Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Stoyle v Govita Agencies Pty Ltd

 

[2019] QSC 62

 

­­SUPREME COURT OF QUEENSLAND

 

CITATION:

Stoyle & ors v Govita Agencies Pty Ltd ACN 051 200 027 & ors [2019] QSC 62

PARTIES:

SANDRA LOUISE STOYLE

(first plaintiff)

and

NICOLE RENEE RACHELE

(second plaintiff)

and

ANGELA RAE WILSON

(third plaintiff)

and

STEFANIE RENDALLS

(fourth plaintiff)

and

KATHRYN SMITH SWEETING

(fifth plaintiff)

v

GOVITA AGENCIES PTY LTD

ACN 051 200 027

(first defendant)

and

GOVITA DISTRIBUTORS LTD

ACN 003 173 439

(second defendant)

and

HEALTHY LIFE GROUP PTY LTD

ACN 155 723 989

(third defendant)

and

OSFAM PTY LTD

ACN 122 473 965

(fourth defendant)

and

HASEENA OSMAN

(fifth defendant)

and

FERHAAD OSMAN

(sixth defendant)

and

ABDULLAH OSMAN

(seventh defendant)

FILE NO:

SC No 14192 of 2018

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

20 March 2019

DELIVERED AT:

Brisbane

HEARING DATE:

30 January 2019; 1 February 2019; written submissions on behalf of the defendants received 4 February 2019; written submissions on behalf of the plaintiffs received 6 February 2019.

JUDGE:

Wilson J

ORDER:

The order of the Court is that:

  1. The first, second, third, fourth and fifth plaintiffs pay the fourth, fifth, sixth and seventh defendants’ costs of and incidental to the proceedings, including the application filed on 21 January 2019, and including reserved costs, to be assessed on the standard basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – where the defendants made an application for the plaintiffs to pay costs on the indemnity basis – whether the plaintiffs should pay the defendants’ costs on the indemnity basis – whether there was some special or unusual feature of the case that justified a departure from the usual rule that the costs of a successful party are to be calculated on the standard basis – whether costs calculated on the indemnity basis should be ordered.

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – FORM OF PLEADING – COSTS – where the plaintiffs advised of an intention to file an amended pleading, which did not occur – where the defendants made an application that the plaintiffs’ claim be set aside, and the statement of claim be struck out – where the plaintiffs consented to the claim to be set aside and the statement of claim to be struck out after the hearing.

PROFESSIONS AND TRADES – LAWYERS – where the plaintiffs’ counsel did not provide written submissions at the hearing of the defendants’ application that the plaintiffs’ claim be set aside, and the statement of claim be struck out – where the plaintiffs consented to the claim to be set aside and the statement of claim to be struck out after the hearing – whether the plaintiffs’ legal representatives are personally liable for the defendants’ costs.

Uniform Civil Procedure Rules 1999 (Qld) r 171, 681, 690, 703

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, cited

2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2) [2016] QSC 65, cited

White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169, cited

Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor [2007] QSC 386, cited

Ingot Capital Investment & Ors v Macquarie Equity Capital Markets & Ors (No 7) (2008) 65 ACSR 324, [2008] NSWSC 19, cited

LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305, cited

COUNSEL:

D M Stevenson for the first, second, third, fourth and fifth plaintiffs

B W J Kidston for the first and second defendants

No appearance from the third defendant

A C Harding for the fourth, fifth, sixth and seventh defendants

SOLICITORS:

Nathan Lawyers Brisbane Pty Ltd (in liquidation) for the first, second, third, fourth and fifth plaintiffs

Colin Biggers & Paisley Pty Ltd for the first and second defendants

Macpherson Kelley Lawyers for the fourth, fifth, sixth and seventh defendants

Background

  1. [1]
    On 21 December 2018 the first, second, third, fourth and fifth plaintiffs (“the plaintiffs”) filed the claim and statement of claim (“the Proceedings”),[1] and served the same on the fourth, fifth, sixth and seventh defendants (“the defendants”).[2]
  1. [2]
    The plaintiffs claimed (jointly) the following relief:
  1. specific performance in the amount of $240,000 for breach of contract;
  2. alternatively, damages in the amount of $240,000 for breach of contract;
  3. damages for workplace bullying and harassment in the amount of $3,000,000;
  4. alternatively, damages for negligence for breach of duty as an employer in the amount of $3,000,000; and
  5. alternatively, general damages for economic and personal loss and future economic and personal loss, in the amount of $3,000,000;
  6. costs;
  7. interest pursuant to the Supreme Court of Queensland Act 1991 (Qld).[3]
  1. [3]
    On 7 January 2019, the defendants filed a Conditional Notice of Intention to Defend.[4]
  1. [4]
    On 8 January 2019, the defendants’ solicitors wrote to the plaintiffs’ solicitors serving the Conditional Notice of Intention to Defend.[5] Relevantly, this letter also:
  1. set out in considerable detail the deficiencies in the plaintiffs’ claim and statement of claim;
  2. called on the plaintiffs, in the light of the deficiencies, to take specified action to rectify the deficiencies by 15 January 2019; and
  3. if this was not done then foreshadowed the making of an application to strike out the claim and statement of claim, and seek costs on the indemnity basis.[6] 
  1. [5]
    On 14 January 2019, the defendants’ solicitors informed the plaintiffs’ solicitors that they were “ instructed to brief Counsel for the making the Application in the event that our clients’ demands are not addressed in the way set out, before the deadline, in our earlier letter ”.[7]
  1. [6]
    On 18 January 2019, the plaintiffs’ solicitors wrote to the defendants’ solicitors stating, relevantly, that “ ...we intend to amend our pleadings ”.[8] This correspondence:
  1. provided no information regarding the extent or nature of the amendments the plaintiffs intended on making;
  2. said nothing about whether the plaintiffs accepted that the claims (or any of them), as formulated, were outside the jurisdiction of the Supreme Court of Queensland;
  3. said nothing about the expected time for filing and serving the amended pleadings; and
  4. threatened to seek indemnity costs from the defendants if the application was made before the plaintiffs had filed an amended pleading.[9]
  1. [7]
    On 21 January 2019, the defendants filed an application seeking, inter alia, a declaration pursuant to rule 16 of the Uniform Civil Procedure Rules 1999 (Qld) (“the UCPR”) that the claim and statement of claim filed by the plaintiffs on 21 December 2018 has not, for want of jurisdiction, been properly started (“the Application”), and an order that the plaintiffs and the lawyers for the plaintiffs pay the costs of and incidental to the Application on the indemnity basis.[10]
  1. [8]
    Then, on 23 January 2019, the defendants’ solicitors wrote to the plaintiffs’ solicitors outlining “Unreasonable Conduct of the Plaintiffs”,[11] which included:

(a) Our clients sought to understand the basis for your clients [sic] claim and continued to do so from your initial correspondence on 15 June 2018. You and/ or your clients unreasonable refused to provide our clients with any particulars in support of the claims your client threatened;

 

(b) You and/ or your clients made no attempts to properly negotiate, or to outline in any sensible and reasonable way the basis for the broad assertions made against our clients prior to filing and serving the current proceedings on the afternoon of the last Court date for the 2018 Calendar year. The taking of this step at this time had the effect of causing maximum distress to our clients over the Christmas period, as it can reasonably be inferred it was intended to do;

 

(c) You and/ or your clients consciously elected to file embarrassing and baseless claims as against parties who were not in any employment relationship with your clients without any proper lawful basis;

 

(d) Your correspondence of 18 January 2019, fails to articulate:

(i) The extent or nature of the amendments your clients intend making [sic];

(ii) Whether your clients accept that the claims, as presently formulated, are outside the jurisdiction of the Supreme Court of Queensland; and

(iii) The expected time frame for filing and serving the amended pleadings.

…”.

  1. [9]
    The defendants rely on this letter as putting the plaintiffs on clear notice as to the further bases, besides the deficiencies in their claim and statement of claim, as to why, by their conduct, an order for indemnity costs is the appropriate order.[12]
  1. [10]
    The Application was listed to be heard on 30 January 2019. At no time before the hearing did the plaintiffs make any concessions about the deficiencies in their claim and statement of claim,[13] and had not filed an amended claim and statement of claim.
  1. [11]
    At the hearing the plaintiffs’ counsel informed the Court that he is married to the first plaintiff; no issue was taken by the defendants’ counsel with the plaintiffs’ counsel continuing to act.[14]
  1. [12]
    At that hearing, the defendants’ counsel provided written submissions.
  1. [13]
    The plaintiffs’ counsel provided no written submissions at this time as his printer “died” the night before.[15]  The defendants’ counsel offered for the submissions to be emailed to them and they would endeavour to get them printed out.[16] The plaintiffs’ counsel stated that this could not occur as his computer was at his chambers on the Sunshine Coast,[17] and someone from his chambers wasn’t able to email it.[18]
  1. [14]
    Discussions were undertaken with counsel with respect to a deadline for further written submissions, during which the plaintiffs’ counsel stated the following:

“It concerns me, your Honour, that the frustration appears to be coming out. I’m concerned by your hearing of this matter, your Honour, but I will make those in my submissions.

Yes, your Honour. I understand that. I also understand that there is significant evidence before the court with respect to a number of issues that are triable issues within Queensland and under Queensland common law rights as well as statutory rights, and it concerns me greatly, your Honour, that I – I feel that your frustration is being taken out on myself personally. I’m concerned greatly, your Honour, that your frustration has been taken out on me personally, and that that will have an impact on these proceedings because I am a husband of one of the plaintiffs. That’s very concerning to me, your Honour. I concede, your Honour, that there are issues with respect to the pleadings, and those issues should be allowed to be addressed, but, your Honour, with all due respect, the frustration you feel is also the frustration that I feel as I feel that this may judge – this may impair your decision making process with respect to this application. Your Honour, again, I will make those submissions in…”.[19]

  1. [15]
    In the course of the hearing the plaintiffs’ counsel conceded for the first time that the claim, in so far as it was based in contract, was not within the jurisdiction of this Court.[20] No other concessions were made. No explanation has been given as to why it took to the hearing to make such a concession. It is noted, however, that throughout the course of the hearing, the plaintiffs’ counsel apologised on a number of occasions for the absence of written submissions.[21]
  1. [16]
    Also at the hearing, the plaintiffs’ counsel indicated that he wished to cross-examine the defendants’ solicitor,[22] and he may consider making an application to exclude me on the grounds of bias.[23]
  1. [17]
    I made an Order that the plaintiffs’ submissions be filed and given to the defendants by 10:00am on 31 January 2019, and emailed to my chambers by midday on 31 January 2019.[24] Any application and submissions in relation to grounds of bias were to be filed by 3:00pm on 31 January 2019.[25]
  1. [18]
    At the time of making that Order, the plaintiffs’ counsel apologised, stating:

“Your Honour, I would like to take a moment.  I have actually just spoken with a preeminent silk with respect to my earlier statement.  I apologise profusely to your Honour with respect to raising issues of my personal feelings.  That was inappropriate.  I do apologise for that, your Honour.  That goes beyond the scope of what I am entitled to say as a counsel.  So I do apologise with respect to that, your Honour.  My feelings are not relevant in this matter and that was inappropriate and I do apologise, your Honour.  I do accept that it overstepped the mark and I am very sorry”.[26]

  1. [19]
    On 31 January 2019, the plaintiffs’ counsel emailed my associate apologising for his behaviour:

“Dear Associate,

I am writing to formally apologise to Her Honour for my behaviour in Court yesterday, it was inappropriate and unprofessional and I apologise unreservedly.

If Her Honour is so minded I am fully prepared to report myself to the Legal Services Commission for disciplinary action.

I have included the opposing Counsel in this correspondence and they consent to me sending this email”.

  1. [20]
    I make no adverse finding as to the plaintiffs’ conduct for raising the issue of bias.
  1. [21]
    The matter then resolved quickly.
  1. [22]
    The plaintiffs’ written submissions were not filed, and the plaintiffs’ counsel advised by email at 11:59am on 31 January 2019 that the Proceedings, insofar as they concerned the defendants, remained unresolved (but that the Proceedings, insofar as they concerned the first and second defendants, had been compromised). The plaintiffs’ counsel also advised that he did not intend to file any written submissions.[27]
  1. [23]
    On 1 February 2019, the plaintiffs consented to an Order that the plaintiffs’ claim, insofar as it concerns the first, second and fourth, fifth, sixth and seventh defendants, be set aside and the statement of claim be struck out.[28]
  2. [24]
    I made a further Order, by consent, that the plaintiffs pay the first and second defendants’ costs of the Application and the Proceedings, on the standard basis, as agreed or assessed.[29]
  1. [25]
    The issue with respect to the defendants’ costs of the Application and the Proceedings was subject to further submissions,[30] and the parties have since filed written submissions.
  1. [26]
    The defendants seek an order that the plaintiffs pay the defendants’ costs of the Application and the Proceeding, on the indemnity basis, and a costs order be made against the plaintiffs’ legal representatives.[31]
  1. [27]
    The plaintiffs resist this, and have submitted that costs should follow the event, assessed on the standard basis.[32]

The parties’ positions

  1. [28]
    The starting point is that costs of the Proceedings, including the costs of the Application, are in the discretion of the court but follow the event, unless the court orders otherwise.[33]
  1. [29]
    The plaintiffs concede that costs should be awarded in these Proceedings pursuant to rule 681 of the UCPR.[34]
  1. [30]
    The defendants make an application for costs to be calculated on the indemnity basis and submit that pursuant to rule 690 of the UCPR, it is appropriate that the costs order be made against the plaintiffs’ legal representatives.[35]

Indemnity costs

  1. [31]
    Rule 171 of the UCPR provides the court with the discretionary power to strike out all or part of a pleading, and then the power to award indemnity costs following such a strike-out:

“(1) This rule applies if a pleading or part of a pleading—

(a) discloses no reasonable cause of action or defence; or

(b) has a tendency to prejudice or delay the fair trial of the proceeding; or

(c) is unnecessary or scandalous; or

(d) is frivolous or vexatious; or

(e) is otherwise an abuse of the process of the court.

(2) The court, at any stage of the proceeding, may strike out all or part of the pleading and order the costs of the application to be paid by a party calculated on the indemnity basis.[36]

(3) On the hearing of an application under subrule (2), the court is not limited to receiving evidence about the pleading”.

  1. [32]
    The court’s power to order that the costs of the Proceedings, including the Application, be paid on the indemnity basis is entirely discretionary.[37]
  1. [33]
    The defendants acknowledge that there should not be a greater disposition towards making an order for costs to be paid on the indemnity basis in the case of applications to strike out under rule 171 of the UCPR than in the case of other interlocutory applications (notwithstanding the specific reference to the indemnity basis in rule 171(2) of the UCPR).[38]

The defendants’ submissions

  1. [34]
    Counsel for the defendants outlined the procedural history of the Proceedings, and made the following submissions, in support of the application for costs being ordered on the indemnity basis:[39]
  1. At the hearing on 30 January 2019 the plaintiffs, by their counsel, did not make any concessions other than that the claim, insofar as it was based in contract, was not within the jurisdiction of the court.
  2. At the hearing on 30 January 2019 the plaintiffs, by their counsel, made and persisted with an application to cross-examine the solicitor for the defendants about parts of his affidavit, with the stated reasons being that the solicitor had misled the court concerning the contracting party in the employment relationships and about the effect of the 14 January 2019 letter. Counsel for the defendants says this application was misconceived, and patently so. Counsel also says these allegations never could have been substantiated, and that both matters were irrelevant to the issues to be decided by the court.
  3. At the hearing on 30 January 2019 the plaintiffs, by their counsel, raised the prospect of, but did not make, an application for me to recuse myself on the grounds of apprehended bias.
  4. The hearing of 30 January 2019 was adjourned for a further day as a result of counsel for the plaintiffs not having attended with written submissions.
  5. Counsel for the defendants submitted that the Proceedings were commenced and formulated in disregard of clearly established law and without any meaningful attempt to comply with the rules of pleading.
  6. Well before the commencement of the Proceedings the defendants had sought to persuade the plaintiffs to engage in a process which might have avoided legal proceedings, but the plaintiffs ignored these entreaties.[40]
  7. The defendants’ counsel says that the plaintiffs put up no arguments whatsoever supporting the claim and the statement of claim as formulated and pleaded in circumstances where the defendants had explicitly informed the plaintiffs well before the hearing of the Application that their claim and statement of claim were liable to be set aside and/or struck out.
  8. The defendants’ counsel submits that the approach taken by the plaintiffs has caused hardship and expense to the defendants, that the Proceedings were commenced for an ulterior purpose, and that the plaintiffs have behaved unreasonably in bringing the Proceedings.
  9. Counsel for the defendants also referred to rule 690 of the UCPR, which provides:

“The court may order a lawyer to repay to the lawyer’s client all or part of any costs ordered to be paid by the client to another party if the party incurred the costs because of the lawyer’s delay, misconduct or negligence”.

  1. The defendants’ counsel acknowledges that although the jurisdiction to order costs against a solicitor in a proceeding should be exercised sparingly and with great caution, counsel for the defendants submits that it clearly extends to misconduct or default which does not constitute gross negligence, including to costs caused to be incurred without reasonable cause.
  2. Counsel for the defendants rely on a text message sent by the plaintiffs’ counsel[41] to say that it demonstrates, well before Proceedings were commenced, his interest in the outcome extended beyond simply being the plaintiffs’ lawyer and had strayed into conduct unconnected with his role as an officer of the court.
  1. [35]
    Finally, the defendants’ counsel submits that the proceedings as formulated were grossly negligent, and the plaintiffs’ legal representatives, especially their counsel, ought not to have permitted the Proceedings to persist once the letter of 8 January 2019[42] had been received, and its contents considered. Further, that the plaintiffs’ counsel ought not to have wasted the time of the court and the defendants with the misconceived application to cross-examine the defendants’ solicitor, and the proposed application for me to recuse myself.

The plaintiffs’ submissions

  1. [36]
    Counsel for the plaintiffs submitted, relevantly, the following in response:

“a. The Counsel for the fourth through seventh defendants has twice provided submissions to this Honourable Court that are in excess of the allowed pages and have done so by disregarding the formal and proper layout of parties [sic] names;

b. the plaintiffs were former and current employees and as such are entitled to work in a safe work place and with safe conditions;

c. the plaintiffs are also entitled to be paid fairly and properly for the hours they worked and in safe conditions;

d. the first plaintiff spoke with the fifth defendant on a number of occasions requesting a proper pay level;

e. the plaintiffs contacted and made a formal complaint to the Fair Work Ombudsman (FWO); 

f. The plaintiffs were forced to commence proceedings because the FWO incorrectly and unlawfully misled and misinformed the plaintiffs that they could not be involved because the claim was over $20,000 and would not address the bullying issues.

g. The FWO have now admitted that there was no [sic] $20,000 and they were required to properly investigate all the matter [sic] and did not

…”.[43]

  1. [37]
    The plaintiffs’ counsel submitted that the plaintiffs have raised triable issues that needed to be addressed that go beyond the jurisdiction and scope of the Fair Work Act 2009 (Cth).[44]
  1. [38]
    However, counsel for the plaintiffs also submitted:

“the plaintiffs say that this entire litigation may have been entirely unnecessary because had the relevant statutory body, the FWO, not completely misled the plaintiffs with respect to the non and underpayment of wages, sham contracts and bullying and harassment, and that the FWO was required to properly investigate the matter, then the plaintiffs would not have commenced proceedings”.[45]

  1. [39]
    The first plaintiff has sworn an affidavit, and the plaintiffs’ counsel has sought leave to read and file this affidavit, in relation to the costs issue. This affidavit reads, relevantly:

“2. At about 4:00pm on 5 February 2019, I was contact [sic] by a director from the Fair Work Ombudsman (FWO), Mr Cameron Hankins (Mr Hankins).

3. Mr Hankins informed me that I and the second plaintiff, Nicole Rachele, should not have been informed by the FWO, or any of its employees, that there was a $20,000 limit on investigation of these matters.

4. I was also informed that our complaint made in or about May 2018 was not properly investigated and FWO was required to investigate this matter, but did not. Mr Hankins apologies to me for this”.[46]

  1. [40]
    The defendants oppose leave being given for this affidavit, stating:

“The basis of the opposition is lack of relevance. It is submitted that the dealings between the plaintiffs and the Fair Work Ombudsman (a statutory agency which is neither a party to the proceedings nor is mentioned in the Statement of Claim) are irrelevant to any of the issues in the proceedings and, moreover, cannot provide a relevant justification, excuse or explanation for the manifold deficiencies in the Claim and Statement of Claim which resulted in the orders which were made by her Honour on 1 February 2019”.[47]

  1. [41]
    In response, counsel for the plaintiffs submitted:

“The affidavit is relied on with respect to the plaintiffs’ submissions and should be allowed as it is directly relevant to the issue of costs”.[48]

  1. [42]
    This affidavit is based on hearsay evidence; there is no affidavit from any person from the Fair Work Ombudsman (“FWO”).
  1. [43]
    I agree that the dealings between the plaintiffs and the FWO (a statutory agency which is neither a party to the Proceedings nor is mentioned in the statement of claim or claim) are irrelevant to any of the issues in the Proceedings and, moreover, cannot provide a relevant justification, excuse or explanation on behalf of the plaintiffs as to the instigation of the Proceedings. This affidavit is not relevant to the Proceedings.
  1. [44]
    I note the plaintiffs’ counsel also submitted that the plaintiffs’ solicitors wrote on several occasions in an attempt to resolve this matter before the need for litigation.[49] This is a curious submission in circumstances where the plaintiffs consented to the claim being set aside, and the statement of claim being struck out, less than two months after filing the claim.

Authorities – indemnity costs

  1. [45]
    The applicable principles for awarding indemnity costs were summarised by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows:[50]

“evidence of particular misconduct that causes loss of time to the Court and to other parties … the fact that proceedings were commenced or continued … in wilful disregard of known facts or clearly established law … the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions … an imprudent refusal of an offer to compromise …”.[51]

  1. [46]
    Burns J, in 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2) [2-16] QSC 65, summarised these principles as follows:

“… reference is often made to the variety of circumstances set out in the judgment of Shepherd J in Colgate Palmolive Company & Anor v Cussons Pty Ltd or in subsequent decisions that have followed a similar approach. Although the several circumstances highlighted in these cases to warrant an order for indemnity costs were not intended to cover the field, they supply useful guidance. Thus, where:

(a) allegations of fraud are made knowing them to be false or irrelevant;

(b) evidence of particular misconduct causes the loss of time to the court and the other parties;

(c) the proceeding was commenced for some ulterior motive; (d) the proceeding was commenced in wilful disregard of known facts or clearly established law;

(e) allegations are made that ought never to have been made;

(f) the case is unduly prolonged because of groundless contentions;

(g) the losing party, properly advised, should have known there was no chance of success;

(h) the court’s processes have been abused in the sense that the court’s time, and the litigants’ money, has been wasted on a frivolous or unjustified proceeding; or

(i) there has been an imprudent refusal of an offer to compromise; the court may conclude in favour of an award of costs assessed on an indemnity basis. Of course, in all cases, costs are in the discretion of the trial judge and the mere presence of one or more of these recognised circumstances does not give rise to an automatic entitlement to indemnity costs. All of the circumstances of the case must be considered to determine whether such an order should be made, and it would be wrong in principle to focus solely on the conduct of the case by the losing party”.[52]

  1. [47]
    However, those principles operate only as a guide to the exercise of relevant discretion. They do not define all of the circumstances in which the discretion is to be exercised, and do not limit the width of that discretion.[53] The justification for an award of indemnity costs continues to require some special or unusual feature of the particular case which justifies the use of the Court’s discretion to do so.[54]
  1. [48]
    In Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor [2007] QSC 386, Chesterman J stated “it is, of course, irresponsible to commence proceedings which cannot succeed because of a known legal impediment”.[55]

Authorities – costs against legal representatives

  1. [49]
    With respect to rule 690 of the UCPR, the defendants’ counsel acknowledges the jurisdiction to order costs against legal representatives in a proceeding should be exercised sparingly and with great caution, but submit that it clearly extends to misconduct or default which does not constitute gross negligence, including to costs caused to be incurred with reasonable cause.[56]
  1. [50]
    The defendants’ counsel also referred to White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169, where Goldberg J stated:

“The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably. It is not clear what is encompassed by 'unreasonably' initiating or continuing proceedings if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success”.[57]

Discussion – indemnity costs

  1. [51]
    The defendants wrote to the plaintiffs on 8 January 2019 and set out a number of deficiencies in the plaintiffs’ claim and statement of claim. As can be seen, this letter was clear in its terms and appropriately sets out the inherent legal impediments in the plaintiffs’ case.
  1. [52]
    The defendants’ letter also set out a number of other issues regarding their view that the plaintiffs have initiated the Proceedings “ for the collateral purpose of embarrassing our clients and injuring their commercial relationship”.[58] I am not satisfied, on the evidence before me, that the plaintiffs’ conduct reaches such a level, and I don’t make any findings in that regard.
  1. [53]
    The plaintiffs responded on 18 January 2019.[59]The plaintiffs responded by advising the defendants that they would amend their pleadings, and if a strike out application was filed prior to the filing of their amended pleadings, then they would be seeking costs on the indemnity basis.[60]No time frame was given as to when such amended pleadings would be filed.
  1. [54]
    Prior to the hearing on 30 January 2019, no amended pleadings had been filed, and no concessions had been made. At the hearing, counsel for the plaintiffs for the first time raised that the claim, in so far as it was based in contract, was not within the jurisdiction of this court. No other concession was made at this time.
  1. [55]
    This matter was adjourned for the plaintiffs’ counsel to provide written submissions. 
  1. [56]
    However, this matter was then resolved quickly; within two days a compromise had been reached and the plaintiffs consented to the claim being set aside, and the statement of claim being struck out.
  1. [57]
    It took the plaintiffs just over two weeks, from the time of their letter on 18 January 2019, until agreeing to a consent order. This was due to the efficiency of the defendants in listing this matter for a strike out application, as foreshadowed in their correspondence.
  1. [58]
    It is clear that the plaintiffs did not conduct this case in an efficient or adept manner. However, to their credit, the plaintiffs did ultimately consent to the claim being set aside, and the statement of claim being struck out. This did save considerable court time.
  1. [59]
    In LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305, Boddice J (whom Holmes JA and McMurdo JA agreed) held:

“Whilst the awarding of costs on an indemnity basis will always ultimately depend upon the exercise of a discretion in the particular circumstances of each individual case, the justification for an award of indemnity costs continues to require some special or unusual feature of the particular case. As was observed by Basten JA in Chaina v Alvaro Homes Pty Ltd , the general rule remains that costs should be assessed on a party and party basis, and the standard to be applied in awarding indemnity costs ought not “be allowed to diminish to the extent that an unsuccessful party will be at risk of an order for costs assessed on an indemnity basis, absent some blameworthy conduct on its part”.[61]

  1. [60]
    The justification for an award of indemnity costs continues to require some special or unusual features; I find that the plaintiffs’ conduct does not meet this threshold.

Discussion – costs against legal representatives

  1. [61]
    The defendants further submit that a costs order should also be made against the plaintiffs’ legal representatives. The focus of their submission is on the conduct of the plaintiffs’ counsel. It is submitted that the text message sent by the plaintiffs’ counsel demonstrates that, well before the Proceedings were commenced, his interest in the outcome extended beyond simply that of being the plaintiffs’ lawyer and had strayed into conduct unconnected with his role as an officer of the court. It is further submitted that what then followed, specifically the plaintiffs’ continued baseless opposition to the relief sought in the Application, needs to be seen in that light.
  1. [62]
    Counsel’s independence is under greater stress when representing family members; however, I am not satisfied on the evidence before me, that in this case it was compromised.
  1. [63]
    I am not satisfied that the plaintiffs’ counsel’s conduct, or any of the plaintiffs’ legal representatives, rises to the level as set out by Goldberg J in White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169
  1. [64]
    I do not make any costs order pursuant to rule 690 of the UCPR against the plaintiffs’ legal representatives.

Order

  1. [65]
    The order for costs shall be:

The first, second, third, fourth and fifth plaintiffs pay the fourth, fifth, sixth and seventh defendants’ costs of and incidental to the proceedings, including the application filed on 21 January 2019, and including reserved costs, to be assessed on the standard basis.

Footnotes

[1] Statement of Claim filed 21 December 2018; Claim filed 21 December 2018.

[2]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-9, p 19. 

[3]  Claim filed 21 December 2018, p 2.

[4]  Conditional Notice of Intention to Defend filed 7 January 2019.

[5]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-10, p 21.

[6]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-10, p 23.

[7]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-12, p 30.

[8]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-30, p 163.

[9]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 3, para 10.

[10]  Application filed 21 January 2019.

[11]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-31, p 164-165.

[12]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 3, para 11. 

[13]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 3, para 12

[14]  Transcript of hearing on 30 January 2019, p 10, paras 5 – 15.

[15]  Transcript of hearing on 30 January 2019, p 11, para 40.

[16]  Transcript of hearing on 30 January 2019, p 20, para 45.

[17]  Transcript of hearing on 30 January 2019, p 21, para 1.

[18]  Transcript of hearing on 30 January 2019, p 21, para 15.

[19]  Transcript of hearing on 30 January 2019, p 25, paras 25, 25 to 45. 

[20]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 3.

[21]  Transcript of hearing on 30 January 2019, p 9, 11, 20 and 21.

[22]  Transcript of hearing on 30 January 2019, p 10, para 32.

[23]  Transcript of hearing on 30 January 2019, p 26, para 15.

[24]  Transcript of the Order on 30 January 2019, p 2, para 5.

[25]  Transcript of the Order on 30 January 2019, p 2, para 5 to 10. 

[26]  Transcript of the Order on 30 January 2019, p 2, para 10 to 15.

[27]  Email from the plaintiffs’ counsel dated 31 January 2019, at 11:59am.

[28]  Order dated 1 February 2019.

[29]  Order dated 1 February 2019.

[30]  Order dated 1 February 2019.

[31]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019.

[32]  The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019.

[33] Uniform Civil Procedure Rules 1999 (Qld) r 681, the defendants’ Outline of Submissions on Costs filed on 5 February 2019.

[34]  The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019, p 4.

[35]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 5.

[36]  Emphasis added.

[37] Uniform Civil Procedure Rules 1999 (Qld) r 171(2) and r 703.

[38]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019, p 1, referring to the judgment of Jackson J in Mio Art Pty Ltd v Macequest Pty Ltd (No 2) [2013] QSC 271 at [37].

[39]  The defendants’ Outline of Submissions on Costs filed on 5 February 2019. 

[40]  The defendants rely on the affidavit of John-Anthony Hodgens filed 23 January 2019, exhibits JAH-3 – JAH-8, p 8-18 in this respect.

[41]  Affidavit of John-Anthony Hodgens filed by leave on 1 February 2019, exhibit JAH-38.

[42]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-10, p 21.

[43] The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019, p 2-3, footnotes and emphasis omitted.

[44] The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019, p 2-3, footnotes and emphasis omitted.

[45]  The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019, p 3.

[46]  Affidavit of the first plaintiff affirmed on 6 February 2019.

[47]  Email from Nicola Skeggs, solicitor for the defendants, dated 7 February 2019 at 8:51AM.

[48]  Email from the plaintiffs’ counsel, dated 7 February 2019 at 9:18AM.

[49]  The plaintiffs’ Outline of Argument – Costs filed on 7 February 2019, p 3.

[50] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.

[51] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233.

[52] 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2) [2016] QSC 65 at [4], footnotes omitted.

[53] Ingot Capital Investment & Ors v Macquarie Equity Capital Markets & Ors (No 7) [2008] NSWSC 199 at [26]; LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305 at [22].

[54] LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305 at [22]; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233.

[55] Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor [2007] QSC 386 at [4].

[56]  The defendants refer to the case of Levick v Cmr of Taxation (2000) 102 FCR 155 at [31]–[50] (Wilcox, Burchett and Tamberlin JJ).

[57] White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169 at 236.

[58]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-10, p 22, para 14.

[59]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-30, p 163.

[60]  Affidavit of John-Anthony Hodgens filed 23 January 2019, exhibit JAH-30, p 163.

[61] LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305 at [22], footnotes omitted.

Close

Editorial Notes

  • Published Case Name:

    Stoyle & Ors v Govita Agencies Pty Ltd ACN 051 200 027 & Ors

  • Shortened Case Name:

    Stoyle v Govita Agencies Pty Ltd

  • MNC:

    [2019] QSC 62

  • Court:

    QSC

  • Judge(s):

    Wilson J

  • Date:

    20 Mar 2019

Litigation History

Event Citation or File Date Notes
Primary Judgment [2019] QSC 62 20 Mar 2019 Determination of costs order after proceedings struck out by consent: Wilson J.

Appeal Status

No Status