Southlink Holdings Pty Ltd v Morerand Pty Ltd (No. 2)
[2010] VSC 247
•28 May 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6363 of 2004
| SOUTHLINK HOLDINGS PTY LTD | Plaintiff |
| v | |
| MORERAND PTY LTD | Defendant |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 May 2010 | |
DATE OF JUDGMENT: | 28 May 2010 | |
CASE MAY BE CITED AS: | Southlink Holdings Pty Ltd v Morerand Pty Ltd (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 247 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Woodhouse, Mills Oakley Lawyers | |
| For the Defendant | Mr R Rosenberg | Sackville Wilks Lawyers |
HIS HONOUR:
In this matter I delivered judgment this morning in which I concluded that the claim of the plaintiff should succeed and I awarded damages in the sum of $30,361.16. To that the plaintiff is entitled to interest which the parties have agreed as $20,545.31.
The question now arises as to the entitlement of the plaintiff to costs. The starting position of course is that the plaintiff, as the successful party, is entitled to its costs and no argument was really addressed against that. Second, a plaintiff in these circumstances is entitled to costs on a party and party basis, and no one suggested otherwise.
The area of debate however is that the relatively modest sum for which the plaintiff has been successful is said to be caught by Rule 63.24 of the Supreme Court (General Civil Procedure) Rules 2005, which is a rule which deals with a claim which, in accordance with the headnote to the rule, is: "money claimed in wrong court". That rather inelegant description of this rule, however, reflects the intention of the rule that a plaintiff who fails to recover upon trial a sum which is considered to be appropriate for a proceeding in this court should pay costs at the County Court rate unless the court otherwise orders.
The first question I am required to consider is whether this rule has application to this case. And being a rule of practice, it operates from the date of the judgment, 28 May 2010, so that the rule which I apply is the rule in its current form.
The rule operates in a rather awkward situation since the amendment to the County Court Act 1958 achieved by the Courts' Legislation (Jurisdiction) Act 2006. This Act by s 3 which was operative from 1 January 2007 repealed for practical purposes the jurisdictional limit which previously was, for a case of this kind, $200,000.00 in the County Court.
As a consequence of this amendment, the jurisdiction of the County Court for a case of this kind is unlimited by reference to the amount claimed or otherwise. Section 4 of the amending Act inserts a new s 91 in the County Court Act dealing with the transitional operation of this amendment of 2006. It reads as follows:
The amendments of this Act made by s 3 of the Courts' Legislation (Jurisdiction) Act 2006 apply only to proceedings commenced on or after the commencement of that section.
The reference to "this Act" is a reference to the County Court Act. Consequently, when this proceeding was commenced in 2004, the limit of the County Court was $200,000.00. When the jurisdiction of the County Court for these proceedings became unlimited in terms of the amount of a claim, in January 2007, it did not affect proceedings which had already been commenced. Those proceedings, and in particular this proceeding, remained to be subject to the old jurisdictional limit of $200,000.00.
We now look at Rule 63.24. And I quote sub-Rule (1). I omit the qualification in the opening words which has no relevance to this and it starts as follows:
Where in a proceeding for debt or damages (other than a proceeding in which the jurisdiction of the County Court is unlimited) the plaintiff recovers by judgment or otherwise an amount (exclusive of costs) not exceeding one half of the amount to which the jurisdiction of the County Court is limited, the plaintiff shall, unless the Court otherwise orders, be entitled only to the costs to which the plaintiff would have been entitled if the plaintiff had brought the proceeding in the County Court.
It was argued on behalf of the defendant that the parenthesis at the beginning of this rule has no application because this is not "a proceeding in which the jurisdiction of the County Court is unlimited". It said that this result is achieved because, under the transitional provisions of s 91, the removal of the limits has no application to this proceeding.
On behalf of the plaintiff, it was said that this expression "a proceeding in which the jurisdiction of the County Court is unlimited" means not an actual case of that kind, but rather a case of the kind of case which is so described. It was said that the parenthesis therefore picks up a proceeding of a kind where the jurisdiction is, present tense, is now unlimited. And it was said in support of that submission that if a proceeding of the sort that the plaintiff brought were commenced today, it would be a proceeding in which the jurisdiction of the County Court is unlimited today.
It is said that this is consistent with the thinking behind the legislation in as much as the title to the rule describes it, in as much as parties are encouraged to bring their claims in "the right court". It was also said that because the proceeding commenced as long ago as 2004, it might not then have been appropriate to bring in the County Court, however it might have been transferred to transmitted to the County Court following the enlargement of the County Court jurisdiction under the legislation for remitting cases from this court to the County Court where that is appropriate.
I have not heard argument about whether such a remitter would be possible from a procedural point of view, but it was submitted on behalf plaintiff that the defendant never sought that this should be done.
This perhaps turns more on the discretionary aspects of the matter, rather than the matter of construction. When I look at Rule 63.24, I am satisfied that the terminology of the rule is as counsel for the defendant has put it. The parenthesis applies therefore to this proceeding. This is not a proceeding in which the jurisdiction of the County Court is unlimited by reason of the transitional provisions of s 91.
I then apply Rule 63.24 on that basis. It clear that the plaintiff has recovered less than one-half of the $200,000.00 limit which was previously the limit of the County Court jurisdiction, so that the rule applies.
The position then changes and the plaintiff must now seek a dispensation from the punitive aspect of this rule to contend that the court should otherwise order. In support of that submission, counsel pointed to a number of features of this case which he said would require the conclusion that the court should otherwise order because the proceeding was one which was appropriate for this court. He mentioned that the case concerns land and that that is a subject matter which was peculiar within the concern of this court.
This is of course correct but particularly in the modern environment there are many cases involving land which are dealt with in the County Court and I would not be heard to say that this court should have or claim an exclusive jurisdiction with respect to all disputes concerning land.
Furthermore, this case in fact was not about land. It was about a joint venture agreement, a matter which is quite within the competence and appropriate for determination in the County Court. The fact that there was land, the subject of the joint venture agreement, is simply peripheral to that principal issue of the case.
Next it was said that the claim was a substantial one and a complicated one because of the substantial claim for loss of chance. Now, in fact, that claim has failed and the way the rule works is that a plaintiff must take its chance as to whether a claim of a particular kind, or part of it, might fail. In other words, a plaintiff issuing a proceeding must decide which court to go to and it matters not that the plaintiff puts a very large dollar claim forward. Ultimately the determinant is what the result is and in this case the result is well within the jurisdiction of the County Court.
Other considerations were pressed on me, such as that the defendants made no Calderbank offers. The parties were hostile to each other for reasons unconnected with this particular piece of litigation, and as a consequence this proceeding was hard fought. It was said that the parties are still locked in litigation and that of course is a matter for regret, but hardly a matter that bears on this issue.
I have of course a familiarity with the issues in this case and I have dealt with them, in my judgment. I am not persuaded that I should otherwise order. Accordingly, the order I make for costs must reflect the failure of the plaintiff to achieve 50 percent of the jurisdictional limit applicable to this proceeding.
Now where does that take us, Mr Rosenberg? I see, you get your costs on the County Court at the appropriate County Court scale.
MR ROSENBERG: Your Honour, I have rough fashioned the sort of order that I think is appropriate, having an application being heard and I have done so on the basis of Your Honour's judgment in Brenner[1] and the language of the judgment should be something like. And I would propose, Your Honour, that I have prepared for minutes in the proper form.
[1]Brenner & Anor v First Artists’ Management Pty Ltd & Anor [1993] 2 VR 221
HIS HONOUR: So there is a sort of a set off. They get their costs on the County Court basis and then they, less an amount equal to the additional costs incurred by the defendant.
MR ROSENBERG: Yes, we have to somehow estimate whether our costs have been increased and argue - - -
HIS HONOUR: That will be a negative figure at this rate, I would think, would it not?
MR ROSENBERG: I do not know about that, Your Honour. I think you would just add on - you would have to calculate what the additional costs are as between County - - -
HIS HONOUR: Well should I simply make an order for costs. That the plaintiff's costs of the proceeding, including reserved costs, be paid by the defendant. And then we go, "Such costs to be those costs" - and I am reading the rule - "the plaintiff would have been entitled had it brought the proceeding in the County Court, less an amount" blah, blah, blah following it on?
MR ROSENBERG: You can do that, Your Honour. Could I read what I have drafted on the basis of Your Honour's earlier order, which I have here.
HIS HONOUR: Good - - -
MR ROSENBERG: There would obviously be the first form of order would be judgment for the plaintiff in the sum of $30,361.16 together the sum of $20,545.31 damages by way of interest.
2.The defendant pay the plaintiff's costs of the proceeding including reserved costs to be taxed on the County Court scales. Your Honour used the language "from time to time" appropriate to the judgment in that court for the sum of $50,906.00, being the total sum. From that amount of costs so determined or agreed there be deducted an amount equal to the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the Supreme Court instead of the County Court."
I have just taken the language of Your Honour's order from that Brenner case and used it with the different figures, Your Honour. And I thought that that was the appropriate way to go, having heard the application.
HIS HONOUR: Yes.
MR ROSENBERG: If an application had not been made, Your Honour, would not have to make any order other than a usual order for costs and then the taxing officer would have (indistinct). So I would propose, Your Honour, to draft such a minute and - - -
HIS HONOUR: All right. Well, Mr Woodhouse, have you anything to say about that in principle, leaving aside the detail?
MR WOODHOUSE: What my friend read out sounded very much like what is stated in the rule, Your Honour.
HIS HONOUR: Yes.
MR WOODHOUSE: But one thing which he did not read out, but which I would ask should be in the order, is the concluding words of 63.24(1), "but shall not be required to pay to the defendant any amount by which the additional costs exceed the costs payable to the plaintiff."
HIS HONOUR: So you do not get a negative order for costs.
MR WOODHOUSE: Exactly. So whatever happens we do not have pay them anything in costs.
MR ROSENBERG: I accept that, Your Honour.
MR WOODHOUSE: If the difference wipes out our costs completely, so be it, but we do not have pay them anything. That is what the rule says and if the other part of it is going to be in the order, those words should also be in the order, Your Honour.
HIS HONOUR: All right, well I am happy to make an order in those terms. So if, Mr Rosenberg, you could prepare an order in the form that you mentioned, but making it clear as Mr Woodhouse says, that there is not to be a negative order.
MR ROSENBERG: Yes, of course, Your Honour.
HIS HONOUR: Then would do it, would it not?
MR ROSENBERG: Yes, Your Honour, just a matter of formality, I do apply for a short stay on the judgment, just 14 days, Your Honour, on the judgment on the money sum. (Indistinct) necessary to be done.
HIS HONOUR: Is there some particular problem. This is a very substantial estate as far as I understand it and we are talking about - - -
MR ROSENBERG: It is an organisational matter. This is not a company that holds significant funds available - - -
HIS HONOUR: Of course, it is not the estate, yes. Well, do you want to say about 14 days' stay. We do not want you issuing a notice to wind them up, that's all. And this might happen in this sort of case because it is the bad feeling.
MR WOODHOUSE: You cannot actually do that, Your Honour, I think until you get an authenticated order and it is served, which would probably take at least 14 days the way things are going. I would like to know why, the reason. My learned friend did not give any reason for a stay.
HIS HONOUR: He said there was administrative problems. They have got to raise the money because this is a trustee company and I do not know what the cash position of the trust is.
MR WOODHOUSE: I will not object to seven days' stay, Your Honour.
HIS HONOUR: All right, you can have seven days, Mr Rosenberg. It is a small sum.
MR ROSENBERG: That is fine, Your Honour.
HIS HONOUR: All right, so there will be a stay of seven days.
MR ROSENBERG: The only other matter is that I am instructed to seek costs of this application, Your Honour. That is the costs of the argument on the question of the application.
MR WOODHOUSE: Well we were here today anyway, Your Honour, to get judgment. The costs are costs - - -
HIS HONOUR: I agree with you, Mr Woodhouse.
MR WOODHOUSE: Yes. Thank you, Your Honour.
HIS HONOUR: The costs of hearing the judgment will include the costs of negotiating the order consequent upon the judgment. I will make that order and if you could let me have it sooner rather than later, Mr Rosenberg. I will send it down to - I think this is a matter that should be authenticated, because it is a judgment. So I will send it down, if you could let me have a draft at your convenience.
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