Shanamere Pty Ltd v Litigation Support Services Pty Ltd - [2006] SASC 120

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
SHANAMERE PTY LTD v LITIGATION SUPPORT SERVICES PTY LTD
Judgment of The Honourable Justice Sulan
21 April 2006
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
Application for costs - the plaintiff is a beneficiary of a unit trust of which the defendant is trustee - the unit trust holds shares in a company 'Australian Litigation Fund' ("ALF") - certain resolutions were proposed to be passed at an extraordinary general meeting of ALF - the plaintiff initially brought an application for injunctive relief to force the defendant to vote in favour of the resolutions at the extraordinary general meeting - it was subsequently determined that the votes of the defendant would not affect the outcome and the application for an injunction was withdrawn - the defendant brought an application for party and party costs, and solicitor and client costs, or indemnity costs for a limited period when the plaintiff ought to have known that the application was doomed to fail - the defendant also sought that the costs be taxed and paid forthwith - the plaintiff applied for party and party costs for a specified period - defendant's application for indemnity costs refused - order for costs to be paid on a party and party basis by the plaintiff except for the costs of the adjourned hearing on 13 January 2006 - defendant's application to have costs taxed and paid forthwith refused.
Supreme Court Rules r 101.02, r 101.01(6), r 101.01(7), referred to.
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Cretazzo v Lombardi (1975) 13 SASR 4; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Horrobin v Australia and New Zealand Banking Group Ltd (NSWSCA) unreported, 6 June 1997; Ogier v Booth (1883) 5 ALT 109; Pope v DRP Nominees Pty Ltd (No 2) (2000) 207) LSJS 344; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; Taylor v Santos Ltd [1999] SASC 429; Thompson Land Ltd v Lendlease Shopping Centre Development Pty Ltd [2000] VSC 140; Thunderdome Racetiming and Scoring Pty Ltd & Anor v Dorian Industries Pty Ltd & Anor (1992) 109 ALR 196, considered.

SHANAMERE PTY LTD v LITIGATION SUPPORT SERVICES PTY LTD
[2006] SASC 120
Civil

SULAN J: This is now an application for costs. Originally the applicant sought injunctive relief. The plaintiff, Shanamere Pty Ltd (“Shanamere”) sought an order that the defendant, Litigation Support Services Pty Ltd (“LSS”) be restrained, without the prior written consent of the plaintiff or otherwise as ordered by the Court, from exercising any voting rights in respect of 350,000 ordinary “I” class shares in Australian Litigation Fund Pty Ltd (“ALF”) held by LSS as trustee of the ALF Investment Unit Trust (“ALFIUT”) in respect of resolutions specified in a notice of general meeting dated 5 December 2005 to be held on 6…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] SASC 120
Decision Date: 21 April 2006

CaseChat Overview and Summary

Shanamere Pty Ltd, a beneficiary of a unit trust managed by Litigation Support Services Pty Ltd, sought injunctive relief to compel the defendant to vote in favor of certain resolutions at an extraordinary general meeting of Australian Litigation Fund (ALF), a company in which the unit trust holds shares. After it was determined that the defendant's votes would not affect the outcome, the plaintiff withdrew the application for an injunction. Litigation Support Services Pty Ltd then sought party and party costs, as well as solicitor and client costs or indemnity costs for a limited period during which the plaintiff should have realized that the application was doomed to fail. The defendant also requested that the costs be assessed and paid immediately. The plaintiff countered by requesting party and party costs for a specified period. The court ruled against the defendant's request for indemnity costs and ordered that the plaintiff pay party and party costs, except for the costs associated with the adjourned hearing on 13 January 2006. The defendant's application for immediate assessment and payment of costs was also denied.

The court considered whether the plaintiff's application for injunctive relief was reasonable and whether the defendant's application for indemnity costs was justified. The court found that while the plaintiff's application was initially reasonable, it became clear that it was unlikely to succeed, and the plaintiff should have withdrawn it sooner. However, the court determined that the defendant's application for indemnity costs was not warranted as the plaintiff's actions did not amount to a clear abuse of the court process. The court emphasized that the costs should be assessed and paid on a party and party basis, except for the costs related to the adjourned hearing on 13 January 2006, which were to be borne by the plaintiff. The defendant's application for immediate assessment and payment of costs was rejected as the court believed that the usual process for assessing and paying costs should be followed.

Orders