Parkridge Group Pty Ltd v Shorescape Holdings Pty Ltd t/as Summit Realty South West [No 2] - [2012] WADC 37

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: PARKRIDGE GROUP PTY LTD -v- SHORESCAPE HOLDINGS PTY LTD t/as SUMMIT REALTY SOUTH WEST [No 2] [2012] WADC 37

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: ON THE PAPERS

DELIVERED : 13 MARCH 2012

FILE NO/S: CIV 1990 of 2010

BETWEEN: PARKRIDGE GROUP PTY LTD
Plaintiff
AND
SHORESCAPE HOLDINGS PTY LTD t/as SUMMIT REALTY SOUTH WEST
Defendant

Catchwords:

Practice - Practice under the Rules of the Supreme Court 1971- Application for summary judgment and to strike out defence - Applications unsuccessful - Costs of the application - Order 66 r 58 and O 14 r 8 of the Rules of the Supreme Court 1971 considered - Turns on its facts - Application to remove scale limit - Turns on its facts

Legislation:

Nil

Result:

Defendants costs of the application in any event
Application to remove scale limit unsuccessful

Representation:

Counsel:

Plaintiff: Mr N F Manucheri
Defendant: Mr A J Musikanth

Solicitors:

Plaintiff: Civic Legal
Defendant: Jackson McDonald

Case(s) referred to in judgment(s):

Cristovao v Butcher Paull & Caulder [2008] WADC 49
Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21
Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd, (Unreported, WASCA, Library No 920347, 19 June 1992)

DEPUTY REGISTRAR HARMAN: The plaintiff applied for summary judgment, alternatively to strike out the defence. Its case for judgment failed as I was not persuaded that on the critical allegation in its pleading, it had discharged the onus. On the strike out application I have previously delivered written reasons. But for the question of the costs, each part of the application has been dismissed. At the conclusion of the hearing I invited the parties to file submissions, upon which, in the absence of a request for relisting, I would make a determination. Neither party has sought a relisting. Each has filed submissions and I now give reasons for decision on the defendant's applications for costs and an order removing the limit on recovery imposed by the scale; and the plaintiff's application that costs be in the cause.
In putting their submissions the focus of the parties has been on the application for summary judgment.
In support of its claim for costs the defendant cites from the reasons for decision of Keen J in Cristovao v Butcher Paull & Caulder [2008] WADC 49 as follows:
[35] Seaman at [14.8.1] notes that the usual order on dismissal of an application for summary judgment is that the costs be in the cause so that the party who is successful at trial recovers them: Whitehall Holdings Pty Ltd v Ravi Nominees Pty Ltd, unreported; FCt SCt of WA; Library No 920347; 13 December 1991. However, it is also noted that in exceptional cases costs may be awarded against the plaintiff where the application should never have been made. It is also suggested that the proper exercise of the discretion to award costs against the plaintiff may extend beyond exceptional cases and in particular to cases in which the plaintiff fails by virtue of defects in the application.
The plaintiff relies on the proposition that there was no feature of the case that would justify a departure from the usual order that costs be in the cause for which it cites Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd, (Unreported, WASCA, Library No 920347, 19 June 1992).
I have no difficulty with the proposition that upon dismissal of an application for summary judgment it is usual to order that costs be in the cause, however in my experience that has been what parties have proposed. As for the proposition put by the plaintiff, in my opinion it would have the tendency to constrain the exercise of discretion.
In his reasons for decision in Whitehall Holdings Pty Ipp J commenced as follows:
On 13 May 1992, this Court set aside the summary judgment that was granted and ordered that the appellants have leave to defend. The appellants were granted liberty to apply in relation to costs.
The appellants have now applied for several costs orders. It is sufficient to state that the appellants seek an order for the costs of the summary judgment. …
I shall deal firstly with the application for the costs of the summary judgment application. The usual order where an application for summary judgment is dismissed is that the costs of the application be in the cause so that the party successful at the trial recovers them. …
Exceptionally, when an application for summary judgment is dismissed, costs are awarded to the defendant; cases of this kind occur where the applications should never have been made.
… The rule that the costs of a summary judgment application may be ordered against an unsuccessful plaintiff where he knows of the existence of a defence rests in essence on the principle that applications for summary judgment should not be brought when the plaintiff is aware or should be aware that the application is hopeless and that it has no prospect of succeeding.
The relevant parts of the reasons of Pidgeon J are as follows:
… As I see it, where the Master grants leave to defend, the normal order as to costs is costs in the cause. That would not be the invariable order where leave is given to defend but it would be the normal order … There could be circumstances to make a different order. If the matter comes within the area of rule 8 of order 14 the Court may dismiss the application with costs.
I agree with the reasons of Ipp J that there is nothing apparent here. In fact I would say every reason is apparent here why the normal order should be made that the Full Court, having granted leave to defend - the substituted order by the Full Court for the Master's order should, for the reasons given by Ipp J, be an order for costs in the cause …
Owen J stated as follows:
I also agree with what has fallen from my brothers and just wish to add one short point. In my experience, short as it may be, there has been, it seems to me, a tendency to bring summary judgment applications in cases where they are somewhat doubtful. I would not wish to be seen to be suggesting that it would not be appropriate in some circumstances to make orders other than that they be costs in the cause when a summary judgment application has been unsuccessful.
…
The feasibility of a summary judgment application being made was canvassed with the expedited list Judge and the application itself found favour with the learned Master. In that respect, for the reasons give by his Honour Ipp J, I cannot see that it could be said that the stance taken by the respondents to the appeal was so unreasonable that it ought now to reflect in an immediate order for costs.
Although only Pidgeon J expressly mentions O 14 r 8(1) of the Rules of the Supreme Court 1971, I have no doubt that the exception to which Ipp J referred was founded on the circumstance that it contemplates. It is as follows:
If the plaintiff makes an application under Rule 1 and the case is not within this Order or if it appears to the Court that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, the court may dismiss the application with costs, and may require the costs to be paid by the plaintiff forthwith.
It is not clear that the appellant had sought an order under r 8(1). Judging from the context portrayed by Ipp J, it had not done so.
There is nothing in the reasons of the members of the court to indicate that its determination was founded upon any rule or principle. In my opinion it is open to consider that the characterisation of the order as 'normal' or 'usual' was founded upon practice.
A passage from the reasons of Pidgeon J in which he considers the costs of the appeal reveals the interplay between practice and principle:
In respect of the normal order that costs on appeal follow the event, that, in my experience, has been the invariable practice of this Court. There is no authority quoted in the White Book to ground that as a rule, but I would consider that by following first principles one would inevitably come to that conclusion because if a person did have summary judgment entered against him which was found on appeal to be wrong, that person ought not normally be at risk to have to pay the costs of an appeal if he lost the action.
Owen J identified the feature of an order for costs by which it operates as a penalty: it is not in the identification of the adverse party but rather, departure from landscape generated under the common law retainer.
My only observation in relation to r 8(1) is that once that mechanism is exposed, it rests comfortably with the operation of O 66 r 48(1). It is as follows:
Unless the Court otherwise orders, the costs of a motion or application in an action shall be deemed to be part of the costs of the action of the party in whose favour the motion or application is determined unless the motion or application is unopposed.
In my opinion Whitehall Holdings Pty Ltd has nothing definitive to say regarding the exercise of discretion.
The plaintiff also relies on the authority of Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21. In that case Blackburn CJ had determined and dismissed the substantive application. At page 23 he stated:
The question of costs of the application was argued. In a case where the application fails because the defendant shows a genuine possibility of defence to the claim, the costs are normally ordered to be costs in the cause, the principle being that should the defendant ultimately fail he will probably be ordered to pay the plaintiff's costs of the action which will then include the costs of the application; a corresponding result will occur if the plaintiff ultimately fails.
I struggle with the proposition that by expressing himself as he did Blackburn CJ had located any principle. His Honour acknowledged that as much as the costs of an interlocutory application are discretionary, so too the costs of an action. Rather than revealing any principle, his Honour may simply have been speaking to the consequences of the order being made, as was Ipp J in Whitehall Holdings Pty Ltd. In any event for any such principle to operate in this jurisdiction would require some accommodation with the import of O 66 r 48.
Across the range of unsuccessful applications brought under O 14 I suspect that a common feature would be that the applicant had failed to discharge either the evidentiary or persuasive onus. To justify as a proposition of general application, recovery by a party successful at trial, of its costs of an unsuccessful application for interlocutory judgment, suggests that at some level or dimension of litigation, there would be a sufficient relationship between those proceedings: yet at each point, the case then put by a plaintiff would be determined on its merits. And there is no reason to consider that success at trial would reflect upon the reason for dismissal of the application. In my opinion it is so unlikely that there would be scope to establish a sufficient relationship, the only question that emerges is why it would be considered to be appropriate for a court to establish a linkage. Absent a linkage it is difficult to conceive that r 48 would not apply. To put that point in context, if what is countenanced by r 48 was presented before a taxing officer, in my opinion there would be no reason to consider that the rule would not have effect.
In addition to what flows from the fact that the application before me was voluntarily undertaken; along with the risks of which the plaintiff is taken to have been aware, in bringing the application it had knowledge of the extent to which costs would be generated; and that there could be no guarantee that it would be awarded the right to recover those costs from the respondent. To be more particular on the measure of costs, but without justifying my projection, it is reasonable to consider that embarking on the application to its conclusion at a contested hearing would add 10 per cent to the costs of the litigation.
The application brought no benefit to either party. In my opinion that fact alone provides good reason to consider that the court ought not to provide the prospect that the applicant would recover its wasted expense.
On its application it is for the plaintiff to persuade the court that it is appropriate that I allow for the prospect that it would recover its costs. Its case failed because it did not establish the necessary basis for judgment. Despite the references to the 'normal' or 'usual' order in Whitehall Holdings Pty Ltd and Harry Smith Car Sales, in my opinion there is no reason to establish a relationship between what transpired on the application and the result of any trial. I am not persuaded that it is appropriate to order that the costs be in the cause.
As for the defendant's application, it bears the onus of persuasion. On the basis of the considerations that I have recorded I am attracted to the proposition that it is appropriate that the defendant recovers its costs. When I isolate the fact that the application has brought no benefit to either party I have no doubt that is the appropriate result.
On the strike out application there are no different considerations that bear upon the exercise of discretion.
As for the defendant's application to lift the limit on recovery, it seeks a result that would facilitate recovery to the extent of the costs incurred in opposing the application. The limit on recovery is $10,230. The affidavits filed in the application are significant. Together in height they measure some 7 cm. I have no difficulty with the submission that each of the particular 68 cases brought within the scope of the action demanded some measure of individual attention by the defendant.
In my opinion, critically there is no evidence to found the proposition that any costs greater than $10,230 were either able to be generated under the defendant's retainer or were incurred by the defendant. Absent such evidence there is no basis to consider that the defendant's costs could exceed the scale.
In any event on a review of the evidence and submissions in support of the application, the issues on the application and the time spent at the hearing I am not persuaded that it is appropriate to facilitate above scale recovery.