Piper Alderman (A Firm) v Australian MEDIC-CARE Company Ltd (No 2)
[2012] SASC 21
•23 February 2012
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
PIPER ALDERMAN (A FIRM) v AUSTRALIAN MEDIC-CARE COMPANY LTD & ANOR (NO 2)
[2012] SASC 21
Judgment of The Honourable Justice Stanley
23 February 2012
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF ISSUES
The plaintiff applied for an adjudication of its claim that the defendants were liable to pay legal costs – the taxation came before Judge Lunn – Judge Lunn referred the proceedings for determination of whether a costs agreement in writing between the parties existed and alternatively, whether a term or terms of that agreement were not fair and reasonable – following a trial, the plaintiff was successful on both issues – the proceedings were referred back to Judge Lunn for determination of outstanding issues – the plaintiff seeks an order for costs in relation to that trial – the defendants seek an order that each party pay its own costs of the trial.
Held: No proper basis to depart from the usual approach that costs should follow the event – plaintiff is entitled to an order for costs of the trial and preparation of the matter for trial, including the interlocutory hearings in preparation for trial and the argument in relation to costs.
Legal Practitioners Act 1981 (SA) s 42(1)(a), s 42(6), s 42(7); Supreme Court Civil Rules 2006 r 16, r 272, referred to.
Durham v Collins [1999] SASC 163, considered.
PIPER ALDERMAN (A FIRM) v AUSTRALIAN MEDIC-CARE COMPANY LTD & ANOR (NO 2)
[2012] SASC 21Civil
STANLEY J:
Introduction
The plaintiff is a firm of solicitors (“Piper Alderman”). It acted for the defendants in a long and complex action in the Federal Court of Australia.
Pursuant to s 42(1)(a) of the Legal Practitioners Act 1981 (SA) (“the Act”) and 6SCR 272 of the Supreme Court Civil Rules 2006 Piper Alderman applied for an adjudication of its claim that the defendants were liable to pay legal costs to the firm. That taxation came before his Honour Judge Lunn.
In the course of the proceedings, it became apparent that the defendants challenged the firm’s entitlement to payment of legal costs on two grounds. First, on the basis that there was no agreement in writing between Piper Alderman and the defendants for payment of legal costs on a time-costing basis pursuant to s 42(6) of the Act. Secondly, in the alternative, if there was such an agreement in writing, the defendants sought an order by the Court, pursuant to s 42(7), rescinding the agreement on the basis that a term or terms of the agreement were not fair and reasonable.
Pursuant to 6SCR 16, his Honour Judge Lunn referred the proceedings for hearing and determination by me. Following a trial of the action, I found for the plaintiff. I found that there was an agreement in writing between the firm and the defendants for the payment of legal costs on a time-costing basis pursuant to s 42(6) of the Act. Further, I did not find that any term of the agreement was not fair and reasonable within the meaning of s 42(7) of the Act.
In the circumstances, I referred the proceedings back to his Honour Judge Lunn for hearing and determination of any outstanding issues in the matter.
Subsequently, the plaintiff has applied for an order for costs in relation to the trial. That order is opposed by the defendants. The defendants submit that I should make an order that each party pay its own costs of the trial.
In my view, the plaintiff is entitled to an order for the costs of the trial, and the interlocutory hearings in relation to the conduct of the trial, heard by me, together with the costs of the preparation of the matter for trial and this argument on costs. The issue of any costs in relation to other aspects of the proceedings before the Court, I will leave for the consideration of his Honour Judge Lunn after he has heard and determined any outstanding issues in the matter.
I come to this view in relation to costs for the following reasons.
The question of costs is a matter for the exercise of the Court’s discretion. The discretion must be exercised judicially and confined to grounds relating to the litigation. Usually costs will follow the event, but this is not an invariable rule. Usually a successful party will only be deprived of its costs in special circumstances.[1]
[1] Durham v Collins [1999] SASC 163 at [16] – [17].
It is not easy to understand the basis upon which the defendants oppose the making of a costs order in favour of the plaintiff, except, that they put the submission that the need for the trial resulted from the plaintiff’s failure to identify, prior to 31 October 2011, that the agreement in writing it relied upon for the purposes of s 42(6) of the Act, was the email exchange of 4 August 2009.
The difficulty for the defendants in putting this submission is that, even if the premise of the submission is accepted, it remains the case that after 31 October 2011 the defendants persisted in disputing that the emails of 4 August 2009 constituted an agreement in writing within the meaning of s 42(6) of the Act. In addition, thereafter, throughout the trial and up to the delivery of judgment, the defendants continued to defend the claim for recovery of costs by the plaintiff on the basis that if there was an agreement in writing, it was not fair and reasonable within the meaning of s 42(7) of the Act.
As I indicated earlier, the defendants were unsuccessful in relation to both these issues. These were the only issues at trial.
In the circumstances, I do not consider there is any proper basis to depart from the usual approach that costs should follow the event.
Accordingly, I consider that the plaintiff is entitled to an order for costs of the trial and the preparation of the matter for trial, including the interlocutory hearings conducted before me and this argument in relation to costs. As the matter has been remitted to his Honour Judge Lunn for hearing and determination of any outstanding issues, I will leave to his Honour the determination of the question of liability for any other costs in the matter.
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