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King Tide Company Pty Ltd v Arawak Holdings Pty Ltd[2021] QCA 118

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd[2021] QCA 118

SUPREME COURT OF QUEENSLAND

CITATION:

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2021] QCA118

PARTIES:

KING TIDE COMPANY PTY LTD

ACN 602 611 423

(appellant)

v

ARAWAK HOLDINGS PTY LTD

ACN 157 865 195

(respondent/applicant)

FILE NO/S:

Appeal No 456 of 2020

SC No 5530 of 2017

DIVISION:

Court of Appeal

PROCEEDING:

Application for Security for Costs – Further Order

ORIGINATING COURT:

Supreme Court at Brisbane – Unreported, 16 December 2019 (Boddice J)

DELIVERED ON:

28 May 2021

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGE:

Fraser JA

ORDER:

Application refused.

CATCHWORDS:

Procedure – Civil proceedings in State and Territory courts – Costs – General matters – Nature of costs: indemnity doctrine – Other cases – where the respondent made an application that the amount of the respondent’s costs of the respondent’s application for security for costs be fixed – where the appellant submitted fixing the respondent’s costs would breach the indemnity principle – where no costs agreement between the respondent and the respondent’s solicitor had been produced – whether the respondent’s costs of the respondent’s application for security for costs should be fixed

Arawak Holdings Pty Ltd v King Tide Company Pty Ltd [2018] QCA 148, cited

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251, cited

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2021] QCA 91, cited

COUNSEL:

P Somers for the appellant

B W J Kidston for the respondent

SOLICITORS:

Hartnett Lawyers for the appellant

Enyo Lawyers for the respondent

  1. [1]
    FRASER JA:  Before the hearing of this appeal, the respondent applied for an order that the appellant show cause why an order should not be made against it pursuant to r 374 of the Uniform Civil Procedure Rules 1999, or that the appellant provide security for the respondent’s costs of the appeal.  For reasons I gave on 3 June 2020, I ordered the appellant to provide security and I ordered the appellant to pay the respondent’s costs of that application.  I gave leave to the appellant to make written submissions and to file an affidavit concerning the amount of the respondent’s costs of the application.  I reserved the question whether the amount of the costs should be fixed.
  2. [2]
    One of the issues raised by the appellant’s written submissions was whether or not an order fixing the costs might infringe the “indemnity principle”.  The principle is that, because costs are awarded as an indemnity, a party entitled to recover costs cannot recover more than the amount for which the party is liable to that party’s own solicitor.
  3. [3]
    The question whether the indemnity principle had been infringed was one of the questions raised in the appeal itself.  A previous appeal by King Tide, appeal number 5530 of 2007, was dismissed with costs on 27 October 2017[1] and, subsequently, Mr Beau Timothy John Hartnett had also been ordered to pay the respondent’s costs of the appeal on the standard basis.[2]  (Mr Hartnett is the principal of the firm of solicitors, Hartnett Lawyers, which has acted throughout for the appellant.)  On 16 December 2019 a judge in the Trial Division (“the primary judge”) dismissed an application by the appellant filed on 22 November 2019 for orders reviewing and setting aside a costs assessor’s certificate which assessed the respondent’s costs of appeal number 5530 of 2017.  The grounds of appeal against the primary judge’s decision included contentions that his Honour should have required the respondent to produce costs agreements between the respondent and its solicitors and its counsel, and that the primary judge erred in finding that the respondent’s claim for costs as assessed did not infringe the indemnity principle.
  4. [4]
    The appeal was allowed on 5 May 2021.[3]  The Court recorded that in the course of argument before the primary judge the solicitor who then appeared for the appellant suggested that the Court did not have possession of all the documents that went to make up the costs agreement between the respondent and its lawyers.  Although the solicitor could not provide the primary judge with a basis for that assertion, documents provided to the appellant after the commencement of the appeal demonstrated that there were further documents which recorded the terms of the agreements between the respondent, its solicitors and its counsel.  Whilst counsel for the respondent informed the Court that the effect of those documents was the same as the document considered by the primary judge, the appellant did not accept that the true terms of the agreements between the respondent and its lawyers have been disclosed; and in those circumstances the parties had agreed that there was a factual question which needed to be determined in the Trial Division.
  5. [5]
    Accordingly, the Court acceded to the parties’ request that the appeal be allowed and the case be remitted to the Trial Division.  The orders made by the Court confined the matter to be reheard to the indemnity point.  The costs of the appeal were reserved because of the possibility that the rehearing of the indemnity point might prove to be futile, in which case it would be unjust for the respondent to bear the costs of the appeal.
  6. [6]
    In support of the proposition that the indemnity principle may apply to preclude recovery or reduce the amount recoverable under my costs order of 3 June 2020 the appellant relied upon various circumstances: the respondent’s solicitors acted in the earlier appeal on a speculative basis; the respondent asserted that there was a new costs agreement with the respondent in relation to this appeal, but that new costs agreement had not been produced; given a previous acknowledgement that the respondent was impecunious, it could be inferred that the respondent’s solicitors were continuing to act on a speculative basis; and it was not known what are the conditions of the new costs agreement that would trigger an obligation for the respondent to pay its solicitors.  The respondent’s counsel’s retainer had not been produced and it was not clear whether that retainer would oblige the respondent to pay him for work done on the appeal, including the interlocutory application.  The appellant submitted that if the costs were fixed before a determination of the extent of the respondent’s liability to its solicitors under the new costs agreement, the respondent might receive an amount of costs in excess of that which the respondent was liable to pay its solicitors, thereby infringing the indemnity principle.
  7. [7]
    For these reasons, and because the matter has been remitted for a rehearing in which one question is whether further documents disclosed after the hearing of the application before me reflect the true terms of the earlier agreements between the respondent and its lawyers, it is inappropriate to adopt the summary process of fixing the amount of costs payable by the appellant to the respondent pursuant to my order of 3 June 2020.  That conclusion leaves it open to the respondent to proceed by way of an assessment of the outstanding costs at an appropriate time.
  8. [8]
    I refuse the respondent’s application that the amount of the respondent’s costs of its application filed on 10 March 2020 and as amended on 24 April 2020 be fixed.

Footnotes

[1]King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251.

[2]Arawak Holding Pty Ltd v King Tide Company Pty Ltd [2018] QCA 148.

[3]King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2021] QCA 91.

Close

Editorial Notes

  • Published Case Name:

    King Tide Company Pty Ltd v Arawak Holdings Pty Ltd

  • Shortened Case Name:

    King Tide Company Pty Ltd v Arawak Holdings Pty Ltd

  • MNC:

    [2021] QCA 118

  • Court:

    QCA

  • Judge(s):

    Fraser JA

  • Date:

    28 May 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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