Kingsford Smith Transport Pty Ltd v Slattery Auctions Australia Pty Ltd [2008] NSWSC 393

New South Wales Supreme Court

CITATION : Kingsford Smith Transport Pty Ltd v Slattery Auctions Australia Pty Ltd [2008] NSWSC 393

HEARING DATE(S) : 7 May 2008

JUDGMENT DATE : 9 May 2008

JUDGMENT OF : Malpass AsJ

DECISION : Summons dismissed; plaintiff to pay the costs of the Summons

CATCHWORDS : COMMON LAW - Local Court appeal - costs - leave and relevant considerations

Local Court Act 2007 LEGISLATION CITED : Uniform Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005

CATEGORY : Principal judgment

CASES CITED : Furber v Stacey [2005] NSWCA 242 House v The King (1936) 55 CLR 499

PARTIES : Kingsford Smith Transport Pty Ltd (Plaintiff) Slattery Auctions Australia Pty Ltd (First defendant) Bruce Mulvaney (Second defendant)

FILE NUMBER(S) : SC 15070/07

COUNSEL : CP Locke (Plaintiff) S Callan (Defendants)

SOLICITORS : Oliveri Attorneys (Plaintiff) Colquhoun & Colquhoun (Defendants)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 9412/06

LOWER COURT JUDICIAL OFFICER : Williams LCM

LOWER COURT DATE OF DECISION : 24 May 2007

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

Friday 9 May 2008

15070/07 Kingsford Smith Transport Pty Ltd v Slattery Auctions Australia Pty Ltd & Anor

JUDGMENT 1 HIS HONOUR: The plaintiff brought proceedings in the Local Court against Slattery Auctions Australia Pty Limited (the defendant). The claim concerned the purchase of a motor vehicle. The proceedings were defended on the basis that the defendant was merely an agent. The defendant later brought a cross-claim against Bruce Mulvaney (the cross-defendant). The cross-claim sought indemnity. 2 In May 2007, a settlement took place between the defendant and the cross-defendant. In effect, the cross-defendant conceded that it was liable to indemnify the defendant. The question of the costs of the cross-claim was to be reserved. There was a change of solicitors for the defendant (7 May 2007). Presumably, the cross-defendant then took over the conduct of the defence and the parties had the same legal representation as from the original proceedings. 3 Thereafter a hearing took place between the plaintiff and the defendant (it commenced on 16 May 2007). Judgment was delivered on 24 May 2007. The defendant was successful on the agency issue. 4 The Magistrate then heard argument on questions of costs. Largely, it concerned the costs of the cross-claim. One argument was that the plaintiff should pay the cross-defendant's costs (reference was made to the making of a Bullock or a Sanderson order). Reference was also made to settlement attempts on 24 August 2006, 17 January 2007 and 11 April 2007. 5 After hearing argument, the Magistrate made the following observations: "I propose to make the following orders: costs in favour of the defendant as assessed or agreed from commencement of proceedings up to 11 April 2007, thereafter indemnity costs in favour of the defendant. In relation to the cross-claim, I'll make the following order: judgment in accordance with the terms dated 2 May 2007 and signed by the parties. Further noted notice of discontinuance filed by the parties on 8 May 2007. As to the plaintiff and the defendant, no order as to costs. Thank you Mr Oliveri and Mr Arblaster, you are excused." 6 The proceedings came back to Court on 6 September 2007. The stance taken by the cross-defendant was that the Magistrate had not dealt with the question of the cross-defendant's costs of the cross-claim. This application brought the following observation from the Magistrate: "I think I stated as between the plaintiff and the defendant there was no order as to costs, that's in relation to the cross-claim and there was no, I don't think there was any application before me with respect to any other costs whether between the cross-defendant and the cross-claimant." 7 The Magistrate then proceeded to hear argument on the question. The plaintiff took the stance that, inter alia, the Magistrate was functus officio. The argument that was put on behalf of the cross-defendant was similar to that which had been put on 24 May 2007. After hearing argument, the Magistrate adjourned the matter to 12 September 2007. 8 On 12 September 2007, the Magistrate observed, inter alia, as follows: "I not that on that day there was some issue in relation to the third party's position and in relation to the third party which is Bruce Mulvaney, the cross-defendant, it was noted that as between the defendant and the cross-defendant, that a notice of discontinuance had been filed. And also as to costs the court stated that as to the plaintiff and the defendant there was no order as to costs. Therefore on that date the issue between the plaintiff and the defendant was decided in relation to costs in relation to the cross-claim." 9 The Magistrate further observed as follows: "Firstly, looking at the short minutes of order which were filed and also the notice of discontinuance that were filed in relation to the cross-claim, it is clear that costs were reserved at that time in relation to both documents. In dealing with this matter it is important to have a look at whether assistance can be provided by cases decided on this issue from superior courts. In particular there is a case in the New South Wales Court of Appeal referred to as Furber v Stacey [2005] NSWCA 242. This sets out various propositions and things which need to be considered as to whether the plaintiff, amongst other things, should pay the costs of a third party. In this matter it was considered that even where the making of a third party claim can be said to have been justifiable, this is not sufficient to make it appropriate to pass the costs of the successful party on to the plaintiff. And various principles were then set out. It's noted that the court does have a broad discretion in relation to costs and should seek to do justice between the parties. And whilst the prima facie rule that costs follow the event can be varied in particular cases, the court should have regard to particular circumstances. Including the claims which have been lodged, the evidence and the result. In looking at this matter the pleadings, the cross-claims, the defence and various correspondence and taking into account the evidence which was provided and my previous judgment it would appear to the court that the defendants in this matter were virtually forced by the plaintiff to join the third party. And I note, in particular, the correspondence which was handed up by the defendant on the last occasions, that's 6 September and this correspondence being evidence that was previously provided in the case or produced to the court. Considering that, it is clear to the court that it was inevitable that once these proceedings were brought by the plaintiff against the defendant that the defendant had to join a third party, and in this instance Bruce Mulvaney, in these proceedings. On that basis I intend to make a costs order in favour of the cross-defendant in these proceedings." 10 He then proceeded to make orders of the following effect:- The costs order is that the Plaintiff pay the costs of the Cross-Defendant to the First Cross-Claim as agreed or assessed up to 24 August on an ordinary basis and thereafter on an indemnity basis. 11 On 5 October 2007, the plaintiff filed a Summons in this Court. It seeks leave to appeal what was raised in the Summons, and has been reduced to the following matters: "2. The Plaintiff confines the relief sought in the appeal proceedings herein to: (i) An Order that the said costs order made by the Magistrate on 12 September 2007 be set aside; (ii) An Order that leave be granted if required to appeal from the said costs order made by the Magistrate on 12 September 2007. (iii) An Order that the Cross-Defendant pay the Plaintiff's costs of the appeal.