Rasch Nominees Pty Ltd v Bartholomaeus

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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…

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Details
Case
[2013] SASCFC 105
Decision Date

CaseChat Overview and Summary

This matter concerned a cross-appeal brought by the first to fifth cross-appellants against a costs order made by a lower court. The appeal was heard by Gray, Sulan, and Stanley JJ of the Supreme Court of South Australia.

The primary legal issue before the Full Court was whether the trial judge had erred in exercising their discretion regarding costs, and consequently, whether the appellate court should intervene. Specifically, the court had to determine if permission to appeal on a question of costs should be granted, and if so, whether the trial judge's decision was demonstrably wrong or so unreasonable as to warrant substitution of the appellate court's own discretion.

The court applied the well-established principles governing appeals against the exercise of a general discretion, particularly in relation to costs. It was held that an appellate court will only interfere with such a discretion if there is clear error, as identified in *House v King*, or if the exercise of discretion was so unreasonable as to require the appellate court to substitute its own. It is insufficient for the appellate judges to believe they would have acted differently. The court noted that leave to appeal on costs generally requires an important question of principle, not merely the application of settled principles to specific facts.

The Full Court refused permission to cross-appeal and dismissed the cross-appeal. The court found that the material before the trial judge entitled him to exercise his discretion as he did, and no error of principle was identified. The orders made did not give rise to a substantial injustice, and the cross-appellants failed to demonstrate that the judge's exercise of discretion was so unreasonable or unjust as to require the appellate court to substitute its own.

Orders

Orders of the court

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.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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.