[Back to Main List] [Back to NTSC 2005 List]

Iskandar & Natrabu v Merpati [2005] NTSC 84

 

PARTIES: FREDDIE ISKANDAR and
NATRABU (AUST) TOURS & TRAVEL PTY LTD

v

MERPATI NUSANTARA AIRLINE

TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION: SUPREME COURT OF THE NORTHERN TERRITORY exercising Territory jurisdiction

FILE NO: 248/96 (9626979)

DELIVERED: 22 December 2005

HEARING DATES: 1 December 2005

JUDGMENT OF: THOMAS J

CATCHWORDS:

REPRESENTATION:

Counsel:
Appellant: F Davis
Respondent: J Reeves QC

Solicitors:
Appellant: Davis Norman
Respondent: Cridlands

Judgment category classification: C
Judgment ID Number: tho200512
Number of pages: 11


IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Iskandar & Natrabu v Merpati [2005] NTSC 84
No. 248/96 (9626979)

BETWEEN:

FREDDIE ISKANDAR
First Plaintiff

NATRABU (AUST) TOURS & TRAVEL PTY LTD
Second Plaintiff

AND:

MERPATI NUSANTARA AIRLINE
Defendant

CORAM: THOMAS J

REASONS FOR JUDGMENT

(Delivered 22 December 2005)

[1] On 6 October 2005, I delivered written reasons for my decision for making an order to dismiss the proceedings.

[2] Leave was granted to the parties to apply on the question of costs.

[3] On 9 November 2005, solicitors for the defendant issued a summons seeking the following orders:
“1. The solicitor for the Plaintiffs, or alternatively the Plaintiffs, pay the Defendant’s costs of the proceeding, including the application to dismiss the proceeding for want of prosecution and of this application, on an indemnity basis, or alternatively on the standard basis;
2. The first Plaintiff attend before the Master to be orally examined and to produce all documents in his possession, custody or power relating to the material questions (as defined by RSC 67.01) as they relate to both Plaintiffs.”

[4] On 2 November 2005, solicitor for the plaintiff issued a summons seeking the following orders:
“(1) That the Defendants Counter Claim is dismissed.
(2) Costs; and
(3) Such Orders as this honourable Court deems appropriate.”

[5] These matters were heard together on 1 December 2005. I shall deal firstly with the defendant’s summons.

[6] At the commencement of submissions, Mr Reeves QC, as counsel for the defendant, advised that the application for costs with respect to the solicitor for the plaintiff would not be proceeding. Accordingly, the application for costs is against the plaintiffs for costs on an indemnity basis or alternately on the standard basis. It is submitted that the application is based upon the following factors:
“2. (a) the dismissal of the proceedings for want of prosecution;
(b) the finding that there had been inordinate delay on the part of the plaintiffs (Reasons at [85]);
(c) the inordinate delay had not been explained in any way by the plaintiffs (Reasons at [88]);
(d) want of prosecution is a form of abuse of process;
(e) the length of the delay;
(f) a substantial portion of the claim being outside the limitation period, with no application to extend time. That part of the claim was almost doomed to failure.”

[7] The power to order costs is set out in Order 63 of the Supreme Court Rules. Rule 63.03 provides that costs of a proceeding are in the discretion of the Court. Rule 63.29(1) gives the Court a discretion to award costs on an indemnity basis. Rule 63.29(2) sets out circumstances in which the costs shall be taxed on the indemnity basis.

Those circumstances are not applicable to this application.

[8] Costs normally follow the event which means the defendant’s having been successful in their application to have the proceedings dismissed would normally be entitled to an order for costs.

[9] Mr Davis, as solicitor for the plaintiffs, submits that the appropriate order would be for each party to bear their own costs. Mr Davis bases this submission on matters set out in the affidavit of Mr Henschke sworn 16 September 2005 and 24 August 2005.

[10] I note that the affidavit of Mr Henschke, dated 24 August 2005, was sworn in support of the defendant’s application for an adjournment of the hearing. This application was heard on 1 September 2005. The application for an adjournment of the hearing was opposed by Mr Davis on behalf of the plaintiffs. The application for an adjournment of the hearing was refused. It was noted the matter was in the civil list scheduled to commence on 12 September 2005. The matter was listed for mention on 7 September 2005. There was an order made that costs be costs in the cause. There was a further mention of the matter on 9 September when the hearing of the matter was scheduled to commence on 19 September 2005.

[11] On 15 September 2005, the defendant filed a summons returnable for 19 September 2005 seeking a number of orders the first being that the proceedings be dismissed. This application was the subject of a hearing during the week commencing 19 September 2003.

[12] On 6 October I delivered written reasons for the order I made which was that the proceedings be dismissed on the basis that there could not now be a fair trial of the issues between the plaintiffs and the defendant. In the course of these reasons, I noted there had been a lack of action by the defendant since December 2004 in preparing the matter for trial. I also noted the lack of action by the defendant since December 2004 did not excuse the many delays occasioned by the plaintiffs prior to December 2004, which formed the basis of the defendant’s application that the proceedings be dismissed. I also noted that it may well have been more appropriate to have brought on the application to dismiss the proceedings before making an application to adjourn the hearing.

[13] Had the defendant been preparing for a hearing following an order made by the Acting Master on 13 December 2004, referring the matter to the Registrar to list for trial, then it could reasonably be anticipated that there would have been an application made on behalf of the defendant to dismiss the proceedings at a much earlier time in 2005. Instead the defendant waited until some two weeks before the matter was scheduled for trial and made an application for adjournment on rather spurious grounds which included not having taken the requirement for preparation of the claim by Mr Iskandar seriously.

[14] Mr Davis made further submissions about the failure of the defendant to have full statements of witnesses prepared and signed. In his affidavit sworn 16 September 2005, Mr Henschke deposes to the fact that he did travel to Indonesia in 1997 to obtain statements from key witnesses for the defence. He did not return to Indonesia to have these statements signed as from the subsequent inaction by the plaintiffs he determined that there was no pressing reason for him to return to Indonesia to have the draft statement signed.

[15] I do not consider the failure to return to Indonesia in 1997 or 1998 to have such statement signed is relevant to the issue of costs. However, the defendant’s lack of action since December 2004 does have a relevance because a hearing of the application to dismiss the proceedings could have been made much earlier. This would have obviated the necessity for any adjournment application and spared the time and expense incurred by the plaintiffs in preparing for a hearing on the merits of the claim.

[16] Mr Davis further submitted that relying on the affidavit of Freddie Iskandar sworn 29 November 2005 paragraph 9 asserts Mr Iskandar has paid $1,000,000 of debts which were the responsibility of the defendant. This assertion is disputed by the defendant. It is not an established fact on which I can base any orders.

[17] The defendant has sought costs on an indemnity basis. To obtain an order for costs on an indemnity basis the defendant must show special circumstances (Vivanet Pty Ltd v Power [2001] NTSC 66). In that case Mildren J ordered costs on an indemnity basis because of the unreasonable actions of the defendant.

[18] The essential basis for the defendant’s application for costs to be awarded on an indemnity basis, is the undue delay by the plaintiffs in litigating the claim which has caused prejudice to the defendant – see Bollag & Bond v Attorney-General (Cth) & Anor (1997) 47 ALD 568 at 587. The principles to be applied in awarding costs on an indemnity basis were set out in Re Wilcox; Ex parte Venture Industries Pty Ltd 1(1996) 41 ALR 727 at 732:
“Until Marks the principles enunciated in Colgate-Palmolive and generally applied in the Court were:
(1) Section 43 of the FCA confers an absolute and unfettered discretion on the court to make orders as to costs but the discretion must be exercised judicially.
(2) In order to exercise the discretion judicially the following principles have been accepted by the court as applicable:
(a) the court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the court in departing from the usual course;
(b) the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the court in departing from the usual course;
(c) while the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.”

[19] The Federal Court constituted of Black CJ, Cooper and Merkel JJ applied these principles in making an order for costs on an indemnity basis – see also applicant NAOU of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs; sub nom per Spender, Ryan and Whitlam JJ.

[20] In the case before this Court, I have found there was an inordinate delay on the part of the plaintiffs such that there cannot now be a fair trial. I did find that the defendant had been inattentive to its case since December 2004, although, for the purpose of the application to dismiss the proceedings this did not excuse the plaintiffs’ delay in the years prior to December 2004. However, I consider it does have some bearing on the question of costs.

[21] I have already set out how the delay on the part of the defendant since 2004 has affected these proceedings. For the reasons already set out, I have concluded the facts and circumstances of this case do not warrant the making of an order for costs other than on a party and party basis.

[22] I have concluded that there is no reason to depart from the usual order that costs follow the event. The defendant was successful in obtaining an order that the plaintiffs’ claim be dismissed.

[23] Accordingly, I order that the plaintiffs pay the defendant’s costs of the proceedings to be agreed or taxed on the standard basis. The defendant has been successful in obtaining an order for costs on a standard basis but not successful with respect to the application for such costs to be paid on an indemnity basis. Accordingly, I consider it appropriate to make no order for costs with respect to the application for costs.

[24] The summons filed on behalf of the defendant seeking an order for costs returnable on 1 December 2005, sought an order for costs against the solicitor for the plaintiffs or alternately the plaintiffs. On the morning of 1 December 2005, Mr Reeves QC advised the Court that the defendant would not be seeking costs against the solicitor for the plaintiffs. I accept Mr Davis’ submission that he had not been informed of this until late in the day before the hearing. I accept Mr Davis prepared written submissions, affidavit material and details of authorities in preparation for his argument on that point. I agree that Mr Davis is entitled to an order that the defendant pay the plaintiffs’ costs in respect of this aspect of the defendant’s application for costs.

[25] The defendant also seeks an order that the first plaintiff in his own capacity and as a director of the second plaintiff attend before the Master, on a date to be fixed, to be examined orally, and produce all documents in his possession, custody or power relating to debts owing to the first and second plaintiffs and as to the property of the first or second plaintiff or means of satisfying the order for costs. The power to make such an order and the consequent procedure is contained in Order 67 of the Supreme Court Rules.

[26] Mr Reeves QC, on behalf of the defendant, refers to the decision in Wilkie v Wilkie & McCalla (No2) [1905] VLR 104. Hood J decided that an order for costs, although not taxed or agreed, is nevertheless a debt within the rule. Mr Reeves QC relies on this decision as authority for the proposition that an order under Rule 67.02 can be made for the examination of Mr Iskandar who has been ordered to pay costs, although these costs have not yet been taxed. I accept the power exists to make such an order. However, I also note that at this time there has been no opportunity for the parties to attempt to come to an agreement on the question of costs.

[27] The authority relied upon of Wilkie v Wilkie & McCalla (No2) (supra) was decided one hundred years ago and in another jurisdiction. There was no evidence put to the Court that it has been the practise of Courts in this jurisdiction to order the examination of a person as to their ability to satisfy an order for costs prior to either an agreement as to the costs or the taxation of the costs. There is no evidence before the Court as to why there is any imperative to have Mr Iskandar so examined prior to the taxation of costs. The highest that it could be put is that Mr Iskandar may decide to return to Indonesia to live and avoid paying the costs. I accept that this is a possibility. However, there was no evidence put to the Court to support this as a realistic concern. Mr Iskandar has clearly resided in the Northern Territory for many years. I am not persuaded that in these circumstances it would be appropriate to make an order for examination of Mr Iskandar at this time.

[28] With respect to the plaintiffs’ summons that the counter claim be dismissed it was decided by consent that this should more appropriately be dealt with at the conclusion of the appeal lodged by the plaintiffs in this matter. Accordingly, this application is to be adjourned sine die. The parties have liberty to apply.

[29] I summarise the orders that are made as follows:

1. An order that the plaintiffs pay the defendant’s costs of the proceedings including the application to dismiss the proceeding for want of prosecution on the standard basis.
2. The application to have these costs paid on an indemnity basis is refused.
3. An order that the defendant pay the plaintiffs’ costs relevant to the application made on behalf of the defendant for an order for costs against the solicitor for the plaintiffs.
4. Other than the order made in Order 3 above, there is no order with respect to the costs on the application for costs, or with respect to the application relating to examination of the first plaintiff.
5. The application to have the first plaintiff examined before the Master pursuant to Order 67 of the Supreme Court Rules is refused.
6. The plaintiffs’ application to have the defendant’s counterclaim dismissed is adjourned sine die with liberty to apply.

_________________________________