Remely v O'Shea[2008] QCA 111

SUPREME COURT OF QUEENSLAND

1. THE COURT:  On 4 April 2008 the Court dismissed the appellant's appeal against a trial judge's refusal of his application for judicial review of a decision of the first respondent acting as referee under the Small Claims Tribunal Act 1973 (Qld).  The Court also refused various applications made by the appellant.  The Court ordered the appellant to pay the respondents' costs of the appeal and those applications to be assessed on the standard basis in each case, but the second respondents were given leave to make written submissions pursuant to Practice Direction No 1 of 2005 in support of their application that the costs should instead be assessed on the indemnity basis. 

2. The second respondents rely in part on the appellant’s failure to accept their offer made on 26 October 2007 that if the appellant withdrew his appeal within 14 days then the second respondents would not seek any costs of the appeal. That offer was not made under Ch 9 Pt 5 of the Uniform Civil Procedure Rules 1999 (Qld), which in any event is not applicable to appeals.  Nevertheless, that the appellant achieved a less favourable result in his appeal and other applications than was offered many months before the hearing is a factor that, depending on other circumstances, might support an order for costs on the indemnity basis.^[1] 

3. Also in favour of indemnity costs is the Court's conclusion that the appellant pursued some hopeless contentions in the appeal, including his assertions of bias by the referee and his attempts to re-litigate some of the claims on the merits.^[2]  The allegation of bias lacked substance and should not have been made or reiterated on appeal.  The appellant submits that the findings of this Court do not condone or exonerate the conduct of the second respondents in relation to what he alleged were the second respondents’ overcharges and withholding of the bond.  But the appellant was not entitled to litigate the merits of the decision of the referee in the Supreme Court.^[3]  Much less was it reasonable for him to attempt to re-litigate those issues on appeal after the statutory limitations upon the Court's jurisdiction had clearly been pointed out in the reasons of the trial judge.

4. The appellant also unnecessarily increased the costs of the proceedings by his insubstantial application to review the interlocutory decision of Holmes JA^[4]  and by his three equally insubstantial interlocutory applications which he did not press, or pressed only faintly, at the hearing of the appeal.^[5]

5. The appellant argues that the order should not be made because the second respondents own property and business worth more than $2,000,000 and have a gross annual income that exceeds $600,000 whereas he has a very small income in the form of a disability pension. As long ago as 23 October 2007 Holmes JA pointed out, as a reason for refusing the appellant’s application for a stay of the costs order of the trial judge, that there "is no evidence at all about any assets."^[6]  The appellant’s failure to adduce any evidence as to whether he had any and if so what assets was again brought to his attention in this Court's judgment of 4 April 2008 and in a context which demonstrated its relevance to the appropriate costs orders to be made.^[7]  Despite those reminders, the appellant has pointedly failed to adduce any evidence on the topic.  In these circumstances it would be wrong to allow the appellant to shelter behind his unverified assertions about his resources as a justification for depriving the second respondents of an indemnity against the costs they have incurred in responding to the unmeritorious litigation so aggressively promoted by the appellant. 

6. The appellant argues that what he alleges were the second respondents’ annual overcharges of electricity calculation and non-refunded bonds over the duration of the tenancy amounted to about $13,784.64. The figure is misleading: it comprehends theoretical claims by other persons that were not in fact made. The imprudence of the appellant's conduct in failing to accept the second respondents' offer of 26 October 2007 is demonstrated by the triviality of the amount really at issue in the litigation: it appears to have been less than $200.

7. By way of contrast with that sum, an affidavit filed on behalf of the second respondents exhibit a costs statement which claimed something over $13,000 for professional costs and outlays for the trial. The appellant had refused to agree to the second respondents' proposal that they would accept the comparatively modest $5,000 for those costs. In the interlocutory proceedings before Holmes JA, the second respondents had indicated their preparedness to accept $2,600 for costs of those proceedings but, that offer having been rejected, their costs statement now claims $4,688.20. The second respondents' solicitor estimates that the cost of the appeal and associated applications (on a "solicitor and own client basis", presumably similar to an amount assessed on the indemnity basis) is $38,087 compared to $26,000 if assessed on a standard basis. On any view, the litigation pursued by the appellant has caused the second respondents to incur expense in an amount which is disproportionate to the amount at stake.

8. The appellant argues that because the second respondents' legal costs were tax deductible the second respondents have suffered no financial loss on account of these proceedings and that any costs order in their favour would be a windfall profit. The argument needs only to be stated to demonstrate its lack of merit. Whether or not the second respondents’ costs are tax deductible they have sustained a significant adverse financial impact as a result of the appellant’s unsuccessful litigation, an impact which may be much worse if the costs are not assessed on the indemnity basis.

9. In the circumstances summarised above, the appellant's failure to accept the second respondents’ offer of 26 October 2007 is appropriately to be stigmatised as being so unreasonable as to justify the award of indemnity costs in the second respondents’ favour.^[8]

10. After the reasons set out above were prepared, the Court received a further submission from the appellant. Because the second respondents’ submissions had strayed outside the parameters of Practice Direction No 1 of 2005, para 37A and bearing in mind that the appellant represented himself, exceptionally we have taken this additional submission into account even though it was made without leave. Apart from some plainly irrelevant matters and some responses to some matters in the second respondents’ submission and accompanying affidavit that we have not in any event thought to be of particular significance, the appellant’s submission also attached two letters from the appellant, of 30 October 2007 and 7 November 2007.

11. Those letters serve to confirm the second respondents’ submission that the appellant did not accept their offer of 26 October 2007. Instead, the appellant made a counter-offer under which his appeal would continue but the second respondents would withdraw from it (i.e., they would give up their right to support the judgment of the trial judge and thus also the decision of the referee) in exchange for the appellant not pursuing costs in relation to the appeal - and even then only on condition that they surrendered the benefit of their earlier costs orders against the appellant. The result in the appeal was considerably less favourable to the appellant than that counter-offer.

12. We therefore order that the costs order made on 4 April 2008 be vacated and instead the applicant/appellant be ordered to pay the respondents' costs of the appeal and the applications, to be assessed on the standard basis in the case of the first respondent and to be assessed on the indemnity basis in the case of the second respondents.