Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd [No 1]

[1999] NSWSC 363

CITATION:	Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd & Ors [No 1] [1999] NSWSC 363
CURRENT JURISDICTION:	Admin Law Division
FILE NUMBER(S):	30048/98
HEARING DATE(S):	11/02/99, 12/02/99, 16/04/99
JUDGMENT DATE:	16 April 1999
PARTIES :	Taylor Farms (Australia) Pty Limited (Pl) A Calkos Pty Limited (1 Def) Union International (NSW) Pty Ltd (2 Def) Commercial Tribunal of NSW (3 Def)
JUDGMENT OF:	Kirby J

LOWER COURT JURISDICTION:	Commercial Tribunal of NSW
LOWER COURT FILE NUMBER(S) :	1089/97
LOWER COURT JUDICIAL OFFICER:	Deputy Chairman Hoeben

COUNSEL :	M S M White (Pl) Dr R J Desiatnik (Defs)
SOLICITORS:	S Barton Adams & Co (Pl) Astley Thompson & Valtas (1 Def) Blake Dawson Waldron (2 Def) Stephen H Montgomery (3 Def)
CATCHWORDS:	Jurisdiction of Commercial Tribunal re damages; Fair Trading Act 1987, and defence of promissory estoppel; Application of Retail Leases Act 1994 to assignment of lease; Costs
ACTS CITED:	Supreme Court Act Fair Trading Act 1987 Retail Leases Act 1994
CASES CITED:	Waters v P C Henderson (Aust) P/L (C of A, unreported, 6 July 1994) Hughes v West Australian Cricket Association Inc (1986) ATPR 40-748
DECISION:	See para 25

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

KIRBY J

Friday 16 April 1999

30048/98 - Taylor Farms (Australia) Pty Ltd v A Calkos Pty Ltd & Ors [No 1]

JUDGMENT (re costs)

1 HIS HONOUR: On 12 March 1999 I gave judgment in this matter. The order I made was in these terms:
1. I allow the appeal.
2. I vary order 1 made by the Commercial Tribunal so as to exclude para 4 and vacate orders 2 and 3.
3. I remit the matter to the Commercial Tribunal to redetermine the issues arising under para 4. Taylor Farms should have the opportunity of re-pleading para 4 so that the Tribunal can then determine whether it has jurisdiction to deal with the issue.
4. I reserve the question of costs. Taylor Farms has ultimately succeeded upon one aspect of the claim (although not an aspect which it identified, in terms, in the statement under Pt 51A r 5). I am inclined to think, subject to further argument, that Taylor Farms should have one third of its costs. However, I give leave to either party to relist the matter within fourteen days to argue the question of costs. If, within that period, neither party does so, my order will be as above.
2 The parties have not been able to reach agreement on the question of costs. The issue, therefore, has come back before me. Both parties have made written submissions. Both claim success. Each, therefore, claims costs. Each in the alternative says that it should be awarded some proportion of the costs which they have incurred.
3 I have been provided with a copy of the decision of the Court of Appeal in Waters v P C Henderson (Australia) Pty Limited (unreported, 6 July 1994) which deals with the issue of costs.
4 The principles are not in doubt. They can be stated as follows:
· First, the costs are in the discretion of the court - s 76(1)(a) of the Supreme Court Act.
· Second, the court has the power to determine by whom and to what extent costs should be paid - s 76(1)(b).
· Third, the costs should normally follow the event unless it appears to the court that some other order should be made (Pt 52A r 11).
· Four, it is not unusual in litigation for a party to make a number of claims, and to succeed on only some of those claims. Nonetheless, that success ordinarily entitles a party to its costs. The court does not seek to determine costs issue by issue.
· Five, where there is an issue which is dominant and separable, and the party who succeeded in the litigation fails on that issue, the court may recognise that failure in the order which it makes concerning costs.
· Six, that recognition may take a number of forms. In an appropriate case the court may award costs on that issue to the party who succeeded in respect of it. Alternatively, and perhaps more usually, the court may moderate the costs order to which the successful party is entitled.
5 Here the plaintiff Taylor Farms points to its ultimate success. The appeal was allowed. The matter should not be looked at issue by issue. The usual rule should apply.
6 The defendant Calkos says this: first, the judgment runs for thirty-four pages, it contains eighty-six paragraphs, apart from the order which is para 87. Of those thirty-four pages, all but the last record reasons for rejecting the various claims of the plaintiff. Only paras 85 and 86 deal with the issues in respect of which Taylor Farms succeeded.
7 Secondly, that in determining the significance which should be attached to paras 85 and 86, for the purposes of costs, a number of matters are relevant. The issue upon which the plaintiff ultimately succeeded was not identified in the grounds of appeal under Pt 51A r 5. As a consequence Calkos was not really in a position to meet that argument. Had it been given notice, Calkos would have pointed to, as it now does, the opportunity which the Tribunal afforded Taylor Farms to re-plead their defence after it had been struck out. Further, the problems of Taylor Farms, in respect of para 4, were very much of its own making. The pleading was deficient, as the Tribunal remarked, and as I remarked in the course of my judgment.
8 The parties have appeared before me today, and elaborated upon these submissions. Dealing first with the plaintiff's submission, the ordinary rule that costs follows the event really does depend upon one being able to discern an “event” in respect of which the plaintiff succeeded. Whilst success need not be complete in order to attract an order for costs, here the plaintiff did fail in a significant number of respects.
9 The document which was under attack in the Commercial Tribunal was headed Statement of Defence and Cross-Claim. It included claims which were as follows: first, a claim under the Fair Trading Act 1987 (paras 1 and 2). Secondly, a claim under the Retail Leases Act 1994 (para 3). Thirdly, a claim treated by the Tribunal as based upon promissory estoppel (para 4). Finally, para 5 which made a claim which has not been pressed before me.
10 The plaintiff failed in respect of paras 1, 2 and 3. It abandoned para 5. It succeeded, therefore, in respect of part only of para 4. I agreed with the Tribunal's view concerning promissory estoppel, but took the view that the claim as pleaded was somewhat broader than simply promissory estoppel.
11 Turning to the defendant's arguments, it is not accurate to identify only the last page of the judgment as recording success on the part of the plaintiff, in my view. The judgment sets out material which was relevant to the issue upon which the plaintiff ultimately succeeded. Paragraph 4 could be dealt with briefly because the earlier paragraphs deal with the limits to the jurisdiction of the Tribunal. I, therefore, do not find an analysis based upon paragraphs numbers, or pages, helpful in determining the issue of fairness in respect of costs. Nor do I accept that the defendant was not in a position to meet the plaintiff's arguments in respect of para 4, as it relates to aspects other than promissory estoppel. Though the defendant complained at the original hearing that the issue was a late arrival, and did not appear in the Pt 51A r 5 statement, it did not seek an adjournment. It dealt with the issue which was, after all, within a fairly narrow compass.
12 An affidavit of the solicitor for the defendant, Mr Stephen Valtas, sworn on 25 March 1999, has been tendered on the issue of costs. The affidavit draws attention to a hearing on 1 May 1998 before the Registrar of the Commercial Tribunal in which the plaintiff in these proceedings, Taylor Farms, was given leave to file an amended defence. I rather gather that they did not take up that leave. However, that matter does not change my view concerning the issues which relate to para 4.
13 On my understanding there were limitation issues, which the defendant had foreshadowed, relating to the various claims which the plaintiff sought to press before the Commercial Tribunal. However, amending a pleading which was filed some considerable time ago may be very different from filing a new pleading, its predecessor having been struck out. I came to the view that the Tribunal ought, in fairness, have sought clarification of para 4, in the absence of a concession that all that was intended was promissory estoppel. However, the defendant is right that the plaintiff Taylor Farms, through a pleading which was less than adequate, created many of the difficulties which were before the Commercial Tribunal, and before this court on the present appeal.
14 These being the arguments what should be done? I believe it not entirely fair to the plaintiff to simply look paragraph by paragraph of the statement, the cross-claim and defence and record the outcome. The hearing was, as I have said, an exploration of the jurisdiction of the Commercial Tribunal. Toohey J, when sitting in the Federal Court in Hughes v West Australian Cricket Association Inc (1986) ATPR 40-748, made a number of observations in the context of cost rules which are similar to those in the Supreme Court.
15 His Honour said this:
"In the present case it is true that if one took a head count of the cause of action pleaded in the statement of claim, the applicant failed on more than he succeeded, and by some margin. Nevertheless the applicant succeeded in his primary aim viz to challenge the operation of r 2 rr 38.1 of the rules of the Cricket Council insofar as the rule operated to preclude him from playing district cricket by reason of his participation in the South African tours."
16 Ultimately his Honour awarded the applicant 75 per cent of his costs.
17 Here the plaintiff succeeded in having the order of the Tribunal, so far as it related to para 4, set aside, and the appeal allowed. The adverse findings to the plaintiff were rather more substantial than was the case before Toohey J. At the time I made the tentative suggestion in my order of 12 March 1999 I wondered to myself whether I was being too harsh on the plaintiff in suggesting they receive only one-third of their costs.
18 Before I resolve the issue as to what is fair in all the circumstances I should mention one other aspect. This morning in argument it was put, on behalf of Calkos, that the order I made, order 2, vacating the order of the Tribunal, required revision. The Tribunal having struck out the pleading, ordered Taylor Farms to pay the costs of the motion. It was suggested that the appropriate order by this court should be that the Tribunal's costs order, so far as it related to para 4 only, should be vacated. It should otherwise be left undisturbed.
19 I gave thought to this matter before I framed order 2. I believe the order I made was appropriate. Had the Tribunal not struck out para 4, it may have made an entirely different costs order. It may have ordered each party to pay its own costs. It is really not possible, at this time, and on the information I have, to say whether it is practicable to make an order in the form which has now been suggested.
20 It therefore seems to me better that the appeal, having been allowed, the costs order below should be vacated. The success of Calkos before me on certain issues, repeating the success below, should be reflected in the costs awarded in these proceedings to Taylor Farms.
21 When choosing the figure of one-third as the appropriate proportion, I was endeavouring to balance these various matters. Having heard argument, and reflected upon the written submissions, and the issues generally, I still believe that the order I set out in my original judgment is the appropriate order. Given that the plaintiff succeeded on the appeal, an award of only one-third of the costs is unusual. However, I believe that proportion, in the context of order 2 which I made (vacating the costs order below), is fair. I, therefore, order that the defendant should pay one-third of the costs of Taylor Farms.
22 Dr Desiatnik, in the course of argument, drew attention to the order I made, order 3. He indicated that the problems that had arisen in the Commercial Tribunal can be traced to the fact that the plaintiff, Taylor Farms, had inappropriately failed to differentiate between, on the one hand, the matters which were put by way of cross-claim, and the matters which were put by way of defence. He asserted that the matters which are dealt with in para 4 were purely matters of defence, and that ought to be made plain by me in the orders which I frame.
23 There was some debate between us as to whether one might characterise the residual matters in para 4, if I can so term them, that is the matters other than promissory estoppel, as plainly matters of defence.
24 I was inclined to agree with him that they may be so regarded. However, ultimately I believe that it is a matter for the Tribunal, and a matter which may depend upon the way in which the claim is eventually framed once the facts are set out. I, therefore, believe the Tribunal is in a much better position to deal with that issue than I am, and I therefore make no comment other than to reaffirm the terms of my original order.

25 ORDERS:

1. I allow the appeal.
2. I vary order 1 made by the Commercial Tribunal, so as to exclude para 4, and vacate orders 2 and 3.
3. I remit the matter to the Commercial Tribunal to redetermine the issues arising under para 4. Taylor Farms should have the opportunity of re-pleading para 4 so that the Tribunal can then determine whether it has jurisdiction to deal with the issue.
4. The plaintiff should be entitled to one-third only of its costs on this appeal.
**********

Last Modified: 04/21/1999