Rose v Meriton Apartments Ptd Ltd and another (No 2) [2008] NSWIRComm 25 (14 February 2008)

Last Updated: 30 May 2008

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Rose v Meriton Apartments Ptd Ltd and another (No 2) [2008] NSWIRComm 25



FILE NUMBER(S):
IRC 3505

HEARING DATE(S):
Written submissions

DATE OF JUDGMENT:
14 February 2008

PARTIES:
APPELLANT
John Emanuel Rose

RESPONDENT
Meriton Apartments Pty Ltd and another

CORAM:
Wright J President Walton J Vice-President Boland J


CATCHWORDS: Costs - Appeal - Unfair Contract - Costs should follow event - Whether costs should be paid forthwith - Costs ordered.

LEGAL REPRESENTATIVES
APPELLANT
Mr A W Street SC
Adrian Barwick, Solicitor
FIRST RESPONDENT
Katerina Mihail, Solicitor

SECOND RESPONDENT
Michelle Rockliff, Solicitor
Rockliffs Solicitors & Attorneys

CASES CITED:
Nagle (t/a W.D. & J.L. Nagle & Sons) v Tilburg (1993) 51 IR 8
Surfing Hardware International Holdings Pty Limited and Ors v William McCausland and Anor (No 6) [2007] NSWIRComm 285

LEGISLATION CITED:
Bankruptcy Act 1966
Industrial Relations Act 1996
Industrial Relations Commission Rules 1996


TEXTS CITED:




JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

FULL BENCH

CORAM: WRIGHT J, President
WALTON J, Vice-President

BOLAND J

Thursday 14 February 2008

Matter No IRC 3505 of 2006

JOHN EMANUEL ROSE v MERITON APARTMENTS PTY LTD AND ANOTHER

Application by John Emanuel Rose for leave to appeal and appeal against a judgment of Justice Marks given on 31 October 2006 in Matter No IRC 2131 of 2005

JUDGMENT OF THE COURT

[2008] NSWIRComm 25

1 This matter concerns an application by the appellant for costs arising from the decision of the Full Bench in Rose v Meriton Apartments Pty Ltd and anor [2007] NSWIRComm 264.

2 In Rose v Meriton the Court made the following orders (at [98]):

1. Leave to appeal is granted;

2. The appeal is upheld;

3. The decision at first instance is quashed;

4. The Full Bench orders that the application filed by John Emanuel Rose on 27 August 2006 to amend the proceedings so as to add the appellant as a party to the contract in question be dismissed;

5. The Full Bench orders that the motion filed by Meriton Apartments Pty Ltd on 23 February 2006 to strike out the proceedings commenced by the appellant under s 106 of the Industrial Relations Act 1996 should be dismissed;

6. The Full Bench orders that the motion filed by Owners Corporation Strata Plan No 56443 on 2 March 2006 to strike out the proceedings commenced by the appellant under s 106 of the Industrial Relations Act 1996 be dismissed;

7. The Full Bench orders that the motion filed by Owners Corporation Strata Plan No 56443 on 23 February 2006 that the proceedings be dismissed, or permanently stayed, or stayed pending provision by the appellant of security for costs, be dismissed;

8. The proceedings in Matter No IRC 2131 of 2005 is remitted to a judge of the Industrial Court to be dealt with in accordance with this judgment;

9. The appellant shall file and serve submissions as to costs within 14 days. The respondents have 14 days in which to file and serve a reply. The appellant has a further seven days to respond. Unless the parties or any one of them require to be heard orally on the question of costs, costs will be dealt with on the papers. If the parties reach a consent position in respect of costs, the appellant shall file short minutes of order reflecting the consent position.

3 In his written submission in the present issue, the appellant sought costs of both the appeal and interlocutory proceedings at first instance. He contended that such orders should be made upon the basis of the principle that costs should follow the event. The appellant also contended that, notwithstanding Rule 211 of the Industrial Relations Commission Rules 1996 (that all costs are costs in the cause, unless otherwise ordered), the circumstances of this matter warranted that costs be paid forthwith. Reliance was placed on Rule 203 which states that the Court's power as to costs can be exercised at any stage in the proceedings. Citing Surfing Hardware International Holdings Pty Ltd v McCausland [2007] NSWIRComm 285 as authority which illustrated the broad discretion inherent in Rule 203, the appellant contended that costs orders could be made forthwith in this case as the issues relating to bankruptcy and jurisdiction under s 106 were sufficiently self-contained and detached from the remainder of the proceedings. In addition, to not order the payment of costs forthwith would stultify the appellant's ability to pursue the proceedings, and impede the facilitation of legal representation. This, it was contended, was not consistent with the interests of justice.

4 As to the appellant's unsuccessful motion filed on 27 August 2006 to add the appellant as party, it was contended that costs should be in the cause, given the superfluous nature of the motion and the insignificant bearing it had on either parties' costs. In the alternative, it was submitted there should be no order as to costs.

5 The first respondent submitted that it neither opposed nor consented to the appeal by the appellant, and, accordingly, no order for costs should be made against it in the appeal proceedings. The first respondent accepted that costs should follow the event in respect of the first respondent's notice of motion filed on 23 February 2006, which pursuant to order 5 was dismissed by the Full Bench.

6 The second respondent accepted that costs should follow the event in respect of the appeal and the notices of motion filed by the second respondent on 23 February 2006 and 2 March 2006, which were dismissed by the Full Bench pursuant to orders 6 and 7.

7 The first and second respondents submitted that the respective costs as agreed or assessed should be payable by them at the conclusion of the substantive proceedings and not forthwith. The respondents submitted substantially similar arguments in this respect, contending essentially:

(a) that the appellant was an undischarged bankrupt and if he was ultimately unsuccessful in his claim or if costs were made in favour of the respondents, those costs could not be recovered because of that fact;

(b) the appellant would have an unfair advantage if he was able to recover costs forthwith, while the respondents would be deprived of the opportunity to set off the costs order against any future order made in their respective favour;

(c) there were no grounds that warranted the Court exercising its discretion under Rule 203 and ordering that costs be payable forthwith;

(d) because the appellant had also sought an order that costs be payable to him directly, by application of the Bankruptcy Act 1966, in those circumstances, pursuant to s 58(1)(b), any costs payable would be property of the trustee;

(e) in relation to the appellant's unsuccessful notice of motion dated 27 August 2006, the appellant should pay the costs of the motion and due to the bankruptcy, all costs orders should be made at the conclusion of the proceedings.

8 We consider that, with respect to the second respondent, the usual rule should apply and that costs should follow the event, and the appellant should receive his costs with respect to both the appeal proceedings and the interlocutory applications in the Court below in the form of the orders made below.

9 Because of the submitting appearance by the first respondent, no order shall be made against the first respondent in the appeal proceedings, but an order for the costs incurred at first instance on the first respondent's motion should be made in favour of the appellant.

10 The decision in Surfing Hardware International Pty Ltd v McCausland sets out the relevant principles when a costs order may be made prior to a final order for costs, see [49] - [51]:

[49] It may be accepted that the mere fact that an interlocutory application has been determined does not mean that a cost order should be made in favour of the successful party prior to the final order for costs (see r 211 and Selman v Sweet (No 2) [2003] NSWIRComm 53 at [8]). On the other hand, as reflected in r 203 of the Rules, there is no general principle of law that requires that costs only be paid on the ultimate disposition of the proceedings. Indeed, r 203 provides the Court with a wide discretion to order that costs be paid forthwith notwithstanding that the proceedings are not concluded: UnitedGlobalCom Inc v McRann (No 2) (2004) 133 IR 21 at [8].

[50] The circumstances in which a cost order may be made prior to the final order for costs include where:

(a) a question in the proceedings has been separately determined, no issue in the trial of the balance of the proceedings overlaps with the question in the separate determination and no issue in the trial of the balance of the proceedings can cast doubt on the correctness of an order for costs (see Baramon Sales Pty Ltd v Goodman Fielder Mills Limited [2001] FCA 1819 at [6]–[7];

(b) a question in the proceedings has been separately determined and the question was discrete from any other relief sought in the proceedings (see Charlie Brown Pty Limited and anor v Green and ors (Unreported, Supreme Court of New South Wales, McLelland CJ, 3 July 1995) at 1);

(c) an aspect of the proceedings which has been determined is sufficiently self-contained and detached or detachable from the remainder of the proceedings yet to be heard (see Peter Robert Horrobin v Australia and New Zealand Banking Group Limited (Unreported, Court of Appeal of New South Wales, Priestley JA, 6 June 1997) at 9; Fiduciary Ltd and another v Morningstar Research Pty Ltd and others [2002] NSWSC 432; (2002) 55 NSWLR 1 at [10];

(d) the proceedings were instituted some time previously and there is a considerable time before the proceedings will be disposed of finally (see Horrobin at 9; Fiduciary at [13]; Allstate Life Insurance Co v Australia & New Zealand Banking Group Limited (No 13) (Unreported, Federal Court of Australia, Lockhart, Lindgren and Tamberlin JJ, 17 August 1995) at [5]; UnitedGlobalCom at [24]);

[51] A guiding factor is whether the “demands of justice” (or the “interests of justice”) support the making of costs order prior to the final order for costs (see Fiduciary at [7]–[8], [18]; Thunderdome Racetiming and Scoring Pty Ltd and another v Dorian Industries Pty Ltd and another (1992) 36 FCR 297 at 312; UnitedGlobalCom at [16], [24]).

11 The jurisdictional issues in Rose v Meriton essentially concerned the standing of the appellant (which concerned the construction of s 108 of the Act) and the issues relating to the appellant's bankruptcy. These are matters which are self-contained and are substantially unconnected to other jurisdictional or merit issues that may emerge in the proceedings. We consider that the construction of s 108 and the bankruptcy issues resolved in Rose v Meriton meet the principles enunciated in Surfing Hardware International Pty Ltd v McCausland because they are jurisdictional issues which stand apart from the balance of the proceedings.

12 Whilst we acknowledge that there may arise other jurisdictional challenges , these, by and large, relate to s 106(1) of the Act and potentially attract the operation of the principle in Nagle (t/a W.D. & J.L. Nagle & Sons) v Tilburg (1993) 51 IR 8.

13 We also observe that the interests of justice might not be served if costs are not paid forthwith given the appellant's circumstances. There are circumstances which suggest that if costs are not ordered to be paid forthwith this would impede the appellant's ability to pursue the proceedings.

14 With respect to the costs of the application filed by the appellant on 27 August 2006, they will be costs in the cause. The substantive matters resolved by the appeal concerned the issues raised by the other motions and rendered the resolution of that motion superfluous. Because that motion was not the subject of a substantive determination on its merits, nor represented any substantive costs, it follows that an adverse order should not be made against the appellant.

ORDERS

15 The Court orders as follows:

1. The second respondent shall forthwith pay the appellant's costs of the appeal proceedings as agreed or assessed;

2. The second respondent shall pay the appellant's costs of the proceedings at first instance with respect to the hearing of the notices of motion filed by the second respondent on 2 March 2006 and 23 February 2006 referred to in Orders 6 and 7 made by the Full Bench on 30 November 2007;

3. The first respondent shall pay the appellant's costs of the proceedings at first instance with respect to the hearing of the notice of motion filed by the first respondent on 23 February 2006 referred to in Order 5 made by the Full Bench on 30 November 2007;

4. The costs of the notice of motion filed by the appellant on 27 August 2006 referred to in Order 4 made by the Full Bench on 30 November 2007 shall be costs in the cause.

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LAST UPDATED:
14 February 2008