Adam Toth Constructions Pty Ltd v Lu (No. 2)
[2022] QDC 266
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- Unreported Judgment
- Adam Toth Constructions Pty Ltd v Lu (No. 2)[2022] QDC 266
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Adam Toth Constructions Pty Ltd v Lu (No. 2)[2022] QDC 266
Adam Toth Constructions Pty Ltd v Lu (No. 2)[2022] QDC 266
DISTRICT COURT OF QUEENSLAND
CITATION: | Adam Toth Constructions Pty Ltd v Lu (No. 2) [2022] QDC 266 |
PARTIES: | ADAM TOTH CONSTRUCTIONS PTY LTD (Plaintiff/Respondent) v QIMING LU (Defendant/Applicant) |
FILE NO: | 1776/20 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court of Queensland |
DELIVERED ON: | 10 June 2022 (delivered ex tempore) |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 June 2022 |
JUDGE: | Dearden DCJ |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – POWER TO ORDER – where the defendant’s application was granted – where most of the statement of claim was ordered to be struck out – where the applicant/defendant seeks costs of the application on an indemnity basis – whether indemnity costs are appropriate |
LEGISLATION: | Uniform Civil Procedure Rules 1999 (Qld) rr 681, 702, 703 |
CASES: | Cowley v Mackwood Proprietary Limited & Ors (No. 2) [2015] QSC 344 |
COUNSEL: | J R Moxon for the defendant/applicant J Basson for the plaintiff/respondent |
SOLICITORS: | 23Legal for the applicant/defendant Rostron Carlyle Rojas Lawyers for the plaintiff/respondent |
Introduction
- [1]On 9 June 2022, I handed down a decision in respect of the matter of Adam Toth Constructions Proprietary Limited v Lu and in doing so, granted the application by the defendant and ordered most (but not all) of the statement of claim be struck out.
- [2]It should be noted that those portions of the statement of claim that were not struck out were portions that were accepted by the applicant/defendant in respect of this application.
- [3]The applicant/defendant now seeks costs of this application on the indemnity basis.
The Law – costs
- [4]
Defendant/applicant submissions
- [5]The lines of this particular battleground are narrow because Mr Basson who appears for the plaintiff/respondent appropriately concedes that costs should be awarded, and should be awarded, he submits, on a standard basis; whereas Mr Moxon who appears for the defendant/applicant argues for costs on the indemnity basis.
- [6]Mr Moxon has taken me through the material, and starting at the affidavit of Andrew Suffern sworn 8 April 2022,[4] is a letter dated 21 February 2022, setting out an extensive list in exhaustive detail of the defendant’s difficulties with the plaintiff’s particulars and is, in Mr Moxon’s submission, clear notice since that date in February of the fundamental flaws (as the defendant has submitted in these proceedings) of the plaintiff’s case and providing the plaintiff an opportunity to respond.
- [7]At exhibit AWS 17,[5] the plaintiff’s solicitors respond, but without reference to the exhaustive list of complaints about particulars.
- [8]At exhibit AWS 18 of the same affidavit,[6] the defendant’s solicitors again put the plaintiff on notice as to their failure to respond to that aspect of their previous correspondence in respect of the particulars.
- [9]At exhibit AWS 19,[7] the plaintiff’s solicitors again respond on 18 March 2022 but that response does not deal with the issue of particulars in any meaningful way.
- [10]At exhibit AWS 20,[8] the letter from the defendant’s solicitors to the plaintiff’s solicitors dated 25 March 2022 explicitly, at paragraphs 2 and three, identifies the concerns about the particulars.
- [11]At exhibit AWS 22,[9] the plaintiff’s solicitors, in a letter dated 6 April 2022, asserts at paragraph 9 that no amendments of the statement of claim or the further and better particulars are “essential or necessary”.
- [12]The application then proceeded and at the further affidavit of Andrew Suffern sworn 22 April 2022,[10] the letter from the defendant’s solicitors to the plaintiff’s solicitors, again requests particularisation as previously identified, and at paragraph 11, places the plaintiff’s solicitors on notice that an application would be made for costs on an indemnity basis (the application which, of course, has now proceeded as indicated).
- [13]The draft order attached to that correspondence indicates,[11] at that stage, effectively, that the defendant was prepared to settle for the provision of further and better particulars and costs on a standard basis.
- [14]Exhibit AWS 2,[12] is an email dated 19 April 2022 and the draft order indicates that the plaintiff may file further and better particulars or file and serve an amended statement of claim. I should note as an aside that perhaps that order has been less than elegantly drafted because, as Mr Basson effectively pointed out in his submissions, what the plaintiff is indicating by that order is not that it would not provide either of further and better particulars or an amended statement of claim but either one or the other, but the unfortunate placement of the word “or” at the end of paragraph 2(a)(iv) leads to some perhaps understandable ambiguity. Critically, however, that draft order proposed “costs reserved”.
- [15]
- [16]At exhibit AWS 9,[15] the defendant’s solicitors offered to accept the compromise in respect of the provision of further and better particulars but sought costs on a standard basis, but that was not agreed to by the plaintiff’s solicitors and consequently, the battle lines, as I’ve indicated, are now drawn over the issue as to whether this is an appropriate case for the order of indemnity costs.
Plaintiff/respondent submissions
- [17]Mr Basson, who appears for the plaintiff, submits firstly that the application by the defendant was not entirely successful, although, as I’ve already identified, those paragraphs of the statement of claim which remain are those which are accepted by the defendant. He also identifies, correctly, that the parties did come close to a compromise, but the sticking point was the issue of costs and, ultimately, given that there was close to an agreement prior to these proceedings being litigated before me, his submission, as I understand it, is that this is not a case that is sufficiently unusual to justify an order for indemnity costs.
Discussion
- [18]I’m assisted by the decision of Cowley v Mackwood Proprietary Limited & Ors (No. 2) [2015] QSC 344 where McMeekin J identifies:-[16]
“The principles applicable to the awarding of costs on the indemnity basis have been discussed in cases such as Di Carlo v Dubois; Quinn Villages Proprietary Limited v Mulherin; and Colgate-Palmolive Company v Cussons Proprietary Limited [citations deleted]. Effectively, special or unusual circumstances and some evidence of unreasonable conduct by the party in the bringing or the defending of an action is required. Such an order should not be seen as too readily available.”
- [19]I respectfully adopt his Honour’s observation on the issue of indemnity costs. As both parties agreed, the starting point, of course, is costs on a standard basis. In my view, the defendant/applicant has effectively entirely won his application; the reservation of small portions of the statement of claim from being struck out are really technical and practical and could not be said to be anything less than a complete success.
- [20]The history of the correspondence which I’ve identified, quite exhaustively, in setting out the background to this matter clearly indicates that as of 21 February 2022, the plaintiffs were put on notice with an extensive catalogue of the specific difficulties with its particulars and, eventually, that catalogue of difficulties was accepted by the plaintiff as being the appropriate basis for a consent order, but even to the conclusion of the negotiation process prior to the litigation process, the plaintiff persisted in seeking, at best, an order for costs reserved rather than an agreement on costs to be paid on a standard basis.
- [21]As I canvassed with Mr Moxon, there was not even, at that stage, perhaps an attempt to cap costs in some way by some frank discussion with the defendant’s solicitors as to an order for costs that could ensure that the parties could then complete a consent order prior to the hearing.
- [22]Mr Moxon, in my view, puts it appropriately and bluntly when he submits that it is unreasonable for the plaintiff to capitulate and then not be prepared to offer costs. I might say that that unreasonable or unusual response is perhaps further amplified given that the final settlement offered involved costs on a standard basis. The defendant has had to attend at this court in order to litigate the argument, and then, of course, not only attend to receive judgment but also to argue the issue of costs 24 hours later. In all of the circumstances, I’m satisfied that this is a matter that satisfies McMeekin J’s appropriate identification of it being either something “effectively special or unusual circumstances” and certainly, the apparent resistance of being willing to pay costs by the now unsuccessful plaintiff is evidence of (in the sense that McMeekin J uses it) “unreasonable conduct” which, in these circumstances, appropriately justifies indemnity costs. Accordingly, the application is granted to the extent that costs should be ordered on an indemnity basis.
Footnotes
[1] Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) r 681.
[2] UCPR r 702(1).
[3] UCPR r 703.
[4] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 16 (p. 32 of the exhibits).
[5] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 17 (p. 43 of the particulars).
[6] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 18 (p. 45 of the exhibits).
[7] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 19 (p. 47 of the exhibits).
[8] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 20 (p. 50 of the exhibits).
[9] Affidavit of Andrew Suffern sworn 8 April 2022, exhibit AWS 22 (p. 55 of the exhibits).
[10] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 1 [2]-[3], [11].
[11] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 1 pp. 4-5.
[12] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 2 (p. 6 of the exhibits).
[13] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 8.
[14] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 8 (pp. 32-33 of the affidavit exhibits)
[15] Further Affidavit of Andrew Suffern sworn 22 April 2022, exhibit AWS 9 (exhibits p. 34).
[16] Cowley v Mackwood Proprietary Limited & Ors (No. 2) [2015] QSC 344 [6] (McMeekin J).