Hudson v Standfield[2013] QDC 327

Introduction

1. [1]
   On 22 November 2013, I dismissed the plaintiff’s claim, and gave judgment for the plaintiff on the counterclaim.
2. [2]
   I have received written submissions on costs from both parties.
3. [3]
   The defendant seeks costs on the indemnity basis. The plaintiff submits that he should pay no more than two-thirds of the defendant’s costs on the standard basis and further, that costs should be assessed on the Magistrates Court Scale, given that the defendant chose not to transfer the proceedings to the Magistrates Court of Queensland.  

Background

4. [4]
   The plaintiff commenced the claim in the District Court. The defendant filed his defence and counterclaim in the District Court. The amount claimed under the claim was for a monetary amount that fell within the jurisdiction of the District Court at that time. The counterclaim was for a monetary amount that fell within the jurisdiction of the Magistrates Court.
5. [5]
   The defendant made a written offer to settle the proceedings on 17 June 2010.The offer was purported to be made “pursuant to Part 5, Chapter 9 of the Uniform Civil Procedure Rules 1999”^[1]. The terms of the offer were: that the plaintiff discontinue its claim against the defendant; the defendant discontinue its counterclaim and both parties bear their own costs.  The offer remained open for a period of 14 days. 
6. [6]
   On 14 October 2013, the defendant was granted leave to file an Amended Defence and Counterclaim. The amendments amended the original issues raised in the defence and also added two new defences. This necessitated the plaintiff filing an Amended Reply and Answer with substantial amendments and additions.
7. [7]
   On 29 October 2013, the first day of trial, the defendant disclosed a bundle of file notes made by the defendant recording conversations which occurred between the defendant and the plaintiff. Some of the contents of the file notes, and the fact they were made contemporaneously with the alleged conversations, had a direct bearing on my findings

that the defendant was a more reliable witness than the plaintiff. The plaintiff took no objection at trial to the admission of the file notes. 

8. [8]
   The trial was listed for two days and finished at lunchtime on the second day. The plaintiff complains that the trial would have concluded in one day without the additional issues raised in the Amended Defence and Counterclaim.

Defendant’s submissions

9. [9]
   The defendant submits costs should follow the event, and the plaintiff should be ordered to pay the defendant’s costs of the proceedings on an indemnity basis. 
10. [10]
    The defendant submits the Court should exercise its discretion under r 703 Uniform Civil Procedure Rules 1999 (UCPR) for the following reasons:

    • The plaintiff knew or ought to have known that the sale contract had not been mutually terminated at the time he commenced proceedings;
    • The plaintiff knew or ought to have known he had not complied with his statutory obligations under Property Agents and Motor Dealers Act 2000 (PAMDA); and
    • The plaintiff’s refusal to accept the defendant’s written offer of 17 June 2010 to settle the claim and counterclaim.  

Plaintiff’s Submissions

[11]  The plaintiff submits that, although the defendant succeeded on two out of the three issues in dispute on the claim, costs should be limited because the defendant failed to disclose to the plaintiff his file notes until the first day of the trial. The plaintiff submits the defendant’s extensive amendments to the Amended Defence and Counterclaim filed just two weeks prior to the commencement of the trial increased the duration of the trial into a second day and also necessitated the  plaintiff having to file an amended Reply and Answer at considerable cost. The plaintiff also submits that costs should be awarded on the Magistrates Court scale because the defendant failed to transfer the proceedings to the Magistrates court.

Consideration: Claim

12. [12]
    The defendant’s offer to settle was made under Part 5, Chapter 9 UCPR.  In that event the assessment of costs would normally be governed by r 361 UCPR, however s 361 UCPR is not applicable in this case because the plaintiff did not obtain any judgment.^[2]

Costs should therefore be assessed on the claim under r 681 UCPR. Although r 361 UCPR does not apply, the circumstance that the offer was made and not accepted still remains relevant to the exercise of discretion.^[3]  Costs on the counterclaim should be assessed pursuant to r 360 UCPR.

13. [13]
    Under r 681 UCPR the usual order is for costs should follow the event and be awarded on the standard basis unless the court is satisfied some special feature would warrant the Court awarding costs on an indemnity basis.^[4] 
14. [14]
    I do not accept the defendant’s submission that the proceedings were commenced in wilful disregard of the known facts or law. The plaintiff was unrepresented until just before the trial commenced. As stated at [35]-[36] of the Judgment, my impression of the plaintiff was that he believed he had a legitimate right to commission under the appointment and appeared confused as to what had occurred in his conversations with the defendant. The evidence required a careful consideration of somewhat unusual events surrounding the termination of the contract of sale. I made findings of fact in the defendant’s favour having regard to a number of matters which included the file notes. The defendant’s late disclosure of the file notes was a breach of the defendant’s obligations to disclose. The issue of the plaintiff’s obligations under PAMDA did not arise until the defendant filed the Amended Defence and Counterclaim very late in the proceedings.
15. [15]
    The offer to settle is a matter to which I have regard in determining how to exercise my discretion. The offer was for both parties to walk away and bear their own costs.
16. [16]
    I am not satisfied these matters amount to “some special or unusual feature” in the circumstances of this case to justify the Court departing from the ordinary practice of awarding costs on the standard basis.^[5]
17. [17]
    On the other hand, I am not satisfied that the late disclosure affected the manner in which the trial proceeded. The plaintiff did not ask for an adjournment and continued with the trial despite the late disclosure. 
18. [18]
    The fact the trial went into a second day was inevitable due to defence counsel’s lengthy cross-examination of the plaintiff, hampered by the plaintiff’s problems with concentration and confusion when attempting to answer questions. I am not satisfied the trial would have concluded in one day, even without the new defences raised in the Amended Defence and Counterclaim. The defendant was entitled to pursue all defences open to him on the evidence. 
19. [19]
    There is no merit in the plaintiff’s submission that the defendant should have transferred the proceedings to the Magistrates Court because the counterclaim was for an amount that fell within the Magistrates Court jurisdiction. The defendant was required to continue the matter in the District Court which was the jurisdiction where the plaintiff chose to commence his claim.
20. [20]
    I have concluded the plaintiff should pay the defendant’s costs of the proceedings to be assessed on the standard basis except for the following costs.
21. [21]
    I consider that the plaintiff is entitled to costs arising from preparation and filing of the Amended Reply and Answer to be assessed on the standard basis.

Counterclaim

22. [22]
    The award for costs on the Counterclaim is governed by r 360 UCPR because the plaintiff on the counterclaim obtained a judgment no less favourable than the offer to settle made under Part 5 Chapter 9 UCPR dated 17 June 2010. Pursuant to r 360 (1) UCPR, I am satisfied the plaintiff on the counterclaim should be awarded costs, however on the standard basis rather than the indemnity basis having regard to the matters referred to by me above. 
23. [23]
    I note that it was accepted by both parties at the commencement of the trial that the successful party on the claim would also be successful on the counterclaim. For this reason, no time in the trial was devoted to the Counterclaim. I imagine any award for costs on the Counterclaim would be determined, bearing this in mind. All costs are to be assessed on the District Court Scale.

Order

24. [24]
    The plaintiff on the claim pay the defendant on the claim costs on the standard basis except for the costs arising from the preparation and filing of the amended Reply and Answer which costs are to be paid by the defendant to the plaintiff. Costs are to be assessed on the District Court Scale.
25. [25]
    The defendant on the counterclaim pay the plaintiff on the counterclaim the costs of the counterclaim on the standard basis. Costs are to be assessed on the District Court Scale.