DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   On 11 June 2010 I made orders in this proceeding dealing with costs of the parties. They are Orders 3 and 4 in the orders made that day. Under Order 5, I gave “liberty to apply” within 14 days concerning “costs”.

2. [2]
   Both the defendant and the plaintiffs have now taken advantage of that liberty and filed submissions on costs.

3. [3]
   I have considered both sets of submissions and I decline to make any further orders, including any orders amending or varying Orders 3 and 4 of the orders made on 11 June 2010, for the reasons that follow.

Offer at mediation

4. [4]
   The defendant has filed an affidavit raising the issue of things allegedly said at a court ordered mediation between the parties. This is contained in the affidavit of Simon Christopher Fisher affirmed 25 June 2010 and filed 25 June 2010.

5. [5]
   Unsurprisingly in the circumstances, the written submissions of the plaintiffs in response object to the conduct of the filing of an affidavit which sets out details of matters allegedly occurring during the course of that mediation (which was held on 29 September 2009). The basis of the objection is, because of the recognition that it is in the public interest to encourage parties to resolve disputes by this means through diminishing the workload of the courts with a concomitant reduction in the costs to public funds in maintaining the court system, that ADR subjects such offers to “privilege”. That also reflects the position at common law: cf s 131(2)(h) of the Evidence Act 1995 (Cth).

6. [6]
   But, here, there is a more fundamental objection. Section 109(1) of the District Court of Queensland Act 1967 states that evidence of “anything” said at an ADR process about the dispute is admissible at the trial of the dispute, or in another civil proceeding, before the District Court or elsewhere “only if” all parties to the dispute “agree”.  Section 109(2) contains an irrelevant exception.  Subject to the relevant exceptions, a mediation thus proceeds on the basis of “without prejudice” discussions being privileged from disclosure. 

7. [7]
   There is nothing that I can see, where, as here, the parties have not so agreed, which permits that prohibition on such evidence to be lifted.

8. [8]
   Hence, even if there are certain circumstances in which “without prejudice” discussions might be able to be availed of with respect to issues of costs, they could not here override the statutory prohibition against reference to such discussions in the present circumstances.

9. [9]
   Accordingly, I will ignore all matters contained in the affidavit of Simon Christopher Fisher insofar as those matters purport to be with respect to anything said, or done, at the relevant mediation.

Offer to settle

10. [10]
    While the plaintiffs did make an Offer to Settle dated 28 October 2009, that offer has not been relied upon by them. Such non-reliance is absolutely correct because the offer was made to settle in a sum way beyond what the plaintiffs in fact recovered.

11. [11]
    Yet the submissions by the defendant purport to rely upon that Offer to Settle. But this reliance depends on the solidity of the basis that it was an offer made in “bad faith”. The alleged bad faith is said to result from the fact that that offer was “above” the last offer made by the plaintiffs to the defendant at the abovementioned mediation. If for no reason other than my earlier decision to ignore all things done or said at that mediation, that “bad faith” assertion cannot be sustained.

“Liberty to apply”

12. [12]
    In the submissions made by the plaintiffs, it is contended that there is no basis for the defendant making a submission that the costs orders (namely Orders 3 and 4) should be substantially varied in the way sought. This is based upon an assertion that the cases and textbook authorities concerning the phrase “liberty to apply” mean that such orders cannot be varied.

13. [13]
    The principal case relied upon is Cristel v Cristel [1951] 2 KB 727.  But the extract from that case relied upon contains the term prima facie when stating that a “liberty to apply” indulgence does not entitle people to come and ask that the order itself be varied. 

14. [14]
    As is abundantly clear from the Reasons for Judgment made and published on 11 June 2010, “liberty to apply” in the circumstances clearly referred to the parties making submissions that the orders made might in fact be varied. So much was made clear when the decision itself was handed down.

15. [15]
    As is graphically illustrated by the decision of McPherson SPJ (as he then was) in Flylas Pty Ltd v Vynal Pty Ltd [1992] 2 Qd R 593, the circumstances of Cristel, in a prima facie sense, showed that an attempt to have an order varied under a “liberty to apply” provision in the circumstances of that case was no “working out” of the actual order: at 598-599.  What had in fact occurred was that the order which was made was that the husband have possession, but that it be suspended until he provided suitable alternative accommodation which was to be in the form of a “house” or “bungalow”.  An attempt was made to have the order varied under the liberty to apply by seeking to add the words “or flat” after “bungalow”.  Quite unsurprisingly, the “liberty to apply” provision was limited to what was necessary for the working out of the consequences of the order made.  In contrast in the present case, particularly where both parties did not know the outcome of the proceeding until the Reasons for Judgment were delivered, and particularly where there was, at the very least, a clear implication that the costs orders made might be amended or varied if persuasive submissions were made under the “liberty to apply” order, I would have, had it been necessary, entertained a successful application to so amend or vary. 

Rule 697 of the Uniform Civil Procedure Rules

16. [16]
    This particular rule, formerly r 698, deals with the costs of a proceeding where that proceeding should have begun in the Magistrates Court rather than the District Court. In particular, r 697(1) states that r 697(2) applies if the relief obtained by a plaintiff in a proceeding in the District Court is a judgment that, when the proceeding began, could have been given in a Magistrates Court.  In turn, r 697(2) states that the costs that the plaintiff may recover may be assessed as if the proceeding had been started in the Magistrates Court, unless the District Court otherwise orders. 

17. [17]
    In considering r 697 of the UCPR, the Court of Appeal in Campbell v Turner & Ors (No 2) [2008] QCA 189 referred to the relevant conferral of jurisdiction on the Magistrates Court in s 4 of the Magistrates Courts Acts 1921: at [9].  In particular, it referred to s 4(c) which limits equitable claims to those in respect of which the only relief sought is the recovery of a sum of money or damages, either liquidated or unliquidated. 

18. [18]
    While it is true that the plaintiffs’ claim, after amendments effective from 18 June 2009, sought merely $42,517.23, the Amended Defence and Counter-claim of the defendant filed on 30 June 2009 contained many claims that could not have been agitated within the jurisdiction of the Magistrates Court. Moreover, that pleading claimed both a set-off and counter-claim. The claim itself, in the context of the defence and counter-claim, was always likely to involve complex, and potentially important, questions of fact and law. In the written submissions of the defendant it was contended that undue influence was relied upon in “seeking relief against the payment claims” of the plaintiffs by the defendant as “Counterclaimant”, as well as “an accounting” for the principal and interest payments made for the Drewvale land: see paragraph 80. By paragraph 81 he relied upon equitable fraud, breach of fiduciary duty and unconscionable conduct, in addition to undue influence. 

19. [19]
    Given that it was always clear at the time of the filing of the Amended Statement of Claim that there would be agitated against the plaintiffs some of the matters contained in the Amended Defence and Counter-claim which would have been outside the jurisdiction of the Magistrates Court, given that it would have been probable that there would then have been no order that the claim and the defence and counter-claim be heard in separate proceedings in different courts given their inter-connection (as outlined) [see s 78(3)(b) of the District Court of Queensland Act 1967], and given that the defendant made no such application for removal of the claim alone to the Magistrates Court, it was always probable that the plaintiffs’ amended claim for $42,517.23 would be heard at trial in the District Court in this proceeding. 

20. [20]
    Consequently, I conclude that it was appropriate both for the plaintiffs and the defendant to have proceeded to have this particular proceeding heard in the District Court. Accordingly, it was within the power of this court to order that the costs orders which were made were not costs orders, at least with respect to the Amended Statement of Claim, which should be assessed as if the proceeding had been started in the Magistrates Court.

Indemnity Costs (and 40% of costs)

21. [21]
    The defendant seeks that his percentage of costs be increased from 10% to 40% and that they be on an indemnity basis.

22. [22]
    While the Amended Counter-claim may have dealt extensively with the claim for detinue, the evidence led on this issue at trial over 3 days was very brief.

23. [23]
    Further, while it is true that, given the Reasons for Judgement, there was at trial time no basis successfully advanced for defending the claim for detinue, the allowance of 10% (rather than some lower percentage) of the assessed costs on the standard basis incorporated the condemnation of the Court for the failure to resolve this claim, as well as an acknowledgment that 10% was well in excess of the real time spent in consideration of the detinue claim (particularly when the defendant’s grandmother’s ring was a discrete issue, and lost by the defendant on the evidence). This occurred in circumstances where, following the Orders of Robin QC DCJ made on 24 June 2009, there was very little more for the defendant to do to agitate this claim successfully, especially when there was no evidence led about any damages arising, no claim by the plaintiffs of any lien, and where the defendant’s evidence was simply that the goods had not been returned to him. Also, as Order 4 shows, the defendant was awarded full costs for the costs reserved on 24 June 2009. Otherwise, given the complexity of all other unsuccessful issues, the relative “non-admission” of detinue was minor; and did not generate any “special case” circumstances: cf ACN 070 037 599 Pty Ltd v Larvik Pty Ltd & Anor [2008] QCA 416 at [151].

Conclusions

24. [24]
    As a result of the reasons canvassed, I conclude that Orders 3 and 4 should not be amended or varied. This has the consequence that the orders that I made on 11 June 2010 stand in the form in which they were made.