Monty Financial Services Ltd v Cash Resources Pty Ltd
[2001] VSC 117
•18 April 2001
| SUPREME COURT OF VICTORIA | Not Restricted | |
| COMMERCIAL AND EQUITY DIVISION | ||
No. 6027 of 1993
| MONTY FINANCIAL SERVICES LTD & ANOR | Plaintiffs |
| v | |
| CASH RESOURCES PTY LTD & ORS | Defendants |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF JUDGMENT: | 18 April 2001 |
CASE MAY BE CITED AS: | Monty Financial Service Ltd & Anor |
MEDIUM NEUTRAL CITATION: | [2001] VSC 117 |
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Costs: Proceedings to recover damages suffered in consequence of ex parte interim injunction where undertaking as to damages given to court; proceedings commenced and prosecuted in court to which undertaking given; exercise of court's discretion: order that R.63.24(1) not to apply: damages in nature of interest.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiffs | Mr P. Nugent | Charles Fice |
| For the Defendants | Mr B. Watkins | Mulcahy Mendelson & Round |
HIS HONOUR:
On 30 March 2001 I delivered my judgment in the proceedings of the fourth defendant Cash Resources Pty Ltd against the plaintiffs. As appears from my judgment, on 7 May 1993, the plaintiffs by their counsel giving to this court an undertaking as to damages, the court made against the fourth defendant an interim ex-parte order restraining the fourth defendant until 4.15 p.m. on 13 May 1993 from doing or performing various acts as set out in the order. It was further ordered that a summons then before the court be adjourned until 13 May 1993. On that day it was ordered that the summons be dismissed. On 28 May 1993 the plaintiffs filed a notice of discontinuance of their proceedings against the fourth defendant.
In the proceeding of the fourth defendant against the plaintiffs the fourth defendant sought to recover against the plaintiffs damages allegedly suffered by it in consequence of the order made against it on 7 May 1993. The fourth defendant claimed to be entitled to recover such damages against the plaintiffs by reason of the undertaking as to damages given by counsel on their behalf to the court on 7 May 1993. On 29 March 1994 orders by consent were made as to the filing and serving of the fourth defendant's statement of claim against the plaintiffs and the serving and filing of their defence to the statement of claim. By the statement of claim of the fourth defendant it alleged that in consequence of the order made on 7 May 1993, it had suffered loss and damage in the amount of $108,369.35. No matter was raised by the plaintiffs in their defence as to why in the circumstances the court should not enquire into and determine matters pleaded by the fourth defendant in its statement of claim. The trial of this proceeding took place before the court over six days between 29 January and 5 February 2001. In the result and for the reasons set out in my judgment, it was ordered that in such proceedings there be judgment for the fourth defendant against the plaintiffs for $1,837 and that the plaintiffs pay that sum to the fourth defendant. On behalf of the fourth defendant an application was made that the plaintiffs pay the fourth defendant interest on the amount recovered and that they pay the fourth defendant's costs of the proceedings. I have now received written submissions and heard oral submissions by counsel relevant to those matters.
On behalf of the fourth defendant it has been submitted that it should have its costs of the proceedings against the plaintiffs to be taxed on a solicitor and own client (indemnity) basis. It was submitted that as the plaintiffs had issued proceedings in this court against the fourth defendant, and it was to this court that an undertaking as to damages had been given on behalf of the plaintiffs on 7 May 1993, that it was this court which should enquire and determine whether in consequences of the ex-parte order made against the fourth defendant, it had suffered any and what loss and damage as alleged. It was submitted that notwithstanding that the fourth defendant had only recovered the sum of $1,837 against the plaintiffs, that it had been successful in its claim for damages and that the court should order that the plaintiffs should pay its costs of the proceedings.
It was submitted on behalf of the fourth defendant that as this court was the only court in which the fourth defendant's claim against the plaintiffs could be brought, that the provisions of Rule 63.24(1) of the Rules of the Court had no application, and that it should recover all its costs against the plaintiffs on the Supreme Court Scale as to costs. It was further submitted on behalf of the fourth defendant, that as the proceedings of the fourth defendant against the plaintiff were of an equitable nature, that it was questionable whether Rule 63.24(1) had application to these proceedings, and that in such circumstances the court should not have regard to that rule in the circumstances of these proceedings. Further it was submitted on behalf of the fourth defendant that the plaintiffs had an opportunity to protect themselves against any order as to costs in these proceedings, by making to the fourth defendant a "Calderbank" offer which had not been done, and that therefore there was no good reason why the fourth defendant should not recover its full costs against the plaintiffs on the scale of costs appropriate to proceedings brought in this court.
Further it was submitted on behalf of the fourth defendant that it should not suffer as to costs in its proceedings against the plaintiffs because it was by their ex-parte application made to the court, which they failed to be able to maintain on 13 May 1993, that it had been found by the court that it was entitled to recover damages against the plaintiffs.
On behalf of the plaintiffs it was submitted that by the fourth defendant's claim for damages as initially pursued at trial, the fourth defendant claimed damages allegedly suffered by it was under some nine heads or categories of damages. It was submitted, as was the fact, that after the close of evidence, counsel for the fourth defendant did not seek to pursue the fourth defendant's claim under two heads or categories, and that of the seven remaining heads of damages pursued, the fourth defendant was only successful on one head of its claim for damages which resulted in judgment being entered in its favour for $1,837.
It was submitted that when regard is had to the transcript of the proceedings, it is to be seen that approximately 1.2 per cent of the total time of the trial was occupied on the head of damages on which the fourth defendant was successful, and that the remainder of the trial was occupied on matters and evidence relevant to other heads of damages. Further it was submitted that as to the amount recovered by judgment as compared to the amount of damages initially pursued at trial, the fourth defendant had only succeeded on an amount equivalent to 1.7 per cent of the fourth defendant's original claim.
It was submitted that both these matters should be had regard to by the court in exercise of its discretion as to costs. It was submitted on behalf of the plaintiffs that when regard is had to these matters, it would be open to the court in the exercise of its discretion as to costs that the court should have regard to the provisions of Rule 63.04 and only award to the fourth defendant a small proportion of its costs of the proceedings. Again, it was submitted on behalf of the plaintiffs that not only should the fourth defendant's costs, able to be recovered by it against the plaintiffs be limited in proportion to the time spent at trial on the matters on which it was successful, but that the plaintiffs should have their costs against the fourth defendant on the matters on which they were successful against the fourth defendant. Reference was had to that which was said by Bray C.J. in Cretazzo v. Lombardi (1975) 13 S.A.S.R. 4 at 12, where the Chief Justice said:
"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 `issues' does not mean a precise issue in the technical pleading sense but any disputed question of fact, or in my view of law: Forster v. Farquar [1893] 1 Q.B. 564 per Bowen LJ 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 damages on which he had failed."
Further, on behalf of the plaintiffs it was submitted that when regard is had to the amount recovered by judgment, the proceedings of the fourth defendant could have been and were able to be brought by the fourth defendant in the Magistrates Court. Pursuant to s.100.1(b) of the Magistrates Court Act 1989, the Magistrates Court has jurisdiction to hear and determine any claim for equitable relief if the value of the relief sought is within the jurisdictional limit of the court. At all relevant times to these proceedings, a claim for equitable damages in the sum of $1,837 was within the jurisdictional limit of the Magistrates Court. It was submitted that although the undertaking as to damages given by the plaintiffs was given by the plaintiffs to this court, which undertaking provided the very basis for the fourth defendant's claim in damages against the plaintiffs, it did not follow that it was only this court which could entertain the fourth defendant's claim against the plaintiffs. It was submitted that the proceedings by the fourth defendant against the plaintiffs could have been instituted and prosecuted in the Magistrates Court.
Founded on this submission, it was contended on behalf of the plaintiffs that if the fourth defendant was to recover costs against them, then such costs should be limited to costs that would be recoverable in the Magistrates Court if in the exercise of its equitable jurisdiction a party had recovered $1,837.
In answer to the submissions made on behalf of the fourth defendant that the plaintiff could have protected themselves by making to the fourth defendant a "Calderbank" offer, it was submitted on behalf of the plaintiffs that in this case the plaintiffs had no reasonable opportunity to assess the fourth defendant's claim because of the lack of documents discovered by the fourth defendant to substantiate its claim in damages. As expressed in my judgment, I concluded that the fourth defendant had discovered or produced during the trial, very few documents to substantiate its claim in damages against the plaintiffs. I specifically dealt with this when considering the various claims for damages made by the fourth defendant.
In the circumstances of this case, it may well have been difficult for the plaintiffs to assess the fourth defendant's claim before trial, such as to be able to make such offer. This does not however, mean that an adequate assessment of the fourth defendant's claim could not have been made resulting in an appropriate offer in settlement to be made. Many cases involving difficult issues have been able and are able, to be assessed by counsel and by solicitors to enable them to make a "Calderbank" offer. However, in the circumstances of this case, I am of the view that I should not have regard to this matter in determining the question as to what costs should be paid by the plaintiffs to the fourth defendant.
The power of the court to make an order for costs of and incidental to a matter in the court is vested in the court pursuant to s.24(1) of the Supreme Court Act 1986. That power vests in the court a wide discretion as to costs, which must be exercised judicially. Ordinarily the court will order costs against a party to proceedings on a party and party basis, that such is the settled practice or ordinary rule of the court, has been accepted by the court over a long period of time. It is reflected in Rule 63.31 which provides:
"Except as provided by these Rules or any order of the Court costs shall be taxed on a party and party basis."
In the exercise of its discretion to award costs against a party, the court may order costs on a measure higher than on a party and party basis if there exists circumstances which warrant the court from departing from the ordinary rule as to costs. The question must be addressed in each case where costs are sought other than on a party and party basis, whether in the circumstances as existing, justice requires that an order for costs be made other than on a party and party basis - Spencer v. Dowling (1997) 2 V.R. 127 Winneke P. at 147.
In the proceedings before the court, the fourth defendant sought to recover against the plaintiffs damages alleged to be suffered by it in consequence of the interim ex parte injunction granted by the court in favour of the plaintiffs against it on 7 May 1993, which relief the plaintiffs failed to maintain on 19 May 1993. The fourth defendant's claim against the plaintiffs had not as its foundation that the plaintiffs had committed some wrongful act or had acted in breach of contract, or that they had breached some duty owed by them to the fourth defendant. Rather the foundation of the fourth defendant's claim was that in obtaining such interim ex parte relief against it, which the plaintiffs were not able later to maintain, there had been suffered by it an injustice, and that an undertaking having been given by the plaintiffs, the court was "armed with the jurisdiction otherwise lacking to right that injustice and compensate that defendant for that harm". Air Express Limited v. Ansett Transport Industries (Operation) Pty Ltd (1981) 146 C.L.R. 309 Stephen J. at p.319-320. However, the fact that the court was exercising that jurisdiction in the fourth defendant's claim against the plaintiffs, does not cause, in my view, circumstances to exist which should warrant the court making an order for costs in favour of the fourth defendant against the plaintiffs on a basis other than on a party and party basis.
It was to this court on 7 May 1993 that the plaintiffs came seeking against the fourth defendant interim ex parte relief. It was to this court that the plaintiffs gave an undertaking as to damages in order that they may be granted interim ex parte relief against the fourth defendant.
It was the plaintiffs' failure on 13 May 1993 to maintain the injunction granted against the fourth defendant on 7 May 1993 which gave rise to this court's jurisdiction to enquire as to whether the fourth defendant had suffered any and what damages in consequence of the injunction granted by the court against it. In my view it was just and proper for the fourth defendant to bring to this court its proceedings against the plaintiffs to recover damages against them alleged to have been suffered in consequence of the interim ex parte order.
In the proceedings the defendant was successful. The fact that the amount recovered including interest, to which I shall deal with hereafter, was in an amount a sum which would have been within the equitable jurisdiction of the Magistrates' Court, does not mean, in my view, that the claim of the plaintiffs was a claim for money brought and pursued by the fourth defendant in the wrong court.
It was to this court, in exercise of its equitable jurisdiction, that the fourth defendant was able to turn, to be compensated in damages for the injustice suffered by it, which gave rise to its suffering some loss.
I propose to order that the provisions of Rule 63.24(1) have no application to these proceedings on taxation of the fourth defendant's costs against the plaintiffs.
The fourth defendant is entitled to have its costs against the plaintiffs as between party and party, and to have those costs taxed on a scale of costs applicable to the proceedings in this court, without bearing any of the plaintiffs' costs by application of Rule 63.24(1).
I have given consideration to the submissions made on behalf of the plaintiffs, that I should have regard to R.63.04 in the exercise of the court's discretion, and only permit the fourth defendant to recover a small proportion of its costs against the plaintiffs as the fourth defendant succeeded on one matter or head of damages, which at trial took only a small portion of the whole time.
Although that is so, and it is also correct that on all heads of damages except one, the plaintiffs were successful, in my view, having regard to these proceedings which were strenuously contested on behalf of the plaintiffs with respect to all heads of damages, I do not propose to make an order limiting the amount of costs which the fourth defendant may recover against the plaintiffs by reference to that part of the claim in damages on which the fourth defendant was successful.
Nor do I propose to make an order that the plaintiffs have costs against the fourth defendant in part or in proportion with reference to those parts of the proceedings in respect of which they successfully resisted the fourth defendant's claim in damages.
Further, the fourth defendant sought an order that there be judgment for it against the plaintiffs for damages in the nature of interest on the amount recovered by it against the plaintiffs. Pursuant to s.60 of the Supreme Court Act 1986, the court on application in any proceeding for the recovery of "debt or damages", must unless good cause is shown to the contrary, give damages in the nature of interest.
The expression "debt or damages" is very wide and covers, inter alia, any sum of money which is recoverable by one party from another in equity - BP Exploration (Libya) Limited v. Hunt No. 2 (1983) 2 A.C. 352 at 373.
Section 60 of the Act provides that:
"The rate of interest as fixed by the court shall not exceed the rate for the time fixed under s.2 of the Penalty Interests Rate Act 1983 from the commencement of the proceedings to the date of judgment."
It was submitted on behalf of the fourth defendant that interest should run from 13 May 1993 as it was at that time, being the date on which the plaintiffs claim for an interlocutory injunction was dismissed, that the fourth defendant had suffered damages recovered in the proceedings against the plaintiffs. Alternatively, it was submitted, that interest should run from 20 April 1994, being the date on which the fourth defendant's statement of claim against the plaintiffs was filed.
It was on 29 March 1994 that it was ordered by consent that the fourth defendant file and serve its statement of claim against the plaintiffs on or before 19 April 1994. It was on 20 April 1994 that there was filed with the court the fourth defendant's statement of claim against the plaintiffs.
I take the commencement of the proceedings for the purpose of this exercise, to be 20 April 1994. It is from that date, if the fourth defendant is able to recover, in these proceedings, against the plaintiffs, damages in the nature of interest that such damages commenced to run.
Calculations have been provided to me on behalf of the fourth defendant setting out figures and amounts of damages in the nature of interest that may be awarded, having regard to the provisions of s.2 of the penalty interest rate. There appears to be no dispute that the figures as furnished are figures relevant to making the necessary calculation. Applying such figures, damages in the nature of interest able to be awarded to the fourth defendant from 20 April 1994 to this day, total $1,644.63.
However, on behalf of the plaintiffs it was submitted that such amounts should not be awarded to the fourth defendant. On behalf of the plaintiffs it was submitted that although the proceedings of the fourth defendant against the plaintiffs were commenced by the filing, on 9 March 1994, of a summons on its behalf seeking an order that there be judgment for the fourth defendant against the plaintiffs for damages to be assessed pursuant to the undertaking as to damages given on 7 May 1993, damages in the nature of interest should not run from that time until 30 March 2001, on which date judgment was entered for the fourth defendant.
It was submitted, as was the fact from 7 July 1994 until 29 August 1994, no step was taken in the action by the fourth defendant on which later date application was made to reinstate the proceedings after it had been struck out in consequence of the fourth defendant's failure to have the proceedings entered into an appropriate list.
It was submitted that the period between 7 July 1994 and 29 August 1997 should not be taken into account when calculating interest. Further, it was submitted that again the fourth defendant did not seek to prosecute its claim which caused the plaintiffs to issue a summons on 30 March 2000, seeking to have the proceedings of the fourth defendant dismissed for want of prosecution, and again that damages in the nature of interest should not run for the period during which the fourth defendant allowed the proceedings to lie dormant.
On the hearing of that summons, orders were made as to the conduct of the trial of the proceedings. It follows that on return of that summons, the proceedings were not dismissed for want of prosecution. In substance it was submitted that the plaintiffs should not be required to pay damages in the nature of interest during the periods when the fourth defendant did nothing to prosecute its claim. To this it was submitted on behalf of the fourth defendant that throughout the time from the commencement of the proceedings until the determination of this matter, the plaintiffs enjoyed the use of moneys which were rightly those of the fourth defendant in that it had the use of moneys in respect of which they were found liable to the fourth defendant, in consequence of the undertaking given by the plaintiffs to the court.
In my view this submission made on behalf of the fourth defendant provides a good answer to the submissions made on behalf of the plaintiffs with respect to this matter.
Further it was submitted that the fourth defendant should only have damages in the nature of interest until 30 March 2001, when judgment was delivered in this matter.
No evidence has been put before the court, nor has any suggestion been made that subsequent to judgment being delivered, the plaintiffs have paid to the fourth defendant the judgment debt. In those circumstances the fourth defendant should have damages in the nature of interest until this day from 20 April 1994 on which date the statement of claim of the fourth defendant was filed.
For these reasons it is ordered:
(1)That there be judgment for the fourth defendant against the plaintiffs for damages in the nature of interest in the sum of $1,644.63.
(2)That the plaintiffs pay the fourth defendant's costs of the proceedings brought by it against them, to be taxed as between party and party on the scale applicable to Supreme Court proceedings.
(3)That the provisions of Rule 63.24(1) have no application to the defendant's costs to be taxed and paid by the plaintiffs pursuant to Order 2 hereof.
(4)It is directed that the submissions and correspondence on behalf of the plaintiffs and the fourth defendant relevant to costs and damages in the nature of interest, be placed on and remain on the court file.
I so order.
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