Karageozis v Sherman [No 3][2024] QCA 256

SUPREME COURT OF QUEENSLAND

1. [1]
   THE COURT:  The hearing on 9 December 2024 was listed at the direction of the Court in response to a letter sent by email by Ms Lamb to the Registry dated 8 November 2024 in relation to the costs orders made on this appeal.
2. [2]
   The respondent successfully sued Ms Lamb in the District Court for defamation.  Although the judgment was for only $10,000, the costs of the District Court proceeding were in the vicinity of $600,000.  On 21 October 2022 Ms Lamb filed an application for leave to appeal that judgment.  On 5 December 2022, the Court ordered that Ms Lamb give security in the sum of $35,990 for the respondent’s costs of the application and the appeal, if leave were granted.  That amount was paid into Court by Ms Lamb.  Ms Lamb was made bankrupt pursuant to a sequestration order made on 10 February 2023.  The petitioning creditor was the respondent.
3. [3]
   The trustee in bankruptcy elected to prosecute the application for leave to appeal.  The original trustee was replaced by Mr Karageozis as the trustee of Ms Lamb’s bankrupt estate on 29 March 2023.  A costs agreement was entered into between the trustee, the bankrupt and BlackBay Lawyers on 7 September 2023.  BlackBay Lawyers took over running the appeal on a speculative basis on the conditions of the costs agreement.  One of the conditions was that the trustee in bankruptcy would not under any circumstances be liable for any costs of BlackBay Lawyers.
4. [4]
   BlackBay Lawyers became the solicitors on the record for the appellant on 11 September 2023 and an order was made on 28 September 2023 substituting Mr Bill Karageozis as trustee for the bankrupt estate of Ms Lamb as the appellant in the proceeding.  The appeal was heard on 22 November 2023.  Judgment was delivered on 15 December 2023: Bill Karageozis as trustee for the bankrupt estate of Siobhan Lamb v Sherman [2023] QCA 258.  The orders made in relation to the application for leave to appeal and the appeal were as follows:

3. “1.
   Allow the application for leave to appeal.

3. 2.
   Allow the appeal, set aside the order of the primary judge made on 23 September 2022 and in lieu thereof order judgment for the defendant.

3. 3.
   The respondent is to pay the appellant’s costs of this appeal.”

5. [5]
   Further orders were made when the judgment was delivered to facilitate the making of a costs order in relation to the District Court proceeding.  That was to be determined on the papers.  Both the appellant and the respondent filed written submissions in relation to the appropriate costs order for the District Court proceeding.
6. [6]
   Judgment was given by the Court in relation to the costs of the District Court proceeding on 9 February 2024: Bill Karageozis as trustee for the bankrupt estate of Siobhan Lamb v Sherman [No 2] [2024] QCA 12 (the costs judgment).  The order made by the trial judge in the District Court proceeding was set aside and, in lieu, it was ordered “that the respondent pay the appellant’s costs of District Court Proceeding 1634/20”.  In addition, the costs judgment re-considered order 3 made on 15 December 2023, as a result of further submissions made by the parties, including in relation to an offer to settle that had been made and withdrawn by Ms Lamb before the District Court trial.  Order 2 of the costs judgment became the operative order for the costs of the appeal and was in the following terms:

“Order 3 made by this Court on 15 December 2023 be vacated and in lieu thereof, it is ordered that the respondent is to pay the appellant’s costs of this appeal, and the application for leave to appeal, save for the costs of and incidental to the applications filed 22 May 2023, 14 August 2023 and 15 September 2023.”

7. [7]
   On 13 August 2024 an order was made by this Court by consent of the solicitors then acting for the appellant, the respondent and Ms Lamb in relation to the payment out of the moneys paid into Court by Ms Lamb pursuant to the order made on 5 December 2022.  The moneys together with interest and accretions were ordered to be paid to the appellant and the parties had agreed on no order as to costs.
8. [8]
   There is no formal application by Ms Lamb to the Court but her letter dated 8 November 2024 requested correction under the slip rule (rule 388 of the Uniform Civil Procedure Rules 1999 (Qld)), as Ms Lamb asserts that only the costs that the trustee is liable to pay in respect of the appeal are recoverable pursuant to the order for costs made in the appellant’s favour on the appeal (which was order 2 made as a result of the costs judgment).
9. [9]
   There is an issue about whether Ms Lamb has any standing to apply to the Court for the correction of an order under r 388 where her trustee in bankruptcy was the party to the appeal, and she remains a bankrupt.  It is not necessary to resolve that issue.  If the Court were satisfied that there was a clerical mistake in an order of the Court resulting from an accidental slip or omission, the Court can act under r 388(2) on its own initiative to correct the mistake or error.
10. [10]
    It was the intention of the Court in ordering that the respondent pay the appellant’s costs of the application for leave to appeal and the appeal (subject to the exceptions in order 2 made on 9 February 2024) that the respondent pay those costs incurred in prosecuting the application for leave to appeal and the appeal whether they were incurred by Ms Lamb before she became bankrupt or by Mr Karageozis after he was substituted as the appellant.
11. [11]
    It appears that there is a good reason for Ms Lamb’s concern expressed in her letter of 8 November 2024 about the costs order on the appeal being made by mistake.  It was confirmed by the appellant at the hearing on 9 December 2024, that the appellant had taken no steps under the costs order made in respect of the appeal to recover from the respondent the costs that Ms Lamb had incurred in prosecuting the appeal before she was made bankrupt.
12. [12]
    There is a clerical mistake in order 2 of the costs order made on 9 February 2024 which the Court considers can be corrected by inserting “(including the costs incurred by Ms Lamb before she was made bankrupt)” after “leave to appeal”.
13. [13]
    Ms Lamb put before the Court three affidavits which she had sworn on 7 December 2024.  To the extent that the affidavits make complaints about the conduct of the trustee in bankruptcy as her trustee, this Court has no jurisdiction to deal with those complaints.  Ms Lamb makes complaints about both the conduct of the trustee and BlackBay Lawyers in relation to the costs agreement.  That is a matter that cannot be raised in this completed appeal.
14. [14]
    Ms Lamb makes a request in the affidavit designated “Affidavit 3” for amendment of order 1 made on 9 February 2024.  This affidavit deals with substantive matters in relation to the conduct of the District Court proceeding and makes complaints about the solicitors who acted for Ms Lamb in that proceeding and complaints against the solicitors for the respondent in that proceeding.  This Court has determined the substantive appeal and is not the appropriate jurisdiction now for raising those complaints.
15. [15]
    In relation to order 1 made on 9 February 2024, Ms Lamb asserts that the costs order in favour of the appellant in respect of the District Court proceeding is inoperable, as it is in favour of the trustee only.
16. [16]
    The appellant in his costs submissions dated 29 December 2023 in relation to the District Court proceeding had submitted that “the costs of the trial should follow the event, so that the plaintiff should pay the defendant’s costs”.  The respondent in his costs submissions dated 12 January 2024 did not oppose an order that “he pay the appellant’s costs of the trial on the standard basis” where the word “appellant’s” was footnoted as referring to Ms Lamb.  Even on the terms of order 1 as it was made by this Court on 9 February 2024, the appellant is seeking to recover, as the costs ordered in favour of the appellant in the District Court proceeding, those costs incurred by Ms Lamb as defendant in that proceeding.  The respondent does not demur from the right of the trustee to do so.  As the order is taking effect as the parties to the appeal contemplated in their submissions (and as the Court intended by order 1 made on 9 February 2024), the exercise of the jurisdiction under r 388 is not called for.
17. [17]
    As the three affidavits of Ms Lamb make allegations and disclose material that is irrelevant to the completed appeal, it is appropriate that the three affidavits be placed in an envelope which is sealed and that envelope is not to be opened except by order of the Court or a judge.
18. [18]
    As the hearing on 9 December 2024 was for the purpose of dealing with the application of the slip rule, it is appropriate that there be no order as to costs.
19. [19]
    The orders which should be made are:

1. Order 2 made on 9 February 2024 is corrected by inserting “(including the costs incurred by Ms Lamb before she was made bankrupt)” after “leave to appeal”.
2. The three affidavits sworn by Ms Lamb on 7 December 2024 are to be placed in an envelope which is sealed and the envelope is not to be opened except by order of the Court or a judge.
3. No order as to costs in respect of the hearing on 9 December 2024.