Transms Pty Ltd v Icon Plastics Pty Ltd
[2024] VCC 1647
•23 October 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised (Not) Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-21-03072
| TRANSMS PTY LTD (ACN 088 785 200) | Plaintiff |
| V | |
| ICON PLASTICS PTY LTD (ACN 071 392 366) | Defendant |
---
JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers (written submissions filed 21 October 2024) | |
DATE OF RULING: | 23 October 2024 | |
CASE MAY BE CITED AS: | Transms Pty Ltd v Icon Plastics Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1647 | |
RULING
---
Subject:COSTS
Catchwords: Whether costs should be the parties’ costs in the proceeding – Whether defendant should be entitled to costs thrown away – Whether should be taxed immediately or at the conclusion of the proceeding
Legislation Cited: County Court Civil Procedure Rules2018 rr 24.06, 63A.17 and 63A.20.1; Civil Procedure Act2010 s 7, 24, 25, s 28(2); Supreme Court Rules 2015 r 63A.17
Cases Cited:Edelman v Badower [2010] VSC 427; Burke v Ash Sounds Pty Ltd (No 2) [2019] VSC 290; Cassimatis v Australian Securities and Investments Commission (ASIC) (2016) 334 ALR 350; Ziliotto v Hakim (No 2) [2012] NSWSC 1079; Dale v Clayton Utz (No 3) [2013] VSC 593; Stanley v Layne Christensen Company [2006] WASCA 50; National Builders Group IP Holdings Pty Ltd v ACN 092 675 164 Pty Ltd (In Liq) & Anor [2015] VSCA 260; Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; Sobey v Commissioner of Taxation [2008] FCA 1621; Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297; Eaton v ISS Catering Services [2013] VSCA 361
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | D R Merriman | NOH Group |
| For the Defendant | H A Aprile | Macpherson Kelly Pty Ltd |
HER HONOUR:
Introduction
1By summons dated 21 August 2024, the plaintiff (“TMS”) sought orders of the Court pursuant to its inherent jurisdiction and/or the Civil Procedure Act 2010 (Vic), to reinstate the proceeding and list the matter for an administrative mention, for leave to file and serve an amended statement of claim (“ASOC”) and for costs of the amendment to be the parties’ costs in the proceeding. The application was supported by an affidavit of Mr Omar El-Hissi, TMS’ solicitor, sworn on 21 August 2024 and written submissions dated 28 August 2024.
2The defendant (“Icon”) initially opposed the application and relied on the affidavit of Ms Stefanie Nicole Orlando, Icon’s solicitor, sworn on 27 August 2024 and written submissions dated 27 August 2024.
3On 29 August 2024, TMS was granted leave to amend its summons and file and serve any further affidavit material and written outline of submissions in respect of the amended hearing. TMS was ordered to pay Icon’s costs thrown away by reason of the amendment to the summons on a standard basis to be taxed in default of agreement, within 30 days of the date of the orders.
4The amended summons included references to rr 24.06(a) and/or 24.06(b) of the County Court Civil Procedure Rules 2018.
5On 2 October 2024, the application was adjourned to 18 October 2024 to enable the parties additional time to confer on the disputed issues, with a view to resolving or narrowing the issues for determination. The hearing was further adjourned to 21 October 2024 to enable the parties more time to resolve the issues in dispute.
6By email dated 14 October 2024, Mr El-Hissi sent proposed orders to the Court, noting that Icon had not yet confirmed its position in relation to same. The proposed minute of order included a costs order that “[t]he plaintiff pay the defendant’s costs of the reinstatement, to be taxed in default of agreement”.
7By email dated 16 October 2024, the Court proposed the following orders to be made on the papers unless objections were received:
“1. Pursuant to Rule 24.06 of the Rules, the proceeding is reinstated and listed for an Administrative Mention on a date to be fixed (not before 28 October 2024).
2. The plaintiff has leave to file and serve an Amended Statement of Claim substantially in the form annexed to the Plaintiff’s Amended Summons filed 28 August 2024 by 4:00 pm on 25 October 2024.
3. The parties’ costs of and incidental to the Amended Statement of Claim be the parties’ costs in the proceeding.
4. The plaintiff pay the defendant’s costs of the reinstatement, to be taxed in default of agreement.
5. Liberty to apply.”
8By email dated 17 October 2024, Icon’s solicitor proposed an amended form of order in relation to costs. It sought orders that:
“1. The plaintiff pay the defendant’s costs thrown away by reason of the amended statement of claim on a standard basis within 30 days of agreement or 30 days from taxation.
2. The plaintiff pay the defendant’s costs of the reinstatement on a standard basis within 30 days of agreement or 30 days from taxation.”
9On 18 October 2024, the Court made the following orders:
“1. The hearing listed for 21 October 2024 is vacated.
2. Pursuant to Rule 24.06 of the County Court Civil Procedure Rules 2018, the proceeding is reinstated and listed for an Administrative Mention on 1 November 2024 by which time the parties are to advise the Court in writing (by email to the Commercial Registry [email protected]) whether they are ready to proceed and if so whether any orders are sought by consent on the papers for the listing of the proceeding for trial.
3. Failure to comply with the Administrative Mention by the date specified may result in the proceeding being struck out without further notice.
4. The plaintiff has leave to file and serve an amended statement of claim substantially in the form annexed to the plaintiff’s amended summons filed 28 August 2024 by 4:00 pm on 25 October 2024.
5. By 4.00pm on 21 October 2024, the parties must file and exchange short written submissions on the question of costs thrown away by reason of the amendment and the costs of the reinstatement (no more than 5 A4 pages), to the associates of her Honour Judge Burchell via email ([email protected]).
6. The Court will thereafter determine the question of costs on the papers.
7. Reserve liberty to the parties to apply by email to the Commercial Registry ([email protected]) for further directions upon giving reasonable notice to all other parties.”
Background Facts
10It is common ground between the parties that this matter has a long procedural history in the Court. The Writ was filed on 26 July 2021 and a notice of appearance was filed on 5 August 2021. An administrative mention was then listed on 21 September 2021. A defence and counterclaim was filed on 13 September 2021.
11Consent orders were made on 5 October 2021 following conferral and agreement between the parties' legal representatives. Those orders were in the then usual form and included an order for private mediation to be held by 29 April 2022.
12A reply and defence to counterclaim was filed on 8 November 2021. A reply to the defence to counterclaim was filed 7 December 2021. A request for further and better particulars was filed on 17 December 2021 by Icon. An affidavit of documents by Icon was filed on 28 April 2022. The setting down for trial fee paid on behalf of TMS on 16 May 2022. An affidavit of documents filed on behalf of TMS on 23 May 2022.
13On 2 June 2022, orders were made by consent, amongst others, vacating the trial listed on 13 July 2022, and extending the “mediate by” date to 15 July 2022. The orders also refixed the trial for 1 March 2023. On 10 August 2022, orders were made by consent, amongst others, extending the “mediate by” date to 18 August 2022.
14A mediation took place on 17 August 2022. The proceeding did not settle at the mediation however, the parties agreed to adjourn the mediation, to enable the preparation of further accounting reports and account reconciliations (the parties traded together for an extensive period of time and a reconciliation of all invoices issued and payments made was a significant task). Both parties have substantial businesses and required input and cross-referencing with their internal accountants. The parties agreed that the relevant date for the purposes of the reconciliation process would be 5 February 2018 until the parties ceased trading some years later.
15Agreement was reached at the 17 August 2022 mediation, to adjourn the mediation to a mediation mention on 3 October 2022. Directions were given at the time by the mediator in respect of exchanges of further accounting reports and reconciliations and position papers on quantum issues only.
16The proceeding was listed for a subsequent administrative mention on 24 August 2022. That mention did not take place.
17On 6 December 2022, the Court requested an update from the parties as it had not received a response to the administrative mention listed on 24 August 2022.
18On 14 December 2022, Icon’s solicitor emailed the Court informing it that the mediation had been adjourned to 15 December 2022.
19The adjourned mediation was held on 17 December 2022 with Mr Carey Nichol. Further issues were raised in relation to the updated accounting reports prepared by the parties. At the time, it was agreed to further adjourn the mediation to a further mention once the parties' internal accountants had a chance to confer in person about the account reconciliations.
20On 22 December 2022, Icon’s solicitor informed the Court that the mediation was ongoing and suggested that the timetable be vacated to enable the parties to continue settlement discussions.
21On 31 January 2023, the Court made orders including vacating the trial date of 1 March 2023, extending the time for the completion of mediation to 21 February 2023 and listing the matter for a subsequent administrative mention on 28 February 2023.
22The parties met in person at Icon’s premises at the end of February 2023 for the purpose of the internal accountants' conferral with the context of the continuing mediation in this proceeding. The meeting did not resolve the quantum issues between the parties.
23On 1 March 2023, Icon’s solicitor wrote to TMS’ solicitor requesting confirmation of the rate card applied at the relevant time to allow the parties to undertake an accounting task. There was no response from TMS between 1 March 2023 and 2 October 2023.
24On 5 September 2023, the Court listed the matter for a warning administrative mention on 3 October 2023.
25On 2 October 2023, Icon’s solicitor received an email from TMS’ solicitor requesting an adjournment of 60 days to allow the parties to continue their settlement discussions.
26Without prejudice discussions continued between the parties thereafter but did not resolve the matter.
27The proceeding was listed for a further administrative mention on 4 December 2023.
28On 15 January 2024, having received no correspondence from the parties in relation to the 4 December 2024 administrative mention, the proceeding was listed for another warning administrative mention on 12 February 2024.
29On 12 February 2024, Icon’s solicitor received proposed minutes of consent from TMS’ solicitor with a revised timeline for the parties to file and serve amended material. On the same date, TMS’ solicitor wrote to the Court to confirm that minutes of consent orders would be provided. No further correspondence was received by the Court from the parties.
30On 14 February 2024, Icon’s solicitor provided an amended minute of proposed consent orders, which included a self-executing order if Icon did not file and serve its ASOC by 29 February 2024 as the matter had dragged on unnecessarily.
31On 2 March 2024, TMS’ solicitor emailed Icon’s solicitors stating that the amended pleading was with the client for instruction and could be expected to be finalised by 11 March 2024 and the delay in providing the ASOC was due to the death of the client’s wife.
32On 4 March 2024, Icon’s solicitor asked TMS’ solicitor for an update and confirmation the proposed minutes of consent had been filed with the Court.
33On 23 May 2024, TMS’ solicitor stated that he was aiming to discuss the finalised copy of the proposed ASOC with his client the following week and he would then be in contact about the timetabling for the matter. There was no confirmation in relation to the proposed minutes of consent orders.
34The proposed minutes of consent orders were not provided to the Court.
35On 7 August 2024, the Court dismissed the proceeding for the parties’ failure to respond to the warning administrative mention.
Issues
36There are three issues for determination being:
(a) Whether TMS ought to pay Icon’s costs thrown away by reason of the amendments of the statement of claim, or whether the costs should be in the proceeding;
(b) If TMS ought to pay Icon’s costs thrown away by reason of the ASOC on a standard basis, whether they ought to be paid within 30 days of agreement or 30 days from taxation; and
(c) Whether TMS ought to pay Icon’s costs of the reinstatement on a standard basis, within 30 days of agreement or 30 days from taxation.
Legal context
37Rule 63A.17 of the County Court Civil Procedure Rules2018 (“the Rules”) provides that:
“Where a pleading is amended (whether with or without leave) the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties' costs in the proceeding, unless the Court otherwise orders”.
38In Edelman v Badower,[1] Associate Justice Mukhtar considered the meaning of the phrase “costs of and occasioned by the amendment” in r 63.17 of the Supreme Court Rules 2015 (the equivalent to r 63A.17 of the Rules). His Honour held that this phrase does not include costs incurred prior to the date of an amendment. Rather, r 63.17 of the Supreme Court Rules 2015 is concerned with prospective or consequential costs. The conclusions of Mukhtar AsJ were more recently affirmed by McDonald J in Burke v Ash Sounds Pty Ltd (No 2)[2] and Edelman J in Cassimatis v Australian Securities and Investments Commission (ASIC)[3].
[1] [2010] VSC 427 at [29]–[30] (“Edelman”).
[2] [2019] VSC 290 at [11] (“Burke v Ash”).
[3] (2016) 334 ALR 350 at [56]–[57] (“Cassimatis”).
39As approved by Edelman J in Cassimatis,[4] it is well established that “costs thrown away” are those costs that “have been reasonably incurred that relate to work done and wasted”.[5]
[4] Ibid.
[5] Sobey v Commissioner of Taxation [2008] FCA 1621 at [21] (per Kenny J).
40The question of whether costs are thrown away involves a causal enquiry. It is necessary to ask whether costs that were incurred would not have been incurred but for the relevant event, here: the amendment of the statement of claim, and the consequential need to plead a defence to the amended pleading.
41In Ziliotto v Dr Hakim(No 2),[6] Davies J expressed it in the following way:
“The enquiry must be directed to what costs were expended which would not have been expended had it not been for the adjournment and what prompted the need for the adjournment. I agree with Mukhtar AsJ’s analysis that “costs thrown away” is looking to past costs — compensation for work already done and wasted because of the adjournment, or amendment or error. It does not refer to costs which have not yet been incurred even though they would not have been incurred but for the adjournment”. [7]
[6] [2012] NSWSC 1079 at [47] (“Ziliotto (No 2)”).
[7] The judgment of Davies J was overturned in part on appeal in Ziliotto v Hakim [2013] NSWCA 359, however, not on this point.
42Further, costs are ordinarily taxed at the conclusion of proceedings, as set out in r 63A.20.1 of the Rules:
“If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately”.
43As reasoned by Hollingworth J in Dale v Clayton Utz (No 3),[8] given the fact that interlocutory applications usually do not conclude a proceeding, the Court is not generally in a position to determine where costs should fall between the parties. However, the Court does maintain its discretion in respect of taxation of costs.
[8] [2013] VSC 593 at [13] (“Dale (No 3)”).
44In the case of Dale (No 3), Hollingworth J considers the reasons why r 63.20.1 have been introduced[9]. These include to avoid interlocutory applications being used as a means to exhaust the funds of an opposing party and to avoid unfairness, for example, where the successful party is unable to set off their judgment against an earlier liability to pay costs.
[9]Dale (No 3) at [58].
45The discretion may be exercised in favour of a party if they are able to establish that the demands of justice require the departure from the general rule.[10] This would include circumstances where, because of the conduct of the unsuccessful party, there is a likely delay before the completion of the proceeding and the interlocutory application involves a separate or discrete issue.
[10] Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at [312].
Costs thrown away by reason of the amendments to the statement of claim
46The central issue in dispute between the parties is the correct methodology to be applied to freight charges. The parties are in general agreement as to the existence of the agreement for TMS to supply freight, transport and logistical services to Icon, its terms and the services provided by TMS to Icon over the years.
47TMS submits that the default position envisaged by r 63A.17 of the Rules should be followed in respect of its amendments to its statement of claim, and that there is no reason to otherwise order.
48TMS contends that the parties are agreed that the dispute in this matter relates to the calculation of freight charges that were to be charged by TMS to Icon. The parties have attended mediations and engaged in continued settlement discussions in 2023 and 2024, including through meetings of accounting staff of the parties.
49TMS argues that as a result of these negotiations, it has sought to simplify its statement of claim by:
(a) the removal of a reference to a second agreement (which was in any case largely admitted by Icon, save for, in the main part, some allegations that that agreement contained unfair terms);
(b) the clarification of the basis upon which freight charges were calculated, and amendment of the amount said to be owed by Icon to TMS; and
(c) the clarification of the quantum in dispute, including striking out of a claim by TMS to certain interest amounts.
50TMS claims that notwithstanding the delays in the progress of the matter and the unfortunate circumstances leading to them, the parties have been able to narrow the issues in dispute, as they are required to do. TMS asserts that it should not be punished for engaging in that process and amending its claim accordingly.
51TMS argues that the amendments to its statement of claim do not substantially alter the substance of the claim. This is confirmed by the parties’ affidavit material in the reinstatement application as to their agreement regarding the narrow matters in dispute.
52TMS submits that Icon has given no indication that it objects to the proposed amendments since the proposed draft ASOC was circulated with TMS’ summons dated 21 August 2024. TMS notes that Icon did not seek any costs with respect to the amendment of the statement of claim when proposed orders permitting such an amendment were circulated in February 2024. TMS contends that there is no evidence as to why the amendments now permitted by the Court have caused prejudice warranting an award of costs to be suffered, or further costs to be incurred, since that time.
53Icon submits that the majority of steps have been taken place, including mediation, however, it is only now, more than three years since the proceeding was commenced, and almost a year since the last without prejudice discussion took place between the parties, that TMS seeks to amend its claim.
54Icon acknowledges that TMS has reduced the quantum of its claim which is welcome. However, it argues that the claim ought to have been pleaded correctly in the first place, or it ought to have been amended promptly – not three years after commencing the proceeding and almost a year after without prejudice discussions.
55Icon contends that the chronology indicates that TMS did not seek to amend its claim promptly. Icon relies on TMS’ solicitor’s evidence that he had been conferring with his client and their accountant about the draft ASOC for over a year before TMS actually sought to amend the claim.
56Icon claims it has incurred wasted costs on drafting the defence to respond to the Second Agreement (as that term is defined in the ASOC) and in conducting its defence on the basis that the claim it was required to meet involved two agreements.
57Icon claims that it will now need to expend further costs on considering any amendments which are required to its defence by reason of the ASOC, and then drafting that amended defence.
58Icon submits that it is clear that TMS has not conducted the proceeding in accordance with its obligations under the Civil Procedure Act 2010 (Vic) (“the CPA”). That is, to prosecute the claim as expeditiously as possible.
59Icon acknowledges that those persons who have carriage of the matter on behalf of TMS have suffered personal loss and Icon does not wish in any way to diminish the difficulty that this may have caused. However, this does not explain why it has taken TMS the best part of a year to finalise and file the amended statement of claim.
60McDonald J in Burke v Ash[11] and Mukhtar AsJ in Edelman, observe that the costs rule contained in the equivalent r 63A.17 does not confer power on the Court to award “costs thrown away” by reason of an amendment of a parties’ pleading. Instead, costs “of and occasioned by the amendment” are prospective or forward looking. In turn, the general course that would be adopted in such an application, is that the costs application should be determined in accordance with the ordinary rule in r 63A.17.
[11] [2019] VSC 290 at [12].
61In agreeance with Davies J in Ziliotto (No 2)[12] and Mukhtar AsJ in Edelman[13], “costs thrown away” considers looking to past costs and compensation for work already done and wasted because of TMS’ amendment to its statement of claim. This would exclude costs that have not yet been incurred even though they would not have been incurred but for TMS being given leave of the Court to amend its statement of claim.
[12] Ziliotto (No 2) at [47].
[13] [2010] VSC 427 at [29] – [30].
62Wheeler JA in Stanley v Layne Christensen Company,[14] observed that, where amendments are not substantial or where they are simply to further clarify an otherwise broadly satisfactory pleading, it may be appropriate simply to order costs in the proceeding.
[14] [2006] WASCA 50 at [55].
63In my view the ASOC does contain a substantial amendment by reason of the abandonment of the second agreement and an inclusion of an allegation of a variation of the agreement. It is not to the point that the other amendments are not substantial or are simply to further clarify or decrease the quantum sought against Icon. The amendments are significant and provide considerable additional detail by way of particulars to the alleged quantum and a reference to a spreadsheet. As a result, Icon will have to file an amended defence.
64Further, the Court notes that the overarching purpose in civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[15] Further, the CPA requires the use of reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate, noting that with the amendments to the quantum, this case became a lower value claim in the sum of $109,457.72.[16] The CPA imposes “overarching obligations” on parties to proceedings and their legal practitioners. Relevant obligations include to use reasonable endeavours in connection with the civil proceeding to act promptly and minimise delay.[17]
[15] CPA s7.
[16] Ibid s24.
[17] Ibid s25.
65Section 28(2) of the CPA provides that a Court may take into account any contravention of the overarching obligations when exercising its discretion as to costs.
66There is no fundamental common law right to a fair trial on the basis that the right to a hearing in civil proceeding has never been unqualified as it is governed by rules of procedure. It was Parliament’s intention to impose a strict discipline on the conduct of civil proceedings through the enactment of the CPA itself and when enacting the CPA, the Attorney General at the time, Rob Hulls, noted that the Bill “expressly gives the Court powers to strongly sanction failure to comply with, or misuse of, the discovery process”.[18]
[18] National Builders Group IP Holdings Pty Ltd v ACN 092 675 164 Pty Ltd (In Liq) & Anor [2015] VSCA 260 at [40]-[43].
67I agree that TMS’ conduct does enliven contraventions to obligations under the CPA to minimise delay and, therefore, must be take into consideration when determining costs. Icon requested clarification of TMS’ solicitor on 1 March 2023, in seeking confirmation of the rate card applied at the relevant time to allow the parties to undertake an accounting task. There was no response from TMS between 1 March 2023 and 2 October 2023.
68On 2 March 2024, TMS’ solicitor emailed Icon stating that the amended pleading was with the client for instruction and could be expected to be finalised by 11 March 2024. That did not occur.
69Again, on 23 May 2024, TMS’ solicitor stated that he was aiming to discuss the finalised copy of the proposed ASOC with his client the following week and he would then be in contact about the timetabling for the matter. Again, that did not occur. The matter was not being prosecuted by TMS until orders were made by the Court dismissing the proceeding for failure to respond to the warning administrative mention.
70TMS sought to explain this lack of progress in the matter on the basis of the loss suffered by the family standing behind TMS and an assertion that a long time employee of TMS, Mr George Zavitsanos, who had knowledge of Icon’s accounts had suffered a stroke earlier in 2024, and he took a period of time off work. Fundamentally, none of this was communicated to the Court at the relevant time, at the return of the administrative mentions and no admissible medical evidence was before the Court. TMS seeks an indulgence from the Court for the lack of prosecution of its own case.
71In my view, in applying Hollingworth J’s observations in Dale (No 3)[19] there is reason to depart from the ordinary position against immediate taxation in circumstances where the issue is discrete and there is a delay in the conclusion of the proceeding. Here, there has been a delay to the finalisation of the proceeding given the trial has now been vacated from its previous trial date of 1 March 2023 and will not be refixed for at least another 12-month period. It is not in the interests of justice that Icon be out of pocket for the wasted costs for that period because of TMS’ inactivity.
[19] Dale (No 3).
Costs of the reinstatement application
72The orders TMS sent to the Court on 16 October 2024 provided for TMS to pay Icon’s costs of the reinstatement, to be taxed in default of agreement. Accordingly, Icon’s entitlement to these costs is agreed.
73TMS submits that it has conceded the question of it paying Icon’s costs of the reinstatement. That is a sensible concession owing to the indulgence it has had to seek as a result of these difficult circumstances. Notwithstanding that concession, TMS claims that Icon now seeks to punish TMS by seeking the payment of those costs forthwith. TMS contends that concessions should not be discouraged by the possibility of costs orders exacting further punishment against the conceding party and that it is clear that the circumstances leading to the reinstatement application are not such as to warrant the further punishment of TMS in any way.
74TMS contends that the circumstances around the dismissal of the proceeding and the need for reinstatement centre on the unfortunate death of Mr Abdul Kassaby’s wife, and Mr Zavitsanos having suffered a stroke at a time when TMS was attempting to settle its ASOC and to settle the proceedings generally. TMS argues that the need for its application does not flow from its recalcitrance or disregard for the orders of the Court. They arise from saddening and deeply personal circumstances on the part of these individuals.
75Icon submits that this Court dismissed this proceeding for want of prosecution. The evidence shows that TMS, since commencement, has conducted the proceeding in a dilatory manner.
76Icon notes that the parties had agreed consent orders in advance of the warning mention listed for 12 February 2024. However, TMS failed to file them.
77There were no communications between the respective parties’ solicitors between 23 May 2024 and the time at which the proceeding was dismissed.
78Icon claims that it has granted TMS an indulgence in consenting to reinstatement of the proceeding to save the parties and the Court time and costs in circumstances where it was not required to do so, and it should not have to bear the costs of doing so.
79In my view, TMS’ conduct has caused the delay of the final completion of the proceeding. Although the person matters deposed to by TMS’ solicitor are unfortunate, this case involves the failure of TMS to comply with procedural orders and administrative mentions in a timely way. In Eaton v ISS Catering Services[20] the Victorian Court of Appeal observed:
“Although the ‘overarching purpose’ of the Act and the rules includes the fair and just resolution of disputes, it also includes the efficient and timely resolution of disputes. So parties cannot casually ignore case management orders or directions. “
[20] [2013] VSCA 361 at [47] (“Eaton”).
80As Gummow, Hayne, Crennan, Kiefel and Bell JJ observed in Aon Risk Services Australia Limited v Australian National University:[21]
“Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a ‘just resolution’ is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule’s reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party’s opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all. Such a view may largely explain the decision of this Court in Shannon v Lee Chun which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. In the present case it is difficult to see that such an order could be sufficient compensation, given that AON would be required to again defend litigation which was, effectively, to be commenced afresh.”
[21] (2009) 239 CLR 175 (French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel And Bell JJ) at [98]-[100].
81In Eaton, the Court of Appeal held that the obvious intention of the directions of this Court was to further the overarching purpose by facilitating mediation and a timely trial.[22] Any practice of not obeying Court directions to save costs because of settlement discussions was contrary to the overarching obligations.[23]
[22]Eaton at [54].
[23] Ibid at [55].
82In my view, in circumstances where the likelihood of any lapse of time between the interlocutory application and the final determination of the proceeding was by reason of the conduct of TMS, I will exercise my discretion to depart from the general practice set out in the Rules and order that costs be payable within 30 days of agreement or 30 days from taxation.
Conclusion
83For the reasons outlined above, I order that:
(a) the plaintiff/defendant by counterclaim pay the defendant/plaintiff by counterclaim’s costs by reason of the amended statement of claim filed on 18 October 2024, on a standard basis, within 30 days of agreement or taxation; and
(b) the plaintiff/defendant by counterclaim pay the defendant/plaintiff by counterclaim’s costs of the reinstatement of the proceeding, on a standard basis, within 30 days of agreement or taxation.
- - -
Certificate
I certify that these 17 pages are a true copy of the judgment of Her Honour Judge Burchell delivered on 23 October 2024.
Dated: 23 October 2024
Alexandria Peck
Associate to Her Honour Judge Burchell
0
14
0