Supabarn Supermarkets Pty Ltd v Cotrell Pty Ltd

[2011] ACTSC 47

Supabarn Supermarkets Pty Ltd v Cotrell Pty Ltd
 [2011] ACTSC 47 (18 March 2011)

COSTS – Application for costs of interlocutory application filed by defendant – defendant discontinuing partial claim for relief at the hearing without contest – plaintiff abandoning remaining contested issues – orders for costs apportioned according to discrete issues raised by application

Court Procedures Rules 2006 (Act) rr 513, 1060, 1163, 1721
Supreme Court Act 1935 (SA) s 40
Trade Practices Act 1974 (Cth)

Cretazzo v Lombardi (1975) 13 SASR 4
Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495
Hughes v Western Australian Cricket Association (Inc) and Others (1986) 8 ATPR 40-748
Latoudis v Casey (1990) 170 CLR 534
Oshlack v Richmond River Council (1998) 193 CLR 72
Ritter v Godfrey (1920) 2 KB 47
Roadshow Films Pty Ltd v iiNet Limited (No. 4) (2010) 269 ALR 606

No. SC  1030 of  2009

Judge:  Cowdroy J
Supreme Court of the ACT
Date:   18 March 2011

IN THE SUPREME COURT OF THE     )
  )          No. SC 1030 of  2009
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:SUPABARN SUPERMARKETS PTY LTD

Plaintiff

AND:             COTRELL PTY LTD
  Defendant

ORDER

Judge:  Cowdroy J
Date:  18 March 2011 
Place:  Canberra

THE COURT ORDERS THAT:

1. The Plaintiff pay the Defendant’s costs thrown away by virtue of the amendment of the Trade Practices claims included in the Amended Statement of Claim.

2. The Defendant pay the costs of the Plaintiff thrown away by the Defendant’s abandonment of its application to strike out paragraphs 10, 12, 14, 18, 21, 23, 25, 27, 36 and 37 of the Amended Statement of Claim.

3. The costs payable by orders 1 and 2, if not agreed upon between the parties, is to be assessed or taxed.

4. No further order as to costs of the Defendant’s application lodged 31 July 2009 or of its Amended Application lodged on 26 March 2010.

IN THE SUPREME COURT OF THE     )   No. SC 1030 of 2009
  )
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:SUPABARN SUPERMARKETS PTY LTD

Plaintiff

AND:COTRELL PTY LTD

Defendant

Judge:  Cowdroy J
Date:  18 March 2011
Place:  Sydney

REASONS FOR JUDGMENT

1. The plaintiff (‘Supabarn’) and the defendant (‘Cotrell’) each apply for orders relating to the costs of an interlocutory application brought by Cotrell. An Application was lodged by Cotrell on 31 July 2009 seeking to strike out several paragraphs of Supabarn’s Statement of Claim for lack of particulars, but was superseded by an Amended Application lodged 26 March 2010.  The amendments contained in the Amended Application are not relevant for present purposes, and for convenience the Court will simply refer to Cotrell’s Amended Application and the Application lodged on 31 July 2009 as ‘the Application’.

1. The Application came before the Court on 21 September 2010. On that day the parties reached agreement upon the disputed issues, leaving unresolved only the issue of the costs. This judgment relates to that question.

1. The application for costs has, at the request of the parties, been considered in the absence of a hearing and based upon the written submissions of each party. The Court found it necessary to require the production of correspondence from the parties which was referred to in the submissions. Otherwise, the Court has not had the benefit of any other documentation and makes its decision on the basis that no other documentation relevant to the question of costs exists.

The Relief Sought

1. This litigation has arisen from disputes over a lease of commercial premises known as Unit 12, Subleasing Plan No. 5195, at Kaleen Plaza Shopping Centre in the Australian Capital Territory. Supabarn is the lessee and Cotrell is the lessor. Supabarn sued Cotrell alleging numerous breaches of the lease between them. The lease was entered into on 7 September 2001 and followed an earlier lease.

1. These proceedings were commenced by a Statement of Claim filed on 19 February 2009. An Amended Statement of Claim (‘ASOC’) was filed on 31 March 2009.

1. Cotrell was the moving party in the Application. By its Application lodged on 31 July 2009 Cotrell sought orders that numerous paragraphs of the ASOC be struck out; that a subpoena dated 15 July 2009 directed to the Perpetual Trustee Company Limited and issued by the Court at the request of Supabarn be set aside; and other relief which is not relevant for present purposes.

1. The paragraphs sought to be struck out of the ASOC were paragraphs 10, 12, 14, 18, 21, 23, 25, 27, 36 and 37. Such paragraphs related to Supabarn’s claims of alleged breaches of the lease of the subject premises (‘the lease claims’).

1. The second group of paragraphs sought to be struck out of the ASOC related to allegations made with regard to the extant Trade Practices Act 1974 (Cth) (‘the Trade Practices Act’) namely [49]-[60] (‘the trade practices claims’). Since this pleading was filed on 31 March 2009, namely 5 days before the filing of the ASOC, the Court infers that Cotrell had advance notice of the amendments proposed in the ASOC to enable it to seek the relief foreshadowed in its Application.

1. When the Application came on for hearing before the Court on 21 September 2010, Cotrell indicated that it did not intend to pursue its claim to strike out the paragraphs with respect to the issues raised by the lease claims. Cotrell submitted that its complaint concerning the inadequacy of the detail had been rectified by Supabarn’s provision of further particulars after the filing of the Application.

1. As to the trade practices claims, these issues were also resolved when the Application came on for hearing by Supabarn abandoning such claims. Cotrell submits that it was only following the filing of the Application that Supabarn elected to withdraw such claims, and that Cotrell should have its costs on this issue. Supabarn agreed at the hearing to pay the costs thrown away by its no longer pressing such claims.

1. The remaining issues raised for determination were essentially resolved by agreement between the parties and no issue turns upon them. Accordingly the only issue for determination is the issue of costs of the Application.

1. The Court will consider each issue hereunder.

Adequacy of Particulars of the Lease Claims

1. Cotrell submits that the details provided in the ASOC of Cotrell’s alleged breaches of the lease lacked particularity, and that Supabarn did not specifically identify the matters to be relied upon. Instead, Supabarn referred to a document entitled Schedule of Particulars of Breach. Such schedule identified numerous breaches relating to a wide range of different subject matters. Cotrell submits that because the pleading did not sufficiently identify the numerous breaches, it was appropriate for it to file its Application.

1. Cotrell submits that the supply of particulars by Supabarn after the filing of the Application demonstrated the validity of its allegation that the pleadings were insufficiently particularised. Accordingly, Cotrell claims it should be entitled to the costs of the Application.

1. Supabarn asserts that Cotrell’s solicitors had been provided with detailed particulars in December 2009, namely four months before the filing of the Amended Application. Despite Supabarn’s solicitors seeking confirmation of the particulars’ adequacy, there was no suggestion by Cotrell that the particulars provided were insufficient.

1. Supabarn submits that Cotrell first indicated that it would not pursue its claim for the striking out of the paragraphs relating to the lease claims at the hearing on 21 September 2010. Supabarn also submits that Cotrell deliberately waited until the morning of the hearing to make its position known. Supabarn and its legal representatives assert that they were required to undertake considerable preparation to resist Cotrell’s attempt to strike out the lease claim paragraphs of the ASOC, and estimates that such proportion was 90% of such wasted expenditure.

1. For these reasons Supabarn seeks an order that Cotrell pay Supabarn’s costs thrown away by virtue of Cotrell’s abandonment of its application to strike out the lease claim paragraphs.

Adequacy of the trade practices claims

1. Cotrell submits that it should have its costs relating to this issue. It submits that the trade practices claims represented distinct causes of action, and were incorporated into Supabarn’s claim by the amended ASOC; and that following the filing of Cotrell’s Application, Supabarn withdrew its trade practices claims.

1. Cotrell relies upon r 513 of the Court Procedures Rules 2006 (Act) (‘the Rules’) which provides that costs are payable by a party making an amendment unless the Court otherwise orders; r 1160 which authorises withdrawals of claims prior to a certificate of readiness being filed; and r 1163 which provides that a party who withdraws is liable to pay the cost of the party to whom the discontinuance relates.

1. Cotrell also submits that Supabarn had no reasonable basis for making certain of the representations relied upon in support of its trade practices claims; that these were serious allegations; and that the trade practices claims had no prospect of success in view of a statutory limitation defence provided by the Trade Practices Act.

1. Supabarn submits that it abandoned the trade practices claims to progress the principal litigation and to enable the allocation of an early hearing date, and that these claims were not without merit. Further, in its consent orders relating to this claim, Supabarn agreed to pay the costs occasioned by withdrawal of the trade practices claims.

1. For these reasons Supabarn submits to an order that it pay the costs thrown away by the amendments made to the ASOC pertaining to the trade practices claims and submits that Cotrell should be ordered to pay the costs thrown away in relation to the application to strike out the lease claim paragraphs. Otherwise there should be no order as to costs.

FINDINGS

1. The power of the Court to award costs lies in the Court’s discretion; see r 1721 of the Rules which provides:

1721Costs—general rule

(1)The costs of a proceeding or of an application in a proceeding are in the discretion of the court.

(2)The costs of the proceeding include the costs of an application in the proceeding, unless the court otherwise orders.

1. The power of the Court to award costs is generally unfettered subject to the qualification that the power must be exercised judicially: see Oshlack v Richmond River Council (1998) 193 CLR 72 per McHugh J at [65]. Further, as was observed by McHugh J in Latoudis v Casey (1990) 170 CLR 534 at 567, the function of an award of costs is to compensate the successful party, and no element of punishment is involved.

1. Usually costs follow the event and a successful litigant is entitled to costs in the absence of special circumstances justifying some other order: see Ritter v Godfrey (1920) 2 KB 47 as considered in Hughes v Western Australian Cricket Association (Inc) and Others (1986) 8 ATPR 40-748 per Toohey J; see also Oshlack at [66]. For further authorities to the same effect: see Roadshow Films Pty Ltd v iiNet Limited (No. 4) (2010) 269 ALR 606 at [24] and [28].

1. In Cretazzo v Lombardi (1975) 13 SASR 4 Jacobs J at 16, when considering the provisions of s 40 of the Supreme Court Act 1935 (SA) expressed ‘…. a note of cautious disapproval’ of applications to apportion costs where one party has succeeded on various issues but not on others. Similar observations have been expressed more recently: see Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at [10].

1. However, where discrete issues are involved, it has also been recognised that apportionment of costs may be desirable: see Roadshow at [30]-[37].

1. In the present Application the issues are discrete, and the Court considers that apportionment of costs is appropriate.

Lease Claims Paragraphs of ASOC

1. Cotrell lodged its Application to strike out the several paragraphs of the ASOC on 31 July 2009. There is no evidence of any correspondence which preceded the lodging of the application.

1. Further and better particulars of the lease claim paragraphs were supplied in Supabarn’s solicitor’s letter dated 26 November 2009. Such letter provided comprehensive schedules in answer to Cotrell’s claim to strike out the lease claim paragraphs of the ASOC.

1. On 9 December 2009 Supabarn’s solicitors wrote to Cotrell’s solicitors, relevantly stating:

We refer to the above matter and our letter of 26 November 2009, which served on you the plaintiff’s response to your request for particulars in accordance with Registrar Jorgensen’s Orders on 4 August 2009.

We note that paragraph 2(a) of the defendant’s application dated 30 July 2009 (and adjourned to this Friday, 11 December 2009) sought to strike out paragraphs 10, 12, 14, 18, 21 , 23, 25, 27, 36 and 37 of the plaintiff’s statement of claim.

In light of the detailed answers provided, please indicate if the defendant still presses paragraph 2(a) of it application. Further, we confirm that Cottrell is willing to consent to paragraphs 2(c)(i) and 4 of the defendant’s application.

1. The Court notes that paragraphs 2(c)(i) and 4 of Cotrell’s application are not relevant to these proceedings.

1. It is not apparent that there was any further request by Cotrell for particulars, nor any comment in response. There is no evidence of any further communication between the parties concerning Cotrell’s Application. However, on 26 March 2010, namely four months after the supply of particulars, an Amended Application was filed by Cotrell, which inter alia, maintained its claim that the lease claim paragraphs and the trade practice claims be struck out.

1. As a result of Supabarn’s solicitor’s letter of 9 December 2009, Cotrell was clearly placed on notice that Supabarn was seeking confirmation that the particulars supplied were adequate. Such indication would have avoided any further expenditure in relation to the Application.

1. In the absence of further communication, Supabarn believed until the morning of the hearing that the Application was unresolved and that Cotrell was pressing for the relief claimed in its Application. Accordingly when the Application came before the Court on 21 September 2010, Supabarn expected that the Application was being maintained by Cotrell in respect of the lease claim paragraphs.

1. On 21 September 2010, Supabarn was informed for the first time that Cotrell considered that the further and better particulars supplied by Supabarn on 26 November 2009 satisfied its purposes, and that Cotrell would not press its Application to strike out the lease claim paragraphs.

1. It is puzzling that no action was taken by Cotrell to inform Supabarn of its true position prior to the hearing day, which would have avoided wasting time and money preparing for an issue which had, so far as Cotrell was concerned, already been resolved.

1. There is no explanation why Cotrell persisted in its claim for strike out; why it failed to respond to Supabarn’s specific inquiry made by its solicitor’s letter dated 9 December 2009; and why Cotrell lodged its Amended Application on 26 March 2010 to maintain its claim to strike out the lease claim paragraphs if the particulars supplied on 26 November 2009 were considered by it to be sufficient.

1. Taking these matters into consideration, the Court considers that it should exercise its discretion by ordering Cotrell to pay Supabarn’s costs thrown away as a result of the application to strike out the lease claims paragraphs of the ASOC.

Trade Practices Claim Paragraphs of ASOC

1. As to the striking out of the trade practices claims, Supabarn informed Cotrell at the hearing on 21 September 2010 that it had decided not to proceed with such claims. Why this decision was not communicated to Cotrell at an earlier date is also unexplained. Understandably Supabarn consents to an order that it pay the costs of Cottrell thrown away by virtue of this amendment. The Court will make such order.

1. The Court considers that it would not be appropriate to make any further order for costs relating to any subsidiary issues, which were not argued nor pressed.

   I certify that the preceding 41 numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Cowdroy.

   Associate:

   Date:   18 March 2011

Counsel for the plaintiff:  S Robb QC & D Hassall
Solicitor for the plaintiff:  Snedden Hall & Gallop
Counsel for the defendant:  P Greenwood SC & P Walker
Solicitor for the defendant:  Norton Rose
Date of hearing:  21 September 2010 
Date of judgment:   18 March 2011