Gatt & Microbuild Pty Ltd v Norlin - [1998] VSCA 140 - VSCA 1998 case summary — Zoe

VICVSCA

Gatt & Microbuild Pty Ltd v Norlin

[1998] VSCA 140

Court of Appeal (Vic)|1998-12-16|Before: PHILLIPS, CHARLES and CALLAWAY, JJ.A.

At a glance

Source facts

Court of Appeal (Vic)

1998-12-16

PHILLIPS, CHARLES and CALLAWAY, JJ.A.

Original judgment source is linked above.

[1]

For the reasons I have given, I would grant leave to appeal (in case leave is necessary) and then allow the appeal, set aside the judgment entered, and in lieu enter judgment in favour of the plaintiff for the sum of $156,000 together with damages in the nature of interest (in a sum that doubtless can be determined when we deliver judgment). I note that the judgment as authenticated simply fixes the quantum of the damages awarded without specifying that those damages were awarded against Microbuild Pty. Ltd. only, a result which can be gathered only from the reasons for judgment where it is plainly stated that "all claims against the firstnamed defendant [Dr. Gatt] are ...... dismissed". To that extent the judgment had to be regularised, whatever the outcome of this appeal. The judgment now to be substituted for damages should be expressed to be against the defendant Microbuild Pty. Ltd. only.

[2]

In lieu of the order against both the defendants for the costs of the proceeding brought by the plaintiff, I would order that the company only pay the costs of the proceeding brought against it and that, for the rest, the plaintiff do pay the costs of the defendant Gatt to the extent that the defendants' costs of the proceeding, including the trial, were increased by the bringing of those claims. (As I follow it, the time occupied at trial in the prosecution of Dr. Norlin's claims against Dr. Gatt personally was not very great.)

Applicant/Plaintiff:

# Gatt & Microbuild Pty Ltd

Respondent/Defendant:

Norlin

Court Act 1958

Nevertheless, to say this is not to accept Mr. Brett's argument that the consequence of Dr. Gatt's failing to complete the writing of the programme must fall upon both sides, and liability therefor cannot be cast on one to the exclusion of the other. The expression "joint venture" is not a term of art: United Dominions Corporation Ltd. v. Brian Pty. Ltd. [1985] HCA 49; (1985) 157 C.L.R. 1 at 10 per Mason, Brennan and Deane, JJ. Certainly "joint venture" cannot be equated with partnership; yet that, I think, was the effect of counsel's submission. The obligations of the parties inter se do not derive from characterising their enterprise as a "joint venture"; rather they derive from the actual terms, express or implied, by which the enterprise is established: see and compare Pursell v. Newberry (1967) 67 S.R.(N.S.W.) 415, Canny Gabriel Castle Jackson Advertising Pty. Ltd. v. Volume Sales (Finance) Pty. Ltd. [1974] HCA 22; (1974) 131 C.L.R. 321; Noranda Australia Ltd. v. Lachlan Resources N.L. (1988) 14 N.S.W.L.R. 1. In this case, those terms are sufficiently found in the agreement made in July 1990 and in the later agreement made in February 1992.

By far the greater part of the trial was over the claims made by Dr. Norlin against the company, and these claims succeeded in the main. An order for costs against the company could not be resisted, but it is hard to see any basis for ordering those costs against Dr. Gatt. The argument proceeded before us on the footing that, for the purpose of this order for costs, Dr. Gatt should be regarded as a "non-party"; that while costs are in the discretion of the Court, the County Court had jurisdiction to order costs against a non-party under s.78A(1) of the County Court Act 1958 (see Knight v. FP Special Assets Ltd. [1992] HCA 28; (1992) 174 C.L.R. 178 at 192, Burns Philp & Co. Ltd. v. Bhagat [1993] VicRp 13; [1993] 1 V.R. 203 at 219, Symphony Group PLC v. Hodgson [1994] Q.B. 179 at 191); but, again, that such an order will be justified only by "exceptional circumstances": Verna Trading, MLC Insurance Ltd. v. FAI Traders Insurance Co. Ltd. (1994) 49 F.C.R. 23. We were also referred to Ritter v. Godfrey [1920] 2 K.B. 47 at 60-61 per Atkin, L.J., but only for the categories mentioned by his Lordship (for the statement of principle appearing there was disapproved in Donald Campbell & Co. Ltd. v. Pollak [1927] A.C. 732 at 811-12: see also at 154 per Kaye, J., ; at 570 per Gobbo, J.). Those being the principles upon which the argument before us proceeded, it was submitted for Dr. Gatt that there were no such "exceptional circumstances" in this instance.

On costs, Mr. Costigan relied upon Symphony Group Pty. Ltd. v. Hodgson, especially at 191-2 where Balcombe, L.J. summarised a number of situations in which the Court might order a person, not a party, to pay costs, but on examination, none of them seemed to fit this case. Thus, although the first refers to a person, who had some management of the action, causing the company to sue or defend, his Lordship speaks only of a case in which such a person causes the company "improperly" to sue or defend - and that was not so here. Next, his Lordship refers to the case where "a person has maintained or financed the action", but that refers to a plaintiff presumably: for example, in Forest Pty. Ltd. v. Keen Bay Ltd. [1991] 9 A.C.L.C. 460, an order was made against the receivers and managers of an insolvent company who had brought proceedings in the company's name for the benefit of the banks who had appointed them. So too in Oz B & S Pty. Ltd. v. Elders IXL Ltd. [1993] FCA 371; (1993) 117 A.L.R. 128, where Einfeld, J. ordered the principal director and shareholder of the applicant company to pay the costs of the respondent's success. See also Knight v. FP Special Assets Ltd., where the non-party "played an active part in the conduct of the litigation" brought by an insolvent. These were the cases to which we were referred in support of the submission that Dr. Gatt should here have been ordered to pay costs, but none of them supports the submission.