Rasch Nominees Pty Ltd v Bartholomaeus
[2013] SASCFC 105
•14 October 2013
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Application)
RASCH NOMINEES PTY LTD & ANOR v BARTHOLOMAEUS & ORS
[2013] SASCFC 105
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Sulan and The Honourable Justice Stanley)
14 October 2013
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - OTHER MATTERS - COSTS
PROCEDURE - COSTS - APPEALS AS TO COSTS - DISCRETION
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - POWERS OF COURT
This is an application for permission to cross-appeal against costs orders made following a trial before a single judge of this Court.
The judge found that the first plaintiff was not entitled to the orders sought registering it as proprietor of land it had contracted to purchase from the first and second defendants, and dismissed the claim against the third, fourth and fifth defendants. Judgment on the substantive issues was delivered on 30 April 2012.
Following the Judge’s principal decision, costs orders were made on 21 September 2012 and 21 December 2012. Part of the costs orders included an order that the first plaintiff pay the first and second defendants’ costs on the issue of quantum of damages on an indemnity basis, and 25 per cent of the first and second defendants’ other costs on a party and party basis. Part of the costs orders made also required that the second plaintiff pay the first, second, third, fourth and fifth defendants’ costs on the issue of damages and issues peculiar to the second plaintiff’s claim on an indemnity basis.
On the cross-appeal, the first and second defendants complain that the Judge erred in limiting the order for party and party costs against the first plaintiff to 25 per cent of the whole of the action, and in limiting the order for indemnity costs against the second plaintiff to the issue of damages and issues peculiar to the second plaintiff’s claim. The third, fourth and fifth defendants complain that the Judge erred in principle in differentiating between the peculiar costs and the common costs of the second plaintiff’s claim, and that regard ought to have been had to the punitive purpose of indemnity costs.
Held per Stanley J (Gray and Sulan JJ agreeing), refusing permission to cross-appeal and dismissing the cross-appeal:
1. On the material before the Judge, his Honour was entitled to exercise his discretion as to costs in the manner he adopted. No error of principle was identified and the orders made do not give rise to a substantial injustice. The cross-appellants failed to demonstrate that the Judge’s exercise of the discretion was so unreasonable or unjust as to require this Court to substitute its own discretion. [63].
Supreme Court Act 1935 (SA) s 40, s 50; Supreme Court Civil Rules 2006 (SA) r 264, r 283, r 288; Supreme Court Rules 1987 (SA) r 101, referred to.
Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168; Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14; House v King (1936) 55 CLR 499; Settlement Wine Co Pty Ltd v National & General Insurance Co Ltd (No 3) (1997) LSJS 101; Advance Resource Services Pty Ltd v Charlton (2008) 100 SASR 388; Oshlack v Richmond River Council (1998) 193 CLR 72, discussed.
Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (2013) 115 SASR 473; Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (2012) 114 SASR 448; Currabubula & Paola Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232; Hutchinson v Ellis [2010] SASCFC 71; Norwest Refrigeration Services Pty Ltd v Baine Dawes (WA) Pty Ltd (1984) 157 CLR 149; Samsung Electronics Co Limited v Apple Inc (2011) 286 ALR 257; Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; Kazar Pty Ltd v Kargarian; Re Frontier Architects Pty Ltd (2011) 284 ALR 237; Hamilton-Smith v Bernsteen Pty Ltd (in liq) [2005] SASC 190; Cretazzo v Lombardi (1975) 13 SASR 4; Copping v ANZ McCaughan Ltd (1995) 63 SASR 523; Gwinnett v Day (No 2) [2012] SASC 61; Stubing & Anor v Halling & Anor (2012) 115 SASR 1; Friends of Hinchinbrook Society Inc v Minister for the Environment & Ors (1998) 84 FCR 186, considered.
RASCH NOMINEES PTY LTD & ANOR v BARTHOLOMAEUS & ORS
[2013] SASCFC 105Full Court: Gray, Sulan and Stanley JJ
GRAY J: I agree with the reasons of Stanley J and with the orders that he proposes.
SULAN J: I agree with Stanley J and the orders he proposes.
STANLEY J: This is an application for permission to cross-appeal against costs orders made following a trial before a judge of this Court.[1]
[1] The parties to the cross-appeal are as follows: first cross-appellant – Brian Norman Bartholomaeus; second cross-appellant – Jean Edna Bartholomaeus; third cross-appellant – Mount Barker Properties Pty Ltd; fourth cross-appellant – Jondam Pty Ltd; fifth cross-appellant – Damian John Hone; first cross-respondent – Rasch Nominees Pty Ltd; and second cross-respondent – The South Australian Potato Company Pty Ltd.
Introduction
Brian Norman Bartholomaeus and Jean Edna Bartholomaeus[2] seek permission to cross-appeal against the costs orders of 21 September (as subsequently amended) and 21 December 2012. Mount Barker Properties Pty Ltd (Mount Barker Properties), Jondam Pty Ltd (Jondam) and Damian John Hone (Mr Hone) seek permission to cross-appeal against the costs orders of 21 December 2012. The Court heard the application for permission and the cross-appeal together.
[2] Herein referred together as “the Bartholomaeuses”.
History of the proceedings
It is helpful to set out the history of the proceedings in this matter.[3]
[3] The parties to the initial action and the substantive appeal were as follows: first appellant and first plaintiff – Rasch Nominees Pty Ltd; second appellant and second plaintiff – The South Australian Potato Company Pty Ltd; first respondent and first defendant – Brian Norman Bartholomaeus; second respondent and second defendant – Jean Edna Bartholomaeus; third respondent and third defendant – Mount Barker Properties Pty Ltd; fourth respondent and fourth defendant – Jondam Pty Ltd; fifth respondent and fifth defendant – Damian John Hone; sixth respondent and sixth defendant – Mead Robson Steele, A Firm; seventh respondent and eight defendant – Dutton Motors Pty Ltd; eighth respondent and ninth defendant – Jodian Property Holdings Pty Ltd; ninth respondent and tenth defendant – Jodian Pty Ltd.
On 31 October 2005, Rasch Nominees Pty Ltd (Rasch Nominees) entered into a contract with the Bartholomaeuses to purchase three allotments of land at Mount Barker. The contract of sale was subject to a registered lease to Mount Barker Properties over two of the three allotments.
Mount Barker Properties had a 10-year lease over the two allotments, with a right of renewal for a further 10 years. It used the properties for business purposes. Pursuant to Item 11 of the Schedule to the lease, Mount Barker Properties had a right of first refusal in respect of the two allotments. On 2 November 2005, the solicitor for Mount Barker Properties prepared and lodged a caveat to protect its interest, describing the interest as that of an equitable purchaser.
By 23 November 2005, Rasch Nominees had become aware of the caveat that had been lodged by Mount Barker Properties and its terms. On 9 December 2005, Mr Mead, solicitor for the Bartholomaeuses, forwarded to Mount Barker Properties an unqualified offer of $850,000 for the two allotments the subject of the lease. This offer was accepted on 22 December 2005.
Consequently, at 22 December 2005, the Bartholomaeuses had sold two of the three allotments to different parties. Two of the allotments were the subject of sale to Mount Barker Properties under its right of first refusal. Those same two allotments also formed part of the sale from the Bartholomaeuses to Rasch Nominees. Mount Barker Properties had protected itself against any settlement on the Rasch Nominees’ contract by way of its caveat over the allotments. Mount Barker Properties pursued as early a settlement as possible on its contract. Despite being legally represented at this time, Rasch Nominees did not lodge a caveat to protect its interest under its contract with the Bartholomaeuses.
On 17 January 2006, the Bartholomaeuses settled the sale of the two allotments the subject of the lease to Mount Barker Properties. Subsequently, Mount Barker Properties transferred one of the allotments to a related entity, Jondam.
The judge found that as at 22 December 2005, the Bartholomaeuses were in a position of conflict. They led Rasch Nominees to believe that steps would be taken to have the caveat removed so they could settle on the contract with Rasch Nominees. The judge found that Mount Barker Properties was not aware of this representation. The correctness of this finding was an issue on appeal.
At trial, Rasch Nominees argued that the Bartholomaeuses, having entered into a contract with it and having been paid a deposit, determined not to proceed with the contract and to instead sell two of the allotments to Mount Barker Properties. Rasch Nominees alleged that Mount Barker Properties was aware of the Bartholomaeuses’ misrepresentation that they would take steps to remove the caveat so that the contract with Rasch Nominees could settle. It was Rasch Nominees’ case at trial that Mount Barker Properties colluded with the Bartholomaeuses in proceeding to settle as soon as possible to avoid the risk of Rasch Nominees lodging a caveat or taking some other action to enforce its contract.
The South Australian Potato Company Pty Ltd (SAPC), being a corporation related to Rasch Nominees, also claimed that the Bartholomaeuses, Mount Barker Properties, Jondam and Mr Hone were liable to it for damages for operating losses incurred by reason of Rasch Nominees’ failure to obtain the allotments. However, on the first day of trial, SAPC sought leave to discontinue its claim. SAPC’s claim was formally discontinued on 28 March 2011.
Although the judge found that the Bartholomaeuses had acted dishonestly, his Honour was not prepared to find that Mr Hone, the director of Mount Barker Properties, was aware of the Bartholomaeuses’ misleading and deceptive conduct. The judge appeared to treat the knowledge of Mr Hone as that of Mount Barker Properties. His Honour rejected Rasch Nominees’ assertion that Mount Barker Properties acted in collusion with the Bartholomaeuses.
Rasch Nominees appealed the Court’s judgment. This Court dismissed the substantive appeal.[4]
[4] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 23, (2013) 115 SASR 473.
Proceedings in relation to costs
The judge dealt with the issue of costs in two separate decisions.[5] This is due to the fact that two costs orders were made in relation to the matter. Judgment on the substantive issues of the action was delivered on 30 April 2012.[6] Thereafter, submissions on the form of the final orders and the question of costs were heard. On 21 September 2012, the judge made costs orders and published his reasons.[7] Subsequent to further argument on costs on 14 December 2012, the judge made additional orders on 21 December 2012. The orders of 21 December 2012 varied certain of the orders made on 21 September 2012. Reasons for making the orders of 21 December 2012 were delivered on 7 February 2013.[8]
[5] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168; Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14.
[6] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2012] SASC 70, (2012) 114 SASR 448.
[7] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168.
[8] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14.
The orders that are the subject of the cross-appeal are Order 4 and Order 21 of the orders of 21 September 2012, and Order 1 (to the extent that it introduces Order 3A into the judgment of 21 September 2012) and Order 10 of the orders of 21 December 2012.
The judge’s orders made on 21 September 2012 are as follows:[9]
[9] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [1].
Orders in terms of the orders proposed by the plaintiffs as amended and initialled by me:
1. The first plaintiff recovers its award of nominal damages against the first and second defendants assessed in the amount of $1.00.
2. Orders numbered 1, 2 and 3 made on 13 June 2012 are recalled and orders in the same terms are made with effect from 21 September 2012 for the purposes of time within which to appeal.
3. The second plaintiff pay to the first, second, third, fourth and fifth defendants their costs, on an indemnity basis of the second plaintiff’s claims in the action from the date of the joinder of the second plaintiff on 15 July 2008, to be agreed or adjudicated.
4. In relation to the first plaintiff’s claim (FDN 195) against the first and second defendants:
4.1The first plaintiff is to pay the first and second defendants’ costs, on an indemnity basis, on the issue of quantum of its damages including all reserved costs, up to and including 11 March 2012, to be agreed or adjudicated.
4.2The first plaintiff is to pay 25 per cent of all of the first and second defendants’ other costs on a party and party basis, to be agreed or adjudicated.
5. In relation to the first plaintiff’s claims (by FDN 195) against the third, fourth and fifth defendants, the first plaintiff is to pay their party and party costs and the first plaintiff and the third, fourth and fifth defendants may apply to the Court for further directions.
Orders made in terms of the orders proposed by the first and second defendants as amended and initialled by me:
6. The first and second defendants have liberty to apply for a lump sum costs assessment in respect of any of the costs orders set out in order 4.
7. The first and second defendants have liberty to apply for a lump sum costs assessment in respect of the costs order set out in order 3.
8. In respect of the first and second defendants’ cross action against the sixth defendant (by FDN 108 and 171):
8.1There be judgment in favour of the first and second defendants against the sixth defendant on the question of liability.
8.2The first and second defendants recover from the sixth defendant damages to be assessed and the question of assessment of damages be reserved until further order.
8.3The question of costs be reserved until further order.
8.4The first, second and sixth defendants have liberty to apply
9. The sixth defendant’s cross action against the first defendant (by FDN 21) and the second defendant (by FDN 22) be dismissed.
10. The sixth defendant pay:
10.1The first defendant’s costs of the sixth defendant’s cross action against the first defendant, on a party/party basis, to be agreed or adjudicated.
10.2The second defendant’s costs of the sixth defendant’s cross action against the second defendant, on a party/party basis, to be agreed or adjudicated.
11. The cross action by the sixth defendant against the third, fourth and fifth defendants be dismissed and that the third, fourth and fifth defendants have their costs of that cross action on a party/party basis.
12. The first and second defendants’ third party claim against the third defendant in District Court Action No 1446 of 2006 (by FDN 15 and FDN 25 in that action) be dismissed.
13. The first and second defendants pay the third defendant’s costs of the third party claim against the third defendant in the District Court Action No 1446 of 2006 on a party/party basis, to be agreed or adjudicated.
14. The first and second defendants’ cross action against the third defendant (by FDN 90 and FDN 91) be dismissed with no order as to costs.
15. The first and second defendants’ cross action against the fourth defendant (by FDN 16) be dismissed with no order as to costs.
16. The first and second defendants’ cross action against the fifth defendant (by FDN 14) be dismissed with no order as to costs.
17. The third defendant’s cross action against the first and second defendants (by FDN 59) be adjourned for further consideration pending the outcome of the appeal.
18. There be no order as to the costs of the application for the production of the settlement deed as between the third, fourth and fifth defendants and the first plaintiff.
Further orders:
19. The first and second plaintiffs pay 50 per cent of the costs of the third to fifth defendants on the costs argument.
20. The first and second plaintiffs pay all of the costs of the non-parties on the costs argument.
21. Otherwise, each party bear their own costs of the costs argument.
22. Adjourned to 15 October 2012 at 9.15am for further orders.
In the course of the judge’s reasons of 21 September 2012, it is noted that SAPC discontinued its claim on 28 March 2011 and consented to an order that it pay the Bartholomaeuses, Mount Barker Properties, Jondam and Mr Hone their party/party costs of its claim in the action from the date of its joinder on 15 July 2008. However, the Bartholomaeuses, Mount Barker Properties, Jondam and Mr Hone sought costs from SAPC on an indemnity basis. The judge considered expert reports and the outlines of witness statements in relation to the viability of SAPC’s claim. His Honour concluded that there never was a reasonably worked out basis for SAPC’s claim.[10] Accordingly, the judge ordered that SAPC pay the costs of the Bartholomaeuses, Mount Barker Properties, Jondam and Mr Hone on an indemnity basis from the date of SAPC’s joinder. This is Order 3 of the judge’s orders of 21 September 2012.
[10] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [18].
The judge then considered the issue of costs in relation to the claims of Rasch Nominees. His Honour noted that, although Rasch Nominees obtained judgment for nominal damages, it did not, in any real sense, succeed in its claims for substantial relief. The judge observed that Rasch Nominees brought the action against the Bartholomaeuses to recover substantial common law damages but then abandoned that claim. It also failed in claims for damages against the Bartholomaeuses for tortious and statutory wrongs.
The judge described the dominant purpose of the contractual claim against the Bartholomaeuses as being to enable a conveyance of the land to Rasch Nominees to be made in the event that the conveyances to Mount Barker Properties and Jondam were set aside.[11] His Honour then observed that Rasch Nominees failed in its claim against Mount Barker Properties, Jondam and Mr Hone.
[11] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [25].
However, after Rasch Nominees had abandoned its claims for substantial damages against the Bartholomaeuses, the Bartholomaeuses refused to submit to a judgment for nominal damages for breach of contract and continued their defence against the claims. The judge accepted that the Bartholomaeuses’ concern to actively deny allegations of fraudulent and misleading conduct against them carried some weight.
The judge acknowledged that the exercise of a costs discretion required substantial weight to be given to practical considerations.[12] His Honour addressed two Calderbank letters of offer made by the Bartholomaeuses. Rasch Nominees’ non-acceptance of these offers forms the basis of the Bartholomaeuses’ contention on cross-appeal that an order for costs in their favour should be made on an indemnity basis. The judge outlined the basis of the two offers:[13]
On 25 February 2008, the solicitors for Mr and Mrs Bartholomaeus offered to transfer Lot 25 to Rasch for the sum of $360,000. The offer of $360,000 was $40,000 less than the notional value of Lot 25, having regard to the Rasch contract purchase price and the sale of Lots 23 and 24 to [Mount Barker Properties] for $850,000. They also offered to realign the boundaries so as to deal with the encroachments. The offer was made without prejudice to any further claim for damages which might be made. Plainly enough, the offer did not address any real compensation for the loss of the property right in Lots 23 and 24. Mr and Mrs Bartholomaeus had also offered to pay $100,000 to Rasch for damages. The offer was withdrawn on 4 February 2010.
On 23 December 2010, Mr and Mrs Bartholomaeus made a second offer. They offered to settle Rasch’s claims on the basis that Rasch discontinue and pay Mr and Mrs Bartholomaeus 80 per cent of their party/party costs. That offer remained open until 17 February 2011. As will shortly be seen, that offer was possibly for a greater proportion of the costs than the order I am about to make. I further observe that the offer was also one as to costs only and for that reason has little weight on the issue of indemnity costs.
[12] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [29].
[13] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [30] – [31].
Having made the above observations, the judge then reached his conclusion in relation to costs between Rasch Nominees and the Bartholomaeuses, expressed in the following terms:[14]
The most appropriate way to balance the competing considerations to which I have referred, is for an order that [Rasch Nominees] pay the [Bartholomaeuses] costs on the issue of the quantum of its damages, including all reserved costs until 11 March 2011 on which day it indicated that it abandoned its claim for damages. I order that those costs be taxed on an indemnity basis for two reasons. First, it was unlikely that anything more than nominal damages would be awarded because of Rasch’s borrowing costs. Secondly, the letter of 25 February 2008 made a generous offer in settlement of the damages claim.
I order that Rasch pay 25 per cent of all of the other costs of Mr and Mrs Bartholomaeus on a party and party basis. Despite its overall success on the issues against Mr and Mrs Bartholomaeus, it failed ultimately in the substantial relief it claimed. Much time was also spent cross-examining Mr Bartholomaeus and Mr Hone in an effort to show that [Mount Barker Properties] had been offered the Land pursuant to the right of pre-emption but had refused it. Rasch lost on that issue. Moreover, Mr and Mrs Bartholomaeus remained at risk on the claim for s 30 damages. On the other hand, Mr and Mrs Bartholomaeus’ costs would have been much less if they had submitted to an order that they had breached the Rasch contract.
The Calderbank letters are not sufficient reason to assess those costs on an indemnity basis. The letters did not acknowledge the contractual breach of Mr and Mrs Bartholomaeus. It was essential to Rasch’s claim against the Hone Parties that it establish its contractual right as against Mr and Mrs Bartholomaeus if it were to recover the land... Rasch had a properly arguable case against the Hone Parties even though it ultimately failed.
[14] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [33] – [35].
This conclusion formed the basis of Order 4 of the judge’s orders of 21 September 2012.
Subsequent to the orders of 21 September 2012 being made, Mount Barker Properties, Jondam and Mr Hone pursued an application for a lump sum assessment of the costs payable by SAPC and applied for an interim allocatur with respect to the costs payable by Rasch Nominees. On the hearing of those applications, a question arose as to the true meaning and effect of the orders made on 21 September 2012. The judge provided clarification on this point by way of his Honour’s orders of 21 December 2012.
The judge’s orders of 21 December 2012 are as follows:[15]
[15] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [1].
1.Order 3 of the orders of 21 September 2012 is recalled and the following orders will be made instead:
3A. The second plaintiff pay the first, second, third, fourth and fifth defendants their costs on the issue of damages in, and on any other issue peculiar to the second plaintiff’s claim, in the action on an indemnity basis from the date of the joinder of the second plaintiff on 15 July 2008, to be agreed or adjudicated.
3B. The second plaintiff be jointly and severally liable to pay the costs ordered against the first plaintiff in Order 4.2.
3C. The second plaintiff be jointly and severally liable to pay the costs ordered against the first plaintiff in Order 5.
2.Orders 3B and 3C are stayed until further order.
3.There be an interim allocatur against the first plaintiff on Order 5 of the orders of 21 September 2012 in the sum of $150,000.00.
4.The application for lump sum assessment of costs is adjourned for the first plaintiff to obtain the reports from Mr Genders and to put any other material on the suitability of proceeding by way of lump sum assessment of those costs.
4.1. Order 4 above is made on the condition that the first plaintiff pays the third, fourth and fifth defendants’ interest on the sum of $350,000.00 at the rate payable by the third, fourth and fifth defendants for moneys borrowed by them to pay their legal costs.
4.2. That interest is to be paid by the first plaintiff seven days after the presentation of proof of payment of the monthly interest being payable from and including the month of December 2012 until the determination of the first plaintiff’s appeal.
4.3. The conditions in order 4.1 and 4.2 above are to operate on the third, fourth and fifth defendants undertaking that it will repay the interest to the first plaintiff if the costs order in Order 5 of the orders of 21 September 2012 is set aside.
5.The first and second defendants are granted an extension of time within which to lodge an application for permission to appeal the costs orders to close of business on 21 January 2013.
6.The third, fourth and fifth defendants are granted an extension of time within which to lodge an application for permission to appeal the costs orders to close of business on 21 January 2013.
7.The first and second plaintiffs may amend their notice of appeal by close of business on 9 January 2013.
8.Order 4.1 of the orders of 21 September 2012 is varied so that 11 March 2012 reads 11 March 2011.
9.Reasons reserved.
10.Each party will bear their own costs of the costs argument.
11.Liberty to apply.
In his reasons delivered 7 February 2013, the judge noted his previous conclusion that SAPC never had a reasonable basis for its derivative damages claim, and that the claims of Rasch Nominees founded on fraud and statutory misrepresentation, although ultimately unsuccessful, were reasonably prosecuted.[16]
[16] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [4] – [5].
In his reasons of 7 February 2013, the judge addressed the meaning of Order 3 of the orders made 21 September 2012:[17]
Mr and Mrs Bartholomaeus and the Hone Parties contend that the order, on its terms, applies also to the costs attributable to work done on liability, even though the same work was performed in defence of Rasch’s claim. The defendants contend that order 3 extends to the costs of the work common to both claims.
I accept that the natural meaning of order 3 is as the defendants contend but that construction was not my intention. I intended that order 3 would apply to the costs of the defendants which were attributable to work done which was peculiar to the defence of the action brought by SAPC, and in particular, to work related to SAPC’s damages claim.
[17] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [6] – [7].
He continued:[18]
In my view, there is no reason why Mr and Mrs Bartholomaeus and the Hone Parties should enjoy a greater indemnity than that which I held they should have for the costs of defending Rasch’s claim on liability by reason of the circumstance that SAPC had joined in the action as an, ultimately, unsuccessful plaintiff.
The question here is related to, but not the same as, the apportionment of costs between multiple plaintiffs and defendants when one of the parties, on one side of the record, is successful but another is unsuccessful. Both questions raise for consideration how the cost efficiencies of joint actions should be reflected in costs orders.
[18] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [9] – [10].
The judge then identified the general rule as to costs in such circumstances:[19]
When defendants who are jointly represented variously fail and succeed, the rule is that the plaintiff is liable to the successful defendant for those costs which are attributable to the work done for that defendant alone and for a proportionate share of the costs of the work performed in common for all defendants. The origin of the rule is in the Chancery practice as to costs when bills were filed against multiple defendants in order to properly constitute proceedings even though some defendants were only peripherally concerned in the substantial controversy. A solicitor acting for all of the defendants was, in the absence of an express agreement which provided otherwise, limited to recovering from each defendant the costs only for that work performed exclusively for him or her and for a proportionate share of the costs of the work done in common.[20] That contractual presumption was, in turn, reflected in the costs orders made against a plaintiff in favour of a successful defendant. The contractual presumption did not apply to joint plaintiffs who, in the absence of a special retainer, were jointly and severally liable for all of the costs of the jointly retained solicitor.
[19] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [11].
[20] D A Starke Pty Ltd v Yard & Anor [2012] SASC 19.
The judge considered Einstein J’s criticism of the rule in Currabubula & Paola Holdings Pty Ltd v State Bank of New South Wales:[21]
There is authority for the proposition that the rule of thumb is not to be extended: Korner v H Korner & Co Ltd (supra). The premise upon which the rule of thumb operates is, as has been shown, one which applies only in the case of defendants. To apply it to plaintiffs, as was done in Keen v Towler (supra), is, to my mind, to extend the rule beyond its principled and authoritative basis and to achieve a result which is not self‑evidently just. There is no logical reason why a defendant who is sued by several plaintiffs who are variously successful and unsuccessful should be in a more advantageous position qua joint costs (ie., those costs not referable to any one plaintiff but necessary for the cases of all the plaintiffs), than would be an unsuccessful defendant sued by one successful plaintiff alone. Intuitively, justice would seem to require that a defendant, found to be in the wrong, should bear all the costs which the successful plaintiff would have to incur in bringing the action and should be spared only those costs occasioned by the joining of the unsuccessful plaintiffs. To my mind, this is the correct legal position, as is stated by Mr Mark Orkin QC in Law of Costs (2 ed, Canada Law Book Inc, 1987, para 208.1) as follows:
Where several plaintiffs sue by the same solicitor, and one succeeds while the others fail, the successful plaintiff will be entitled to recover the whole of his costs from the defendant and not merely a proportion. The unsuccessful plaintiffs will be obliged to pay the defendant’s costs as occasioned by their having been joined unless the Court otherwise orders.
I respectfully agree with his Honour’s conclusions and with his criticism of the decision in Keen v Towler.[22] Einstein J’s observations were approved in Howards Storage World Pty Ltd & Ors v Haviv Holdings Pty Ltd & Anor.[23]
[21] [2000] NSWSC 232 at [104]; Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [12].
[22] (1924) 41 TLR 86.
[23] (2010) 182 FCR 84.
In respect of the general rule, his Honour observed:[24]
It is not obvious to me why, if the rule is based on the nature of the retainer, it does not give way when a special retainer, by which defendants are jointly and severally liable, has been agreed.[25] I also find it difficult to distinguish between one side of the record and the other in terms of the “intuitively” just result. The “rule of thumb” founded, as it is, in the practice in Chancery is problematic in its application to multiple parties and claims properly joined in one action in accordance with the Judicature Act reforms. My preference is to approach the costs discretion from the starting point that costs should reflect the way in which the common issues in the joint trial were decided and the reasonableness of the respective claims and defences of the parties.
[24] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [13].
[25] A possible rationale is that a contractual variation of the common law position is a matter of choice which should not affect the application of the rule.
Having made the above observations, the judge then reached his conclusion, expressed in the following terms:[26]
The order I made in 4.2 reflected the balancing of the respective successes and failures of Rasch on the one hand and Mr and Mrs Bartholomaeus on the other, on the issue of liability. The order in paragraph 5 embodies my view of the appropriate costs obligation of Rasch to the Hone Parties on the liability issues. Those liability issues were common to Rasch and SAPC. Having dealt separately with the costs obligations of Rasch and SAPC on the issue of damages, there is no reason to impose on SAPC a greater costs burden on the common liability issues than that imposed on Rasch. For that reason I have, by order 3A, expressly excluded from the indemnity costs order made against SAPC the defendants’ costs of litigating the common liability issues. On the other hand, there is no reason why SAPC should not be jointly and severally liable for the common costs attributable to the liability issues ordered against Rasch. SAPC would, in the ordinary course, not be liable for that part of those costs incurred after it discontinued its action. However, the contractual indemnity given by SAPC with respect to Rasch’s costs relieves me of the need to further complicate these orders. I therefore fixed SAPC’s joint and several liability for the common costs by reference to the orders made against Rasch.
[26] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [18].
In relation to the applications as to costs argued on 14 December 2012, the judge ordered that each of the parties bear their own costs, stating that enough is enough.[27]
[27] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [32].
The cross-appeal
As the cross-appeal is limited to the question of costs, permission to appeal is required pursuant to s 50(4) of the Supreme Court Act 1935 (SA) and 6SCR 288(1)(b). The judge formally extended the time for the first to fifth cross-appellants to lodge an application for permission to appeal in his Honour’s orders of 21 December 2012. The first and second, and third to fifth cross-appellants filed two separate notices of cross-appeal by 21 January 2013. The Bartholomaeuses rely on an amended notice of cross-appeal, filed on 4 February 2013.
At the hearing of the arguments on cross-appeal on 9 May 2013, Mr Robertson SC, counsel for the Bartholomaeuses, submitted that permission ought to be granted as the judge made an error of principle[28] and the orders made are practicably unworkable. Similarly, the third to fifth cross-appellants contend that the issue for determination raised by the cross-appeal is an important issue of principle and thus permission to appeal ought to be granted.
[28] Full Court transcript, (9 May 2013) p 4.
Should permission to cross-appeal be granted, the Bartholomaeuses contend that the judge erred in fact and law in limiting the order for indemnity costs against SAPC to the issue of damages and issues peculiar to SAPC’s claim in the action, and in limiting the order for indemnity costs against Rasch Nominees to the issue of damages. It is further contended by the Bartholomaeuses that the judge erred in limiting the order for party/party costs of the liability issues referrable to Rasch Nominees and SAPC to 25 per cent of the whole of the action.
It was accepted by the Bartholomaeuses that, where a decision the subject of a general discretion is appealed against, an appeal court will only intervene where there is an identifiable error, or if the exercise of discretion has been so unreasonable as to necessitate the appellate court to substitute its own discretion.[29] However, the Bartholomaeuses complain that the judge, in an effort to achieve an equitable result in determining costs, impermissibly conflated the interests of Rasch Nominees and SAPC with the consequence that the costs orders the subject of the cross-appeal are contrary to principle. The Bartholomaeuses submit that the costs orders the subject of the cross-appeal are so unreasonable that they require this Court to substitute the exercise of the judge’s discretion with that of its own.
[29] Hutchinson v Ellis [2010] SASCFC 71 at [17] per Gray J, citing Norwest Refrigeration Services Pty Ltd v Baine Dawes (WA) Pty Ltd (1984) 157 CLR 149 at 176 per Brennan J.
It is Mr Robertson SC’s submission that the judge erred in approaching the costs discretion from the starting point that costs should reflect the manner in which the common issues in the joint trial were decided and the reasonableness of the respective claims and defences of the parties.[30] Mr Robertson SC contends that the judge conflated the practice which is applied in relation to the exercise of the discretion where there are multiple parties, some of whom are successful and some of whom are not successful, with the position of a party that has been wholly successful.[31]
[30] Full Court transcript, (9 May 2013) p 5.
[31] Full Court transcript, (9 May 2013) pp 9 – 10.
Mr Robertson SC relies on the dissenting judgment of McHugh J in Oshlack v Richmond River Council[32] in his submission that it is a principle, as opposed to a matter of practice, that a court should begin its consideration of costs with the proposition that the successful party is prima facie entitled to an order for costs in its favour.[33] Mr Robertson SC contends that the starting point should have been that the Bartholomaeuses were entitled to an order for costs against SAPC and Rasch Nominees, and from that starting point the judge should have considered whether there were special circumstances that justified a departure from the general rule.[34] Thus, it is the Bartholomaeuses’ case on the cross-appeal that the judge erred in his approach to the costs discretion.
[32] [1998] HCA 11 at [67], (1998) 193 CLR 72 at 97.
[33] Full Court transcript, (9 May 2013) p 8.
[34] Full Court transcript, (9 May 2013) p 6.
The Bartholomaeuses further contend that each of the judge’s five reasons[35] for ordering that Rasch Nominees pay the Bartholomaeuses only 25 per cent of their costs of the liability issues were incorrect. However, the Bartholomaeuses’ primary contention is that the judge’s approach to awarding costs produced a capricious result, which was not justified in his Honour’s reasons.[36]
[35] Rasch Nominees Pty Ltd v Bartholomaeus & Ors (No 2) [2012] SASC 168 at [26] – [30].
[36] Full Court transcript, (9 May 2013) pp 19 – 20.
The practical workability of the judge’s orders as to costs are also in issue on the cross-appeal. The Bartholomaeuses contend that, in the exercise of the costs discretion, the practicality of enforcing costs orders is a relevant consideration. It is Mr Robertson SC’s submission that Order 4 of the orders of 21 September 2012 and Order 1 of the orders of 21 December 2012 (to the extent that it introduces Order 3A into the judgment of 21 September 2012) are unworkable and ought to be set aside.
On the cross-appeal, Mount Barker Properties, Jondam and Mr Hone contend that the judge fell into error in confining the scope of indemnity costs to those costs peculiar to SAPC’s claim. Mr Manetta, counsel for the third to fifth cross-appellants, submits that the judge should have allowed the ordinary course to follow.[37] That is, SAPC should pay the whole of the costs of its claim on an indemnity basis, including the costs of the common issues of the Rasch Nominees and SAPC claims.
[37] Full Court transcript, (9 May 2013) p 28.
It is Mr Manetta’s submission that the judge made an error of principle in having regard to the ancillary effect that an indemnity costs award against SAPC would have on the Rasch Nominees claim.[38] Mr Manetta submits that the judge tended to regard Rasch Nominees as the primary plaintiff and SAPC as “along for the ride”.[39] It is contended that it was wrong to treat SAPC’s claim as being there for the ride, as it was a stand-alone claim that significantly inflated the damages faced by the third to fifth cross-appellants. Mr Manetta submits that the judge therefore erred in his application by analogy of the costs rules applicable to cases where multiple parties on one side of the record have varied success. It is due to this alleged error that the judge confined the scope of Order 3A to the costs peculiar to the claim of SAPC and excised the common costs of the SAPC and Rasch Nominees claims from the indemnity order. Mr Manetta submits that there is no foundation in principle to differentiate between the peculiar costs and the common costs of SAPC’s claim.[40]
[38] Full Court transcript, (9 May 2013) p 30.
[39] Full Court transcript, (9 May 2013) p 33.
[40] Full Court transcript, (9 May 2013) p 33.
Mr Manetta concedes that the judge’s preference in approaching the costs discretion from the starting point that costs should reflect the manner in which the common issues at trial were decided and the reasonableness of the respective claims and defences of the parties was correct.[41] However, Mr Manetta contends that the judge ultimately failed to apply this approach in relation to the third to fifth cross-appellants and, consequently, made an error in application. This can be contrasted with the position of Mr Robertson SC, who submits that the judge’s approach was wrong in principle.
[41] Full Court transcript, (9 May 2013) p 35.
The third to fifth cross-appellants further contend that regard should be had to the purpose of indemnity costs. Mr Manetta submits that, in some measure, the purpose of indemnity costs is to punish delinquent litigants for bringing unmeritorious claims.[42] It is contended that, in restricting the scope of the indemnity costs awarded against SAPC, Order 3A is deprived of any punitive effect and the judge’s discretion has therefore miscarried.
[42] Full Court transcript, (9 May 2013) p 36.
Conversely, the first and second cross-respondents submit that there is not sufficient doubt to warrant this Court to consider the cross-appeal[43] and that it has not been demonstrated that substantial injustice would result from a refusal to grant permission.[44] It is submitted that the conduct of the Bartholomaeuses at trial justified the judge’s exercise of the costs discretion and, accordingly, there was no error in the exercise of the discretion. The first and second cross-respondents submit that, although it has been accepted that joint plaintiffs are generally liable for the whole of the costs of the action, it is within the discretion of the court to depart from the ordinary course should the facts of a particular case so require.
[43] Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156 at [26] – [30], (2011) 286 ALR 257 at 266.
[44] Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 – 400.
Mr Crawley, counsel for the first and second cross-respondents, submits that the judge’s approach sought to achieve substantial justice between the parties.[45] It is submitted that the judge approached the costs discretion by reference to his Honour’s verdicts on discrete and substantial issues at trial and the reasonableness of the parties’ claims, rather than the overall success or failure of the parties.[46] The first and second cross-respondents submit that the approach adopted by the judge was correct in the circumstances of this case.
[45] Full Court transcript, (9 May 2013) p 41.
[46] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [13]; [16].
It is further submitted by the first and second cross-respondents that the judge took into account relevant considerations in making the costs orders which largely aggregated the plaintiffs’ claims. The first and second cross-respondents submit that, due to the way in which the trial was run, it was reasonably open to the judge to confine the scope of indemnity costs against SAPC to those costs peculiar to SAPC’s claim. Accordingly, it is submitted that the discretion of the judge did not miscarry and, if permission is granted, the cross-appeal should nevertheless be dismissed.
In relation to the purpose of indemnity costs, the first and second cross-respondents submit that such costs orders are intended to indemnify the successful party rather than to punish the unsuccessful party.[47]
[47] Advance Resource Services Pty Ltd v Charlton [2008] SASC 118 at [11], (2008) 100 SASR 388 at 391.
Basis on which an appellate court can interfere with a trial judge’s decision as to costs
The judge had a general discretion as to costs[48] and the basis for awarding costs.[49] The manner in which an appeal against the exercise of a general discretion should be determined is well established. In an appeal against a decision the subject of a general discretion, an appellate court will only intervene where clear error has been shown of the nature identified in House v King.[50] It is not enough that the judges composing the appellate court consider that, if they had been in the position of the trial judge, they would have taken a different course.[51] There is a strong presumption in favour of the correctness of the decision appealed from and that the decision should be affirmed unless the appeal court is satisfied that it is clearly wrong.[52] A decision regarding costs will only be interfered with if the appellate court is satisfied that there is an identifiable error or if the exercise of the discretion was so unreasonable as to require the appellate court to substitute its own discretion.[53]
[48] Supreme Court Civil Rules 2006 (SA) r 263.
[49] Supreme Court Civil Rules 2006 (SA) r 264.
[50] [1936] HCA 40, (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.
[51] House v King [1936] HCA 40, (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.
[52] Kazar Pty Ltd v Kargarian; Re Frontier Architects Pty Ltd [2011] FCAFC 136 at [52], (2011) 284 ALR 237 at 250.
[53] Hutchinson v Ellis [2010] SASCFC 71 at [17] per Gray J, citing Norwest Refrigeration Services Pty Ltd v Baine Dawes (WA) Pty Ltd (1984) 157 CLR 149 at 176 per Brennan J.
Consideration
The first to fifth cross-appellants require permission to appeal, as the proposed appeal is limited to a question on costs.[54] Generally, leave to appeal against a costs order necessitates the identification of an important question of principle requiring resolution, as opposed to the application of settled principle to particular facts.[55] The notices of appeal filed by the first and second, and third to fifth cross-appellants do not raise important questions of principle requiring resolution. Rather, the notices of appeal involve the application of settled principles concerning the costs discretion to the particular facts of this case.
[54] Supreme Court Civil Rules 2006 (SA) rule 288(1)(b).
[55] Hamilton-Smith v Bernsteen Pty Ltd(in liq) [2005] SASC 190 at [26] per Gray, Sulan and White JJ.
In any event, the decision of the judge is not attended by sufficient doubt to warrant the grant of permission to appeal. The first to fifth cross-appellants have not demonstrated that it is sufficiently arguable that the judge fell into error or that his Honour’s reasons did not justify the final orders made.
The Court has an absolute and unfettered discretion as to costs, subject only to the requirement that the discretion be exercised judicially, not arbitrarily or capriciously, and that it cannot be exercised on grounds unconnected with the litigation.[56]
[56] Cretazzo v Lombardi (1975) 13 SASR 4 at 11 per Bray CJ.
Section 40(1) of the Supreme Court Act 1935 (SA) provides:
(1) Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, 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.
6SCR 263(1) provides that as a general rule, costs follow the event. It then prescribes exceptions to the general rule. In Copping v ANZ McCaughan Ltd[57] King CJ rejected an argument that r 101.02 of the 1987 Supreme Court Rules, the predecessor to 6SCR 263, fettered the operation of s 40. King CJ, with whom Mohr and Nyland JJ agreed, said of s 40:[58]
… the legislative intention is plainly to confer on courts and judges an unfettered discretion as to costs. A construction of a rule of court which practically negates the statutory provision is not lightly to be adopted.
[57] [1995] SASC 4917, (1995) 63 SASR 523 at 527.
[58] [1995] SASC 4917, (1995) 63 SASR 523 at 527.
The Chief Justice went on to contemplate that a rule which purported to limit the Court’s unfettered discretion as to costs might be invalid as it would be repugnant to s 40. In my view, 6SCR 263 should not be construed so as to limit the court’s unfettered discretion as to costs conferred by s 40. 6SCR 263 is to be construed as identifying the general approach to awarding costs and identifying specific exceptions to the general approach, but it is not to be construed as defining the exceptions to the general rule exhaustively.[59] In this context, I note the judgment of Perry J in Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (No. 3)[60] where his Honour held that because s 40(1) is expressed to be subject, inter alia, to the Rules of Court, this means that the breadth of the discretion conferred by s 40 is confined to that defined by the rules. Curiously, Perry J did not refer to the Full Court’s judgment in Copping. In any event, I am satisfied that the approach of Perry J can be reconciled with the Full Court’s judgment in Copping on the basis that I have explained.
[59] Gwinnett v Day (No. 2) [2012] SASC 61 at [12] – [14].
[60] [1997] SASC 6041 at [22], (1997) 190 LSJS 101 at 105.
In Advance Resource Services v Charlton,[61] Doyle CJ considered the principles relevant to the exercise of a statutory costs provision such as s 40 in the light of the High Court’s judgment in Oshlack v Richmond River Council[62] He said:
In relation to statutory provisions that confer on a court a general discretion as to costs, certain general principles have emerged. One is that the discretion should be exercised judicially, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation: see Gaudron and Gummow JJ in Oshlack (at [34]). Another general principle is that ordinarily a wholly successful defendant will receive that defendant’s costs unless there is a good reason to order otherwise: see Gaudron and Gummow JJ in Oshlack (at [35]). However, it needs to be emphasised that these are but general principles, and should not be treated as if they are rules of law.
Another well recognised principle was identified by McHugh J in Oshlack. Although his was a dissenting judgment, the principle to which he referred is well established: see Latoudis v Casey (1990) 170 CLR 534 and Ohn v Walton (1995) 36 NSWLR 77 at 79. The principle is that the purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made: Oshlack (at [82]).
[61] [2008] SASC 118 at [10] – [11], (2008) 100 SASR 388 at 391.
[62] [1998] HCA 11, (1998) 193 CLR 72.
Although guiding rules of principle and practice have developed,[63] the discretion remains unfettered and each case must be decided on its own facts. On an analysis of the judge’s reasons, it is evident that his Honour has paid close attention to the many matters that he considered relevant. The judge weighed those matters and came to a decision. Those matters were all connected to the subject matter of the litigation. The discretion was exercised judicially. There was no departure from the compensatory principle. The judge did not purport to exercise the discretion in a punitive fashion. Neither, in my view, did he do so in fact. It is immaterial whether the judges composing this Court would have taken a different course. The question is whether it was open to the judge to adopt such an approach and come to his Honour’s ultimate decision.
[63] Stubing and Anor v Halling and Anor [2012] SASCFC 123 at [28], (2012) 115 SASR 1 at 7 – 8, per Gray J.
Mr Robertson SC sought to place considerable reliance upon the principle identified by McHugh J in his dissenting judgment in Oshlack that a successful party prima facie is entitled to an order for costs in its favour. However, as was observed by the Full Federal Court in Friends of Hinchinbrook Society Inc v Minister for the Environment & Ors,[64] the majority decision of the High Court in Oshlack affirms the width of the discretion conferred upon a court in relation to costs. Further, as Doyle CJ observed in Charlton, the general principles applicable to the exercise of the costs discretion should not be treated as if they are rules of law. In my view, Mr Robertson SC’s submission can be understood when considered in terms of the judge departing from practices generally followed. However, to depart from a common practice does not necessarily amount to an error of principle. The relevant principle in the circumstances is that the judge had an absolute and unfettered discretion in awarding costs,[65] guided by rules of practice that have been developed and exercised judicially. Rules of practice are no more than that, and the judge’s reasons must be analysed in light of his unfettered discretion. Where the judge noted his starting point was reflected by certain matters,[66] he was not indicating where his starting point was, but merely indicating that he was influenced by certain matters. There is no error of principle in this approach. Complaints about the practical workability of the judge’s orders as to costs do not invoke any question of principle.
[64] (1998) 84 FCR 186 at 188.
[65] Cretazzo v Lombardi (1975) 13 SASR 4 at 11 per Bray CJ.
[66] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14 at [13].
In my view, the same response can be given to the submissions of the third to fifth cross-appellants. Their arguments constitute a complaint about the basis of the judge’s exercise of his discretion cloaked in the language of an error of principle.
On the material before the judge, his Honour was entitled to exercise his discretion as to costs in the manner he adopted. No error of principle has been identified and I do not consider that the orders made give rise to a substantial injustice. The first to fifth cross-appellants have failed to demonstrate that the judge’s exercise of discretion was so unreasonable or unjust as to require this Court to substitute its own discretion.
Conclusion
I would refuse permission to cross-appeal. Accordingly, the cross-appeal is dismissed.
I would hear the parties as to costs.
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