Lyons v Legalese Pty Ltd (No 2)

[2017] SASC 2

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

LYONS v LEGALESE PTY LTD & ORS (No 2)

[2017] SASC 2

Reasons for Decision of The Honourable Justice Hinton

13 January 2017

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PAYMENT INTO COURT, AND OFFERS TO SETTLE OR CONSENT TO JUDGMENT

Reasons for decision on an application for costs of action.

The plaintiff succeeded in obtaining an order restraining the first and third defendants from acting for their client, the second defendant, in an inferior court.

The plaintiff sought an order for costs of the application on the basis that there was no reason to depart from the general rule that costs follow the event.

The first and third defendants contended that there be no order as to costs, on the ground that an offer was put approximately two weeks prior to trial, and that the litigation may be characterised as public interest litigation. In the alternative, the first and third defendants sought a reduction in the award of costs on the basis that the plaintiff was not successful on all issues and no real need existed for the plaintiff to have the benefit of the assistance of senior and junior counsel.

Held:

1.       There is no reason to depart from the general rule that costs follow the event. The plaintiff is awarded the costs of and occassioned by the application.

2.       The proceedings cannot be characterised as public interest litigation.

3.       It was not unreasonable for the plaintiff to instruct senior and junior counsel.

Supreme Court Act 1935 (SA) s 40, s 72; Supreme Court Civil Rules 2006 (SA) r 263, referred to.
Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 105; Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492; Oshlack v Richmond River Council (1998) 193 CLR 72; Norbis v Norbis (1986) 161 CLR 513; Latoudis v Casey (1990) 170 CLR 534; Cachia v Hanes (1994) 179 CLR 403; Knight v F P Special Assets Ltd (1992) 174 CLR 178; Mericka v Rathbone (2016) 125 SASR 563; Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261; Stanley v Phillips (1966) 115 CLR 470; Cretazzo v Lombardi (1975) 13 SASR 4, considered.

LYONS v LEGALESE PTY LTD & ORS (No 2)
[2017] SASC 2

Civil

HINTON J.

Introduction

1. On 5 October 2016 I ordered that Legalese Pty Ltd and the partnership, P A Scragg & R V Scragg, and any legal practitioner employed by them or acting as agent for them, be restrained from acting for Kathy Morris (nee Butcher) in Action No AMCCI-14-3641 in the Magistrates Court of South Australia. On 18 October 2016 I ordered that Legalese Pty Ltd and the partnership, P A Scragg & R V Scragg, pay Ms Lyons’ costs of and occasioned by the application that lead to my order of 5 October 2016. My reasons for making the latter order, which should be read against the background of my judgment given on the substantive application,[1] follow.

   [1]    Lyons v Legalese Pty Ltd & Ors (2016) 126 SASR 232.

   The applicable principles

2. The power vested in this Court to award costs is contained in s 40 of the Supreme Court Act 1935 (SA) (SCA). Section 40(1) provides:

   40—Power of court with regard to costs

   (1)   Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.

3. Nothing express in the SCA cuts down the breadth of that discretionary power as it applies to these proceedings. That said, the power is also expressed as being subject to the rules of court. In this connection rules of court relevant to the exercise of the discretion contained in s 40(1) SCA have been made pursuant to the rule making power contained in s 72 SCA. Relevantly, r 263 of the Supreme Court Civil Rules 2006 (SA) provides:

   263—Court's discretion as to costs

   (1)     As a general rule, costs follow the event.

   (2)     The general rule is, however, subject to specific rules to the contrary1 and also to the following exceptions (which apply subject to the Court's order to the contrary)—

   (a)the costs of an amendment are to be awarded against the party making the amendment;

   (b)the costs of an application to extend time fixed by or under these Rules are to be awarded against the applicant;

   (c)the costs of an application that should have been (but was not) made at an earlier stage of the proceedings are to be awarded against the applicant;

   (d)the costs of an adjournment arising from a party's default are to be awarded against the party in default;

   (e)the costs of proving a fact or document that a party has unreasonably failed to admit are to be awarded against that party;

   (f)in an action founded on a claim for defamation, general costs of action are not to be awarded in favour of the successful plaintiff unless the damages exceed $50,000;

   (g)in an action founded on a claim for damages or any other monetary sum (other than a claim for defamation), general costs of action are not to be awarded in favour of the successful plaintiff unless the amount awarded exceeds $120,000.

   Example—

   1For example, the special provisions as to costs where a party fails to accept an offer of settlement and the amount obtained by judgment does not exceed the amount of the offer (see rule 188).

   (3)     In exercising its discretion, the Court may (subject to any other relevant rule) have regard to any offer to consent to judgment or other attempt to settle the action or an issue involved in the action.

   (4)     In exercising its discretion with regard to counsel fees, the Court will have regard to the importance of the case, its difficulty and the time reasonably occupied by counsel.

   (5)     If an action is transferred or removed into the Court, the Court will not disturb orders for costs made in the other court or tribunal unless there is good reason to do so.

4. In Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors the Full Court held that r 263 should not be construed as fettering the discretion conferred by s 40 SCA.[2] Stanley J, with whom Gray and Sulan JJ agreed, said r 263:[3]

   …is to be construed as identifying the general approach to awarding costs and identifying specific exceptions to the general approach, but it is not to be construed as defining the exceptions to the general rule exhaustively.

   (citation omitted).

   [2] [2013] SASCFC 105.

   [3]    Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 105 at [58].

5. In the light of this the starting position is that s 40 SCA grants this Court a discretion confined only by subject matter, scope and purpose.[4] Its antecedents can be traced to the Supreme Court of Judicature Act 1890 (UK) with the closing words of the section having been inserted “to ensure that the court has, so far as possible, freedom of action”.[5] The breadth of such power was commented upon in Norbis v Norbis by Mason and Deane JJ.[6] Their Honours said:[7]

   The point of preserving the width of the discretion which Parliament has created is that it maximizes the possibility of doing justice in every case. But the need for consistency in judicial adjudication, which is the antithesis of arbitrary and capricious decision-making, provides an important countervailing consideration supporting the giving of guidance by appellate courts, whether in the form of principles or guidelines.

   [4]    Water Conservation and Irrigation Commission (NSW) vBrowning (1947) 74 CLR 492 at 505 (Dixon J).

   [5]    Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965 at 975 quoted with approval in Oshlack v Richmond River Council (1998) 193 CLR 72 at [32] (Gaudron and Gummow JJ).

   [6] (1986) 161 CLR 513.

   [7]    Norbis v Norbis (1986) 161 CLR 513 at 519; see also, Latoudis v Casey (1990) 170 CLR 534 at 541-2 (Mason CJ), 558 (Dawson J),

6. It is settled that costs are compensatory in nature and are awarded “to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings” and not by way of punishment of the unsuccessful party.[8] Three points should be made here; first, the party in whose favour an award of costs is made is compensated for work done or expenses incurred by their lawyers or persons working for their lawyers and not for their loss more generally.[9] Second, whilst it is true that a costs order is not intended to punish, costs may be awarded on a ‘solicitor and client’ or ‘indemnity basis’ if the unsuccessful party engages in some “relevant delinquency”.[10] Costs awarded on a ‘solicitor and client’ or ‘indemnity basis’ result in the successful party being “more fully or adequately compensated”.[11] Third, the power contained in s 40 SCA is not confined to making an award of costs against a party. The power may be exercised adverse to a non-party.[12]

   [8]    Latoudis v Casey (1990) 170 CLR 534 at 543 (Mason CJ), 563 (Toohey J), 566-7 (McHugh J); Cachia v Hanes (1994) 179 CLR 403 at 410 (Mason CJ, Brennan, Deane, Dawson and McHugh JJ); Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J).

   [9]    Cachia v Hanes (1994) 179 CLR 403 at 410 (Mason CJ, Brennan, Deane, Dawson and McHugh JJ).

   [10]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [44] (Gaudron and Gummow JJ).

   [11]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [44] (Gaudron and Gummow JJ).

   [12]   Knight v F P Special AssetsLtd (1992) 174 CLR 178.

7. Once it is accepted that an order for costs is compensatory in nature two things follow. First, the outcome of the proceedings becomes the primary consideration in the exercise of the discretion as it identifies who is to be compensated.[13] Second, the general rule subject of r 263(1) necessarily becomes “a relevant consideration in any exercise of the discretion in relation to costs”.[14]

   [13]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [66] (McHugh J).

   [14]   Mericka v Rathbone (2016) 125 SASR 563 at [172] (Doyle J).

8. Fairness and policy dictate that it is the successful party who ordinarily should be compensated.[15]  An order in terms of the general rule is ordinarily fair because if the proceedings had not been brought the successful party would not have incurred costs.[16] From a policy perspective the sobering effect that the potential liability for costs has on would be litigants contributes to discouraging unnecessary litigation. That, in turn, eases the burden on scarce judicial resources, and prevents angst more generally.[17] The same sobering effect encourages responsibility in the conduct of litigation. This is not to contend that a court in exercising the discretion contained in s 40 SCA should factor in some sort of general deterrent component. But, as McHugh J commented in Oshlack v Richmond River Council, it highlights the risk associated with the “[l]arge scale disregard of the principle of the usual order as to costs”.[18]

   [15]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J).

   [16]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J).

   [17]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [68] (McHugh J).

   [18]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [68].

9. Importantly, the general rule is not absolute. There is no absolute rule.[19] The discretion must be exercised judicially and not capriciously, having regard to all relevant factors, and upon the facts leading up to and connected with the litigation, and, in the light thereof, the application of the general rule is considered.[20]

   [19]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [34] (Gaudron and Gummow JJ).

   [20]   Latoudis v Casey (1990) 170 CLR 534 at 557 (Dawson J).

10. As indicated the general rule is underpinned in part by the notion of fairness. Fairness may provide reason to depart from the general rule in whole or in part, and, conceivably to award the unsuccessful party its costs. Thus, whether it is fair to award the successful party costs may depend upon that party’s conduct of the matter. In this regard in Oshlack v Richmond River Council McHugh J listed examples of circumstances where a successful party engages in conduct in prosecuting a matter that may disentitle it to the benefit of the general rule in whole or in part. He said:[21]

    … 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 matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.

    (citations omitted).

    [21] (1998) 193 CLR 72 at [69].

11. The specific rules in r 263(2) reflect the same rationale.

12. Fairness may also have the consequence that the successful party be disentitled to a portion of their costs in reflection of that party having failed in relation to a particular cause of action or discrete issue despite succeeding overall. This sort of situation was the subject of comment in Cretazzo v Lombardi where Bray CJ said:[22]

    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, per Bowen L.J., as he then was, at p. 570. 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. Moreover it has been held by the House of Lords that the support of an extravagant claim by fraudulent acts or evidence may be good cause for depriving a successful plaintiff of his costs: Huxley v West London Extension Railway Company.

    (citations omitted).

    [22]   Cretazzo v Lombardi (1975) 13 SASR 4 at 12; see also A, DC v Prince Alfred College Inc (No 2) [2016] SASCFC 27 at [5]-[12] (The Court); Jackson & Anor v Abram & Anor(No 2) [2016] SASCFC 36 at [3] (The Court).

13. In these sorts of circumstance costs may be apportioned between the parties. Such apportionment is itself a matter of discretion where “[m]athematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.”[23]

    [23]   Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 (Gummow, French and Hill JJ).

14. There are two further factors relevant to the exercise of the discretion that have been raised in this matter. The first concerns the power of the Court to deny the successful party costs for both senior and junior counsel or for more than one counsel. This qualification may also be seen as derived from the notion of fairness in that if the forensic contest did not warrant two counsel it would be unfair to visit upon the unsuccessful party the cost of two counsel. The factors relevant to determining whether a successful party should be denied costs for two or more counsel were identified by Barwick CJ in Stanley v Phillips.[24] The Chief Justice said:[25]

    The question for the taxing master is whether the case by reason of any of its features, the volume of material to be handled, the number or character of the witnesses to be examined, the nature or extent of the cross-examination required, the anticipated length of the case, the complexity of its issues of fact or of law, the extent of the preparatory research of fact or of law to be undertaken, the involvement of charges of fraud, or other serious imputations of personal reputation or integrity, the complexity of the required presentation and so on, make it reasonably necessary or proper that the services of two counsel be engaged in order that the court may do justice between the parties.

    [24] (1966) 115 CLR 470.

    [25]   Stanley v Phillips (1966) 115 CLR 470 at 479-80.

15. The same sort of factors are relevant to determining whether it is fair in the relevant sense that the successful party be awarded costs for both senior and junior counsel.

16. The second concerns what has been characterised as public interest litigation. Use of that label is fraught with danger.[26] The concept includes litigation that concerns the power of the state to affect rights, entitlements or interests, the outcome of which has ramifications extending beyond the parties and to a broad sector of the public. In such circumstances the importance of the resolution of the issue in the interests of the public more broadly may be a factor taken into account in determining whether to burden the unsuccessful party with the entirety of a costs order, or at all.[27] In an age where public authorities are no strangers to litigation, the mere fact that the exercise of the power of the state is under consideration, or an agency or instrument of the state is involved, will not suffice to warrant characterising a matter as public interest litigation for costs purposes.

    [26]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [75] (McHugh J).

    [27]   Oshlack v Richmond River Council (1998) 193 CLR 72 at [49] (McHugh J), [134] (Kirby J).

17. The cases also suggest that public interest litigation includes cases that resolve a significant number of other disputes concerning the exercise of the power of the state or the application of a legislative regime, that are pending or anticipated, or, concern a public function the performance of which, in the public interest, should not be influenced by the pressure of costs implications.

18. A final example may be described as test cases; those that involve a question of law of general public importance that has not been resolved and will be of far reaching effect.

19. The characterisation of the litigation as being in the public interest will not automatically insulate a party from an award of costs against them.[28] Much will depend upon the context in which the litigation arises.

    [28]   See, for example, Latoudis v Casey (1990) 170 CLR 534.

    Attempts made to prevent the litigation

20. In support of Ms Lyons’ application for costs I received the sixth affidavit of Fiona Elizabeth Brady, sworn 17 October 2016, and the exhibits referred to therein. That affidavit was sworn with r 263(3) in mind. It reveals that prior to the institution of these proceedings Ms Lyons’ solicitors wrote to Peter Scragg & Associates on 23 May 2016. That letter was sent by email and advised of the intention to institute these proceedings for the purposes of obtaining an order that Peter Scragg & Associates be restrained from acting further on behalf of Ms Morris in Magistrates Court Action 3641 of 2014. The letter further advised of the intention to file these proceedings on the afternoon of the following day. The letter made plain that it was sent in order that Peter Scragg & Associates have the opportunity to take steps to cease acting prior to the proceedings being filed.

21. It is to be recalled that this letter was written after Ms Lyons’ counsel had applied in the Magistrates Court for an order restraining Peter Scragg & Associates from continuing to act in the proceedings, after the Magistrate ruled that she did not have power to entertain such application but nonetheless agreed to adjourn the matter in order that Ms Lyons could approach this Court for the order she sought, and after the Magistrate had intimated that the application was not without merit.[29] It is also to be recalled that the application made in the Magistrates Court was not the first time that the solicitors for Ms Lyons had raised with Peter Scragg & Associates the appropriateness of the firm continuing to act for Ms Morris in circumstances where an extension of time was to be sought on bases including solicitor error. Ms Lyons’ solicitors first advised of an intention to seek orders restraining Peter Scragg & Associates from acting further due to Ms Morris’ reliance on solicitor error in seeking an extension of time by letter dated 4 May 2016 and had foreshadowed the same in a letter of 2 May 2016.[30]

    [29]   Lyons v Legalese Pty Ltd& Ors (2016) 126 SASR 232 at [37]-[40].

    [30]   Lyons v Legalese Pty Ltd& Ors (2016) 126 SASR 232 at [29] and [35].

1. Counsel for Peter Scragg & Associates attempted to settle these proceedings. By email dated 12 July 2016 he indicated that his client was prepared to cease acting for Ms Morris upon giving whatever undertakings were necessary, provided that the parties bear their own costs of the proceedings in this Court, and provided that the costs of the adjournment in the Magistrates Court be costs in the cause. That offer was rejected. A counter offer was made by Ms Lyons. The counter offer required Peter Scragg & Associates to consent to an order being made by this Court restraining the firm from acting further and that the firm pay Ms Lyons’ costs of instituting the proceedings in this Court on a party/party basis. It was appropriate, Ms Lyons’ solicitors contended, that her costs of instituting the proceedings in this Court be paid bearing in mind the opportunities given to Peter Scragg & Associates to cease acting prior to the proceedings being instituted. In the alternative it was suggested that Peter Scragg & Associates submit to an order restraining them from acting but leave the issue of costs to be determined by this Court.

2. This was not the only attempt to resolve the matter. By letter dated 12 May 2016, Peter Scragg & Associates offered to create a “Chinese Wall” separating Rosita Scragg, who it was anticipated would be called to give evidence as part of Ms Morris’ case on her application for an extension of time, from the remaining members of the firm for the duration of the trial.[31] That proposal was rejected.

   [31]   Lyons v Legalese Pty Ltd& Ors (2016) 126 SASR 232 at [41]-[42].

   Submissions

3. Ms Lyons submitted that there was no reason why in this case the general rule should not be applied.

4. In reply Peter Scragg & Associates contended that no order for costs should be made for two reasons. First, Ms Lyons could have avoided much of the costs incurred had the offer contained in the letter of 12 July 2016 been accepted. Second, the litigation may be characterised as public interest litigation with the result that Peter Scragg & Associates should not be expected to shoulder the burden of costs where the issue to be determined is one the fruits of which will be widely shared. It was added that in the alternative the same two reasons justified a reduction in an award of costs otherwise considered appropriate. Further reductions should also be made, it was contended, on the basis that Ms Lyons did not succeed on all issues and no real need existed for her to have the benefit of the assistance of senior counsel in addition to junior counsel.

5. The contention that Ms Lyons did not succeed on all issues focuses upon that limb of Ms Lyons’ case in this Court to the effect that Peter Scragg & Associates had conducted the Magistrates Court proceedings on behalf of Ms Morris in a manner at odds with what was properly to be expected of the disinterested practitioner and in pursuit of its own interests. I dealt with this limb of Ms Lyons’ case at some length in my reasons.[32] I was not persuaded that Mr Scragg and Peter Scragg & Associates had, since filing the statement of claim and prior to receiving Allianz’s letter of 10 March 2015, acted in the conduct of Ms Morris’ claim in furtherance of their own interests. I was satisfied, however, that Mrs Scragg and Peter Scragg & Associates had an interest in the outcome of Ms Morris’ application for an extension of time distinct from their interest in supporting the success of their client by the discharge of their professional skill and duties in the action.

   [32]   Lyons v Legalese Pty Ltd& Ors (2016) 126 SASR 232 at [132]-[149].

   Consideration

6. I do not think the rejected offer of 12 July 2016 provides reason to divert from the general rule. Bearing in mind the notice that Peter Scragg & Associates had of the intention to pursue these proceedings, including the stipulation of a day upon which they would be instituted, and the failure by Peter Scragg & Associates to act before the cost of instituting the action was incurred, it is understandable that Ms Lyons’ solicitors did not accede to that offer. Whilst the benefits of requiring Peter Scragg & Associates to submit to a consent order of this Court, enforceable by this Court, as opposed to undertakings given between practitioners, may be arguable, cost had been incurred by reason of the refusal on the part of Peter Scragg & Associates to cease acting prior to that time. By 12 July 2016 such costs extended beyond those incurred in drawing and engrossing the initiating documentation and supporting affidavits to the attendance at court on two occasions and the preparation of a notice of contentions, an amended notice of contentions and written submissions. This incursion of such costs by Ms Lyons’ lawyers would have been plain to Peter Scragg & Associates. The rejection of the counter offer bespeaks an intent to run the risk in this Court of an unfavourable outcome.

7. The characterisation of these proceedings as public interest litigation was never fully explained. It was somehow suggested to be linked to the Motor Accident Commission’s desired approach to cases such as this. In my view these proceedings cannot be characterised as public interest litigation in the sense referred to above. Nothing in the resolution of Ms Lyons’ application determines more generally questions as to rights, entitlements and interests arising under or affected by the exercise of the power of the state, or impaired in some way by statute. There is no suggestion of other cases the resolution of which are awaiting the outcome of this matter. Nor is there any ‘public power’ exercised in this case which, it could be argued, should not be subject to the chill of costs implications. This case does not bear the hallmarks of a test case that will resolve issues in dispute in other cases or more generally. Lastly, the principles applied in this case are not novel.

8. I also reject the contention that Ms Lyons should not be entitled to an award of costs that includes the costs of senior counsel. The prosecution of the application entailed challenging the conduct and approach of an established law firm the principal of which, Mr Scragg, is a lawyer of significant experience. It is both understandable and reasonable that confronted by the prospect of having to challenge the professional conduct of experienced practitioners, particularly in cross-examining Mr Scragg, that Ms Lyons would seek the experience of senior counsel. I do not think doing so should be considered as, in effect, a substitute for junior counsel. The availability to senior counsel of counsel who has had the conduct of the matter in the court below allows for some saving of time and cost in preparation. It also ensured continuity that, in turn, provides comfort that nothing has been overlooked. Importantly, it cannot be said to be unreasonable for Ms Lyons to instruct senior counsel in the wake of the nature of the application made in this Court, and at the same time retain the services for this application of junior counsel from the trial. The proceedings are self-evidently linked and the application in this Court is in no small part based upon a knowledge of the conduct of the matter in the Magistrates Court to date, including, the foreshadowed conduct of Ms Morris’ case.

9. Ms Lyons’ case could be considered as having two parts – a part that focused on apprehension and that which focused on actuality. She did not succeed in relation to the latter. That is, she did not succeed in persuading the Court that Peter Scragg & Associates had actually conducted Ms Morris’ claim in the Magistrates Court in furtherance of its own interests. Despite this I do not think that any adjustment to the general rule should be made. To the extent that Ms Lyons did not succeed it was primarily because Mr Scragg’s history of litigating against and negotiating with Allianz, including negotiating matters instituted out of time to settlement, coupled with the assurance he was given that time would not be an issue in Ms Morris’ case, explained much of his conduct as not being in furtherance of his firm’s interests.[33] Mr Scragg’s affidavit sworn 4 July 2016 did not provide the same detail regarding his history of dealings with Allianz as he did in giving his evidence in this Court. It was only in his evidence that he revealed that in the past he had negotiated matters to settlement, despite them being out of time, and that Allianz had indicated that they would not take issue with Ms Morris’ claim being instituted out of time. It was this evidence that I considered provided the unifying link explaining most of the actions alleged by Ms Lyons to be indicative of an intent on the part of Peter Scragg & Associates to act in furtherance of its interests and to Ms Morris’ detriment to be benign. This unifying evidence was not laid out in Mr Scragg’s affidavit. I do not think it could or should have been anticipated by Allianz. In particular, the evidence of the assurance supposedly provided by Allianz to Mrs Scragg was admitted on the limited basis that it explained Mr Scragg’s conduct, otherwise it was hearsay. Mrs Scragg did not give evidence and no details of the Allianz representative nor what they purportedly said were ever actually disclosed.

   [33]   Lyons v Legalese Pty Ltd& Ors (2016) 126 SASR 232 at [134], [143].

10. In my view the allegations advanced were arguable. Absent any reasonable explanation given prior to entering the witness box, it cannot be said that pursuing the allegations was unreasonable. Cross-examination did not unnecessarily prolong the hearing.

11. Further, Ms Lyons’ allegations were arguable irrespective of Mr Scragg’s evidence. Not only that, any one of those allegations if established could be prayed in aid of the contention that injunctive relief was necessary in order that the integrity of the judicial process and the administration of justice be protected. That is to say, any one of the allegations, if accepted, would support the primary contention – that part of Ms Lyons’ case based on apprehension – that the reasonably informed member of the public would conclude that injunctive relief was necessary in order that the integrity of the judicial process and the administration of justice be protected. Accepting that the allegations were arguable and supportive of the primary contention, it is not reasonable in my view to separate them out for differential treatment in considering the exercise of the discretion conferred by s 40 SCA.

12. I return to the general rule. I bear in mind the notice Peter Scragg & Associates had of the intended application and the consequent opportunity provided for the firm to consider its position and the authorities. That included the benefit of hearing Ms Lyons’ junior counsel’s argument in the Magistrates Court. I cannot criticise the conduct of the application by Ms Lyons and her lawyers. In the circumstances, in my view, fairness dictates that in this case the successful party be awarded costs. I add, to the extent necessary, this case was one fit for senior and junior counsel.

    Conclusion

13. For the above reasons, I ordered that the first and third defendants pay the plaintiff’s costs of and occasioned by the application resulting in my order of 5 October 2016.