DISTRICT COURT OF QUEENSLAND

1. [1]
   On 21 December 2012, I delivered my decision on an appeal and cross-appeal from a decision of the Magistrates Court and invited written submissions on the form of orders and costs. The outcome of the findings made on appeal is that Ms Stevens must pay a larger sum to the family trust than the appealed decision required her to do. The parties agree on the form of orders to give effect to that decision, subject to the calculation of interest, but disagree about the orders that should be made about the costs of the trial and of the appeal.

2. [2]
   The family trust seeks an award of costs on an indemnity basis for both the trial and the appeal. Ms Stevens submitted the costs award made in the decision under appeal should not be disturbed but concedes she should pay the costs of the appeal assessed on the standard basis.

Costs of the trial

3. [3]
   The learned Acting Magistrate ordered Ms Stevens to pay the family trust $4,434.68 in unpaid rent, interest and costs. That sum included only $844 for unpaid rent, because the learned Magistrate deducted $10,352.80 from the amount of $11,197.20 claimed by the family trust for unpaid rent. The deduction represented part of Ms Stevens’ counterclaim which his Honour determined the family trust was deemed to have admitted on the pleadings. On appeal, the finding there was a deemed admission was set aside and damages were assessed at $7,700.

4. [4]
   The substituted orders reflect a principal judgment sum of $3,497.20 being the claim for unpaid rent of $11,197.20, for which no defence was offered, less damages for breach of contract by the plaintiff, quantified at $7,700.

5. [5]
   In the decision under appeal, his Honour awarded costs and outlays of $3,254.60. Although the family trust disputed that was the correct calculation of costs of the trial, for the purpose of assessing the effect of an offer made to settle the proceedings before trial, it adopted that calculation.

6. [6]
   The family trust made an offer to settle the proceedings if Ms Stevens paid it the sum of $6,500. Had the learned Acting Magistrate made his decision in accordance with the appeal findings, and assuming interest was calculated to the date of the original judgment and the costs, as he calculated them, were included, Ms Stevens would have been required to pay the family trust the sum of $8,399.79. That outcome would have been no less favourable to the family trust than its offer to settle.

7. [7]
   Ms Stevens disputed costs should be considered when the Court assesses whether its offer was no less favourable to the family trust than the orders substituted on appeal. I reject that argument.

8. [8]
   The offer was to settle all claims rights and remedies that each of the parties may have had against each other.^[1] Although there is no express reference to costs, properly construed it was an all up offer. It did not reserve the plaintiff’s position as to costs. The phrase “all claims rights and remedies” encompasses a claim for costs arising out of the litigation. Even adopting his Honour’s calculation of costs (which the family trust disputes) the offer to settle is no less favourable than the orders that will be substituted on appeal.

9. [9]
   I am satisfied the family trust has established its entitlement, pursuant to Rule 360 of the UCPR, to an award of costs on an indemnity basis for its claim for unpaid rent.^[2] Rule 360 applies to a plaintiff, not to the defendant to a counterclaim. The costs of the counterclaim must be accounted for in the orders.^[3] The court has discretion to award costs on an indemnity basis.^[4] There seems to be no reason in principle why a defendant who has done better than an offer should not obtain an order for indemnity costs.^[5]

10. [10]
    The offer was made to settle both the claim and counterclaim. The family trust succeeded entirely in its claim and successfully defended Ms Stevens except to the extent of the award of $7,700 in damages. In the context of her counterclaim for a sum in excess of $50,000, the family trust was clearly the successful party in the litigation.

11. [11]
    I consider the proper order is for the family trust to recover its costs of both claim and counter-claim assessed on an indemnity basis, pursuant to UCPR rules 683 and 691.

Costs of the appeal

12. [12]
    The costs of the appeal call for separate consideration.

13. [13]
    The family trust offered to settle the appeal and cross-appeal if Ms Stevens paid 50% of its costs assessed on the standard basis. The offer was made some 4 months before the appeal hearing. The appeal outcome is no less favourable to the family trust than the appeal outcome, because the offer did not disturb the original decision, by which less was due to the family trust than is owed pursuant to the order substituted on appeal.

14. [14]
    However, the question of costs on this appeal is decided by reference to different considerations than apply to the trial. Rule 360 does not apply to appellate proceedings.^[6] The fact, therefore, that Ms Stevens has rejected an offer no less favourable to the family trust than the appeal outcome, is not determinative.

15. [15]
    The usual order is that costs follow the event, assessed on the standard basis. That rule will not be departed from unless the appellant has acted plainly unreasonably or there are special or unusual features that justify a different order.^[7] The family trust argued Ms Stevens’ conduct of the appeal, including her decision to reject its offer to settle the appeal, was unreasonable and justified the family trust recovering its costs on an indemnity basis.

16. [16]
    Ms Stevens was legally represented throughout. Unfortunately this did not result in a focussed appeal. The Notice of Appeal was overpopulated with numerous grounds of appeal. There was little common ground between the Appeal notice and written submissions. The Court was assisted by counsel, in particular counsel for the family trust, who endeavoured to translate the many grounds of appeal into discrete questions that had to be addressed to dispose of Ms Stevens’ appeal. Nevertheless, the way in which the appeal was conducted placed an unnecessary additional burden on both the family trust and this Court.

17. [17]
    When the settlement offer was made, Ms Stevens had the family trust’s written submissions which comprehensively addressed the various grounds raised on appeal and demonstrated that many of them were entirely without merit. At the hearing, Ms Stevens was given time to consider which grounds she wished to maintain. She did not abandon any ground of appeal, despite their lack of merit and even though her counsel did not agitate many of them in his oral submissions.

18. [18]
    Of particular concern is that Ms Stevens maintained an allegation of criminal conduct by a person not represented in the proceedings, without any basis for doing so. She abandoned an application to lead fresh evidence, which, it seemed, might relate to that allegation. At the last minute she abandoned the application. The allegation should, then, have been withdrawn. It was not.

19. [19]
    Litigants enjoy protection from liability for allegations made in the context of court proceedings. It is a privilege that should not be abused. No explanation for given to the Court for Ms Stevens’ decision to maintain an allegation with the potential to seriously damage the reputation of the person concerned, in the absence of any evidence to support it.

20. [20]
    In deciding what costs should be awarded, I must consider whether Ms Stevens’ conduct of the appeal, including her rejection of the offer to settle, was plainly unreasonable or demonstrated some special or unusual feature which justifies departing from the general rule as to costs on appeal.

21. [21]
    Ms Stevens rejected a sensible compromise which would have preserved a decision more favourable to her than the appeal outcome. She did so when she was in possession of the family trust’s extensive written submissions and had the opportunity to realistically assess her prospects of succeeding on many of her grounds of appeal. Although most grounds entirely without merit were not argued at the hearing, counsel for the family trust could not know that before the event and prepared to address them. Having abandoned her application to introduce fresh evidence on appeal she failed to abandon a ground of appeal alleging criminal conduct without any evidence to maintain it.

22. [22]
    There is scope for disagreement about whether conduct is unreasonable and, ultimately it is a matter of judgment and impression^[8]. I consider the aggregation of factors in this case justifies the description of the conduct of the appeal as plainly unreasonable. The family trust should recover its costs of the appeal assessed on an indemnity basis.

Orders

23. [23]
    Accordingly, I make the following orders:

1. The judgment of Acting Magistrate Hasted dated 22 February 2012 is set aside and, in its place, the following orders are made:

1. (a)
   The defendant must pay the plaintiffs the sum of $3,497.20.

2. (b)
   The defendant must pay the plaintiffs interest on the judgment sum in the amount of $1816.37.

3. (c)
   The defendant must pay the plaintiffs’ costs referable only to the plaintiffs’ claim fixed in the amount of $1065.00.

4. (d)
   The defendant must pay the plaintiffs’ costs otherwise of the proceeding to be assessed on the indemnity basis.

2. The appellant pay the respondents’ cost of the appeal and the cross-appeal, to be assessed on the indemnity basis.