New South Wales Supreme Court CITATION : Padlyn Pools Pty Ltd trading as Smart Pools & Renovations v Muggridge (No 2) [2010] NSWSC 19 HEARING DATE(S) : 5 November 2009 + written submissions JUDGMENT DATE : 3 February 2010 JURISDICTION : Common Law JUDGMENT OF : Rothman J DECISION : The Court dismisses the application for costs and further orders that, in relation to the application for costs, there also be no order for costs. The proceedings are dismissed. CATCHWORDS : COSTS – ordinary rule that costs follow the event to be displaced only if onus satisfied that order should not be made – onus satisfied – unusual proceeding in which leave to appeal refused – no order for costs LEGISLATION CITED : Civil Procedure Act 2005 Uniform Civil Procedure Rules 2000 CATEGORY : Consequential orders CASES CITED : Padlyn Pools Pty Ltd v Muggridge [2009] NSWSC 1041 PARTIES : Padlyn Pools Pty Ltd t/as Smart Pools & Renovations (Plaintiff) Maureen Caroline Muggridge (Defendant) FILE NUMBER(S) : SC 12430/2008 SOLICITORS : Mahony Dominic Lawyers (Plaintiff) Maurice Marshan Lawyer (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ROTHMAN J 3 FEBRUARY 2010 12430/2008 Padlyn Pools Pty Ltd t/as Smart Pools & Renovations v Muggridge (No 2) JUDGMENT 1 HIS HONOUR: The defendant, Ms Maureen Muggridge, seeks to take advantage of leave reserved to either party to make application for orders for costs, arising out of the substantive judgment: Padlyn Pools Pty Ltd v Muggridge [2009] NSWSC 1041 (hereinafter "the principal judgment"). The principal judgment should be read in conjunction with these reasons. 2 Ms Muggridge stole property from her employer, the plaintiff (hereinafter referred to as "Smart Pools"). In December 1999, Ms Muggridge was convicted of a number of offences relating to that conduct, but no custodial sentence was imposed. By separate order, the Local Court ordered compensation to Smart Pools in the amount of $27,084.65. As a result of an application for writ of execution and applications by Ms Muggridge, the Local Court ordered payment by instalments of $50 per week, commencing in October 2000. 3 Apart from an initial lack of punctuality (the first scheduled payment was three days late), nothing further was heard of these orders until after June 2007. By that stage, seven years' worth of payments had been made, although, given the rate of payment, if the payments were satisfying interest costs, they would have barely done so. There were communications between the parties and, eventually, Smart Pools made application for the setting aside of the instalment orders and the immediate payment of the judgment debt. 4 By the time the matter came before the Local Court, the remaining outstanding debt had been paid. Smart Pools applied to the Local Court for an order that Ms Muggridge pay its costs of the proceedings before the Local Court (i.e. the initial proceedings for judgment and the proceedings for cessation of the instalment scheme). The learned magistrate made some disparaging remarks about the methods of Smart Pools and refused to award costs to them, but ordered Smart Pools to pay Ms Muggridge's costs on an indemnity basis. 5 Smart Pools appealed and the Court, as presently constituted, refused leave to appeal and otherwise dismissed the proceedings, making no order as to costs. In those circumstances, Ms Muggridge submits that costs should follow the event, and, given that the appeal to this Court has been dismissed, the plaintiff should pay Ms Muggridge's costs in this Court. 6 This Court, as a superior court of record of general jurisdiction in both common law and equity and by virtue of its establishment by letters patent with all the powers of the Courts of Westminster, has an inherent jurisdiction to award costs. Since the promulgation of the Civil Procedure Act 2005, the awarding of costs has been dealt with by s 98 of that Act. By s 98 of the Civil Procedure Act, costs are within the discretion of the Court and the Court has full power to determine by whom, to whom and to what extent costs are to be paid, and on what basis. 7 Notwithstanding the relevantly unqualified terms of s 98, the discretion to order costs (and to whose benefit and on what basis it should be ordered) must be exercised judicially. Ordinarily, costs follow the event: UCPR 42.1. The Uniform Civil Procedure Rules 2005 further (UCPR 42.1) provide that, if any order as to costs were to be made, the Court is to order that the costs follow the event, unless it appears that some other order should be made. In some respects, this creates a higher onus on a party seeking to depart from the ordinary basis and imposes on such a party an onus to convince the Court that the ordinary basis ought not apply. In circumstances where it is the Court that considers a different order should be made, that order is to be made only in circumstances where it is satisfied that the ordinary rule, namely that costs follow the event, should not apply. 8 The exercise of that discretion is informed by the provisions of s 60 of the Civil Procedure Act, which requires that the Court's procedure be implemented with the object of resolving issues between the parties in a way that costs are proportionate to the importance and complexity of the subject matter. In essence, this means that in relation to matters involving a controversy of little importance or complexity (and/or small amounts of money), the process of the Court ought to be even more expeditious and, possibly, less formal. Otherwise, the other provisions of the Civil Procedure Act apply, particularly s 56 and following. 9 The appeal was dismissed and, ordinarily, the plaintiff would pay the defendant's costs. In this instance, the appeal was dismissed without determining the merits of the appeal. The amount in issue was small. The order for costs was for an amount less than $3,000. There was no unreasonableness associated with the desire of the plaintiff to have the judgment debt paid in full. And it was, directly or indirectly, as a result of that application that the amount was paid in full. 10 On the other hand, the defendant had complied with the orders of the Local Court, save to a miniscule extent at the very outset. The defendant had the benefit of a payment by instalments scheme that seemed generous, and the judgment arose from her criminal conduct injuring the victim, i.e. the plaintiff. However, costs are not a punishment, but a recompense for the reasonable costs of enforcing or defending a party's rights. 11 It was in those circumstances that the Court took the preliminary view that there should be no order for costs. Notwithstanding the cogent submissions of the defendant, which, in accordance with the directions of the Court, were in writing, the Court confirms its preliminary view. For all the reasons given in the entirety of these reasons for judgment, together with the reasons in the principal judgment, the Court is satisfied that the ordinary rule should not apply and that no party should, in relation to the proceedings before this Court, obtain an order for costs. 12 If the matter were to have been decided on the merits, it is more than arguable that the learned magistrate may have been in error in not applying the ordinary rule that costs follow the event. As earlier stated, even the application for the cessation of the instalment arrangement was successful in that it precipitated the full payment of the judgment debt. An employer, in the position of the plaintiff, is not unreasonable in seeking the full payment of the debt owed, when it had reason to believe that its former employee was in a different financial position than she was when the instalment scheme was implemented. 13 The Court dismisses the application for costs and further orders that, in relation to the application for costs, there also be no order for costs. The proceedings are dismissed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.