Murphy & Anor v Goldtrap P/L
[1996] QSC 275
•12 November 1996
IN THE SUPREME COURT
OF QUEENSLAND
No. 1811 of 1992
Brisbane
Before Mr Justice Ambrose
[Murphy & Anor v. Goldtrap P/L & Ors]
BETWEEN:
PHILLIP REGINALD MURPHY
First Plaintiff
AND:
EMZAY PTY LTD A.C.N. 010 659 097
Second Plaintiff
AND:
GOLDTRAP PTY LTD A.C.N. 010 989 250
First Defendant
AND:
TOSH ORDY MURPHY
Second Defendant
AND:
LINDA JANE MURPHY
Third Defendant
AND:
ROBERT JAMES TRASK
Fourth Defendant
AND:
REMFORD PTY LTD A.C.N. 010 660 394
Fifth Defendant
AND:
MAPGATE PTY LTD A.C.N. 010 974 571
Sixth Defendant
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 12 November 1996
CATCHWORDS: JUDGMENT IN FAVOUR OF PLAINTIFFS - whether plaintiffs allowed to submit 2 bills of costs relating to pre-judgment and post-judgment costs - construction of judgment orders - liberty to apply for directions.
Counsel:S. J. Russell (solicitor) for plaintiffs
G. J. Robinson for defendants
Solicitors:Russell & Co for plaintiffs
Bain Gasteen for defendants
Hearing Date: 28 February 1996
IN THE SUPREME COURT
OF QUEENSLAND
No. 1811 of 1992
Brisbane
Before Mr Justice Ambrose
[Murphy & Anor v. Goldtrap P/L & Ors]
BETWEEN:
PHILLIP REGINALD MURPHY
First Plaintiff
AND:
EMZAY PTY LTD A.C.N. 010 659 097
Second Plaintiff
AND:
GOLDTRAP PTY LTD A.C.N. 010 989 250
First Defendant
AND:
TOSH ORDY MURPHY
Second Defendant
AND:
LINDA JANE MURPHY
Third Defendant
AND:
ROBERT JAMES TRASK
Fourth Defendant
AND:
REMFORD PTY LTD A.C.N. 010 660 394
Fifth Defendant
AND:
MAPGATE PTY LTD A.C.N. 010 974 571
Sixth Defendant
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 12 December 1996
This is an application by successful plaintiffs for liberty to file two separate bills of costs pursuant to an order made in their favour on 24 October 1995 in an action in which they succeeded against certain of the defendants in obtaining declaratory relief in respect, inter alia, of land held by the fifth defendant in trust partly for the second plaintiff. Orders which were based on that basic declaratory relief were made restraining the fifth defendant from increasing any indebtedness with respect to certain parts of that land and requiring that the second, third and fifth defendants pay costs which would necessarily be incurred in enabling the second plaintiff to become registered owner of part of the land held in trust for it.
It was further ordered that the second, third and fifth defendants account to the second plaintiff for all moneys which they had received from any sale or dealing with lands to which the second plaintiff was declared to have been entitled, all moneys paid by them for acquisition of those lands and any profits or other benefits derived by any of them in connection with the lands in respect of which the declaration was made in favour of the second plaintiff.
It was further ordered that the accounts be delivered in writing and filed and served on the plaintiffs by Monday, 27 November 1995.
It was further ordered that those accounts be verified by affidavit, be accompanied by a schedule identifying any profit or loss made by dealing with the lands in the period from 1 July 1990 to the date of the accounts and that they otherwise conform with the requirements of the Rules of Court as to the taking of accounts. It was directed that a Registrar of the Court take the accounts and that the second, third and fifth defendants pay to the second plaintiff a sum equal to 15% of the profits and other benefits derived by them from dealing with the lands in accordance with the Registrar's certificate given upon the taking of the accounts. The defendants were ordered to pay interest to the second plaintiff upon the sum which was found to be due on the taking of the accounts. Various other orders were made with a view to the second plaintiff being paid forthwith moneys to which it was declared to be entitled which were in the possession or under the control of the defendants. It is unnecessary to deal in detail with those matters.
In the same judgment it was ordered that the counterclaim of the second, third and fifth defendants be dismissed.
It is clear from the terms of the judgment and ancillary orders that:
The plaintiff succeeded in obtaining an order for final relief against the defendants in respect of the property which it had claimed the defendants held upon trust for it.
A counterclaim by the defendants in respect of the same matters was dismissed.
Orders were made to facilitate prompt payment by the defendants to the second plaintiff of moneys under their control to which it was adjudged the second plaintiff was entitled.
An order was made for the taking of accounts with respect to dealings by the defendants with land to which it was adjudged the second plaintiff was entitled, extending over a period of nearly 6½ years and orders were made designed to regulate the procedures for the taking of those accounts by the Registrar.
Analysed broadly, the terms of the judgment declared the beneficial rights of the second plaintiff to property in the possession of and under the control of the defendants. It made orders designed to enable the second plaintiff to enjoy forthwith the benefit of certain specified sums of cash. It also, as I have indicated, provided for the taking of accounts designed to enable a full and detailed investigation of profits made with respect to property to which the plaintiff was declared to be entitled in part and upon the taking of those accounts it was ordered that any sum found to be due to the plaintiff be paid forthwith to the plaintiff.
There has been a good deal of delay apparently involved in the taking of accounts.
The Registrar informs me that the parties estimate that it will take at least three weeks to take the accounts. There is a large number of objections filed. At the present time an appointment has been made for one weeks hearing commencing on 10 February 1997 when oral evidence will be called. The completion of the taking of accounts will depend upon the time available to the Registrar after March 1997.
It emerges from the material that the plaintiff was significantly disadvantaged financially by the breach of trust established against the defendants.
Accounts have not yet been taken. A number of applications have been made to the court and Registrar even since this application was made in February 1996 and the long and short of it is that the plaintiffs who have incurred significant legal costs in obtaining judgment are anxious to be reimbursed in respect of those costs.
It is the contention of the defendants that the plaintiff is not entitled to present more than one bill of costs under the terms of the order and that therefore no costs will be taxable under the judgment until there has been a final taking of accounts and a due certification of the sum (if any) to which the plaintiffs are entitled. It emerges from the material that there will be a strenuous contest on the taking of accounts requiring oral examination etc.
The plaintiffs therefore seek an order that they be at liberty to file two separate bills of costs pursuant to the judgment of 24 October 1995. That is to say:
A bill of costs of and incidental to the action (including the counterclaim) which excludes the costs of and incidental to the taking of the accounts; and
a bill of costs of and incidental to the taking of the accounts, pursuant to the order.
The plaintiffs also seek an order that the taxation of each such bill of costs may proceed separately and that the Registrar sign and issue separate allocaturs and certificates in respect of each bill.
While it is not unusual in my experience for separate bills of cost to be taxed with respect to interlocutory proceedings which take place in the course of an action, it is unusual to have separate bills of costs prepared in respect of a final order made for costs.
It is not contested in the present case that it was within the discretion of the trial judge to make an order of the sort for which the plaintiffs now contend. Indeed, it is contended by the plaintiff that upon a proper construction of the order made by the trial judge on 24 October 1995, that is precisely what he did do.
It is the contention of the defendants, however, that upon a proper construction of that order he did not order that the costs of taking the accounts be dealt with separately from the other order for costs incurred by the plaintiff in pursuing its action. It is the contention of the defendant that a fair reading of the order does not permit the construction for which the plaintiffs contend.
It is the contention of the defendants that if upon its proper construction the order for costs does not permit the preparation of two separate bills of cost, then there is no power under the "liberty to apply" provision contained in the order to make such an order on the facts of this case - however hard that may be on the plaintiffs.
The plaintiffs point out that under s.48(2)(b) of the Supreme Court Act 1995, interest for non-payment of the costs incurred to date of judgment to which they are entitled and which may now readily be detailed in a bill of costs in taxable form will not commence to accrue until taxation has been completed. The contention is that a very significant part of the costs to which the plaintiffs are entitled under the order already made are readily ascertainable now and the taking of the accounts which has extended for a long time and which, at least at date of application, had not commenced (and apparently have still not commenced) might involve the incurring of significantly less costs than the costs of trial prior to perfection of judgment.
The starting point then in considering the matters in issue is to look at the order for costs contained in para.23 of the order of Byrne J made on 24 October 1995 which reads:
"IT IS FURTHER ORDERED THAT that the second, third and fifth defendants shall pay the plaintiffs' costs of and incidental to this action, the taking of the accounts pursuant to this judgment, and the counter-claim, including reserved costs, if any, on a solicitor and client basis;".
Paragraph 24 provides:
"AND IT IS FURTHER ORDERED THAT the parties have liberty to apply on two days' written notice to the others."
It is contended for the plaintiffs that had it been the intention of the learned trial judge to treat the taking of accounts pursuant to judgment as merely part of the necessary working out of or enforcement of its terms for the purpose of the costs order, it would have been quite unnecessary for him to mention specifically "the taking of the accounts pursuant to this judgment". It is contended that had that been the intention in making the order for costs, his Honour would simply have ordered payment of the plaintiffs' costs of and incidental to the action and counter-claim, including reserved costs. It is said that that would of course have included the costs of taking accounts pursuant to the judgment just as it would have included other costs involved in the execution of the judgment.
It is not contended for the defendants that it was not possible for the learned trial judge to make one order for payment of costs incurred by the plaintiffs prior to the taking of accounts and a separate order for the payment of costs incurred by the plaintiff in the taking of the accounts. The defendants contend simply that that is not a proper construction of the terms of the order actually made.
In construing the order for costs made in this case, it is permissible in my view to look at other parts of the order obviously designed to put the plaintiff without delay in receipt of readily available benefits to which it was declared to be entitled and of which it had been wrongfully deprived up to the making of the order.
Thus under para. 7 of the order it was specifically directed that the defendants pay any stamp duty and registration fees on any instruments necessary to enable the second plaintiff to become registered owner of certain of the trust lands in issue. Under para. 16 of the order the defendants were required to "forthwith use their best endeavours" to procure the first defendant "forthwith to pay to the Second Plaintiff 15% of the total sum held in each such trust investment account consequent upon an assignment of certain rights and property previously referred to in the order.
Under para. 17 of the order, defendants were ordered "forthwith to use their best endeavours ... to pay to the Second Plaintiff from the moneys in the said accounts, a sum equal to $130,000.00, less the money paid pursuant to paragraph 16" of the judgment. That order was made upon the plaintiffs' undertaking to repay such part of the balance of the trust investment accounts "as may be found due upon the taking of the said accounts".
Paragraph 18 of the order again requires the specified defendants to:forthwith use their best endeavours ... to procure the First Defendant forthwith to pay to the Second Plaintiff the balance remaining in each such trust investment account (referred to in the judgment) upon the payment of the sums referred to in paragraphs 16 and 17 hereof, such payment to be made and received on account of the liability of the fifth defendant under this judgment, but subject to the said undertaking;"
I infer from the detailed provisions of the order for payments forthwith of funds to the plaintiffs "upon account" of the funds which it was assumed would eventually upon the taking of accounts be found to be payable to it, a recognition of the plaintiffs' financial impoverishment resulting from the defendants' breach of trust and having regard to the substantive relief granted in the judgment, the intention of the learned trial judge that the defendants forthwith take steps to promptly relieve that impoverishment upon the giving of the requisite undertakings.
In my view, it is permissible to keep this intention in mind when construing para. 23 of the order relating to costs to determine whether having regard to the words used in the order, there is a sufficient indication of intention that the plaintiffs should have the right to have the costs of the action generally taxed and paid forthwith by the defendants with the right then to have the costs of taking the accounts and receiving payment of money found to be due upon taking them taxed separately and paid to the plaintiffs whenever that accounting exercise should be completed.
It emerges from the material that the action was long and complicated commencing in 1992. The defendants submitted to judgment on the eve of the trial. The plaintiffs have already incurred very significant solicitor and own client costs (in excess of $200,000) to date of obtaining judgment.
Interest under s.48(2)(b) of the Supreme Court Act 1995 will not commence to run upon the sum taxed for costs until after a certificate of taxation is signed.
The taking of the accounts will be a long complicated and costly exercise.
It is contended that the action which concluded upon delivery and perfection of final judgment and the taking of accounts as ordered in that final judgment are really quite discreet proceedings and there would be no problem at all in drawing and presenting separate bills of costs. Both the plaintiff and the defendant refer to Re Segalov: Hyman and Teff v. Segalov (1952) P. 241 where Wallington J considered a case where plaintiffs in a probate action presented three bills of costs, one for the costs of the action in which they succeeded and the other two for costs incurred in the administration ad litum of the estate by a bank pending the determination of the testamentary capacity of the testator. His Honour held in the circumstances that the plaintiff in that case was not entitled to select a portion of the costs to which he became entitled upon obtaining judgment in his favour and having received an allocatur in respect of that portion to then seek to present further bills of cost in respect of other expenses which had been incurred prior to the obtaining of judgment. At p. 248 his Honour observed:"It appears to me to be quite clear that a litigant in possession of a judgment against an opposite party to pay his taxed costs must lodge a bill for taxation which includes all the costs to the payment of which when taxed the judgment entitles him."
At p.247 he said:
"A matter which is not without importance is the fact that in submitting to taxation and obtaining payment of the bill of costs allowed at £433.16 the plaintiff's solicitor acted in such a way as to make it clear to the defendant that that bill was the bill of costs which was taxable pursuant to the judgment of the trial judgment in which he condemned the defendant in the plaintiff's costs of the suit. It is impossible for me to entertain any doubt that on receipt of that bill and of the order to pay and of the pressure for payment the defendant must have been satisfied that having paid the amount of the bill his liability for costs under the judgment had been satisfied."
In my view on the facts of this case which I have outlined briefly the defendants could be under no misapprehension were a bill of costs presented and taxed with respect to the costs of the action generally and a separate bill of costs prepared and taxed upon completion of the taking of accounts. It would seem to me therefore that the facts considered in Segalov are quite distinguishable from the facts contemplated and discussed in the present case. Further, all the costs considered in Segalov appear to have been incurred prior to the perfection of the judgment upon conclusion of the trial. There is nothing in the ratio of that case, in my view, which militates against the construction of the order for costs for which the plaintiffs contend or for that matter if thought appropriate, making a direction of the sort which they seek.
RSC O. 91 rr. 64, 81, 82 and 82A make it clear that costs may be taxed only after they have been incurred. Presumably in this case the costs of taking the accounts will continue to be incurred until the Registrar gives his certificate pursuant to para. 13 of the judgment.
It was conceded that upon the facts of this case it was within the discretion of the trial judge to make an order in clear terms having the effect which the plaintiffs say the order actually made does have. Had the order been expressed in words similar to these:"ordered that the .... defendants shall pay the plaintiffs' costs of and incidental to the claim and counterclaim including reserved costs if any on a solicitor and client basis and the plaintiffs' costs of and incidental to the taking of the accounts pursuant to this judgment on a solicitor and client basis."
in my view it would have been clear enough that the intention manifest on the face of the order was to make two separate orders for costs - (i) in respect of the costs of the action incurred up to perfection of judgment; and (ii) in respect of the taking of accounts as required by the judgment subsequent to its perfection.
Although a wording such as suggested may perhaps have made the intention a little clearer, the most telling indication of intention of course in both the order actually made and the alternative form posited, is the express and specifically different categorisation of the costs of the claim and counterclaim and the costs of taking accounts subsequent to perfection of judgment. Without that categorisation of course an order merely for the costs of claim and counterclaim would include the costs of taking accounts as directed by the judgment. The only explanation for the separate categorisation of the costs of taking accounts and all the other costs of the action in my view is the intention that the costs of taking the accounts should not be treated as only one segment of the overall costs ordered to be paid with respect to the claim and counterclaim generally to be taxed in the one bill as would have been the position had that express categorisation not been made.
Further and in the alternative, the plaintiffs contend that in the circumstances the giving of liberty to apply gives power to make further orders or to give further directions as to the mode of carrying out the order for costs to make it more efficacious to achieve the results obviously intended by the order on its face. The plaintiffs rely upon the observations of McPherson SPJ in Fylas Pty Ltd v. Vynal [1992] 2 Qd R 593 at p. 598 where he observed:
"A judgment or order that expressly reserves to parties a leave or liberty to apply can be varied on an application pursuant to such leave only so far as may be necessary for the purpose of working out the actual terms of the order so as to make it more efficacious in matters of detail."
In my view, manifest on the face of the order, is an intention that the costs of taking the accounts may be considered separately from the costs of the action generally. In the context of other provisions of the order designed to relieve promptly the plaintiffs' impecuniously it seeks to avoid as far as possible the delay which would inevitably be occasioned to the plaintiffs should taxation of the costs incurred up to perfection of judgment be postponed to completion of the taking of accounts. The only object of making an order in the terms used would be to enable the plaintiffs if they so desired to present separate bills of cost (i) in respect of the action and counterclaim, including reserved costs; and (ii) in respect of the taking of accounts as required by the terms of the judgment.
The difficulties encountered by the plaintiffs may probably be best overcome by a declaration to that effect. However in my view it is also open to them to seek a specific direction or order in the terms actually sought under the liberty to apply provisions of para.24 of the order. It is not the position that only one of those two forms of relief can properly be given. In the circumstances of this case in my view it is open to both make a declaration and give a direction in the terms sought.
I declare therefore that:
upon the proper construction of the order made by Byrne J on 24 October 1995 the plaintiffs may tax a bill of costs (including reserved costs) incurred in pursuit of their action and in defending the defendants' counterclaim on a solicitor and client basis separately from, and independently of taxing a bill of the costs involved in having accounts taken by the Registrar pursuant to paras. 9, 10, 11 and 12 of the judgment; and
the said order upon its proper construction permits the plaintiffs if they so desire to tax their costs of taking accounts pursuant to paras. 9, 10, 11 and 12 of the judgment separately from and subsequent to the taxation of the bill of costs of the action being claim and counterclaim.
Pursuant to para. 24 of the judgment, the plaintiffs may make this application for the direction sought in the summons to the extent that it may be of assistance to them in achieving the rights given under the order.
I therefore order that the plaintiffs have liberty to deliver separate bills of costs:
(a)in relation to the costs of the action including the counterclaim; and
(b)in relation to the costs of taking the accounts referred to in para.9 of the order of Byrne J made on 24 October 1995.
I order that the costs of and incidental to this application be costs in the cause.
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