State Bank of New South Wales Limited v Layoun
[2001] NSWSC 198
•14 March 2001
CITATION: State Bank of New South Wales Limited v Layoun [2001] NSWSC 198 CURRENT JURISDICTION: Common Law FILE NUMBER(S): SC 12757 of 1994 HEARING DATE(S): 14 March 2001 JUDGMENT DATE:
14 March 2001PARTIES :
STATE BANK OF NEW SOUTH WALES LIMITED
(ACN 003 963 228)
(Plainiff)v
ANTHONY LAYOUN
(First Defendant)BADRA LAYOUN
(Second Defendant)DANIEL LAYOUN
LOUIS LAYOUN
(Third Defendant)
(Fourth Defendant)
JUDGMENT OF: Levine J
COUNSEL : D J Russell
R Sofroniou
(Plaintiff)
(Defendants)SOLICITORS: Parish Patience
Jackson Smith
(Plaintiff)
(Defendants)CATCHWORDS: On costs LEGISLATION CITED: Contracts Review Act 1980 (NSW) CASES CITED: Australian Trade Commission v Disktravel [2000] FCA 62
Cretazzo v Lombardi (1975) 13 SASR 4DECISION: See paragraphs 13 - 15
THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
No. 12757 of 1994
JUSTICE DAVID LEVINE
WEDNESDAY 14 MARCH 2001
STATE BANK OF NEW SOUTH WALES LIMITED
(ACN 003 963 228)
(Plaintiff)
v
ANTHONY LAYOUN
(First Defendant)
DANIEL LAYOUNBADRA LAYOUN
(Second Defendant)
(Third Defendant)
(Fourth Defendant)
JUDGMENT (On Costs)
1 HIS HONOUR: The final matter for determination in this litigation is the question of costs consequent upon my judgment delivered on 9 March 2001 (NSWSC 113). The order for costs when one party has succeeded in standardly structured litigation is that costs follow the event. However, the order is essentially within the discretion of the presiding judge.
2 It is here argued for the plaintiff, in the end the unsuccessful party to the litigation, that, notwithstanding that it was open to the defendants/cross-claimants to advance the non est factum defence, they having failed on that by reason of adverse findings as to credit though otherwise succeeding in the independently structured cross-claim, should not have the benefit of the usual order.
3 For the defendants/cross-claimants, it is submitted that, notwithstanding the failure of that particular plea in answer to the plaintiff's statement of claim and notwithstanding its failure on the basis of credit, its litigation was inexorably connected with the successful component of the case, namely, the unconscionability aspect. Given that it was open to the defendants/cross-claimants to raise and prosecute this aspect and to litigate in a way that may be described as holistic, there is no reason for departure from the ordinary rule that costs follow the event; a fortiori when the successful component by reason of the operation of the Contracts Review Act required the positive or assertive plea by way of cross-claim.
4 I have been referred to a decision of the Federal Court of Australia in Australian Trade Commission v Disktravel [2000] FCA 62 (11 February 2000). Their Honours were dealing with the circumstances peculiar to the appeal before them but usefully restate matters of general principle. Reference is made to the general discretion under that Court's legislation to award costs and to the requirement that that discretion be exercised judicially.
5 By reference to another decision, referred to in a paragraph numbered 3, the usual propositions were stated by their Honours that costs follow the event and that the successful litigant receives costs in the absence of special circumstances justifying some other order. Further, where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed. Further, a successful party who has failed on certain issues may not only be deprived of costs of those issues but may be ordered to pay the other side's costs of them.
6 It is pointed out in the context of that third proposition that the "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.
Their Honours then refer to a decision of Jacobs J of the Supreme Court of South Australia in Cretazzo v Lombardi (1975) 13 SASR 4 at 15, where his Honour said:
- "The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including, in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely upon his success in those particular issues."
7 The policy matter referred to by Jacobs J is one of which sight must never be lost. There is a risk that the Court, by the making of certain costs orders, could be perceived as intervening or intruding into matters strictly between legal advisers and their clients as to how a particular matter should be litigated. As was submitted in this instant case, it is to be assumed that the prosecution of the non est factum plea was not frivolous or an abuse, but rather conformed with all those ingredients that properly attend lawyers - client relationship.
8 The difficulty in this case is that its outcome could lead to the characterisation of the prosecution of the non est factum plea as unreasonable because, to state it shortly, it failed on the issue of credit, an issue which did not otherwise inform the outcome of the case. By reason, however, of the outcome - namely, the rejection of that plea on the basis of credit - it is submitted for the plaintiff, the unsuccessful party, that the appropriate order for costs to be made in a principled way in the light of the outcome is that each party pay its own costs or that the plaintiff pay half of the defendants' costs of the proceedings.
9 I am informed and accept, and it is fairly clear, that an order to the effect that the plaintiff pay the defendants/cross-claimants' costs of the cross-claim more probably than not would result in assessment procedures of such complexity that in the end the benefit of the costs order made and its allocation would, in reality, be defeated.
10 What I have just remarked is an observation. The issue is to be resolved more importantly on the principles to which I have referred.
11 It would be contrary to the interests of justice in the sense to which Jacobs J refers if, as a matter of general practice, a party would be deprived of the benefit of costs or, worse, penalised by having to pay the opposite side's costs merely by reason of the failure of an issue the party chose to litigate and merely by reason of the failure being explained in terms of the party's credibility on that issue being rejected.
12 The matter that in the end persuades me in favour of the defendants/cross-claimants is the litigation of the non est factum plea as a defence to the relief sought in the statement of claim and as one in terms of fact and indeed credit was raised and litigated in a way intimately connected with, even if in the end in fact severed from, the positive assertions in the unconscionability component.
13 For that reason, I am not persuaded to depart from the ordinary principle. Accordingly, I make the declarations referred to in paragraphs 1 and 2 in the short minutes of order handed up in court today.
14 I make the orders in paragraph 3(a) and (b) and I make the order for costs in paragraph 4.
15 The exhibits are to be returned.
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