Young, Neil John v Pioneer Concrete (Vic) Pty Ltd
[1996] FCA 245
•17 Apr 1996
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No VG 457 of 1994
BETWEEN:
NEIL JOHN YOUNG, ALLAN JAMES MYERS and
JENNIFER CLAIRE O'CALLAGHAN
Applicants
-and-
PIONEER CONCRETE (VIC) PTY LTD
Respondent
PIONEER CONCRETE (VIC) PTY LTD
Cross Claimant
-and-
NEIL JOHN YOUNG, ALLAN JAMES MYERS and
JENNIFER CLAIRE O'CALLAGHAN
Cross Respondents
Coram: Olney J
Place: Melbourne
Date: 17 April 1996.
MINUTE OF ORDER
THE COURT DECLARES THAT, on a proper construction of the lease of the premises situate at the First Floor, 1183 Toorak Road, Hartwell between Catchklin Pty Ltd and Pioneer Concrete (Vic) Pty Ltd made 1 January 1990 ("the lease"), the lease provides as follows:
The rent payable under the lease must be reviewed in respect of each successive 18 month period of the term or any renewal thereof.
The only method of reviewing the rent payable under the lease is by observing the procedure set out in paragraphs (a) to (f) of Special Condition 3.
The lessor is obliged to give a "lessor's notice" in respect of each rent review date but such notice may be given at any time.
If the lessee does not dispute the amount of rent fixed by the lessor in the lessor's notice, the rent payable for the next ensuing 18 month period is the amount fixed by the lessor.
If the lessee disputes the amount of rent set out in the lessor's notice, in the absence of agreement between the lessor and the lessee:
(i)the rent for each review period other than those referred to in paragraph (d) of Special Condition 3 is the current open market rent as determined by an independent valuer or the rent payable for the preceding 18 month period plus 12.32% thereof whichever is the greater;
(ii)the rent for the periods referred to in paragraph (d) of Special Condition 3 is the current open market rent determined by an independent valuer.
AND THE COURT ORDERS THAT the applicants pay the respondent's costs of the proceeding.
NOTE: Settlement and entry of orders is dealt with in rule 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No VG 457 of 1994
BETWEEN:
NEIL JOHN YOUNG, ALLAN JAMES MYERS and
JENNIFER CLAIRE O'CALLAGHAN
Applicants
-and-
PIONEER CONCRETE (VIC) PTY LTD
Respondent
PIONEER CONCRETE (VIC) PTY LTD
Cross Claimant
-and-
NEIL JOHN YOUNG, ALLAN JAMES MYERS and
JENNIFER CLAIRE O'CALLAGHAN
Cross Respondents
Coram: Olney J
Place: Melbourne
Date: 17 April 1996.
SUPPLEMENTARY REASONS FOR JUDGMENT
On 26 March 1996 I published reasons for my decision in this matter but deferred questions relating to the actual form of the order and costs to give the parties the opportunity to consider my reasons. The parties were invited to make written submissions on these questions and that has been done.
There is no dispute as to the form of the declaratory relief that should be ordered to give effect to the decision and a declaration in the agreed form will be made.
The applicants have indicated their intention to lodge an appeal and seek orders relating to the filing and service of notices of appeal, cross-appeal and contention (if any), the settlement of the appeal papers, and the fixing of a date for the hearing of the appeal. The respondent has made no submission in respect of these matters.
Whether or not the applicants appeal is for them to decide and they are entitled to file their notice of appeal within the time prescribed by the Federal Court Rules. As no judgment has been entered in the proceeding there is no question of an extension of time being sought at this stage and it is entirely inappropriate that an order should be made fixing the time for lodging notice of appeal. If the respondent wishes to take any steps by way of cross-appeal or by filing a notice of contention the procedures prescribed by the rules should be followed.
The settlement of the appeal papers and the fixing of a date for the appeal are both matters which are dealt with by the Chief Justice in accordance with the rules. The trial Judge has no authority to usurp these functions.
In the circumstances I decline to make any orders relating to the foreshadowed appeal.
The main thrust of the written submissions has to do with the question of costs. Although neither the form of the declaratory relief to be granted, nor the reasoning which commended itself to me, is precisely as advocated by the respondent there is no question that in the result the respondent is the successful party and in the ordinary course of events could expect to have its costs.
The applicant concedes that it should pay the respondent's costs from 24 February 1996 but argues that the respondent should only have 50% of its costs up to 23 February 1996. The case for reducing the costs payable prior to 24 February 1996 is put on this basis:
Pioneer pursued discovery of documents which were solely relevant to the circumstances in which the lease was executed. This put the applicants to a great deal of trouble and expense. In the result, no evidence was led at the trial as to the circumstances in which the lease was executed.
On 11 December 1995, Pioneer's application for leave to plead rectification was refused. Notwithstanding that dismissal, orders were made on 11 December 1995 for the preparation of a Court Book and witness statements. Following those orders, the solicitors for the applicants informed the solicitors for the respondent that, in their view, the only relevant document to be included in the Court Book was the lease. The respondent's solicitors did not agree and chose to have included in the Court Book a number of documents relating to the circumstances surrounding the execution of the lease. The applicants' solicitors maintained that such documents were inadmissible, and it was agreed that they would be included in a separate section of the Court Book for documents disputed as to relevance/admissibility.
As a result, the Court Book was significantly expanded. As the applicants were the purchasers of the reversion under the lease, it was necessary for representatives of the original lessor, Catchklin Pty Ltd and Jones Lang Wootton, to be consulted and a review of the files of Jones Lang Wootton was also undertaken. Submissions were prepared on the basis that the respondent would seek to admit parol evidence of the circumstances surrounding execution of the lease. Junior counsel and an instructing solicitor spent approximately 1½ days in conference with potential witnesses, reviewing the Jones Lang Wootton file and in the preparation of submissions on the admissibility of such evidence. Senior counsel spent approximately half a day reviewing these issues and settling the parol evidence submissions.
The first occasion on which the applicants became aware that the respondent did not seek to have such evidence admitted was on 24 February 1996.
The respondent opposed any reduction in costs for these reasons:
On 11 December 1995 the Court ordered, inter alia, that:
(a)an agreed bundle of documents be prepared by the parties for use at the trial by 4.00pm on 15 January 1996;
(b)the parties file and serve a signed statement of the evidence of each witness which that party intends to call to give evidence at the hearing by 4.00pm on 1 February 1996;
(c)each party file and serve any signed statement of evidence in reply by 4.00pm on 9 February 1996.
Shortly prior to 1 February 1996 in discussions between the solicitor for the applicants and the solicitor for the respondent, it was agreed that it was not necessary for either party to submit a witness statement for the lease to be put into evidence.
Notwithstanding that the respondent requested to be included in the Court Book documents which were ultimately not relied upon at the trial, it should have been patently obvious to the applicants that the deliberate choice of the respondent not to file witness statements by 1 February 1996 would result in the respondent not being able to prove the documents of which the relevance was disputed by the applicants, and that the trial would proceed with only the lease being put in evidence by the respondent. Following the discussions between the respective solicitors referred to earlier, it should have been obvious to the applicants as from 1 February 1996 that the respondents would not be relying on any document other than the lease. The respondents should not be penalised in terms of costs because of the applicants' over caution in assuming that the respondent would seek to prove all documents in the Court Book, when no witness statement dealing with those documents was filed and served.
The applicants say that as soon as the respondent decided that it would not seek to put in evidence any of the documents in the Court Book, it ought to have informed the applicants of that fact forthwith. They say they were entitled to prepare their case on the assumption that the respondent would (or might) attempt to put in evidence the documents it insisted on going into the Court Book. Once the point was raised, it was reasonable for the applicants to prepare themselves against that point being pursued. Further and in any event, the extra costs incurred by the applicants in the discovery process and in the preparation of a draft Court Book containing parol documents put forward by the respondent ought to be paid by the respondent.
Having regard to the nature of the proceeding and the very significant issues at stake it seems to me that both parties adopted a cautious approach to the pre-trial procedures and to the preparation of their respective cases. Neither can be criticised for being either over zealous or over cautious.
The Court's discretion in relation to costs must in every case be exercised judicially and according to well established principles. However, at the end of the day, it is a matter for the Court to determine on the basis of the particular facts and circumstances of the case. In this case, I am not satisfied that the successful party has conducted its case unreasonably and in the circumstances there is no reason to depart from the normal rule that costs should follow the event.
The following declaration and orders will be made:
THE COURT DECLARES THAT, on a proper construction of the lease of the premises situate at the First Floor, 1183 Toorak Road, Hartwell between Catchklin Pty Ltd and Pioneer Concrete (Vic) Pty Ltd made 1 January 1990 ("the lease"), the lease provides as follows:
The rent payable under the lease must be reviewed in respect of each successive 18 month period of the term or any renewal thereof.
The only method of reviewing the rent payable under the lease is by observing the procedure set out in paragraphs (a) to (f) of Special Condition 3.
The lessor is obliged to give a "lessor's notice" in respect of each rent review date but such notice may be given at any time.
If the lessee does not dispute the amount of rent fixed by the lessor in the lessor's notice, the rent payable for the next ensuing 18 month period is the amount fixed by the lessor.
If the lessee disputes the amount of rent set out in the lessor's notice, in the absence of agreement between the lessor and the lessee:
(i)the rent for each review period other than those referred to in paragraph (d) of Special Condition 3 is the current open market rent as determined by an independent valuer or the rent payable for the preceding eighteen month period plus 12.32% thereof whichever is the greater;
(ii)the rent for the periods referred to in paragraph (d) of Special Condition 3 is the current open market rent determined by an independent valuer.
AND THE COURT ORDERS THAT the applicants pay the respondent's costs of the proceeding.
I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney
Associate:
Dated:
Heard: 26 and 27 February 1996
Place: Melbourne
Reasons
published: 26 March 1996
Judgment: 17 April 1996.
Appearances:
Mr K. Hargrave QC with Mr K. Lyons (instructed by Mahony Galvin Rylah) appeared for the applicants.
Dr C.L. Pannam QC with Mr R.J. Weber (instructed by Cornwall Stoddart) appeared for the respondent.
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