Junius & Kumar v Messenger Press & Ors No. Scgrg-94-318 Judgment No. S199

[1999] SASC 199

JUNIUS & KUMAR  v  MESSENGER PRESS & ORS
[1999] SASC 199

Application for Costs
Nyland J

1. This is an application for an order for costs on behalf of the plaintiffs following judgment entered in their favour on 16 March 1999.  On that date I entered judgment for the plaintiffs against the defendants in the sum of $405,000.  On 17 March 1999, I made a further order that interest accruing on that judgment be fixed in the agreed sum of $105,300, making a total award against the defendants of $510,300.

2. Supreme Court Rule 41.04 provides:

   “Plaintiff bettering offer

   Where a defendant has not accepted a plaintiff’s offer made pursuant to this Rule and the sum recovered or, as the case may be, the proportion of the debt or damages or the relief recovered by the plaintiff is equal to or greater than that contained in the plaintiff’s offer, the Court, unless it thinks proper to order otherwise, shall order the defendant to pay the whole of the plaintiff’s costs of action to be taxed as between solicitor and client.”

3. In this case, I am told that the plaintiffs filed an offer pursuant to SCR 41 on 29 April 1997 in the sum of $140,000.  That offer was withdrawn on 16 September 1997 and replaced with an offer of $200,000.  The trial commenced on 3 November 1997.  The plaintiffs therefore seek an order that the plaintiffs receive their costs on a solicitor client basis for the whole of the action.

4. The defendants do not dispute the sequence of events as outlined by the plaintiff.  The defendants have, however, submitted that the court has a discretion as to whether or not in a particular case it will make an order for costs in accordance with Rule 41.04.  Mr Harris for the defendants submitted that in this case, although the ultimate findings were adverse to the defendants, there were aspects of the case which occupied a significant amount of time in respect of which I made express adverse findings against the plaintiffs.  On that basis, the defendants, not only resist the order for costs on a solicitor client basis, but also claim an order for costs against the plaintiff on those issues on which they have been successful.  Mr Harris specifically adverted to such topics as “the P67 affiliation issue”, “the use of false titles”, “the non-profit organisation” and the evidence as to the experience of the plaintiff Kumar.  He referred to the commentary in Lunn with respect to SCR 101 at p10,707 in which the learned commentator discusses the circumstances in which a successful plaintiff may be deprived of costs.  One of those situations is that which relates to the costs of issues on which a plaintiff has failed.  The commentary refers to Cromer v Rickards Tivoli Theatres Ltd [1921] SASR 325 and Inn Leisure Industries Pty Ltd v McCloy Pty Ltd (No 2) (1991) 28 FCR 172. In the latter decision, French J, after referring to the general discretion under s43(2) of the Federal Court of Australia Act 1976 to award costs, said (at 173):

   “As Toohey J said in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134 at 48,136, the discretion must be exercised judicially. His Honour referred in a summary way to the effect of decisions of Australian and English courts and made the following points:

   (1).... Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.

   (2)Where a litigant has succeeded only upon a portion of his claim the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.

   (3).... A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them.  In this sense, issue does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.

   Those principles are subject to the caveat referred to by his Honour and expressed by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 12, where it was said that trials occur daily in which a party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law:

   ‘The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues however doubtful which might be material to the decision of the case.  There are of course many factors affecting the exercise of the discretion as to costs in each case including, in particular, the severability of the issues and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issue upon which he may have succeeded based merely on his success in those particular issues.’”

5. Mr Heywood-Smith relied on Hughes and Cretazzo to oppose the orders sought by the defendants.  He spent a considerable period of time going through the pleadings in order to define “the issues” by reference to those pleadings.  He then submitted that as the plaintiffs had ultimately been successful with respect to their claim they should not be penalised in any way with respect to costs.

6. True it is in this case that the plaintiffs were ultimately successful but it seems to me that to analyse the “issues” by reference to the pleadings is somewhat inconsistent with the comments of Bray CJ in Cretazzo wherein he said (at 12):

   “The next matter is this.  A successful party who has failed on certain issues may well not only be deprived of his own costs of those issues, but ordered in addition to pay his opponent’s costs of them, and in this context ‘issue’ does not mean a precise issue in the technical pleading sense, but any disputed question of fact or, in my view, of law: Foster v Farquhar [1893] 1 QB 564, per Bowen LJ, as he then was, at p570. In fact in that case the plaintiff, who succeeded to a substantial extent, was deprived of his costs and ordered to pay the defendant’s costs in relation to certain specific disputed items of special damage on which he failed.” (emphasis added)

7. In my view the situation which has arisen in this case is akin to that which arose in Cretazzo.  I have found that the plaintiffs have not been completely frank with the court as to some issues and they have exaggerated with respect to others.  In particular, the issue of P67, which was a topic relevant to the issue of affiliation, occupied a substantial part of the trial.  As Mr Harris pointed out, this topic was canvassed over many days and some 400 pages of transcript. 

8. I have finally concluded therefore that this is a case in which there should be some costs order against the plaintiffs to reflect the issues upon which the defendants can be described as having succeeded, notwithstanding the ultimate judgment in favour of the plaintiffs.  I propose, however, to make only one order for costs, which will be in favour of the plaintiffs, which will reflect the following matters:

   (a)     The plaintiffs’ entitlement to costs pursuant to SCR 41.04;

   (b).... The deprivation of costs to the plaintiffs on those issues on which the defendants have succeeded; and

   (c)The plaintiffs’ liability for costs to the defendants with respect to those matters.

9. I therefore, in the exercise of my discretion, make an order that the defendants pay 60% of the plaintiffs’ costs of and incidental to the whole of the action as may be agreed or taxed in default of agreement, such costs to be taxed as between solicitor and client.