Hemer Pty Ltd v Benni (No 2)

[2010] SASC 322

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

HEMER PTY LTD v BENNI & ORS (No 2)

[2010] SASC 322

Judgment of The Honourable Justice Vanstone

24 November 2010

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS

Application by defendants for order that costs be paid on indemnity basis - application dismissed.

Held:  Order for payment of defendants' costs on party and party basis only.

Moyes & Anor v J & L Developments Pty Ltd & Anor (No 3) [2007] SASC 268; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, considered.

HEMER PTY LTD v BENNI & ORS (No 2)
[2010] SASC 322

Civil

1. VANSTONE J:     On 6 August 2010 I gave judgment in favour of the defendants in this matter and dismissed the plaintiff’s summons.

2. The defendants now seek an order that their costs be paid by the plaintiff on an indemnity basis.  In support of the application they point to several factors.  They include that, at various times prior to trial, offers to settle the matter were made on terms more favourable than the plaintiff’s position after the judgment;  that an argument based on suggested election or waiver was mounted by the plaintiff during the trial, but was without substance;  that the plaintiff, although at trial claiming that he was always prepared to pay a proportion of rates and taxes on a reasonable basis, had in fact failed to make any payment until immediately before trial.  They also contended that the proceedings were taken for an ulterior motive, namely to exert pressure on the defendants to relinquish some of their land.

3. Generally, costs are awarded on a party and party basis.  Circumstances can justify a departure from the ordinary rule.  Some special or unusual feature in the case can justify such a departure.  Some examples of what can constitute a “special or unusual feature” were set out by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234. Those circumstances generally relate to the behaviour during the trial of the unsuccessful party, for instance, behaviour which unnecessarily or unreasonably prolongs the trial. Another example is a case in which an offer made in compliance with the rules of court is not bettered at trial. Yet another example is a case in which the taking of the proceedings amounts to an abuse of process, such as where proceedings were taken for an ulterior motive. The category of cases which may justify departing from the usual rule is not closed.

4. In this matter counsel for the defendants, Mr Blight, has mounted a substantial argument in support of his contention that the plaintiff’s conduct in a number of respects, taken together, justifies an order for indemnity costs.  Most of the submissions relate to the plaintiff’s conduct prior to trial.

5. I am sympathetic to the defendants’ arguments.  Mr Horbelt’s conduct prior to trial was, in my view, rude and bullying.  However, he was entitled to come to the court to seek relief against forfeiture.  I cannot say that he had an ulterior motive in doing so.  As Debelle J said in Moyes & Anor v J & L Developments Pty Ltd & Anor (No 3) [2007] SASC 268 at [8]:

   An award of costs is an award of compensation for the expense incurred in prosecuting litigation.  It is not a means of punishing that person for wrongful conduct outside the litigation.

   While I acknowledge that several of Mr Blight’s arguments have some force, I am not satisfied that this is an appropriate case in which to depart from the usual rule.

6. Accordingly, the order I make is that the plaintiff is to pay the costs of the defendants on a party and party basis.