Plaintiff v Second Defendant

Supreme Court of Victoria|2013-09-04|Before: SIFRIS J

COSTS - Indemnity costs - Whether special circumstances - Whether plaintiff disregarded known facts - Whether plaintiff had ulterior purpose - Relevance of irrelevant and unpleaded allegations of fraud during cross-examination - Breach of ss 18 (proper basis for claim) and 25 (delay) of Civil Procedure Act 2010 (Vic) - Indemnity costs not ordered - Usual order as to costs.

COSTS - New scale of costs from 1 April 2013 - Whether costs incurred before 1 April 2013 are able to be taxed on new scale if order made after 1 April 2013 - Transitional provisions - No retrospective operation - r 63.28 and r 63.90.

**1 On 9 August 2013 I answered six questions in issue between the parties and published my reasons for the answers that I gave.[1] The parties agree that the answers to the six questions effectively dispose of the entire case and that in addition to the answers to the questions there should be an order that the proceeding otherwise be dismissed. The only remaining dispute in this case is in relation to costs.

2 The defendants seek indemnity costs. They contend that there are special circumstances that justify such an award. The plaintiff submits that there should be no order as to costs.

3 The Court has a wide and unfettered discretion in relation to costs. In my opinion having regard to the issues in the case, the evidence and the conduct of the case the defendants should recover their costs but not on an indemnity basis. There will be an order that the plaintiff pay the defendants' costs, including reserved costs, according to the Supreme Court scale on a party and party basis up to 31 March 2013, and on the standard basis with effect from 1 April 2013.[2] I do not propose to make any adjustment for the fact that the case commenced in the County Court and was transferred to the Supreme Court on 6 August 2012.[3]

4 In the event that I decline to make an order for indemnity costs Senior Counsel for the defendants submitted that I should simply order costs on the standard basis for the whole of the proceeding, notwithstanding that part of the proceeding related to a period prior to 1 April 2013. Costs on the standard basis are higher than party and party costs. I do not accept the submission.

5 Rule 63.28 of the Supreme Court Rules came into operation on 1 April 2013. Rule 63.90 is headed 'Transitional provisions' and is in the following terms:**

63.90 Transitional provisions - Supreme Court (Chapter 1 New Scale of Costs and Other Costs Amendments) Rules 2012

For the avoidance of doubt, these Rules, as amended by the Supreme Court (Chapter 1 New Scale of Costs and Other Costs Amendments) Rules 2012, apply to all things done or required to be done or omitted to be done on or after 1 April 2013 in, or in relation to, any proceeding in the Court, including the Costs Court (including all work and all amendments, applications and orders), regardless of the date of commencement of the proceeding.

**6 I do not regard the fact that the wording refers to all things done after 1 April 2013, regardless of the date of commencement of the proceedings, as rendering the new scale of costs applicable prior to 1 April 2013. In my opinion there is no ambiguity. Everything done after 1 April 2013 is to be dealt with on the new scale. The fact that an order for costs is being made after 1 April 2013 is not sufficient to include or capture costs prior to 1 April 2013.

7 On the defendants' construction, the new scale of costs alters the pre-existing rights and obligations of the parties and thus has a retrospective operation. Clear wording is required to enable a statute or rules to operate retrospectively.[4] The words are sufficiently clear but to the opposite effect. It could not be otherwise. Parties have conducted themselves on the basis of the old costs regime and assessed risks, made offers of compromise and Calderbank letters on this basis. The suggested construction would interfere with what parties understood to be their substantive rights and could lead to unjust and anomalous results. In other words it attaches 'new legal consequences to facts, or events which occurred before its commencement'.[5]

8 Finally it follows that I do not regard the introduction of the new scale of costs as being simply a procedural matter that on some of the authorities escapes the general rule against retrospectivity.[6]

9 If I am wrong in the above approach, I would nevertheless, in the exercise of my discretion, only order costs commensurate with the party and party scale as it existed prior to 1 April 2013. This in my judgment is the appropriate scale. Rule 63.28(c) of the Supreme Court Rules specifically permits the Court to order costs on such other basis as it may direct.

10 The defendants contended that the plaintiff commenced and continued this proceeding in wilful disregard of the facts well known to him. Critical to this submission was the inconsistency between the position Bob Jane took in the Family Court proceeding and the case that he sought to advance in this proceeding.

11 Bob Jane admitted the inconsistency. In particular he admitted that the case he sought to run in this proceeding was contrary to sworn evidence he had given in the Family Court proceeding. However, he sought to explain the inconsistency by saying that he relied on trusted advisors to give him the correct financial information, particularly in light of the fact that he had suffered a stroke. I rejected the explanation and regarded the inconsistency as an important factor in finding against Bob Jane.

12 However, Bob Jane was entitled to run his case and endeavour to convince the Court that his explanation was valid and sufficient. The fact that I disagreed with him says nothing about his entitlement to make the argument. His case was that he did not disregard the known facts but disputed the accuracy and impact of those facts. His evidence fell short and he failed. The facts as found by the Court were only after a trial with evidence and cross-examination. The conclusion after a trial does not necessarily mean that at the outset it was inevitable that the claim would fail. The Court must avoid hindsight analysis, a point made by counsel for Bob Jane.[7]

13 I consider that this case is distinguishable from Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3)[8], a case relied on by Senior Counsel for the defendants. In any event each case must be considered on its own facts and peculiar circumstances and context. In Sunland it emerged clearly at trial that the relevant important witnesses always knew and understood the correct position and that their claim was hopeless. From the cross-examination at trial it was clear that the true position was known at the outset. This case is different. Unlike Sunland it cannot be concluded that Bob Jane always knew that he did not have a proper explanation for the inconsistency in his evidence and that his proposed and attempted explanation was hopeless. It was weak and unsubstantiated as it turned out. This case is not nearly as clear as Sunland and although the matter is finely balanced and not free from difficulty given the critical findings made by the Court, I do not consider that in all the circumstances I should exercise my discretion in favour of awarding indemnity costs.

14 Finally Croft J regarded the point as one that needed to be fully explored at trial.[9] It was. Bob Jane lost and must pay the costs.

15 The next submission made by the defendants was that Bob Jane commenced and continued this case for an ulterior purpose, namely to injure and inflict maximum damage on the reputation of Rodney Jane and others who worked closely with Rodney at Bob Jane Corporation. I was asked to infer ulterior motive from irrelevant and malicious evidence voluntarily given by both Bob Jane and Laree Jane. It was submitted that this motive could further be inferred from the fact that the evidence was given in open court with immunity and in the presence of the press.

16 I reject the submission. There is no doubt that passions were and remain high and that this is a bitter family dispute. In the context of this dispute and in giving evidence in the witness box, and in particular being subject to lengthy and probative cross-examination, things are said and answers given that are passionate and even malicious. This is often reflective and symptomatic of extreme pressure and deep seated emotions. However, it does not mean that the case was run to provide a forum for the making of such incidental albeit unfortunate comments. They could have been made and indeed were and continue to be made to the press outside of the witness box.

17 The next submission made by the defendants was that Bob Jane made allegations of fraud knowing them to be false and irrelevant. Fraud was not pleaded and was not part of Bob Jane's case. The answer is the same as the previous submission.

18 Finally, the defendants submitted that Bob Jane breached ss 18 and 25 of the Civil Procedure Act 2010 (Vic) ('Civil Procedure Act') by making a claim that did not have a proper basis (s 18) and by causing delay (s 25).

19 As pointed out above, the findings made after a trial with extensive cross-examination do not by their own force suggest that there was no basis for the claim. It was a weak claim but Croft J permitted the claim to go ahead and Bob Jane was entitled to run his case as pointed out earlier in these reasons.

20 As to s 25 Civil Procedure Act, it is true that there was delay. The trial should have commenced on 6 May 2013 and not 8 May 2013. However, I do not consider that this alone is a sufficient basis or constitutes special circumstances that call for an order for indemnity costs in respect of the delay.**

[1] Jane v Bob Jane Corporation Pty Ltd & Anor [2013] VSC 406 ('Judgment'). I will assume familiarity with the Judgment. Defined terms bear the same meaning.

[2] Supreme Court (General Civil Procedure) Rules 2005 ('Supreme Court Rules') Rule 63.28 which came into effect on 1 April 2013 provides for the standard basis.

[3] The case was transferred from the County Court pursuant to s 21 of the Courts (Case Transfer) Act 1991 (Vic) ('the Act'). Ordinarily costs prior to the transfer are payable on the County Court Scale (s 22(f) of the Act) unless otherwise ordered. To the extent necessary I make such an order.

[4] Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261, 267 (Dixon CJ) ('Maxwell'); Fisher v Hebburn Ltd [1960] HCA 80; (1960) 105 CLR 188, 194 (Fullagar J) ('Fisher'); Geraldton Building Co Pty Ltd v May [1977] HCA 17; (1977) 136 CLR 379.

[6] Fullagar J in Maxwell. 286; Victrawl Pty Ltd v Telstra Corp Ltd [1995] HCA 51; (1995), 183 CLR 595, 615.

[7] Reference was made to the decision of Redlich J (as his Honour then was) in Aljade & MKIC v OCBC [2004] VSC 351, [36]-[37].

[8] [2012] VSC 399 ('Sunland').

Court (General Civil Procedure) Rules 2005

Supreme Court (Chapter 1 New Scale of Costs and Other Costs Amendments) Rules 2012

(Case Transfer) Act 1991

At a glance

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Judgment (31 paragraphs)

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