Filaria Pty Ltd v Kazar [2002] ACTSC 82 (27 August 2002)

Last Updated: 28 August 2002

FILARIA PTY LIMITED v HENRY KAZAR as trustee for UNITS 157, 158, 159, 160, 161 AND 162 OF THE PAVILLION ON NORTHBOURNE (FORMERLY CANBERRA INTERNATIONAL HOTEL) and THE PROPRIETORS OF UNITS PLAN 932

[2002] ACTSC 82 (27 August 2002)

CATCHWORDS

COSTS - plaintiff applies for leave to discontinue without liability to pay general costs of action - application made only after filing of amended defence - amendment to defence necessitated by plaintiff's lack of particularity in statement of claim.

Unit Titles Act 1970

Supreme Court Act 1933

Supreme Court Rules, O 30 r 1 and r 2, O 65 r 1

Latoudis v Casey CLR [1990] HCA 59; (1990) 170 CLR 534

No. SC 130 of 2000

Judge: Miles CJ

Supreme Court of the ACT

Date: 27 August 2002

IN THE SUPREME COURT OF THE )

) No. SC 130 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: FILARIA PTY LIMITED

ACN 056 933 843

Plaintiff

AND: HENRY KAZAR as trustee for UNITS 157, 158, 159, 160, 161 AND 162 OF THE PAVILLION ON NORTHBOURNE (FORMERLY CANBERRA INTERNATIONAL HOTEL)

First Defendant

AND: THE PROPRIETORS OF UNITS PLAN 932

Second Defendant

ORDER

Judge: Miles CJ

Date: 27 August 2002

Place: Canberra

THE COURT ORDERS THAT:

1. Leave be granted to the plaintiff to discontinue against the second defendant.

2. The plaintiff pay the defendant's costs of the action up to and including the application.

1. This is an application by the plaintiff to discontinue what was essentially an action in detinue against the two defendants commenced by originating application and statement of claim filed on 3 March 2000.

2. The plaintiff's claim against the first defendant was settled by consent judgment on 20  August 2001.

3. There was no opposition by the second defendant to the discontinuance, but the plaintiff wanted leave granted without any adverse order as to costs before the filing of an amended defence on 4 February 2002. That course was opposed by the second defendant who wanted an order for costs against the plaintiff up to and including the hearing of the application for leave to discontinue. The background to all this may be capable of being summarised as follows.

4. There is a hotel on the northern outskirts of Canberra. The land and buildings were the subject of a lease from the Commonwealth to the plaintiff. On 26 October 1993 they became subject to the Unit Titles Act 1970. The plaintiff sold 114 units and retained 42 units. Some of the units retained were used for the general purposes of the hotel, such as kitchen, offices and the like. Those units were known as the ROF units, and the plaintiff held them on behalf of all the other unit holders. The second defendant held title to the common areas such as corridors and lobbies. After a series of events, the first defendant, Mr Kazar, was appointed trustee of the ROF units in place of the plaintiff. Then a dispute arose about who was entitled to various items in the common areas and in the ROF units. The plaintiff claimed in the present proceedings that it was so entitled. Both defendants put on defences general in nature. The first rule about costs on the civil side of the Supreme Court is that there is no rule.

5. It was not until after the claim against Mr Kazar was settled that the legal representatives of the plaintiff and the second defendant got together and sorted out which of the items claimed by the plaintiff were in the ROF units and which were in the common areas. Agreement was reached in this respect by 16 January 2002. The second defendant acted reasonably promptly thereafter and filed an amended defence on 4 February 2002 which reflected the agreement reached.

6. The plaintiff in its statement of claim made no distinction as to those of the goods alleged to be in the possession of the first defendant and those alleged to be in the possession of the second defendant, nor between those alleged to be within the ROF units and those in the common areas. The claim lacking specificity, the second defendant, in my view, was entitled to defend generally. However, once the plaintiff clarified that aspect, which, I was told, did not occur until after inspection of the premises in early January 2002, the second defendant was in a position to amend its defence in order to deny successfully that it was never in possession of the goods claimed save for those the ownership of which was transferred by the plaintiff to the second defendant after the registration of the Units Plan and a resolution passed at a meeting on 28 October 1992.

7. That is the basic principle laid down by the legislature in s 23 of the Supreme Court Act 1933 and is reflected in Rules of Court, O 65 r 1. However, the second rule about costs is that the first rule is contradicted by the entrenched principle that usually the loser pays the winner's costs, unless there is some reason to make an order otherwise; Latoudis v Casey CLR [1990] HCA 59; (1990) 170 CLR 534.

8. Some of the rules of court make particular provision for the allocation of liability for costs. For the purposes of the present case, the relevant rules are or include O 30 r 1 and r 2. There is no alternative to setting out these rules in their entirety:

"Order 30 Discontinuance

1 May be entire or partial

(1) The plaintiff may, where there are pleadings, at any time before the receipt of the defendant's defence, or, after the receipt thereof, before taking any other proceeding in the action (save any interlocutory application), and, where there are no pleadings, the plaintiff may, within 15 days after appearance, by notice in writing, wholly discontinue his or her action against all or any of the defendants, or withdraw any part or parts of his or her alleged cause of complaint, and thereupon he or she shall pay the defendant's costs of the action, or, if the action is not wholly discontinued, the costs occasioned by the matter so withdrawn.

(2) Such costs shall be taxed, and such discontinuance or withdrawal (as the case may be) shall not be a defence to any subsequent action.

(3) Save as in this rule otherwise provided, it shall not be competent for the plaintiff to withdraw the record or discontinue the action without leave of the court, but the court may, before, or at or after the hearing or trial, on such terms as to costs and as to any other action and otherwise as are just, order the action to be discontinued, or any part of the alleged cause of complaint to be struck out.

1A Striking out defence

The court may, in like manner, and with the like discretion as to terms, on the application of a defendant, order the whole or any part of his or her alleged grounds of defence or counterclaim to be withdrawn or struck out, but it shall not be competent to a defendant to withdraw his or her defence, or any part thereof without such leave.

2. Withdrawal by consent

A cause may be discontinued at any time on filing a consent in writing signed by all parties."

9. Once the amended defence was filed on 4 February 2002, the plaintiff accepted, as it was compelled to do, that it had no case against the second defendant. If the statement of claim had made clear which items were claimed as against which defendant or in respect of which area in the hotel, the plaintiff might have avoided responsibility for costs. However, it did not and, in my view, the plaintiff should be liable to pay the second defendant's costs up to the filing of the amended defence and thereafter including costs of this application.

10. There is also an issue for the purpose of a claim in detinue of whether the plaintiff had made the necessary demand for return of the goods prior to commencing proceedings, but I do not consider it necessary to decide this issue.

11. The order of the Court is that leave be granted to the plaintiff to discontinue against the second defendant, the plaintiff to pay the defendant's costs of the action up to and including this application.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Miles.

Associate:

Date: 27 August 2002

Counsel for the Plaintiff: Mr C Erskine

Solicitor for the Plaintiff: Meyer Clapham

Counsel for the First Defendant: Mr C Whitelaw

Solicitor for the First Defendant: Gary Robb and Associates

Counsel for the Second Defendant: -

Counsel for the Second Defendant: Colquhoun Murphy

Date of hearing: 1 March 2002

Date of judgment: 27 August 2002