Malcolm v Malcolm (No 2)
[2016] SADC 102
•23 August 2016
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MALCOLM & ANOR v MALCOLM & ANOR (No 2)
[2016] SADC 102
Judgment of His Honour Judge Slattery
23 August 2016
PROCEDURE - COSTS
The trial of this matter was due to commence on 4 March 2013. The defendants applied for an adjournment of the trial based upon alleged forgery of documents disclosed by the plaintiffs late.
The trial commenced on 18 August 2014. The second defendant passed away prior to that date and there was no application to appoint a guardian ad litem. The first defendant elected not to call any evidence. Subsequent to the reservation of judgment the first defendant applied to reopen the case and lead evidence. Permission was granted.
The first defendant succeeded in defending the claim of the plaintiffs and the second defendant was found to be in breach of warranty of authority. The deceased estate of the second defendant is impecunious.
Whether a Bullock order should be made.
Whether a Sanderson order should be made.
Whether costs should follow the event or whether some other form of order should be made.
Held:
1. In the exercise of the Court’s discretion on costs no Bullock order or Sanderson order will be made.
2. On the application for adjournment of the trial in March 2013, the plaintiffs are to have the costs of the application, certified fit for counsel, and also costs thrown away by virtue of the adjournment application including the adjournment of the trial which was due to commence on 4 March 2013.
3. The plaintiffs pay the costs of the first defendant for the first day of the trial (Monday 18 August 2014).
4. The first defendant to pay the plaintiffs for 50% of their costs of the second day of the trial (19 August 2014).
5. The first defendant pay the plaintiffs’ costs of the third day of the trial (20 August 2014).
6. The first defendant pay 75% of the plaintiffs’ costs of 22 August 2014.
7. The plaintiffs pay the first defendant’s costs of 29 August 2014.
8. That the plaintiffs have 50% of its costs of the argument on costs.
9. That the first defendant have 50% of its costs of the argument on costs.
10. There should be no other order for costs apart from any extant orders.
Dal Pont and Walker, Law of Costs (LexisNexus Butterworths 2003); Real Property Act s 69; Dal Pont, Law of Agency (LexisNexus Butterworths, 2nd edition); District Court Rules 6 R 263 and 6 R 264, Part 2 Chapter 12, referred to.
Thorne v Doug Wade Consultants [1985] VR 433; Micarone & Ors v Perpetual Trustee Australia Ltd & Ors (No 2) [1999] SASC 533; Lackersteen v Jones & Ors (No 2) (1988) 93 FLR 442; State of Victoria v Horvath & Ors (No 2) [2003] VSCA 24; Walker & Anor v Corporation of the City of Adelaide & Ors (No 2) [2004] SASC 139, discussed.
Reid v Campbell Wallis Moule [1990] VR 859; Post v Colbert (1978) 20 SASR 62; Lackersteen v Jones (No 2) (1988) 93 FLR 442; Gould v Vaggelas (1985) 157 CLR 215; McCracken & McCracken v Pippett (No 2) [2000] VSCA 20; Altamura v Victorian Railways Commissioners [1974] VR 33; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131; Bonnette v Woolworths Limited (1937) 37 SR (NSW) 142; Malcolm & Anor v Malcolm & Anor [2015] SADC 96; Bullock v London General Omnibus Company [1907] 1 KB 264; Sanderson v Blyth Theatre Co [1903] 2 KB 533, considered.
MALCOLM & ANOR v MALCOLM & ANOR (No 2)
[2016] SADC 102JUDGE SLATTERY
In this action I delivered judgment on 16 June 2015.[1] The plaintiffs failed on their claim against the first defendant. The second defendant was found to have acted in breach of warranty of his authority from the first defendant. The second defendant is now deceased and the deceased estate appears to be insolvent.
[1] Malcolm & Anor v Malcolm & Anor [2015] SADC 96.
Since the time of delivery of my judgment there has been a number of costs arguments including whether the Court should make a Bullock[2] or Sanderson[3] order. I turn to the matter first. In order to explain my decision it is necessary to canvas a number of authorities on the topic which give guidance about how I should approach my task here.
[2] Bullock v London General Omnibus Company [1907] 1 KB 264.
[3] Sanderson v Blyth Theatre Co [1903] 2 KB 533.
In Thorne v Doug Wade Consultants[4] McGarvie J said:
The essential difference between the two forms of order (a Bullock or a Sanderson order) is that although in both an unsuccessful defendant is ordered to pay the costs of the successful defendant, in a Sanderson order the unsuccessful defendant is ordered to pay those costs direct to the successful defendant, whereas by a Bullock order the plaintiff will recover from the unsuccessful defendant the costs of the successful defendant which he has been ordered to pay.
[4] [1985] VR 433 at 500.
In Micarone & Ors v Perpetual Trustee Australia Ltd & Ors (No 2)[5] Olsson, Debelle and Wicks JJ said:
[38] While it was appropriate to join the causes of action against the separate defendants, it does not necessarily follow that it is appropriate to make either a Bullock or a Sanderson order. A Bullock order will be made only if the conduct of the unsuccessful defendant in relation to the plaintiff's claim against him show that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought: Gould v Vaggelas[6] per Brennan J at 260. See also Gibbs CJ at 229 - 230; Reid v Campbell Wallis Moule[7] and Post v Colbert.[8] A Sanderson order will only be made if the causes of action are substantially connected or dependent the one on the other: Lackersteen v Jones (No 2).[9]
[5] [1999] SASC 533.
[6] (1985) 157 CLR 215.
[7] [1990] VR 859 at 876-879.
[8] (1978) 20 SASR 62.
[9] (1988) 93 FLR 442 at 449.
In State of Victoria v Horvath & Ors (No 2)[10] the Court of Appeal of Victoria[11] said at [10] et seq. as follows:-
…a plaintiff who seeks a Bullock or a Sanderson order must also ordinarily show that it was reasonable for him to have joined the successful defendant and that the conduct of the unsuccessful defendant was such as to make it just to require him to indemnify the successful defendant. In Gould v Vaggelas, for example, Gibbs CJ said:[12]
"It is sometimes said that the court may make an order of that kind - a Bullock order - where it was reasonable in all the circumstances for the plaintiff to bring the action against two or more defendants… There are some statements in the authorities which appear to support that view… In my respectful opinion, however, the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.
The ground on which a Bullock order may be made is, in my opinion, more accurately stated in a passage in Sanderson v Blyth Theatre Co which was cited with approval in Bullock v London General Omnibus Co and Hong v A & R Brown, viz., that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed 'are ordered to be paid by the unsuccessful defendant, on the ground that ... those costs have been reasonably and properly incurred by the plaintiff as between him and the [unsuccessful] defendant'…In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant.' (Footnotes omitted)
The test was expressed in slightly differently terms by Brennan J[13] and by Wilson J[14] although their formulation of it does not detract from the utility of the above two step analysis favoured by Gibbs CJ in the appropriate case. Such an approach was adopted by Callaway JA in McCracken & McCracken v Pippett (No 2)[15] on the basis, as his Honour said, that it was "convenient" for the purposes of the case before the Court to do so. His Honour warned, however, that:
…it would not always be convenient and it could lead to error. It is easy to think of circumstances in which the reasonableness of bringing suit might be directly related to conduct on the part of the unsuccessful defendant. In truth there is a single question, namely whether it is fair, as between the plaintiff and the unsuccessful defendant, that the latter should pay the successful defendant's costs. Prima facie, the unsuccessful defendant should not have to do so. There must, as Gibbs CJ and Blackburn CJ recognized, be something about his or her conduct that makes it appropriate to shift the incidence of the successful defendant's costs. The plaintiff, after all, has been unsuccessful too.
[10] [2003] VSCA 24.
[11] Winneke P, Chernov & Vincent JJA.
[12] At 229-230.
[13] At 260.
[14] At 247.
[15] [2000] VSCA 20 at [9]-[11].
At [11] their Honours said as follows:
“We take his Honour (Kaye J in Altamura v Victorian Railways Commissioners[16]) as saying in that passage no more than that one of the prerequisites for a Bullock or a Sanderson order is that the plaintiff has acted reasonably in joining the successful defendant in the action.”
[16] [1974] VR 33 at [35].
At [15] their Honours said as follows:
“Where the court concludes that the losing defendant should bear the costs of the successful defendant, it is entirely within its discretion, subject to it being exercised judicially, whether it makes the relevant costs order in the Bullock or Sanderson form… Ordinarily, there is no practical difference between the two forms of order, but that is usually not so where the losing defendant is insolvent or, as here, where there is at least a real risk that he is impecunious. In those circumstances, it seems that the insolvency (or the impecuniosity) of the losing defendant is taken into account, as part of the overall circumstances, for the purpose of determining which form of costs order should be made as a matter of fairness. In that context, it would ordinarily be appropriate to have regard to the comparative hardships that will be experienced by the relevant parties from one or other form of the costs order. But that is only one of the matters to be considered, along with factors such as the relevant conduct of the losing defendant in relation to the proceeding and whether the plaintiff had acted reasonably in joining the successful defendant to the proceeding as well as other matters relevant to determining what form of order would be just in the circumstances.”
In Lackersteen v Jones & Ors (No 2)[17] Asche CJ in the Supreme Court of the Northern Territory considered when a Bullock order or a Sanderson order should be made. At page 449, his Honour said as follows:
“From those cases therefore the following principles seem to be established before a Judge can make a Bullock or Sanderson order.
1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.
2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependant the one on the other.
3. While is it essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.
4. Finally, in considering whether to make such an order, the Court should in the exercise of its discretion balance overall two considerations of policy: the first that an unnecessary multiplicity of actions should not be forced on litigants so that a party who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay any more than one set of costs merely because he is unsuccessful.
[17] (1988) 93 FLR 442.
The essential question for my consideration is where, as here, the plaintiffs have succeeded against only one of two defendants whether I would, in the exercise of my discretion, order the unsuccessful defendant to pay the costs of the successful defendant. I could do that by one of two ways. The first would be to order the plaintiffs to pay the costs of the successful defendant and then order the losing defendant to pay to the plaintiffs the costs that they are required to pay to the successful defendant. The second is by ordering the unsuccessful defendant to pay additionally to the plaintiff’s costs, the costs of the successful defendant directly to that defendant. As I have set out above, the order in the first form is known as a Bullock order and the order in the second form is known as a Sanderson order.
For the reasons that I set out hereunder, I see no utility in making either a Bullock order or a Sanderson order. I would not exercise my discretion to do so in the circumstances of this case. The (estate of the) second defendant is impecunious. I am guided by the decision of the Court of Appeal of Victoria in Horvath that the impecuniosity of the losing defendant must be taken into account as part of the overall circumstances. I may take that impecuniosity into account for the purpose of determining which form of cost order should be made or whether any such cost order should be made in the circumstances.
As my judgment makes clear, I am satisfied that the joinder of the first defendant to the proceedings was reasonable and no contrary proposition has been put by any of the parties. I therefore consider that the plaintiffs acted reasonably and properly in that regard and this was not a position where, for example, it might be said that the plaintiffs pressed their case and incurred costs against multiple defendants in circumstances where the incurring of those costs was disproportionate to the issues arising in the case.
Due to the factual circumstances which I have set out above and which are more fully explored in my judgment at first instance, I see no practical or other utility in making a Sanderson order or a Bullock order. I acknowledge that in modern parlance that a Sanderson order is more direct and therefore less secure. In Law of Costs, Dal Pont and Walker[18] say:
[11.10] In those circumstances whether an indirect (Bullock) or a direct (Sanderson) order is made or not, so far as the ultimate outcome is concerned, make any difference. Yet as a Sanderson order is direct and therefore less secure, it has been described as the modern form of order and to represent a practice which should be adhered to wherever practicable to do so. (Citations omitted)
[18] LexisNexus Butterworths 2003 at 334.
The same authors suggest that it is inappropriate to make a Sanderson order where the making of the order would place upon a successful defendant, the burden of the unsuccessful defendant’s insolvency. Perry J considered that matter in Walker & Anor v Corporation of the City of Adelaide & Ors (No 2)[19] at [48] and following. There his Honour said:-
[48] While it has commonly been held that it is inappropriate to make a Sanderson order where the making of the order would “cast upon the successful defendant the burden of the unsuccessful defendant’s insolvency”,[20] such a result can be avoided if the order is expressed in terms which would enable recourse to be made to the plaintiff by the successful defendants in the event of a failure by the successful defendants or any of them to recover costs from the unsuccessful defendant.
[49] In my view, the appropriate order in this case is a Sanderson order conditioned in that way.
[19] [2004] SASC 139.
[20] Law of Costs, Dal Pont and Walker (supra) at 334.
If a Sanderson order was made, the successful first defendant would not be in a position to recover any costs from the unsuccessful second defendant, then there would be no utility in making a Sanderson order conditioned in a way which gave the first defendant an ability to have recourse to the plaintiffs under that order.
I have formed that view for a number of reasons. The first is as a matter of practicality. The second is that this is not the ordinary case and there are a number of features of this case which require separate orders to be made in relation to costs. It is in those circumstances that I would refuse to make either a Bullock order or a Sanderson order and I think that separate and distinct orders for costs can be made. I set out my reasons hereunder.
The second defendant passed away before the trial began. The representatives of the deceased estate took no part in the trial proceedings. As such, consideration no. 3 in the decision of Asche CJ in Lackersteen has no part to play here. This diminishes the matters before the Court on the exercise of my discretion.
The action concerned claims between former partners, the plaintiffs and the first defendant about the purchase by the first defendant from the plaintiffs of their moiety interest in “partnership property” at Streaky Bay in South Australia. The partners were each registered as proprietors of the land until the first defendant purchased their moiety interest and became the sole registered proprietor of the land. No allegation of s 69 Real Property Act fraud associated with that transfer was made. This was the transaction that was central to the issues before me at trial.
The arrangements for the transfer were made by the second defendant purportedly on behalf of the first defendant. The first defendant allowed the second defendant to act as her agent in only a limited and implied sense. The second defendant purported to bind the first defendant to a contract to purchase the plaintiffs’ interest in the land for $270,000 at a time when it was nominally worth about $46,000. The first defendant did not give authority to the second defendant to make such a contract on her behalf although he at least impliedly did have her authority to contract with the plaintiffs to purchase their interest for $5,000. This had another consequence of the discharge of any liability of the plaintiffs to restore their deficiency in the partnership capital accounts of those partners. The Court refused the application of the plaintiffs for orders binding the first defendant to a contract to purchase the moiety interest for $270,000. The second defendant was held to be in breach of warranty of authority.
Part of the activity subsequent to judgment has been to ascertain if there are any assets remaining within the deceased estate of the second defendant. I am satisfied from the material before me that the deceased estate of the second defendant is in a state of penury and is likely insolvent. Any order for costs made against that estate would not be met. The time spent in Court on that issue was necessary; the plaintiffs’ enquiries and applications were reasonably necessary and reasonably based. I will deal with all of the costs connected with those attendances and arguments by a broad order as I consider that no order for costs should be made in connection with them.
There are a number of separate aspects of costs for my consideration. They include the costs arising from an order for adjournment of the trial of the action made on 1 March 2013, and the fact that the trial of this action was heard in two parts due to what I consider to be an error on the part of the second defendant (and as a consequence the first defendant) in comprehending a letter of particulars sent in 2010.
On the second day of hearing on 19 August 2014 the first defendant asked for a little under half a day to be set aside for her to give consideration to whether she would call any evidence. On the morning of 20 August 2014, the first defendant announced through her counsel that she elected to call no evidence. The parties then made their closing addresses and I reserved my decision.
In the course of closing addresses Mr Ower submitted that the plaintiffs’ main contention was that the second defendant acted as the agent of the first defendant and he did so as an express agent of the first defendant.[21] The point of distinction was that it was not alleged that the second defendant was the ostensible agent of the first defendant.[22] This was confirmed several times.
[21] T204.22.
[22] T221.25.
After both parties had made their submissions and on the next day, an application was made by the first defendant for orders as follows:-
The first defendant, Angela Malcolm, applies for the following orders or directions:
1. The trial which was heard on Monday 18, Tuesday 19 and Wednesday 20 August 2014 be reopened on Friday 22 August 2014 at 10.00am before his Honour Judge Slattery.
2. The first and second plaintiffs not be permitted to rely on the cause of action of express agency first raised by them on Wednesday 20 August 2014.
3. In the alternative, that the first and second plaintiffs only be permitted to rely on the said cause of action on just terms, being that the first defendant be entitled to reopen her case and adduce evidence on the issue.
4. Costs on an indemnity basis of and incidental thereto be the costs of the first and second plaintiffs.
In support of the application the first defendant read the affidavit of Kate Louise Chinnery sworn 21 August 2014 (FDN50). This affidavit discloses an exchange of correspondence in 2010 in which the defendants sought particulars of the plaintiffs’ claim, especially on agency. The letter of the plaintiffs’ solicitors discloses that the plaintiffs do not allege any written appointment by the first defendant of the second defendant as her agent. The next relevant paragraphs of the affidavit read as follows:-
13. By letter dated 7 July 2010 from Ms Neill to me, the first and second plaintiffs provided further and better particulars of the statement of claim, including in relation to paragraph 22 as follows:
As to paragraph 22 of the Claim we state that “the second-named defendant Morrie Malcolm on behalf of Angela Malcolm entered negotiations with the first and second plaintiffs to purchase their interest…”
We are instructed that there was no written appointment of the agency. There was no oral appointment insofar as Angela did not formally advise Chris and/or Phil that Morrie was her agent.
However, the appointment is ostensible in the context of the dealings between the parties…
14. …
15. It is submitted that as a matter of law the principles of express agency and ostensible authority are entirely different. Express and implied authority are forms of actual agency whereas ostensible authority is not a true agency, but is concerned solely with the rights of third parties against the principal arising from the appearance of authority in the “agent”.
16. It follows that express agency and ostensible authority are different causes of action.
17. The first defendant was not on notice of any claim based on express agency until it was first raised in the plaintiffs’ closing address after the defendants had closed their case, including after choosing to call no evidence on behalf of the defendants.
The second defendant was not ever a partner in the partnership. His connection to the partnership[23] is explained in my judgment. He appears to have been the person who controlled the whole of the commercial endeavours of the partnership at the Streaky Bay land. All the partners permitted him to do this and were content to leave those matters largely to him. The work done by the second defendant as described in the later paragraphs of the letter of particulars[24] are not a particular of any form of ostensible agency of the second defendant as held out by the first defendant. Rather, they are particulars of the implied agency of the second defendant to act as agent of the partnership and so of each of the partners. In no sense could it be said that the second defendant acted only for the first defendant in this regard. I consider it to be an erroneous assertion to suggest that the first defendant could have in some way been misled by the provision of these particulars into thinking that the plaintiffs’ case was confined to an ostensible authority case. The language used by the plaintiffs’ solicitors is wrong at law but there is a disconnect between the use of the expression “ostensible” and what follows. Eventually what follows discloses an authority of the second defendant to act on behalf of the partnership. That is as matters turned out.
[23] The partnership business’ name was ACP Investments. ACP is an obvious acronym of the first initials of each of the first names of the partners – Angela, Christopher and Phillip.
[24] From: MOLONEY & PARTNERS
To: Thomson Playford Cutlers
…
However the appointment is ostensible in the context of the dealings between the parties over the period April 1993 to November 2003 insofar as Morrie Malcolm was the instigator of the enterprise, the driving force behind the redevelopment, Morrie Malcolm paid the original deposit cheque for $6,000 to the vendor in February 1993, Morrie Malcolm provided instructions to the accountant and solicitors in relation to the preparation of the Partnership Agreement and the preparation of the Partnership Returns.
Over the course of the matter but predominantly in 1993 and 1994, Morrie Malcolm purchased equipment on behalf of the partnership, produced various schedules of payments and monies owed by ACP Investments to him for purchases that he made on behalf of ACP Investments. Morrie Malcolm provided instructions to the companies employed by ACP Investments to survey the land and produced the proposed plans of the development and was involved in discussion with the Streaky Bay Council.
The writer is in the process of producing a List of Documents in our possession many of which are addressed to Morrie Malcolm in respect of the proposed development of the site.
It was therefore common knowledge that whilst the property was held in the name of Angela Malcolm, Morrie Malcolm had vested interest therein.
Allied to that position was the fact that the evidence of the plaintiffs, if unanswered, led at least to the inference that the second defendant had some form of implied actual authority of the first defendant to make the subject contract contended for by the plaintiffs. In relation to the transfer of the moiety interest of the plaintiffs in the Streaky Bay land, he arranged the written form of the contract, the creation of the transfer document and its execution (and therefore acceptance) by the first defendant as transferee/offeree. The first defendant had no part in this conduct apart from paying the $5,000 to the plaintiffs and sending documents to them; she did this as she was directed by the second defendant. This was known by the first defendant and in light of these facts, a decision not to call her to give evidence was obviously a conscious choice and left the plaintiffs in a position to attack her silence at every opportunity. This the plaintiffs did with great effect in their summing up on the first occasion.
When summing up on the first occasion on 20 August 2014 the plaintiffs strongly emphasised the failure of the first defendant to give evidence in light of the known facts. The plaintiffs contended[25] that the second defendant acted as the authorised agent of the first defendant as principal and therefore an issue for the court was whether the first defendant was bound by the agreement the second defendant made as her agent. The plaintiffs relied upon the decision of Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd,[26] Bonnette v Woolworths Limited[27] and Dal Pont: Law of Agency.[28] The emphasis of the plaintiffs’ criticisms of the evidentiary silence of the first defendant was based on her obvious participation in the transaction by accepting the transfer of the moiety interest negotiated by the second defendant with the plaintiffs, one of whom is his own son.
[25] T204.14.
[26] [2005] FCAFC 131.
[27] (1937) 37 SR (NSW) 142.
[28] 2nd edition, p. 92 at [4.4] et seq.
The plaintiffs then asked the court to draw inferences adverse to the first defendant, she having at least impliedly conceded the breach of the second defendant of his warranty of authority. Those attacks upon the first defendant by the plaintiffs were not a revelation that could not otherwise have been anticipated. My very strong impression was that the effectiveness of these attacks on the position of the first defendant was, on a number of levels, influential in the decision of the first defendant to seek to reopen her case and lead evidence. I allowed that application principally because I was of the view that in the administration of justice it is always necessary to allow someone in the position of the first defendant to seek to lead evidence not otherwise led in the court. Those interests were overwhelmingly in favour of the grant of leave to the first defendant. I made these orders and at the time I reserved the question of costs. I did so because I wanted to gauge how much time in trial may have been lost as a result of the election of the first defendant that was received within a day of the reservation of my judgment (on grounds that I considered had little or no substance apart from the requirement of the due administration of justice).
The 2014 trial date was not the first time that this action had been listed for hearing. The first trial date of 4 March 2013 was adjourned because of the application of the second defendant that was joined in by the first defendant. This was based upon alleged late disclosure of a handwritten letter sent by the second defendant to the plaintiffs dated 17 November 2007. The letter was sent by the second defendant with the documents to be executed by the plaintiffs’ concerning the transfer of the moiety interest by them to the first defendant. It suggests also that $5,000 will be deposited by the first defendant as portion of the sale price of $270,000; this amount of $5,000 was paid to the plaintiff Phillip Malcolm by the first defendant.
There were two bases for the adjournment application (but in reality only one): that the discovered document was forgery and late disclosure. The allegation of forgery made by the second defendant and joined by the first defendant was the predominant ground. It allegedly required time for this issue to be “chased down” by the defendants. Suggestions of retainers of hand writing experts were made to the Court. The second ground of delay was minor because it was married to the first and stood or fell with it.
At the trial before me no assertion was ever made that the letter of 17 November 2003 disclosed by the plaintiffs was a forgery. I consider such a proposition to be seriously flawed. I will not conjecture but I am left with a very uneasy feeling about the merits and timing of this application. It is sufficient that I am satisfied that the grounds alleged were baseless. The costs of the adjournment application and any costs thrown away were reserved to me as the trial judge by his Honour Judge Costello of this Court.
It is in that background that I now consider the question of costs.
The orders that I make for costs in this action are in the end a matter for the exercise of my discretion. I must exercise my discretion judicially in the administration of justice. That exercise of discretion stands in the foreground of the Rules of Court[29] under which costs should as a general rule, follow the event. In this case, it is not as simple as to say that the event was the success of the first defendant’s Defence. There are a number of matters that overlay that position.
[29] 6 R 263 and 6 R 264 District Court Rules. See also generally Part 2 Chapter 12 District Court Rules.
I am satisfied that the adjournment of the trial in 2013 was based on ungrounded conjecture. The defendants must jointly carry the burden of those costs.
I have found that in this action the second defendant acted in breach of warranty of authority and an order for costs would ordinarily be made against the (assets of the) deceased estate. This estate is now impecunious.
The decision by the first defendant not to call evidence was an error that led to the prolongation of the trial and a loss of time. As a result the plaintiffs must have an order for cost concerning lost time and costs thrown away as a result of that decision.
So also must the plaintiffs have the costs of the delay and argument on 22 August 2014. The first defendant should not have any costs of 22 August 2014 but should have the costs of 29 August 2014. There should be an order in the first defendant’s favour for the costs of 18 August 2014, the first day of trial.
I consider that otherwise, apart from extant orders for costs, there should be no other order for costs.
I have reached my decision on costs based upon the whole history of the matter as described in my judgment and the matters that I have summarised earlier in these reasons. In so doing I have reached the conclusion that the usual rule of costs following the event should not apply in the factual circumstances of this case. I am also satisfied that in exercise of my judicial discretion for the same reasons, the appropriate order for costs are as set out hereunder.
On the application for adjournment, in 2013, the plaintiffs are to have the costs of the application, certified fit for counsel, and also costs thrown away by virtue of the adjournment application including the adjournment of the trial which was due to commence on 4 March 2013. The defendants are severally and jointly liable for these costs.
On the costs of the trial, I consider that there is no utility in making any further order involving the second defendant in light of the known circumstances of the deceased estate of that defendant.
The balance of orders for costs that I would make are as follows:-
1The plaintiffs pay the costs of the first defendant for Monday 18 August 2014;
2The first defendant to pay the plaintiffs for 50% of their costs of 19 August 2014;
3The first defendant pay the plaintiffs’ costs of 20 August 2014;
4The first defendant pay 75% of the plaintiffs’ costs of 22 August 2014;
5The plaintiffs pay the first defendant’s costs of 29 August 2014;
6That all extant costs orders made by the Court remain;
7That the plaintiffs have 50% of its costs of the arguments on costs;
8That the first defendant have 50% of its costs of the arguments on costs;
9That otherwise there be no order as to costs.
0
8
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