Thumbiran v Silver Chef Rentals Pty Ltd; Thumbiran v Silver Chef Rentals Pty Ltd (No 2)

THE COURT: This Court allowed two appeals brought by Mr Thumbiran and set aside orders made in two separate proceedings in the Equity Division on 11 August 2022: Thumbiran v Silver Chef Rentals Pty Ltd; Thumbiran v Silver Chef Rentals Pty Ltd [2022] NSWCA 148. In each case, the appeal was allowed with costs. This Court also re-exercised the costs discretion made when Ball J summarily dismissed Mr Thumbiran’s proceedings on Silver Chef’s application, setting aside the order that Mr Thumbiran pay Silver Chef’s costs of that application, and ordering that Silver Chef pay his costs of that application. In relation to the earlier hearing before Darke J, this Court left in place the extant costs order (reflecting Mr Thumbiran’s failure on whether the parties had reached a binding agreement) but noted that the order did not extend to subsequent costs when Darke J made orders on Silver Chef’s application which went beyond the agreement found to have been reached. In explaining that course, it was said at [47]:

Within the time specified by UCPR r 36.16, Silver Chef applied to vary the orders as to costs. Its supporting affidavit did not disclose the basis for the application. However, by submissions filed on 2 September 2022 in accordance with directions made by the Registrar, it explained why it sought orders that Mr Thumbiran pay its costs, or alternatively that there be no order as to costs.

The Registrar also stated that the Court would after receipt of Silver Chef’s submissions, advise whether to invite Mr Thumbiran to make submissions in response. It has not been necessary to do so. The following summary of Silver Chef’s submissions presupposes some familiarity with the history recounted in this Court’s main judgment.

Silver Chef submits, correctly, that Mr Thumbiran succeeded on appeal on a point not raised before Ball J, and further that his decision to take that course was a “conscious and deliberate one”. It also relies on the fact that this Court did not determine Mr Thumbiran’s submission that Silver Chef’s success before Darke J was “tainted by fraud” or had been obtained by an abuse of process. On those bases, it makes the following submission, which is best reproduced verbatim:

The starting point is UCPR r 42.1. The usual order is that costs follow the event. The event in each case was the appeal being allowed. The question is whether Silver Chef has demonstrated some reason for departing from the usual rule. There are occasions when a successful appellant’s failure to take a point is a proper basis for departing from the usual rule. But each case will turn on its own facts.

In the present case, this Court rejected the submission which was advanced by Silver Chef, that the document signed by Mr Thumbiran somehow constituted a charge on his land securing his obligations as guarantor. That submission was wrong. It seems likely that that error is the source of the entire litigation, because seemingly on the strength of that document, Silver Chef lodged caveats on Mr Thumbiran’s land.

This Court also found that Darke J had erred in making orders in accordance with the deed proffered by Silver Chef. Silver Chef’s draft deed departed materially, and favourably to Silver Chef, from the agreement reached by exchange of emails between the parties’ solicitors. It left Mr Thumbiran in breach at the outset. It contained an exclusive jurisdiction clause in Victoria. And, most significantly for what ensued, the deed also recited an acknowledgement that Mr Thumbiran had charged his land. None of this should have occurred. It is true that those matters were not pointed out by the unadmitted clerk who appeared for Mr Thumbiran on that occasion. But they should never have been contained in the deed. Even if that were not so, when the judge deleted other clauses which went beyond the parties’ agreement, that should have alerted the lawyer who appeared for Silver Chef to alert the judge to other clauses which on no view could ever have been part of the parties’ agreement.

Those two matters were at the forefront of this Court’s reasons. It was said at [19]:

The fact that neither side pointed this out to the Court was reflected in this Court making orders with the effect that each side would bear his and its own costs of that aspect of the proceeding.

It was also said at [41]-[42]:

These points, which are not addressed in Silver Chef’s submissions, form an amply sufficient basis for not departing from the usual order as to costs of the appeal from Darke J’s decision, and for not altering the effect of the costs of that proceeding at first instance.

In the appeal from Ball J’s decision, two further points may be made. The first is that it is not unusual for courts not to determine submissions in an interlocutory appeal when there may in the future be a final hearing on different evidence. That circumstance is relevant to the exercise of the costs discretion, but usually more relevant will be the nature of the submissions which the Court did determine. In the present case, Silver Chef sought to defend Ball J’s decision on the basis that his Honour had not materially relied on the clauses inserted by Silver Chef in the deed reciting that Mr Thumbiran had charged his land. That submission was rejected (see at [38]-[39]). Thus, not only did Mr Thumbiran succeed and Silver Chef fail in this Court based on the acceptance and rejection of their submissions, but also the outcome was directly linked to Silver Chef’s original incorporation in the deed propounded by it of recitals which should not have been there.

We doubt that there is a proper basis for the inference that insofar as Mr Thumbiran did not make those points before Ball J, his decision was “a conscious and deliberate one”. But it is not necessary in order to determine this application to take that point any further. The issue is whether Silver Chef has made out a proper basis to alter the effect of r 42.1. Even taking Silver Chef’s case at its highest, it has failed to do so. Contrary to its submission, there is nothing unjust in Silver Chef bearing the costs of both appeals and the interlocutory hearing before Ball J where those costs were a direct consequence of its incorrect submissions as to the legal effect of documents drafted by it. Silver Chef’s notice of motion should be dismissed, with costs.