Nassif v Fahd
[2007] NSWCA 308
•31 October 2007
New South Wales
Court of Appeal
CITATION: Nassif & Anor v Fahd & Ors [2007] NSWCA 308 HEARING DATE(S): Written Submissions 11 & 12/10/2007
JUDGMENT DATE:
31 October 2007JUDGMENT OF: Ipp JA; McColl JA; Bryson AJA DECISION: 1. Make no order as to costs in the District Court to the intent that each party be left to bear their own costs; 2. Make no order as to costs of the appeal to the intent that each party be left to bear their own costs. CATCHWORDS: COSTS - appellants succeed on point not taken in District Court - 7-day trial in District Court unlikely to have taken place if point relied on there - overwhelmingly strong point based on clear High Court authority - review of discretionary considerations - each party left to bear own costs in District Court and Court of Appeal. LEGISLATION CITED: Civil Procedure Act 2005; s 98 CASES CITED: Latoudis v Casey (1990) 170 CLR 534
Oshlack v Richmond River Council (1998) 193 CLR 72
PARTIES: Sarkis Nassif - 1st Appellant
Bernadette Nassif - 2nd Appellant
Alex George Fahd - 1st Respondent
Ibtasim Fahd - 2nd Respondent
Alexi Mama Fahd - 3rd Respondent
Priscilla Fahd - 4th RespondentFILE NUMBER(S): CA 40586/2006 COUNSEL: Mr R. Forster SC with Mr D.L. Warren for the appellant
Mr F. Lever SC for the RespondentSOLICITORS: Advance Legal - Appellant
McGrath Dicembre & Co - RespondentLOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 5026/2004 LOWER COURT JUDICIAL OFFICER: Judge O'Connor Q.C.
CA 40586/2006
31 October 2007IPP JA
McCOLL JA
BRYSON AJA
1 THE COURT: These reasons deal with costs in the District Court and in the Court of Appeal, further consideration of which was reserved on 8 October 2007 – [2007] NSWCA 269. The appellants, defendants in the District Court, succeeded completely on appeal, the appeal was allowed and judgment was given for the defendants. The Court has a wide discretionary power with respect to costs: see Civil Procedure Act 2005 s 98. The ordinary course is that costs follow the event: see UCPR 42.1. The ordinary outcome of the exercise of discretionary powers as to costs, and the circumstances in which the ordinary outcome has been departed from are dealt with in many reported decisions; particularly note observations in the High Court in Latoudis v Casey (1990) 170 CLR 534 at 566-567 and Oshlack v Richmond River Council (1998) 193 CLR 72 at 97-98 [67] to [70] (McHugh J). The discretion is sufficiently wide to support an order costs against a successful party, where circumstances make that appropriate. A costs order is remedial, not punitive. Withholding costs should not be a punitive measure, as awarding costs should not be a punitive measure.
2 The most important consideration is whether costs were reasonably incurred so as to achieve the outcome which the court's decision has established was just. The circumstances which led Bryson AJA to propose that the Court of Appeal reserve further consideration of costs appear from his judgment at paras [4], [5] and [39]. The appellants succeeded on appeal on a point which was not taken in the District Court although it plainly ought to have been stated in their Grounds of Defence and put forward for decision by the Trial Judge, on objections to the admissibility of the respondent’s evidence of an oral collateral agreement inconsistent with the express written terms of the contracts for sale of land, and on final submissions. The hearing in the District Court extended over seven days and almost all the hearing time related to what in fact were the terms of the oral agreements between Mr Nassif and Mr Fahd, with many collateral and credit issues relating to acceptance of the evidence of one or the other of the participants, and to the probabilities.
3 The respondents succeeded and obtained findings which could not be attacked with success on appeal. Until about a week before the appeal was heard the appellants’ case, so far as could be understood from the notice of appeal and from preparatory steps, was an attack on the Trial Judge’s disposition; the point on which the appellants succeeded emerged in communications from counsel about one week before the hearing, in a proposed amendment to the notice of appeal circulated several days before the hearing, and in an actual amendment at the outset of the hearing. When the point was raised and relied on it was overwhelming, and the question whether or not the terms of the agreements were as Mr Fahd said they were was shown not to have been worthy of the attention which had been given to it: when everything Mr Fahd said was established to be true, the respondents were not entitled to enforce the arrangements.
4 The question what measures it was reasonably necessary for the appellants to take and what costs it was reasonably necessary for them to incur to attain justice is answered clearly and obviously that no more was necessary to be done than to state in a distinct way in the Grounds of Defence the point which was ultimately relied on, and if the point was not conceded by the respondents (and they did not concede it at the hearing of the appeal) to advocate it in a clear way at the trial. While it cannot be seen clearly what course exactly would have followed if this had happened, it is extremely unlikely that (as the appellants’ written submissions contended) the trial would have proceeded on the issues of fact and that decision would not have emerged until after a long hearing such as the one that took place. It is overwhelmingly likely that the trial would have been far shorter; and it is possible that the trial would not have taken place at all, having regard to the overwhelming strength of the point. There was a serious failure by the appellants to consider fully, discern and notify the court and their opponents the grounds on which the respondents’ claim was resisted. Appropriate respect for the court and appropriate participation in its functions required much more of the appellants and of their legal advisers. The appellants put the respondents to the trouble and expense of a lengthy trial rather than a short trial, and to an appeal in which they should not have been involved. The course taken by the appellants contributed to a heavy burden of costs and trouble which the respondents have incurred: although the main element in the respondents’ burden is their own decision to sue for a remedy to which they were not entitled.
5 There was misconduct in the manner in which the appellants’ case was conducted in the District Court, and it is not appropriate to attempt to sever out, on a basis which to some degree would be speculative, what attendances would have taken place in the reasonable conduct of the District Court litigation, and what would not. With proper conduct on behalf of the appellants it is highly likely that the District Court litigation would not have gone anywhere or would not have gone very far. It is quite possible that the trial would not have taken place, and it is highly likely that if it took place it would have been far shorter and far more readily disposed of than it was. The appropriate disposition of costs in the District Court is that the appellants should be left to pay their own costs of the proceedings there. The respondents did not succeed, they brought a case which should not succeed, and there is not a just basis upon which they should, as their counsel contended was appropriate, recover their costs in the District Court against the appellants.
6 The appeal was not a measure which it was reasonably necessary for the appellants to take in order to obtain justice. If they had conducted the litigation of the District Court in the appropriate way there would not have been any need for an appeal. The need for an appeal arose only of the highly unsatisfactory manner in which the District Court litigation was conducted. In the circumstances the appropriate disposition of costs is one in which the appellants are left to bear their own costs of the appeal.
7 The respondents’ Senior Counsel contended to the effect that the respondents should recover their costs in the District Court, and part of their costs in the appeal, from the appellants. Consideration of this contention is dominated by the circumstances that the respondents did not succeed, were not entitled to succeed, and that their claim in the proceedings was barred by a well-known and clearly established legal principle. Their own erroneous concept of their rights contributed at least as much as misconduct of the appellants to the respondents’ lack of success and to the large expenditure which the respondents incurred in pursuing a remedy to which they did not have an entitlement.
8 The orders of the Court of Appeal are:
(1) Make no order as to costs in the District Court to the intent that each party be left to bear their own costs;
(2) Make no order as to costs of the appeal to the intent that each party be left to bear their own costs.
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