MONEY TREE MGNT SVS P/L v THE DEP COMM OF TAXATION No. SCGRG-00-837 [2000] SASC 345

1 LANDER J: The appellant, Institute Taxation Research Pty Ltd, filed a Notice of Appeal on 4 April 2000, against orders made by a judge of this Court joining the appellant as a party to the proceedings in which Money Tree Management Services Pty Ltd was plaintiff and the respondent to this appeal defendant, and ordering the appellant to pay the respondent's costs on an indemnity basis.

2 This morning, immediately before the appeal was due to be heard, the appellant attempted to file a Notice of Discontinuance. That attempt was made in circumstances where the appellant's solicitor had notified my associate late yesterday afternoon that such a notice would be filed.

3 The attempt to file a Notice of Discontinuance occurred after the respondent, and the intervener, the State of South Australia, had submitted written argument, and in the knowledge that the respondent had indicated, in a letter to the appellant's solicitors dated 27 April 2000, that the respondent would be seeking indemnity costs in relation to this appeal. The appellant was reminded of the respondent's attitude in relation to its claim for indemnity costs on 13 September 2000.

4 The Notice of Discontinuance, which the appellant attempted to file, does not, on the face of it, conform with the Rules, and the Registry refused to accept it.

5 Yesterday, in anticipation of the appellant filing a Notice of Discontinuance, the respondent filed and served on the appellant, the appellant's solicitors, and the appellant's town agent, an application supported by an affidavit seeking orders that the Notice of Discontinuance be struck out as an abuse of process, and that the appellant pay the costs incurred by the respondent on an indemnity basis.

6 A number of issues arise. First, does the Notice of Discontinuance, which the appellant attempted to file, conform with the Rules, and should it be accepted by this Court as a proper discontinuance of the appeal? Secondly, if it does not comply with the Rules of Court, should the appeal be called on and struck out? Thirdly, if it does comply with the Rules of Court, what is the effect of r 95.07 of the Supreme Court Rules, as to costs?; Fourthly, if it does comply with the Rules of Court, does the filing the Notice of Discontinuance evidence an abuse of process on the part of the appellant?

7 In my opinion, the Notice which the appellant has attempted to file does not comply with the Rules of Court, and the Registry was entitled to refuse it. The Rules do not provide for the filing by facsimile of a Notice of Discontinuance. This Notice has been sent by facsimile transmission from Victoria.

8 It therefore follows, in my opinion, that the appeal should be called on and should be dismissed, if there is no appearance by the appellant. In fact, before any argument was put in relation to any of these matters, the Court had the appellant called in the precincts of the court. There was no appearance of the appellant.

9 It would follow that if the appeal is dismissed for the non-appearance of the appellant, this Court should then hear the respondent's application for costs, and in particular the respondent's application for indemnity costs.

10 If, however, I am wrong about that, and the Notice of Discontinuance is in a form which complies with the Rules and should have been received by the Registry, and thereby does have the effect of discontinuing this appeal, in my opinion, the respondent would still be entitled to seek under r 95.07, costs on an indemnity basis.

11 In my opinion, the filing of the Notice of Discontinuance does not have the effect of preventing the respondent making an application for costs on an indemnity basis. Rule 95.07(3) provides:

"A party filing a Notice of Discontinuance ... shall be liable to pay the costs of the other party or parties occasioned by his appeal'.

12 Of course, costs, as understood under r 95.07, would ordinarily be costs on a party/party basis but, in my opinion, the filing of a Notice of Discontinuance does not prevent the party, against whom the notice is filed and served, from making application for costs on a basis, apart from a party/party basis: s 40 Supreme Court Act; r 101 of the Supreme Court Rules. In those circumstances, this Court is entitled to hear the respondent's application for indemnity costs, even if the Notice of Discontinuance does conform with the Rules and should have been accepted by the Registry.

13 In those circumstances, this Court does not need to decide whether the filing of the Notice of Discontinuance, itself, was an abuse of process. However I agree the filing of a Notice of Discontinuance could be an abuse of the court's process, even though it might seem illogical to suggest that a party can abuse a process by discontinuing the process. The abuse is, however, in using a process for a collateral or improper purpose, or for a purpose for which the process, in this case the Notice of Discontinuance, was not intended; Castanho v Brown & Root (UK) Ltd [1981] AC 557. To use the court's processes to visit an injustice on another party, by keeping the other party out of costs to which the other party would otherwise be entitled, would be an abuse.

14 However, the onus is on the respondent to establish that the predominant purpose for the filing of the Notice of Discontinuance was for the collateral advantage, in this case, of keeping the respondents out of the respondent's indemnity costs: Packer v Meagher [1984] 3 NSWLR 486.

15 I am not sure that that onus has been discharged in this case. These are other reasons why the appellant might have filed the Notice of Discontinuance. The appellant might have realised that there were little or no prospects of success. It might have been that it was unable to obtain counsel to argue the matters raised in the appellant's Notice of Appeal. In those circumstances, I would not be prepared to hold that this Court should set aside the Notice of Discontinuance, if it is regular, on the basis that the filing of the Notice of Discontinuance was, itself, an abuse of process.

16 In any event, my reasons mean that this Court is entitled to consider the respondent's application for indemnity costs, whether the Notice of Discontinuance was or was not within the form provided for in the Rules of Court.

17 In support of the application for indemnity costs, Mr Slattery, who appeared with Dr Ebbeck, for the respondent, has pointed to the proceedings which were heard by the judge below, and the arguments which were put. He has pointed out that the arguments were described by the court below as spurious. Of course, it was not the appellant who put those arguments directly to the court below, but the judge, at first instance, in due course, found that the appellant had been responsible for the preparation and the carriage of those arguments.

18 Mr Slattery has also pointed out that the Notice of Appeal includes grounds all but one of which were not advanced to the judge below. He further pointed out that the written summary of argument, which the appellant provided late yesterday, addresses arguments which are not included either in the Notice of Appeal, and which were not put to the judge at first instance.

19 He has submitted that the whole of this action, from start to finish, has been no more than a tactical manoeuvre on the part of the plaintiff, and on the part of the appellant, to avoid the plaintiff paying taxation which the plaintiff was obliged to pay.

20 He also submitted that the Grounds of Appeal and the submissions put in support of those grounds are a nonsense. Of course this Court has not heard oral argument on the Grounds of Appeal or oral argument developing the written submissions. However I must say, even without that assistance, I feel obliged to agree that none of the Grounds of Appeal could ever have succeeded.

21 I am satisfied that in the circumstances of this case, that the ordinary order for party/party costs would not be appropriate, and that because of the conduct of the appellant since judgment and until today, an order for costs on an indemnity basis ought to be made. I, therefore, propose that this Court order that the appellant pay the respondent's costs on an indemnity basis.

(2) The appellant to pay the respondent's costs on an indemnity basis.