Phoenix Security P/L v Papas Transport Eng. P/L (No 2) No. DCCIV-97-746

[2000] SADC 79

PHOENIX SECURITY PTY LTD v PAPAS TRANSPORT ENGINEERINT PTY LTD (NO 2)
[2000] SADC 79

Judge Robertson
Civil

1. The Plaintiff obtained Judgment against the Defendant for damages amounting to $15,623.50.  The parties have agreed that the Plaintiff is to receive Pre-Judgement interest amounting to $3,000.  The Plaintiff has applied for costs against the Defendant.  The Defendant obtained a Judgment against the Plaintiff on its Counterclaim for $1,033 damages.  It seeks costs on that Judgment.

2. The Defendant does not dispute that the Plaintiff is entitled to costs of the proceedings.  However, the Defendant submits:-

   ·.. that the appropriate scale for costs incurred from the commencement of the hearing is that of the Magistrates Court;

   ·.. alternatively, that if the appropriate scale for costs is that of the District Court then the Plaintiff should not receive its total costs but only a proportion thereof.

3. It is the Defendant’s submission that by the time the hearing commenced the total amount the Plaintiff could have recovered on its best case was $23,211.78.  Accordingly, the Defendant submitted that as that sum was well below the Magistrates Court jurisdictional limit of $30,000 the Plaintiff should only receive costs on the Magistrates Court Scale.  Mr Crocker, counsel for the Defendant, submitted that I should make that order to reflect the legislative policy that litigants should bring their proceedings in the appropriate Court having regard to the quantum of the claim.  He cited Burton v Litton (1977) 16 SASR 162 at 171 in support of this submission.

4. In my view the submission should not be accepted for a number of reasons.

5. In my opinion, the Plaintiff was entitled to consider, at the commencement of the trial, that some of the repairs which Mr Turner of Trueline classified during the Trial as “usual repairs” could be recovered as part of its claim.  The fact that I accepted the evidence of Mr Turner regarding the “unusual repairs” does not detract from that proposition.  The submission also ignores the Plaintiff’s claim for replacement of hydraulic oil for a sum in excess of $2,000.  Furthermore, it ignores the fact that the Plaintiff would have been entitled to a substantial award of interest if it was successful. 

6. Those factors standing alone are sufficient to meet the Defendant’s submission that the most the Plaintiff could recover was $23,211.78. The items referred to had the potential to significantly increase the claim beyond that amount. Furthermore, it is too simplistic to suggest that the Plaintiff should have reached the view at the time the trial commenced that it would not be able to recover any loss for the misrepresentation and breach of contract claims, absent any valuation evidence at that time. Whilst it is unnecessary to go into details there were a number of possible options available to the Plaintiff to attempt to establish its loss. One such option was adopted by the plaintiff when it sought a gains-based award of damages pursuant to Section 87 of the Trade Practices Act.

7. Finally, apart from those reasons the submission suffers from unreasonably demanding a counsel of perfection on the part of the Plaintiff, with the benefit of hindsight.

8. In my opinion the Trial was heard in the appropriate Court.  For the reasons I have expressed, I am of the opinion that the Plaintiff is entitled to its costs on the District Court Scale.

9. I now turn to the alternate submission made by the Defendant, namely that the Plaintiff should not receive its entire costs but only a proportion.  Mr Crocker submitted that the Defendant succeeded on a number of issues and I should reflect that success in reducing the amount of costs awarded.  Dr Salu submitted that there was nothing to justify departure from the principle that ordinarily a successful litigant is entitled to recover its entire costs. 

10. It was not disputed that I have a discretion to award less than the total of the Plaintiff’s costs.  In my opinion, the relevant principles regarding the exercise of the discretion were identified by French J in the Federal Court in Inn Leisure Industries Pty Ltd v McCloy Pty Ltd (No 2) (1991) 28 FCR 172 at 173:-

    "As Toohey J  said in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134 at 48,136, the discretion must be exercised judicially.   His Honour referred in a summary way to the effect of decisions of Australian and English courts and made the following points:

    (1).... Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. 

    (2)Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. 

    (3) .. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs.  In this sense, issue does not mean a precise issue in the technical pleading sense, but any disputed question of fact or of law. 

    Those principles are subject to the caveat referred to by his Honour and expressed by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 12, where it was said that trials occur daily in which a party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law:

    ‘The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues however doubtful which might be material to the decision of the case.  There are of course many factors affecting the exercise of the discretion as to costs in each case including, in particular, the severability of the issues and no two cases are alike.   I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded based merely on his success in those particular issues.’”

11. One of the many features of this case was that there were a number of clearly identifiable and discrete issues of fact and law. The first of those was the Plaintiff’s claim for damages under the Trade Practices Act 1974 and the Misrepresentation Act 1972. The claim was based on misrepresentations. The Plaintiff also claimed damages for breach of contract asserting that the representations upon which the claim for misrepresentation was based also became terms of the contract between the parties. The Plaintiff succeeded in establishing an entitlement to damages for what I describe as “the fifty bin” misrepresentation. It failed to establish its claim for other misrepresentations pleaded. It also established breach of contract on the basis that the fifty bin representation had become a term of the contract. However, the Plaintiff failed to call valuation evidence necessary to establish its loss in relation to both those causes of action. Accordingly, the Plaintiff was unsuccessful with respect to these claims.

12. The proceedings relevant to these claims took up a not insignificant amount of hearing time.  However, it must be acknowledged that some of the evidence relevant to these claims was also relevant to claims upon which the Plaintiff succeeded.  In my view the Plaintiff’s failure with respect to these claims must be reflected by a reduction in the amount of costs awarded to the Plaintiff.  In doing so the fact that some of the evidence was relevant to other claims upon which the Plaintiff has been successful needs to be taken into account.

13. The Plaintiff’s claim for damages for breach of terms implied by the Sale of Goods Act, 1895 and in negligence involved discrete parts of the waste vehicle and thus discrete factual issues. One such claim was damage to the chassis of the waste vehicle. The plaintiff was unsuccessful on this claim. There was a significant amount of evidence given in relation to this item of the Plaintiff’s claim. In view of its discrete nature I am of the view that the Plaintiff should not receive its costs for this part of its claim. However, some of the evidence was relevant to the issue raised by the Defendant that the reason for the problems with various parts of the waste vehicle was the elevated hydraulic pressure. This needs to be taken into account when determining the Plaintiff’s entitlement to costs.

14. The Defendant pointed to other issues where the Plaintiff was wholly or partially unsuccessful.  I am not persuaded that I should take these other factors into account for the purpose of reducing the Plaintiff’s costs.  In the first place, many of them were not discrete issues of fact or law of the nature of the misrepresentation and the chassis claims.  In my view they were the types of issues to which the caveat referred to by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR at 12 should apply.

15. Finally, although I have just dealt generally with the remainder of the submissions made by the Defendant, there is one submission which I wish to deal with specifically.  The Defendant submitted that a factor to take into account is the disparity between what the Plaintiff claimed and the amount of the Judgment.  At the commencement of the Trial the Plaintiff claimed the sum of $105,905 made up of:-

    ·.. Loss on sale of waste vehicle  $40,800

    ·.. Repairs to waste vehicle  $48,890

    ·.. Cost of replacement contractors  $16,215

I have earlier mentioned that the Judgment sum was $15,623.50.

1. A relevant factor in the exercise of the discretion is whether a Plaintiff’s claim is exaggerated or excessive (Austrust Limited v Astley (1996) 67 SASR 207 at 242). It is clear that the Plaintiff only recovered a small proportion of its total claim. The failure of the Plaintiff to prove its loss in the misrepresentation and breach of contract claims accounts for a substantial part of the difference between what was claimed and the amount of the Judgment. I have earlier dealt with that issue. With respect to the claim for repairs, the Plaintiff failed to prove that many of the repairs were relevant to the liability of the Defendant for breach of implied terms and/or negligence. The claim for replacement contractors was significantly reduced as a result of the claim for repairs being reduced. It also failed in some cases to establish a temporal link between the costs of replacement contractors and the particular repairs which were allowed. I am not prepared to accept that the claims for either of those heads of loss were of an excessive or exaggerated nature which should be reflected by a reduction in the amount of costs the Plaintiff should receive.

2. I have earlier stated that there should be a costs order against the Plaintiff to reflect its failure with respect to first, the misrepresentation and breach of contract claim and secondly, the damaged chassis claim. I think this is best done by reducing the amount of costs the Plaintiff should receive. In assessing that amount I need to take into account that the Plaintiff’s claim pursuant to the Sale of Goods Act, 1895 and negligence consumed, by far, the most hearing time. Those other issues which I have identified took only a relatively small proportion of the time. The order I make will also need to reflect the Plaintiff’s liability to the Defendant on its successful Counterclaim. Accordingly, in the exercise of my discretion the Plaintiff is to receive 85% of its party and party costs.

3. I therefore make the following orders:-

   1.      that the Defendant will pay to the Plaintiff the sum of $3,000 by way of pre-judgment interest.

   2.      that the Defendant will pay to the Plaintiff 85% of its costs of and incidental to the action as may be agreed or taxed in default of agreement.

   I make no order for costs on the Defendant’s Counterclaim.