Price v BW & RD Smart (No 2) - [2020] SASCFC 15

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PRICE v BW & RD SMART (No 2)
[2020] SASCFC 15
Judgment of The Full Court
(The Honourable Justice Kelly, The Honourable Justice Blue and The Honourable Justice Nicholson)
28 February 2020
PROCEDURE - COSTS - APPEALS AS TO COSTS - DISCRETION
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PARTICULAR ITEMS - COUNSEL FEES - SENIOR OR QUEEN'S COUNSEL
Appellant successfully appealed against a Master’s order that he, as a non-party to an action, pay two thirds of the respondent’s costs of the underlying proceedings.
Appellant now seeks orders that (1) the respondent pay the appellant’s costs of the proceedings before the Master on a party and party basis; and (2) that the respondent pay the appellants costs of the appeal on a party and party basis until 29 March 2019 and on an indemnity basis thereafter.
Held by the Court:
1.      The respondent is to pay the appellant’s costs of the respondent's application for costs against the appellant before the Master on a party and party basis.
2.      The respondent is to pay the appellant’s costs of the appeal, including of the respondent’s application to introduce fresh evidence on appeal, on a party and party basis.
3.      The proceeding on appeal is certified fit for junior counsel.
Supreme Court Act 1935 (SA) (SA) s 40; Supreme Court Civil Rules 2006 (SA) r 263, r 264, referred to.
Hay Direct Australia Pty Ltd v BW & RD Smart (Unreported, Action No SCCIV-17-490, 26 February 2018); Hay Direct Australia Pty Ltd v BW & RD Smart (Unreported, Action No SCCIV-17-490, 24 October 2017); Price v BW & RD Smart [2020] SASCFC 2; House v The King (1936) 55 CLR 499; Copping v ANZ McCaughan (1995) 63 SASR 523; Gwinnett v Day (No 2) [2012] SASC 61; Stanley v Phillips (1966) 115 CLR 470; Beasley v Marshall (No 3) (1986) 41 SASR 321, considered.

PRICE v BW & RD SMART (No 2)
[2020] SASCFC 15
Full Court: Kelly, Blue and Nicholson JJ
THE COURT
Introduction

The appellant successfully appealed to this Court against a Master’s order that he, as a non-party to an action, pay two-thirds of the respondent’s costs of the underlying proceedings. The appellant now seeks orders:
(i)that the respondent pay the appellant’s costs of the proceedings before the Master on a party and party basis; and
(ii)that the respondent pay the appellant’s costs of the appeal on a party and party basis until 29 March 2019 and on an indemnity basis thereafter.
The full background to the matter has been canvassed in the Master’s trial reasons,[1] the Master’s costs reasons[2] and this Court’s reasons on appeal.[3]
[1]    Hay Direct Australia Pty Ltd v BW & RD Smart (Unreported, Action No SCCIV-17-490, 24 October 2017).
[2]    Hay Direct Australia Pty Ltd v BW & RD Smart (Unreported, Action No SCCIV-17-490, 26 February 2018).
[3]    Price v BW & RD Smart [2020] SASCFC 2.
General principles
Rule 263 of the Supreme Court Civil Rules 2006 (SA) provides (subject to various identified exceptions) that, as a general rule, costs follow the event. Rule 264 provides that the Court may, in the exercise of its discretion as to costs, award costs on any basis the Court considers appropriate. However, the general approach is that costs are awarded as between party and party and in accordance with the relevant scale provided under the Rules.
When the Rules are read in conjunction with section 40 of the Supreme Court Act 1935 (SA)[4] there has been conferred on courts and judges an unfettered discretion as to costs.[5] Of course, the discretion must be exercised judicially and having regard to relevant considerations and not relying on irrelevant considerations.[6]
[4] Section 40(1) provides – subject to the express provisions of this Act and of the Rules of court and to the express provisions in any other Act whenever passed, the costs of and incidental to all proceedings in the court, ... shall be in the discretion of the court or judge and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.
[5] See generally Copping v ANZ McCaughan [1995] SASC 4917; (1995) 63 SASR 523 at 527, Gwinnett v Day(No 2) [2012] SASC 61.
[6] House v The King [1936] HCA 40; (1936) 55 CLR 499.
The costs of the respondent’s application for non-party costs before the Master
The respondent brought an application before the Master that the appellant non-party should pay its costs of the underlying proceeding and succeeded in obtaining an order for two-thirds of those costs. However, on appeal this order was set aside; thus the respondent wholly failed with its costs application. In the ordinary case costs should follow the event.
The respondent has not put forward any submission in opposition to this position. In any event, there are no features to indicate that this is not an ordinary case. The respondent is to pay the appellant’s costs of the respondent’s application for costs against the appellant before the Master on a party and party basis if not agreed.
The costs of the appeal
The appellant was wholly successful on appeal and, ordinarily, should have his costs on a party and party basis. However, the appellant has sought costs on an indemnity basis for the period after 29 March 2019 being 14 days after the date on which he made a written offer to settle the appeal, the offer having been held open for that period. The offer was not accepted.
The appellant offered, in effect, to discontinue his appeal with no order as to costs provided that the respondent gave an undertaking not to enforce the Master’s costs order against the appellant. This was not an offer that involved a genuine compromise. Further, no explanation was provided as to why the appeal was likely to succeed in circumstances where the respondent had a discretionary judgment in its favour. Nevertheless, the appellant effectively sought a total capitulation. Whilst, as events transpired, the respondent would have been better off had it accepted this offer, there is no basis to find that, given the circumstances at the time, the refusal to accept was so imprudent as to warrant the unusual course of an indemnity costs order.
The respondent submits that the appellant should not have his party and party costs. On 5 April 2018, the respondent made its own written offer to settle. It identified two-thirds of its costs in the proceeding before the Master as amounting to $26,403.30 and offered to settle the appeal in the following terms:
[O]ur client would be prepared to accept the sum of $20,000 for their costs and the order made by his Honour …
(Emphasis supplied)
Read in context, the phrase (italics supplied) “and the order” is no doubt a transcription or typographical error for “under the order”. Nothing is said about the costs of the appeal expended to that point. In any event, the offer was well and truly bettered by the appellant and the respondent can gain no costs advantage from having made it.
The respondent further submits that its offer served to limit the dispute to a contest over $20,000. It is submitted that any benefit to be gained from prosecuting the appeal by the appellant did not warrant and was disproportionate to the resources he had devoted to it. This may or may not turn out to be so but it is not a reason for denying the appellant his costs, having been wholly successful on appeal.
The appellant has provided a detailed written submission in support of an entitlement to recover the costs of having engaged two counsel including senior counsel on the appeal to which we have had regard.
Nevertheless, we agree with the respondent’s contention that the nature and circumstances of this costs dispute did not warrant two counsel[7] nor senior counsel. In our view, a reasonable litigant at the time of delivery of the brief would not have considered it necessary or prudent to brief senior counsel for the adequate prosecution of the case.[8] Ordinarily these are matters for the taxing Master. However, we wish to make clear that only one junior counsel’s fees should be recoverable on any adjudication.
[7] The matters to be considered in this respect were identified by Barwick CJ in Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470 at 479-480.
[8] Beasley v Marshall (No 3) (1986) 41 SASR 321.
Conclusion
We make the following orders.
1.The respondent is to pay the appellant’s costs of the respondent’s application for costs against the appellant before the Master on a party and party basis.
2.The respondent is to pay the appellant’s costs of the appeal, including of the respondent’s application to introduce fresh evidence on appeal, on a party and party basis.
3.The proceeding on appeal is certified fit for junior counsel.