St Hilliers Property Pty Ltd v ACT Projects Pty Ltd (No 2)
[2017] ACTSC 263
•20 September 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | St Hilliers Property Pty Ltd v ACT Projects Pty Ltd and Anor (No 2) |
Citation: | [2017] ACTSC 263 |
Date of Last Submissions: | 28 August 2017 |
DecisionDate: | 20 September 2017 |
Before: | Walmsley AJ |
Decision: | The defendants are to pay the plaintiff’s costs. See [58]. |
Catchwords: | PROCEDURE – COSTS – Apportionment – whether “special circumstances” exist for costs to be apportioned between unsuccessful parties – whether there has been an unreasonable pursuit of points which have no merit |
Legislation Cited: | Building and Construction (Security of Payment) Act 2009 (ACT), ss 24(2), 37(1) |
Cases Cited: | Canberra Hire Pty Ltd v Koppers Wood Products Pty Ltd [2008] ACTSC 92 Fernando v Medical Complaints Tribunal [2007] TASSC 44; 16 Tas R 237 Waters v PC Henderson (Aust) Pty Ltd [1994] NSWCA 338; 254 ALR 28 |
Parties: | St Hilliers Property Pty Ltd (Plaintiff) ACT Projects Pty Ltd (First Defendant) Simon Wilson (Second Defendant) |
Representation: | Counsel Mr M Sheldon (Plaintiff) Mr J T Moffett (First Defendant) Mr M Orlov (Second Defendant) |
| Solicitors Collin Biggers & Paisley (Plaintiff) Bradley Allen Love (First Defendant) CCS Legal Pty Ltd (Second Defendant) | |
File Number(s): | SCA 59 of 2016 SC 363 of 2016 |
Walmsley AJ:
Background
On 20 July 2017 I found in favour of the plaintiff and directed the parties to file submissions concerning costs.
All parties have now filed their submissions.
When giving judgment I referred to the possibility that each defendant should bear a proportion of the plaintiff’s costs and suggested a possible division.
By reason of the submissions since filed, I have formed the view that there should be no such division, but that the defendants should pay the plaintiff’s costs.
First Defendant’s Submissions
The first defendant submitted it should bear only one third of the costs, asserting the second defendant had played a more substantial and active part, especially given the Building and Construction (Security of Payment) Act 2009 (ACT) (‘BCA’) did not compel his active participation.
It also submitted the plaintiff should pay its costs thrown away by an abandonment of parts of the plaintiff’s claims and parts of its evidence.
Mr Moffett, who appeared for the first defendant, relied on, inter alia, R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13, arguing by analogy, for the proposition that when a tribunal becomes a protagonist it risks endangering the impartiality it is expected to adopt in later cases coming before it; thus its intervention in litigation arising from its decision should be exceptional and limited to submissions about its powers and procedures. On this issue it also relied on R (on application of Davis) v Birmingham Deputy Coroner [2004] EWCA Civ 207; [2004] 1 WLR 2739 and Fernando v Medical Complaints Tribunal [2007] TASSC 44; 16 Tas R 237.
Mr Moffett did not submit the second defendant had been involved in serious misconduct, but that his mere involvement in a significant way when he could simply have relied on the protection of s 37(1) BCA, went far beyond putting arguments about his functions.
Mr Moffett argued the issues Mr Wilson raised in the proceedings deprived him of protections otherwise available to him under s 37(1) of the BCA.
His involvement in the proceedings had added significantly to the costs incurred by the parties, he submitted.
Mr Moffett pointed in that connection to the affidavits sworn by the second defendant, consisting of hundreds of pages, and his lengthy cross-examination by counsel for the plaintiff.
He also relied on the finding I had made that I was not satisfied that the second defendant had complied with s 24(2) of the BCA.
He also submitted the plaintiff should pay the first defendant its costs for aspects of the case the plaintiff had abandoned, aspects he labelled “significant components”, which, he submitted, had caused the first defendant to incur costs which later proved unnecessary. He submitted his client had had to address evidence served but later abandoned by the plaintiff. He described this material as “voluminous” and said it had “exceeded thousands of pages”. Of particular concern, he said, was an expert report which had required a great deal of work.
In that context he referred to the Court’s unfettered discretion about costs. He also relied on rules 513 and 1754 concerning beneficial orders. As to costs thrown away he referred to Canberra Hire Pty Ltd v Koppers Wood Products Pty Ltd [2008] ACTSC 92.
He submitted the plaintiff had not given any reasons for its late abandonment of or reliance on certain issues.
He submitted any costs payable to the plaintiff should be shared on the basis of one third by the first defendant and two thirds by the second defendant. He submitted the plaintiff should not have its costs for the affidavit and expert evidence not relied on, and should pay his client’s costs thrown away by preparing for the part of the case abandoned by the plaintiff.
Second Defendant’s Submissions
Mr Orlov, counsel for the second defendant, submitted that of the five issues decided, only two had concerned his client, namely, the delegation issue and the issue concerning whether he made his determination in time. He referred to the fact that the delegation issue had only been raised at a late stage, after time sheets had been produced on subpoena. He noted his client’s participation in the judicial review had only concerned the time issue.
He submitted his client had succeeded on the one issue requiring his initial participation, namely when he had completed his determination, and that four of the five issues I had determined concerned the validity of the determination, and had been “entirely between” the plaintiff and the first defendant.
He submitted his client had been “drawn into” the delegation issue as that was one of the grounds on which the determination was impugned and that I should regard his participation as having occurred solely on the fifth issue. On that basis, Mr Orlov submitted his client should not be liable for any costs, as he had succeeded on the fifth issue. Further, as he had succeeded, the plaintiff should pay his costs.
Alternatively, he submitted that as his client had succeeded on the fifth issue and the delegation issue had been raised late in the proceedings, a reasonable apportionment would be 10 per cent payable by him and 90 per cent by the first defendant.
Mr Orlov adopted the first defendant’s submissions as to costs his client had incurred unnecessarily in preparing issues later abandoned.
Ultimately, Mr Orlov submitted the first defendant should pay all of the plaintiff’s costs, and the plaintiff should pay his client’s costs or alternatively his client should pay 10 per cent of the plaintiff’s costs, and the first defendant 90 per cent, the plaintiff having none of its costs for abandoned issues.
Plaintiff’s Submissions
Mr Sheldon, for the plaintiff, submitted costs should follow the event, without apportionment, and as it had succeeded in both actions it should have its costs in both actions on the usual basis, without differentiation between issues: Waters v PC Henderson (Aust) Pty Ltd [1994] NSWCA 338; 254 ALR 28 at 330-331; Cf Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at 122.
He argued this had not been a case where distinct issues had been unreasonably pursued or which had significantly contributed to the hearing’s length.
He submitted there had been no abandonment of “numerous grounds”, only two.
As to abandoning its abuse-of-process claim, this had substantially overlapped with the reference-date argument, on which the plaintiff had succeeded, and had relied on the same logic. That claim had been included in the pleading when there was a difference of judicial approach between the States and Territories and uncertainty in the ACT as to whether a determination could be set aside for an absence of a reference date.
That issue had then been decided by the High Court in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd [2016] HCA 52; 91 ALJR 233, after the pleading had been filed. So it had been reasonable to have raised it and then abandoned it.
The other matter not pursued had concerned the possible insolvency of the first defendant. The plaintiff submitted most of these costs had been incurred because the first defendant had resisted supplying certain documents on subpoena and the work had been done in pursuance of the documents the subject of that subpoena.
Mr Sheldon submitted that when the subpoena dispute had come before Elkaim J, each party had enjoyed mixed success and that the first defendant was now seeking to go behind his Honour’s orders.
There were costs incurred when the first defendant applied on 1 March 2017 to discharge consent orders. However, orders made that day had dealt with the costs of that issue.
Even if the abuse of process and solvency issues had been run at trial and lost by the plaintiff the outcome would have been the same costs-wise, and the plaintiff should not be punished for narrowing the issues.
As to the argument that the plaintiff had not relied on “voluminous” amounts of evidence, the evidence had been used on solvency arguments in earlier proceedings, and an affidavit of Mr Joseph Cummings, whilst not read on the final hearing, had been prepared for an interlocutory application following which the first defendant had consented to orders.
Documents exhibited to that affidavit had however been tendered on the hearing and referred to there by both the plaintiff and first defendant.
Mr Sheldon submitted that, contrary to the second defendant’s submission that he had played only a limited role, his role had been significant. He had made detailed written and oral submissions on the delegation issue and had read two affidavits on that issue. The fee issue had been minor.
He submitted that as there had not been special circumstances, no apportionment would be appropriate: Royal v El Ali (No 3) [2016] FCA 1573 at [53].
First Defendant’s Submission in Reply
The first defendant in reply again submitted that the defendants should not be, in effect, punished for incurring substantial costs in preparing their response to issues upon which the plaintiff had not ultimately relied.
It submitted the plaintiff should bear some of the first defendant’s costs. The first defendant had given the plaintiff warning it would take that position but the plaintiff had not responded.
As to Elkaim J’s orders, it noted his Honour had made no order as to costs and there had been no appeal.
As to the evidence the plaintiff said had gone to the solvency issue, it asserted that was incorrect and that the plaintiff had acknowledged that by giving notice on 23 February and 27 February 2017 it no longer relied on the solvency evidence.
Consideration
As the plaintiff succeeded against both defendants I consider, subject to what appears below, that it should have an order for costs against both defendants.
Further, as I am not persuaded there were relevant special circumstances, I do not consider it would be appropriate for me to apportion costs.
As the plaintiff’s counsel correctly observes, it will be a matter for the defendants, if appropriate, to seek contributions from each other, and it is not for the plaintiff to run the risk of not obtaining full satisfaction of its costs against one or other of them.
As to the second defendant’s submission that he had played little part in the proceedings, I reject it.
Mr Wilson served affidavits on the delegation issue and his counsel filed and served written submissions and he gave lengthy viva-voce evidence to support his affidavits.
While a primary consideration for him was his right to be paid, and he succeeded on that issue, that was a minor issue which took little time, and the contest between him and the plaintiff was, as I saw it, mainly on the delegation issue.
By reason of his very active participation in the proceedings I consider he ought be jointly and severally liable for all the costs with the first defendant. The issues he was involved in went far beyond any arguments on his functions.
It is true there were more issues involved between the plaintiff and the first defendant than between the plaintiff and him. But he was deeply involved in the delegation issue and that issue occupied a substantial part of the hearing time.
As to whether there ought be any allowance made because the plaintiff abandoned issues or because certain evidence was not read at the hearing, this is not an easy matter to resolve, given the plaintiff and first defendant did not agree.
However, as to the pleading issue, I accept the plaintiff’s submission that the abuse-of-process case overlapped the reference-date case, and I consider the plaintiff was reasonable in raising the abuse-of-process argument initially and then, after the High Court had made the position clear, in abandoning it. As I see it, they were arguments about the same thing and I cannot see how the initial assertion of an abuse of process can have led to the incurring of any additional costs by the first defendant.
I consider the argument concerning the solvency evidence is in a different position.
The plaintiff says most of this evidence was assembled for an argument about either urgent relief or concerning subpoenas. In the record of proceedings before Elkaim J it appears that on 10 October 2016 his Honour ordered by consent that each of the plaintiff and first defendant pay its own costs.
So his Honour has dealt finally with those costs. I do not consider I should revisit his Honour’s orders. They dealt finally with the costs on that application.
The solvency documents were again relevant on the first defendant’s application before me on 1 March 2017. Orders were made that day concerning costs and they should not be revisited either.
It is not suggested the documents were used thereafter.
In those circumstances I do not consider it necessary to make a special order about the costs on preparation with respect to the solvency issue either in favour of the plaintiff or the first defendant. The order for costs I am about to make will cover only the costs of the hearing. What those costs are, will be for the taxing officer to decide.
In summary, I do not consider the first defendant has any entitlement to costs, since the solvency issue was relevant only to interlocutory matters, where costs issues have been dealt with, and deleting the abuse of process claim did not materially alter the amount of necessary preparation.
There will be an order that the plaintiff’s costs be paid by the defendants.
ORDERS
The defendants are to pay the plaintiff’s costs.
| I certify that the preceding fifty-eight [58] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Walmsley. Associate: Date: 21 September 2017 |
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Amendments
21 September 2017 At Case Title replace “St Hilliers Property Pty Ltd v ACT Projects Pty Ltd and Anor” with “St Hilliers Property Pty Ltd v ACT Projects Pty Ltd and Anor (No 2)”
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