Powell General Sheet Metal Pty Ltd v Autopak Nominees Pty Ltd

[2011] NSWSC 420

Supreme Court

New South Wales

Medium Neutral Citation:

Powell General Sheet Metal Pty Ltd v. Autopak Nominees Pty Ltd [2011] NSWSC 420

Hearing dates:

7 and 8 February 2011, 22 February 2011

Decision date:

06 April 2011

Jurisdiction:

Equity Division

Before:

Sackar J

Decision:

1. Application to vary costs order of April 6 refused

2. Order that the defendant pay the plaintiff's costs of proceedings as agreed or taxed

Catchwords:

COSTS - basis for awarding in variation to original order - exercise of discretion

Cases Cited:

The European Hire Cars Pty Ltd v. Beilby Pulden Costello [2009] NSW SC 526

Category:

Costs

Parties:

Powell General Sheet Metal Pty Ltd - Plaintiff
Autopak Nominees Pty Ltd - Defendant

Representation:

Counsel:
P Walsh - for Plaintiff J Levingston - for Defendant
Solicitors:
Plaintiff: Adams & Partners lawyers
Defendant: Alexander Lee & Associates

File Number(s):

2010/301584

Judgment

1. In this matter on 6 April 2011, I ordered that certain declarations be made in the plaintiff's favour and that the defendant pay the plaintiff's costs of the proceedings.

1. The defendant sought leave, which I granted, to contend that costs should be awarded on a different basis.

1. The defendant now seeks that I vary the order I made so that there should be either no order as to costs, or alternatively, that the defendant should pay the plaintiff's costs of the proceedings as agreed or assessed excluding the plaintiff's costs of certain affidavits not read or where parts of those which were substantially struck out as inadmissible.

No order as to costs

1. In support of the submission that there should be no order as to costs it is contended by the defendant that the conduct of the plaintiff's solicitors was the cause of the dispute. It is submitted that by reference to two affidavits that of Megan Johnson of 5 November 2010 and that of Natalie Ballard of 8 November 2010 the cause of the litigation is said to be clerical errors perpetrated by each or both of these persons. Whilst it is clear there were clerical errors it must be observed that the defendant contested the proceedings on the basis that the amount shown in the ultimate contract was indeed the correct and agreed amount. The defendant resisted rectification for that very reason. Whilst the clerical errors muddied the waters so to speak the real issue between the parties was whether or not the price agreed and negotiated was inclusive or exclusive of GST. The defendant conducted the proceedings in effect on the basis that there were no clerical errors and failed. The presence of clerical errors given the way the case was conducted by the defendant in my view provides no basis for varying the original order.

A Qualified Order

1. In support of a qualified costs order a number of propositions are advanced.

1. First it is submitted that parties are required pursuant to s56 of the Civil Procedure Act 2005 (CPA) to conduct litigation in a manner which facilitates the just, quick and cheap resolution of the real issues in the proceedings. Secondly, s60 of the CPA provides that the costs should be proportional to the complexity and difficulty in the issues in dispute. Here the issues involved questions of common intention and rectification where the amount in dispute was $69,300.

1. Although it is accepted by the defendant that costs should usually follow the event a question that does arise is whether costs have been reasonably incurred. It is accepted that the court has a discretion ultimately as to what order it may make in relation to costs.

1. It is further submitted by the defendant that although there is a discretion in making orders as to costs, and whereas in the past there were certain restraints which flowed as the result of the application of court scales, the process of taxation under the more modern regime requires that an assessment be made as to the "fair and reasonable" costs incurred.

1. The submission simply is that a party is not entitled to recover wasted costs: The European Hire Cars Pty Ltd v. Beilby Poulden Costello [2009] NSW SC 526 per Bryson AJ at [52].

1. It is submitted that here it is appropriate to frame the costs order so as to take account of costs which may be claimed by the plaintiff and which in effect involve wasted costs incurred in relation to the investigation and service of evidence which was not read or which was rejected at the hearing as inadmissible. In particular, the example is given of the expert Mr Henry whose affidavit was served but not read.

1. It is the fact that I ruled that a large number of paragraphs of the plaintiff's affidavits were inadmissible. The defendant submits that the court does have power under s60 of the CPA in relation to the making orders as to the proportion of costs and that I should exercise it accordingly.

1. The plaintiff on the other hand contends that the order which I made on 6 April was appropriate. It is submitted that there is no good reason for departure from the general rule that costs should follow the event.

1. In a short somewhat pithy submission the plaintiff contends that pursuant to s364 of the Legal Profession Act 2004 a costs assessor is mandated to determine costs by considering what reasonably should have been incurred in the particular circumstances of the case. Further, it is pointed out that pursuant to s366 of the Act there is no limitation on the power of the court (or assessor) to determine the level of costs. Nor is there any reason to suppose that the defendant will not make such submissions as it feels appropriate to the assessor and there is no reason to suppose that that assessor will not be able carefully to consider those submissions and make appropriate orders.

Discussion

1. It is true that the issues in this case were confined. The sole question was whether or not there was a common intention as articulated by the plaintiff. It is also true that the amount in dispute was only $69,300. It cannot be gainsaid that many paragraphs of the plaintiff's affidavits were struck out as inadmissible. Indeed certain evidence was not read. I should observe however that the plaintiff's evidentiary materials were relatively short in scope and content. The defendant clearly made a forensic decision not to place any significant evidentiary materials before the court other than the affidavit of Mr Paul Kearney. I also observe that it filed an affidavit from Mr Lee which it did not read. The defendant therefore chose to adopt a somewhat minimalist approach in relation to the evidentiary materials it sought to place against those filed by the plaintiff.

1. Whilst an argument can certainly be made that the inadmissible material led to a waste of some resources, the defendant however largely chose not to answer it.

1. I am confident that a costs assessor will take into account the alleged waste in determining what was fair and reasonable in all the circumstances if costs cannot be agreed.

1. I am therefore not minded to vary the order I made on 6 April 2011. I confirm therefore that the order is that the defendant should pay the plaintiff's costs of the proceedings. If those costs cannot be agreed it seems to me that s364 of the Legal Profession Act gives the defendant ample latitude to make submissions in relation to the precise amount that ultimately it ought to pay if an assessment needs to take place.

**********

Decision last updated: 13 May 2011