Woodleigh Nominees Pty Ltd & Ors v CBFC Leasing Pty Ltd [1996] NTSC 79 (9 October 1996)
[2]
COURT
IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF
AUSTRALIA
THOMAS J
CWDS
Practice and procedure - interlocutory proceedings
costs.
HRNG
DARWIN, 10 July 1996 (hearing), 9 October 1996 (decision)
#DATE 9:10:1996
#ADD 18:2:1997
Counsel for appellant: S. Porter
Solicitors for appellant: De Silva Hebron
Counsel for respondent:
W R Somerville
Solicitors for respondent: Somerville and Minahan
ORDER
Confirm the decision of the Master that on the application
before
the Master there be no order as to costs.
That the plaintiff pay the defendant's costs of the appeal,
including the costs
in respect of the hearing on the issue of costs to
be taxed at the conclusion of the proceedings to which they relate.
JUDGE1
THOMAS
J
This is an application by the defendant for costs of an interlocutory
application before the Master of the Supreme Court of
the Northern
Territory and the subsequent appeal of that decision. In the
substantial action between the parties, the plaintiffs
are claiming
damages for the alleged wrongful seizure of certain mining machinery.
The issues appear to be whether the machinery
was subject to hire
purchase agreements which were void and what damages flow from the
seizure. The plaintiffs administered interrogatories
which comprised 33
pages and approximately 480 questions. The defendants sought to have
the interrogatories set aside and were successful
before the Master. Ms
Porter, for the defendant, sought costs of the interlocutory hearing
before the Master, but did not make submissions
as to costs. The Master
refused to order costs. The relevant excerpt from the transcript before
the Master on 2 November 1995 is
as follows:
"MS PORTER: Seeking costs, Master.
THE MASTER: Yes. Why should I depart from the normal rule?
MS PORTER: No reason,
Master."
and at page 3:
"THE MASTER: In light of no submissions as to why I should
depart from the normal order, I make no
order as to costs.
MS PORTER: Yes, Master."
I dismissed the appeal, agreeing with the Master that the plaintiffs'
interrogatories
for the examination of the defendant be set aside, that
the interrogatories were largely irrelevant, vague and unclear and that
their
prolixity made them oppressive. The defendant now claims costs of
the appeal and the interlocutory hearing before the Master.
The
interlocutory application before the Master
Order 63 of the Supreme Court Rules provides for costs. Costs are in
the discretion
of the Court (r63.03) although the general rule is that
each party must bear its own costs of an interlocutory application
(r63.18).
No order as to costs ought to be made against the
unsuccessful party, even if contested, if the grounds of the application
or resistance
are reasonable. However, if such application or
resistance is without real merit, as is often the case, the successful
party should
not have to bear its own costs (TTE Pty Ltd v Ken Day Pty
Ltd (1992) 2 NTLR 143 at 145).
In most actions which are contested it is more likely than not that
during the pre-trial process each side will have
obtained interlocutory
orders against the other. The Court may exercise its power and
discretion as to costs at any stage of the
proceedings or after the
conclusion of the proceedings (r63.04) including in relation to costs
reserved (see definition r63.02).
Rules 63.04(3) and (4), and 63.18 depart from past practice relating
to costs. There must be something exceptional about the
circumstances
of the interlocutory application under consideration to lead the Court,
in the exercise of its discretion, to make
an order as to costs,
taxation and payment (Guernier and Another v Patterson and Others (1992)
110 FLR 178 at 182; TTE Pty Ltd v Ken Day Pty Ltd (supra) at 145).
The principles in relation to the award of costs for interlocutory
proceedings
are set out in TTE Pty Ltd v Ken Day Pty Ltd (supra). A
successful party on an interlocutory application must bear his or her
own
costs unless the Court otherwise orders (r63.18). A successful
party may not proceed to taxation and recovery of costs until the
conclusion of the proceedings (r63.04(3)(a)) unless it appears to the
Court that the costs ought to be taxed at an earlier stage
and so orders
(r63.04(4)). The policy behind the rules seems to acknowledge that at
the end of the day it is likely that in the
ordinary course of events
each side would have obtained and been obliged to comply with some form
of interlocutory orders. The object
of r63.18 is to discourage
unnecessary applications and promote agreement. It acknowledges that
orders for costs may be used oppressively.
The issue then is whether the resistance by the plaintiff to the
application by the defendant for striking out of interrogatories
was
unreasonable.
The plaintiff was unrepresented. Ms Porter submits that this is not
a relevant consideration and that had the
plaintiff, Mr Casey, sought
legal advice in relation to interrogatories, then he would have been
more likely to prepare reasonable
and relevant questions.
This proposition may be countered by the fact that even if the
interrogatories had been prepared following
legal advice, the parties
may still have required an interlocutory hearing on the question of
relevancy. The plaintiff may have
been misguided in his approach to
interrogatories, but I do not consider this to constitute "exceptional
circumstances".
Accordingly,
I am not persuaded that the defendant is now entitled
to an order for costs in respect of the application before the Master.
The
appeal from the decision of the Master
It is normally necessary for a claimant for leave to appeal from an
interlocutory decision
to show something more than that the appeal court
would, if exercising its discretion afresh, have come to a conclusion
different
to that reached by the trial judge. Some error of principle
in the exercise of the discretion, a consideration of irrelevant matters
or some other manifest mistake is needed to take the case out of the
ordinary situation in which, wherever a discretion is to be
exercised,
minds may differ on the result (Guernier and Another v Patterson and
Others (supra) at 184).
The hearing de novo (under
r77.05(1)) required all argument put
before the Master to be put before the Court. On such an appeal the
judge is in the same position
as the Master and is unfettered by the
Master's decision although such decision is given due weight (Southwell
v Specialised Engineering
Services Pty Ltd [1990] NTSC 27; (1990) 101 FLR 175). The
defendant submits that there was no real merit in the argument put on
appeal from the decision of the master. I agree with
submissions by
counsel for the defendant that it is possible that prior to the
interlocutory proceedings before the Master and his
decision delivered
on 2 November 1995, the plaintiff did not realise the prolixity and
irrelevance of the interrogatories. However,
at the conclusion of the
hearing before the Master, the plaintiff should have been aware the
appeal was unwarranted and had minimal
chance of success.
I agree with counsel for the plaintiff that the question of costs
before the Master and before this Court
should be approached separately
and distinctly (see TTE Pty Ltd and Anor v Ken Day Pty Ltd (supra) at
145:
"As to taxation and
payment of interlocutory costs ordered
to be paid by one party to another, a just approach to take
is to consider whether the
successful party ought to have
reasonably anticipated interlocutory proceedings of the
kind in question. If so, then he should
have anticipated
bearing the expense, at least to the conclusion of the
proceedings, and not reckoned on having it paid for
by the
other party. If, however, the kind of interlocutory
application or the number of them could not have been so
anticipated,
then there may be a better case for ordering
that the successful party's costs be taxed and paid
earlier."
Mr Somerville,
for the plaintiff, submits that the appropriate
course is to reserve the question of costs. Under r63.03 the award of
costs lies
in the discretion of the Court. The Court may exercise its
power and discretion as to costs at any stage of the proceeding or after
the conclusion of the proceeding (r63.04). In the case of an appeal,
the costs of the proceeding giving rise to the appeal, as well
as the
costs of the appeal, may be dealt with by the Court hearing the appeal
(r63.04(5)).
In respect of the payment of costs
of an interlocutory application,
it is not necessarily just that the costs of an interlocutory
application should follow the result
of that interlocutory application
but rather should be determined by the result of the principal
litigation of which the interlocutory
application forms but a part
(O'Keeffe v BP [1995] FCA 1079; (1995) 128 ALR 718 at 725).
However, where the interlocutory proceedings would have been
unnecessary if the other side had acted reasonably or where
the
interlocutory proceedings were unnecessarily burdensome, it may be
within the Court's discretion to exercise the power to override
the
principles established by the rules and allow the successful party to be
reimbursed the expense of the interlocutory proceedings
(TTE Pty Ltd v
Ken Day Pty Ltd (supra) at 145).
I find that the plaintiff acted unreasonably in appealing the
decision of the
Master and that there was no merit in the application.
The appeal could not have been reasonably anticipated by the defendant.
It
was unnecessarily burdensome on the defendant. I consider that in
these circumstances the successful party should not have to bear
its
costs. I make the following orders.
I confirm the decision of the Master that on the
application before the Master
there be no order as to
costs.
That the plaintiff pay the defendant's costs of the
appeal, including the costs in respect
of the hearing on
the issue of costs to be taxed at the conclusion of the
proceedings to which they relate.