Otter Gold NL v Barcon P/L & Sankey [2000] NTSC 100

PARTIES:	OTTER GOLD NL

	v

	BARCON (NT) PTY LTD and
	RICHARD ALAN SANKEY

TITLE OF COURT:	SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:	SUPREME COURT OF THE NORTHERN TERRITORY exercising Territory jurisdiction

FILE NO:	22/1999  (9904783)

DELIVERED:	21 December 2000

HEARING DATES:	14 November 2000

JUDGMENT OF:	THOMAS J

CATCHWORDS:
APPEAL FROM MASTER - COSTS
Interlocutory application – appeal against the decision and orders if the Master – costs
Supreme Court Rules 1987 (NT), r 63.04(3) and (4), r 63.18 and r 63.72(9)
TTE Pty Ltd v Ken Day (1990) 2 NTLR 143; Yow v NT Gymnastic Association (1991) 1 NTLR 180; Markorp Pty Ltd v King (as Liquidator of Murray Constructions Pty Ltd) (1992) 106 FLR 286, adopted
Millingimbi Education and Cultural Association Inc v Davies (Kearney J, unreported, 12 October 1990, cited
REPRESENTATION:
Counsel:
	Plaintiff:	D. Alderman
	First & Second Defendants:	B. Johns
Solicitors:
	Plaintiff:	Ward Keller
	First & Second Defendants:	Brian L Johns

Judgment category classification:	C
Judgment ID Number:	tho200027
Number of pages:	7

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Otter Gold NL v Barcon P/L & Sankey [2000] NTSC 100
No. 22/1999  (9904783)

	BETWEEN:

	OTTER GOLD NL
	Plaintiff

	AND:

	BARCON (NT) PTY LTD
	   First Defendant

	and:

	RICHARD ALAN SANKEY
	Second Defendant

CORAM:	THOMAS J

REASONS FOR JUDGMENT

(Delivered 21 December 2000)

[1]	I refer to my Reasons for Judgment in this matter delivered on 15 August 2000.  For the reasons stated I dismissed the applicants’/defendants’ appeal against the decision and orders of the Master dated 1 June 2000.  I further granted leave to the parties to apply on the question of costs.
[2]	Counsel on behalf of the plaintiff, Mr Alderman, sought an order in favour of the plaintiff in respect of the costs before the Master and the costs on the appeal.
[3]	The application to the Master and the appeal to this Court were Interlocutory applications.
[4]	Order 63.18 of the Supreme Court Rules states:
“63.18 Interlocutory application
Each party shall bear his own costs of an interlocutory or other application in a proceeding, whether made on or without notice, unless the Court otherwise orders.”
[5]	In considering the issue of costs on interlocutory applications I respectfully adopt the principle in respect of costs on interlocutory applications expressed by Martin CJ in TTE Pty Ltd v Ken Day (1990) 2 NTLR 142 and discussed by Kearney J in Yow v NT Gymnastic Association (1991) 1 NTLR 180 at 181:
“In TTE Pty Ltd v Ken Day Pty Ltd (unreported, 29 May 1990) Martin J discussed the general principles applicable to the award of costs on interlocutory applications.  His Honour noted the ‘radical departure’ from previous practice evinced by rr 63.18 and 63.04(3)(a); they involved a ‘reversal of thinking about costs in interlocutory matters.’  The reasons of policy which gave rise to that departure meant that:
‘… 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.’
His Honour went on:
‘Given the tenor of the Rules, it would not be just to make interlocutory orders for costs, or, if made, to order that they may be taxed earlier than completion of the proceedings, with a view to punishing the unsuccessful party.  To do so may engender a reluctance in parties to properly ventilate their problems during the pre-trial process.  What is required is an approach which seeks to have a successful party reimbursed the expense of interlocutory proceedings which, for example, would have been unnecessary if the other side had acted reasonably; or which are unnecessarily burdensome; or which are made at a time, such as here, when that party has been deprived of the value of the work done in preparation of his case for trial.  In such instances, and the list is not intended to be definitive or complete, it may well be within the Court’s discretion to exercise the power to override the principles established by the Rules.
Costs in interlocutory matters no longer follow success.  No order as to costs ought to be made against the unsuccessful party, in the usual run of cases, even if contested, if the grounds of the application or resistance [of that party], as the case may be, are reasonable.  However, if such application or resistance [by the unsuccessful party] is without real merit, as if (sic) often the case, the successful party should not have to bear his [own] costs.  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.’ [emphasis mine]
In Milingimbi Education and Cultural Association Inc v Davies (unreported, 12 October 1990), I indicated that I ‘respectfully agree with those general observations.’  The guidelines his Honour provides cannot of course limit the general discretion of the Court.”
See also Millingimbi Education and Cultural Association Inc v Davies (Kearney J, unreported, 12 October 1990).
[6]	Counsel on behalf of the plaintiff submitted that if the defendant had been successful in its application to the Master that would bring the action to finality as against the second defendant and would have concluded the cause of action for a fiduciary claim.  Counsel on behalf of the plaintiff argues this brings matters within exceptional circumstances and is a reason for awarding costs in respect of the interlocutory application.
[7]	Mr Johns on behalf of the defence submits that the application made by the defendant to the Master and the subsequent appeal was perfectly proper and one that could have been anticipated by the plaintiff and was not an application without merit.  Mr Johns states that there is nothing exceptional about the interlocutory application to take it outside of the usual rule that there be no order as to costs on interlocutory applications.
[8]	I accept that had the defendant succeeded in its application before the Master or on appeal then that would have been the end of the action as regards the second defendant and the end of the cause of action for a fiduciary claim as against the first defendant.  I agree that this brings the matter into the category of “exceptional circumstances”.  I do not accept that an action to strike out the plaintiff’s claim as against the second defendant and to strike out certain paragraphs of the plaintiff’s amended statement of claim in respect of the first defendant is an application that could, in these circumstances, have reasonably been anticipated.
[9]	I consider that in these circumstances the interlocutory application does fall within the meaning of the words “exceptional circumstances” such that the plaintiff is entitled to an award of costs.
[10]	The plaintiff further seeks to have such costs taxed forthwith pursuant to Order 63.04(4) of the Supreme Court Rules.  I note that Order 63.04(3) provides that costs on interlocutory proceedings not be taxed until the conclusion of the proceedings to which they relate.  Order 63.04(3) reads as follows:
“(3) Subject to subrule (4), where -
(a) the Court makes an interlocutory order for costs; or 
(b) costs are payable by virtue of these Rules without an order for costs,
those costs shall not be taxed until the conclusion of the proceeding to which they relate.”
63.04(4) provides a wider discretion and states:
“(4)	If it appears to the Court when making an interlocutory order for costs or at a later time that all or a part of the costs ought to be taxed at an earlier stage, it may order accordingly.”
[11]	This issue was considered in the unreported decision of Mildren J, Markorp Pty Ltd v King (as Liquidator of Murray Constructions Pty Ltd) (1992) 106 FLR 286.  I adopt the following from his Honour’s decision at p 293:
“…  The purpose of sub rule (3) is not specified, but presumably it was designed to reduce the administrative burden of having to tax orders for costs made in interlocutory matters, which may in the end become unnecessary, as well as to obviate the need for the payment of costs by one party, and the repayment of costs by the same party, who may well have had both favourable and unfavourable cost orders made as a result of interlocutory proceedings over the lifetime of the action.  Although interlocutory orders for costs may involve relatively large sums of money, in the vast majority of cases, the amounts involved are relatively small, and it seems to me that subrule (3) is primarily directed towards cost orders involving relatively small sums of money.  However, that is not to say that an order to tax might not be made in respect of a relatively small sum in an appropriate case.  In this case, the amounts involved would not be small and are not as likely to be set off against future cost orders that may be made in the plaintiff’s favour on interlocutory applications. ….”
[12]	His Honour then noted that there was no suggestion that if such an order were made it would be unfair or oppressive.
[13]	In this matter I anticipate the costs would be reasonably substantial and would not necessarily be offset by costs on any other interlocutory application during the course of the action.  There is nothing before me to the effect that such an order for taxation would be unfair or oppressive.
[14]	Kearney J held in Yow v NT Gymnastic Association (supra) at 182:
“The outline of this type of interlocutory application usually brings to an end the entire action.  The principle of ‘reasonable anticipation’ referred to by Martin J in relation to r 63.04(3)(a) is not, in my view, of practical application in such a case.  I think the better approach in this type of case is to complete matters immediately; accordingly, the defendant may tax its costs forthwith.”
[15]	Similarly with this matter I consider the better approach is to complete matters immediately.
[16]	Accordingly, I order that the defendant pay the plaintiff’s costs of the proceedings before the Master and on the appeal.  I order that the plaintiff be entitled to tax its costs forthwith.
[17]	During the course of the application, the Court was addressed on issues relating to fiduciary duty which were reasonably complex.  This combined with the fact that had the defendants succeeded there would have been an end to the claim in respect of fiduciary duty justifies its suitability for senior and junior counsel.
[18]	Pursuant to Order 63.72(9)(a) and (b) I certify the matter as fit for senior and junior counsel.

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