Haynes v Elders Limited No. DCCIV-02-1202

[2002] SADC 73

HAYNES & ORS. V ELDERS LIMITED
[2002] SADC 73

Judge Robertson
Civil

1. DRAFT REASONS FOR DECISION

   Nature of Appeal.

2. This is an Appeal from a decision of Acting Master Kelly made on 22 January 2002.  The Acting Master granted an application by the Defendant to adjourn the trial which was to commence in Mount Gambier on 11 February 2002.  He ordered that the Defendant pay the Plaintiff’s costs of the application to adjourn, together with the costs thrown away in consequence of the adjournment of the Trial on a solicitor and client basis.  It is the Acting Master’s order that the costs be taxed on a solicitor and client basis which is the subject of this Appeal. 

3. The Appeal is brought pursuant to Rule 97 of the District Court Rules 1992.  Rule 97.01 makes it plain that where the Appeal involves the exercise of a discretion, the Judge may exercise his own discretion without regard to the manner in which the discretion was exercised by the Master.  (O’Brien Lorinov Crafter Pty Ltd v Corradine (1999) 5 ASC 154 at 5)).

   Facts Relevant to the Application for Adjournment.

4. The Plaintiffs’ claim is brought in negligence and under the Fair Trading Act 1987 for damages arising from advice allegedly given by an employee of the Defendant with respect to the use of chemicals in treating the Plaintiffs’ farming land and the growing of crops on the land.

5. In late August 2001 the Defendant’s solicitors received from the solicitors for the Plaintiffs, an expert’s report prepared by an agronomist which is relevant to the assessment of the Plaintiffs’ claim for damages.  After receiving advice from Counsel that the Defendant should respond to the report prepared by the Plaintiffs’ expert, the Defendant sought to engage an agronomist to consider the Plaintiffs’ expert report and prepare a report in reply.  The Defendant’s solicitors had difficulty in obtaining the services of an agronomist who could assist them until the early part of November 2001 when they engaged the services of Nick Hillier from Nick Hillier Agricultural.  After engaging Mr Hillier, the Defendant’s solicitors forwarded the relevant documents to him.  On 13 November 2001 Mr Hillier recommended that a test should be conducted on the soil of the Plaintiffs’ property and informed the Defendant’s solicitors that tests could be completed within two weeks of samples being obtained.  Furthermore he informed the solicitors that it may be possible to produce a report within two weeks after the tests had been completed, subject to the provision of other information.

6. As a result of receiving this information, the Defendant’s solicitors attended a Directions Hearing on 15 November 2001 and obtained an order for extension of time for the provision of an agronomist’s report.  At the Directions Hearing, in order to move the matter forward, both solicitors sought to dispense with the requirement to file a Certificate of Readiness for trial required by Rule 74A.04 and have the matter referred to a listing conference.  When the matter came on for listing for trial at a Listing Conference Mr Baldock, a partner in the firm of the Defendant’s solicitors, opposed the listing of the action for Trial.  His opposition was on the basis that Mr Hillier’s Report had not been received and that Counsel was not available for the February sittings of the Mount Gambier Circuit.  The solicitor for the Plaintiffs submitted that the proceeding should be listed for trial.  On 6 December the action was listed to be heard in the February sitting at Mount Gambier.  Later the Trial was assigned a specific date, namely 11 February 2002.

7. During the latter part of November and in December, the Defendant’s solicitors forwarded a number of facsimiles to Mr Hillier requesting confirmation regarding the testing of the soil and when his report would be available.  On returning from Christmas leave on 7 January 2002 Mr Baldock, noted that he had not received any response to the facsimile sent to Mr Hillier on 13 December 2001.  He then attempted to contact Mr Hillier by telephone, facsimile and email.  On 14 January 2002 Mr Baldock received a facsimile from Mr Hillier indicating that he would not be able to provide a report for the Defendant.  On receiving this information, and following the receipt of advice from Counsel, the Defendant’s solicitors filed an application in the Court seeking an adjournment of the trial. 

   Hearing Before Acting Master Kelly.

8. The application came on for hearing before Acting Master Kelly on 22 February 2002.  After the Acting Master’s order that the trial be adjourned the Plaintiffs’ Counsel sought solicitor and client costs, with respect to the application and costs thrown away as a result of the adjournment.  The Defendant’s counsel indicated that the Defendant was prepared to consent to an order for party and party costs but opposed an order for solicitor and client costs.  Submissions were made by both Counsel with respect to the application for solicitor and client costs.  The Acting Master reserved his decision and on 23 January 2002 made an order for payment of solicitor and client costs by the Defendant, without giving any reasons.

   Grounds of Appeal.

9. The Plaintiff, in effect, relied on two grounds of appeal:-

   ·First, that there was insufficient evidence before the Acting Master which would justify an order for solicitor and client costs;

   ·Secondly, that the Acting Master had erred in the exercise of his discretion, in that there was no basis to depart from the ordinary rule that party and party costs applied.

   Principles Relevant to Indemnity Costs.

10. The principles applicable to the exercise of a Court’s discretion to order indemnity costs (solicitor and client costs) were summarised by Shepherd J in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234. The ordinary rule is that where a Court orders costs be paid by one party then the order is for payment on a party and party basis. It is acknowledged that a Court has a discretion to depart from the ordinary rule and to award costs on a solicitor and client basis. A court’s discretion to award party and party costs is unfettered, although generally, the departure from the ordinary rule is not warranted unless some special or unusual feature is present to justify the Court ordering indemnity costs (State Government Insurance Commission v Lane (1997) 68 SASR 257 at 265).

    Exercise of the Discretion.

11. As I said, the Acting Master did not provide reasons for his decision.  I propose to exercise the discretion afresh.  In my opinion, it cannot be said that the Defendant’s conduct or that of the Defendant’s solicitors contributed in any way to the need to adjourn the hearing.  The Defendant was entitled to obtain an expert report, in order to respond to the agronomist’s report of the Plaintiff.  Delay in obtaining the report was initially brought about by the Defendant’s solicitors being unable to obtain the services of an agronomist.  The Defendant attempted to obtain the services of a number of agronomists but without success.  On obtaining the services of Mr Hillier, the Defendant, through its solicitors, made regular contact with Mr Hillier with regard to the furnishing of his report.  In the end, the Defendant was let down, without notice, by Mr Hillier indicating that he was unable to provide a report.  It was this action, by Mr Hillier, that necessitated the application for an adjournment.

12. I did not understand Mr Downs, Counsel for the Plaintiffs, to suggest that the Defendant’s solicitors had acted unreasonably in dealing with the matters leading up to the application for an adjournment.  He did not suggest that the Defendant or the Defendant’s solicitors were guilty of delay.  He submitted that the Defendant’s solicitors could have acted more prudently but I was unconvinced by that submission.  I was also not convinced by the submission that the caseflow management rules were contravened by the Defendant or its solicitors.

13. Mr Downs submitted that if the Plaintiffs were to receive party and party costs then they would be out of pocket.  There can be no dispute about that proposition as it is the consequence of the difference between solicitor and clients costs and party and party costs.  He submitted that the Plaintiffs should not be required to meet the difference.  Apart from anything else that submission overlooks that the Plaintiff’s solicitors agreed to the dispensation of the requirement of a Certificate of Dispensation and the referral of the action to a Listing Conference at the time when Mr Hillier’s report was not to hand.  Furthermore the Plaintiffs’ solicitors insisted on the action being listed at the Listing Conference held on 26 December 2001 when the Defendant’s solicitor sought to have the listing for trial delayed.  With respect to this latter factor, I gained the impression that Acting Master Kelly was not made aware of it at the hearing before him.

14. In my opinion, the justice of the matter does not dictate there should be a departure from the ordinary rule that the Plaintiffs receive party and party costs with respect to the adjournment.  There is no special or unusual feature which would justify an order for solicitor and client costs.   Accordingly the Acting Master erred in the exercise of his discretion in ordering that the Defendant pay indemnity costs.

    Conclusion

15. For the reasons I have given I allow the Appeal and set aside the order of the Acting Master that the Defendant pay to the Plaintiff’s solicitor and client costs.  I order that the Defendant pay the Plaintiff’s party and party costs with respect to the application for the adjournment and the costs thrown away as a result of the adjournment of the trial.

16. I will hear the parties on the question of the costs of this Appeal and any other orders which should be made.