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- Unreported Judgment
DISTRICT COURT OF QUEENSLAND
Lemin & Anor v Cooper (No.2)  QDC 163
GRANT KENNETH LEMIN
PRECISION PRIORITY PTY LTD
DAVID MAYHEW COOPER
District Court, Brisbane
2 September 2019
28 August 2019
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – APPEALS AS TO COSTS – RELEVANT PRINCIPLES – GENERALLY – where plaintiffs were the respondents to an application to strike out a claim for defamation – where application unsuccessful – where it was determined that the conduct of plaintiffs warranted the making of a costs order – where order made for plaintiffs to pay defendant’s costs to be assessed on a standard basis – where plaintiffs allege the court erred in making costs order on various grounds – whether leave to appeal against costs order should be granted
District Court of Queensland Act 1967 (Qld) s 118B
Uniform Civil Procedure Rules 1999 (Qld) r 681
AGL Sales (Qld) Pty Ltd v Dawson Sales Pty Ltd  QCA 262, cited
AL Powell Holdings Pty Ltd & Anor v Dick & Anor  QCA 254, explained
Amos v Monsour Pty Ltd  QCA 65, cited
ASIC v Jorgensen  QCA 20, cited
Di Carlo v Dubois & Ors  QSC 041, cited
Emanuel Management Property Ltd (in liquidation) v Foster Brewing Group Ltd  QSC 484, cited
House v The King (1936) 55 CLR 499, cited
Morrison v Hudson & Anor  QCA 170, cited
Oshlack v Richmond River Council (1998) 193 CLR 72, cited
Velissaris v Fitzgerald  VSCA 152, cited
K Horsley for the defendant
C Adamson for the plaintiffs
Bell Dixon Butler for the defendant
- The plaintiffs were the respondents to an application filed on 11 June 2019 by the defendant to the claim. The application sought alternative orders, ranging from striking out the statement of claim, striking out the claim and judgment against the plaintiffs.
- The claim was filed on 8 March 2019 and the statement of claim was filed on 12 March 2019. The statement of claim alleged the defendant had defamed the first plaintiff in six emails.
- The application first came on for hearing on 4 July 2019 when leave was granted to read and file an amended statement of claim.
- At the commencement of the hearing of the application on 11 July 2019 before me, the solicitor for the plaintiffs indicated that he wished to rely upon a further amended statement of claim. The document was provided to me but the plaintiffs did not seek to file the document as, I was informed it required further amendment. During the course of the proceedings, I indicated that I was not prepared to strike out the statement of claim and the issue became whether a costs sanction against the plaintiffs was appropriate.
- The parties made oral submissions as to costs. On 12 July 2019, the solicitor for the plaintiffs requested, via my associate, that he be able to deliver further written submissions as to costs. I granted that request and allowed the defendant to respond.
- On 5 August 2019, I delivered my decision with directions the plaintiffs file and serve any further amended statement of claim by 19 August 2019 and ordered the plaintiffs to pay the defendant’s costs of and incidental to the application to be assessed on a standard basis.
- The plaintiffs seeks leave pursuant to s 118B of the District Court of Queensland Act 1967 (Qld) to appeal the decision as to costs. Notice of the intended application was given on 15 August 2019. The matter was listed for hearing on 28 August 2019 with each party forwarding, via my associate, written submissions on 27 August 2019.
- Section 118B (1) of the District Court of Queensland Act 1967 (Qld) provides:
An appeal only in relation to costs lies to the Court of Appeal from a judgment or order of the District Court only by leave of the judge who gave the judgment or made the order, or, if that judge is not available, another District Court judge.
- Such an appeal is an appeal against a discretionary judgment to which the principles of House v The King apply. Chesterman J in Emanuel Management Property Ltd (in liquidation) v Foster Brewing Group Ltd, referring to the equivalent provision in the Supreme Court Act, said:
The evident purpose of s 253 is to limit appeals ‘as to costs only’. This is because decisions on costs afford a prime example of a discretionary judgment which parliament has recognised should be left to the trial judge.
- He described the approach to be taken in this way:
A trial judge who is asked for leave to appeal should not be defensive about the orders made or overly reluctant to give leave. Nevertheless, the cases make it clear that leave should not be given unless there is an arguable case that, applying the principles of House v The King the discretion will be overturned on appeal.
- In House v The King, Dickson, Evert and McTiernan JJ summarised the grounds on which the exercise of a discretionary judgment can be successfully challenged:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
- Chesterman J in Emanuel summarised the principles of House v The King as:
… there must be an arguable case that the judge committed an error of law, or misapprehended the facts or that the result is inexplicably inconsistent with the facts.
- Fraser JA in AGL Sales (Qld) Pty Ltd v Dawson Sales Pty Ltd, referred to the comments by Mackenzie J in Di Carlo v Dubois where he had said,
The requirement that leave be obtained implies, firstly, that leave is not given merely for the asking. By analogy with other instances where leave to appeal is necessary, a plausible basis for arguing that there are some prospects of success must be demonstrated. Secondly, because the judgment as to costs is a discretionary judgment it would be necessary to identify some prospect of success on an argument that there was a demonstrable error in principle, or an argument that the order was so unreasonable that it could not have been properly made.
- Maxwell P, in Velissaris v Fitzgerald described the task in the following terms:
When reviewing the exercise of a judge’s discretion, it is not enough that this Court considers that it might have made a different decision if it had been in the judge’s position. It must be shown that the judge below made an error in the sense of acting on a wrong principle, taking irrelevant matters into account, making a mistake as to the facts or failing to take a material consideration into account.
- In Morrison v Hudson & Anor, Keane JA commented that whether leave to appeal should be granted “will usually depend on the primary judge’s view as to the balance of competing arguments, whether those arguments relate to matters of legal principle or disputed questions of fact, the importance and difficulty of such arguments, and, on occasion, the amount of money involved.”
- In ASIC v Jorgensen, Keane JA commented that the evident intent of the legislature in requiring leave to be obtained was “to ensure that the primary judge’s balancing of discretionary considerations should not be reconsidered on appeal save in cases where the primary judge has first addressed the question whether there is good reason to allow his or her exercise of the discretion to be reviewed.”
- In Amos v Monsour Pty Ltd, Fraser JA referred to the “unwarranted delay in the final resolution of litigation, the incurring of legal costs in due proportion to the value of the original subject matter of the litigation, and the unjustified generation of other public and private costs.”
Grounds of appeal
- In the proposed notice of appeal, the plaintiffs have identified ten grounds of appeal. By the notice of appeal, the plaintiffs seek a different order to the costs order sought at first instance. The orders sought in the draft Notice of Appeal were that:
- The costs orders made below by Sheridan DCJ be set aside and the following orders made.
- Except as provided below, the appellants and the respondent to bear their own costs of and incidental to the respondent’s application filed below on 11 June 2019.
- The appellants to pay the respondent’s costs in respect of the hearing below on the 4 July 2019.
- The respondent to pay the appellants’ costs of and incidental to the hearing below on 11 July 2019 including the affidavit of the respondent David Cooper sworn 6 June 2019.
- The respondent to pay the appellant’s costs of and incidental to this appeal to be assessed on the standard basis.
- The costs orders made below by Sheridan DCJ be set aside and the following order made instead.
- The appellants and the respondent to bear their costs in respect of the respondent’s application below filed on 11 June 2019,
The respondent to pay the appellant’s costs of this appeal to be assessed on a standard basis.
- The draft grounds of appeal are stated as:
- The court erred in not applying the general rule that costs follow the event;
- The court failed to give adequate reasons why it ordered the plaintiffs’ to pay all of the defendant’s costs;
- When considering all the relevant circumstances, the costs order was unreasonable and unjust;
- The court erred because in all the relevant circumstances the costs order should have been based upon time and work done in respect of issues won or lost or on a percentage basis;
- The court erred in not properly informing itself of the relevant facts and circumstances and in particular the time spent and work done on the issues concerning paragraph 7 and the claim to strike out the whole proceedings as vexatious;
- The court erred in giving undue weight to the errors made in setting out the emails;
- The court erred in finding the application was “properly brought” it being apparent that the application to strike out the whole of the proceedings was not properly brought or lacked reasonable prospects of success;
- The court erred because the court gave undue weight to the mistakes made in respect of the emails set out in paragraph 7 of the statement of claim;
- The court erred in not giving adequate weight and consideration to the plaintiffs’ explanation and actions in filing an amended statement of claim;
- The court erred in not giving the plaintiffs their costs in respect of application to strike out proceedings as vexatious on 11 July 2019;
- The court erred in not giving consideration or adequate consideration and weight to the dismissal of the application and the lack of reasonable prospects of success of the defendant’s application to strike out the whole proceedings as vexatious.
- In relation to the first numbered ground 1, in oral submissions it was said that the ground was based on the submission that the court had before it two separate applications, the first of which it is alleged was an application about the errors in paragraph seven of the statement of claim and the second of which is said to be the application to strike out the statement of claim generally.
- I do not accept that submission. At all times, the court had before it one application, which first came before the court in the applications list on 4 July 2019, and which was adjourned to 11 July 2019. Orders were made on 4 July 2019 requiring the plaintiffs to provide copies of the emails relied upon in the statement of claim. The orders included an order that costs be reserved.
- Given that there was before the court only the one application, the cost orders sought by the plaintiffs, both now and on 11 July 2019, amount to a departure from rule 681 of the Uniform Civil Procedure Rules 1999 (Qld) that “costs follow the event”. Ground numbered 3 and paragraphs 2, 3 and 4 of the costs order now sought, and alternative paragraph 2, cannot be interpreted any other way.
- In relation to the second numbered ground 1, it is clear from the terms of my decision that the way in which the claim and statement of claim had been originally filed and served and the subsequent conduct in relation to that pleading justified, in my view, the bringing of an application. As stated in my decision, a party has an obligation to make allegations based on fact and not to mislead. The errors in the pleading were confounded by the errors in the copy emails provided. The plaintiffs failed in their obligations. As is stated in the decision, it was in that sense that the statement was made, in my decision, that the application was “properly brought”.
- In relation to ground numbered 2, for the reasons detailed in paragraphs  to  of my decision at first instance I referred to the conduct of the plaintiffs in terms of the errors in the statement of claim and commented that I did not accept the submission that it would have been apparent that a bad cut and paste job had been done on the emails extracted in paragraph 7. The emails formed the basis of the claim for defamation. I considered that a party was entitled to assume that an accurate depiction of a document would be contained in a pleading and the plaintiffs had failed to do so and, when issues had been raised, failed to take the necessary steps to ensure the errors were corrected and the cause of the errors properly explained. The first time any explanation was proffered was when the application first came on for hearing on 4 July 2019 and that was by way of an explanation from the bar table. Further, it is accepted that the subsequent affidavit filed purportedly explaining the cause of the error was badly drafted. In view of that conduct, it is not accepted that the costs order was unreasonable and unjust.
- In relation to ground numbered 3, an order in the terms proposed would be unusual, is clearly a departure from “costs follow the event” and further, was not an order sought at first instance.
- In relation to ground numbered 4, in giving my decision I made reference to the corrections to paragraph 7 of the statement of claim and the explanation given for the need for the corrections to be made. I indicated that I understood the explanation that the errors had occurred because of the way in which the first plaintiff himself or his wife had copied and pasted the emails in sending them to their solicitor. It was not precisely indicated how that cut and paste job had been done and the affidavit filed did not give an adequate or acceptable explanation for the error. In the submissions now filed, the solicitor accepts the affidavit was badly drafted. The consequence of what was done was that the alleged defamatory matter was not properly set out in the statement of claim.
- In terms of grounds numbered 5, 6 and 7 the focus is again on the court having given undue weight to the mistakes made in respect of the emails in paragraph 7 of the statement of claim. That raises the same issues as ground numbered 4. The focus of the claim for defamation is the emails. In my judgment, I referred to the explanation for the error and concluded that the plaintiffs had an obligation to properly plead the defamatory matter and initially failed to do so, then failed to disclose proper copies of the emails and then failed to provide an accurate explanation for the mistakes.
- In relation to the first stated ground numbered 8, I held that errors in the statement of claim justified the bringing of an application before the court. In giving my decision, I accepted that the emails relied upon for the allegations that the defendant defamed the plaintiffs had been, by the time the application was before the court, properly pleaded, or substantially so as submitted by the solicitor for the plaintiffs. However, by the date of hearing, the solicitor for the plaintiffs stated that the pleading still contained errors and requested that leave be granted to file a further amended statement of claim. Despite the application to strike out, the solicitor for the plaintiffs had still not progressed the matter so as to finalise the statement of claim.
- In relation to second ground numbered 8, by the date of hearing of the application on 11 July 2019, the solicitor for the plaintiffs accepted that the pleading still required further amendment. Whilst an order was not made to strike out the statement of claim, at the request of the solicitor for the plaintiffs, a further pleading was to be filed, which is still yet to be filed.
- In relation to ground numbered 9, the court was aware that the application to strike out had not succeeded and it was for that reason that the court had, in particular, requested the parties address the issue of costs. The court had recognised the issues which had been created by the plaintiffs in failing to issue a pleading absent of error.
- In making oral submissions, the solicitor for the plaintiffs focussed on the failure of the decision to identify any “misconduct” by the plaintiffs, relying on the statement made in the decision of the Court of Appeal in AL Powell Holdings Pty Ltd & Anor v Dick & Anor namely that:
Generally, a successful moving party is entitled to his costs, and will only be deprived of his costs if the opposite party can point to some misconduct relative to the litigation.
- The court commented that, while there was much to complain about the approach of a particular party in that case, it did not, overall, give rise to disentitling conduct. In making that statement, reference was made to the statement of McHugh J in Oshlack v Richmond River Council. McHugh J stated that ‘misconduct’ in this context means ‘misconduct’ relating to the litigation or the circumstances leading up to the litigation with examples being given of a successful party’s lax conduct effectively inviting the litigation, conduct which protracts the proceedings, success on a point not argued below, prosecuting a matter solely to increase costs recoverable or obtaining relief already offered.
- As stated above, in giving the decision at first instance, I referred to the “bad cut and paste job” done in extracting the emails in paragraph 7 of the statement of claim. I did not accept the submission that it would have been apparent that the “bad cut and paste job” was the cause of the problems in paragraph seven. It is clear, that the plaintiffs had been given a number of opportunities to correct the errors in paragraph seven, and for some time had chosen not to, nor to offer a fulsome explanation with respect to the error, and when it did so, the explanation was wanting. I held that a party has an obligation to make allegations in its pleading based on fact and not to mislead the other party as to the nature of the allegation.
- In oral submissions, it was said that the issue as to the need for there to be a finding of misconduct, raised a legal principle. Given my decision, and the fact that I had determined there was conduct by the plaintiffs which justified the making of the order, there is no legal principle in issue.
- Further, there does not appear to be any dispute as to the facts found, other than a criticism that an insufficient analysis was done of the explanation offered for the “bad cut and paste job”.
- In the absence of the court now being satisfied that an issue of legal principle is to be raised, nor important or difficult arguments of law, it is not an appropriate matter in which to grant leave to appeal.
- The plaintiffs’ application for leave to appeal order numbered 2 of the judgment delivered on 5 August 2019 is dismissed.
- I order that the plaintiffs pay the defendant’s costs of the application for leave.
  QDC 137.
 (1936) 55 CLR 499.
  QSC 484,  (Emanuel).
 (1936) 55 CLR 499, 504-505.
 Emanuel, .
  QCA 262, referred to by Martin J in IS Schache and K Schache Superannuation Fund and as representative for investors in the Arafura Pearl Project for the financial year 2005/2006 & Ors v GP No 1 Pty Ltd & Ors  QSC 175.
  QSC 041, .
  VSCA 152, .
  QCA 170, .
  QCA 20,  (with whom Holmes and Fraser JA agreed).
  QCA 65, .
  QCA 254, .
 (1998) 193 CLR 72.
 Ibid, -.
- Published Case Name:
Lemin & Anor v Cooper (No.2)
- Shortened Case Name:
Lemin & Anor v Cooper (No.2)
 QDC 163
02 Sep 2019