Michail v Australian Alliance Insurance Co Ltd (No.2)
[2013] QDC 305
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- Unreported Judgment
- Appeal Determined (QCA)
- Michail v Australian Alliance Insurance Co Ltd (No.2)[2013] QDC 305
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Michail v Australian Alliance Insurance Co Ltd (No.2)[2013] QDC 305
Michail v Australian Alliance Insurance Co Ltd (No.2)[2013] QDC 305
DISTRICT COURT OF QUEENSLAND
CITATION: | Michail v Australian Alliance Insurance Co Ltd (No.2) [2013] QDC 305 |
PARTIES: | RODNEY MICHAIL v AUSTRALIAN ALLIANCE INSURANCE COMPANY LIMITED (ACN 006 471 709) |
FILE NO/S: | 292/12 |
DIVISION: | Civil |
PROCEEDING: | Trial |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 2 December 2013 |
DELIVERED AT: | Brisbane |
HEARING DATE: | On the papers |
JUDGE: | Dorney QC DCJ |
ORDER: |
|
CATCHWORDS: LEGLISLATION: CASES CITED: | Costs – whether costs otherwise following the “event” (as litigated at trial) should be reduced – disputation of Notice to Admit Facts partly withdrawn after some preparation for trial, but only just over a month before trial Uniform Civil Procedure Rules 1999 (Qld), rr 189, 681, 684 Aion Corporation Pty Ltd v Yolla Holdings Pty Ltd & Anor [2013] QSC 216 BHP Coal Pty Ltd v O & K Orenstein & Koppel AG and Ors (No 2) [2009] QSC 64 Mio Art Pty Ltd v Macequest Pty Ltd & Ors (No 2) [2013]QSC 271 Mio Art Pty Ltd v Mango Boulevard Pty Ltd & Ors (No. 3) [2013] QSC 95 |
COUNSEL: | A Greinke for the plaintiff K Holyoak for the defendant |
SOLICITORS: | Morgan Conley for the plaintiff Barry Nilsson for the defendant |
Introduction
- [1]When handing down my judgment in this proceeding on 19 November 2013 I ordered that submissions on costs, if any, be filed, and served by 4.00pm, 22 November 2013.
- [2]I have now received written submissions both from the plaintiff and the defendant. Both parties have also filed affidavits dealing with the matters affecting this costs issue. It is unnecessary to do other than accept the matters deposed to in those affidavits, as they speak to a common set of facts.
Nub of costs issue
- [3]There is no dispute between the parties that, at least as a primary order, the plaintiff should pay the defendant’s costs of the proceeding. As a result of analysis by Jackson J in Mio Art Pty Ltd v Macequest Pty Ltd & Ors (No 2),[1] it is unnecessary to make specific orders that they are to be assessed or that they be on the standard basis.
- [4]What is in issue is whether costs which were thrown away by the plaintiff “in respect of, and incidental to, the proof of the matters in paras 1, 2, 3 and 4” of the Notice to Admit Facts, dated 18 February 2013, should be reflected in any addition to, or qualification of, the primary order.
Plaintiff’s submissions
- [5]With respect to the consequences of the serving of, and the response to, the Notice to Admit Facts, the plaintiff has submitted that the defendant should pay such costs so thrown away because:
- the defendant disputed each of the facts in that Notice;
- the plaintiff incurred costs in preparing for trial to prove those facts; and
- only shortly before the trial the defendant abandoned its defences pleaded in respect of those facts, causing costs to be so thrown away.
Defendant’s submissions
- [6]The defendant submits that the usual rule, as appears in r 681 of the Uniform and Civil Procedure Rules 1999 (“UCPR”), ought to be followed. That is, where a defendant has been “wholly” successful, the defendant should have his, her, or its costs unless there are “exceptional” circumstances (say, by successfully invoking r 684).
- [7]The defendant submits that no different approach to that general approach should arise where, rather than pressing matters to trial unsuccessfully, the party chooses not to press matters to trial. In particular, the defendant submits that:
- there is no reason to find that any of the “abandoned” grounds were advanced in bad faith, or were irrelevant, so as to warrant a special costs order;
- there is no other circumstance which makes the current circumstances “exceptional”; and
- absent such “exceptional” circumstances, no basis exists for other than the usual order.
- [8]But the defendant does make alternative submissions, should the Court not accept those arguments. The alternative submissions are that the appropriate remedy would be:
- either to award the (successful) defendant the costs of and incidental to the proceedings, but that the defendant pay the costs “thrown away”, if any, of the plaintiff of the “abandoned” issues in the defence;
- or, in the further alternative, reduce the costs awarded to the (successful) defendant under r 684 of the UCPR.
Relevant authorities
- [9]These authorities should be seen in the context of the actual terms of r 681 and r 684 of the UCPR.
- [10]Rule 681(1) states that costs of a proceeding, relevantly, are in the discretion of the Court, but follow the event, unless the Court orders otherwise. Rule 681(2) states that r 681(1) applies, unless the UCPR provide otherwise.
- [11]In turn, r 684(1) states that the Court may make an order for costs in relation to a particular question in, or a particular part of, a proceeding. Rule 684(2) states that, for r 684(1), the Court may declare what percentage of the costs of the proceeding is attributable to the question, or part of the proceeding, to which the order relates.
- [12]Given the circumstances of this case, it is also appropriate to refer to r 189 of the UCPR. In particular, r 189(4) states that, with respect to a Notice to Admit Facts, if the party upon whom such a notice is served serves a disputing notice, and afterwards the fact is proved in the proceeding, the disputing party “must” pay the costs of proof, unless the Court otherwise orders.
- [13]There is no authority referred to in either set of submissions - and I have not located one myself - which deals with the particular circumstance in this case of such a Notice to Admit Facts being served, a Notice of Disputation being served and, then, the disputing party “admitting” the facts in the sense that the disputing party informed the other side that the “facts” would no longer be in issue, because of the withdrawal of relevant defences.
- [14]The cases concerning the general approach are summarised by Jackson J in Aion Corporation Pty Ltd v Yolla Holdings Pty Ltd & Anor.[2] He held, after noting that the purpose of costs is compensatory, and with particular reference to r 681 and r 684 of the UCPR, that the word “event” in the former rule is to be read as including the plural “events”, so that an order for costs may reflect the success of particular parties in respect of separate events decided in the proceeding; and that, as well, the latter rule refers to making an order for costs in relation to “a particular question in, or particular part of, a proceeding”, whereas the previous comparable rule referred to costs of several “issues” – which had a potential confining affect: at [5]. His reference to r 681 footnoted Mio Art Pty Ltd v Mango Boulevard Pty Ltd & Ors (No. 3).[3] In that latter case, Philip McMurdo J remarked that, while there should be some order which reflected the plaintiff’s ultimate success in the case, it would be unfair to award the entirety of the costs of the plaintiff “when it failed on some of the distinct issues”: at [9].
- [15]It is noted that Jackson J in Aion Corporation ordered recovery of 80% of the costs of the proceeding. He also referred to BHP Coal Pty Ltd & Ors v O & K Orenstein & Koppel AG and Ors (No 2)[4] where, again, Philip McMurdo J, having raised the enquiry about exceptional circumstances, preferred the solution to be determined by framing the question in the following form: what is it about the present case which warrants a departure from the general rule?
- [16]It serves little purpose to examine, minutely, the many different cases the parties have raised in addition to those to which I have referred.
Relevant facts
- [17]The affidavits filed by both parties establish the following:
- the Notice to Admit Facts, dated 18 February 2013 was served by the plaintiff on the defendant on 19 February 2013;
- as at 19 February 2013, no Request for Trial Date had been filed;
- on 28 February 2013, the defendant served a Notice Disputing Facts, dated that day, pursuant to r 189(2) of the UCPR, being a disputation of all 7 paragraphs in the Notice to Admit Facts;
- on 23 September 2013, the defendant stated to the plaintiff, by letter dated that day and sent through its solicitors, that it intended to “no longer pursue” certain defences set out in certain identified paragraphs of the then Further Amended Defence;
- the defences no longer to be pursued were relevant to paragraphs 1, 2, 3 and 4 of the Notice to Admit Facts;
- it is not disputed that by 23 September 2013 the plaintiff had incurred some costs in respect of preparing to prove the facts in those first 4 paragraphs of the Notice to Admit Facts;
- between 8 October 2013 and 18 October 2013 correspondence passed between the parties dealing with the consequences of those defences which were no longer maintained; and
- on the first day of the trial on 28 October 2013, and subsequently, I gave leave for a complete set of amended pleadings by both parties to regularise exactly what was in dispute.
- [18]In terms of chronology, the Request for Trial Date for this proceeding was filed by the plaintiff on 8 May 2013.
Resolution
- [19]What is particularly relevant to this proceeding – and is absent from the authorities already discussed – is the background potential applicability of r 189 of the UCPR to both r 681 and r 684. While r 189(4) does not apply in the events that occurred, it is interesting that the provision uses the word “must” with respect to the payment of costs of proof, although it also has the proviso of the Court “otherwise” ordering. The clear intent of r 189 is, consistently with r 5, to avoid the generation of unnecessary costs and to have civil litigation resolved, in a just and expeditious way, concerned only with the real issues, at a minimum of expense.
- [20]Posing that particular question of what it is about this case which warrants some departure from the general rule, I conclude that it was necessary for the plaintiff to make preparations for evidence to be gathered for the purposes of proving the particular set of facts which were part of the disputation in the Notice to Admit Facts. Given that the abandonment of the disputation of those facts occurred at a time significantly after service of the Notice itself and (relatively) shortly before trial, it is appropriate that the provisions of r 684 of the UCPR are bought into effect, in reliance on either a “question” or “part”. As to the manner of that effect, r 684(2) empowers a Court to declare a percentage. That was the approach adopted both in Aion Corporation and Mio Art (No. 3). As Jackson J observed in Aion Corporation, a rough apportionment of costs “intelligently made” has been said to lead to a fairer result than an assessment, or “taxation”, had sometimes achieved which, rather, produced “disconcerting and unfair results, as well as being troublesome and difficult to carry out”: at [15].
- [21]Since I have obtained reasonably inferred knowledge (from the trial and from the different questions framed by the relevant parts of the Notice to Admit) about the extent of the costs thrown away in circumstances where r 684 bespeaks percentages to any reader of it, and given that I do determine that a percentage application is the proper way to proceed, noting the concession by the defendant in its written submissions that any appropriate reduction should “not exceed” 15%, where the plaintiff was provided with notice some relatively short (in terms of preparation) time before trial but where the facts in the relevant paragraphs were significant potential “events” in each of their own rights, I conclude that I should declare that a reduction of 15% of the defendant’s costs would achieve the end of acknowledging both the defendant’s success in the “proceeding” and the plaintiff’s “wasted” preparation concerning the designated “questions” (or “part”).
Order
- [22]Although, taking a position not mandated by the judgment given, the defendant has unilaterally decided to refund the premium, I will not take any such itimation of that payment into account with respect to my order as to costs. If the parties choose to do so, it is their decision alone. Accordingly, I intend to order that the plaintiff pay the defendant’s costs of the proceeding, fixed at 85% of those costs.