Plaintiff v Defendants

2 The defendants relied upon submissions filed 11 July 2022 (the defendants' submissions). The plaintiffs relied upon submissions filed 14 July 2022 (the plaintiffs' submissions). Counsel for the parties made submissions at the hearing.

3 The defendants submitted that the Court should order that the plaintiffs pay their costs of and incidental to the plaintiffs' summons on a standard basis to be taxed in default of agreement. In summary, the defendants primarily submitted:

(a) The general rule is that costs usually follow the event.

(b) The Court should not accept the plaintiffs' submission that the default position for a pleading amendment is that the costs are the parties' costs in the proceeding.

(c) Rules 63.17 and 63.20 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) do not fetter the Court's discretion in relation to costs. Rule 63.17 does not apply as the present application concerns amendments that were not allowed.

(d) The passage in the decision of the New South Wales Court of Appeal of His Eminence Metropolitan Petar, Diocesan Bishop of Macedonian Orthodox Church of Australia and New Zealand & Anor v The Macedonian Orthodox Community Church St Petka Incorporated & Anor (No 2)[2] relied upon by the plaintiffs may be distinguished as it concerned interlocutory injunctions.

(e) The Court is in a position to determine where the justice lies between the parties in making a costs order as the plaintiffs' application for leave concerned a discreet question and is separate from the matters the Court will determine at the trial.

(f) The plaintiffs' application was unsuccessful on all contested issues. Leave was refused to make the impugned amendments. The defendants were the 'clear winners' of the application.

(g) The impugned amendments were the focus of the plaintiffs' application.

(h) The amendments that were permitted were not opposed and minor in nature.

(i) There has been no disentitling conduct on the part of the defendants to modify or displace the principles that costs usually follow the event.

(j) This case may be distinguished from cases in which there has been a novel or new event or something that has taken a party by surprise that would displace the costs follow the event rule. The defendants relied upon a letter from the defendants' solicitors to the plaintiffs' solicitors dated 30 March 2022 (exhibited to an affidavit of Mr Stops affirmed 5 April 2022) and submitted 'the plaintiffs are being told that there are both Aon reasons, that their application, if brought will fail. And that also the pleading that they have put forward is bad in form.'.[3] The defendant also submitted that 'there were general observations maintained, as Your Honour is aware, through the written submissions. And then throughout the oral submissions made during the hearing, obviously during the hearing, which all parties were represented by both senior and junior counsel, there were a number of issues regarding the form of the pleadings that arose for submission and argument.'.[4]

(k) If the Court is against making a costs order in favour of the defendants, the more appropriate order would be to reserve the question of the costs of the plaintiffs' summons.

4 The plaintiffs submitted that the Court should order that the costs of the plaintiffs' summons be the parties' costs in the proceeding. In summary, the plaintiffs primarily submitted:

(a) Costs are in the discretion of the Court.

(b) The 'default position' for a pleading amendment is that costs are the parties' costs in the proceeding.

(c) Unless the Court makes an order as to costs the 'default position' in r 63.17 and r 63.20 applies. Rule 63.20 suggests 'that there should be a feeling of persuasion to do something else than to make no order'.[5]

(d) The plaintiffs also relied upon a passage in Metropolitan Petar in which the New South Wales Court of Appeal observed:

Applications for interlocutory injunctions are commonplace. If there is nothing to distinguish an application from the typical case that comes before the court, then the underlying jurisprudence relating to the exercise of the discretion may warrant the making of what is referred to in the legal vernacular as the "usual order", whether that be costs in the cause or the plaintiff's costs in the cause. The making of such an order does not displace the exercise of the court's discretion. Rather, it is a shorthand form of giving effect to the principles that govern the court's discretion in circumstances where there are no countervailing or different circumstances to warrant the exercise of the discretion in a different manner.[6]

The plaintiffs submitted that they relied upon this passage in Metropolitan Petar 'simply by analogy'.[7]

(e) The Court has not finally determined the issues the subject of the impugned amendments. The Ruling is a 'step along the road to trial.'[8]

(f) The plaintiffs accepted that they were not successful on the contested matters.

(g) The basis upon which the impugned amendments were refused was not the subject of consideration and argument upon proper notice.[9]

5 Pursuant to section 24(1) of the Supreme Court Act 1986 (Vic), the costs are in the discretion of the Court, and the Court has full power to determine by whom and to what extent the costs are to be paid. This discretion must be exercised judicially.

6 As recently observed by Connock J in Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 2):[10]

...when exercising its discretion to award costs the court is also to have regard to the objects set out in s 9(1) of the CPA [Civil Procedure Act] and may have regard to the matters referred to in s 9(2). The court is also subject to the obligation in s 8(1) of the CPA regarding the overarching purpose referred to in s 7. [11]

Where a pleading is amended (whether with or without leave) the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties costs in the proceeding, unless the Court otherwise orders.

Where an interlocutory or other application is made in a proceeding and -

(a) no order is made on the application; or

(b) the order made is silent as to costs -

the costs are the parties' costs in the proceeding, unless the Court otherwise orders.

9 In Dale v Clayton Utz (No 3), [12] Hollingworth J said:

Rules 63.20 and 63.22 both reflect the fact that interlocutory applications usually do not conclude a proceeding, so the court is often not in a position at that stage of the proceeding to determine where the justice lies between the parties in any costs order. However, both rules empower the court to "otherwise order" in an appropriate case. The court's discretion to "otherwise order" is not circumscribed in any way by the rules, but must be exercised judicially. [13]

10 Similarly, r 63.17 empowers the Court to otherwise order in an appropriate case.

11 In Diakou v Rouse,[14] the Court of Appeal observed:

1. Section 24(1) of the Supreme Court Act 1986 confers on the Supreme Court a wide discretion in deciding questions of costs. However, that discretion must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. There are well-established principles that provide guidance for the exercise of the discretion and avoid it being exercised in an arbitrary or inconsistent manner.
2. One such well-established principle is that costs usually follow the event, that is, that the unsuccessful party is usually ordered to pay the successful party's costs. Recently, in Northern Territory v Sangare, the High Court said the following about that principle:

A guiding principle by reference to which the discretion is to be exercised - indeed, 'one of the most, if not the most, important' principle - is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. For example, a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action.

12 In my view, it is appropriate and just to order that the plaintiffs pay the costs of the defendants of and incidental to the plaintiffs' summons filed 5 April 2022 to be taxed on a standard basis in default of agreement.

13 At the trial there will not be any consideration of the impugned amendments and whether they are unintelligible and embarrassing. The Court is in a position to determine where the justice lies between the parties upon the issue of the costs of the plaintiffs' summons.

14 The plaintiffs were not successful on the contested matters the subject of the plaintiffs' summons. The defendants succeeded in opposing leave being given for the plaintiffs to make the impugned amendments.

15 The decision of Metropolitan Petar does not assist the plaintiffs. It may be readily distinguished. The observations made by the New South Wales Court of Appeal concerned applications for interlocutory injunctions and the 'underlying jurisprudence' in relation to cost orders concerning such applications.

16 I reject the plaintiffs' submissions that 'the basis upon which the impugned amendments were refused was not the subject of consideration and argument upon proper notice'.[15]

17 In conclusion, I will order that the plaintiffs pay the costs of the defendants of and incidental to the plaintiffs' summons filed 5 April 2022 to be taxed on a standard basis in default of agreement.

TEICO INVESTMENTS PTY LTD (ACN 057 341 929) Plaintiff

TIECO INTERNATIONAL (AUST) PTY LTD (ACN 005 658 364) Second Plaintiff

WA BLUE GUM LIMITED (ACN 060 179 982) First Defendant

WA BLUE GUM AFFORESTATION PTY LTD (ACN 082 919 542) Second Defendant

WA BLUE GUM LIMITED (ACN 060 179 982) First Plaintiff by Counterclaim

WA BLUE GUM AFFORESTATION PTY LTD Second Plaintiff by Counterclaim

TEICO INVESTMENTS PTY LTD (ACN 057 341 929) First Defendant by Counterclaim

TIECO INTERNATIONAL (AUST) PTY LTD Second Defendant by Counterclaim

[2] [2007] NSWCA 142 (Beazley, Giles and Hodgson JJA), (Metropolitan Petar).

[3] Transcript of Proceedings (Teico Investments Pty Ltd & Anor v WA Blue Gum Limited & Ors, Attiwill J) on 2 August 2022 (Transcript of Proceedings), 45.24-27.

[4] Ibid, 45.28-46.4; see also at 58.22-59.11 and 60.25-61.2.

[7] Transcript of Proceedings, 54.27-29.

[9] See the plaintiffs' submissions, [6]-[9] and Transcript of Proceedings, 55.23-58.14.

[10] [2021] VSC 547.

[12] [2013] VSC 593.

[14] [2019] VSCA 199, (Kyrou, McLeish and Emerton JJA) (citations omitted).

[15] I refer to the Ruling, [10]-[11], [16], [17], [26], [27], [38], [39], [46] and [47].