Liggins & Anor v ParkTrent Properties Group Pty Ltd & Anor [2022] NSWSC 1439 | Case summary

The Parties Submissions and the Court's Consideration

This section of these reasons deals with the parties' submissions and the Court's consideration of the parts of those submissions that relate to the decisive issues. The method employed here is first to set out the plaintiffs' submissions. Then the Court analyses the defendants' submissions, taking into account the plaintiffs' submissions in reply.
The Plaintiffs' Submissions. The plaintiffs submit that ParkTrent should pay the plaintiffs' costs of the proceedings, because the plaintiffs succeeded in their primary claim against ParkTrent in respect of the buyback agreement and obtained their alternative remedy in damages in the agreed amount of $76,000 and that as a result, costs should follow the event.
The plaintiffs accept that they did not succeed against ParkTrent in respect of the alternative claims for unconscionable conduct and misleading and deceptive conduct but their failure on those actions should not give rise to a different costs order being made as between them and ParkTrent because the core of the proceedings related to the buyback agreement and the alternative claims were not discrete issues which took up any material portion of the proceedings, such as would justify the making of an order for costs other than the usual order that costs follow the event.
Before addressing the appropriate order for costs between the plaintiffs and Mr Cross, the plaintiffs point out that Mr Cross was only joined to the proceedings in June 2019 upon the filing of the Amended Statement of Claim and shortly before the substantive hearing on 31 October and 1 November 2019. The plaintiffs point out that the alternative unconscionable conduct claim was only brought against ParkTrent, not Mr Cross. Moreover, the plaintiffs submit that after the Court delivered its first judgment on 25 August 2020 the litigation has solely concerned the plaintiffs and ParkTrent on the question of damages and have not involved Mr Cross.
The plaintiffs accept that the applicable rule commonly applied where a solicitor acts for more than one defendant, and one of the defendants is successful and the other is not successful is stated in King Network Group Limited v Club of the Clubs Pty Ltd (No. 2) [2009] NSWCA 204 at [25] - [35] ("King Network Group"). But citing the first judgment (at [157]) where this subject was discussed and the authorities referred to in J P Hamilton, G C Lindsay, M F Morahan, C Webster, NSW Civil Procedure Handbook 2021 (LawBook Co, 2021) at [42.1.100], the plaintiffs submit the relevant "common costs" are those referable to the claim pressed against both the successful and unsuccessful defendants, as well as any costs referrable solely to the plaintiffs' claim against the successful defendant.
The plaintiffs argue that the misleading and deceptive conduct claim was the only claim the plaintiffs advanced against each of the jointly represented defendants for which there would be common costs within the rule. The plaintiffs submit that it follows that they should only pay 50% of the defendants' costs incurred solely in respect of the plaintiffs misleading and deceptive conduct claims.
Analysis of the Defendants' Submissions. The defendants' submissions first emphasize the areas where the plaintiffs have been unsuccessful in the proceedings. They point out the following: the plaintiffs failed to obtain the remedy of specific performance; their misleading and deceptive conduct and unconscionable conduct claims were rejected; their damages claims were not entirely successful as to the damages issues argued and then determined in the second judgment; the plaintiffs ultimately failed to obtain any damages for the Bundoora property because its value had risen since its purchase and that the ultimate judgment of $76,000 was well within the District Court's jurisdiction and disproportionate to the costs likely to be incurred by the parties in the Supreme Court.
The defendants' case elaborated a number of these matters. The Court has found some of them persuasive, but many are not.
Costs between the Plaintiffs and ParkTrent. The defendants submit that the plaintiffs' primary claim for relief was in specific performance. They point out that not only was it the primary claim for relief, but the plaintiffs' written submissions dealt with damages in a very abbreviated form. The defendants further submit that it would be unjust when exercising the costs discretion not to consider the plaintiffs' failure to obtain the primary relief they sought and their lack of success in the misleading and deceptive conduct and unconscionable conduct claims.
The defendants further submit that the plaintiffs' pursuit of their alternative damages claim led to the need to depart from the agreed valuation dates of the properties as at February 2018 and October 2019, thereby occasioning significant further work to the parties. At the time of the hearing the pleadings alleged breach of the buyback agreement, but the defendants' submissions complain that there was no clear allegation of breach of contract as at October 2019, or any other relevant date, occasioning an enquiry about the correct date.
The defendants submit that the Court should depart from the general approach that costs should be awarded in accordance with the outcome of the proceedings without differentiating between particular issues on which each party succeeded, even though there were multiple issues in the proceedings and the plaintiffs had mixed success: Bostik Australia Pty Ltd v Liddiard (No. 2) [2009] NSWCA 304 ("Bostik") at [308].
This argument is not persuasive. Whilst it is true that ParkTrent failed upon its primary claim for relief, the contentions and facts underlying both claims overlap very substantially. For each remedy it was necessary to prove the contract and its terms, to construe the contract and to establish whether it had been breached. Such issues represented the substance of the argument at the liability hearing and the reasons in the first judgment. The claims for the remedies then diverge with the Court needing to consider the discretionary defences raised to the remedy for specific performance on which the plaintiffs lost. It was then necessary for the Court to examine the question of what the correct date for the assessment of damages was.
The overlap between these two remedies is sufficiently substantial that it does not itself call for any departure from Bostik. The principles stated in Bostik accept that Court may depart from the general approach, for example, where a particular issue or group of issues is clearly dominant or separable, or if the matters upon which an otherwise successful party was unsuccessful took up a significant part of the trial: Bostik at [38]. But here the contest on the discretionary issue of delay in relation to the remedy of specific performance was not clearly dominant or separable and did not constitute a substantial part of the first judgment or the hearing: first judgment (at [126] - [133]).
And it is difficult to attribute to the plaintiffs the responsibility for the costs that were incurred in valuing the properties or obtaining the correct date o transcript are the last hearing Aurora grab me that they are working folder if you want to head home after that feel free n which damages should be assessed in this case. As the Court explained in the first judgment (at [152]), the Court was "yet to hear full submissions on the matter of damages" and the Court undertook a preliminary non-binding analysis of some of the damages issues, subject to further submissions from the parties. The selection of the correct date for the assessment of damages is not something which could have been conveniently and efficiently argued at the time of the first hearing, as it may have become unnecessary if specific performance had been granted. Thus, it was logical to defer that issue.
Moreover, once damages issues had been deferred, as the Court explained in the second judgment (at [60] - [67]), there was a strong connection between the plaintiffs' pursuit of the remedy of specific performance and the fixing of the date for assessment of damages. The Court's fixing of the date for the assessment of damages depended in part upon whether the plaintiffs as vendors had acted reasonably in pursuing the remedy for specific performance. And if it were reasonable for them as vendors to await the outcome of a claim for the remedy for specific performance, then the appropriate date for the assessment of damages was the date that remedy was denied by the Court.
Here the Court has found the plaintiffs' decision to seek specific performance was reasonable even though the plaintiffs were unsuccessful: first judgment at [61]. It was not possible for the date for the assessment of damages to have been fixed until the Court had determined whether a specific performance decree was made or denied and whether the bringing of an action for specific performance was reasonable. This demonstrates substantial overlap between the two remedies. It is difficult therefore for the defendants to criticise the plaintiffs' pursuit of the remedy of specific performance as somehow a waste of costs.
Next the defendants submit that the plaintiffs' damages case in respect of the Bundoora property failed. The defendants point out that the plaintiffs continued to seek damages in respect of the Bundoora property, even though the earlier agreed valuations of the property 2018 and October 2019 showed that it had increased in value. The defendants say that ultimately the plaintiffs could never have demonstrated they had suffered any recoverable loss so far as the Bundoora property was concerned.
But this argument is not persuasive. It is not possible to sever the plaintiffs' lack of success on the Bundoora property from the rest of their claim for several reasons. It is true that the plaintiffs were aware at the time of the liability hearing that the Bundoora property had apparently increased in value over its purchase price, but the differences were marginal and at that stage there was still uncertainty about what the correct date of the assessment of damages was to be. Moreover, the plaintiffs were using in their case the fact that the Bundoora property had increased in value to advance their case for the grant of specific performance over both properties, because it was said that no hardship could arise from any delay, given the slight increase in property values over the period of the alleged delay.
Moreover, it is to be remembered that the buyback agreement was for both properties. Had the plaintiffs not included the Bundoora property in the action for specific performance they may have been met by a defence in answer that the remedy was not available because the bargain that ParkTrent had made was for the reacquisition of two properties, not one. These matters show the very substantial interconnection between the plaintiffs' remedy for specific performance and the remedy for damages so as not to warrant any departure from the usual rule explained in Bostik.
The defendants submit that the plaintiffs succeeded on a case that was never specifically pleaded and in support of which they led no evidence before the damages judgment. The defendants submit that the plaintiffs did not plead the buyback agreement was breached in February/May 2013 as was found in the first judgment (at [120]). The defendants further contend that the plaintiffs never pleaded that they suffered any loss as at 25 August 2020, the basis on which damages were awarded in the second judgment (at [67]). The defendants say that the relevant costs considerations that should be applied here are analogous here to those that were applied in Faraday v Rappaport & Ors [2007] NSWSC 253 at [25] - [30] ("Faraday").
This argument takes too narrow a view of the plaintiffs' case. It is true that the Further Amended Statement of Claim did not plead a breach of the buyback agreement in the precise period February - May 2013, but in paragraph [14] it did plead a breach of the buyback agreement. It is not uncommon in proceedings alleging a breach of contract for the precise date of breach to be a matter of debate at trial, which can sometimes only be fixed after all the evidence is considered. Moreover, as was explained above, the date of 25 August 2020 is the time of breach fixed after the Court itself selected a date on which it declined to make a decree of specific performance. The plaintiffs can hardly be blamed for not anticipating a particular date, which was ultimately selected by the Court. For these reasons this case is not analogous to cases such as Faraday in which the principle sought to be applied related to a wholly new claim being pleaded on which it turned out was the only basis upon which success was ultimately achieved. In such cases a successful plaintiff can be deprived of a substantial part of that plaintiff's costs. But that is not this case.
Next, the defendants complain that judgment was entered for $76,000, although at one stage prior to the damages hearing the plaintiffs had sought a total of $166,664. The defendants point out that those amounts are well below the amount specified in UCPR, r 32.34 which, subject to the Court's discretion, states that an order for costs would not ordinarily be made where a plaintiff obtains a judgment against defendants for less than $500,000, unless the commencement of proceedings in the Supreme Court rather than the District Court is warranted. Here, the plaintiffs claimed the remedy of specific performance for land of substantial value, a remedy not available in the District Court. The complexity of the proceedings warranted proceedings being brought in the Supreme Court. UCPR, r 32.34 is not an impediment to the plaintiffs recovering their full costs, nor is the quantum of damages.
The misleading and deceptive conduct claim was ultimately dismissed in the first judgment as it had been commenced out of time. But this was not a case in which there was the commitment of very much time to factual contests about misleading and deceptive conduct. The misleading and deceptive conduct claim related to a limited number of conversations and exchanges of correspondence. The Court did not have to decide the issue on a balance of credibility of the plaintiffs and defendants' witnesses as Mr Cross did not give evidence. Mr Liggins and Ms Wu were cross-examined but their credibility was not damaged and the misleading and deceptive conduct was only one part of the issues on which they were cross-examined.
The plaintiff misleading deceptive conduct claim was not a clearly dominant or separable part of the plaintiff's case against ParkTrent and did not constitute a substantial part of the first judgment or the hearing: first judgment [143] to [149]. The plaintiffs' failure against ParkTrent on this claim does not warrant any reduction in the plaintiffs' costs against ParkTrent. And it is to be remembered that the whole of the damages hearing took place without any consideration of the misleading deceptive conduct claim.
Costs between the Plaintiffs and Mr Cross. Finally, the defendants put submissions in relation to the appropriate costs order against Mr Cross. The defendants submit that the plaintiffs were wholly unsuccessful on the misleading and deceptive conduct claim that was brought against Mr Cross (and ParkTrent) and that it is appropriate for them to pay all the costs of Mr Cross.
But the plaintiffs' failure on the misleading deceptive conduct claim, the sole claim against Mr Cross, requires a special costs order to be made applying the principles stated in King Network Group.
As the Court explained in the first judgment (at [157]), where a plaintiff is successful against some of several defendants represented by the same lawyers, the rule is that each successful defendant is only entitled to that defendants' proportion of the common costs incurred on behalf of all defendants plus any extra costs incurred exclusively on behalf of that defendant. This is consistent with the way the rule is described in earlier authorities: see Currabubula Holdings v State Bank of NSW [2000] NSWSC 232 ("Currabubula") at [95]. In Wardle v Agricultural and Rural Finance Pty Ltd (No. 2) [2012] NSWCA 338 at [46] - [47] the Court of Appeal cited with approval Einstein J's statement of this rule in Currabubula in the following passage: "[95] These decisions reveal that the concern of the rule of thumb is to achieve substantial justice in the awarding of costs as between a partially successful plaintiff and variously successful and unsuccessful defendants. The rule operates upon the premise that defendants are proportionately responsible for and liable for the joint costs involved in mounting the defence. Thus, a successful defendant cannot claim from the plaintiff more than a proportionate share of the joint costs of the action in addition to any costs separately referable to that defendant. Conversely, the partially successful plaintiff is prevented from looking to each of the unsuccessful defendants for more than an equal proportionate share of the costs not solely referable to the plaintiff's case against one or other of the defendants individually, in addition to the costs which are so referable. In this way, the rule of thumb prevents both the unjust enrichment of the partially successful plaintiff or successful defendant and the casting of an unfair burden on the unsuccessful defendants. Where the premise is falsified or the rule does not achieve its intended effect, it finds no application."
The principles in Wardle and Currabubula have been widely applied. But although this rule of thumb is convenient in an ordinary case, it cannot be applied in every case, and regard must always be had to the nature of the case and the defences raised to the same claim: Korner v H. Korner & Co Ltd (1951) Ch 10 ("Korner") and King Network Group at [27].
Ordinarily the application of this rule would entitle Mr Cross to an order for 50 per cent of the common costs incurred by the defendant together with any costs which exclusively relate to Mr Cross' case. But as was emphasised in Korner the nature of the case and the defences raised must always be considered flexibly. Here the misleading and deceptive conduct case was a less dominant part of the overall procedural effort in the action than the contract case and it did not result in Mr Cross being called to give evidence. Therefore, the Court will vary the usual order so that Mr Cross will recover one third of the joint costs of the defendants of the proceedings and in addition Mr Cross should recover any other costs referrable to the conduct of his separate case.
But one argument put by the plaintiffs about the costs to be awarded in favour of Mr Cross should be rejected.
The plaintiffs contended for a narrower order than the one that the Court will make, namely one in which the plaintiffs would pay to Mr Cross 50 per cent of the defendants' costs "incurred solely in respect of the plaintiffs misleading and deceptive conduct claim". This contention is said to be based on what Hodgson JA said at [25] in King Network Group at [25] where his Honour said: "25 The respondents put that there is a recognised 'rule of thumb' that a successful jointly represented defendant recovers a proportionate share of the 'common' costs which are referable to claims pressed against each of the defendants. That proposition is said to be supported by a number of authorities, including at least two that I decided at first instance, namely, Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (15 July 1996, unreported) and Rogers v Kabriel (No 2) [1999] NSWSC 474."
The plaintiffs' contention in substance is that the Court should isolate the defendants' common costs incurred solely in respect of the plaintiffs' misleading and deceptive conduct case - that being the "claims pressed against each of the defendants" - and then only award 50 per cent of those defence costs against the plaintiffs. The plaintiff's contention if accepted, would prevent the Court from considering as part of the "common" costs for apportionment under the rule, any costs incurred for the joint benefit of ParkTrent and Mr Cross, which are not specifically referable to the misleading deceptive conduct case. One example of these might be filing fees or fees associated with drafting defences to multiple causes of action.
But it is clear in King Network Group (at [25]) that Hodgson JA is citing the submissions of counsel, not stating the exact form in which the rule has been authoritatively stated. To find an authoritative statement this aspect of the rule it is necessary to go back to a decision of Young J when a member of the Equity division in Rogers v Kabriel (No. 2) [1999] NSWSC 474 ("Rogers") where his Honour stated the rule with precision at [14] - [16]: "14 The authorities show that there is a rule of thumb that is applied when the plaintiff has succeeded against one defendant and not the other defendant, where both defendants have been represented by the same solicitors and counsel. The rule was laid down as early as Re Colquhoun (1854) 5 De GM & G 35; 43 ER 781, and was affirmed in Ellingsen's case. Ellingsen's case has been applied in Australia; see Troupp v Caffery, a decision of the old Queensland District Court in [1920] QWN 27, in the Nicholas case (supra), and by myself in Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (No 2) 15 July 1996, unreported. That decision was partly reversed in the Court of Appeal (17.12.1997) but the appeal decision did not touch this part of the case. 15 The rule is that in the absence of any evidence as to how the defendants have retained their solicitor the court infers that each is liable to pay an aliquot part of the costs, so that if successful the only order in their favour is an aliquot part of the total costs. 16 That is a rule of thumb and not a rule that must be applied in each case and in the appropriate case the court will order an assessment of costs on the basis that the costs are to be split between the costs referable to all defendants and the costs referable to a particular defendant; see Korner v H Korner & Co Ltd [1951] Ch 10. The rule of thumb will also not apply where there is evidence before the court of the exact arrangement that has been made by the defendants with their solicitor, particularly where the other side is aware of that arrangement."
It is not necessary for the Court to attempt to divide up the causes of action which are common to all the defendants in this case and only to apply the rule of thumb to those common causes of action. In this case, as in many cases like this one, it would markedly and unnecessarily increase the costs on assessment for the assessor to have to separate out the costs of the misleading and deceptive conduct claims and then apportion those costs. Moreover, that is not what a correct reading of King Network Group requires. All that needs to be considered is the common costs of the action against the jointly represented defendants, not some subset of those costs referable to commonly pleaded claims. Ascertaining common costs will often but not always pick up common claims.
Rather, the Court has sought here to apply the rule in the way it is stated in Rogers and Currrabubula with the flexibility applied in Korner and to consider the lesser prominence of the misleading and deceptive conduct claim in the proceedings in the fixing of a percentage of the defendants' common costs to be paid by the plaintiffs to Mr Cross.
The Court has not been given any material as to whether the first or second defendants jointly or severally engaged their solicitor, but in the absence of evidence I would infer as probable, as is commonly done and as Young J did in Rogers in the absence of specific evidence, that the retainer is joint. Accordingly, the plaintiffs should pay one third of the second defendant's costs.
Therefore, the Court will order that Mr Cross will recover from the plaintiffs one third of the defendants' common costs of the defendants of the proceedings and in addition Mr Cross should recover any other costs referrable to the conduct of his separate case.

Liggins & Anor v ParkTrent Properties Group Pty Ltd & Anor

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Cases Cited (8)