King v Ombudsman (No 2)

[2019] SASC 153

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

KING v OMBUDSMAN & ANOR (No 2)

[2019] SASC 153

Judgment of The Honourable Justice Kelly

23 August 2019

ADMINISTRATIVE LAW - JUDICIAL REVIEW

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - PARTIES AND NON-PARTIES - COSTS IN PROCEEDINGS WHERE MULTIPLE PARTIES

Costs application.

Where plaintiff’s application for judicial review was dismissed – where first defendant seeks its costs of and incidental to the proceedings on a party and party basis – where second defendant seeks its costs of and incidental to the proceedings on an indemnity basis.

Held:

1.       The first and second defendants are entitled to recover their costs of, and incidental to, the proceedings on a party and party basis.

2.       In the absence of agreement, those costs are to be taxed.

Ombudsman Act 1972 (SA), referred to.
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, applied.
McGovern v Ku-ring-gai Council (2008) 72 NSWLR 504; Parabanks Shopping Centre Pty Ltd v City of Salisbury (No 2) [2013] SASC 204, distinguished.

KING v OMBUDSMAN & ANOR (No 2)
[2019] SASC 153

Civil

1. KELLY J:             In this matter, the second defendant, Trevor Adamson, seeks an order that the plaintiff, Richard King, pay his costs of and incidental to these proceedings on an indemnity basis.

2. The first defendant seeks its costs on a party and party basis.

3. The plaintiff, as the unsuccessful party, acknowledges his obligation to pay costs, but argues that the costs awarded should not exceed the amount payable on a party and party basis if the defendants had employed the same legal representatives.

4. The plaintiff’s submission is based on a New South Wales decision in the Court of Appeal, in McGovern v Ku-ring-gai Council,[1] which was cited with approval by Blue J in Parabanks Shopping Centre Pty Ltd v City of Salisbury (No 2).[2]

   [1] (2008) 72 NSWLR 504, 551-552 [226]-[228].

   [2] [2013] SASC 204, 6 [23].

5. Both matters referred to by the plaintiff’s counsel involved applications to quash development consents given by councils.  I do not consider that either of those authorities have any direct relevance to the context in which the current matter was litigated.

6. In the first place, it is apparent that there was a division of responsibility between the first and second defendants in their conduct of the matter.  The second defendant’s role in the proceedings was, and remained, limited. 

7. At a directions hearing on 6 July 2018, counsel then acting for the second defendant, indicated to the Court and to the parties, that the second defendant proposed to play a very limited role in the proceedings and abide the outcome.

8. The second defendant eventually filed a response to the plaintiff’s application for judicial review on 3 August 2018 which substantially adopted and replicated the first defendant’s response to the plaintiff’s application.

9. At a further directions hearing before another Judge on 24 August 2018, the second defendant again indicated that he took no position about the plaintiff’s interlocutory application seeking an interlocutory injunction to restrain the first defendant, the Ombudsman, from any further investigation or consideration in respect of the 2016 investigation.  He thereafter took no active part in that application.

10. On 20 September 2018, counsel then acting for the second defendant again indicated that any response by the second defendant to the third statement of grounds would be minimal. 

11. Although the second defendant adopted a more active role closer to the hearing, particularly in relation to the allegation of fraud, ultimately, the first defendant had the carriage of the bulk of oral argument and witness examination.

12. Furthermore, while the two defendants were concerned to uphold the validity of the Ombudsman’s first report and to ensure that the 2017 investigation be allowed to continue, each defendant had different reasons for participating in the hearing.

13. The plaintiff’s pleadings raised significant issues of construction about the Ombudsman Act 1972 (SA) and the availability for prerogative relief against the Ombudsman.

14. The second defendant had a particular personal interest in responding to allegations of fraud made against him by the plaintiff.  In the third statement of grounds, the plaintiff alleged that both the plaintiff and the first defendant, but not the second defendant, were the victims of the fraud.  The allegations of fraud against the second defendant were prosecuted vigorously by the plaintiff who at no stage resiled from those allegations, notwithstanding an abundance of material pointing to the contrary.

15. There was always a potential for conflict of interest to arise, although in the end, no such conflict did in fact arise.

16. For the reasons I have outlined above, I consider that the second defendant’s application for indemnity costs is not without merit.  However, in all of the circumstances, I do not consider that I should exercise the discretion to award indemnity costs against the plaintiff. 

17. In this regard, I accept and apply the principles set out in Colgate Palmolive Co v Cussons Pty Ltd.[3]

    [3] (1993) 46 FCR 225, 233.

18. I am satisfied, however, that it is appropriate that each of the defendants be entitled to recover their costs of, and incidental to, the proceedings on a party and party basis.

19. Therefore, there will be an order that each of the first and second defendants are entitled to recover their costs of, and incidental to, the proceedings on a party and party basis.  In the absence of agreement, those costs are to be taxed.