Frederick W Nielsen (Canberra) Pty Limited v Pdc Constructions (ACT) Pty Limited and National Capital Development Commission [1988] ACTSC 66 (10 November 1988)

SUPREME COURT OF THE ACT

FREDERICK W. NIELSEN (CANBERRA) PTY. LIMITED v. P.D.C. CONSTRUCTIONS (A.C.T.)
PTY. LIMITED and NATIONAL CAPITAL DEVELOPMENT COMMISSION
S.C. No. 1652 of 1983
Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Practice and Procedure - costs - application for deter- mination of question of costs reserved - at what stage of proceedings such a question may be determined - meaning of term "costs reserved".

HEARING

CANBERRA
10:11:1988

Counsel for the Plaintiff: Mr P. Dodson

Solicitors for the Plaintiff: Gillespie Jones & Co.

Counsel for the 1st defendant: Mr R. Clynes

Solicitors for the 1st defendant: Minter Ellison

ORDER

1. The costs of the firstnamed defendant incidental to the first notice of motion of 21 June 1984 and including the costs of the hearing before the Registrar on 9 July 1984 and the hearing of the appeal before Blackburn C.J. up to and including 14 September 1984 be paid by the plaintiff.

2. Each party bear its own costs relating to the first notice of motion of 21 June 1984 incurred after 14 September 1984.

3. Each party bear its own costs of the notice of motion dated 21 October 1987.

4. The plaintiff file and serve notice of discontinuance against the second defendant within seven days.

DECISION

This is an application by notice of motion dated 21 October 1987 seeking an order that the question of costs reserved by Blackburn C.J. on 14 September 1984 be decided in favour of the applicant first defendant, that is to say, that the first defendant's costs of the proceedings before Blackburn C.J. be paid by the plaintiff.

2. The matter has a complicated history which may be summarised as follows.

3. On 12 October 1983 the plaintiff issued a writ of summons to which was attached a statement of claim. The plaintiff sued the first defendant in tort and contract and the second defendant in tort only. Both defendants took out notices of motion seeking to strike out certain paragraphs of the statement of claim. The applications came before the Registrar, who decided that the statement of claim disclosed no cause of action in tort. The Registrar decided further that there were defects in the claim in contract as pleaded, and made an order striking out most of the statement of claim but giving leave to the plaintiff to re-plead its cause of action which, in accordance with the decision of the Registrar, was necessarily a claim in contract only. The Registrar's decision had the effect of barring the plaintiff from continuing against the second defendant, although apparently no formal steps have been taken to dismiss the second defendant from the action. It is about time that such steps were taken. From here on I shall refer to the first defendant as simply "the defendant".

4. On 12 April 1984 the plaintiff filed a notice of appeal against the Registrar's decision to strike out the statement of claim, but on 22 May 1984 filed an amended statement of claim which accorded or purported to accord with the Registrar's order insofar as it sought relief against the first defendant in contract and quantum meruit only. The plaintiff's advisers took the attitude, with some justification, that the plaintiff was obliged to take this course in accordance with Order 32 Rule 7 of the Supreme Court Rules. That rule provides:
"7. If a party who has obtained an order for

1leave to amend does not amend accordingly within
the time limited for that purpose by the order,
or, if no time is thereby limited, then within
fourteen days from the date of the order, such
order to amend shall, on the expiration of such
limited time or of such fourteen days (as the
case may be), become ipso facto void, unless the
time is extended by the Court or Judge."

5. On 21 June 1984 the defendant took out a notice of motion seeking a stay of proceedings until the disposal of the plaintiff's appeal from the Registrar's order striking out the statement of claim. That notice of motion was dismissed by the Registrar on 6 August 1984. On 8 August 1984 the defendants filed a notice of appeal against the Registrar's refusal to stay proceedings and the appeal came before Blackburn C.J. I am told, and it is not in dispute, that his Honour indicated during the course of the hearing that he had formed the view that it was appropriate to stay the action until the question of the outstanding appeal against the Registrar's striking-out order could be heard. The parties then consented to an order that "all proceedings herein on the plaintiff's amended statement of claim filed 22 May 1984 be stayed pending the resolution of the plaintiff's appeal from the decision of the Registrar handed down on 22 April 1984 until further order" and his Honour further ordered that the costs of and incidental to the first defendant's notice of motion of 21 June 1984 including the costs of the hearing before the Registrar on 9 July 1984 and of the appeal be reserved.

6. On 12 March 1987 the appeal against the order of the Registrar that the statement of claim be struck out as disclosing no reasonable cause of action was dismissed. The plaintiff filed a further amended statement of claim on 8 April 1987. There was correspondence between the parties' solicitors relating to particulars. The defendant took out a notice of motion to strike out certain paragraphs of the further amended statement of claim. That notice of motion was dismissed with costs on 10 August 1987. There was an appeal against that decision which was dismissed by me on 2 October 1987. The notice of motion, which is now before me, was taken out on 21 October 1987. The defendant filed a defence on 13 November 1987.

7. The defendant submits that there is no reason why the question of costs reserved by Blackburn C.J. on 14 September 1984 should not be decided now. Counsel for the plaintiff contends that the question of costs which was reserved then should not be decided until the hearing of the action, when all matters which might bear on the issue may be investigated and ventilated. The defendant relied upon the fact that the defence has now been filed. The plaintiff relied upon the fact that the case is not yet ready to be listed for hearing, that discovery has not yet been completed, and that the notice of motion now under consideration was taken out on 21 October 1987 before the defence was filed on 13 November 1987. Reference was made to Williams, Supreme Court Practice Victoria 2nd. ed. para 65.1.13, where the learned author states that costs are reserved when the court is not in a position to know on whom the burden falls. This is, in my view, probably so in most cases, but it does not mean that, when a court orders that costs be reserved, that the court could not, by enquiry, place itself in a position to decide who should bear the costs at that stage. It is common for costs to be reserved simply as a matter of convenience when the business of the court is such that it is not convenient to enter into an enquiry on the matter there and then. I tend to the view that the term "costs reserved" means that the question of costs is put aside until a later time. That time will, in the absence of any order of the court to the contrary, be the time of the final determination of the litigation. If a party wants the question of reserved costs to be determined before then, normally some reason would have to be shown to justify the court embarking upon the enquiry at some time earlier than the final hearing. In the present case the defendant has not put forward any persuasive reason why the question of costs reserved by Blackburn C.J. should be determined now.

8. However, having heard the parties fully on the question, I would think it pedantic in the extreme if I were to further defer deciding the outstanding question of the costs reserved by Blackburn C.J. During the course of the hearing his Honour intimated that there should be a stay of proceedings until the determination of the appeal against the decision of the Registrar on 9 April 1984. That seems to me, if I may say so, to have been an eminently sensible suggestion, so much so that it was accepted by the parties to this litigation, in which agreement and consent have not been conspicuous. For the defendant to have been required to plead to the amended statement of claim filed on 27 May 1984 when there was an outstanding question whether the statement of claim should have been amended at all, would have been to embark upon an enterprise which might have turned out to be entirely fruitless. That the appeal against the Registrar's striking-out order failed does not, in my view, make any difference. The case, as we know, has become complicated enough and Blackburn C.J. clearly foresaw that to stay the proceedings until determination of the appeal was likely to avoid unnecessary complication and cost. The parties accepted what fell from his Honour, and the order staying proceedings was made by consent. In those circumstances, the conclusion is inescapable that the defendant, who sought the stay which was resisted by the plaintiff until the matter was part heard by Blackburn C.J., should have the costs paid by the plaintiff. Nothing is to be gained by postponing any further the resolution of who should pay the costs reserved by Blackburn C.J. The plaintiff must bear those costs.

9. However, the costs of the present application before me are a different matter. I have now decided the question of the costs reserved by Blackburn C.J. because I have been appraised of all the issues, but there does not appear to be any good reason why the application should have been brought before me at this stage. There is no reason why it should not have awaited the hearing of the action itself, whenever that might be. It is inappropriate, therefore, that the defendant should have its costs of the application now before me paid by the plaintiff.

10. The orders I make are as follows:

1. The costs of the first defendant incidental to the
first notice of motion of 21 June 1984 and including
the costs of the hearing before the Registrar on
9 July 1984 and the hearing of the appeal before
Blackburn C.J. up to and including 14 September 1984
be paid by the plaintiff.
2. Each party is to bear its own costs relating to the
first notice of motion of 21 June 1984 incurred after
14 September 1984.
3. Each party is to bear its own costs of the notice of
motion of 21 October 1987.
4. The plaintiff is to file and serve notice of
discontinuance against the second defendant within
seven days.