Ridgway v Sporting SHOOTERS' Association of Australia Hunting & Conservation Branch (SA) Inc (No 2) - [2015] SASC 56

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
RIDGWAY v SPORTING SHOOTERS' ASSOCIATION OF AUSTRALIA HUNTING & CONSERVATION BRANCH (SA) INC (No 2)
[2015] SASC 56
Judgment of The Honourable Justice Nicholson
8 April 2015
PROCEDURE - COSTS
Depriving a successful party of part of their costs - ordering a successful party to pay part of their opponent's costs.
Held: The plaintiff is to pay 60 per cent of the defendant's costs of the proceedings on a party and party basis.
Associations Incorporation Act 1985 s61; Supreme Court Civil Rules 2006 r263, r264; Supreme Court Act 1935 s40, referred to.
Ridgway v Sporting Shooters’ Association of Australia Hunting & Conservation Branch (SA) Inc [2015] SASC 7; Cretazzo v Lombardi (1975) 13 SASR 4; House v The King [1936] HCA 40, (1936) 55 CLR 499; ANZ McCaughan [1995] SASC 4917, (1995) 63 SASR 523; Gwinnett v Day (No 2) [2012] SASC 61; McFadzean v CFMEU [2007] VSCA 289, (2007) 20 VR 250, considered.

RIDGWAY v SPORTING SHOOTERS' ASSOCIATION OF AUSTRALIA HUNTING & CONSERVATION BRANCH (SA) INC (No 2)
[2015] SASC 56
NICHOLSON J.
Introduction

On 28 January 2015, I delivered reasons for allowing, in part, the plaintiff’s claim against the defendant.[1] These reasons concern the question of costs.
[1] Ridgway v Sporting Shooters’ Association of Australia Hunting & Conservation Branch (SA) Inc [2015] SASC 7.
The trial went for nine days in this Court and traversed wide ranging issues of fact and law. On any analysis, it will have been a very expensive undertaking for both sides. Whilst the plaintiff succeeded with his claim, in part, much of the trial and, I infer, the trial preparation was consumed by issues with respect to which the plaintiff failed. The plaintiff’s success can only be described as pyrrhic.
The plaintiff seeks an order that the defendant pay his costs of the action on a party and party basis or, in the alternative, that the defendant pay a proportion of his costs or, in the further alternative, that each party bears their own costs.
The defendant seeks an order that the plaintiff pay its costs of the action on a party and party basis or, in the alternative, that the plaintiff pay a substantial proportion of its costs or, in the further alternative, that there be no order as to costs (that is, each party bears their own costs).
The plaintiff’s claim and the judgment
The plaintiff, a former member of the defendant shooting club, was expelled from membership on 20 March 2013. The decision to expel was the culmination of an extended period of disharmony between the plaintiff and the defendant over a period of two years or so. The plaintiff sought, inter alia, a declaration that the expulsion was null and void and an order that he be reinstated as a member. The plaintiff complained that the defendant failed to afford him natural justice during the expulsion process, that the defendant engaged in oppressive or unreasonable conduct towards him within section 61 of the Associations Incorporation Act 1985 and that it failed to follow due process at the meeting during which the expulsion took place. The plaintiff also sought an award of damages.
The evidence and factual findings are set out at length in my reasons for judgment.[2] I held as follows:[3]
1. The plaintiff was provided with proper notice of the defendant’s complaints against him together with sufficient time to prepare for and to address them at the 20 March 2013 meeting and to this extent was afforded natural justice.
2. In reaching its decision to expel the plaintiff, the defendant did not act oppressively or unreasonably within s61 of the Associations Incorporation Act 1985.
3. The defendant failed to afford the plaintiff procedural fairness at the 20 March 2013 meeting and, as a consequence, the resolution expelling him from membership for the 2012/2013 year was invalid.
4. In the circumstances, the plaintiff’s membership expired as at 30 October 2013.
5. An order for reinstatement of membership is not appropriate, in all the circumstances.
6. The plaintiff is entitled to an award of damages in the amount of $500.
[2] Ridgway v Sporting Shooters’ Association of Australia Hunting & Conservation Branch (SA) Inc [2015] SASC 7.
[3] Taken from the head note to the judgment of [2015] SASC 7 as published.
The plaintiff succeeded only as recorded in 3 and 6 above. There were two bases for the finding that the defendant failed to afford procedural fairness at the expulsion meeting itself.
The first basis was that the plaintiff’s solicitor who represented him at the expulsion meeting was excluded from a closed session of the meeting. Further, and unlike the session of the meeting that was attended by the plaintiff’s solicitor, there was no record taken of the closed session. It was possible that additional discussion occurred prior to the vote to expel being taken about which the plaintiff was not put on notice. The second basis was that two members of the defendant’s council who participated in the discussion and the vote were, in my view, to be seen as having a personal interest in the matter and, in the circumstances, could be seen as having participated as judges in their own cause. I found that they should not have participated. The second basis had been pleaded and always was in issue between the parties. The first matter was not pleaded. It arose for consideration only late in the trial.
Neither matter took up much trial time at all, nor, I would expect, much preparation time. However, I do accept the submission from counsel for the plaintiff that they were not matters that could have been dealt with entirely in isolation. That is, even if these were the only two issues propounded by the plaintiff, some of the (otherwise extensive) background story would need to have been adduced in evidence, in any event, to permit of a proper understanding of these two issues.
The plaintiff sought the following relief.
1.A declaration that in and about the expulsion the association did not adopt the principles of natural justice.
2.A declaration that the purported expulsion of the plaintiff as a member of the defendant is null and void and of no effect.
3.A declaration that in breach of section 61 of the Associations Incorporation Act the defendant has engaged in conduct concerning the plaintiff that is oppressive or unreasonable.
4.A declaration that the member is still a member of the association.
5.An injunction restraining the defendant from taking further disciplinary action against the plaintiff in respect of events up to the commencement of these proceedings.
6.Damages.
7.Costs.
The plaintiff succeeded only with two and six above. The damages award of $500, whilst more than nominal, was an extremely modest award and was always going to be so for the reasons given in the principle judgment.[4]
[4] Ridgway v Sporting Shooters’ Association of Australia Hunting & Conservation Branch (SA) Inc [2015] SASC 7 at [204]-[216].
I received detailed written and oral submissions by both parties. After having reviewed those submissions, I am satisfied that the costs determination in this matter falls within the territory of the discretion available to require a successful party (the plaintiff) to pay some or all of the “unsuccessful” party’s costs.
For this purpose, the plaintiff can be regarded as the successful party by characterising the event following which the costs might follow as being the plaintiff’s success in obtaining the limited declaratory relief and the award for damages earlier identified. This, of course, is to be viewed against the background of the defendant succeeding on all other issues, being issues which occupied most of the trial and preparation time.
Also of relevance is the fact that the relief obtained by the plaintiff was never the main game. From the outset the plaintiff insisted he was entitled to a full reinstatement of his membership of the club to the date of trial judgment and, in effect, findings and relief aimed at preventing the club from cancelling his membership again (except in the case of new grounds arising). The defendant was equally intransigent in denying that the plaintiff was entitled to this.[5] The defendant succeeded in this respect. I earlier described the plaintiff’s success as “pyrrhic”. A finding made on 28 January 2015 that he had remained a member for the balance of the 2012-2013 year achieved nothing.
[5] See the parties’ letters attempting to resolve the matter both prior to and during the trial, being exhibits JAW1 and JAW2 to the affidavit of John Anthony Wadlow (defendant’s solicitor) sworn 27 February 2015. This fundamental issue that divided the parties was never negotiable.
General principles
Rule 263 of the Supreme Court Civil Rules 2006 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 to be awarded as between party and party and in accordance with the relevant scale provided under the Rules. Neither party seeks anything other than party and party costs.
When the Rules are read in conjunction with section 40 of the Supreme Court Act 1935[6] there has been conferred on courts and judges an unfettered discretion as to costs.[7] Of course, the discretion must be exercised judicially and by having regard to relevant considerations and not relying on irrelevant considerations.[8]
[6] 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.
[7] See generally Copping v ANZ McCaughan [1995] SASC 4917, (1995) 63 SASR 523 at 527; Gwinnett v Day(No 2) [2012] SASC 61.
[8] House v The King [1936] HCA 40, (1936) 55 CLR 499.
However, in Cretazzo v Lombardi[9] Bray CJ (with whose reasons Zelling and Jacobs JJ agreed) said this.
[T]here was once an idea that a successful party, though he might be deprived of his costs, could not be ordered to pay his opponent's costs. As a matter of fact, the so-called rule never applied to successful plaintiffs. There was a time, however, when it did apply to wholly successful defendants: Dicks v. Yates• It has now been held, however, that the rule when it existed was founded on the practice of the old Court of Chancery and that its existence disappeared in England after the enactment of s. 5 of the Supreme Court of Judicature Act 1890: Knight v. Clifton, per Russell L.J. at pp. 709-710. The South Australian counterpart of that section is s. 40 of the Supreme Court Act 1935-1974, which for the present purpose is in indistinguishable terms and which reads:
"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."
It follows, therefore, that there is now jurisdiction to order a successful party, even a wholly successful party and whether plaintiff or defendant, to pay his opponent's costs in part or in whole. Of course, it by no means follows that it would be a judicial exercise of the discretion to do so and it may well be that in many cases it would not, since there must be some reason for departing from the settled practice whereby the successful party receives his costs from his opponent; see Donald Campbell & Co. v. Pollak, per Viscount Cave L.C. at p. 812.
The next matter is this. A successful party who has failed on certain issues may well not only be deprived of his own costs of those issues, but ordered in addition to pay his opponent's costs of them, and in this context "issue" does not mean a precise issue in the technical pleading sense, but any disputed question of fact or, in my view, of law: Foster v. Farquhar, per Bowen L.J., as he then was, at p. 570. In fact in that case the plaintiff, who succeeded to a substantial extent, was deprived of his costs and ordered to pay the defendant's costs in relation to certain specific disputed items of special damage on which he failed. Moreover it has been held by the House of Lords that the support of an extravagant claim by fraudulent acts or evidence may be good cause for depriving a successful plaintiff of his costs: Huxley v. West London Extension Railway Company.
[9] (1975) 13 SASR 4 at 11-12 (citations omitted).
A more contemporary formulation of this approach has been offered by the Victorian Court of Appeal in McFadzean v CFMEU.[10]
The position as to costs where a party has been partially successful was summarised by Eames J in Pricom Pty Ltd v Sgarioto:
As a general rule costs should follow the event, and a successful party should obtain all of the costs of the action even although it failed to establish some of the alternative heads of its claim: Ritter v Godfrey [1920] 2 KB 47. However, in the exercise of its discretion the court may decline to order costs in favour of a successful party, or may order the successful party to pay the costs of the unsuccessful party, where the plaintiff failed to establish discrete heads of claim, or failed to establish issues which it pursued in its claim, although ultimately succeeding on the basis of another discrete head of claim: Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748, per Toohey J at 48,136.
The judge below acknowledged that in the normal course, a plaintiff who was only successful on one of a number of pleaded causes of action would be entitled to costs. In our view, the reasons his Honour gave for departing from this course were sound. The Rules of Court are wide enough to permit an apportionment of costs according to issues or causes of action. Importantly, the judge regarded the case brought by the successful appellants as a “substantial failure … whether assessed by references to causes of action or issues”. His Honour observed that the plaintiffs had been successful in eight of the 63 causes of action they had brought, and that, assessed as a proportion of the disputed questions of fact resolved in their favour, the success of the plaintiffs was substantially less than that. In these circumstances, there was clearly a reasonable basis for his Honour’s conclusion that a “substantial injustice” would result from an award of costs in favour of the successful plaintiffs.
[10] [2007] VSCA 289; (2007) 20 VR 250 at [152]-[153] (Warren CJ, Nettle and Redlich JJA).
Consideration and conclusion
Like in McFadzean, the case brought by the plaintiff here was a “substantial failure... whether assessed by reference to causes of action or issues.” The plaintiff failed with respect to the only relief that mattered to either party. It is, ultimately, misleading to characterise the “event”, for costs purposes, in the way earlier described, that is, in terms of the minor success enjoyed by the plaintiff. A more realistic approach is to see the defendant as the successful party and to determine whether there is any basis on which it should be deprived of part of its costs. In my view, to deprive the defendant of all of its costs would bring about a substantial injustice.
As earlier indicated, I agree that some of the background evidence, from both parties, would have been needed in any event, in order to permit a resolution of that part of the claim with which the plaintiff did succeed.
Doing the best I can and exercising a broad axe, the just outcome is that the plaintiff is to pay 60 per cent of the defendant’s costs of the proceedings taxed on a party and party basis. I so order.