Tony John Saliba v Woolworths Limited [1998] ACTSC 147 (13 February 1998)

  
  
  
  

  
   

  

   IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

   MASTER T. CONNOLLY

  

  

   Costs -
Interlocutory Proceedings - Costs awarded in favour of a non party.

  

  

   CANBERRA, 2 February 1998 (hearing), 13 February
1998 (decision)

   #DATE 13:2:1998

  

   Counsel for the Defendant: Mr W Arthur

   Instructing Solicitors: Blake Dawson Waldron

   (62344000)

   Counsel for the proposed

   Second Third Party: Mr M McDonogh

   Instructing Solicitors: Abbott Tout Harper
Blain

   (62497788)

  

  

   THE COURT ORDERS THAT:

  

   1. Paragraph 2 of the Notice of Motion dated 10 December 1997 be
dismissed.

   2. The defendant pay Mr Kun's costs of and incidental to the application.

  

  

   MASTER T. CONNOLLY

  

   This
matter raises the question of whether costs can, and should, be
ordered in favour of a person who is not a party to current proceedings
before
the court.

  

   The plaintiff has brought an action for damages for personal injuries
against the defendant, alleging a
slip in the defendant's premises in 1994. In
1992 the plaintiff was injured as a result of a motor vehicle accident, and
brought
proceedings against Mr Kun in this court . Those proceedings were
settled in November 1997.

  

   A Notice of Motion was issued
by the defendant on 10 December 1997 seeking
to join Mr Kun as a third party to the proceedings. There had been previous
correspondence
between the solicitors for the defendant and the solicitors for
Mr Kun, who had acted on behalf of the NRMA as third party insurer
in relation
to the 1992 motor vehicle accident.

  

   The solicitors for Mr Kun briefed counsel to oppose the Notice of Motion.
The grounds for opposing the order sought would have been that it is
inappropriate to seek to join a separate tortfeaser in this
manner. I was
referred to the decision of the High Court in Dillingham Constructions Pty Ltd
v Steel Mains Pty Ltd [1975] HCA 23;  (1975) 132 CLR 323 where the Court struck out a claim
against a separate tortfeaser which had been joined to an action relating
to a
later accident. I was also urged to accept the proposition that, as the
earlier claim had been settled, to now attempt to in
effect re open that claim
by joining the tortfeaser to a later proceeding would offend the principle of
Res Judicata . Both of these
arguments are strong ones, but they are
unnecessary for me to decide, because the defendant on 27 January advised the
solicitors
for Mr Kun that they would withdraw their application to join Mr
Kun as a third party.

  

   The notice of motion dated 10 December
1997 seeking to join Mr Kun and
another as third parties was returnable before the Registrar on 2 February
1997. At that hearing
the plaintiff and defendant agreed to stand the
application over generally, but counsel appeared for Mr Kun and sought costs.
The
matter was relisted before me that afternoon.

  

   Counsel for Mr Kun argued that the Court has jurisdiction to award costs
against
a non party. He relied on the decision of the High Court in Knight v
F.P. Special Assets Ltd [1992] HCA 28;  (1992) 174 CLR 178, which involved a consideration of
the Rules of the Queensland Supreme Court. Counsel for the defendant accepted,
correctly, that this case is authority for the proposition that a Court may
order costs for or against a person, whether that person
is formally a party
to proceedings or not. He argued that in the circumstances of this case the
unusual procedure of an award of
costs in favour of a non party should not
occur.

  

   The argument in favour of the exercise of the discretion to grant costs
follows from first principles. Mr McDonogh argued that his client was provided
with a copy of the Notice of Motion which sought to
join his client to these
proceedings. He argues that the receipt of a Notice of Motion would be taken
as an important matter, and
that his client accordingly took advice and
prepared himself to appear and contest the matter. He has accordingly incurred
reasonable
costs, and that in the interests of justice when the party moving
the notice of motion abandons the matter, the person who was preparing
to
defend the matter should have their costs in the ordinary manner.

  

   Counsel for the defendant referred me to the Reasons
for Judgment of Finn J
in Lidden v Composite Buyers Ltd [1997] 897 FCA (3 September 1997). In that
matter a firm of accountants received
a letter from a party indicating that
they were intending to proceed with a Notice of Motion to join the firm to the
proceedings.
In the event no Notice of Motion was issued, and the firm of
accountants sought their costs of preparing to oppose the Notice of
Motion, of
which they had been forewarned but which in fact was never taken out.

  

   His Honour took the view that the accountants
were not entitled to an award
of costs. He found that there had been no proceeding before the Court in
relation to which costs had
been incurred. He said

  

  

   "Until a notice of motion had been filed seeking leave to cross claim, or
until the court had
otherwise entertained the matter of such leave - until the
respondents actually made 'use of the machinery of the Court' to obtain
leave:
cf In re Crittenden; Ex parte The Law Institute of Victoria [1958] VR 101 at
102 - there was not such a proceeding on foot
in relation to the cross claim
as would justify a conclusion that Ernst and Young was a non party - let alone
a party - to a proceeding
before the Court."

   Counsel for the defendant argued that until an order was made against Mr
Kun he was not a party to any proceeding.
He said that Mr Kun's failure to
file an appearance was confirmation of this. Counsel for Mr Kun argued that
there is no provision
or requirement in the rules to require an appearance in
these circumstances. I agree with this. He further argued that Mr Kun was
in a
very different position from that considered by Justice Finn, in that he had
been provided with a copy of the Notice of Motion
taken out in this Court
which sought to join him to the proceedings. In this sense, the defendant in
these proceedings had made use
of the "machinery of the Court" against Mr Kun,
and he was accordingly entitled to seek costs for his reasonable costs
incurred in
defending his interests.

  

   I am of the view that Mr Kun is entitled to his costs in responding to the
Notice of Motion. This
is a very different situation from that of the firm of
accountants in Lidden, who had only received a letter threatening them with
future legal proceedings which were never in fact taken out. In this case the
Notice of Motion was taken out. It would have joined
Mr Kun to a personal
injuries claim. It would have effected his legal liabilities, and it is
perfectly reasonable in the circumstances
that he took legal advice and
following that advice prepared to attend and argue the point. To not allow a
person in such circumstances
their costs could well result in significant
injustice.

  

   Counsel for the defendant argued that Mr Kun's solicitors had only
been
advised of the Notice of Motion, and that the correct procedure, if a party
feels that they should not be joined, is to allow
the order to be made joining
them, and then to seek to strike it out. Such and application, if successful,
would attract costs. But
this procedure seems to me to only lengthen
litigation. If a notice of motion is taken out which seeks to join a non party
to proceedings,
that person is able to attend and make submissions. If an
application to join a third party is then refused, it would seem to me
that in
the ordinary event the person who successfully resisted the application to
join them would be entitled to their costs. In
this case the person sought to
be joined prepared to take this course, and was then advised that the Notice
of Motion would not be
proceeded with. They have however legitimately incurred
costs, which should be awarded.

  

   Before the Registrar it was agreed,
as between the plaintiff and the
defendant, to stand the matter over generally. I am satisfied that paragraph 2
of the Notice of
Motion, which seeks to join Mr Kun as a third party should be
dismissed, rather than stood over. I am further satisfied that Mr Kun
should
have his costs.