State of South Australia v Clarke (No 2) - [2016] SADC 28

District Court of South Australia
(Civil)
STATE OF SOUTH AUSTRALIA v CLARKE (No 2)
[2016] SADC 28
Judgment of His Honour Judge Slattery (ex tempore)
4 March 2016
PROCEDURE - COSTS
Migration Act (1958) (Cth) s46A(2), s189, s196, s198 , referred to.
Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322; Firebird Global Master Fund II Limited v Republic of Nauru [No 2] [2015] HCA 53; E G Oshlack v Richmond River Council (1998) 193 CLR 72 , considered.

STATE OF SOUTH AUSTRALIA v CLARKE (No 2)
[2016] SADC 28
Determination of the question of costs and interest payable upon the judgment in favour of the plaintiff against the defendant Clarke

I will deal first with the question of interest. In this action, the plaintiff has achieved a judgment in its favour of the sum of $166,408.06. That amount awarded to the plaintiff follows upon the submissions made by the plaintiff in the proceedings that the applicable provision for the calculation of the amount due by Clarke was s36(5c) WRCA (1986). It was not in contention between the parties that if s36(5) WRCA (1986) governed this application, then the amount recoverable from Clarke in the proceedings was in the sum of $233,324.06. A rate of interest was to be applied to the amount due and payable by Clarke.
As my judgment discloses, the gross amounts of workers compensation received by Clarke were in the amount of $233,324.06 and the net amount after tax received by him was $166,408.06. The difference, in the sum of $66,916 would have been recoverable by Clarke from the Commissioner of Taxation if s36(5) WRCA (1986) had application. As matters stand, the right to make that recovery from the Commissioner of Taxation now vests in the plaintiff.
The parties have now agreed the rate of interest applicable to the judgment sum, the period over which interest is to be calculated and the quantum of the amount of interest payable by the defendant. That amount is $36,543.21.
Costs
The second question that arises before me today is the question of the costs of the action. The plaintiff seeks its costs. Clarke’s response is that having regard to some of the matters argued by the plaintiff that were not successful, there should be some reduction in the amount of the costs payable to the plaintiff or at least some apportionment of the total costs claim so as to reduce the plaintiff’s claim for costs. On the reports of the decisions of intermediate Courts of Appeal I have found it difficult to draw together guiding principles on this topic. I think that two recent decisions of the High Court are of great assistance in resolving arguments of this type. My consideration of them requires a short reiteration of the relevant issues in the case at bar.
Alternative arguments were put by the parties on the question of mistake and detriment. I commenced my discussion of the parties’ contentions on this topic at paragraph [197] of my judgment.[1] It is not correct to say that this was really one component of the plaintiff’s case that could be isolated from the rest of the case. The need to consider this alternative case arose more in the course of argument put by Clarke than in conformance with any pleaded case of Clarke.
[1] [2016] SADC 13.
After Clarke raised issues in argument that particular payments had been made by the plaintiff whilst it was labouring under a mistake of fact or law or of fact and law, Clarke was then required to file an amended pleading so that those matters became an issue for resolution by me in the action. As a result, the plaintiff amended its Reply and then, partially at the insistence of the court, amended its Statement of Claim and led further evidence at trial. Those matters were derived in part from the plaintiff’s own position and in part from the issues raised by Clarke. I have gone to some lengths in my judgment to set out the factual situation as it developed over a long period of time. That history does not support the contentions of Clarke on the question of costs of the action even though the plaintiff ultimately failed on that issue of mistake and detriment.
In Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship,[2] Kiefel and Keane JJ (who wrote the decision of the Court on this issue) considered the question of the costs of that appeal. In the appeal, the plaintiff challenged a well settled authority of the High Court in the migration area and also challenged the validity of ss189, 196 and 198 of the Migration Act (1958) (Cth). Those challenges failed. The plaintiff did succeed in obtaining declaratory relief that the exercise of the Minister’s power under s46A(2) of the Migration Act was affected by an error of law which led to the Department forming an erroneous conclusion about the criterion to be applied to a protection visa application.
[2] (2013) 251 CLR 322.
Kiefel and Keane JJ considered the question of costs at page 393 at [241]. Their Honours said:
[241]The disposition of the costs of the litigation is in the discretion of the court.[3] In some cases, the ‘event’ may be contestable, especially where separate issues have fallen in different ways. This is such a case.
[3] See E G Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 [67] per McHugh J.
Their Honours then decided the question of costs on the result of the contestable issues and held that there should be no order as to costs.
In Firebird Global Master Fund II Limited v Republic of Nauru [No 2] [2015] HCA 53,[4] the High Court considered an application for costs by a partially successful appellant. The court identified that of four issues on the appeal, the appellant Firebird was successful in relation to part only of two of the four issues. It was unsuccessful on all of the other issues. On that basis, the High Court[5] held as follows:
[5]If the question of costs is to be determined on the basis of success on issues, rather than on the outcome of the appeal, these factors would not suggest as appropriate an order apportioning costs, let alone one that Firebird and Nauru pay their own costs, for which Firebird contends.
[6]In any event, the preferable approach in this case is the one usually taken, that costs should follow the outcome of the appeal. This is not a case where it may be said that the event of success is contestable, by reference to how separate issues have been determined.[6] There are no special circumstances to warrant a departure from the general rule and good reasons not to encourage applications regarding costs on an issue by issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like.
[4]    23 December 2015.
[5]    French CJ, Kiefel, Nettle and Gordon JJ.
[6]    Cf. Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at 393 [241].
If it be thought that the decision of Kiefel and Keane JJ in Plaintiff M76 does not necessarily elucidate the meaning of “the event”, I consider that the position has been made clear in the judgment in Firebird. If the Court is to depart from the usual costs rule about an action then the Court must be able to identify that it is the event of success which is contestable [my underlining]. That event of success being contestable must be obvious from a survey of how all of the issues have been determined. If it is the case that the event of success is contestable then special circumstances arise that justify a departure from the usual costs rule. The finding of the event of success being contestable was open to the court in Plaintiff M76 but not in Firebird. These are questions of fact and degree in the exercise of the discretion. The proper approach that guides the exercise of my discretion here is that the question of the determination of the separate issues must disclose that the event of success is contestable. Absent such a situation the High Court has stated that applications regarding costs on an issue by issue basis should not be encouraged and that there should be adherence to the general rule that costs should follow the event.
I acknowledge that these are costs decisions of the High Court on appeals but I am unable to detect any reason why the principles enunciated by the High Court in these cases should not apply to actions generally. To the contrary: the guidance given by these High Court decisions tends to deflect from often tedious and unprofitable costs arguments focussed solely upon issues won or lost and instead focuses upon whether the event of success is contestable. That approach lends itself to the determination of costs issues at trial as well as in the appeal setting.
Applying those High Court authorities to the case at bar, it is not a situation where it may be said that the event of success is contestable. That being the case, it is inappropriate to attempt to assess costs on ‘… an issue by issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like’.
In those circumstances, I think this matter falls into the usual category of cases where costs ought to follow the event. In the exercise of my discretion and having regard to the whole of the circumstances of the case and all of the matters that have been canvassed by me in the published judgment, it is my decision to make an order for costs of the action in favour of the plaintiff on a party/party basis.