Bellino v Douglas (No 2)[2016] QDC 262

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   This is the costs decision consequent on the decision given in Bellino v Douglas & Anor.^[1]  In the primary decision I made orders for directions as to the conduct of the proceedings.

Plaintiff’s submissions

2. [2]
   The plaintiff submits that the costs of and incidental to the application heard on 30 September 2016 should be costs in the proceeding because the court found the proceeding had a lengthy history, the court made directions as to the future conduct of this matter and it cannot be said that the application was misconceived; the directions were in the ambit of the application filed in the court and it was in the spirit of the rules of the interests of justice to allow the case to proceed without directions. It is submitted the defendant was primarily responsible for the delay in this case. Despite knowing that the third party was bankrupt since February 2014 the defendant first indicated to the plaintiff it would need to file an application regarding this on 8 February 2016. The application was only filed after service of the request for trial date. It was reasonable for the plaintiff to assume the third party would not defend the proceedings given it had not filed a defence since November 2014. The third party filed its defence some 36 months after the third party proceeding was commenced and four days before the hearing of the application. It is submitted the plaintiff acted reasonably. He reconsidered his position and acted to negotiate directions with the defendant and third party to progress the matter. In contrast, the defendant’s position was unreasonable in that he refused to participate in any such negotiations and relevant material is relied upon.^[2]

3. [3]
   It is submitted the defendant’s unreasonableness has been characteristic of its approach to these proceedings. In the circumstances, bearing in mind the findings of the court in the primary decision, the costs of and incidental to the application should be costs in the proceeding.

Defendant’s submissions

4. [4]
   On the other hand, the defendant seeks an order that the plaintiff pay his costs of and incidental to the application on an indemnity or alternatively standard basis. It is submitted that the application was expressly to dispense with Mr Douglas’ signature on the request for trial date and not for directions. The history of the matter is relied upon. On 11 July 2016 the applicant sent Mr Douglas the request for trial date. The letter did not refer to directions. The request for trial date was not served on the third party. The request for trial date was defective as was found in the primary judgment. By letter dated 20 July 2016, Mr Londy gave reasons as to why the matter was not ready for trial and why the request for trial date could not be signed in particular pointing out that the defendant’s application in the Federal Circuit Court was to be heard on 29 August 2016. There was no response by the applicant to that letter. On 20 August 2016 a rule 444 letter was sent by the plaintiff not seeking directions. There was a rule 445 response on 28 August 2016. There was no response by the plaintiff to that letter. On 2 September 2016 the application was filed not specifically seeking directions. On 16 September 2016 the defendant’s solicitor wrote to the plaintiff requesting that there be consent order the application be dismissed with no order as to costs, otherwise their client would seek costs. The plaintiff did not respond to that correspondence. There was without prejudice correspondence on 27 September 2016 in the nature of a Calderbank offer which noted:

“If the offer [to dismiss the application with no order as to costs] is not accepted we intend to seek costs against your client on the indemnity basis, by reason of your unreasonable refusal to accept this offer.”

5. [5]
   On 28 September 2016 the third party wrote to the plaintiff stating the application was defective. On 28 September 2016 the plaintiff rejected the defendant’s offer and raised the issue of directions and sought to reserve all costs. There was a response dated 28 September 2016 again requiring the plaintiff to pay costs. On 29 September 2016 the applicant and the third party agreed to a form of consent orders. It is submitted this does not affect the question of costs. On 29 September 2016 the outline of the plaintiff’s submissions pressed for dispensation of the signature. It is submitted that this was also pressed on 30 September 2016. It is submitted that the event here was the request of the dispensation and that the defendant has succeeded and in those circumstances the general rule as to costs ought not to be applied.^[3]  It is submitted the plaintiff failed in the face of repeated warnings not to bring or proceed with the application and this was an imprudent refusal to accept a reasonable offer.

6. [6]
   It is submitted the defendant was required to incur costs of responding to the application to dispense with the signature and in those circumstances seeks his costs.

Third party submissions

7. [7]
   The third party does not propose to make any submissions.

Disposition

8. [8]
   It is my view, having considered the material, including the written submissions, the affidavits in the primary proceedings, the affidavit of Mr Chand filed by leave on 6 October 2016 and the affidavit of Mr Londy filed by leave on 6 October 2016 that costs in this matter should be costs in the proceeding. I have made this determination for the following reasons.

9. [9]
   Firstly in my view, there has been fault on both sides here. The defendant solicitors were aware of the bankruptcy in 2014 yet this was not disclosed to the plaintiff until 2016.

10. [10]
    Secondly, the defendant’s solicitors had four months from February 2016 to file the application in the Federal Circuit Court but failed to do so until a late stage.

11. [11]
    Thirdly it was reasonable for the plaintiff to consider that no defence would be filed to the third party proceedings in light of the delay.

12. [12]
    Fourthly on the other hand I consider the request for trial date to be defective for the reasons given in the primary judgment.

13. [13]
    Fifthly it seems to me that paragraph three of the application could encompass a request directions. The fact is the matter turned into a directions hearing at the hearing of the matter and the defendant could have agreed on directions concerning the matter. In this regard it may be seen there was success by the plaintiff on the question of directions. The fact is there is a discretion in the court to make directions at any time as I observed in the primary judgment.

14. [14]
    Finally despite the correspondence between the parties the matter could easily have been resolved into consent directions with reserved costs. There was no impediment to an agreed set of directions despite the application in the Federal Circuit Court.

15. [15]
    In all of the circumstances I exercise my discretion to order that costs be costs in the proceeding.

Order

16. [16]
    My formal order is that the costs of and incidental to the application should be costs in the proceeding.