S & Z Maintenance Solutions Pty Ltd v Goalmine Fitness Pty Ltd as Trustee for BENNYFIT No 2 Trust t/as Anytime Fitness Kalgoorlie [No 2]
[2017] WADC 152
•30 NOVEMBER 2017
S & Z MAINTENANCE SOLUTIONS PTY LTD -v- GOALMINE FITNESS PTY LTD as Trustee for BENNYFIT NO 2 TRUST t/as ANYTIME FITNESS KALGOORLIE [No 2] [2017] WADC 152
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 152 | |
| Case No: | CIV:3567/2014 | 20 NOVEMBER 2017 | |
| Coram: | EATON DCJ | 30/11/17 | |
| PERTH | |||
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed - order that the plaintiff pay the defendant's costs of the action, the application and the appeal | ||
| PDF Version |
| Parties: | S & Z MAINTENANCE SOLUTIONS PTY LTD GOALMINE FITNESS PTY LTD as Trustee for BENNYFIT NO 2 TRUST t/as ANYTIME FITNESS KALGOORLIE |
Catchwords: | Practice and procedure Plaintiff's action dismissed for want of prosecution under case management rules Appropriate costs order |
Legislation: | District Court Rules 2005 (WA) |
Case References: | Elwood v Goodman [2014] WADC 143 Jeruth Pty Ltd v Haybale Pty Ltd [2004] VSC 319 Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622; (1997) 143 ALR 1; (1997) 71 ALJR 533 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
GOALMINE FITNESS PTY LTD as Trustee for BENNYFIT NO 2 TRUST t/as ANYTIME FITNESS KALGOORLIE
Defendant
Catchwords:
Practice and procedure - Plaintiff's action dismissed for want of prosecution under case management rules - Appropriate costs order
Legislation:
District Court Rules 2005 (WA)
Result:
Appeal allowed - order that the plaintiff pay the defendant's costs of the action, the application and the appeal
Representation:
Counsel:
Plaintiff : Mr M Curwood
Defendant : Mr A Noonan
Solicitors:
Plaintiff : Taylor Smart
Defendant : MacDonald Rudder
Case(s) referred to in judgment(s):
Elwood v Goodman [2014] WADC 143
Jeruth Pty Ltd v Haybale Pty Ltd [2004] VSC 319
Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622; (1997) 143 ALR 1; (1997) 71 ALJR 533
1 EATON DCJ: This action was commenced by the filing and service of a writ of summons on 3 November 2014. The writ included a statement of claim which, in very brief terms, claimed from the defendant an amount of $136,068.69 said to be owed by the defendant to the plaintiff for construction services provided to the defendant, particulars of which were said to have been provided to the defendant. The plaintiff also claimed interest on the amount claimed and costs.
2 The defendant filed a memorandum of conditional appearance on 17 November 2014 and an application for security for costs on 19 December 2014. On 18 March 2015 that application came before Deputy Registrar Hewitt. It was dismissed with an order that the defendant pay the plaintiff's costs of the application including costs reserved on 20 January 2015.
3 On 27 March 2015 the defendant filed a notice of appeal from the dismissal of the application for security for costs. It was listed for hearing before a judge on 22 June 2015. The matter of the appeal came before me on 19 June 2015. I made an order in terms of a minute of consent orders dismissing the appeal with no order as to costs. I vacated the hearing of the appeal.
4 On 10 April 2015 the defendant filed a defence and set-off. On 29 April 2015 the plaintiff responded with a request for further and better particulars of defence.
5 On 1 February 2016 the court registry gave notice that the plaintiff had not entered the action for trial, as required, and that if it failed to do so on or before 16 February 2016 it would be included on the Inactive Cases List. On 17 February 2016 the principal registrar, by notice to the plaintiff, advised that the action had been placed on the Inactive Cases List on that day. The notice informed that pursuant to r 44G(1) of the District Court Rules 2005 a case that is on the list for six continuous months is taken to have been dismissed for want of prosecution.
6 On 26 August 2016 the court registry gave written notice to the plaintiff that the case had been dismissed for want of prosecution under r 44G.
7 On 20 October 2016 the plaintiff applied by chamber summons for an order setting aside the dismissal of its action. The application was opposed. It was heard by Registrar Kingsley on 30 November 2016. On 12 May 2017 he dismissed the application and published reasons for doing so. He ordered that the plaintiff pay the defendant's costs of the application and the hearing.
8 On 7 July 2017 the plaintiff filed a further writ of summons against the defendant, thereby commencing a new action. It included an indorsement of claim in which the plaintiff seeks $136,068.68 allegedly owed to it for services and work performed pursuant to an agreement with the defendant, partly oral and partly in writing. There is a 1 cent difference between the amount claimed in the original writ and that claimed in the later writ. The cause of action would appear to be the same.
9 On 12 July 2017 the plaintiff filed written submissions in support of the proposition that the costs of the action dismissed for want of prosecution should be reserved for determination upon the completion of the action commenced on 7 July 2017.
10 On 14 July 2017 Registrar Kingsley ordered that there be no costs order as to the action in the wake of its dismissal. On 24 July 2017 the defendant filed a notice of appeal from that decision. The notice states:
Take notice that the defendant appeals from the decision of Registrar Kingsley made 14 July 2017 on the defendant's oral application made 12 May 2017 for the costs of this action wherein Registrar Kingsley ordered that there be no order as to costs of the action.
The final order that the defendant proposes the court should make on the appeal is that the plaintiff do pay the defendant's costs of the action including any reserved costs, the costs of the application and the costs of this appeal to be taxed.
11 The District Court Rules provide that if a party is dissatisfied with a decision of a registrar that party may appeal to a judge. Such an appeal must be commenced within 10 days after the date of the decision. The defendant's appeal is within time. An appeal is to be by way of a new hearing of the matter that was before the registrar.
12 I am assisted in determining this matter by the following:
1. the defendant's outline of its submissions and list of authorities dated 20 October 2017; and
2. the plaintiff's outline of submissions and list of authorities dated 27 October 2017.
13 In addition to the foregoing I am assisted by the oral submissions of respective counsel at the hearing of the appeal.
14 The plaintiff seeks an order that the costs of the action be reserved to the court for determination upon the completion of the action between the parties being District Court action 2426 of 2017. The latter is the new action commenced by the plaintiff following the dismissal of the earlier action for want of prosecution. The plaintiff informs that the new action 'will traverse the same factual and legal issues as the previous action'.
15 The defendant relies upon O 66 r 1 of the Rules of the Supreme Court 1971 which provides that the costs of and incidental to all proceedings shall be in the discretion of the court but, without limiting the general discretion conferred the court will generally order that the successful party to an action or matter recover his costs.
16 The plaintiff submits that, in dealing with the issue of costs following the dismissal of its action, Registrar Kingsley 'referred to and elected to follow' a decision of Deputy Registrar Kubacz: Elwood v Goodman [2014] WADC 143. In that case the matter had been placed on the Inactive Cases List by operation of the District Court Rules. No further step was taken. The action was dismissed for want of prosecution pursuant to r 44G(1) of those rules.
17 Deputy Registrar Kubacz dealt with the plaintiff's application for orders that the dismissal of the action pursuant to r 44G(1) be set aside and that the action be reinstated as active. She held that there were no exceptional circumstances which might warrant reactivation of the plaintiff's action and dismissed the application.
18 In dealing with the question of costs the learned deputy registrar concluded that there was no successful party. In consequence, she made no order as to costs.
19 In arriving at her conclusion she relied upon the decision of Redlich J in Jeruth Pty Ltd v Haybale Pty Ltd [2004] VSC 319. At [2] Redlich J noted that a successful litigant is generally entitled to an award of costs. That reflects the position in Western Australia and at common law. His Honour said [2]:
Where no hearing on the merits has taken place the criteria upon which costs are normally awarded, namely success or failure of the litigation, is absent and the appropriate order is generally that each party bear its own costs.
20 His Honour went on to observe that costs orders are made where there has been no hearing on the merits. He referred to circumstances such as discontinuance by the plaintiff or where substantial relief is granted without opposition either because the claim is conceded or because events after the issue of proceedings have rendered further dispute futile. In the matter before him, the latter circumstance was particularly poignant.
21 In that matter the plaintiff and the second, third and fourth defendants entered into a joint venture to purchase real estate for the purpose of development as student accommodation. The joint venture established a unit trust and acquired shares in the trustee in proportion to their investment in the unit trust. The trustee was the first-named defendant in the action (Haybale Pty Ltd).
22 Properties were, in due course, acquired and developed for student accommodation. Upon completion of the development a student accommodation business was undertaken. Further projects were embarked upon. Another property was acquired.
23 Between February and September 2002 disagreements emerged between the joint venturers over a number of issues which were not resolved. In early September 2002 the plaintiff sought the appointment of a provisional liquidator of Haybale Pty Ltd and commenced proceedings to have it and an associated entity wound up on the ground that their affairs had been conducted oppressively against the plaintiff and that it was just and equitable that the company be wound up. The plaintiff joined the other joint venturers as defendants. In due course a provisional liquidator was appointed and, in consequence, National Australia Bank appointed receivers of Haybale Pty Ltd and the associated entity.
24 The various properties acquired were sold and trading ceased.
25 The action was listed for trial. On the first day of trial the plaintiff advised that it was no longer seeking any relief or wished to proceed with its allegation of oppression. All parties recognised that the outcome sought by the plaintiff in the action had been affected by means other than a court order. There was agreement that orders should be made by consent winding up Haybale Pty Ltd and another entity and that the trustee proceedings against Haybale Pty Ltd would be dismissed. It was in that setting that the plaintiff and the defendants sought orders for costs against each other.
26 In conclusion Redlich J said [57]:
The nature and the extent of the controversy prevents me from making any determination on the merits that either party would clearly have been successful. The earnest submissions made on behalf of each party that there are sufficient undisputed facts to establish that they would have succeeded has not been made out. Whether the plaintiff should have pursued other equitable relief raises an interesting question of law but it cannot be resolved without a determination of critical facts which are very much in issue.
27 His Honour said [59]:
Those facts which are not in dispute satisfy me that it was reasonable of the plaintiff to have commenced proceedings and reasonable of the defendants to have resisted them. On those facts upon which I can rely I am unable to draw any distinction between the reasonableness of the actions taken by either of the parties either before or during the course of the litigation. There exists no sound basis upon which I could conclude that one party should be rewarded for its reasonable action and the other party suffer a detriment in costs.
28 It is clear from the foregoing that the rationale of his Honour in arriving at a conclusion that there be no order as to costs was very much founded upon the circumstances in which the parties before him found themselves and his view of the reasonableness of the actions of the parties in, firstly, commencing and defending or resisting the action and, secondly, in conducting the litigation.
29 In that regard his Honour was following McHugh J in Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622; (1997) 143 ALR 1; (1997) 71 ALJR 533 where his Honour said:
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
30 McHugh J, in that case, prefaced that passage with the following:
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
31 In the matter before me it is true that there has been no determination on the merits of the claim or defence. There probably would have been had the matter gone to trial. It did not do so. It was not entered for trial by the party which commenced the action. Instead the action became inactive and was dismissed.
32 In his judgment delivered on 30 November 2016 Registrar Kingsley said [29]:
Whilst understandable that the plaintiff would devote his time and energy to his work that, in itself, is not an exceptional circumstance. It is not exceptional in the sense of being out of the ordinary, unusual, special or uncommon, for litigants to be placed under work pressures whilst in the course of conducting litigation.
33 The plaintiff, in seeking to have its action re-instated, relied upon preoccupation with and pressures of work to explain its failure to comply with the Rules of Court and to found its claim that there were exceptional circumstances. Clearly, the Registrar did not agree.
34 On 1 February 2016 the plaintiff was given notice that, unless the plaintiff entered the action for trial on or before 16 February 2016, the action would become inactive. A notice that the case had been included on the Inactive Cases List was issued on 17 February 2016. By a notice issued on 26 August 2016 the parties were notified that on 17 August 2016, as the case had been on the Inactive Cases List for six continuous months, the case was dismissed pursuant to the Rules of Court.
35 In arriving at his decision in the matter of Jeruth Pty Ltd v Haybale Pty Ltd Redlich J was unable to discern that any of the parties had acted unreasonably in the litigation. In the absence of a trial he was in no position to determine the merits of the matter. All parties agreed that there was no point in pursuing the matter to trial.
36 In the matter before me it is the case that there has been no determination on the merits but that is, undoubtedly, due to the inactivity of the plaintiff. That conduct led to the action being dismissed. The plaintiff commenced and pursued an action against the defendant and lapsed into inactivity, such that the action was dismissed. The conduct of the plaintiff must be regarded as being unreasonable. A plaintiff acting reasonably would have conducted the matter diligently. The absence of a determination on the merits is a consequence of that unreasonable conduct.
37 It follows from the foregoing that in this action the plaintiff has been entirely unsuccessful and the defendant has been entirely successful. It may be that, in the newly commenced action, the plaintiff will prevail. It may be that the defendant will prevail. There may be a settlement or compromise. The plaintiff may, again, lapse into inactivity. Such matters cannot be known.
38 In my view, the outcome of a recently commenced action cannot be determinative of the issue of costs in an action brought to an end by the inactivity of the plaintiff.
39 In my view the appeal must succeed. There should be an order that the plaintiff pay the defendant's costs of the action dismissed for want of prosecution including any reserved costs, the costs of the defendant's application and the costs of the appeal to be taxed.
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