JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: MARIANNE DEBORAH PINTO as trustee for the MARVIAN FAMILY TRUST & ANOR -v- FRANK IVAN KINKELA as trustee for the KINKELA FAMILY TRUST & ANOR [2003] WASC 126
CORAM: COMMISSIONER JOHNSON QC
HEARD: 6 & 7 FEBRUARY 2003
DELIVERED : 27 JUNE 2003
FILE NO/S: CIV 2741 of 2001
BETWEEN: MARIANNE DEBORAH PINTO as trustee for the MARVIAN FAMILY TRUST
First-Named Plaintiff
VIANNEY PINTO as trustee for the MARVIAN FAMILY TRUST
Second-Named PlaintiffAND
FRANK IVAN KINKELA as trustee for the KINKELA FAMILY TRUST
First-Named DefendantLEE HOON KINKELA as trustee for the KINKELA FAMILY TRUST
Second-Named Defendant
Catchwords:
Costs - Rule as to costs where a proceeding terminates without a hearing - Confidentiality of mediation
Legislation:
Surveillance Devices Act 1998 (WA)
Result:
Leave to discontinue granted
Category: B
Representation:
Counsel:
First-Named Plaintiff : Mr J T Schoombee and Mr O D Feinauer
Second-Named Plaintiff : Mr J T Schoombee and Mr O D Feinauer
First-Named Defendant : Mr M D Howard
Second-Named Defendant : Mr M D Howard
Solicitors:
First-Named Plaintiff : Feinauer & Associates
Second-Named Plaintiff : Feinauer & Associates
First-Named Defendant : Anderson Josland
Second-Named Defendant : Anderson Josland
Case(s) referred to in judgment(s):
APM Investments Pty Ltd v Trade Practices Commission (1984) 2 FCR 116
Australian Consolidated Press Limited v Morgan and Anor (1964) 112 CLR 483
Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194
Bridgetown/Greenbushes Friends of the Forest Inc & Anor v Executive Director of the Department of Conservation and Land Management (1997) 18 WAR 126
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876
Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469
Homestyle Pty Ltd v The Western Australian Builders Labourers, Painters & Plasterers Union of Workers [2002] WASC 57
John Fairfax Publications Pty Ltd v Doe (1994) 37 NSWLR 81
O'Neill v Mann [2000] FCA 1680
One-Tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270
Re Surveillance Devices Act 1998; Ex parte TCN Channel Nine Pty Ltd [1999] WASC 246
Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622
Reddy v Hughes (1996) 37 IPR 413
Stambulich v Ekamper (2001) 48 ATR 159
The South East Queensland Electricity Board v Australian Telecommunications Commission Qld, unreported; Federal Court, per Pincus J; G168 of 1997; 10 February 1989
Timms v Clift [1998] 2 Qd R 100
Case(s) also cited:
Australian Broadcasting Corp v Lenah Game Meats Pty Ltd [2001] HCA 63
Hooper v Rogers [1975] 1 Ch 43
Hunter v Canary Wharf Ltd [1997] IAC 655
O'Brien v Komesaroff (1982) 150 CLR 310
COMMISSIONER JOHNSON QC:…
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- Pinto v Kinkela [2003] WASC 126
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- [2003] WASC 126
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CaseChat Overview and Summary
The court considered several legal principles in making its decision. Firstly, it noted that the power to order costs is generally discretionary and usually exercised after a hearing on the merits, with the successful party typically entitled to costs. However, in cases where there has been no hearing on the merits, the court must exercise its discretion based on the justice of the case. The court also considered whether the discontinuance resulted from an effective surrender or a supervening event that rendered the matter moot. It highlighted that the reasonableness of the conduct of the parties was a key factor in determining the award of costs.
The court concluded that it was appropriate to make an order for costs in this case. It noted that an examination of the reasonableness of the conduct of the parties could provide a basis for an order, particularly where the court could be confident that one party was almost certain to have succeeded if the matter had been fully tried. The court found that the plaintiff's conduct was reasonable, and the defendant's conduct unreasonable, leading to the decision to grant leave to discontinue the action and award costs to the plaintiff.
The court ordered that the plaintiff be awarded costs of the proceeding.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
I turn now to the legal principles which govern an award of costs on a grant of leave to discontinue an action. As McHugh J observed in The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Qin (at 625):"In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs: Latoudis v Casey (1990) 170 CLR 534. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order: Latoudis v Casey at 543, 566 - 568. When there has been no hearing on the merits, however, a Court is necessarily deprived of the factor that usually determines whether or how it will make a costs order." However, the terms of O 23 r 2(3) are wide enough to enable the Court to make any costs order which is required by the justice of the case. The conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs: O’Neill v Mann, at [13], applying McHugh J in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Qin, at 625. The following is a summary of the relevant principles to be applied:(1)Where a discontinuance results from an acknowledgement by a party of likely defeat and amounts to an effective surrender to the other party, then a costs order in favour of the other party will ordinarily be made: O’Neill v Mann, at [13].A number of authorities express the principle as it applies to plaintiffs in terms of an entitlement to costs from the defendant where the plaintiff "has secured from the defendant the relief sought in the proceedings": Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469, at 472; see also Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Qin per McHugh J, at 624.However, it is apparent from the facts of these cases and other relevant principles set out in them that the entitlement to costs arises only where the obtaining of the relief sought amounts to a capitulation by the defendant or a forensic win by the plaintiff: Homestyle Pty Ltd v The Western Australian Builders Labourers, Painters & Plasterers Union of Workers [2002] WASC 57; Supreme Court of Western Australia, 27 March 2002.As Hodgson J observed in Tsaprazis v Goldcrest Properties Pty Ltd [2000] NSWSC 765, at [33]:"There is a distinction to be drawn between a case in which one part effectively surrenders to the other party, and a case in which a supervening event renders the matter moot. In the former case, it is very often appropriate to make an award of costs in favour of the party receiving the effective surrender. In the latter case, I accept that the usual order would be that each party pay its own costs."See also One-Tel Ltd v Deputy Commissioner of Taxation (13 March 2000) per Burchett J; The South East Queensland Electricity Board v Australian Telecommunications Commission Qld, unreported; Federal Court, per Pincus J; G168 of 1997; 10 February 1989, at [16].(2)In a case which terminates before there has been a hearing, the Court should not resolve the issue of costs by engaging in the nature of a hypothetical trial: One-Tel Ltd v Deputy Commissioner of Taxation (13 March 2000) per Burchett J, at [5]; ASC v Aust-Home Investments Ltd, at 201; Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin, at 624; O’Neill v Mann per Finn J, at [13].However, this principle is not absolute. It will rarely be appropriate for a Court to endeavour to determine for itself the case on the merits in order to determine the issue of costs: ASC v Aust-Home Investments Ltd (at 201). In particular, the Court should not attempt to come to a decision on any seriously disputed question of fact in circumstances where there has not been a full hearing of the proceedings: Tsaprazis v Goldcrest Properties Pty Ltd, at [35]. But, in an appropriate case, a Court will make an order for costs even when there has been no hearing on the merits: Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin per McHugh J, at 624.For example, in Tsaprazis v Goldcrest Properties Pty Ltd, Hodgson J, having stated the basic principle, added at [36]:"On the other hand, it seems to me that, where there are substantial costs involved, it may in some cases be appropriate to consider questions of law and questions of interpretation raised by the case, and to come to decisions on those questions; and also, to come to decisions of fact where the facts are clear."In One-Tel Ltd v Deputy Commissioner of Taxation (13 March 2000) Burchett J identified the two primary circumstances in which it would be appropriate to make an order for costs in a case which terminates before there has been a hearing, at [5]:"But this does not mean that a Court can never make an order for costs. Often, it will be unable to do so; but in other cases an examination of the reasonableness of the conduct of the parties respectively, may provide the basis of an order, or 'a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.'"See also Tsaprazis v Goldcrest Properties Pty Ltd, at [38] and [51].However, awards of costs based on certainty of success are likely to be rare: Ex parte Lai Qin, at 625, McHugh J. If an assessment is to be made as to merit, such assessment should only be made in the clearest of cases, for example involving only the resolution of a legal issue and/or where the facts upon which the determination is based are clear or not in dispute: Tsaprazis v Goldcrest Properties Pty Ltd, at [51]; Homestyle Pty Ltd v The Western Australian Builders Labourers, Painters & Plasterers Union of Workers.(3)The reasonableness of the conduct of the parties in bringing and defending the claim is frequently the determining factor in determining the award of costs: One-Tel v Deputy Commissioner of Taxation (13 March 2000) per Burchett J, at [5]; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin per McHugh J, at 624 - 625; Reddy v Hughes (1996) 37 IPR 413, at 415, per Branson J; ASC v Aust-Home Investments Ltd, at 201.As McHugh J observed in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, at 625:"If both parties acted reasonably in commencing and defending the proceedings and continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the Court will make no order as to the costs of the proceedings."In fact, as Pincus J pointed out in The South East Queensland Electricity Board v Australian Telecommunications Commission Qld, at [9]: "The Court has to go further than merely find that the applicant acted reasonably in commencing proceedings as that description may apply even where the Court decides, in the end, that there is no cause of action." In essence, the real question is whether one of the parties has acted so unreasonably that the other party should obtain the costs of the action: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, at 625; Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, at 201.In determining whether a party has acted unreasonably, a Court is entitled to take into account the conduct of a respondent prior to the commencement of the proceedings where the conduct may have precipitated the litigation: ASC v Aust-Home Investments Ltd, at 201.