| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : NELSON -v- MOORCRAFT [2012] WADC 170 (S) CORAM : WAGER DCJ HEARD : 23 - 25 OCTOBER 2012, 19 DECEMBER 2012 & 5 FEBRUARY 2013 DELIVERED : 11 DECEMBER 2012 SUPPLEMENTARY
DECISION : 13 FEBRUARY 2013 FILE NO/S : ALB CIV 3 of 2011 BETWEEN : PETER STANLEY NELSON Plaintiff
AND
PETER MOORCRAFT
Defendant
Catchwords: Costs - General rule that successful party entitled to costs - Whether departure from general rule warranted Legislation: Nil
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Result: Costs awarded to defendant
Representation: Counsel:
Plaintiff : Mr P Kyle
Defendant : Mr H Sklarz
Solicitors:
Plaintiff : Haynes Robinson
Defendant : H Sklarz
Case(s) referred to in judgment(s):
Abreu v Thomas Peacock & Sons Pty Ltd [No 3] [2012] WADC 31 (S)
Alsanto Nominees Pty Ltd v Bowen [2009] WADC 130 (S)
Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S)
Cretazzo v Lombardi (1975) 13 SASR 4
Nelson v Moorcraft [2012] WADC 170
Wallace v Shorescape Holdings Pty Ltd [2010] WADC 114 (S)
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1 WAGER DCJ: On 11 December 2012 I delivered judgment in this matter. My findings are set out in full in Nelson v Moorcraft [2012] WADC 170 and will not be dealt with here.
2 On 19 December 2012 I made orders arising from the judgment and considered written and oral submissions made on behalf of the defendant and oral submissions made on behalf of the plaintiff in relation to a number of matters including the issue of costs. The issue of costs was reserved. I heard further oral submissions on 5 February 2013. 3 Although the plaintiff had represented himself at trial Mr Kyle appeared as counsel for the plaintiff on 19 December 2012 and 5 February 2013. However a memorandum of appearance had not been filed. I advised that I would provide a written decision in relation to the issue of costs once a memorandum of appearance had been filed on the plaintiff's behalf. A notice of appointment of solicitor was filed by Haynes Robinson on 6 February 2013. 4 The trial related to two agreements that had been entered into by the parties; one in relation to the ownership of land and one being a partnership agreement. The plaintiff claimed that the two agreements were breached by the defendant and sought damages resulting from the breaches. The defendant denied liability and counterclaimed that the partnership agreement had been dissolved and the ownership of land agreement was void. I dismissed the plaintiff's claim. The defendant's counterclaim was successful in that I determined that the partnership was dissolved and that the ownership of land agreement was void because the agreement had been frustrated. My findings differed from the counterclaim pleaded because the defendant had argued that the ownership of land agreement was void for lack of consideration. 5 Orders made in respect of the judgment on 19 December 2012 included: (Page 4)
The defendant's submissions 6 The defendant submits that the general rule that the successful party to the action will recover his costs applies and the plaintiff should pay the defendant's costs to be taxed if not agreed. He submits that although the defendant did not succeed on all matters pleaded in his defence the onus was on the plaintiff to prove the claim that he brought to the standard of balance of probabilities. The issues raised in the defence that were not successful were not distinct and severable nor did the matters increase the length of the trial. 7 The defendant advises that the defendant had invited the plaintiff to carry out an accounting of the partnership assets and liabilities in 2010 however the plaintiff had chosen not to do so and had proceeded with his claim. The defendant was self-represented until August 2012. Once counsel started to act for the defendant an amended defence and counterclaim was filed which substantially changed the nature of the matters pleaded by the defendant however the plaintiff was still given sufficient time to have an opportunity to mediate or to attempt to settle the matter prior to the listed trial dates proceeding in October 2012 had he chosen to follow this course. 8 Counsel for the defendant Mr Sklarz narrowed the issues at trial and attempted to assist the court to keep the trial on track. Given the quantity of materials filed by the plaintiff and the width of the matters pleaded by the plaintiff Mr Sklarz' assistance and pragmatic approach to the issues to be determined at trial enabled the trial to be completed in the listed period of three days. 9 The defendant submits that both parties led evidence to challenge credibility of the other party. The majority of the evidence relevant to the defendant's pleadings on unsuccessful issues was also relevant to issues of credibility and therefore no significant additional periods of court time were taken up by the defendant.
The plaintiff's submissions 10 The plaintiff submits that the defendant unsuccessfully pleaded issues including: (Page 5)
1. the claim that the defendant's psychiatric state at the time of entering into the agreements precluded the defendant from understanding the nature of the agreements; 2. that the plaintiff had exerted undue influence over the defendant in order to have him sign the agreements; 3. that the agreements were void for lack of consideration; and 4. that the court may not have had jurisdiction to deal with the plaintiff's claim. 11 The plaintiff argues that the unsuccessful issues took up at least half of the trial and accordingly the parties should each bear their own costs or alternatively an order apportioning costs would be appropriate.
The law 12 The court has a general discretion in respect of costs however the court will generally order that the successful party to any action or matter shall recover his costs (O 66 r 1(1)) Rules of the Supreme Court 1971. 13 If however the court is of the opinion that the conduct of the party has resulted in costs being unnecessarily or unreasonably incurred then the court may deprive the party of his costs, wholly or in part, or may order him to pay the costs of the unsuccessful party, either wholly or in part (O 66 r 1(2)). 14 Order 66 r 1(3) provides: Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increase the costs the court may order such party to pay the costs of such issue or issues. 15 Courts are generally reluctant to apportion costs on the basis of success or failure on issues that arise during the course of the trial: Cretazzo v Lombardi (1975) 13 SASR 4. 16 In Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S) [7] the Court of Appeal said: [T]he power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed, is properly exercised only where there are discreet and severable issues upon which the generally successful party has failed, and which have added to the costs of the proceedings in a significant and readily discernible way. In a case in (Page 6)
which the generally successful party has failed on only a minor issue which did not add materially to the cost of the conduct of proceedings it would not ordinarily be appropriate to depart from the general rule, unless the conduct of the generally successful party in relation to that issue had been unreasonable. In the event of unreasonableness, different considerations may apply. 17 Staude DCJ set out the principles applicable to the application of O 66 r 1(3) in Alsanto Nominees Pty Ltd v Bowen [2009] WADC 130(S). His Honour stated at [6] - [8]: In McConnell v Nationwide News Pty Ltd; Prue v Nationwide News Pty Ltd (Unreported, WASC, Library No 920670, 10 December 1992) Owen J stated:
'Order 66 r 1(3) only applies where the failed issue has increased the costs. The term 'issue' does not mean a precise issue in the technical pleading sense, but any disputed question of fact or issue of law, and a party will not be awarded costs merely because of his success on particular issues: Cretazzo v Lombardi (1975) 13 SASR 4 at 12, 16. Because of court delays and the high cost of litigation, courts should always exercise the discretion to award the costs of issues on which parties fail in such a way that they will come to realise they will not necessarily recover the whole of their costs of raising a discrete issue, and therefore carefully consider what matters they will raise: Commission of Australian Federal Police v Razzi (1991) 101 ALR 425 at 430.'
In Townsend v Collova [2005] WASC 4 (S) Le Miere J found that for the purposes of O 66 r 1(3)
'an issue is introduced where a defendant denies a fact asserted by the plaintiff and leads evidence to support the defendant's contention in relation to that fact.'
The applicable principle was enunciated by the Court of Appeal in Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) [7] - [8]:
'The power to depart from the general rule to the effect that costs follow the event and to instead adjust the costs order to be made by reference to the failure of the generally successful party on specific and particular issues within the litigation is recognised by practice, authority and the express provisions of O 66 r 1(3). However, its application depends upon the identification of discrete and severable issues, the litigation of which has increased the costs of conducting the proceedings. Established practice in this state, and the authorities, suggest that the exercise of this power should be approached broadly, and as a matter of impression, and without
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an attempt at "mathematical precision" which is likely to prove illusory – see, for example, J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (Western Australian Branch) [No 2] (1993) 46 RR 301. Accordingly, the power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed, is properly exercised only where there are discrete and severable issues upon which the generally successful party has failed, and which have added to the costs of the proceedings in a significant and readily discernable way. In a case in which the generally successful party has failed on only a minor issue, which did not add materially to the cost of the conduct of the proceedings, it would not ordinarily be appropriate to depart from the general rule, unless the conduct of the generally successful party in relation to that issue had been unreasonable. In the event of unreasonableness, different considerations may apply.' 18 His Honour also noted at [12] and [13]: Neither O 66 r 1(3) nor the cases require the court to be satisfied that the conduct of the generally successful party be unreasonable or inappropriate. As appears from the dicta in Amaca at [8], unreasonableness is a consideration where the successful party fails on a minor issue which does not significantly add to the costs of the proceedings. In Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 [54], cited by Newnes J in Mickelberg v The State of Western Australia [2007] WASC 140 (S) [36], Goldberg J put it this way:
'A court should not be too ready to disallow costs simply because a party has failed upon an issue unless it is a quite separate and distinct issue from the issues in respect of which it succeeded or unless there be an element of unreasonableness or inappropriate conduct in relation to that issue. (citation omitted)'
19 The relevant principles were also applied in this court in Abreu v Thomas Peacock & Sons Pty Ltd [No 3] [2012] WADC 31 (S) [13] - [17] and Wallace v Shorescape Holdings Pty Ltd [2010] WADC 114 (S) [3] - [8].
Evidence at trial 20 The plaintiff called evidence on the first two days of trial (23 and 24 October 2012). On the final day of trial (25 October 2012) the defendant called evidence. On 25 October 2012 following Mr Moorcraft's evidence Mr Rudnyckyj, a former project officer, gave brief evidence in relation to the defendant's character. Ms Taylor, a former partner of (Page 8)
Mr Nelson, gave evidence in respect of Mr Nelson's character however I advised the parties that I gave very little weight to her evidence in light of the demise of her relationship with Mr Nelson. Mr Solomon, licensed valuer, gave evidence of the value of the structure partially erected on the property and of the property in question. 21 The defendant was the successful party. The issues raised in defence were directly linked to the plaintiff's pleadings and were likely to arise from the plaintiff's case. The defendant did not act in such way that costs were unnecessarily or unreasonably incurred. 22 I am satisfied that the defendant should have the costs of the trial. I order that the plaintiff pay the defendant's costs of the trial heard 23 - 25 October 2012 in any event.
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