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[2015] VSC 632
Supreme Court of Victoria
2015-03-13
JOHN DIXON J
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Costs - Whether costs should be taxed on an indemnity basis - Whether costs should be taxed immediately - Whether unsatisfactory conduct - s 18 Civil Procedure Act 2010 (Vic), r 63.20.1, 63.28 Supreme Court (General Civil Procedure) Rules 2005.
1 The remaining applications that I have to deal with are firstly, whether the costs to be awarded in favour of the defendant should be taxed on an indemnity basis and secondly, whether I should order that those costs be taxed immediately.
2 Whether or not costs should be awarded on the more generous basis of assessment, as an indemnity, is in the discretion of the court. The principles upon which this discretion is exercised are well known and in essence, an applicant is required to demonstrate that the circumstances of the case are such that the standard basis for taxation of costs is not appropriate and that the exceptional jurisdiction of awarding indemnity costs over and above the ordinary basis for taxation should be invoked. Usually this is where the party has engaged in unmeritorious or deliberate or high-minded or other improper conduct or has commenced or continued a claim in circumstances where the plaintiff, had they been properly advised, should have known that it had no chance of success.
3 As Woodward J remarked in the Fountain Selected Meats[1] case, the seminal decision, commencing a proceeding where the applicant, properly advised, should have known it had no chance of success, gives rise to a presumption that the proceeding was commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law.
4 I am not persuaded on the evidence that the plaintiff has commenced the proceeding in disregard of known facts, or the clearly established law. However, the proceeding was commenced on the basis of a publication alleged to have occurred on 9 June 2010 that resulted in a republication, by others, in or around September and October of 2013, leading to the commencement of the proceeding in 2014.
5 I have been taken, in some detail, through the correspondence between the parties about whether the allegations made in the original statement of claim. The defendant's solicitors on two occasions complained about the sufficiency of the allegations made in the statement of claim and received no response. The defendant's solicitors then issued the summons dated 20 August 2014, seeking summary judgment, alternatively, that certain paragraphs of the statement of claim be struck out or better particularised, or alternatively, for the provision of security for costs.
6 On the day before the summons was to be heard, the summons was resolved by consent, it being agreed between the parties that the plaintiff would deliver a further pleading. Ultimately that pleading, which is dated 13 October 2014, has been filed and served. By the current pleading the plaintiff alleges both a different publication and a different republication from that which was originally alleged, and the original allegations have not been pursued. They have been abandoned.
7 The affidavits filed in support of this application do not explain precisely why these changes were made or set out the underlying factual basis that supports them. This is not particularly surprising, because the amended form of pleading was agreed to by the defendant and the need to fully explain the reasons for the amendment was not cast upon the plaintiff.
8 Nevertheless an inference arises from the fact that the original cause of action, based upon a particular publication and republication, is not pursued at all and a rather different case, albeit one that arises out of the same original statutory declaration, has now been raised.
9 In defence of the plaintiff's position, his counsel submitted that the costs of the summons should be costs in the cause, because the issue of publication is a critical contest between the parties that will only be resolved at trial. While this is true, the issue of publication that is now to go to trial is a different issue to the issue of publication that was alleged by the original statement of claim.
10 The plaintiff contended that the proper basis for its claim was identifiable when it is recalled that the case was put as a circumstantial case. The statutory declaration that is central to the claim has been provided by the defendant to at least one other person. And the publication and replication of that document was central to understanding the nature of the cause of action in defamation that was being put.
11 In the absence of a clear explanation for the circumstances that led to the change in the publications relied on, I infer that the plaintiff accepts that there was not a proper basis for the claim that was originally made based on the publication in 2010. The writ was filed almost three years after that statutory declaration and there was a real issue whether the plaintiff was entitled to bring the proceeding. The plaintiff has not attempted to show a basis for an application for an order extending the limitation period.
12 I am satisfied that the plaintiff is not pursuing that particular publication because on the factual and legal material that was available to it when it was considering the defendant's summary dismissal summons the plaintiff decided that the original claim did not have a proper basis and that the claim, as now pleaded, did and it was that claim that should now be pursued. In those circumstances, it is appropriate to direct that the costs I have ordered in favour of the defendant should be taxed on an indemnity basis.
13 The second application that was made was for an order pursuant to Rule 63.20.1 for immediate taxation of those costs. In Setka v Abbott (No 2),[2] the Court of Appeal stated that:
Factors that may warrant an order for immediate taxation of costs, include one or more of the following: (a) there is a prospect of considerable delay in the completion of the proceedings; (b) the issue, the subject of the interlocutory order is discrete from what will eventually require determination; and (c) the party against whom the order was made, has been guilty of unsatisfactory conduct. That is, conduct that was unreasonable, reprehensible or revolving a want of competence or diligence."
14 The application that is the subject of the interlocutory order cannot, in my view, be said to be discrete. A pleading summons is central to the issues to be resolved in the proceeding and in a different to an application to restrain counsel from acting for a party that was before the court in Dale v Clayton Utz (No 3).[3] As to delay, it is now approximately ten months since this proceeding was issued. The stage has now been reached where the pleadings have been completed. In fact, the pleadings were completed by December 2014, when the reply to defence and counterclaim was filed.
15 In my view it cannot be said that there is a prospect of considerable delay in the completion of the proceedings which of itself would warrant an order for immediate taxation. Thus the question becomes whether the plaintiff has been guilty of unsatisfactory conduct. In that respect the defendant relied upon a number of provisions of the Civil Procedure Act 2010, but in my view the critical consideration on this application is the requirement of a person to whom the overarching obligations apply to not make a claim that does not on the factual and legal material available to the person at the time of making a claim or responding to the claim have a proper basis.[4]
16 As I have already stated in connection with indemnity costs there is no direct evidence touching on the factual and legal material available to the plaintiff at the time of making the original claim that was based upon the 2010 publication. For the reasons that I have already expressed, it is open to me to conclude that there was not a proper basis for that claim when it was first made. All that was stated from the Bar table was that the plaintiff did have information that had been orally provided to her about the original publication.
17 In the circumstances, I am not persuaded that there was a proper basis for that claim and I am persuaded that the plaintiff's conduct in pursuing the original pleading based upon the publication in June 2010 was unsatisfactory conduct. Accordingly I will order that the costs be taxed immediately.
[1] Re: Fountain Selected Meats (Sales) Pty Ltd [1988] FCA 364; 81 ALR 397.
[4] Section 18 of the Civil Procedure Act 2010.
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Parbhakar [2015] VSC 632