Plenty v Seventh Day Adventist Church of Port Pirie (No 2) - [2009] SASC 103

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PLENTY & ANOR v SEVENTH DAY ADVENTIST CHURCH OF PORT PIRIE (No 2)
[2009] SASC 103
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Vanstone and The Honourable Justice Anderson)
24 April 2009
PROCEDURE - COSTS - RECOVERY OF COSTS
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE - OFFER OF COMPROMISE MADE
Application for order for solicitor/client costs following delivery of judgment in appeal and cross-appeal - plaintiff and appellant unsuccessful on appeal - defendant and respondent successful on cross-appeal - whether Calderbank offer from respondent justified special costs order in their favour.
Held: Calderbank offer genuine - special order in respect of appeal and cross appeal justified - respondent to recover costs of appeal and cross-appeal on solicitor/client basis.
Imbree v McNeilly (No 2) [2008] HCA 47; Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404; Brymount Pty Ltd v Cummins (No 2) [2005] NSWCA 69; Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160, considered.

PLENTY & ANOR v SEVENTH DAY ADVENTIST CHURCH OF PORT PIRIE (No 2)
[2009] SASC 103
Full Court Gray, Vanstone and Anderson JJ
GRAY J.

This is an application for an order for solicitor/client costs.
On 19 January 2009 this Court delivered judgment in the appeal and cross-appeal in this proceeding.[1] Mr and Mrs Plenty were unsuccessful in their appeal. The Seventh Day Adventist Church of Port Pirie was successful on its cross-appeal. Following the delivery of judgment, the Church sought a special order for costs. The matter was adjourned to allow the parties to provide written submissions.
[1] Plenty & Anor v Seventh Day Advertise Church of Port Pirie [2009] SASC 10.
Before coming to discuss the merits of the application it is convenient to discuss one preliminary matter. The solicitors for Mr and Mrs Plenty obtained an order from a Master of the Court that they had ceased to act in the action. Mr and Mrs Plenty lodged an appeal against that order. The appeal came on for hearing before me on the application of Mr and Mrs Plenty and was adjourned on two occasions and is still to be heard.
Mr and Mrs Plenty submitted that they were prejudiced in the preparation of their responses to the Church’s cost application because of their ongoing dispute with their solicitors. I indicated to Mr and Mrs Plenty that the Court would extend time for their answering submission.
Mr and Mrs Plenty then said that they were reluctant to engage other solicitors to assist because this would involve a possible waiver of their appeal rights with respect to the orders of the Master that their solicitors had ceased to act. However, the solicitors acknowledged that there would be no such submission advanced. I extended time for Mr and Mrs Plenty to file any answering submission on costs to 31 March 2009. In their submission, filed by that date, although Mr and Mrs Plenty continue to complain about the prejudice to their position they made a submission in respect of costs.
I now return to the Church’s application for an order for solicitor/client costs of the appeal and the cross-appeal. It was submitted that a Calderbank offer made well before the hearing of the appeal and cross-appeal justified a special costs order. That offer was made on 12 July 2007 by letter to the solicitor for Mr and Mrs Plenty. Relevantly, the letter was as follows:
Strachan Carr
...
Dear Sir
Seventh Day Advertise Church of Port Pirie ats Plenty & Anor
Dickson & Anor ats Plenty & Anor
We refer to prior correspondence.
The decision to disfellowship Mr & Mrs Plenty was taken on 1.12.79. The defamation action arises out of a publication that occurred on 29.2.80. The disputes between the parties have been ongoing for over 27 years. They need to be brought to an end.
The continuation of the appeal and cross appeal will not only prolong the disputes between the parties but will involve significant costs.
In an attempt to resolve the disputes once and for all our client proposes that your clients abandon their appeal and that the respondents abandon their cross appeal with the parties bearing their own costs of the appeal and cross appeal.
This letter is written on a without prejudice basis save as to costs and is written bearing in mind the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333 and Cutts v Head [1984] 1 Ch 290. Our client reserves the right to bring this letter to the attention of the Full Court on the issue of costs.
Mr and Mrs Plenty did not accept the offer. The Church submitted that in these circumstances it had acted reasonably in trying to bring to an end this litigation that had extended for almost 30 years. It submitted that the Court should take the letter for offer into account when exercising its discretion with respect to costs relying on Supreme Court Rule 263(3). That Rule provides:
In exercising its discretion, the Court may (subject to any other relevant rule) have regard to any offer to consent to judgment or other attempt to settle the action or an issue involved in the action.
The Church contended that there should be an order for the payment of the cost of the appeal and cross appeal on solicitor/client basis.
Mr and Mrs Plenty submitted that the Church’s letter was not a true attempt to resolve the disputes once and for all. It was further contended that on the cross-appeal the Church was only successful in removing the declaratory order. It was said that this was unnecessary as the underlying findings of the trial Judge that there had been a denial of natural justice. It was emphasised that the cross appeal only succeeded on the basis of submissions put to the appeal court for the first time, that is submissions that had not been made to the trial Judge.
In Imbree v McNeilly (No 2),[2] the High Court considered the effect of a Calderbank offer in respect of an appellate process:
The effect of the consequential orders upon which the parties are now agreed is that Mr Imbree will have judgment for a principal sum of $7,926,535.72.
Mr Imbree made separate offers to compromise his claim at each stage of the proceedings: trial, appeal to the Court of Appeal and the appeal to this Court. The questions that might otherwise arise about the effect to be given to an offer made at or before trial, when deciding what order should be made for costs of an appeal[3], do not arise and need not be considered.
The amount of the judgment that now is to be entered is larger than the amount for which the litigation would have been compromised if any of Mr Imbree’s three offers was accepted. (The first offer was to settle for about $7.1 million; the second was to settle for $7.55 million; the third was to settle for a little less than $7.225 million.) In these circumstances, he should have his costs of his appeal to this Court, and his costs in the Court of Appeal, and at trial after 22 March 2006, on an indemnity basis. The costs of the application for special leave should be determined on the ordinary basis. It is therefore not necessary to make any further order in that application.
[2] Imbree v McNeilly (No 2) [2008] HCA 47.
[3] See, for example, Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404; Brymount Pty Ltd v Cummins (No 2) [2005] NSWCA 69; Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160.
Had Mr and Mrs Plenty accepted the offer of the Church, the proceedings would have been resolved and in particular the declaration made by the trial Judge would have remained.
In my view the submission that the letter of offer was not a genuine offer to resolve the proceedings is misconceived. The cross-appeal was allowed on the basis of submissions not put to the trial Judge. In the ordinary course this may have disentitled the Church to any costs order. However, the position is materially different having regard to the Calderbank letter.
I would make a special order in respect of the appeal and the cross-appeal. I would order that the Church recover its costs of the appeal and cross-appeal on a solicitor/client basis.
VANSTONE J: I agree with the orders proposed by Gray J for the reasons he has given.
ANDERSON J. I agree with the reasons of Gray J and with the orders he proposes.