Hemat Shir & Sayed Developments Pty Ltd v Haseeb
[2014] WASC 485 (S)
•12 FEBRUARY 2015
HEMAT SHIR & SAYED DEVELOPMENTS PTY LTD -v- HASEEB [2014] WASC 485 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 485 (S) | |
| Case No: | CIV:1613/2012 | ON THE PAPERS | |
| Coram: | BEECH J | 12/02/15 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Defendant pay plaintiff's costs of application to set aside default judgment, otherwise no order as to costs | ||
| B | |||
| PDF Version |
| Parties: | HEMAT SHIR & SAYED DEVELOPMENTS PTY LTD SAIED AKBAR HASEEB |
Catchwords: | Costs Defendant successful on plaintiff's claim and on an alternative counterclaim Defendant unsuccessful on primary counterclaim Primary counterclaim founded on false evidence Appropriate costs orders |
Legislation: | Rules of the Supreme Court 1971(WA), O 66 r 1(1) |
Case References: | Brookvista Pty Ltd v Meloni [2009] WASCA 180 Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 Hemat Shir & Sayed Developments Pty Ltd v Haseeb [2014] WASC 485 McKay v Commissioner of Main Roads [No 7] (S) [2011] WASC 223 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Singh v Kaur Bal [2011] WASC 303 (S) Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
SAIED AKBAR HASEEB
Defendant
Catchwords:
Costs - Defendant successful on plaintiff's claim and on an alternative counterclaim - Defendant unsuccessful on primary counterclaim - Primary counterclaim founded on false evidence - Appropriate costs orders
Legislation:
Rules of the Supreme Court 1971(WA), O 66 r 1(1)
Result:
Defendant pay plaintiff's costs of application to set aside default judgment, otherwise no order as to costs
Category: B
Representation:
Counsel:
Plaintiff : No appearance
Defendant : No appearance
Solicitors:
Plaintiff : Lewis Blyth & Hooper
Defendant : Solomon Brothers
Case(s) referred to in judgment(s):
Brookvista Pty Ltd v Meloni [2009] WASCA 180
Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Hemat Shir & Sayed Developments Pty Ltd v Haseeb [2014] WASC 485
McKay v Commissioner of Main Roads [No 7] (S) [2011] WASC 223
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Singh v Kaur Bal [2011] WASC 303 (S)
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
- BEECH J:
Introduction
1 On 19 December 2014, I published reasons for decision in this action.1 These reasons should be read with those reasons. I will use the same abbreviations. In summary, I:
(1) dismissed HSSD's claim for possession;
(2) rejected Mr Haseeb's claim under the 2004 Agreement;
(3) upheld Mr Haseeb's claim under the 2009 Agreement; and
(4) ordered specific performance of the 2009 Agreement by transfer by HSSD of the Property to Mr Haseeb in exchange for payment of the sum of $270,000.
2 On 19 December 2014, I made orders giving effect to those conclusions. I also made orders for the exchange of submissions and affidavits on the question of costs.
3 Both parties claim to be entitled to costs orders in their favour.
HSSD's position
4 HSSD seeks orders that:
(1) Mr Haseeb pay its costs on an indemnity basis from May 2014 onward;
(2) in any event, Mr Haseeb pay HSSD's costs in respect of the 2004 Deed on an indemnity basis;
(3) alternatively, Mr Haseeb pay 75% of HSSD's costs of the action to be taxed if not agreed; and
(4) in any event, Mr Haseeb pay HSSD's costs in respect of his application to set aside default judgment on an indemnity basis, alternatively to be taxed if not agreed.
5 In support of the first proposed order, HSSD relies upon an offer made by email of 16 May 2014.2 The offer was made without prejudice save as to costs. The terms of the offer included:
(1) Mr Haseeb paid to HSSD $270,000 to purchase the Property;
(2) Mr Haseeb also pay a maximum sum of $15,000 by way of reimbursement of local authority and Water Corporation rates and taxes incurred by HSSD from 1 July 2009 through to settlement subject to proof by HSSD that such costs had been incurred; and
(3) upon settlement in accordance with the agreement, the action and counterclaim be dismissed and each party bear their own costs.
6 In support of alternative orders 2 and 3, HSSD points to Mr Haseeb's failure in respect of the 2004 Agreement, and the court's finding that Mr Haseeb (and his brother) gave deliberately false evidence in relation to the 2004 deed, in support of the claim of the 2004 Agreement.
7 As to proposed order 4, HSSD points to the fact that Mr Haseeb's application to set aside default judgment was based on his affidavit which referred only to the 2004 Agreement and not to the 2009 Agreement.
Mr Haseeb's position
8 Mr Haseeb applies for an order that HSSD pay his costs of the proceedings on a party-party basis up to 3 November 2014 or 25 November 2014, and that his costs be paid on an indemnity basis thereafter.
9 In support of his contention that he should generally have the costs of the action, Mr Haseeb submits that:
(1) He is the successful party. He successfully defended HSSD's claim for possession. Although he failed on his primary counterclaim for the 2004 Agreement, he succeeded in relation to his first alternative claim under the 2009 Agreement, and would have succeeded on his second alternative claim.
(2) There is no sufficient justification for departing from the general rule that the successful party should have its costs. It is to be expected that a successful party will fail on some issues. The evidence relating to the two alternative claims was 'interconnected';3 it provided necessary background.
10 In support of his claim for indemnity costs, Mr Haseeb relies on two offers of settlement made in the month preceding trial. On 3 November 2014, he made an offer to settle on terms that:
(1) the Property was to be placed on the market for sale;
(2) at settlement of the sale of the Property;
(a) expenses of sale and marketing would be paid;
(b) the plaintiff was to be paid the sum of $270,000 and rates and taxes paid, not exceeding $15,000; and
(c) Mr Haseeb was to be paid the balance of the purchase price.
(3) each party would bear its own costs of the action.
11 On 25 November 2014 Mr Haseeb made a second settlement offer on the same terms, except that the primary amount was increased from $270,000 to $285,000.
12 Mr Haseeb submits that HSSD's failure to accept these offers was unreasonable, assessed at the time that the offers were made, justifying an order for indemnity costs.
Costs - general principles
13 The following principles were outlined in Singh v Kaur Bal.4
The court's costs discretion under s 37 of the Supreme Court Act 1935 (WA) and O 66 of the Rules of the Supreme Court 1971 (WA) is broad.
Order 66 r 1(1), r 1(2) and r 1(3) are in the following terms:
'1. General rules as to costs:
(1) Subject to the express provisions of any statute and of these Rules the costs of and incidental to all proceedings including the administration of estates and trusts shall be in the discretion of the Court but, without limiting the general discretion conferred on the Court by the Act, and subject to this Order, the Court will generally order that the successful party to any action or matter recover his costs.
(2) If the Court is of opinion that the conduct of a party either before or after the commencement of the litigation or that a claim by a party for an unreasonably excessive amount has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the costs of an unsuccessful party either wholly or in part.
(3) Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.'
In Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S) [5] - [8], the Court of Appeal said as follows:
'It is clear that while the court has a broad discretion as to costs, generally costs will follow the event: Rules of the Supreme Court 1971 (WA), O 66 r 1(1). It is incumbent upon the unsuccessful party to satisfy the court that there are good reasons why it should not pay the other party's costs: Nikolaou v Papasavas, Phillips & Co (No 2) [1989] HCA 11; (1989) 166 CLR 394, 407.
The court may, in the exercise of its discretion, order that a successful party recover only a portion of its costs where that party has been unsuccessful in respect of certain discrete issues. But that should not be done as a matter of course. To embark as a general practice upon an analysis of which party was successful on each issue, or necessarily to deprive a successful party of some portion of its costs if it has lost on a particular issue, would be likely to add further uncertainty and complexity to the outcome of litigation, derogate from the prospect of settlement, and oblige the court to hear lengthy and frequent arguments in relation to costs as an additional burden on its resources and the costs of the parties: see MacKinnon v Petersen (Unreported, NSWSC, 19 April 1989) (Cole J); Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [67] - [68] (McHugh J). Litigation is time-consuming, expensive and burdensome enough already.
In addition, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risks of costs from canvassing all issues which might be material to the decision in the case: Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2002] FCA 282; NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 at [24].
In Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S), the position was put as follows:
"[T]he power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed, is properly exercised only where there are discrete and severable issues upon which the generally successful party has failed, and which have added to the cost of the proceedings in a significant and readily discernible way [7]." '
'In the absence of any special order
(a) where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought.'
The effect of O 66 r 2(a) is that a defendant is prima facie entitled to its costs on causes of action on which the plaintiff fails. However, such an order is not made as of course. The court looks at the realities of the case and attempts to do justice. Where all causes of action arise out of the one course of dealings with the same facts, there would usually be one order for the general costs of the action, 'moulded as necessary to ensure that, however rough and ready it may be, substantial justice is done': Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569, 574 - 575. That is the approach which I propose to take in relation to this action.
The following propositions, relevant to O 66 r 2(a), were stated by the Court of Appeal in Keet v Ward [2011] WASCA 139 [24]:
'(a) the expression "cause of action" in O 66 r 2(a) is a reference to a factual situation, the existence of which entitles the plaintiff to obtain a remedy: Letang v Cooper [1965] 1 QB 232 at 242 (Diplock LJ); Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569 at 572 (Anderson J);
(b) the rule does not provide an inflexible rule which prescribes a mandatory approach to the awarding of costs in cases where there are multiple causes of action. The opening words "in the absence of any special order" indicate that the court retains the discretion to make a special order departing from the rule in O 66 r 2(a): Kimpura Pty Ltd v JWH Group Pty Ltd [2004] WASCA 134 [12] - [15];
(c) however, where there are multiple causes of action and a party has succeeded on only one or some, the other party is prima facie entitled to costs on the others but the court will always attempt to do substantial justice in the circumstances: Permanent Building Society v Wheeler (No 2) (574 - 575) (Anderson J);
(d) it may not be appropriate to make a costs order in accordance with O 66 r 2(a) where there is in substance one contest, that is, where the causes of action arise from the one course of dealings, the one transaction or the same facts: Permanent Building Society v Wheeler (No 2) (574 - 575); R J Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2009] WASC 206 (S); Witcombe v Talbot & Olivier [No 2] [2009] WASC 173 (S) (Beech J).'
I also apply the following principles stated by the Victorian Court of Appeal in Chen v Chan [2009] VSCA 233 [10].
'(1) The general rule is that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where it has not succeeded on all heads of claim.
(2) The Rules of Court permit significant flexibility in determining questions of costs. In particular, the court is entitled to examine the realities of the case and will attempt to do 'substantial justice' as between the parties on matters of costs.
(3) Where there is a multiplicity of issues and mixed success has been enjoyed by the parties, a court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Generally, if such an order is made, it is reflected in the successful party being awarded a proportion of its costs but not the full amount.
(4) A court may, when fixing costs in a claim where there has been mixed success, take into account complications which it considers will arise in the taxation of costs, as part of its consideration of the overall interests of justice.
(5) Where a court determines to make an order apportioning costs, then it does so primarily as 'a matter of impression and evaluation', rather than with arithmetical precision, having considered the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied and the ambit of the submissions made, as well as any other relevant matter.
(6) Where a number of parties have had the same representation, there is a 'rule of thumb' as to the apportionment of costs, namely that, where some of those parties have been successful and others have not, each successful party is only entitled to his or her proportion of the costs incurred on behalf of all, plus the costs, if any, incurred exclusively on his or her behalf. The primary issue for determination in such a case is that of fairness as between the parties, having regard to the manner in which the trial, or appeal, has been conducted. (footnotes omitted)'
15 A Calderbank offer that provides an outcome for the recipient that is at least as favourable as the result of the trial may also be relied upon to justify an order for party-party costs. A finding that a Calderbank offer was unreasonably rejected, judged at the time of the offer, is not a precondition to the power to award party-party costs based on a Calderbank offer.7
The exercise of the costs discretion
16 I accept Mr Haseeb's submission that the starting point is that he is the successful party in the action. He successfully defended HSSD's claim for possession. While he failed on his primary claim under the 2004 Agreement, he successfully obtained an order for specific performance to enforce the 2009 Agreement. In ordinary circumstances, putting aside any offers of settlement, Mr Haseeb would be entitled to his costs, subject to a possible reduction of a portion of his costs to account for his failure on the issue of the 2004 Agreement.
17 However, in this case, Mr Haseeb's primary claim under the 2004 Agreement was founded on the deliberately false evidence of Mr Haseeb and his brother about that agreement, and in particular, the 2004 deed. I have made specific findings to that effect.8
18 I do not accept Mr Haseeb's submission that the evidence concerning the 2004 Agreement and the evidence concerning the 2009 Agreement was 'interconnected'. To the contrary, Mr Haseeb's two alternative claims were inconsistent. Moreover, no part of the evidence of Mr Haseeb or his brother supported the 2009 Agreement. My findings in relation to the 2009 Agreement were based upon the contemporaneous documents and those parts of Mr Hemat's evidence that I accepted.
19 The defendant's advancing of the claim of the 2004 Agreement, founded on evidence he knew to be false, is conduct deserving of sanction. Had the case been solely about whether the 2004 Agreement was made, I may well have ordered Mr Haseeb to pay costs on an indemnity basis.9
20 However, this action was not only about the 2004 Agreement. HSSD defended Mr Haseeb's claim in relation to the 2009 Agreement. The defence of that claim was a not insubstantial element of the trial, notwithstanding that the majority of the trial was occupied by issues relating to the 2004 Agreement. Mr Hemat gave evidence in defence of the claim based on the 2009 Agreement. I rejected important elements of his evidence in that respect.
21 In these circumstances, in my opinion, the substantial justice of the case favours an order that there be no orders as to costs, except in relation to the application to set aside default judgment, to which I will come.
Offers of settlement
22 I am not persuaded that any of the settlement offers made by the parties justify any different order for costs.
23 The offer of 16 May 2014 made by HSSD did not provide an outcome that was at least as favourable to Mr Haseeb as he ultimately obtained at the trial. At trial he obtained an order for specific performance involving payment by him of $270,000. The offer made by HSSD in May 2014 required him to pay an amount of up to $15,000 on top of the purchase price of $270,000.
24 Likewise, the offers made by Mr Haseeb in November 2014 do not sustain a favourable exercise of the costs discretion. The terms of those offers were, from the perspective of HSSD, unsatisfactorily silent or vague in significant respects. There was no specification of the price at which the property was to be sold, nor was anything said as to the timing or process of the sale.
25 Further, none of these offers made any positive provision for the costs of the action up to the point of the offer, providing only that each party bears its own costs. While, in the end, I have determined that no costs orders should be made, to the extent that the questions of whether rejection of the offer was unreasonable, the absence of a term of the offer providing any allowance for the costs of the recipient is a factor suggesting that the rejection of the offer was not unreasonable.
Application to set aside default judgment
26 The costs of Mr Haseeb's application to set aside default judgment were reserved.
27 Mr Haseeb was served with the writ pursuant to the orders for substituted service. In his affidavit in support of his application to set aside default judgment, he did not provide any reasonable explanation for his failure to file an appearance. Further, Mr Haseeb's affidavit in support of the application to set aside default judgment relied solely on the 2004 Agreement including the 2004 Deed, and did not refer to the 2009 Agreement.
28 In the circumstances, notwithstanding Mr Haseeb's submissions to the contrary,10 it is appropriate that Mr Haseeb pay the costs of the application to set aside default judgment.
Conclusion
29 For these reasons I order that:
(1) Mr Haseeb pay HSSD's costs of the application to set aside default judgment; and
(2) otherwise there be no order as to costs.
1Hemat Shir & Sayed Developments Pty Ltd v Haseeb [2014] WASC 485.
2 Affidavit of Christopher Michael Townsend sworn 21 January 2015 Annexure CMT1.
3 Defendant's submissions on costs dated 22 January 2015 [16].
4Singh v Kaur Bal [2011] WASC 303 (S) [9] - [15].
5Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 [16], [23], [28], [89] (Buss JA, Wheeler JA agreeing).
6Ford Motor Co [19].
7McKay v Commissioner of Main Roads [No 7] (S) [2011] WASC 223 [128].
8Hemat Shir & Sayed Developments Pty Ltd v Haseeb [48].
9 See Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32] (Newnes JA, Buss JA agreeing); Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] (Pullin JA & Kenneth Martin J).
10 Defendant's submissions on costs dated 22 January 2015 [32] - [34].
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