Isildur Pty Ltd v Cadar Pty Ltd [2001] VSC 25

Supreme Court of Victoria|2001-02-02|Before: BEACH, J.

This is the review of an order of Master Cain, sitting as the Taxing Master, made on 24 November 2000.The review is pursuant to R.63.57 of the Supreme Court Rules.

The plaintiffs in the proceeding were the owners of 20 per cent of the units in a trust of which the first defendant is trustee. The fifth defendant is controlled by the sixth defendant whose interests initially owned 71 per cent of the units in the trust.

In the course of the proceeding, the trustee proposed issuing further units for purposes which the plaintiffs challenged as intended to dilute their unit holding and as constituting further breaches of trust.

The plaintiffs set about seeking interlocutory injunctive relief in the matter. However, their application, which was to be made to the court on 18 June 1998, was temporally resolved without there being any hearing of the matter. It was resolved on the basis that the new units would be quarantined and the statement of claim would be amended to allege the new breaches of trust in the proceeding. In due course the appropriate amendments were made.

On 18 November 1999 the proceeding was settled. The only term of settlement relevant for present purposes is that relating to the plaintiffs' costs. It reads:

"The trustee will pay the plaintiffs' costs of the proceeding including any reserved costs on a party/party basis to be taxed in default of agreement".

In due course the plaintiffs' solicitors prepared a bill of costs for taxing. Included in the bill were its costs of preparing the application for the injunction and the costs of amending the plaintiffs' statement of claim. It is those costs which are the subject of the present review.

On 24 November 2000, and in quite lengthy reasons for his decision, Master Cain found that the preparation of the injunction, other steps the plaintiffs took to respond to the threat of the issue of the new units in the trust, and the amendments to the plaintiffs' statement of claim were necessary for enforcing or defending the plaintiffs' rights and the Master allowed those costs. In so doing the Master had regard to the provisions of R.63.29 which reads:

"On a taxation on a party and party basis all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed shall be allowed".

It is those findings that the first defendant now seeks to challenge.

It has long been established that the review by a judge of an order of the Taxing Master on a taxation of costs is governed by the same principles as apply to an appeal from the exercise of discretion, that is, there is a strong presumption in favour of the correctness of the decision appealed from and that decision should therefore be affirmed unless the Court of Appeal is satisfied that it is clearly wrong. The authority for that proposition is Australian Coal and Shale Employees' Federation v. Commonwealth [1953] HCA 25; 1953, 94 CLR 621 per Kitto, J. at p. 627.

The arguments advanced by counsel for the first defendant in support of the review may be summarised as follows: In the first place, it is said that the costs are to be taxed under the rules generally, even though the parties did not incorporate the rules in their terms of settlement. The interlocutory application was never made to the court and no order was ever made in respect of the costs of it. In that situation R.63.20, which reads,

"Each party shall bear his own costs of an interlocutory or other application in a proceeding, whether made on or without notice, unless the Court otherwise orders"

should apply and at the worst each party should bear their own costs of anything done in relation to the proposed interlocutory injunction.

As to the costs of amending their statement of claim, it is contended that R.63.17(1) applies. That rule reads:

"A party who amends a pleading without the leave of the Court shall, unless the Court otherwise orders, pay the costs of and occasioned by the amendment".

It was suggested at one stage by counsel for the first-named defendant that clause 13 of the terms of settlement is ambiguous and that in making the determination he did in the matter the Master failed to have regard to the intention of the parties concerning the costs of the proceeding at the time they executed the terms.

In my opinion, that argument is untenable. The term agreed to by the parties is one of the most common terms used by practitioners when dealing with the orders to be made in respect of the costs of a proceeding. If there was any ambiguity about the term, that ambiguity is clearly resolved by reference to R.63.29.

As I said at an earlier stage of these reasons, I have read the very lengthy reasons of the Master for making the orders he did in the matter and I simply say that I am not persuaded that he made any error.

Accordingly, the order of the Master of 24 November 2000 is confirmed.

I order that the first-defendant pay the plaintiffs' costs of the review.

MR GARRATT: So we may avoid further argument, at least in this respect hereafter, would Your Honour be prepared to record in the "other matters" part of the order that this was an appropriate hearing for the appearance of two counsel for the plaintiffs?

HIS HONOUR: Yes, I will incorporate that in the order under the heading of "other matters".

MR FORBES: I ask to be heard on that, Your Honour.

MR FORBES: Your Honour, earlier today I suggested that this matter had some complexity in it. Your Honour disagreed with that and we then proceeded and the matter was relatively straight forward. It's a matter that someone as junior as myself was able to get some submissions together in the extra time allowed by the court, having had no previous familiarity with it.

MR FORBES: Junior counsel present in court has been involved with the taxation for some time, as is apparent from the documents, and in those circumstances, the point at issue being a discrete one, I would respectfully submit that the matter was one that was capable of being handled by any junior counsel of reasonable experience.

Mr Garratt has been the counsel retained in the proceeding throughout, I think it was appropriate he appear on the hearing of the review of the Master's decision to a Judge of the Court.

At a glance

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Judgment (28 paragraphs)

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