SEQ Homemaker 1 Pty. Ltd. v SPAR Corporate Pty Ltd (No. 2)
[2017] QDC 72
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- Unreported Judgment
- SEQ Homemaker 1 Pty. Ltd. v SPAR Corporate Pty Ltd (No. 2)[2017] QDC 72
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SEQ Homemaker 1 Pty. Ltd. v SPAR Corporate Pty Ltd (No. 2)[2017] QDC 72
SEQ Homemaker 1 Pty. Ltd. v SPAR Corporate Pty Ltd (No. 2)[2017] QDC 72
DISTRICT COURT OF QUEENSLAND
CITATION: | SEQ Homemaker 1 Pty Ltd v SPAR Corporate Pty Ltd & others (No 2) [2017] QDC 72 |
PARTIES: | SEQ HOMEMAKER 1 PTY LTD Plaintiff v SPAR CORPORATE PTY LTD First Defendant and DIGWOOD PTY LTD Second Defendant and SPAR AUSTRALIA LIMITED Third Defendant |
FILE NO/S: | 1163/15 |
DIVISION: | Civil |
PROCEEDING: | Trial |
DELIVERED ON: | 27 March 2017 |
DELIVERED AT: | Brisbane |
HEARING DATE: | On the papers |
JUDGE: | Bowskill QC DCJ |
ORDER: | Direct that, by 31 March 2017, the plaintiff provide a form of judgment, reflecting the orders proposed in [154] (including the interest calculation) and [155] of the reasons delivered on 10 March 2017 and [26] of this decision |
CATCHWORDS: | COSTS – appropriate treatment of reserved costs of two previously adjourned trials – whether appropriate to discount costs recoverable by the second and third defendants by a fixed percentage, in light of limited success of the plaintiff on one of the issues Uniform Civil Procedure Rules 1999, rr 681, 684, 698 BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64 Callide Power Management Pty Ltd v Callide Coalfields (Sales) Pty Ltd (No 6) [2016] QSC 229 Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192 Todrell Pty Ltd v Finch (No 2) [2008] 2 Qd R 95 |
COUNSEL: | J Peden and P Somers for the Plaintiff R Anderson QC and A Stoker for the Second and Third Defendants |
SOLICITORS: | Russells Solicitors for the Plaintiff Clamenz Lawyers for the Second and Third Defendants No appearance for the First Defendant |
- [1]On 10 March 2017 I delivered reasons for decision following the trial in this matter: SEQ Homemaker 1 Pty Ltd v SPAR Corporate Pty Ltd & others [2017] QDC 46. The plaintiff was successful in its claim against the first defendant; but not against the second and third defendants.
- [2]I proposed orders in relation to the costs of the proceeding, that:
- (a)the first defendant pay the plaintiff’s costs of the proceeding against the first defendant, in relation to the claim for damages for breach of the lease, as pleaded in paragraphs [17] to [23], [35] to [36] of the further amended statement of claim filed on 22 November 2016 (but not the other claims previously made against the first defendant, but abandoned by the amendments made to the statement of claim on 22 November 2016), to be assessed on the standard basis; and
- (b)the plaintiff pay the second and third defendants’ costs, of the proceeding against those defendants, to be assessed on the standard basis,
- (a)
but invited submissions in relation to these orders.[1]
- [3]Since no contrary submissions have been received in relation to the proposed order against the first defendant, an order in those terms will be made.
- [4]This decision deals with the costs of the proceeding against the second and third defendants.
- [5]Subject to three issues, the plaintiff accepts that the second and third defendants are entitled to their costs as against the plaintiff. The three issues are:
- (a)the costs of the adjourned trial on 1 June 2016, which the plaintiff submits ought to be paid by the second and third defendants;
- (b)the costs of the adjourned trial on 21 November 2016, in respect of which the plaintiff submits there should be no order as to costs; and
- (c)since the plaintiff succeeded in establishing a breach of s 18 of the Australian Consumer Law, in the sense of demonstrating that the third defendant made a misleading or deceptive representation, although failed to establish an entitlement to damages under s 236, the costs recovered by the second and third defendant ought to be discounted by 20% to reflect the plaintiff’s success on that issue.
- (a)
- [6]The second and third defendants argue against each of these issues, and submit the order as originally proposed is the appropriate order to be made.
Adjournment of the trial on 1 June 2016
- [7]This proceeding was commenced by the plaintiff on 23 March 2015. By its original statement of claim the plaintiff claimed against the second and third defendants for damages for conversion (of various stock, described as fruit, vegetables, groceries and meat, said to be the property of the plaintiff);[2]and against the third defendant for damages for inducing breach of the lease – by reference to a deed of settlement and release entered into between the first, second and third defendants, Barry Edmonds and Farmer Pats Rothwell Pty Ltd, on 19 June 2014.[3]
- [8]The trial of the proceeding was originally scheduled to commence on 1 June 2016, before Judge Dorney QC.
- [9]The day before that trial, the second and third defendants disclosed various documents, said to relate to the issue of ownership of the “stock”, one of which was the Business Operating License and Supply Agreement (referred to in the reasons as the business operating agreement).
- [10]At the commencement of the trial on 1 June 2016 the plaintiff applied for an adjournment on the basis of the late disclosure of that document, having regard to its potential relevance to the plaintiff’s then existing claim for damages for conversion of the stock, as well as a possible new cause of action, based on a separate allegation of inducing breach of the lease.[4] The adjournment was opposed by the second and third defendants, on the basis, in part at least, that the business operating agreement did not directly deal with title to the stock.[5] However, counsel for the second and third defendants acknowledged that the document was one which ought to have been disclosed.[6]
- [11]The trial was adjourned, with costs being reserved.
- [12]It is difficult to determine the relevance of the business operating agreement to the claim as then pleaded by the plaintiff against the second and third defendants for damages for conversion of the stock, since that claim was not pursued at the trial before me. In so far as the original claim for damages for inducing breach of contract was concerned, that had nothing at all to do with the business operating agreement, or the claim as it was ultimately framed for the purposes of the trial before me. Neither of those original causes of action against the second and third defendants were pursued to trial. They were abandoned by the time the further amended statement of claim was filed on 22 November 2016.
- [13]It is apparent that, in considering the parties’ submissions in relation to the adjournment application, Judge Dorney QC was concerned that the late disclosed business operating agreement may have had some relevance to the then pleaded inducing breach of contract claim. I am satisfied that is not the case. The difficulties of then determining where the merits of each side’s respective arguments lay led his Honour to reserve the costs of the adjourned trial.
- [14]Given that, in the end, neither of the causes of action then relied on by the plaintiff were persisted in; and in fact the matter went to trial on two different causes of action, I do not consider it is appropriate to order the second and third defendants to pay the plaintiff’s costs of that adjourned trial. However, it also seems fair in all the circumstances that the second and third defendants should not recover their costs of that adjourned trial, given the late disclosure of the business operating agreement. I propose to exclude from the costs ordered to be paid by the plaintiff, the second and third defendants’ costs thrown away as a result of the adjournment of the trial on 1 June 2016.
Adjournment of the trial on 21 November 2016
- [15]Following the adjournment on 1 June 2016, directions were agreed between the plaintiff and the second and third defendants, which were then made by Judge Dorney QC.
- [16]Those directions were not complied with, beginning with a delay of some 2 months in the plaintiff complying with the direction to file and serve an amended statement of claim. An amended statement of claim was eventually filed on 24 August 2016. In this version of the pleading, the plaintiff persisted in its claim for damages for conversion of the stock as against the second and third defendants; as well as the claim against the third defendant, for damages for inducing breach of the lease, as a result of entering into the deed of release and settlement. But in addition, two new causes of action were pleaded, being the claim against the second and third defendants for damages for inducing breach of the lease, by entry into the business operating agreement;[7] and the claim against the third defendant for damages for misleading and deceptive conduct.[8]
- [17]The trial was scheduled to commence on 21 November 2016.
- [18]On that day, the second and third defendants applied for an adjournment, in circumstances where the plaintiff’s amended statement of claim had been delivered two months later than the agreed directions provided for, resulting in further delays in compliance with consequential directions; witness summaries had also been provided late; and the plaintiff was still making disclosure on the morning of the trial.[9] The trial was adjourned, on the basis that it would be unfair to the second and third defendants in the circumstances to press the matter on to trial.[10] It was acknowledged on that occasion that both parties ought to have drawn the delays to the attention of the court, prior to the commencement of the trial, so that the issues could be appropriately managed.
- [19]Following the adjournment of the trial on 21 November 2016, further directions were made, including for the filing of a further amended statement of claim.
- [20]That was done on 22 November 2016. In this further amended statement of claim, the plaintiff abandoned the claim for damages for conversion; as well as the claim for damages for inducing breach of the lease by entering into the deed of settlement and release (but maintained the other two claims, which had been added to the amended statement of claim filed in August 2016).
- [21]I am unable to see any reason why the second and third defendants should not recover their costs of the adjourned trial on 21 November 2016. As appears from the transcript, the necessity for the adjournment was in no small way as a result of the plaintiff’s delay in complying with the agreed directions made following the adjourned trial on 1 June 2016. Given the outcome of the trial, in my view it is appropriate that the second and third defendants recover their costs of this adjournment. As this is the effect of r 698 UCPR in any event, no specific order needs to be made.
Discount of the recoverable costs, reflecting plaintiff’s success on an issue?
- [22]As to the third issue, I see no basis to deal with the issue of whether a representation was made, and whether it was misleading or deceptive, in a separate way – such as to result in a discount of 20% of the costs recoverable by the second and third defendants.
- [23]The general rule is that costs of a proceeding are in the discretion of the court, but follow the event, unless the court orders otherwise: r 681(1) UCPR. Rule 684 provides an exception,[11] permitting the court to make an order for costs in relation to a particular question in, or a particular part of, a proceeding (and for that purpose to declare what percentage of the costs of the proceeding is attributable to the question or part of the proceeding to which the order relates). As McMurdo J said in BHP Coal at [7], “[n]ecessarily the circumstances which would engage r 684 are exceptional circumstances, and the enquiry must be: what is it about the present case which warrants a departure from the general rule?” His Honour also referred to Chesterman J’s approval of the observation that “[n]otwithstanding that the court has power to deprive a successful party of costs, or even order a successful party to pay costs, that is a course to be taken in unusual cases and with a degree of hesitancy”.[12]
- [24]I adopt the reasoning of the High Court in Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192 at [6]:
“… the preferable approach in this case is the one usually taken, that costs should follow the outcome of the appeal. This is not the case where it may be said that the event of success is contestable, by reference to how separate issues have been determined. There are no special circumstances to warrant a departure from the general rule, and good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like…”[13]
- [25]The event here is the dismissal of the plaintiff’s claim against the second and third defendants. Applying the general rule, the second and third defendants are entitled to recover their costs of the proceeding. They were wholly successful in defending the plaintiff’s claims against them. In so far as the claim for damages for misleading and deceptive conduct is concerned, I do not regard it as necessary or appropriate in this case to deprive the [second and] third defendant[14] of part of its costs, on the basis of the finding that one of the pleaded representations was made, and was misleading and deceptive – given the ultimate finding that the representation was not relied on, and in any event no loss was shown to have been suffered because of it. That is not a matter appropriately dealt with as a separate event for the purposes of r 681(1); and there are no special circumstances justifying any other order under r 684.
- [26]The order will therefore be that the plaintiff pay the second and third defendants’ costs of the proceeding against those defendants, excluding the second and third defendants’ costs thrown away by the adjournment of the trial on 1 June 2016, to be assessed on the standard basis.
- [27]I direct that, by 31 March 2017, the plaintiff provide a form of judgment, reflecting the orders proposed in [154] (including the interest calculation) and [155] of the reasons and [26] of this decision.
Footnotes
[1] Reasons at [154(b)], [156] and [157].
[2] Para 27 (meaning of “stock”), and paras 37-39 of the statement of claim.
[3] Paras 30, 40-43 of the statement of claim.
[4] Transcript of 1 June 2016 at p 1-12 to 1-13.
[5] Transcript of 1 June 2016 at p 1-20 to 1-21.
[6] Transcript of 1 June 2016 at p 1-19.
[7] Paras 40A to 40K of the amended statement of claim.
[8] Paras 41A to 41L of the amended statement of claim.
[9] Transcript of 21 November 2016, at p 1-9 to 1-12.
[10] Transcript of 21 November 2016, at p 1-52.
[11]BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64 at [7] per McMurdo J (as his Honour then was).
[12]Todrell Pty Ltd v Finch (No 2) [2008] 2 Qd R 95 at [21], referring to the observation made by Einstein J in Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 423 at [4]. See also Allianz Australia Insurance Ltd v Swainson [2011] QCA 179 at [4]-[5] per Fraser JA and John Urquhart t/as Hart Renovations v Partington & Anor [2016] QCA 199 at [8]-[10].
[13] See also Callide Power Management Pty Ltd v Callide Coalfields (Sales) Pty Ltd [2016] QSC 229 at [5] and [6] per Flanagan J.
[14] The claim for damages for misleading and deceptive conduct was against the third defendant only; but the submission in relation to discounting the recoverable costs was directed to the second and third defendants’ costs.