Inventure Partners P/L v Seeley International P/L (NO. 2) - [2009] SADC 35

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
INVENTURE PARTNERS P/L v SEELEY INTERNATIONAL P/L (NO. 2)
[2009] SADC 35
Judgment of Her Honour Judge McIntyre
30 March 2009
PROCEDURE - COSTS
Plaintiff seeks party/party costs. Defendant opposes this and seeks that plaintiff pay its costs or in the alternative that costs be awarded on the Magistrate's Court scale. Held: Plaintiff entitled to party/party costs on the District Court scale.
District Court Act 1991 s42(1); District Court Rules 2006 R263(1), R263(2), referred to.
Lovell v Lovell (1950) 81 CLR 513 at 532; Hughes v Western Australia Cricket Association Inc (1986) ATPR para 40-78; Cretazzo v Lombardi (1975) 13 SASR ; Forlyle Pty Ltd v Tiver & Anor SASC 464 at para 29; Calderbank v Calderbank (1975) 3 WLR 586, considered.

INVENTURE PARTNERS P/L v SEELEY INTERNATIONAL P/L (NO. 2)
[2009] SADC 35

On 24 March 2009 I delivered Reasons for Decision of Judgment on the plaintiff’s claim in respect of work performed for the defendant. The plaintiff’s claim in contract and promissory estoppel failed however I awarded the plaintiff the sum of $15,000 plus interest on a quantum meruit. I invited submissions on the question of costs and interest prior to entering judgment.
The plaintiff’s claim for interest has been agreed in the sum of $2,935. Accordingly the plaintiff is entitled to judgment in the sum of $17,935 inclusive of interest.
The plaintiff claims its costs on a party and party basis. The defendant resists this and contends that the plaintiff should pay its costs of action.
The starting point for consideration of this issue is s. 42(1) of the District Court Act 1991, which vests a wide, and unfettered discretion to award costs. The discretion must be exercised judicially.[1] Rule 263(1) of the District Court Rules 2006 (DCR) provides that, as a general rule, costs follow the event. None of the specific rules to the contrary outlined in DCR 263(2) apply in this matter. Nor has the defendant made an offer greater than the sum actually awarded to the plaintiff.
[1] Lovell v. Lovell (1950) 81 CLR 513 at 532
The basis of the defendant’s application, briefly stated, is two fold. First it is said that the defendant very largely succeeded in its defence in that it was successful on the primary aspects of the plaintiff’s claim and second that the plaintiff is disentitled to costs by reason of its conduct in failing to properly particularise its claim on a quantum meruit.
The plaintiff pursued the three causes of action, one in contract, one in promissory estoppel and one in quantum meruit. It succeeded on the third. It has long been recognised that a successful plaintiff may be deprived of costs where those costs relate to an issue on which the plaintiff has failed but equally it is true that parties who are successful are rarely successful on all aspects of their claim.[2]
[2] Hughes v Western Australia Cricket Association Inc (1986) ATPR para 40-748; Cretazzo v Lombardi (1975) 13 SASR
The contract and promissory estoppel claims were not severable components of the plaintiff’s case. It cannot be said that the trial or the pre-trial procedures would have been substantially, if at all, shortened if the quantum meruit issue had been the only issue. Much of the evidence relating to the discussions between the parties which was said to evidence the contract and the promissory estoppel claims would also have been required in respect of the quantum meruit claim. The plaintiff did not act unreasonably in pursuing its claim and canvassing all three issues. I do not consider that this, of itself, is a reason for departing from the usual order that the plaintiff have its costs of the action.
The second argument advanced by the defendant is an argument that the plaintiff should be deprived of its costs, and costs awarded to the defendant, because of the manner in which it conducted the claim.
The Full Court of the Supreme Court of South Australia stated the relevant concept as follows:
Misconduct in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the manner solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.[3]
[3] Forlyle v. Tiver (2007) SASC 464 at para. 29
None of these matters apply in this matter. In essence the misconduct is stated to be the plaintiff’s failure to supply an itemised or hourly rate account to the defendant. It is said that, if the plaintiff had formulated a proper account for its work and had not chosen to run its case in a way that avoided providing such an account, the defendant would have been better placed to make appropriate offers of settlement. As indicated in the reasons for decision, this was not the plaintiff’s general charging practice and accordingly it was not surprising that there was limited information on this topic. I do not think that the plaintiff’s conduct in not precisely quantifying its claim in quantum meruit, however desirable that might have been, can be termed misconduct in the relevant sense. If the defendant was of the view that the plaintiff’s particulars of claim or its discovery was inadequate to properly assess the plaintiff’s claim then the defendant had remedies under the Rules.
The defendant’s position was not unusual or rendered particularly difficult by the conduct of the plaintiff. Assessment of appropriate levels at which to make offers is often fraught with difficulty. The defendant has filed an affidavit in support of its contention outlining the offers that it made. The first offer was made pursuant to the principles established in Calderbank v Calderbank.[4]The second offer was made under Rule 187[5]. The first offer was in the sum of $4,979 inclusive of costs and the second offer was in the sum of $7,800 plus costs on the Magistrates Court scale. The highest offer was approximately half the sum ultimately awarded.
[4] (1975) 3 WLR 586
[5] District Court Rules 2006
The defendant’s further contention was that to the extent that costs are awarded against the defendant those costs should be taxed on the appropriate scale in the Magistrates Court. The plaintiff recovered $17,935 inclusive of interest. This was within the jurisdiction of the Magistrates Court. The plaintiff avoided being deprived of costs by reason of DCR 263(2)(h). I consider that that plaintiff was justified in bringing the action in the District Court due to the complexity of the issues involved and the possibility that the assessment of damages would be in a range above the jurisdictional limit of the Magistrates Court. I do not therefore consider that the plaintiff should be limited to costs taxed on the appropriate scale in the Magistrates Court.
Accordingly I order that the plaintiff have its costs on the District Court scale on a party/party basis.