| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : ST KILDA BEACH TAXI SCHOOL AND STAFFING PTY LTD -v- CENTRAL TAXI MANAGEMENT PTY LTD [2012] WADC 114 (S) CORAM : BOWDEN DCJ HEARD : ON THE PAPERS DELIVERED : 23 JULY 2012 SUPPLEMENTARY
DECISION : 23 AUGUST 2012 FILE NO/S : CIV 624 of 2011 BETWEEN : ST KILDA BEACH TAXI SCHOOL AND STAFFING PTY LTD Plaintiff (First defendant by counterclaim)
AND
CENTRAL TAXI MANAGEMENT PTY LTD
First defendant (Second defendant by counterclaim)
EMBLETON MOTOR CO PTY LTD
Second defendant (Plaintiff by counterclaim)
KIM JOHNSON
Third defendant (Plaintiff by counterclaim)
ABDURAHAM SAEDI
Third party (Third defendant by counterclaim)
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Catchwords: Costs - Turns on its own facts Legislation: Nil Result: Orders for costs to be taxed or agreed made Representation: Counsel:
Plaintiff (First defendant by counterclaim) : Mr M Strbac
First defendant (Second defendant by counterclaim): Mr K Kappadath
Second defendant (Plaintiff by counterclaim) : Mr B G Grubb
Third defendant (Plaintiff by counterclaim) : Mr B G Grubb
Third party (Third defendant by counterclaim) : Mr K Kappadath
Solicitors:
Plaintiff (First defendant by counterclaim) : Delta Legal
First defendant (Second defendant by counterclaim): Starnet Legal Pty Ltd
Second defendant (Plaintiff by counterclaim) : Metaxas & Hager
Third defendant (Plaintiff by counterclaim) : Metaxas & Hager
Third party (Third defendant by counterclaim) : Starnet Legal Pty Ltd
Case(s) referred to in judgment(s):
Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S)
Brazendale v Kenna [1961] Tas SR 199
Bullock v London General Omnibus Co [1904 - 7] All ER Rep 44
Capolingua v Phylum Pty Ltd (1991) 5 WAR 137
Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6
Mannix v Loumbos Pty Ltd [2000] NSWCA 32
McFadzean v Construction, Forestry, Mining & Energy Union (2007) 20 VR 250 Sanderson v Blyth Theatre Co [1903] 2 KB 533
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1 BOWDEN DCJ: On 23 July 2012 I delivered judgment in this matter.
2 Subsequently the parties provided written submissions on costs and these are the reasons for the orders I now make.
The claim 3 St Kilda brought an action against Central Taxi Management Pty Ltd (CTM) and Embleton jointly and severally seeking damages, interest, costs and such further relief as the court deemed fit and against Embleton and Mr Johnson seeking an order for delivery up of a taxi plates, an account of profits, costs and such further order as the court deemed fit. 4 On 31May 2011 St Kilda obtained judgment with costs to be taxed, in default of pleadings against CTM and an order that their damages be assessed however, at trial they were unable to prove those damages and I dismissed their claim for damages. 5 I make no order as to the costs of assessing the damages payable by CTM to St Kilda as notwithstanding St Kilda's failure to prove those damages the time devoted to this issue was for all intents and purposes insignificant. 6 St Kilda's claimed against Embleton, inter alia, alternatively damages or an account of profits and the latter claim was successful, they also succeeded in obtaining an order that taxi plate 529 be delivered up to them by Embleton. 7 Embleton and Mr Johnson say St Kilda failed in its counterclaim [sic] for damages as against Embleton and never elected as between damages or an account of profits prior or during the trial and was only successful in its account of profits by relying on the evidence of Embleton's expert and should therefore not be awarded any costs of its counterclaim [sic] as against Embleton on the basis that it never incurred any costs. 8 I reject this contention. 9 I accept that St Kilda did not incur any costs in respect of Mr Siviour and clearly at taxation they would not recover any costs in this regard, however they clearly incurred costs in the action and were the successful party. The fact that they did not recover damages against Embleton on one of their alternative claims does not disentitle them to costs. (Page 4)
10 Costs of an issue of fact maybe awarded where the evidence on that issue can be distinguished without difficulty from evidence on other issues: Brazendale v Kenna [1961] Tas SR 199, 208 and that where there is multiplicity of issues and mixed success has been enjoyed by the parties a court may take a pragmatic approach to the framing of the order of costs taking into account the success (or lack of success) of the parties on an issue basis: McFadzean v Construction, Forestry, Mining & Energy Union (2007) 20 VR 250. 11 However in Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S) the Court of Appeal stated: 5 It is clear that while the court has a broad discretion as to costs, generally costs will follow the event: Rules of the Supreme Court 1971(WA), O 66 r 1(1). It is incumbent upon the unsuccessful party to satisfy the court that there are good reasons why it should not pay the other party's costs: Nikolaou v Papasavas, Phillips & Co (No 2) [1989] HCA 11; (1989) 166 CLR 394, 407. 6 The court may, in the exercise of its discretion, order that a successful party recover only a portion of its costs where that party has been unsuccessful in respect of certain discrete issues. But that should not be done as a matter of course. To embark as a general practice upon an analysis of which party was successful on each issue, or necessarily to deprive a successful party of some portion of its costs if it has lost on a particular issue, would be likely to add further uncertainty and complexity to the outcome of litigation, derogate from the prospect of settlement, and oblige the court to hear lengthy and frequent arguments in relation to costs as an additional burden on its resources and the costs of the parties: see MacKinnon v Petersen (Unreported, NSWSC, 19 April 1989) (Cole J); Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [67] - [68] (McHugh J). Litigation is time-consuming, expensive and burdensome enough already. 7 In addition, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risks of costs from canvassing all issues which might be material to the decision in the case: Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2002] FCA 282; NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 [24]. 8 In Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158 (S), the position was put as follows: '[T]he power to adjust an order for costs by reference to particular issues upon which the generally successful party has failed, is properly exercised only where there are discrete and (Page 5)
severable issues upon which the generally successful party has failed, and which have added to the cost of the proceedings in a significant and readily discernible way [7].' 12 The alternate claim for damages upon which St Kilda was not successful did not add to the costs in a significant and readily discernible way, and was not a discreet or severable issue and their should be no departure from the normal costs order in favour of the successful party. 13 I also reject Embleton and Mr Johnson's submission that CTM should pay St Kilda's costs of the action. 14 All most all of the trial was devoted to the issue of whether Embleton and Mr Johnson established CTM and or Mr Saedi agreed to a five year lease with an option for a further five years for the taxi plates previously supplied. This issue was pivotal to Embleton and Mr Johnson's claims against St Kilda based on issues associated with the Trade Practices Act 1974, Fair Trading Act 1987, agency, implied warranty of authority and/or estoppel and to their claim of being a bona fide purchaser for value. Additionally they raised against St Kilda issues going to the validity of the taxi plate lease with CTM and the allegation that the lease was a sham. They failed on all these issues and as the successful party St Kilda is entitled to its costs and I order Embleton and Mr Johnson pay St Kilda's costs of the action as one set.
The counterclaim and notice to admit facts 15 By their counterclaim Embleton and Mr Johnson brought actions against St Kilda, CTM and Mr Saedi on various grounds. 16 They obtained default judgment, with costs to be taxed against CTM on 16 May 2011 and an order that their damages be assessed. They were successful in assessing their damages at the trial. CTM should pay Embleton and Mr Johnson's costs of the assessment of those damages. 17 Embleton and Mr Johnson's claims against St Kilda and Mr Saedi were not successful. 18 Embleton point out that CTM made unsuccessful applications to set aside the judgment, at the start of the trial and at the completion of all of the evidence, and say it would be unreasonable to allow Mr Saedi any costs of his defence to the counterclaim as CTM relied upon his evidence in those applications. Effectively Embleton says Mr Saedi ran his entire defence on the basis of aiding CTM to set aside the default judgment. (Page 6)
19 Whilst that may have been a collateral effect of his defence, Mr Saedi ran his defence because he was the third defendant to the counterclaim made by Embleton and Mr Johnson who also bought a third party notice against him. He was successful in his defence on both matters and is entitled to his costs notwithstanding that CTM used his evidence in unsuccessful applications. CTM will be ordered to pay the costs of those unsuccessful applications to set aside the default judgment. 20 A successful party may be deprived of costs if guilty of misconduct in relation to the litigation, or the circumstances leading up to litigation, as where by lax conduct, the successful party effectively invites litigation or unnecessarily protracts the proceedings: Mannix v Loumbos Pty Ltd [2000] NSWCA 32. This conduct can relate to pleadings which impede the identification of the real issue in the conduct of the trial: Capolingua v Phylum Pty Ltd (1991) 5 WAR 137. 21 I accept Mr Saedi's pleadings were to say the least minimalistic and amounted to a bear denial effectively putting Embleton and Mr Johnson to proof of their claim 22 I do not consider that there is any reason to make a Bullock order Bullock v London General Omnibus Co [1904 - 7] All ER Rep 44 or a Sanderson order Sanderson v Blyth Theatre Co [1903] 2 KB 533. A Bullock order can be laid where a prudent plaintiff really have no choice but to join the separate defendant: Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6, 15. 23 Whilst it may have been prudent for Embleton to join Mr Saedi to the proceedings as he was the director and shareholder of CTM the reality is Embleton and Mr Johnson were not successful in their claim against Mr Saedi and, subject to the costs relevant to the notice to admit facts, I do not consider that there is anything in his conduct which should deprive him of an award for costs. 24 I order Embleton and Mr Johnson pay St Kilda and Mr Saedi costs of the counter claim action to be taxed or agreed, except for the costs incidental to the notice to admit facts dated 8 March 2012 which costs are to be paid by Mr Saedi pursuant to O 66 r 3(2) Rules of the Supreme Court 1971.
The third party action 25 Embleton and Mr Johnson also brought a third party notice against Mr Saedi which was not successful and the appropriate order is that they (Page 7)
pay Mr Saedi costs of the third party action except for the costs incidental to the notice to admit facts dated 8 March 2012.
CTM applications to set aside the default judgment 26 CTM had judgment and costs entered against them on 16 May 2011 by Embleton and Mr Johnson. I refused their two applications to set aside that default judgment and it should pay Embleton and Mr Johnson costs of those failed applications to be taxed as one set. 27 The orders I make are as follows: 1. Embleton and Mr Johnson (the second and third defendants) pay St Kilda (the plaintiff) costs of the action to be taxed or agreed; 2. There be no order as to costs in relation to the assessment of damages payable by CTM (the first defendant) to St Kilda; 3. CTM (the second defendant by counterclaim) pay Embleton and Mr Johnson (the plaintiffs by counterclaim) costs of the assessment of damages payable by CTM, to be taxed as one set or agreed; 4. Embleton and Mr Johnson (the plaintiffs by counterclaim) pay St Kilda (the first defendant by counterclaim) and Mr Saedi (the third defendant by counterclaim) costs of the counterclaim to be taxed or agreed except for the costs incidental to the notice to admit facts dated 8 March 2012 which costs are to be taxed or agreed and paid by Mr Saedi; 5. Embleton and Mr Johnson (the plaintiffs by counterclaim) pay Mr Saedi (the third party) costs of the third party action to be taxed or agreed except for the costs incidental to the notice to admit facts dated 8 March 2012 which costs are to be taxed or agreed and paid by Mr Saedi; 6. CTM (the second defendant by counterclaim) pay Embleton and Mr Johnson (the plaintiffs by counterclaim) costs to be taxed as one set or agreed of the applications of 10 April 2012 and 27 April 2012 to set aside the default judgment of 16 May 2011; and 7. There be liberty to apply.
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