| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : PERTH PHOTOGRAPHY SERVICES PTY LTD -v- PERTH PROFESSIONAL SALES AND SERVICE PTY LTD [2009] WADC 199 (S) CORAM : GOETZE DCJ HEARD : 29, 30 SEPTEMBER & 1, 2, 5 & 6 OCTOBER 2009 DELIVERED : 22 DECEMBER 2009
SUPPLEMENTARY
DECISION : 5 MARCH 2010 FILE NO/S : CIV 2692 of 2004 BETWEEN : PERTH PHOTOGRAPHY SERVICES PTY LTD Plaintiff
AND
PERTH PROFESSIONAL SALES AND SERVICE PTY LTD
Defendant
PHOTO ELECTRONIC SERVICES PTY LTD
Third Party
Catchwords: Application for costs to be paid by directors of plaintiff company after action dismissed - Turns on own facts
(Page 2)
Legislation: Nil Result: Usual order for costs Representation: Counsel:
Plaintiff : No appearance
Defendant : No appearance
Third Party : No appearance
Solicitors:
Plaintiff : Lawton Lawyers
Defendant : Stables Scott
Third Party : B C Sierakowski
Case(s) referred to in judgment(s):
Naidoo v Williamson [2008] WASCA 179
Yates v Boland [2000] FCA 1895
(Page 3)
1 GOETZE DCJ: On 22 December 2009, I dismissed the plaintiff's claim against the defendant.
2 The defendant seeks an order that the plaintiff and its directors, and shareholders, Peter John Palmer and Susan Jane Palmer, pay the defendant's and the third party's costs to be taxed. 3 The third party seeks an order, in accordance with the usual provision, that, the defendant pay its costs of the action to be taxed, alternatively it seeks an order that Mr and Mrs Palmer pay its costs to be taxed. 4 The plaintiff opposes the making of such an order requiring Mr and Mrs Palmer to pay costs personally. 5 The basis for the application is a fear that the plaintiff company will not be able to pay all costs of the defendant and third party. 6 In Seaman's Civil Procedure Western Australiaat 19.7.1, the learned author notes that: "Where the plaintiff fails against the defendant it is not necessary to enter judgment for the third party against the defendant. All that is required is an order that the defendant pay the costs of the third party: McCourt v Cranston [2009] WASC 56(S). … Normally a successful defendant should be ordered to pay the costs of the third party, but if they ought ultimately to be paid by the plaintiff, it should be ordered that they be added to the defendant's costs of the action against the plaintiff. A third party should not be deprived of his or her costs against a defendant by the making of an order that an impecunious plaintiff pay the third party costs directly: Swisstex Finance Pty Ltd v Lamb [1993] 2 QDR 463 at 465." 7 The power to award costs against the party in favour of a non-party can be exercised pursuant to s 37 of the Supreme Court Act, but, that jurisdiction will only be exercised in exceptional cases and with considerable caution – Naidoo v Williamson[2008] WASCA 179 at [42]. (Page 4)
8 Clearly, the costs in this action are costs which have been incurred in proceedings before the Court. 9 It is necessary to consider the nature of the relationship between Mr and Mrs Palmer and the litigation. They were at all material times the directors and shareholders of the plaintiff company. That alone is not exceptional. Their involvement is therefore not similar to that in the case of Naidoo v Williamson (supra), where Mr Williamson, a director of the plaintiff company, had become the plaintiff in the action after an assignment of all the plaintiff company's, right, title and interest in the action to Mr Williamson. Nothing like that has occurred in this case. 10 Mr and Mrs Palmer could not realistically have been joined as parties to the action. No attempt was made to do so. 11 Further, there has been an order for security for costs. That order was limited to the sum of $47,000. A further order was not requested, although, Mr and Mrs Palmer were warned of an intention to apply for a costs order against them in the absence of a further application for security for costs – see Yates v Boland [2000] FCA 1895. 12 The making of an order for costs against Mr and Mrs Palmer requires an exercise of discretion in the particular circumstances of this case in accordance with the justice of the case. I must necessarily exercise considerable caution against making such an order. 13 I am not satisfied, that, this is an exceptional case requiring the directors of the plaintiff company to pay costs personally. There seems to be no good reason for departing from the usual course of orders and hence, the orders in this action will be as follows: 1. The plaintiff's claim against the defendant be dismissed. 2. Judgment be entered for the defendant. 3. The plaintiff pay the defendant's costs of the action, including the defendant's costs of the third party, to be taxed. 4. The defendant pay the third party's costs of the action to be taxed. 14 In making these orders, I observe that I have been informed by the parties, that, following the provision by each of them of written submissions, that, a further hearing is not required.
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