Oxer v Astec Paints Australia Pty Ltd

[2008] SASC 64

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

OXER v ASTEC PAINTS AUSTRALIA PTY LTD

[2008] SASC 64

Judgment of The Honourable Justice Debelle

6 March 2008

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - AS OF RIGHT

Appeal from Master dismissing application for order that non-parties pay plaintiff’s costs – whether decision of Master is a final judgment – relevant principles – whether appeal lies to Full Court or single judge – whether permission to appeal is required – held, appeal lies to Full Court but to the extent necessary permission to appeal granted.

Supreme Court Act 1935 s 40, s 50; Supreme Court Rules R 17, R 131, R 281, R 285, referred to.
Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246; Gaskin v Heinicke [2007] SASC 256; Licul v Corney (1976) 180 CLR 213; re Land and Property Trust Co plc [1991] 3 All ER 409; Thompson v Fraser (Practice Note) [1986] 1 WLR 17, applied.
Copping v ANZ McCaughan Ltd (1995) 63 SASR 523; Donald Campbell & Co Ltd v Pollak [1927] AC 732; Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd [2004] 2 Qd R 11; Jones v McKie [1964] 1 WLR 960; Knight v F P Special Assets (1992) 174 CLR 178; Wilkinson v Kenny [1993] 1 WLR 963, considered.

OXER v ASTEC PAINTS AUSTRALIA PTY LTD
[2008] SASC 64

Civil

1. DEBELLE J:        This as an appeal from the order of a Master of this court dismissing an application by the plaintiff for an order that persons who are not parties to the action pay the plaintiff’s costs.

2. Mr Britten-Jones, who appeared for the respondent, contended that the appeal is incompetent in that it is an appeal against an order as to costs so that permission to appeal is required and the appellant has not obtained such permission.  He calls in aid Rule 281 of the Supreme Court Rules.  For the reasons which follow, I do not accept that contention.

3. Section 50 of the Supreme Court Act 1935 provides for appeals including appeals against a judgment of a Master of this court. It is necessary to refer only to s 50(1), (2) and (5).

   50    (1)     Subject to this section –

   (a)an appeal lies to the Full Court against a judgment of the court constituted of a single judge; and

   (b)an appeal lies against a judgment of the court constituted of a master.

   (2)     An appeal against a judgment of a master lies, if the rules so provide, to the Full Court and otherwise to the court constituted of a single judge.

   (5)     The rules cannot, however, require the court’s permission for an appeal if the judgment under appeal –

   (a)denies, or imposes conditions on, a right to defend an action; or

   (b)deals with the liberty of the subject or the custody of an infant; or

   (c)grants or refuses relief in the nature of an injunction or the appointment of a receiver; or

   (d)is a declaration of liability or a final assessment of damages under section 30B; or

   (e)makes a final determination of a substantive right.

   The effect of those provisions is that an appeal lies to the Full Court against the judgment of a Master unless the Supreme Court Rules provide otherwise. 

4. Rule 17 of the Supreme Court Rules applies to appeals against judgments of a Master.  It provides:

   17(1)     An appeal lies, as of right, from a final judgement of a Master to the Full      Court.

   (2)An appeal lies, as of right, from any other judgment of a Master to a single     Judge of the Court.

   If the decision of the Master in this case is a final judgment, an appeal lies to the Full Court.  If it is not, the appeal is to a single judge of this court.  The test for determining whether a judgment is final is whether the judgment or order appealed from finally determines the rights of the parties: Licul v Corney (1976) 180 CLR 213 per Gibbs J at 225; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246. The court has regard to the legal rather than the practical effect of the judgment: Finance Corporation at 248 per Gibbs CJ.  The judgment of the Master that the respondents are not liable to pay the appellant’s costs finally determines that issue as between those parties.  It is an issue which has arisen at the end of the proceedings.  It is in no sense an interlocutory judgment.  It binds the parties in the absence of an appeal.  It appears a final judgment in every respect.  For these reasons, this appeal may lie to the Full Court.

5. It is necessary to note also paragraph (b) of Rule 281 which deals with appeals on questions of costs.  Rule 281 provides:

   281Subject to any statutory provision to the contrary, an appeal to the Court lies by permission of the Court if –

   (a)the judgment subject to the appeal is –

   (i)an interlocutory judgment of the Court given by a Judge; or

   (ii)a judgment given on appeal from an interlocutory judgment; or

   (iii)a judgment given by a single Judge on appeal from a Magistrate sitting in the Youth Court, or     

   (b)     the appeal is limited to a question of costs. 

   One question is whether the judgment of the Master in this case was a final determination of a substantive right and so excluded from Rule 281 by s 50(5)(e) of the Supreme Court Act. If it is, Rule 281(b) has no operation. It is a nice question whether a decision whether a non-party is liable to pay the costs of a party to the litigation is the final determination of a substantive right. On balance, I do not think it is. The power of the court to award costs is provided by s 40 of the Supreme Court Act. Section 40(1) provides that the power to award costs shall be in the discretion of the court or judge. That power includes the power to order that a person not a party to the proceedings should pay the costs of a party: Knight v F P Special Assets (1992) 174 CLR 178. Because the order as to whether a non-party should pay costs is made in the exercise of discretion it is not, I think, the determination of a substantive right. Rule 281(b), therefore, applies.

6. The terms of paragraph (b) are clear. If the only questions in the appeal relate to questions about costs, it is necessary to obtain permission to appeal. The only issues in this appeal concerns an issue as to costs, namely, who is liable to pay the costs of these proceedings. Paragraph (b) is expressed in terms so wide that they are capable of including any kind of question as to costs. I do not think that is the intent of the rule. Paragraph (b) is intended to do the work of what was formerly s 50(2) of the Supreme Court Act. Section 50(2)(b) provided that permission to appeal was required from an order “as to costs only which by law are left to the discretion of the judge”. That provision was expressed in terms which were in all material respects the same as s 18(1)(f) of the Supreme Court Act 1981 of England.  The English provision was considered by the Court of Appeal in re Land and Property Trust Co plc [1991] 3 All ER 409. The Court held that s 18(1)(f) did not require permission to appeal in the case of a costs order against a person not a party to the proceedings. Nicholls LJ, with whom Lord Donaldson MR agreed, said:

   To my mind, the making of a costs order against a non-party is such an unusual and far reaching departure from the normal course of events to be expected in litigation that I cannot believe Parliament had this type of case in mind at all when enacting s 18(1)(f) or the corresponding section in the preceding Acts.  It would indeed be remarkable if a ‘stranger’ to proceedings could be ordered to pay the costs of a party to those proceedings and have no right of appeal against that order in any circumstances unless the judge who made the order saw fit to give leave to appeal.  Parliament cannot have intended that such a person should have no right of appeal at all whatever the circumstances and however severe or draconian the effect of the order might be.

   In my view, s 18(1)(f) is to be understood and read as applying only to orders for costs made against persons who were parties to the proceedings in which the costs in question were incurred.  Costs orders against persons who were not parties to the relevant proceedings are not orders which relate ‘only to costs’ within the meaning of that expression in the paragraph.  Such orders necessarily relate to matters other than merely the outcome of the proceedings.  There has to be something more, some conduct by the non-party which makes it just that he should bear the costs of the litigation to which he was not a party.   

   These observations are apposite to the operation of paragraph (b) of Rule 281. 

7. The requirement to obtain permission to appeal on a question of costs exists for the purpose of limiting appeals as to costs to those cases where the judge has not exercised the discretion as to costs judicially: Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 811; Jones v McKie [1964] 1 WLR 960 at 966; Copping v ANZ McCaughan Ltd (1995) 63 SASR 523 at 528-529. It is not the intention of the rule to require leave to appeal where the issue as to costs falls outside the question whether an order for costs should be made between party and party and the terms of that order. For that reason, permission is not required if the issue is whether or not an order as to costs was in fact made: Gaskin v Heinicke [2007] SASC 256. In Thompson v Fraser (Practice Note) [1986] 1 WLR 17 permission to appeal was not required where a solicitor had been ordered to pay all of the costs of possession proceedings. As Nicholls LJ said, the requirement of permission to appeal could result in a stranger to proceedings having no remedy by way of appeal if leave were to be denied. That would result in manifest injustice and, as his Lordship noted, be draconian in effect. These views were considered correct by Sir Thomas Bingham MR in Wilkinson v Kenny [1993] 1 WLR 963 at 972. In Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd [2004] 2 Qd R 11, the Full Court of the Supreme Court of Queensland did not apply the reasoning in re Land and Property Trust Co plc because the terms of the relevant Queensland legislation differed from s 18(1)(f) of the English legislation.  That decision can be distinguished on that ground.  

8. In my view, Rule 285 was intended to have the meaning and effect as expressed in s 50(2)(b) which is in the same terms as s 18(1)(f). For that reason it is appropriate to apply the reasoning of the Court of Appeal in re Land and Property Trust Co plc.  The appeal in this case, therefore, lies to the Full Court and the appellant does not require permission to appeal but has a right of appeal.

9. If I have erred in reaching this conclusion and permission to appeal is required, the fact that the appellant has not obtained permission to appeal from the Master does not render the appeal incompetent.  Rule 285 prescribes the means by which to apply for permission to appeal.   Rule 285 provides:

   285    (1)     When an appeal requires the Court’s permission the appellant may:

   (a)commence the appeal in the ordinary way and include in the notice of appeal a request for the necessary permission; or

   (b)within 14 days after the date of the judgment against which the appellant seeks to appeal, make a separate application for permission to appeal:

   (i)to the single Judge or Master of the Court who gave that judgment; or

   (ii)to a single Judge of the Court, but only when the appeal is from a Master or from a lower Court or tribunal and the appeal, if permission is granted, would lie to a single Judge.

   (2)     If the appellant commences the appeal before obtaining permission to appeal, the appeal is conditional on permission to appeal being granted, and, if permission is refused, the appeal lapses.

   (3)     If the appellant makes a separate application for permission to appeal to the Court before filing a notice of appeal, the appellant must file with the application an affidavit setting out the grounds of the application. 

   Rule 285(2) is called into operation because the appellant has instituted this appeal before obtaining permission to appeal.  Sub-rule (2) does not prescribe a time within which the application is to be made.  Given that the appellant has 21 days within which to appeal, it cannot be said that the time limit of 14 days in Sub-rule 1(b) applies.  Practice Direction 6.1 which regulates applications for permission to appeal contains no time limit within which the application should be made.  Paragraph 6.1.2 of that Practice Direction  requires that the application for permission to appeal be made under Rule 131.  Such an application will be heard by a single judge.  In the course of this hearing, the appellant made an oral application for permission to appeal.  As this purported appeal has been argued at length before me, it is appropriate that I determine the application.  That will avoid the parties having to incur further cost on application for permission to appeal. 

10. I am satisfied that this is a proper case in which to grant permission to appeal, if permission is in fact required.  I am satisfied that the decision of the Master is attended with sufficient doubt that it should be reconsidered on appeal.  There are also important issues of principle to be considered.  There will therefore be an order that, to the extent necessary, the plaintiff have permission to appeal.