Sports Centres Australia Pty Limited v Commissioner for Australian Capital Territory Revenue (No 2)

[2019] ACTSC 314

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Sports Centres Australia Pty Limited v Commissioner for Australian Capital Territory Revenue (No 2)

Citation:

[2019] ACTSC 314

Hearing Dates:

29 August 2019 & 30 September 2019

DecisionDate:

14 November 2019

Before:

Crowe AJ

Decision:

See [21]

Catchwords:

COSTS – Dispute between plaintiffs and second defendant – where the second defendant claims that they took an active part in the proceedings based on the plaintiffs’ pre-hearing position ­– plaintiffs’ position changed at hearing – whether the second defendant was a necessary party in any event ­– where the plaintiffs’ claim that pre-hearing exchanges as to potential orders were qualified ­– joinder of Registrar-General necessary ­– whether a Sanderson order should be made  – second defendant to bear his/her own costs  

Legislation Cited:

Land Titles Act 1925 (ACT) s 14

Cases Cited:

Gould v Vaggelas (1985) 157 CLR 215

McCracken v Pippett [2000] VSCA 20

Sanderson v Blyth Theatre Company (1903) 2 KB 533

Parties:

Sports Centres Australia Pty Limited (First Plaintiff)

Jenke Investments Pty Limited (Second Plaintiff)

Konstantinou Developments Pty Ltd (Third Plaintiff)

Gungahlin Golf Investments Pty Limited (Fourth Plaintiff)

Harry Konstantinou (Fifth Plaintiff)

Commissioner for Australian Capital Territory Revenue (First Defendant)

Registrar-General of the Australian Capital Territory (Second Defendant)

Representation:

Counsel

P Walker SC & B Buckland (Plaintiffs)

C Young (First Defendant)

D Jarvis (Second Defendant)

Solicitors

Viera Legal & Morgan Bryant (Plaintiffs)

ACT Government Solicitors (Defendants)

File Number:

SC 237 of 2019

Crowe AJ

1. On 11 October 2019, I handed down my reasons for decision in this matter. At that time, I made directions for the parties to file and serve submissions as to the form of the declaratory relief reflecting my findings, and also on the issue of costs. As to the former, on 28 October 2019 I made declarations in the terms proposed by the parties.

1. In relation to the question of costs, the plaintiffs and the first defendant have agreed that the costs should follow the event. However, there is a dispute in relation to the position of the second defendant (the Registrar-General, referred to as the RG throughout). The Court has received that party’s written submissions, dated 21 October 2019, and the plaintiffs’ in response, dated 31 October 2019. The first defendant has also filed submissions directed to the issue of whether an order in accordance with the principles of Sanderson v Blyth Theatre Company (1903) 2 KB 533 (Sanderson order) should be made should I conclude that the plaintiff is liable for the second defendant’s costs.

1. The RG argues that he/she took an active role in the litigation because of indications contained in the outline of submissions filed by the plaintiffs. It is claimed that those submissions suggested that they would be seeking an order that the registration of the charges be “expunged”, and that the relevant dealings could be removed from the register with retrospective effect.

1. The RG points out that, in the course of the hearing, the plaintiffs effectively abandoned the arguments based on the proposition that the Register could be altered in some way to remove prior registered dealings. Moreover, insofar as the plaintiffs ran the argument that the RG was precluded from registering the charges by sub-s 14(4) of the Land Titles Act 1925 (ACT) (LTA), that argument was unsuccessful. The Registrar-General submits that the appropriate order in the circumstances is that his costs of representation at the hearing should follow the “event” that prompted the representation.

1. The RG also submits that as both defendants are agencies of the Territory an order in his/her favour of the in circumstances where there is an order against the first defendant will effectively result in a set-off, or reduction, in the costs as between the plaintiffs and the first defendant.

1. The plaintiffs submit that the RG was a necessary party to the proceedings given the nature of the relief sought. As to the issue of precisely what orders could be made in relation to the notices of charges which had been registered by the first defendant, they say that they expressed doubt in their outline of submissions as to whether the dealings could be expunged from the Register. In any event, the possibility that such an order could be made was squarely put in issue by the first defendant in his submissions.

1. The plaintiffs argue that the submissions of the RG were only concerned with the proper administration of the Register and of the LTA. In essence, the plaintiffs submit that the RG was acting in the public interest in making the submissions he/she did.

1. The plaintiffs also say that their Senior Counsel made it clear in the course of his opening remarks at the hearing on 29 August 2019 that the plaintiffs would not be seeking an order removing dealings from the Register.

1. Insofar as the RG relies on email exchanges before he/she commenced to take an active part in the litigation, the plaintiffs say that the statements of their solicitor were qualified. The plaintiffs’ solicitor’s position was that it was a matter for the Court how any relief might be framed.

1. The plaintiffs submit that those representing the defendants were effectively acting in the same interest and that it would not be appropriate for the costs of the successful plaintiffs to be reduced on the basis sought by the RG.

1. Moreover, it is said that the RG did not make any offer or take other steps in communicating with the plaintiffs which might have avoided the need for him/her to take an active part in the proceedings.

1. Based on the above, the plaintiffs say that the appropriate order is that the RG should bear his/her own costs.

1. In the alternative, the plaintiffs submit that if an order is to be made in favour of the RG due to the particular circumstances of this case, it would be appropriate for a Sanderson order to be made. The need to have joined the RG arose due to the unlawful actions taken by the first defendant. It was reasonable for them to have sought the relief they did and if any party should bear the ultimate costs burden it should be the first defendant.

1. The first defendant argues that the plaintiffs have not correctly stated the circumstances which justify the making of a Sanderson order. Reference is made to a passage from Gould v Vaggelas (1985) 157 CLR 215 per Brennan J at 230 in the following terms:

In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission (1978) 21 ACTR 23, when he said that “there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant.

1. The first defendant also relies on the statement of the Victorian Court of Appeal in McCracken v Pippett [2000] VSCA 20 at [11]. It is submitted, by reference to these authorities that it is necessary to identify whether the costs incurred by the RG were attributable to the conduct of the plaintiff, or the conduct of the first defendant. Here, it is said, by reference to the same matter summarised at [3] above, the active part in the hearing taken by the second defendant was prompted by the misconceived reference by the plaintiffs to the possibility of, in effect, deleting something from the Register.

Consideration

1. The legislative framework in which the disputes between the plaintiffs and the first defendant arose was complex. It is true that the plaintiffs pursued some arguments which were ultimately unsuccessful. However, that occurred in a context where they were successful on two of the substantive grounds argued, which resulted in me deciding that the action taken by the first defendant to register the notices of charges was unlawful.

1. The joinder of the RG was necessary, and it seemed to me that the primary function of his legal representatives was to aid the Court in dealing with the potential consequences of the actions of the first defendant. That assistance was helpful, and it was in the public interest for it to have been provided. In all of the circumstances of this case I do not see the matters of dispute as between the plaintiffs and RG in relation to the relief which might be granted, nor as to the sub-s 14(4) LTA issue, as warranting a costs order in favour of the RG.

1. If I am wrong in that view, I should say that I would have made a Sanderson order in relation to any costs ordered in favour of the RG. Having regard to the potential reputational consequences for the plaintiffs flowing from the unlawful registration of the charges, it seems to me that the nature of the conduct of the first defendant not only made it reasonable for the plaintiffs to seek the relief they did as against both defendants, but it also further justifies, on the ground of fairness, the decision to impose liability on the first defendant in relation to the costs of the RG. It seems to me that in all the circumstances the registration of the charges without notice to the plaintiffs placed this matter into a different category of case from one based on a straight-forward administrative error.

1. I am not persuaded that the rather faint reference to the possibility of “expunging” the notices of charge from the Register in the plaintiffs’ Outline of Submissions provides a sufficient basis for the proposition that the costs incurred by the RG were attributable to the conduct of the plaintiff rather than that of the first defendant.

Conclusion

1. It follows from the above that the order I propose in relation to the costs of the RG is that he/she should bear his/her own costs of the proceeding.

Orders of the Court

1. Accordingly, the orders of the Court are as follows:

(1)     The first defendant is to pay the plaintiffs’ costs of the proceedings.

(2)     The second defendant is to bear his/her own costs of the proceedings.

I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe.

Associate:

Date: 14 November 2019