Santer and Santer v Luddy

[1993] QCA 217

IN THE COURT OF APPEAL

[1993] QCA 217

SUPREME COURT OF QUEENSLAND

Appeal No. 34 of 1993

Brisbane

[Santer v. Luddy]

BETWEEN:

ANTHONY JOHN SANTER and ANN MARIE SANTER

(Plaintiffs) Respondents

- and -

JUNE LILLIAN LUDDY

(Defendant) Appellant

The President
Mr Justice Davies

Mr Justice Demack

Judgment delivered 11/06/93

JUDGMENT OF THE COURT

APPEAL ALLOWED. SET ASIDE THOSE PARTS OF THE ORDER OF 8 FEBRUARY 1993 WHICH RELATE TO COSTS. IN LIEU THEREOF, ORDER THAT THE RESPONDENT PAY TO THE APPELLANT THE TAXED COSTS OF AND INCIDENTAL TO THE ACTION IN THE DISTRICT COURT UP TO AND INCLUDING 1 FEBRUARY 1993 AND, ADDITIONALLY, HER TAXED COSTS OF AND INCIDENTAL TO THIS APPEAL.

CATCHWORDS:	COSTS - Action discontinued on second day of trial - Unable to be determined then which party would win and which lose.
PRACTICE - District Court - Discontinuance - No leave required - District Court Rules r.139
Counsel:	Mr K. Fleming Q.C. for the appellant Mr P. Coombe for the respondents
Solicitors:	Messrs. Moynihan and Callinan for the appellant Messrs. Whitehead Morwood and Payne for the respondents
Hearing Date(s):	07/06/93

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 34 of 1993

Brisbane

Before The President
Mr Justice Davies
Mr Justice Demack

[Santer v. Luddy]

BETWEEN:

ANTHONY JOHN SANTER and ANN MARIE SANTER

(Plaintiffs) Respondents

- and -

JUNE LILLIAN LUDDY

(Defendant) Apellant

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 11/06/93

This is an appeal from orders made in the District Court on 8 February 1993. The real point on issue between the parties concerns the bulk of the costs in a District Court action commenced by the respondents against the appellant by a Plaint issued on 28 July 1990.

By a contract bearing date 18 September 1988, the appellant agreed to sell a house and property to the respondents for $100,000.00. Subsequently, she refused to complete and, on 7 December 1988, sold the property to a third party for $130,000.00. The respondents claimed the difference, together with an additional $2,500.00 in respect of professional fees and outlays, bank charges and incidental expenses.

The appellant counter-claimed, seeking rescission of the contract. Paragraph 6 of the appellant's Defence and Counter- Claim was as follows:

"6. The defendant says that the said agreement is voidable due to the unconscionable nature of the transaction particulars whereof are as follows:

(a)	no independent advice was obtained by the defendant prior to signing the set agreement;
(b)	the plaintiffs failed to advise the defendant that she should seek an independent valuation;
(c)	the defendant was born on 19 June, 1929, and was a widow at the material time;
(d)	the defendant has little or no experience dealing with commercial matters;
(e)	the purchase price was substantially below market value;
(f)	the plaintiffs used undue influence to cause the defendant to enter into the contract;
(g)	the plaintiffs were at all material times the selling agents acting for and on behalf of the defendant."

Most of paragraph 6 was put in issue by the respondents' Reply and Answer, but paragraph 6(g) was admitted.

The action came on for trial on 15 October 1992 and, during the course of that day, the evidence of each of the respondents and of another witness was completed and two further witnesses gave evidence in chief. The record does not disclose, and counsel for the appellant declined to permit us to be informed, what further evidence was opened on behalf of the respondents, but it is plain that the respondents' case was not closed that day.
The action was unable to proceed until 1 February 1993, but before it was adjourned the appellant sought and obtained leave to amend to add a further sub-paragraph to paragraph 6 of the Defence and Counter-Claim, alleging that "at all material times, the defendant was a chronic alcoholic".

By a summons filed on 27 January 1993 returnable on the adjourned date for hearing of the trial, 1 February 1993, the respondents sought leave to discontinue their action on the basis that they paid to the appellant "her costs up to and including delivery of her defence, to be taxed if not agreed", and that she paid to them "all their costs incurred and arising after receipt by them of the said defence, to be taxed if not agreed." No reference was made to the appellant's counter- claim.

After hearing argument, the District Court Judge reserved his decision which was delivered on 8 February 1993. He ordered that:-

"(a) The Plaintiffs be given leave to discontinue the

action.

(b) Judgment be given for the defendant.

(c) The Plaintiffs pay the defendant's costs up to and including the date upon which the Entry of Appearance and Defence was delivered, such costs to be taxed.

(d) There be no further order as to costs.

(e) To the extent that leave is necessary, grant leave to the defendant, to appeal against the orders just made."

It is to be said immediately that there are problems with at least some of the orders. Thus, for example, nothing in his reasons delivered on 8 February 1993 reveals why the District Court Judge gave judgment for the appellant, and it does not appear whether it was intended that judgment for her should be entered on both claim or counter-claim or only one of those.

Further, the basis of the respondents' application for leave to discontinue is not readily established. Rule 139 of the District Court Rules permits a plaintiff to discontinue without leave by notice to the Registrar and the defendant or his solicitor, and provides that "the defendant shall thereupon be entitled to costs reasonably incurred up to the time of receipt of such notice but not to costs incurred thereafter unless the court or judge shall otherwise order ...". There is no requirement of leave to discontinue: cf. RSC.030 r.2

The District Court Judge seems to have been persuaded

that the respondents' decision to discontinue was influenced by the further particular added to paragraph 6 of the Defence and Counter-Claim on 15 October 1992, and to have implicitly concluded that, but for such amendment, the respondents would have proceeded with their action and the defence of the appellant's counter-claim. He was probably influenced by assertions to that effect made by Counsel for the respondents, but there was no real basis for such a conclusion.

Counsel for the appellant sought to demonstrate by reference to the evidence already given by and on behalf of the respondents that the appellant would have succeeded in her Defence and Counter-Claim, and there may some basis for such optimism. For example, the respondents were admittedly the appellant's agent in respect the transaction between them, and the very foundation of their claim was that the property was worth considerably more than they had agreed to pay for it.

However, this Court cannot proceed on the basis contended for by the appellant, at least without any indication of the case which had been opened for the respondents before the trial judge.

Before this Court, the respondents' counsel acknowledged that the most favourable basis upon which the matter can be approached from his clients' point of view is that, at the time when they applied for leave to discontinue, it was unable to be determined which party would succeed. Although no similar concession was made by the appellant's counsel, that is the footing upon which we consider that we ought to proceed.
In these circumstances, the point at issue is simple and straight-forward. The discretion with respect to costs fell to be exercised on the basis that the respondents sought, without satisfactory explanation, to discontinue their action at the beginning of the second day of the trial at a time when it was unable to be determined which party would win and which lose.
In such circumstances, whether or not Rule 139 of the District Court Rules is directly applicable, its terms reflect the proper exercise of any discretion which exists with respect to costs.
The appellants submitted that the costs should be ordered to be taxed on a solicitor and own client basis, but in our view no sufficient ground for such an order has been established.

The appeal should accordingly be allowed but, in the absence of any submission from the respondents that the orders appealed from should be varied, only those parts of the order of 8 February 1993 which relate to costs should be set aside. In lieu thereof, the respondent should be ordered to pay to the appellant the taxed costs of and incidental to the action in the District Court up to and including 1 February 1993 and, additionally, her taxed costs of and incidental to this appeal.