232
Sloane v McDonald & Sutherland, unreported; FCt SCt of WA; Library No 980012; 22 January 1998
Case(s) also cited:
Ottway v Jones [1955] 2 All ER 585
(Page 4)
1 STEYTLER J: I have had the advantage of reading the judgments of McLure and Pullin JJA. I agree with McLure JA on each of the issues falling to be determined and with the orders proposed by her.
2 As to the question of interest, I agree with McLure JA, for the reasons she has given, that the delay in prosecuting the appeal is not such as to justify refusing to award interest from the date the cause of action arose, being 16 October 1997.
3 So far as the issue of costs is concerned, like McLure JA, it seems to me that the appellants were substantially successful in the appeal, having successfully challenged the orders made in the first respondent's favour, having successfully appealed against the dismissal of the counterclaims brought by each of them, having their submissions as regards the dismissal of the respondents' notice of contention accepted and having been unsuccessful only in their appeal against the judgment in favour of the second respondent. In those circumstances, like McLure JA, it seems to me that an appropriate exercise of discretion would be one in which the respondents are ordered to pay the appellants 80 per cent of the costs of the appeal and of the notice of contention to be taxed.
4 As to the costs of the trial and of the interrogatories, I agree with the orders proposed by McLure JA, for the reasons given by her.
5 MCLURE J: These reasons concern issues of prejudgment interest and costs arising from the reasons and orders made in Harding & Anor v Essey & Anor [2005] WASCA 30. On 4 March 2005 the Court ordered that:
(1) The appeal against the judgment in favour of the first respondent (first plaintiff) be allowed.
(2) The appeal against the judgment in favour of the second respondent (second plaintiff) be dismissed.
(3) The appeal against the dismissal of the counterclaim by the first appellant (first plaintiff by counterclaim) be allowed.
(4) The appeal against the dismissal of the counterclaim by the second appellant (second plaintiff by counterclaim) be allowed.
(5) The respondents' notice of contention be dismissed.
(Page 5)
- (6) In lieu of the orders made at trial, it is adjudged that:
(a) the claim by the first respondent (first plaintiff) be dismissed;
(b) there be judgment for the second respondent (second plaintiff) against the appellants (defendants);
(c) the first and second appellants (first and second defendants) pay the second respondent (second plaintiff) the sum of $20,000 and interest thereon at 6 per cent per year from 1 October 1997 to the date of these orders;
(d) there be judgment for each of the first and second appellants (first and second plaintiffs by counterclaim) on the counterclaim against the first and second respondents (first and second defendants by counterclaim);
(e) there be a certificate for the costs of the first and second appellants' (first and second plaintiffs by counterclaim) interrogatories.
7 The appellants sought interest at the rate of 6 per cent per annum from 16 October 1997, being the date of publication of the defamatory letter the subject of the counterclaim. The respondents contended that interest should not commence to run until March 2004 because of the appellants' delay in prosecuting the appeal.
8 The Court has a discretion under s 32 of the Supreme Court Act 1935 (WA) to award interest for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect. The awarding of interest is consistent with the principle of compensating an injured party for the damage suffered as a result of a defendant's wrongful conduct. Accepting that the appellants delayed in the prosecution of the appeal, the end result is the respondents have had the use of the judgment sum in the same period. I am not persuaded the
(Page 6)
- delay is such as to justify refusing to award interest from the date the cause of action arose, being 16 October 1997.
9 As to the costs of the appeal, the appellants seek an order that the respondents pay 80 per cent of the appellants' costs of the appeal, including the notice of contention, to be taxed. The respondents contend the appropriate order is that the parties each bear their own costs of the appeal.
10 The appellants were successful in their challenge to the orders made at trial in Mr Essey's favour, in their opposition to the respondents' notice of contention and in reversing the result on their counterclaims. The appellants only failure related to the challenge to the judgment in favour of All-Fect. In financial terms, the appellants went from judgment for a total sum of $60,000 in favour of the respondents to a net gain in their favour of $25,000. The appellants were, on any view, substantially successful in the appeal. I would in the exercise of my discretion order that the respondents pay to the appellants 80 per cent of the costs of the appeal and the notice of contention to be taxed.
11 As to the costs of the trial, the prima facie position under O 66 r 2 of the Supreme Court Rules is that the appellants pay the costs of All-Fect's successful claim, Mr Essey pay the costs of his unsuccessful claim and All-Fect and Mr Essey pay to the appellants the costs of the counterclaim. I agree with Anderson J in Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569 at 574 that a Court will not make an order under O 66 r 2 as of course but, rather, will look to the realities of the case and attempt to do substantial justice. However, I do not have sufficient information and understanding of the course of the trial to ensure that, however rough and ready it may be, substantial justice is done. The matter is further complicated by the fact that the appellants made an O 24A offer on the counterclaim for less than the amount awarded, which offer was not accepted. Accordingly, the prima facie position under O 66 r 2 should apply.
12 There is added complexity in relation to the costs of the claims because the plaintiffs were represented by the same solicitors and counsel. Where a plaintiff is unsuccessful against one of two defendants who have the same solicitor, the unsuccessful defendant can only be compelled to pay the costs which exclusively relate to him or her, and half the costs of the proceedings taken jointly for both defendants: Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567 at 570. That principle applies by analogy to the present circumstances as follows: Mr Essey should pay
(Page 7)
- to the appellants the costs that exclusively relate to his claim and half the costs of the claims proceedings taken jointly for both plaintiffs; the appellants should pay to All-Fect the costs that exclusively relate to its claim and half the costs of the claims proceedings taken jointly for both plaintiffs.
13 The orders made by the Court on 4 March 2005 have the effect of setting aside the order made by the trial Judge in relation to the respondents' interrogatories. All-Fect should have its costs of the interrogatories on the same basis as its other costs.
14 The costs orders I would make are as follows:
(a) Mr Essey do pay to the appellants the costs that exclusively relate to his claim and half the costs of the claims proceedings taken jointly for both plaintiffs to be taxed;
(b) The appellants do pay to All-Fect the costs, including for interrogatories, that exclusively relate to its claim and half the costs of the claims proceedings taken jointly for both plaintiffs to be taxed;
(c) All-Fect and Mr Essey do pay to the appellants the costs of the counterclaim on a party-party basis to 6 October 2001 and thereafter on an indemnity basis to be taxed;
(d) The respondents do pay to the appellants 80 per cent of the costs of the appeal and of the respondents' notice of contention to be taxed.
15 The other orders will be:
(1) The first and second respondents do pay the first appellant the sum of $30,000 and interest thereon at 6 per cent per annum from 16 October 1997 to the date of these orders;
(2) The first and second respondents do pay the second appellant the sum of $15,000 and interest thereon at 6 per cent per annum from 16 October 1997 to the date of these orders.
(Page 8)
16 PULLIN J: Reasons for decision and judgment were given in this matter on 4 March 2005. The parties could not agree in relation to costs and written submissions have been filed on the subject.
17 Following the trial before Hasluck J, judgment was given for the plaintiffs, Mr Essey and All-Fect, in the aggregate sum of $60,000. His Honour dismissed the counterclaim by Mrs Harding and Pinegate, but provisionally assessed damages at $45,000.
18 As a result of the appeal, All-Fect recovers $20,000 and Mrs Harding and Pinegate recover an aggregate award of $45,000. When the costs scales contained an ad valorem element, this had an effect on costs recovered. Now the costs scales contain no ad valorem component and so the difference in awards will have no prima facie effect on the calculation of costs. The time involved in conducting the litigation is the foundation for the costs award.
19 The outcome following the trial and the appeal is that All-Fect succeeded on its claim for defamation and was awarded damages at the trial. The appeal against that judgment by Mrs Harding and Pinegate failed. If costs follow the event then All-Fect would be entitled to its costs of the claim and the costs of the appeal.
20 Mrs Harding and Pinegate, however, succeeded on appeal in establishing that they should have won their counterclaim at trial. If costs follow the event they would be entitled to their costs of the counterclaim, and to the costs of the appeal which was necessary to establish their entitlement.
21 Finally, Mrs Harding and Pinegate also succeeded on the appeal in establishing that the award in favour of Mr Essey was in error. If costs follow the event then Mrs Harding and Pinegate would be entitled to their costs of defending that claim at trial and their costs of the appeal against Mr Essey.
22 The fact is, however, that the proceedings were conducted as one trial and one appeal. The question then arises as to the proper disposition in relation to costs.
23 Mrs Harding and Pinegate submit that they should have 70 per cent of their costs of the action and the counterclaim and 80 per cent of the costs of the appeal.
(Page 9)
24 Mr Essey and All-Fect submit that costs should follow the event and that the appropriate orders would be:
(a) Mr Essey should pay Mrs Harding and Pinegate the costs of the action insofar as they arise from Mr Essey's claim;
(b) that Mrs Harding and Pinegate should pay All-Fect the costs of the actions; and
(c) Mr Essey and All-Fect should pay Mrs Harding and Pinegate their costs of the counterclaim.
(d) Each party should pay their own costs of the appeal
25 It has now been disclosed that Mrs Harding and Pinegate served an O 24A offer on their opponents on 5 October 2001. It contained an offer to compromise the counterclaim if Mr Essey and All-Fect paid $5000 to Mrs Harding and Pinegate. The offer was not accepted. I will consider the effect that the offer should have in relation to costs after considering what orders would have been appropriate had no offer been made.
26 Mrs Harding and Pinegate argue that there will be a difficulty involved in apportioning the costs of the trial and the appeal in relation to the two claims and the two counterclaims and suggest the orders they propose are preferable. They rely on what was said by Anderson J in Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569, particularly at 574 and 579. In that case, the plaintiff sued on three causes of action against five defendants. It succeeded in part only against the first, second and fourth defendants and failed against the third and fifth defendants. The plaintiff sought costs against the unsuccessful defendants. The question then arose as to whether the first, second and fourth defendants should have costs of the issues on which they succeeded. Anderson J referred to O 66 r 2(a) of the Rules of the Supreme Court1971 (WA) which deals with circumstances where a statement of claim contains more than one cause of action and the plaintiff succeeds on some and the defendant succeeds on others. His Honour then decided to make a costs order in favour of the plaintiff but to allow only a proportion of the total costs. In my opinion, the Permanent Building Society caseprovides no guidance in the present circumstances. That case and O 66 r 2(a) deal with the situation where there is one plaintiff (or one group of plaintiffs) and one defendant (or one group of defendants), where there are separate causes of action and the plaintiff succeeds on some of them and loses on others. The situation in this case is that some parties on both sides have wholly succeeded and one party on one side has wholly failed.
(Page 10)
27 Mr Essey and All-Fect in submitting that costs should follow the event in relation to each claim, rely on Re Elgindata Ltd (No 2) [1993] 1 All ER 232 at 237 and Godden v Alford [1960] WAR 235 at 236 - 237. Hale J in Godden v Alford said at 236 - 237:
"Where the claim and the counter-claim raise essentially different issues and where, for instance, the plaintiff succeeds on the claim and the defendant on the counter-claim, there should be separate judgments on claim and counter-claim with the plaintiff having the costs of the claim and the defendant having the costs of the counter-claim: see for instance Chell Engineering Ltd v Unit Tool & Engineering Co Ltd [1950] 1 All ER 378".
28 However his Honour went on to say in that case:
"It is, however, to be noted that in that case, at p 383, Denning, LJ, said that it is desirable that a judge should consider whether a special order should be made as to costs because the issues are often very much interlocked and the usual order as indicated above does not always give a just result …".
29 His Honour then gave examples of cases where a special order would be required. He referred, for example, to the circumstances where a claim advanced by one party is not much in issue and the real contest is about whether the counterclaim should succeed. He also referred to circumstances where the contest arises out of the one transaction so that the counterclaim is in its nature a defence to the claim. His Honour indicated that in those types of cases, if on balance the defendant recovers against the plaintiff, the defendant should have the costs of the claim on the basis of the amount claimed and costs on the counterclaim on the basis of the amount actually recovered by him. His Honour ended the review of the cases by stressing that the court must always look at the particular facts of the case and not to feel bound by any rule as to what it must do merely because the case happens to fall into one or other of the categories that he mentioned by way of example. His Honour then concluded at 237:
"The guiding principle, and in fact the only rule which can justly be called a principle, is that the court should carefully examine the realities of the case in hand, and should so frame its order that justice shall, so far as costs are concerned, be as nearly as possible done between the parties."
(Page 11)
30 Elgindata's case (supra) says nothing different. Nourse LJ referred to the uncontroversial fact that costs are in the discretion of the court and that costs usually follow the event.
31 I refer to O 66 r 2(b) below. Order 66 r 2(b) reads:
"In the absence of any special order -
…
(b) where there is judgment for one party on the claim with costs and judgment for the other party on the counterclaim with costs, the costs shall be assessed as if each party had succeeded in an independent action and charges which cover without discrimination, work referable to the claim and work referable to the counterclaim, shall be divided between the claim and the counterclaim in the proportion in which the work covered by such charge is properly attributable to the claim and to the counterclaim".
32 In relation to the All-Fect v Harding-Pinegate litigation, All-Fect succeeded on the claim and Mrs Harding and Pinegate succeeded on the counterclaim. If there is no special order and the usual orders were made (awarding All-Fect costs of the trial on the claim and awarding Mrs Harding and Pinegate costs of the trial on the counterclaim), then O 66 r 2(b) would apply to work out what would happen on taxation of costs in relation to the trial.
33 There is no doubt that if usual costs orders are made in favour of each successful party, there will be substantial disputation about what work was referable to the claim, and what work was referable to the counterclaim on both the trial and the appeal. These parties appear to be bitter enemies as a result of the litigation and it takes little imagination to see that a large sum of money may be spent on legal fees on both sides in argument about what work was referable to what part of which claim. The parties may not understand the complexities of the issues and the lawyers will in the main be left to drive the dispute. In my opinion, it is in the interests of justice to make an order which will reduce, as much as possible, the prospect of further legal expenditure.
34 That being so, and because of the success of some of the opposing parties and the complication of a party (Mr Essey) who wholly failed, I consider that (putting aside the effect of the O 24A offer) this is a case
(Page 12)
- where a special order should be made. However, I do not consider that the order should provide for a percentage apportionment of costs as Mrs Harding and Pinegate suggest. It is not possible for the Full Court to make an assessment of the costs incurred by reference to submissions about the time involved in conducting the litigation.
35 If the only parties had been All-Fect, Mrs Harding and Pinegate and there had been no O 24A offer, then in my opinion the appropriate special order would have been that each party pay its and her own costs. That would have required an assumption that the costs of All-Fect and the costs of Mrs Harding and Pinegate were equal. It is an assumption I would have been prepared to make. A full taxation of costs on both sides to show whether or not this assumption was correct would be unnecessarily expensive and not in the interests of the parties. However, an order that each party pay its and her own costs would not take account of the fact that Mr Essey's claim has been dismissed on appeal and that his involvement has doubtless increased costs to some degree.
36 The solution would have been to ensure that costs of the trial and the appeal incurred by Mrs Harding and Pinegate and referrable to Mr Essey's claim should be paid by Mr Essey.
37 I would have made the following orders had it not been for the O 24A offer:
1. All-Fect, Mrs Harding and Pinegate each pay its and her own costs of the trial and the appeal.
2. Mr Essey do pay to Mrs Harding and Pinegate any costs incurred by Mrs Harding and Pinegate which are referrable to Mr Essey's claim, Mr Essey's defence of the counterclaim, and Mr Essey's participation in the appeal such costs to be taxed if not agreed.
38 Those orders would not however take account of the O 24A offer. After that offer was made, All-Fect and Mr Essey were at risk of an adverse costs order if they did not settle the counterclaim or if judgment on the counterclaim was for more than $5000. The offer was not accepted and after the appeal judgment on the counterclaim exceeded $5000 and so Mrs Harding and Pinegate are entitled to indemnity costs after the date of the offer (but only in relation to the trial. See Sloane v McDonald & Sutherland, unreported; FCt SCt of WA; Library No 980012; 22 January 1998; Hendrie v Rusli [2000] WASCA 420).
(Page 13)
39 In my view the objective should still be to reduce the possibility of further unnecessary and expensive disputation, but to take account of the O 24A offer. I would therefore make the following orders:
1. Mr Essey should pay Mrs Harding and Pinegate the costs of defending the action attributable to the claim by Mr Essey;
2. Mrs Harding and Pinegate should pay All-Fect the costs of the action attributable to the claim by All-Fect;
3. All-Fect and Mr Essey should pay the costs of Mrs Harding and Pinegate in relation to the trial of the counterclaim on a party/party basis up until 6 October 2001 and after that date on an indemnity basis;
4. Each party should pay its and her own costs of the appeal.
40 I agree with Steytler and McLure JJ concerning the subject of interest and All-Fect's interrogatories therefore orders should be made as proposed by McLure J on those subjects.
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