Bucknell v Robins [2004] QCA 474

[1] McMURDO P: I agree with the orders proposed by Philippides J and with both her Honour's reasons and the additional observations made by Williams JA.

[2] WILLIAMS JA: I have had the advantage of reading the reasons for judgment of Philippides J wherein the relevant background facts are broadly set out.

[3] It is of some importance, in my view, to note that the preliminary rulings on admissibility of evidence referred to by Philippides J were related to the manner of presentation of that evidence rather than to the admissibility of evidence of the type in question. For example, the learned trial judge made it clear to the respondent that a letter from a solicitor containing an expression of opinion was not admissible. The primary rule was that oral evidence had to be called. If consideration was to be given to the admission of a document from the solicitor containing an opinion then it had to comply with the provisions in the Uniform Civil Procedure Rules relating to reports from expert witnesses.

[4] It appears that the real difficulty facing the respondent was in placing evidence before the court in an admissible form. Whilst the respondent was entitled to some latitude because he was self-represented (albeit with his wife assisting), that did not oblige the court to admit evidence, particularly expert evidence, in an impermissible form.

[5] It was therefore incorrect for the respondent to say when seeking leave to discontinue that that course was adopted "because of the rejection of critical evidence in the form of the expert witness report and the inference that further evidence critical to the matter . . . could also be rejected."

[6] In my view the failure to award the successful party costs of the proceedings in the circumstances of this case resulted in a manifest injustice. As the reasoning of the New South Wales Court of Appeal in Mannix v Loumbos Pty Ltd [2000] NSWCA 32 and Giunti v Cavallaro [2004] NSWCA 62 demonstrates, such injustice may provide a sufficient ground for granting leave to appeal and remedying the injustice.

[7] Subject to the foregoing I agree with all that has been said by Philippides J and with the orders proposed.

[8] PHILIPPIDES J: This is an application under s 118(3) of the District Court of Queensland Act 1967 for leave to appeal against a costs order made by the learned primary judge consequent to orders dismissing the within action and giving judgment in favour of the applicant, who was the defendant in the action. The parties are content that the hearing of the application for leave also be treated as a hearing of the appeal, if leave is granted.

[9] The applicant is a solicitor, who acted for the respondent in 1996 in relation to the purchase of a grazing property. In 2002, the respondent, as plaintiff, commenced an action for damages for professional negligence and breach of contract of retainer in respect of that purchase. Essentially, it was alleged by the respondent that the applicant failed to conduct adequate searches of the property prior to purchase, and thus failed to advise the respondent as to the existence of a gazetted road, it being alleged that, had the respondent been aware of its existence, he would not have purchased the property. The applicant's pleaded defence was that the respondent was aware of the existence of the gazetted road prior to entering into the contract to purchase the property and that the applicant had been instructed by the respondent to conduct only limited searches.

[10] The matter proceeded to trial on 20 September 2004 and was set down for three days hearing. The respondent was not legally represented at trial and the respondent's wife was given special leave to appear on his behalf.

[11] During the course of the first day of trial the respondent sought to rely on two letters from Suthers & Taylor, solicitors, as expert evidence on the question of what searches ought to have been undertaken. The letters were received subject to the applicant's objection and the learned primary judge indicated, without making a formal ruling, that the respondent could not rely on those letters because they were not in admissible form. In addition, his Honour indicated that the respondent could not rely on advices received from the solicitors, who acted for the respondent after the applicant had ceased to act. The applicant also foreshadowed an objection to evidence proposed to be led on behalf of the respondent from a Mr Brabon.

[12] On the second day of the hearing, with cross-examination of the respondent not yet having commenced, the respondent sought leave to discontinue the action giving the following reasons:

"We're requesting this leave to withdraw because of the rejection of critical evidence in the form of the expert witness report and the inference that further evidence critical to the matter such as correspondence from Suthers and Taylors [sic] Lawyers and evidence from Graeme Brabon could also be rejected. We do not wish to continue because of the probable failure of the matter. Our evidence is going to be rejected and unable to be considered by the Court. It would be a futile exercise for all parties and the Court."

[13] The applicant opposed the leave sought by the respondent and submitted that the appropriate orders were that the claim be dismissed, that judgment be entered for the applicant and that the respondent pay the applicant's costs.

[14] On the 22 September 2004, the learned primary judge ordered that the action be dismissed and that judgment be given for the applicant, but ordered that there be no order as to costs. The reasons given by the learned primary judge for making no order as to costs were as follows:

"At the point at which the plaintiff decided to withdraw I had an open mind on the merits of the plaintiff's case. The plaintiff therefore, if the action had continued, was in jeopardy of an adverse finding. If judgment is entered for the defendant, as distinct from leave to discontinue this action, it will finally remove any possibility of an adverse finding against the defendant and will enable him to claim, justly, that his professional reputation remains unblemished.

In this particular matter I think that a fair result, both on the question of whether the defendant should be protected by the entry of judgment, given that this action is not to be pursued against him, and on the question whether the plaintiff should bear an order for costs, taking into account the view, necessarily provisional, that I have formed of the reasons for the discontinuance and taking into account the order to be made on the application for discontinuance, is to give judgment in favour of the defendant but let each side bear their own costs."

[15] The applicant contends that leave to appeal ought to be granted because the learned primary judge erred in the exercise of his discretion and the effect of the error is to cause substantial injustice to the applicant. It is of course no longer a requirement for granting leave pursuant to s 118(3) of the Act that the proposed appeal involve "some important question of law or justice". This court has a general discretion whether to grant leave, although the mere fact that an error may be detected in the decision below is not ordinarily in itself sufficient to justify the granting of leave to appeal (ACI Operations Pty Ltd v Bawden [2002] QCA 286, Robertiello v Di Lione & Anor [2003] QCA 497).

[16] The applicant contends that the learned primary judge's exercise of discretion miscarried, because irrelevant considerations were taken into account in the exercise of the discretion. These considerations are identified as being firstly, the respondent's reasons for discontinuance, that is, the apprehended failure of his claim and the perceived futility of continuing and secondly, the nature of the order made by the learned primary judge. The applicant contends that, for the purposes of the exercise of discretion as to costs, the applicant should be characterised as the successful party in the litigation and that the present case called for the application of the general or usual rule as to costs, that costs follow the event, which finds expression in r 689 of the Uniform Civil Procedure Rules.

[17] The discretion in awarding costs is a wide one but it must be exercised judicially and not by reference to irrelevant considerations (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534). As explained by McHugh J in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, the general or usual order as to costs, that a successful party in litigation is entitled to an order of costs in its favour, is grounded in reasons of fairness and policy. There are limited exceptions to the usual order as to costs, which focus "on conduct of the successful party which disentitles it to the beneficial exercise of the discretion" (Oshlack at 98 per McHugh J) or on the existence of "special" or "exceptional" circumstances (Oshlack at 120 and 126 per Kirby J).

[18] As to the first consideration referred to by the learned primary judge, the reasons stated by the respondent for seeking to discontinue were the respondent's view as to the apprehended failure and futility of the proceedings, because of his Honour's indicated rulings. The applicant contended that his Honour's view, necessarily provisional, as to the reasons for the respondent's discontinuance, could only have been relevant as a factor supporting an exercise of the discretion as to costs in its favour. It was submitted that it was not a relevant consideration permitting the discretion to be exercised so as to deprive the applicant of the benefit of the usual order as to costs.

[19] I accept these submissions. The respondent's reasons for seeking to withdraw can in no way be seen as reflecting in any adverse manner on the applicant's conduct in the litigation and was not a consideration which permitted the costs order made. This was not a case which turned on whether the parties acted reasonably in commencing and defending the proceeding. Rather, the basis for the respondent's discontinuance made it a case of the kind discussed by Finn J in O'Neill v Mann [2000] FCA 1680, at [13]:

"[...] where the discontinuance can be said to be an acknowledgement by an applicant of likely defeat or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made."

[20] The second consideration referred to by the learned primary judge concerned the nature of the orders made on the application for discontinuance. His Honour appears to have had regard to the benefit to the applicant of the orders made, that the action be dismissed and judgment be entered for the applicant, over an order which merely permitted the respondent leave to discontinue. The benefit to the applicant was expressed by his Honour as being that the order made would "finally remove any possibility of an adverse finding" against him. It of course precluded any further hearing and determination.

[21] It is contended on behalf of the applicant, correctly, that there was no suggestion that his Honour was benefiting the applicant by giving him any undue protection. His Honour dismissed the action and gave judgment for the applicant, because it was apparent that the action was not to be pursued. Even if the learned primary judge had acceded to the respondent's submissions and given leave to discontinue, I cannot see why the usual order as to costs would not have applied in the applicant's favour. In any event, the nature of the order made was not a matter which permitted the discretion as to costs to be exercised so as to disentitle the applicant to his costs.

[22] In the circumstances, I consider that leave to appeal should be given and that any extension of time in which to appeal should be granted. I would allow the appeal with costs, on the ground that the discretion exercised by the learned primary judge in making no order as to costs miscarried resulting in injustice to the applicant. I would set aside that order and in lieu thereof order that the respondent pay the applicant's costs of the action. I consider that it is appropriate in this case that the respondent has the benefit of a certificate pursuant to s 15 of the Appeal Costs Fund Act 1973.

1. Grant leave to appeal;

2. Extend any necessary time in which to appeal;

3. Allow the appeal with costs to be assessed;

4. Set aside the order at first instance that there be no order as to costs and in lieu thereof order that the respondent pay the applicant's costs of the action;

5. Grant the respondent a certificate pursuant to s 15 of the Appeal Costs Fund Act 1973.