Thompson v Franko[2004] QDC 476

DISTRICT COURT OF QUEENSLAND

1. [1]
   These are two appeals from a decision of a magistrate as to costs orders made after a protracted civil trial in the Magistrates Court. As each appellant has appealed against the same order it is convenient to consider the appeals together.

2. [2]
   The first respondent to each appeal commenced an action in the Magistrates Court against Myles Thompson, solicitor, claiming $5,729.61 as damages for breach of contract and on several other bases and a sum of $9.70 as money had and received. The first respondent was represented in that action by William Royds, solicitor.

3. [3]
   The action concerned a claim against Mr Thompson by the first respondent in relation to Mr Thompson’s actions as a solicitor in a conveyancing matter. The claim for $5,729.61 was based on alleged breach of contract, negligence, breach of duty, misleading and deceptive conduct and breach of fiduciary duty. The claim for $9.70 related to a balance in a trust account.

4. [4]
   The matter proceeded over several days hearing and was prolonged by an application, on the third day of the hearing, by Mr Thompson that the first respondent give security for costs. This also proceeded over several days and involved a consideration by the learned magistrate as to whether the first respondent should be dealt with for contempt of court in relation to a failure to comply with court orders.

5. [5]
   The learned magistrate found in an ex tempore judgment at the conclusion of the fourth day of the hearing that the only claim of the plaintiff/first respondent which succeeded was the claim for $9.70.  By giving an ex tempore judgment the learned magistrate was hoping to avoid the need for an order for security for costs against the plaintiff/first respondent.  That was not to be.  An argument over costs developed.  That also proceeded over the days where the issue for security for costs and contempt were considered.  The learned magistrate revised his finding for the plaintiff/first respondent in the amount of $9.70 together with accrued interest, as he was persuaded that the defendant, Mr Thompson, had satisfied the claim by forwarding a cheque for the relevant amount after the conclusion of the third day of hearing.

6. [6]
   As to costs, the learned magistrate ordered that:

“1. The plaintiff pay the defendant’s costs up to and including 29 June 2004 in the amount of $5,000 that the plaintiff’s obligation be reduced to $2,500 the balance of this amount to be paid in fortnightly amount (sic) of $150 first payment by 4.00pm 30/07/04.

2. William James Royds pay the amount of $2,500 into court as contribution towards the costs ordered against the plaintiff in order 1 hereof.

3. The plaintiff pay the defendant’s costs subsequent to 29 June 2004 on the standard basis to be assessed by the registrar.”

7. [7]
   In order to properly consider these orders it will be necessary to refer to the way in which the summary trial proceeded.

8. [8]
   There is an additional factor which concerns me. I am of the view that there has been inadequate or no notice of these appeals served on the first respondent to each appeal. In relation to the appeals Her Honour Bradley DCJ ordered on 17 September 2004 that Mr Royds try to contact the first respondent by telephone to advise of the proceedings, the directions made and the date of the hearing.  I raised the issue with both parties on the hearing of the appeals.  Mr Royds submitted that the first respondent was not relevant to his appeal (transcript p. 2).  I do not accept that.  Were Mr Royds to be successful in his appeal, the first respondent would become liable for the total $5,000 costs ordered.  Counsel for Mr Thompson asserted that the first respondent was served through his solicitor, Mr Royds (transcript pp. 26-27).  I do not accept that.  The plaintiff/first respondent had clearly terminated his retainer of Mr Royds and advised the court in the hearing conducted on 9 July 2004.  In my view, service on Mr Royds as the plaintiff/first respondent’s solicitor was ineffective.  Counsel for Mr Thompson also submitted that notice was sent by facsimile to the mother of the plaintiff/first respondent at an address in Canada.  No order for substituted service was made (transcript p. 28).  I am of the view that no proper service has been made on the first respondent in either appeal.  However, in the light of my determination in relation to each appeal, the orders I make will have no impact on the plaintiff/first respondent.  In those circumstances I intend to determine the appeals.

The summary trial

9. [9]
   After various preliminary proceedings, the trial commenced on 26 February 2004.  Mr Royds appeared for the plaintiff/first respondent.  Mr Sumner-Potts, instructed by Myles Thompson Lawyers appeared for Mr Thompson.  The learned magistrate immediately asked why the claim was in the Magistrates Court.  He was advised by Mr Royds that the matter was more complex than a small claim (transcript p. 2).  The matter then proceeded.

10. [10]
    At the conclusion of the second day of the hearing (27 February 2004), the learned magistrate commented how foolish the action was in relation to both sides and suggested consideration should be given to settling it (transcript p. 271).

11. [11]
    On the third day of the hearing (21 May 2004) the learned magistrate commented that the matter needed to be resolved quickly and that he was concerned about mounting costs (transcript p.282).  During the hearing on that day Mr Royds made allegations of misappropriation and theft against Mr Thompson in relation to the $9.70.  Also on that day, Mr Sumner-Potts made an application for security for costs as there were fears that the plaintiff/first respondent was leaving the jurisdiction.

12. [12]
    On the fourth day of the hearing (29 June 2004), Mr Thompson indicated in evidence that on 25 May 2004 he had sent a cheque to Mr Royds to cover the $9.70 plus interest.  This was after enquiries determined that that amount had been paid into Mr Thompson’s trust account as accrued interest and that the bank had somehow transferred it into his general account.

13. [13]
    The magistrate gave an ex tempore judgment on the afternoon of the fourth day in an attempt to forestall the necessity for an order for security for costs.  He found that after the third day of the hearing Mr Thompson chose to investigate the issue (of the $9.70) more thoroughly than he had earlier done.  He found that Mr Thompson had not dishonestly dealt with those moneys in any way.  He found that Mr Thompson had done “too little too late” and entered judgment for the plaintiff in the amount of $9.70.  The rest of the plaintiff’s claim was not made out.  The learned magistrate indicated that he was considering making no order as to costs.  He was of that view not only in relation to his findings but also in relation to the way the proceedings had been conducted by each of the solicitor principals involved.  He then heard argument as to costs.

14. [14]
    The learned magistrate was informed that Mr Thompson had made a written offer on 15 May 2003 to pay the amount of $9.70.  That offer was conditional on each party bearing its own costs.  It was argued that this was relevant in terms of the magistrate’s decision as to costs.  On 29 June 2004 indemnity costs were not sought by Mr Thompson.  The argument was adjourned after the learned magistrate ordered that the plaintiff/first respondent was to pay $5,000 into court as security for costs.

15. [15]
    On 2 July 2004 the learned magistrate heard that the money had not been paid into court.  Mr Sumner-Potts submitted that the plaintiff/first respondent should be dealt with for contempt.  A further order was made that the $5,000 be paid into court that day.

16. [16]
    On 5 July 2004 Mr Royds made an application that the learned magistrate disqualify himself because of the way in which the contempt application was conducted.  This was refused.  Again the magistrate was informed that the order for payment into court had not been followed.  On that date the learned magistrate set out some of the history of the matter in relation to the issues of relevance in relation to any costs order and the application for security for costs.

17. [17]
    He made the following comments in relation to the summary trial:

“… I wish to say something about how this litigation, particularly the trial, has been conducted between the two solicitor principals involved.

I had been vaguely aware that there had earlier been litigation between them personally, possibly involving issues concerning a former partnership or other arrangement between them.  I consciously did not interest myself in that and focused on the dealing with the claims made by Mr Franko against Mr Thompson.  This has been done and my conclusions are evident in my decision of 29 June 2004.

However, the whole trial has been made longer, more complex and more difficult to deal with because it has been dominated by the extreme personal animosity evident on the part of Mr Royds for Mr Thompson, and in a more restrained and guarded way by Mr Thompson for Mr Royds.  Mr Thompson wisely engaged counsel to appear for him in the proceedings.  Any criticism made of Mr Royds and Mr Thompson here does not extend to Mr Sumner-Potts of counsel, although it may have been preferable if he had not involved his wife as a witness in the proceedings, but someone quite independent.

I came to this bench from practice as a solicitor in civil litigation.  The system of a solicitor conducting litigation from the standpoint of objective and professional distance from the subject matter of litigation is most valuable.  It is in the early part of litigation that such a solicitor should investigate the claim thoroughly and get the best position he can put forward for his client’s case.

The reverse of that position is that when a solicitor does his investigations early he is able then to properly advise his client to compromise on a claim that cannot be pursued, or not to put forward a claim if it is objectively apparent from the evidence that the claim is not available or the evidence to support does not appear.

In this case the defendant is an experienced solicitor principal acting on his own behalf albeit through an employee of his for a significant part of the time.

In the circumstances where his professional reputation is being attacked and a claim for misappropriation of trust moneys is being made one can question the wisdom of such an approach.

Mr Royds now also a solicitor principal of his own firm acted for Mr Franko, a former client of Mr Thompson, with whom Mr Royds demonstrates serious personal animosity.  A reasonable question Mr Royds should have asked himself – and I do not know that he has not done this – is whether in the circumstances he was able to objectively and dispassionately advise and represent Mr Franko in these proceedings.

From both firms the preparation of this litigation for trial appears to me to have been sloppy at least and appalling at another level.

There were, in the course of the trial, many occasions at which I believe I could have halted the trial and ordered the parties to take further formal steps to prepare the matter properly for trial.

This would, however, have added to the costs of both parties and I determined to continue to try the issues in dispute and, despite the lack of trial preparations, at about 5.30 on 29 June 2004 when submissions for costs of each side had been made I expressed doubt that I had the capacity then to resolve the costs issues raised by each party.

I was then asked to address the earlier made application for security for costs.

…

There were on the late afternoon of 29 June 2004 several considerations foremost in my mind.  Firstly, I was probably not going to give full costs to the defendant for reasons that I shall come to but after I was told about the offer to settle, that is for the 15 May 2003, I would probably give some discretionary amount in costs for the defendant.  I therefore had to consider the question of security for costs.”

18. [18]
    The matter was again adjourned for further argument.

19. [19]
    On 7 July 2004 the plaintiff/first respondent was present.  Submissions were made by Mr Sumner-Potts that the order for judgment against Mr Thompson for $9.70 together with interest should be set aside and the defendant permitted to amend the defence as the defendant had satisfied that claim by his cheque sent under cover of a letter of 25 May 2004.  At that stage the cheque had not been banked by the plaintiff/first respondent.  There followed extensive argument as to the implications of that forwarded cheque which included an extraordinary offer to pay $15 cash across in the courtroom.  The matter was again adjourned.

20. [20]
    On 9 July 2004 the plaintiff/first respondent indicated that he had withdrawn his instructions to Mr Royds and felt that he had been drawn into a conflict between two lawyers.  He said that he had been advised by Mr Royds to sue in the Magistrates Court and only after the hearing commenced did he become aware of the extreme animosity between Mr Thompson and Mr Royds.

21. [21]
    The learned magistrate allowed the defendant to amend the defence and formally found that the defendant had satisfied the only claim that the learned magistrate was prepared to allow on the plaintiff/first respondent’s case.

22. [22]
    The learned magistrate then made a costs order. He said,

“Now, I’m influenced by the ruling I gave this morning and by the whole of the circumstances surrounding this extraordinary case.  I make – I therefore make no award of costs for the plaintiff.  There is an open question as to whether I should make any discretionary payment of costs for the defendant of the – that is of the action up to 29 June.

…

Now, what I’ve done therefore is to line up the consideration for granting costs to the defendant and weighed in against the considerations against granting costs for the defendant.  There is no formal judgment or order against the defendant as I have now ruled.  There were however the adverse findings that have not been changed today, simply the consequences I have now realised are different than I originally foreshadowed.

In my view Mr Thompson was justified in vigorously defending his position.  Mr Royds demonstrated extreme personal animosity against him in a way in which he pursued the case for Mr Franko.

And again to digress, it is not that the claims as they were were pursued, but it is my view that with proper early investigation and objective assessment of the case it should have been evident earlier that based upon the evidence that was available to Mr Franko the principal claims were likely to fall short in terms of reaching the relevant standards of proof.

Mr Royds, perhaps arising from these matters, that is the extreme personal animosity, to go back to what I was saying before, offered none of the usual courtesies that exist between practitioners allowing flexibility in the conduct of an action.  The plaintiff does not appear to have given consideration to the simplified procedure under the rules for recovery of minor debts.

Now, under the heading, “considerations against the granting of costs to the defendant”, I note that the total claim made was in the vicinity of $5,000.

Again, under that heading I note the adverse findings, and again I underlined, “not findings of fraud or dishonesty in the dealing with trust funds.”

Mr Thompson sought to run the case through his own firm, notwithstanding that he had had serious and personal differences with Mr Royds unconnected with Mr Franko’s claims thereby risking the loss of objectivity by him as defendant whether he was responding to Mr Royds personally or to the quite modest claims of Mr Franko noting as I do that I have not allowed them.

Perhaps arising from the above there were some quite serious deficiencies in compliance with procedural rules including disclosure and proper notice.  These are things that I have referred to before, and in respect of which I sought to overlook, in the interests of getting on with the trial that had perhaps improperly been pressed through to a hearing when it clearly was not ready for a hearing.

There is a question in my mind whether Mr Royds, in advising Mr Franko to go on with the trial, sufficiently weighed the possibility of a costs order against Mr Franko in light of the evidence that was available to him to prove his case over the other considerations I have mentioned above.

Now, the position is not clear, but weighing these considerations it is my decision that I award $5,000 in costs and no other to the defendant.”  (transcript, 9 July 2004, pp. 58-59).

23. [23]
    Mr Sumner-Potts then submitted that Mr Royds should be ordered to pay the costs personally. Argument ensued and the learned magistrate adjourned to consider the matter.

24. [24]
    On 13 July 2004 the learned magistrate gave his decision.  He commented that the trial had concluded with him giving judgment for the defendant.  That would normally have resulted in costs following the cause and an award of full standard costs to the defendant.  However, the learned magistrate was of the view that such an order would not, as a matter of justice, be a proper one.  He determined that a “modest and symbolic” amount of costs of $5,000 should be awarded to the defendant.

25. [25]
    The learned magistrate noted,

“This case has been dominated, made more complex, extended by the mutual animosity of the two solicitor/principals involved one for the other.”  (13 July 2004, transcript p. 2).

26. [26]
    The learned magistrate stated his reasons why Mr Thompson should be awarded less than the full costs for the action:

“My principal concern over Mr Thompson’s actions in the matter, and this also applies to Mr Royds, is that he allows his view of Mr Royds and their disputes to cloud the action he took or did not take in relation to Mr Franko’s claims.

Mr Franko from the earliest time ie from the settlement of the conveyance in May 2000 was entitled to return to him of the interest earned during the time that his settlement moneys were held in an investment trust account with the Cairns Penny Bank.

I cannot say precisely what Mr Thompson knew at any specific time, however I am convinced that from the time he knew that Mr Royds was acting for Mr Franko he took an extremely defensive attitude to all of Mr Franko’s claims including the trust account claim.

There was ultimately no judgment against Mr Thompson.  This is because on 25 May 2004 after the third day of trial the appropriate amount was tendered to Mr Franko for the first time unconditionally.

While I have ruled that there should not, in these circumstances, be a judgment against the defendant I have also been of the view that this action to pay Mr Franko his entitlements was, to quote my earlier findings, too little too late given the duty Mr Thompson had throughout the process of four years or so.

On 15 May 2003 Mr Thompson made an offer under UCPR to pay the $9.70 then claimed in respect of this aspect of this claim conditional upon the other claims being dropped and each party bearing their own costs.  Here Mr Thompson offered to conditionally do something that as an officer of the court he was duty bound to do unconditionally.  In addition there were certain formal technical deficiencies by Myles Thompson Lawyers as solicitors for the defendant as there were by the solicitors for the plaintiff.

These are matters which were principally in the area of disclosure of documents during the course of preparation for trial.  Such matters are often in trials overlooked or excused either by the other firm involved or by the court in the interests of expedition and resolving the matter.

In this case I suspect that an overly tight approach to things such as disclosure was taken in the matter because of the general atmosphere between Mr Thompson and Mr Royds.

I had earlier said that ideally Mr Thompson would have been better served by engaging independent solicitors to represent him in this litigation.  I remain firmly of that view.  I accept, however, that Mr Thompson, as the litigation came towards trial did take some steps that had had a more ameliorating effect on the problems that I perceived.

Firstly, he employed an experienced solicitor to take over the conduct of this defence.  Mr Miller has had control of the file on behalf of his employer for approximately one year and as far as it goes I have no criticism of Mr Miller’s conduct of the file except that it would clearly have been better to have a solicitor/principal who was not involved in the action itself.  Mr Thompson, or Mr Miller on his behalf, has involved Mr Sumner-Potts in the matter for trial.

While I have earlier expressed reservations about Mr Sumner-Potts using his wife during the course of some investigations and while I am aware that there appears to have been some other issues of difficulty between Mr Sumner-Potts and Mr Royds I am substantially content that the involvement of counsel was a positive development for which credit should be given to Mr Thompson.  Both of these actions have helped remove him from the direct contact with the immediate steps in the action.”  (13 July 2004, transcript pp. 3-5).

27. [27]
    The learned magistrate also ruled that Mr Royds should personally pay $2,500 of the costs awarded. The learned magistrate stated his reasons:

“Mr Royd’s main interest in acting for [Mr Franko] I unfortunately suspect were (sic) principally because his claim was against Mr Thompson.  That is not to say that Mr Franko’s claim was not one that ought to have been taken on and fully investigated.

At the outset there legitimately appeared to be and ultimately was a good claim about the failure to properly account for trust moneys.  Mr Royds ultimately pressed that too far in alleging dishonesty in relation to these funds when no such evidence was evident as far as I can see.

There was certainly nothing improper in taking up the investigations of the other claims of negligence in the conveyancing process and it is commendable if Mr Royds was prepared to pick up and look at these matters on a speculative basis as appears to have been the case.

It is not proper, however, if it is that the matter was pursued further than it should have been or the way that it should just because Mr Thompson was the potential defendant.  I suspect that Mr Royds judgment was clouded.  I asked the question, was he properly advancing a legitimate claim for Mr Franko in the very best way it could be advanced.  That is the question posed.

I keep in my mind that my findings of 29 June 2004 were simply that I could not be satisfied on the balance of probabilities that Mr Franko had notified Mr Thompson of the alleged breach of the pre-sale conditions required by the vendors for whom Mr Thompson was also acting.  If that is all there was I would not contemplate any award of costs against Mr Royds.

I am not satisfied, however, that Mr Royds has properly advised and represented Mr Franko in a number of respects.  There should have been a conference between Mr Royds and Mr Franko hopefully prior to the commencement of proceedings reviewing the evidence available to prove each of the claims and informing Mr Franko as to the likelihood of success and the consequences of failure of these claims and I note here that Mr Franko was the only witness called for the defence [sic].  This conference should also have canvassed the possibility of utilising the simplified minor debt procedure.  While that approach may have confronted Mr Franko directly with Mr Thompson there could have been an application to allow legal representation for Mr Franko in that process.  It appears that none of this assessment occurred.

On what Mr Franko has said to me since Mr Royds has ceased to represent him I am content that no such conference occurred.  Mr Franko went to this trial, I am convinced, less than fully advised of his position of the prospects of success and the consequences of failure.  There were other deficiencies on the part of Mr Royds related, for example, to persistently pressing claims of intended dishonesty against not only Mr Thompson but also Mr Sumner-Potts (presumably Mrs Sumner-Potts) when there was not in either case any evidence to support these accusations.

This and other deficiencies can, I think, be seen as evidence of a loss of the necessary objectivity that a solicitor should retain to analyse his client’s own case.  This is a duty that he owes to the client, not only to the client, but also to the court.  If this case was to be pursued by a solicitor for the plaintiff who retained the necessary objectivity and had an average level of advocacy skills I believe that it could have been concluded in less than one day’s hearing.

I therefore believe that Mr Royds should have to pay some of the costs awarded against Mr Franko.  In saying what I have said about Mr Royds I am applying to him the high standard that it to be expected of a solicitor as an officer of the court.”  (13 July 2004, transcript pp. 5-8).

28. [28]
    The learned magistrate then made the formal orders referred to in paragraph 6 above. He also discharged the plaintiff/first respondent in relation to any contempt.

29. [29]
    A reading of the trial transcript reveals that it was conducted in an atmosphere of aggression between Mr Royds and Mr Thompson. It involved serious allegations of misconduct and dishonesty made by Mr Royds. In my view the learned magistrate’s comments on how the trial was conducted were entirely apt.

Appeal number 352 of 2004

30. [30]
    The appellant abandoned ground 1 in the notice of appeal.  The grounds pursued by Mr Thompson on the hearing of the appeal were:

“2. His Worship erred in law when he failed to give proper consideration to the discretion to award the appellant his full costs of and ancillary to the action having regard to the general rule about costs as expressed in rule 689 of the UCPR that costs follow the event when he:

1. (a)
   failed to take into account or give sufficient weight to the fact that the appellant had wholly succeeded in his defence of the first respondent’s claim, with the exception of the claim for $9.70, which amount the appellant tendered to the first respondent during the hearing;

2. (b)
   failed to apply the decision of the High Court of Australia in Oshlack v Richmond River Council (1998) 193 CLR 72.

3. His Worship erred in law in the exercise of his discretion in failing to order that the appellant should have his full costs of and ancillary to the action assessed on an indemnity basis when he:

1. (a)
   failed to take into account or give sufficient weight to:

1. (i)
   the unnecessary prolongation of the trial as a result of:

1. (i)
   the lack of objectivity of the second respondent;

2. (ii)
   the absence in the second respondent of an average level of advocacy skills;

3. (iii)
   the making of groundless allegations of dishonesty against the appellant despite the advice received from the Law Society that there was no just cause for complaint;

4. (iv)
   the animosity of the second respondent to the appellant;

5. (v)
   the fact that it was the second respondent who determined how the proceedings were to be prosecuted.

2. (ii)
   the imprudent refusal by the first respondent of the appellant’s offer of compromise;

3. (iii)
   the ulterior motive of the second respondent in acting on behalf of the first respondent.

2. (b)
   failed to apply the decision of the Court of Appeal in Cosgrove v Johns [2000] QCA 157.

4. His Worship erred in law in the exercise of his discretion in failing to order that the second respondent should bear either all of the costs of the proceedings or a greater proportion of the costs of the proceedings in circumstances where the second respondent was guilty of misconduct and/or negligence in the prosecution of the proceedings, when his Worship failed to give sufficient weight to the following facts:

1. (a)
   that the proceedings were extended and made more complex by the animosity of the second respondent towards the appellant;

2. (b)
   that the second respondent’s main interest in acting for the first respondent was principally because the first respondent’s claim was against the appellant;

3. (c)
   that the second respondent went too far in pressing an allegation of dishonesty against the appellant when there was no evidence to support such an allegation;

4. (d)
   that the second respondent was not properly advancing a legitimate claim for the first respondent in the very best way that it could be advanced;

5. (e)
   that the second respondent had not properly advised and represented the first respondent in:

1. (i)
   failing to confer with the first respondent prior to the trial to review the evidence;

2. (ii)
   failing to advise the first respondent as to the likelihood of success and the consequences of failure;

3. (iii)
   failing to canvass with the first respondent the possibility of utilising the simplified minor debt procedure;

6. (f)
   that the second respondent persistently pressed claims of intended dishonesty against the appellant when there was no evidence to support the accusations;

7. (g)
   that the second respondent breached his duty to the first respondent and to the court in failing to demonstrate the necessary objectivity that a solicitor should retain to analyse his case;

8. (h)
   that the second respondent pursued the case on behalf of the first respondent in the absence of an average level of advocacy skills.”

31. [31]
    An issue arose as to whether the appellant required leave to appeal pursuant to s 45 of the Magistrates Court Act 1921 (Qld).  The original action involved a claim in excess of $5,000.  In my view, although the order sought to be appealed from involves $5,000, the original action involved a claim for in excess of $5,000 and no leave is required (Graham v Roberts and Muller [1956] St R Qd 459).

32. [32]
    In relation to ground 2, it is submitted that the learned magistrate erred in departing from the normal rule that an award of costs should indemnify the successful party (Oshlack v Richmond River Council (1998) 193 CLR 72).  However, the normal rule can be departed from in appropriate circumstances.  Such a departure has been described as “an exceptional measure” (Smeaton Hanscomb and Co Ltd v Assoon / Setty, Son and Co (No 2) [1953] 1 WLR 1481 at 1484).  It is clear that the “usual order” should be departed from only in special or exceptional circumstances.  It is clear also that it is the conduct of the successful party which is relevant to any exercise of discretion to disallow all or part of its costs (Oshlack’s case, above;  Latoudis v Casey (1990) 170 CLR 53).

33. [33]
    A reading of the trial transcript clearly indicates that it was Mr Royds who displayed extreme animosity towards Mr Thompson. However, the learned magistrate also found that the conduct of the trial, the disclosures made or not made and proper investigation of the claim for $9.70 were also impacted upon by Mr Thompson’s attitude to Mr Royds. I am of the view that the learned magistrate was clearly entitled to make the findings that he did. I am satisfied that he did not give undue weight to the animosity displayed by the two principals in adding to the length and complexity of the trial, where Mr Royds was clearly more to blame. The animosity also had an impact on how Mr Thompson prepared the trial and on the way in which the trial was conducted. Proper investigation would have demonstrated that the plaintiff was entitled unconditionally to the $9.70 plus accrued interest. The learned magistrate found that such proper investigations were not conducted by Mr Thompson. The learned magistrate was of the view that Mr Thompson’s attitude to Mr Royds contributed to that failing. That was open to him given the course the trial took.

34. [34]
    The award of costs is discretionary. The learned magistrate gave clear reasons as to why he was departing from the normal order. Those findings were plainly open to him. I can see no error in his approach. He was entitled to treat this case as amounting to special or exceptional circumstances. The ground of appeal fails.

35. [35]
    In relation to ground 3, I note that the submission that costs should have been awarded on an indemnity basis was only raised late in the arguments about costs before the learned magistrate.  He determined to award what he termed a “modest and symbolic” amount to recognise the issues that he had identified which warranted a departure from the normal order.  As noted above, I am of the view that such an approach was warranted in the circumstances. Following that finding, I am of the view that it would have been inappropriate to award indemnity costs.  This ground of appeal fails.

36. [36]
    Ground 4 argues that the learned magistrate erred in not ordering that the second respondent, Mr Royds, should personally pay either all of the costs or a greater proportion of them.  I am of the view that Mr Royds approach to the trial was subjective and coloured by his animosity towards Mr Thompson. To describe it as ill advised is perhaps being overly generous to him. Whilst the learned magistrate could well have ordered him to pay all of the $5,000 awarded, I am not persuaded that the learned magistrate erred in his discretion to make the order he did.  Again, the learned magistrate set out extensive reasons for the orders he made.  They disclose no errors or consideration of irrelevant matters or the giving of inappropriate weight to any matter.  In my view, in the exercise of his discretion, after such an extraordinary trial, he was entitled to make the orders he did.  This ground of appeal also fails.

37. [37]
    Appeal number 352 of 2004 is dismissed.

Appeal number 328 of 2004

38. [38]
    On 17 September 2004 Mr Royds was granted leave to appeal against the decision of the learned magistrate.  I am of the view that leave was not required for the reasons stated above in paragraph [31].

39. [39]
    The grounds of appeal are:

“That the magistrate erred in fact and law in that the magistrate:

1. Made his decision without any evidence to support it.

2. Made his decision against the evidence.

3. Made his decision upon his presumptions.

4. Made his decision in a biased manner.

5. Failed to take into account the facts of the matter.

6. Presumed facts which did not exist and for which there was no bases to presume those facts.

7. Made his decision based on his misinterpretation of the rules of court.

8. Made his decision for the wrong reason, namely to justify his previous decisions in making various orders for security for costs against the plaintiff and his actions in respect of contempt of court proceedings against the plaintiff.

9. Ordered that the plaintiff pay the defendant’s costs when the court should have made an order that the defendant pay the plaintiff’s costs.

10. Failed to properly assess the quantum of costs.

11. Failed to take into account the decision of Chacia v Haines.”

40. [40]
    In written submissions the appellant expanded on these grounds and did not pursue some of them.

41. [41]
    The appellant abandoned the argument that the learned magistrate had no power to make the order pursuant to rule 708 of the UCPR, in that the order was that the appellant pay $2,500 costs.  This was clearly not the case as the formal order indicates that the appellant was ordered to pay the amount as contribution to the costs ordered against the plaintiff/first respondent.  This was clearly within the power conferred by rule 708.

42. [42]
    With respect to the grounds that the learned magistrate made his decision without any evidence to support it, made the decision against the evidence, made the decision based on presumptions (or presumed facts which did not exist and for which there was no basis to presume those facts), failed to take into account the facts of the matter and misinterpreted the rules of court, the learned magistrate clearly set out his reasons for ordering a portion of the costs to be paid by the appellant personally. In my view, they display no reliance on facts that are shown to be in error or on presumptions which were not clearly open. The fault on the appellant’s part identified by the learned magistrate related to a lack of objectivity in advising his client based on the appellant’s animosity towards Mr Thompson. That animosity is plainly apparent in the transcript of the trial. The learned magistrate’s decision was also based on the unfounded allegations of dishonesty made by the appellant against Mr Thompson. The findings were clearly open and it is plain that the appellant conducted the trial in a wholly unwarranted aggressive manner. It was clearly open to the learned magistrate to find that this amounted to misconduct in order to found the exercise of discretion to order part of the costs personally against the appellant. There is nothing in any of those complaints.

43. [43]
    With respect to the grounds that the learned magistrate made his decision in a biased manner and had justified previous decisions about security for costs and contempt concerning the plaintiff/first respondent, a reading of the transcript does not disclose any inkling of bias on the part of the learned magistrate. He treated both sides equally. This was in the face of uncalled for aggression by the appellant towards Mr Thompson. The arguments and various decisions concerning security for costs were brought about by the plaintiff absenting himself from the trial and failing to obey court orders. It is also wrong to assert that the plaintiff/first respondent was convicted of contempt. In the end the pending charge of contempt was formally discharged (13 July 2004, decision, transcript p. 17).  In any event the plaintiff/first respondent was ordered to pay the costs of the hearing days involved in the applications for security for costs and the contempt proceedings.

44. [44]
    The learned magistrate decided to make an award of costs to the defendant. The defendant had been successful in the trial although the issue involving the $9.70 only resolved during the course of the trial. That was part of the reasons why only an amount of $5,000 costs was awarded. Costs clearly followed the result although not to the full extent. The decision to order that the appellant recompense part of those costs was clearly open in the circumstances. The way in which the appellant conducted himself clearly added to the complexity and length of the proceedings. He made unfounded allegations of dishonesty. It is clear in my view that his animosity towards Mr Thompson clouded his judgment and his duty to his client to provide objective advice. This added to the distasteful spectacle that occurred.

45. [45]
    It was clearly open to the learned magistrate to make the order. There is no discernable error. There is no merit in any of the grounds of appeal.

46. [46]
    Appeal number 328 of 2004 is dismissed.

Orders

47. [47]
    Appeal number 352 of 2004 is dismissed. The appellant is to pay the second respondent’s costs of the appeal on a standard basis as agreed or assessed.

48. [48]
    Appeal number 328 of 2004 is dismissed. The appellant is to pay the second respondent’s costs of the appeal on a standard basis as agreed or assessed.