Tranchita v Danehill Nominees Pty Ltd [No 2]
[2007] WASC 248
•3 SEPTEMBER 2007
TRANCHITA -v- DANEHILL NOMINEES PTY LTD [No 2] [2007] WASC 248
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 248 | |
| 25/10/2007 | |||
| Case No: | CIV:1124/2004 | 3 SEPTEMBER 2007 | |
| Coram: | MARTIN CJ | 3/09/07 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff in the original action to pay seventh defendant's costs of the action including all costs declared to be in the cause | ||
| B | |||
| PDF Version |
| Parties: | VINCENZO TRANCHITA DANEHILL NOMINEES PTY LTD (ACN 008 867 623) VINCENZO FAZIO GIUSEPPINA FAZIO VINCENT CALALESINA MARIA CALALESINA SEBASTIANO FAZIO MARIA FAZIO BIANCA ROSIE NASO GIUSEPPE MONASTRA NUNZIATA MONASTRA ERIGO FAZIO REGISTRAR OF TITLES SEBASTIANO GIUSEPPE FAZIO MARIA PALMA FAZIO BASILIO TRANCHITA LAURINA TRANCHITA CALOGERO TRANCHITA CONCETTA SILVANA TRANCHITA GIACOMINA SEBASTIANA TRANCHITA ROSARIO TRANCHITA MELINA TRANCHITA MARIA PALMA CALALESINA ZELJKO GREGO TONY GREGO SEBASTIANO CATALANO ROSARIA CATALANO |
Catchwords: | Costs Where action discontinued Indemnity costs |
Legislation: | Nil |
Case References: | Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 283 Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 Tranchita v Danehill Nominees Pty Ltd [2004] WASC 154 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
DANEHILL NOMINEES PTY LTD (ACN 008 867 623)
First Defendant
VINCENZO FAZIO
GIUSEPPINA FAZIO
Second Defendants
VINCENT CALALESINA
MARIA CALALESINA
Third Defendants
SEBASTIANO FAZIO
MARIA FAZIO
Fourth Defendants
BIANCA ROSIE NASO
Fifth Defendant
- GIUSEPPE MONASTRA
NUNZIATA MONASTRA
Sixth Defendants
ERIGO FAZIO
Seventh Defendant
REGISTRAR OF TITLES
Eighth Defendant
SEBASTIANO CATALANO
First Third Party
ROSARIA CATALANO
Second Third Party
(BY ORIGINAL ACTION)
SEBASTIANO GIUSEPPE FAZIO
MARIA PALMA FAZIO
First Plaintiffs
GIUSEPPE MONASTRA
First-named Second Plaintiff
NUNZIATA MONASTRA
Second-named Second Plaintiff
AND
DANEHILL NOMINEES PTY LTD (ACN 008 867 623)
First Defendant
BASILIO TRANCHITA
LAURINA TRANCHITA
Second Defendants
CALOGERO TRANCHITA
CONCETTA SILVANA TRANCHITA
Third Defendants
- GIACOMINA SEBASTIANA TRANCHITA
Fourth Defendant
ROSARIO TRANCHITA
Fifth Defendant
VINCENZO TRANCHITA
Sixth Defendant
MELINA TRANCHITA
Seventh Defendant
BIANCA ROSIE NASO
Eighth Defendant
VINCENT CALALESINA
MARIA PALMA CALALESINA
Ninth Defendants
ERIGO FAZIO
Tenth Defendant
ZELJKO GREGO
Eleventh Defendant
TONY GREGO
Twelfth Defendant
VINCENZO FAZIO
GIUSEPPINA FAZIO
Thirteenth Defendants
(BY COUNTERCLAIM)
Catchwords:
Costs - Where action discontinued - Indemnity costs
(Page 4)
Legislation:
Nil
Result:
Plaintiff in the original action to pay seventh defendant's costs of the action including all costs declared to be in the cause
Category: B
Representation:
Original Action
Counsel:
Plaintiff : Mr C V Eastwood
First Defendant : No appearance
Second Defendants : No appearance
Third Defendants : No appearance
Fourth Defendants : No appearance
Fifth Defendant : No appearance
Sixth Defendants : No appearance
Seventh Defendant : Mr D H Solomon
Eighth Defendant : No appearance
Solicitors:
Plaintiff : Cameron Eastwood
First Defendant : Jackson McDonald
Second Defendants : Jackson McDonald
Third Defendants : CLP Lawyers
Fourth Defendants : Williams Handcock
Fifth Defendant : WA Legal Pty Ltd
Sixth Defendants : Williams Handcock
Seventh Defendant : Solomon Brothers
Eighth Defendant : No appearance
(Page 5)
Counterclaim
Counsel:
First Plaintiffs : No appearance
First-named Second Plaintiff : No appearance
Second-named Second Plaintiff : No appearance
First Defendant : No appearance
Second Defendants : No appearance
Third Defendants : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : Mr C V Eastwood
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Ninth Defendants : No appearance
Tenth Defendant : Mr D H Solomon
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendants : No appearance
First Third Party : No appearance
Second Third Party : No appearance
Solicitors:
First Plaintiffs : Williams Handcock
First-named Second Plaintiff : Cameron Eastwood
Second-named Second Plaintiff : Arthur Metaxas & Co
First Defendant : Jackson McDonald
Second Defendants : No appearance
Third Defendants : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : Cameron Eastwood
Seventh Defendant : No appearance
Eighth Defendant : WA Legal Pty Ltd
Ninth Defendants : CLP Lawyers
Tenth Defendant : Solomon Brothers
Eleventh Defendant : No appearance
Twelfth Defendant : Mony De Kerloy
Thirteenth Defendants : Jackson McDonald
First Third Party : Jackson McDonald
Second Third Party : Jackson McDonald
Case(s) referred to in judgment(s):
Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 283
Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622
Tranchita v Danehill Nominees Pty Ltd [2004] WASC 154
(Page 7)
- MARTIN CJ:
(This judgment was delivered extemporaneously on 3 September 2007 and has been edited from the transcript)
1 The seventh defendant in these proceedings, Mr Erigo Fazio (Mr Fazio) moves for an order that the plaintiff, Mr Vincenzo Tranchita (Mr Tranchita), pay his costs of the proceedings and in particular seeks an order that those costs be taxed on an indemnity basis. The context in which the application is made is the claim by Mr Tranchita against various parties including Mr Fazio.
2 The particular claim against Mr Fazio was for specific performance of an agreement which was characterised in the proceedings as the August 2000 agreement. Mr Tranchita's claim was that by reason of certain events that had occurred, he was entitled to specific performance of that agreement and in particular to be offered the land held by Mr Fazio for purchase. The proceedings came on for trial before me and after some days were resolved by agreement of all the parties concerned.
3 Pursuant to their agreement, I made orders by consent on 24 April 2007. Relevantly for present purposes, those orders were: first a declaration that the agreement described in the joint statement of issues as the August 2000 agreement is at an end; second that Mr Tranchita have leave to discontinue the original action against all defendants to the original action; and third the application for costs made by Mr Fazio be adjourned to a date to be fixed.
4 In the context of the claim which I have enunciated, a declaration to the effect that the agreement described in the joint statement of issues as the August 2000 agreement is at an end, does not involve the determination of that claim. That is because the declaration does not deal with the validity of the agreement at its inception or the events that Mr Tranchita said gave rise to his entitlement to a pre-emptive right to purchase the land held by Mr Fazio. It follows that this is one of those situations in which a case has been resolved by agreement without the court determining the matter on the merits.
5 The authorities establish that ordinarily in such a circumstance the proper exercise of the discretion will be to make no order as to costs, because of the court's inability to assess the merits of a claim that has not been determined (Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622, 624 per McHugh J; Gribbles Pathology Pty Ltd v Health
(Page 8)
- Insurance Commission (1997) 80 FCR 283, 287 per Finkelstein J). However, there are some exceptions to that general rule.
6 One of them was enunciated in the decision in Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 where Davies AJA (with whom Mason P and Meagher JA concurred) observed that, in the circumstances I have described, the judge may make an award if he or she 'is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a marked difference in the reasonableness of the actions taken by the parties' [5].
7 In this case it seems to me to be accurate to describe Mr Fazio as having had a substantial victory and Mr Tranchita as having had a substantial loss. Insofar as Mr Tranchita sought specific performance of the August 2000 agreement against Mr Fazio, that claim was discontinued with leave.
8 The prospect of resuscitating that claim in the face of a declaration to the effect that the August 2000 agreement is now at an end would be remote. I also bring to account my view that the claim for specific performance was always beset with considerable difficulty, for reasons to which I will now refer.
9 The August 2000 agreement is a complicated document not produced by lawyers. Its construction and interpretation was one of the difficult issues which would have been resolved had the trial proceeded. However, on the face of it, any pre-emptive right created by that agreement would first enure to the other members of the group of which Mr Fazio was a member, namely the group described as the Video Group and only in default of the exercise of the pre-emptive right by one or other of the members of that group would a pre-emptive right arise in the other parties to the August 2000 agreement.
10 In such a circumstance the parties entitled to the benefit of the pre-emptive right would be all the members of the Tranchita Group and the Naso Group. Accordingly, as Master Newnes (as he then was) observed in Tranchita v Danehill Nominees Pty Ltd [2004] WASC 154, there would be considerable difficulty in Mr Tranchita making out the case that he alone was entitled to a pre-emptive right.
11 It is also the fact that the others members of the Tranchita Group were not joined as parties to these proceedings. For these reasons, in my view, Mr Tranchita's claim to a pre-emptive right was always beset with difficulties both factual and procedural. It was discontinued with leave.
(Page 9)
- This is one of those cases in which there has been a substantial victory and a substantial loss and it is proper to order that costs should follow that event.
12 I am therefore minded to make an order that Mr Tranchita pay Mr Fazio's costs of the proceedings.
13 The next question which arises is whether that order should extend to embrace the award of indemnity costs, that is to say all costs not unreasonable in amount and not unreasonably incurred.
14 The criterion for the award of indemnity costs is often cited by reference to the decision of Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. In general, the award of such costs is reserved to cases in which it can be concluded that there is some conduct by the party against whom the order is made which justifies some form of sanction because of its unreasonableness or impropriety.
15 The basis upon which that proposition is advanced in this case is the proposition that the claim for specific performance was so hopeless and so unreasonable that had Mr Tranchita been properly advised he would have known that he had no chance of success. As the decision of Woodward J makes clear, in such circumstances it might then be inferred that the action has 'been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law' (401). That course of conduct would call for sanction in the form of an indemnity costs order.
16 Applying that criterion to the present case, the question is whether I should conclude that the claim was so hopeless from its inception that Mr Tranchita properly advised should have known that he had no chance of success. This is, I think, a borderline case, but in the end I am not satisfied that the case was so hopeless as to lead to the conclusion that Mr Tranchita was motivated by some ulterior motive or by a wilful disregard of the known facts or the law.
17 There was, I think, an arguable prospect that some pre-emptive right might have been established by Mr Tranchita, although there may have been procedural difficulties to which I have referred as a result of the non joinder of the other parties. So although the case is borderline, in the end I am not satisfied that it is a case that calls for sanction by the award of indemnity costs against Mr Tranchita.
(Page 10)
18 The other orders sought included orders in relation to costs declared to be in the cause. It is appropriate that all costs ordered to be in the cause insofar as they relate to costs incurred by Mr Fazio also be paid by Mr Tranchita. There was also an application made for a certificate for senior counsel, but counsel for Mr Fazio now agrees that as senior counsel was not present at trial there would be no utility in making such an order.
19 Orders were also sought to lift the scale in relation to the provision of discovery and inspection of documents but there is no evidence before me which would support such an order. What I propose to do in relation to that matter is to reserve liberty to apply to Mr Fazio for any further specific orders in relation to the working out of costs should he be minded to do so.
20 So for those reasons the orders I will make are that Mr Tranchita pay Mr Fazio's costs of the action to be taxed including all costs declared to be in the cause. I will reserve liberty to Mr Fazio to apply for any more specific orders he might seek for the purposes of taxation.
3