Skorpos v United Petroleum Pty Ltd

[2014] SASCFC 21

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Civil)

SKORPOS & ANOR v UNITED PETROLEUM PTY LTD

[2014] SASCFC 21

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice David and The Honourable Justice Peek)

17 March 2014

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - MISCONDUCT, ETC - IN PROCEEDINGS - VEXATIOUS PROCESS AND ISSUES

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS

The appellants’ appeal against a judgment of a Judge of this Court was allowed in a minor respect - the judgment on the substantive issues was delivered on 29 October 2013 - the appellants attempted to advance a case during the appeal hearing (grounds 1-3) which was not only abandoned at trial but opposed to the case they had run at trial - the vexing of the respondent by the appellants’ indecision caused it to unnecessarily incur legal costs substantially beyond the costs of defending a consistently formulated claim.

Held:  the appellants pay the respondent its costs of the appeal on the issue of the respondent’s rental liability on a solicitor-client basis - the appellants pay the respondent on the fourth “make good” ground and sixth “filed offer costs” ground on a party-party basis - the respondent pay the appellants its costs on the fifth ground relating to costs of the tank and line testing on a party-party basis.

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Skorpos & Anor v United Petroleum Pty Ltd [2013] SASCFC 117, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

""solicitor-client costs" and "party-party costs""

SKORPOS & ANOR v UNITED PETROLEUM PTY LTD
[2014] SASCFC 21

Full Court: Kourakis CJ, David and Peek JJ

1. KOURAKIS CJ:      On 29 October 2013 this Court allowed the appellants’ appeal[1] against the judgment of a Judge of this Court in a minor respect after earlier making an order dismissing their substantial grounds of appeal during the hearing of the appeal.  The parties have provided written submissions on the question of costs on which the Court now delivers its judgment.

   [1]    Skorpos v United Petroleum Pty Ltd [2013] SASCFC 117.

2. The action before the Judge concerned disputed leases over petrol station sites leased to the respondent by the appellants.  The substantial issue to which we referred was the subject of the first three grounds of appeal.  It turned on whether the respondent was a tenant at will or a lessee under the terms of written leases in the period that certain preparatory work was undertaken on the sites.    The appellants’ pleaded case was that the respondent was bound by the terms of certain written leases even though the commencement date was subject to contingencies which had not eventuated.  At trial, the appellants abandoned their pleaded case and contended for a tenancy at will.  The Judge dismissed their claim on that issue.  The appellants’ original notice of appeal contended that the Judge had wrongly found that the respondent was not a tenant at will.  A Judge of this Court gave the appellants’ permission to amend their grounds of appeal to contend that the Judge should have found in their favour under the terms of the written leases even though they had abandoned that case at trial.  On the hearing of the appeal, the appellants relied on that abandoned case even though, on that case, their prospects of ultimately recovering rental payments for that period were very poor. 

3. The circumstance that a Judge of this Court gave the appellants permission to amend the grounds of appeal to plead the substantial ground is of little weight.  On an interlocutory application of that kind it is not always possible or appropriate to fully examine the prospects of success of the amended grounds.

4. The vexing of the respondent by the appellants’ vacillation has caused it to unnecessarily incur legal costs substantially beyond the costs of defending a consistently formulated claim.  The attempt to advance a case which was not only abandoned at trial, but diametrically opposed to the case the appellants had run at trial and the very poor prospects of recovery are in combination a “special” or “unusual” feature of this case and amount to good reason to more fully compensate the respondent for its legal costs.[2]  The abandonment of the original grounds of appeal on the rent issue is evidence that they too were very likely to fail.

   [2]    Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.

5. For the above reasons, the Court orders that the appellants pay the respondent its costs of the appeal on the issue of the respondent’s rental liability, other than the cost of the amendments which are the subject of an existing costs order, on a solicitor-client basis. 

6. On the fourth “make good” ground and on the sixth “filed offer costs” ground, the respondent was successful but there is insufficient reason to depart from the ordinary rule.  The Court orders that the appellants pay the respondent its party-party costs on those grounds.

7. The appellants were successful on the fifth ground relating to the costs of the tank and line testing.  The Court orders that the respondent pay the appellant its costs on that ground.

8. The Court would have preferred to make orders in a form which did not entail the complicated taxation which these orders necessitate.  Unfortunately, the Court does not have the material on which lump sums or percentage reductions could be assessed to reflect the object sought to be achieved by those orders. 

9. The Court expresses the, perhaps vain, hope that the parties will be able to either agree the quantum of costs or agree to a procedure for their summary determination. 

10. DAVID J:              I agree with the orders proposed by the Chief Justice and with his reasons.

11. PEEK J:                I agree with the orders proposed by the Chief Justice and with his reasons.