MacKenzie v Albany Finance Ltd
[2003] WASC 100 (S)
MACKENZIE & ANOR -v- ALBANY FINANCE LTD [2003] WASC 100 (S)
| Link to Appeal : | [2004] WASCA 301 [2004] WASCA 301(S) |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 100 (S) | |
| Case No: | CIV:2657/2000 | 5-7 & 10 JUNE, 8, 9, 12, 13, 15 & 16 AUGUST, 2 & 3 OCTOBER 2002, 11 JUNE & 15 JULY 2003 | |
| Coram: | McLURE J | 30/05/03 | |
| 29/07/03 | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application to amend successful | ||
| B | |||
| PDF Version |
| Parties: | JAMES MACKENZIE JOAN EDNA MACKENZIE ALBANY FINANCE LTD |
Catchwords: | Application to amend defence after trial Whether the prima facie position under O 66 r 2(a) of the Rules of the Supreme Court should apply Costs of subpoenaed witness Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 66 r 2(a) |
Case References: | Gould & Birbeck & Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569 Aries Tanker Corporation v Total Transport Ltd [1977] 1 WLR 185 Brandsma & Crockett Pty Ltd v Heindal Pty Ltd (2002) 26 WAR 323 Collins v Westralian Sands Ltd (1993) 9 WAR 56 Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 Gordon v MacGregor (1909) 8 CLR 316 Guinness Plc v Saunders [1988] 1 WLR 863 Hawthorn Cuppaidge & Badgery v Channell [1992] 2 Qd R 488 Hazcor Pty Ltd v Kirwanon Pty Ltd (1995) 12 WAR 62 Henderson v Amadio Pty Ltd, unreported; Fed Ct of Aust (Heerey J); 22 March 1996 Hill v Ziymack (1908) 7 CLR 352 Jewel Walk Pty Ltd & Anor v Kondinin Group Inc [2001] WASC 197 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Latoudis v Casey (1990) 170 CLR 534 Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 Morgan v Banning (1999) 20 WAR 474 Rawson v Samuel (1841) 41 ER 451 Re Madden as Official Liquidator of Aquanaut Constructions Pty ltd (in liq) [2001] NSWSC 1051 Sanders v Snell (No 2) (2000) 174 ALR 53 Sanders v Snell [2003] FCAFC 150 Schmidt v Gilmour [1988] WAR 219 Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323 Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58(S) Waters v PC Henderson (Australia) Pty Ltd, unreported; CA of NSW; Library No 256098; 6 July 1994 Westgold Resources NL v St George Bank Ltd; unreported; SCt of WA (Anderson J); Library No 980717; 9 December 1998 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
2 & 3 OCTOBER 2002, 11 JUNE & 15 JULY 2003 DELIVERED : 30 MAY 2003 SUPPLEMENTARY
DECISION : 29 JULY 2003 FILE NO/S : CIV 2657 of 2000 BETWEEN : JAMES MACKENZIE
- JOAN EDNA MACKENZIE
Plaintiffs
AND
ALBANY FINANCE LTD
Defendant
Catchwords:
Application to amend defence after trial - Whether the prima facie position under O 66 r 2(a) of the Rules of the Supreme Court should apply - Costs of subpoenaed witness - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 2(a)
(Page 2)
Result:
Application to amend successful
Category: B
Representation:
Counsel:
Plaintiffs : Mr D H Solomon
Defendant : Mr M D Howard
Solicitors:
Plaintiffs : Solomon Brothers
Defendant : Greenland Brooksby
Case(s) referred to in judgment(s):
Gould & Birbeck & Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490
Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569
Case(s) also cited:
Aries Tanker Corporation v Total Transport Ltd [1977] 1 WLR 185
Brandsma & Crockett Pty Ltd v Heindal Pty Ltd (2002) 26 WAR 323
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20
Gordon v MacGregor (1909) 8 CLR 316
Guinness Plc v Saunders [1988] 1 WLR 863
Hawthorn Cuppaidge & Badgery v Channell [1992] 2 Qd R 488
Hazcor Pty Ltd v Kirwanon Pty Ltd (1995) 12 WAR 62
Henderson v Amadio Pty Ltd, unreported; Fed Ct of Aust (Heerey J); 22 March 1996
Hill v Ziymack (1908) 7 CLR 352
Jewel Walk Pty Ltd & Anor v Kondinin Group Inc [2001] WASC 197
(Page 3)
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
Latoudis v Casey (1990) 170 CLR 534
Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81
Morgan v Banning (1999) 20 WAR 474
Rawson v Samuel (1841) 41 ER 451
Re Madden as Official Liquidator of Aquanaut Constructions Pty ltd (in liq) [2001] NSWSC 1051
Sanders v Snell (No 2) (2000) 174 ALR 53
Sanders v Snell [2003] FCAFC 150
Schmidt v Gilmour [1988] WAR 219
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58(S)
Waters v PC Henderson (Australia) Pty Ltd, unreported; CA of NSW; Library No 256098; 6 July 1994
Westgold Resources NL v St George Bank Ltd; unreported; SCt of WA (Anderson J); Library No 980717; 9 December 1998
(Page 4)
McLURE J:
Introduction
1 On 30 May 2003 I published my reasons in this matter in which I identified the findings of fact I had made. On that day, I stood the matter over to a date to be fixed for the purpose of making orders giving effect to the reasons. Upon consideration of my reasons, the defendant applied for leave to amend its defence in terms of a minute filed with the application. The application was heard on 15 July 2003. At that hearing the parties also made submissions concerning costs. Further, the parties had productively used the time since the publication of my reasons to agree the interest payable on the amounts I found to be owing. I deal firstly with the amendment application.
Amendment Application
2 The plaintiffs' claim related to seven items or deposits allegedly made by the plaintiffs with the defendant on different dates in the period between 19 November 1987 and 29 January 1998. The approach I took in my reasons was to identify and deal with the issues in the case as it was conducted by the parties which differed in some respects from the case as it was pleaded. In relation to Item 9, I identified the case as it was conducted to include the following issues:
- whether the plaintiffs' account 571 was redeemed and the funds paid to the plaintiffs in combination with deposit accounts 527 and part of 540 together totalling $68,493.73;
- whether deposit 615 was redeemed and the moneys paid to the plaintiffs on or about 31 August 1990;
- whether the sum of $6,000 was paid by LKJA to the defendant on behalf of the plaintiffs for the purchase of shares in the defendant;
- if the [said] payments were made whether they effected a part repayment of the defendant's indebtedness to the plaintiffs in connection with the deposit 346.
- The application to amend the defence relates to these issues.
3 In its defence as it stood at the trial the defendant pleaded in relation to Item 9 that it had repaid in full deposit 346. The defendant seeks to include new paragraphs 3A, 3B and 12A in its defence. Those paragraphs are in the following terms:
(Page 5)
- "3A. Alternatively, the defendant in part repaid the deposit identified as Item 9 and pleaded in paragraph 2 of the statement of claim by paying the following sums on or about the following dates:
| $14,000.23 |
| $1,578.00 |
| $24,744.08 |
| $6,000.00 |
3B. Further, or alternatively, the defendant is entitled to set off the following sums it paid on or about the following dates against the plaintiffs' claim in respect of the deposit identified as Item 9 and pleaded in paragraph 2 of the statement of claim:
| $14,000.23 |
| $1,578.00 |
| $24,744.08 |
| $6,000.00 |
…
12A. Further, or alternatively, in response to paragraph 8.1 of the statement of claim concerning the deposit identified as Item 9:
(a) the defendant repeats here the matters set out in paragraphs 3A and 3B above; and
(b) says that it paid to the plaintiffs interest in the sum of $315.62 on or about 30 June 1989."
(Page 6)
5 The plaintiffs oppose the application to amend. Their opposition to proposed par 3A is in essence based on their disagreement with my characterisation of the relevant issues as arising from the way the parties conducted the case and my analysis and conclusion that the payments effected a part repayment of the defendant's indebtedness in connection with the deposit 346 (see pars 169 and 256-265). As appears from the context, the reference to "set off" in par 262 is not to the term in its technical sense, whether by way of common law or equitable set off, both of which depend on a claim of right. Indeed, I rejected the plaintiffs' submissions in closing that the defendant had a claim of right to the moneys paid to the plaintiffs.
6 I do not intend to revisit my conclusions relating to these issues save to note that I reject the plaintiffs' submission on the amendment application that the evidence on the issues went solely to the question whether repayment was effected on the first transfer of the deposit to LKJA. That submission is inconsistent with the plaintiffs' closing submissions on Item 9 at trial.
7 I regard the principle stated by the High Court in Gould & Birbeck & Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 as apt in the circumstances of this case. The Court said (at page 517):
"Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting a case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest."
8 I am satisfied that is what occurred in this case and that there is no relevant prejudice to the plaintiffs to allow the defendant to amend in accordance with proposed par 3A and 12A(a) of the minute. I propose to give leave to amend accordingly. I refuse leave to amend in accordance with par 3B because it is inconsistent with my reasons and sub-paragraph 12A(b) because it goes beyond my findings.
(Page 7)
Final Orders
9 I can now make final orders in the proceedings. There will be orders that:
(1) the defendant pay to the plaintiffs the sum of $78,556.12 and interest thereon at the daily rate of $9.65 from 2 July 2003 until the date of these orders;
(2) the defendant pay to the second-named plaintiff the sum of $22,423.37 and interest thereon at the daily rate of $2.76 from 16 July 2003 until the date of these orders;
(3) the plaintiffs' claims otherwise be dismissed.
10 There remains the question of costs.
Costs
11 It is common cause that the plaintiffs' claims in relation to each item involved separate causes of action. That being the case, O 66 r 2(a) applies. That provides:
"2. In the absence of any special order –
(a) where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought;"
"In my opinion the approach required by the rules of this Court is that, once it is seen that separate causes of action are involved, and that the plaintiff has succeeded on only one or some, the defendant is prima facie entitled to his costs on the other or others. However, in my experience, this Court will not make such an order as of course. The court will always look at the realities of the case and attempt to do substantial justice. Thus it may be that, although it is strictly correct to say that
(Page 8)
- different causes of action are involved, there may have been only one contest in substance. This will often be so when all causes of action arise out of the one course of dealings, the one transaction or the same facts."
13 The Judge in that case said that was not a case in which "it would be fair to take the easy course of awarding costs to the plaintiff on the issue on which it was successful and costs for the second and fourth defendants on the other issues". It might be the easy course for the trial Judge but in this case it would involve many judgment calls for the taxing officer who has not had the benefit of sitting through the 12 days of hearing. In recognition of the additional time and cost involved in a taxation in accordance with O 66 r 2(a), both parties submitted that I should award costs to the overall winning party reduced by a percentage to reflect the areas of loss. I am prepared to take that approach.
14 The plaintiffs submit that to award them 80 per cent of their costs would be a generous reduction on account of the matters on which they did not succeed. The plaintiffs also seek special costs orders in respect of:
(a) Items 9(b) and 9(c) – discovery and inspection;
(b) Item 13 – getting up case for trial; and
(c) Items 14(a) and 14(b) – fee on brief, first day of trial and preparation, and second and each successive day of hearing.
15 The plaintiffs relied on the affidavit of its solicitor, Mr Bellamy in support of the application for special costs orders. In relation to discovery he refers to the 12 volume trial bundle of 3,062 pages which contain most of the parties discovered documents. He also refers to further and better and continuing discovery. In relation to trial preparation he refers to the factual and legal complexity of the matters in issue. As to counsel fees, he notes that the applicable determination of the legal costs committee does not make provision for refreshers on counsel fees. The trial was part heard on two occasions and on each occasion it was necessary for counsel and Mr Bellamy to spend a considerable amount of time refreshing their memories on the detailed transactions. I was informed that at the time of entry of the action for trial the plaintiffs' estimated it would take four days. The trial lasted 12 days - four in June 2002, six in August 2002 and two in October 2002. Mr Bellamy also deposes that the plaintiffs have incurred legal costs of $167,000 and if special costs orders are not made, the plaintiffs will not recover more than $90,000 on taxation.
(Page 9)
16 On the other hand the defendant points out that of the seven items claimed at trial, the plaintiffs were wholly unsuccessful in respect of five (Items 6, 7, 2/16, 5 and 13) successful in respect of one (Item 11) and partially successful on one (Item 9). The defendant also refers to items abandoned close to trial (Items 8, 12, 17 and 18). However, I have already dealt with the costs in relation to those matters. Those items were abandoned as a result of the plaintiffs' application made in May 2002 to amend the statement of claim. I granted leave to amend and ordered that the plaintiffs pay the costs of the application and the costs thrown away by the amendments.
17 The defendant also points out that of the principal claimed as owing at trial of $161,344.89 the plaintiffs have only been successful in respect of $28,177.69. If interest is included, the plaintiffs have been successful to the extent of just over $100,000.
18 It is incorrect to describe all of the causes of action in this case as being in substance one contest. The individual items were largely separate and discreet although there was evidence that was common to all or nearly all items, in particular, the statements made by the plaintiffs in their income tax returns, veteran affairs forms, audit letters and the District Court action and the defendant's systems. In my view, the appropriate yardstick to use in a general sense is the time taken at trial in respect of the items on which the plaintiffs were successful. Based on the nature and extent of the facts and issues directly and indirectly involved in the determination of Items 9 and 11, I am persuaded that the plaintiffs should be placed in a net positive costs position vis-à-vis the defendant. It would do justice to the parties if the plaintiffs are awarded 40 per cent of their taxed costs and disbursements.
19 I am not persuaded that this is an appropriate case for special costs orders. Such orders would be inconsistent with my assessment of the appropriate costs allocation. In any event, it was not a case of unusual complexity or importance. Further, I am not satisfied that there is anything of significance relating to the discovery or the getting up that qualifies as a good or sufficient reason to make the orders. The staleness of most of the transactions may have increased costs, however I am not satisfied that the defendant should be visited with those cost consequences.
20 As to the claim for refreshers, I am not satisfied that the plaintiffs' estimate of the length of the trial was reasonable in circumstances
(Page 10)
- involving elderly plaintiffs in relation to transactions, most of which took place many years ago.
21 A further issue was raised concerning the payment of Mr Wroth's witness fees. The position as I understand it is that the defendant subpoenaed Mr Wroth to produce documents and attend at trial to give evidence. Mr Wroth produced the documents pursuant to the subpoena. The defendant then decided not to call Mr Wroth to give oral evidence at trial and advised him accordingly. Thereafter, the plaintiffs decided to call Mr Wroth and asked the defendant not to discharge Mr Wroth from its subpoena so that they did not have to issue a fresh subpoena. The defendant paid Mr Wroth his expenses up to the time its solicitors informed Mr Wroth they no longer required him to give evidence on its behalf. It appears the plaintiffs have not paid Mr Wroth in relation to his attendance at court on their behalf. So much is not in dispute. Mr Wroth has complained to the Law Society about the conduct of the plaintiffs' lawyers. It is unnecessary for the resolution of the matters before me to determine who is legally obliged to pay Mr Wroth's expenses, the party who issued the subpoena or the party who, with the issuing party's co-operation, took advantage of the subpoena. Having regard to the undisputed facts, I propose in the exercise of my discretion to order that the plaintiffs pay to Mr Wroth any outstanding sum to which he is entitled under the fourth schedule which they can then include in their bill for taxation as a disbursement necessarily or reasonably incurred under Item 30 of the scale of costs.
22 Accordingly, I propose to order that:
(1) the defendant pay 40 per cent of the plaintiffs' costs and disbursements of the action to be taxed;
(2) the plaintiffs pay to Mr Wroth the balance of the sum to which he is entitled as a witness subpoenaed to give evidence at trial.
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