Fertinova Australia Pty Ltd ACN 052 355 530 & Ors v Samardzija & Ors [1995] QSC 151

, ;;i_~,;;2.. \ , I i \ I I IN TIIE SUPREME COURT· OF QUEENSLAND BE1WEEN: AND: AND: AND: AND: AND: FERTINOVA AUSTRALIA PTY LTD A.C.N. 052 355 530 FERTINOVA INTERNATIONAL (FAR EAST) LIMITED JACK MIROSLA V SAMARDZIJA JACKSON CORPORATION PTY LTD A.C.N. 054 999 138 {In Liquidation F.J. & W.J. TRANSPORT PTY LTD A.C.N. 010 205 803 DAVID OUSTON PTY LTD ORDERS AS TO COSTS - MACKENZIE J Judgment Delivered 10/7/1995 Writ No. 337 of 1993 First Plaintiff Second Plaintiff First Defendant Second Defendant Third Defendant Third Party Upon publication of my reasons for judgment, I invited the parties to make submissions as to costs. Submissions were received from each of the parties including the third party. The plaintiffs which were associated companies and jointly represented, succeeded in establishing conversion against the first and second defendants and in respect of the third defendant succeeded in establishing conversion but only on a limited basis which did not give rise to any -- 1 of 4 -- 2 measurable damages. Proceedings by the first and second defendant against the third defendant failed and third party proceedings by the third defendant against the third party also failed. The sums recovered by the first and second plaintiffs individually and in aggregate were substantially less than the monetary limit of the District Court. An order for costs against the second defendant was made during the course of the trial when the declaration referred to in the reasons for judgment was made. That order remains. The plaintiffs-are also entitled to an order for costs including reserved costs against the first defendant as they were substantially successful against him. As against the third defendant a finding of conversion was made on the basis of an unauthorised sale of the warehousing rights but it was found that after a brief period this was acquiesced in by Mr Ouston, a Director of both the first plaintiff and the third party on behalf of the first plaintiff. Because of this quick acquiescence the plaintiffs failed to establish a case for damages. The third defendant's submission was that the plaintiffs should pay its costs. It was submitted that the plaintiffs were wholly unsuccessful against the third defendant. Because the first and se.cond defendants were likely to prove impecunious but the plaintiffs had given security for costs the third defendant should have recourse to those monies. It was submitted that the plaintiffs' conduct in failing to disclose at the time of the contract through its agent the history of non payment for storage of the goods at the previous location and then failing to pay _storage as it fell due and breaking promises to pay the debt when the third defendant pursued them were relevant circumstances in determining the appropriate order. On the other hand the plaintiffs submitted that departure from the ordinary rule that the plaintiffs pay the. third defendant's costs was justified. It was submitted firstly that because the third defendant had executed ex.55 which the first defendant and second defendant asserted gave title to the goods and the issue of its construction and effect had necessarily to be litigated .. C) CJ -- 2 of 4 -- 3 between the third defendant and the first and second defendants, half the third defendant's costs were attributable to those proceedings, that proportion should be borne by the first and second defendants. Secondly, it was argued that the plaintiff was not wholly unsuccessful because it had established a conversion. An apportionment to reflect that should be made. Thirdly, the submission that the finding of subsequent acquiescence by the third plaintiff to transfer warehousing rights (which was not specifically pleaded) was a relevant factor. In the process of determining whether prior consent had been given on behalf of the plaintiffs to ex.55 being executed a finding was made that there was not prior consent to the transfer of property in or custody of the goods but that once Mr Ouston was aware of the transfer of custody by means of ex.55 he acquiesced in the arrangement. On that basis, the claim for damages failed. Because the third party failed to prove prior consent had been obtained no order for costs should be made against the plaintiffs. Fourthly it was argued that the third defendant's conduct especially in providing to the first and second defendant ex.55 which was not explained until trial, led the plaintiffs to believe reasonably that the third defendant had converted the goods. Exceptional circumstances created by the successful defendant's conduct may be a basis for an order that the defendant bear its own costs. In my opinion the third defendant is entitled to an order against the first and second defendants for costs of the proceedings insofar as they relate to the issues between them. As between the plaintiffs and the third defendant, the situation is more complex. It was not unreasonable for the plaintiffs to proceed to trial against the third defendant on the basis of the information then available. However, upon analysis any success by the plaintiffs against the third defendant is limited in practical terms because of the acquiescence by Mr Ouston to the transfer of the warehousing rights soon after the transfer occurred and before any measurable -- 3 of 4 -- 4 financial damage had been done. This possibility should have been ascertainable by the plaintiffs because of the relationship between them and Mr Ouston. In the circumstances it is appropriate that the plaintiffs should pay the third defendant's costs of the action insofar as the costs relate to issues between them. Any costs attributable solely to issues between the third defendant and first and second defendant should not be included in that sum. So far as the costs of the third party are concerned the third defendant was unsuccessful in establishing its primary contention against the third party. In the absence of any reason to the contrary the third defendant should pay the third party's costs of the third party proceedings. The first and second plaintiffs' substantially unsuccessful claim against the third defendant led to the third party proceedings. Accordingly it is appropriate for an order to be made that the third defendant include in the costs recoverable from the first and second plaintiff any costs that it is required to pay to the third party. The formal orders are the following. The first defendant is ordered to pay the first and second plaintiffs' costs of and incidental to the action including reserved costs to be taxed. The second defendant is ordered to pay the first and second plaintiffs' costs of and incidental to the action to be taxed. The first and second defendants are ordered to pay the third defendant's costs of and incidental to issues in the proceedings between them (including reserved costs if any) to be taxed. The first and second plaintiffs are ordered to pay the third defendant's costs of and incidental to the action (including reserved costs) other than costs attributable solely to issues between the third defendant and first and second defendants. The third defendant is ordered to pay the third party's costs of and incidental to the third party proceedings (including reserved costs if any in such proceedings) to be taxed. The third defendant may include in the costs recoverable from the first and second plaintiffs costs it is required to pay to the third party pursuant to this order. -- 4 of 4 --