O'Sullivan v Spencer; Swan Transport Services Pty Ltd v Ribana Pty Ltd
[2018] QMC 17
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- Unreported Judgment
- O'Sullivan v Spencer; Swan Transport Services Pty Ltd v Ribana Pty Ltd[2018] QMC 17
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O'Sullivan v Spencer; Swan Transport Services Pty Ltd v Ribana Pty Ltd[2018] QMC 17
O'Sullivan v Spencer; Swan Transport Services Pty Ltd v Ribana Pty Ltd[2018] QMC 17
MAGISTRATES COURTS OF QUEENSLAND
CITATION: | O'Sullivan & Ors v Spencer & Ors; Swan Transport Services Pty Ltd v Ribana Pty Ltd & Ors [2018] QMC 17 |
PARTIES: | Rosanna O'Sullivan; O'Sullivan Superannuation Pty Ltd; AAI Limited T/as Vero Insurance (Plaintiffs) v Christopher Rex Spencer (First Defendant) Ribana Pty Ltd (Second Defendant) Adam Bayse Sellar (Third Defendant) Terry Leslie T/as Colossal Pilot Service (Fourth Defendant) AND Swan Transport Services Pty Ltd (Plaintiff) v Ribana Pty Ltd (First Defendant) Terry Leslie (Second Defendant) Adam Bayse Sellar (Third Defendant) |
FILE NO/S: | M52121/16 and M4173/14 |
DIVISION: | Magistrates Courts |
PROCEEDING: | Application by defendants for costs on indemnity basis |
ORIGINATING COURT: | Brisbane Magistrates Court |
DELIVERED ON: | 19 October 2018 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 30-31 July 2018 |
MAGISTRATE: | AC Thacker |
ORDER: | Plaintiffs to pay the defendants’ costs and incidentalsto the proceedings in both M4173 / 14 and M52121 / 16 on the indemnity basis to be agreed or failing agreement to be assessed in accordance with Magistrates Court Practice Direction 10 of 2010. |
CATCHWORDS: | UCPR Chapter 17A costs of a proceeding – indemnity basis |
SOLICITORS: | Mr Templeton, Counsel instructed by Ligeti Partners, Solicitors for Plaintiffs in the first proceeding. Also, instructed by McInnes Wilson for Plaintiff in the second proceeding. Mr A Davis, Counsel instructed by Walker & Hedges & Co Solicitors for Defendant Christopher Spencer and Ribana Pty Ltd. Ms McNeil, Counsel instructed by Mills Oakley for Defendant Adam Sellar. Mr D Edwards, Counsel instructed by Bradley Munt & Co Solicitors for Defendant Terry Leslie trading as Colossal Pilot Services. |
Introduction
- [1]The defendants seek costs on the indemnity basis in light of my judgement in this matter in their favour. The plaintiffs have been wholly unsuccessful against each of the defendants in each of the proceedings No. 4173/14 (the Swan Transport proceedings) and No. 0052121/16 (the O'Sullivan proceedings) which were heard at trial over two days. The orders made at the conclusion of the trial were extensive in response to the plaintiffs’ conduct of the proceedings. The five orders are as follows:-
- The claim by Rosanna O'Sullivan against all defendants in proceeding numbered M52121 of 2016, is dismissed for want of standing.
- The claim by O'Sullivan Superannuation against all defendants in proceeding numbered M52121 of 2016, is dismissed for want of standing.
- The claims by Vero against all defendants (directly and / or vicariously) in proceeding numbered M52121 of 2016, are dismissed.
- The claims by Swan Transport against all defendants (directly and / or vicariously) in proceeding numbered M4173 of 2014, are dismissed.
- Costs follow the event.
- [2]Each of the defendants seek costs against the plaintiffs on the indemnity basis with reasons for justifying this position in written submissions. The parties are content for the question of costs to be determined upon consideration of their written submissions which I have received and read as follows:
- By third defendant in each proceeding (Sellar) filed 27 September 2018;
- By the second / fourth defendant (Leslie) filed 28 September 2018;
- By the plaintiffs filed 4 October 2018; and in response
- By Sellar filed 8 October 2018; and
- By first / second defendant (Ribana) and first defendant (Spencer) filed 8 October 2018.
UCPR and costs of a proceeding
- [3]Civil disputes such as the proceedings in this case are managed by application of the Uniform Civil Procedure Rules 1999 (the UCPR). The philosophy – overriding obligations of parties and court are set out at the beginning of the UCPR at rule 5 which provides (inter alia) the purpose of the rules is to facilitate expeditious resolution of the real issues at minimum expense. To this end a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way. The court may impose appropriate sanctions if a party does not comply with the UCPR. One of the sanctions available to the court is to order indemnity costs against a party.
- [4]Rule 361 UCPR provides for costs if an offer is made to settle by a defendant, as follows:
- (1)This rule applies if –
- (a)The defendant makes an offer that is not accepted by the plaintiff and the plaintiff does not obtain an order that is more favourable to the plaintiff than the offer; and
- (b)The court is satisfied that the defendant was at all material times willing and able to carry out what was proposed in the offer.
- (2)Unless a party shows another order for costs is appropriate in the circumstances, the court must –
- (a)Order the defendant to pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer; and
- (b)Order the plaintiff to pay the defendant’s costs, calculated on the standard basis, after the day of service of the offer.
- (3)N/A
- (4)If the defendant makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule.
- [5]Chapter 17A UCPR also applies to costs payable or to be assessed. There are several rules in this chapter directly relevant to the consideration of the defendants’ applications for costs in this case. I consider that:
- the defendants can not recover any costs of these proceedings from the plaintiffs other than under the UCPR pursuant to rule 680; and
- the costs of these proceedings are in the discretion of the court but follow the event, unless the court orders otherwise or the rules provide otherwise pursuant to rule 681;
- the court has the discretion to order costs to be assessed on the indemnity basis pursuant to rule 703;
- for proceedings before a magistrate the costs of the proceeding may be ordered to be assessed by a cost assessor if the magistrate considers it appropriate because of the nature and complexity of the proceeding pursuant to rule 683;
- the order for costs may relate to a particular part of a proceeding per rule 684;
- costs of a proceeding may include costs incurred in procuring evidence pursuant to rule 272.
Principles by case law
- [6]Courts are acutely aware that potential litigants should not be discouraged from bringing their disputes to the courts. It is such considerations which underlie the general rule that an order for special costs should only be made in special circumstances: Overseas-Chinese Banking Corp v Richfield Investments Pty Ltd [2004] VSC 351 at [60] cited with approval in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] 13 VR 435 and also in Queensland more recently, in the case J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23.
- [7]Generally, the case law establishes that indemnity costs have been awarded in circumstances where the court has been satisfied that a party has behaved unreasonably or in a blameworthy way in pursuing or defending a claim.
- [8]The defendants rely on the following behaviours to support their claim for costs on the indemnity basis:
- (a)Plaintiffs’ refusal to compromise; and/or
- (b)Plaintiffs’ conduct of the proceedings, especially by failing to properly plead their case and/or by continuing the proceedings without evidentiary foundation.
Refusing to compromise
- [9]Refusing to compromise or failing to compromise as provided for in UCPR rule 361 is considered.
- [10]Also, the plaintiff refers to Calderbank v Calderbank [1975] 3 All ER 333 (often referred to as a "Calderbank Offer"). In that case the court held that where a winning party in litigation refuses an earlier settlement offer made by the losing party, the losing party may produce the settlement offer as evidence towards the appropriate level of costs payable. In the Calderbank case the winning party’s award of damages was less than the earlier settlement offer by the losing party. The losing party was ordered to pay less costs to the winning party in recognition of this outcome.
- [11]Stewart v Atco Controls Pty Ltd (no. 2) (2014) 252 CLR 331 is a more recent authority in Australia (following the Calderbank case), for the principle that the non-acceptance of an offer of settlement may be a factor, and sometimes a strong factor, to be taken into account when deciding whether or not indemnity costs are to be ordered.
- [12]In J & D Rigging Pty Ltd v Agripower Australia Limited & Ors the Queensland Court of Appeal referred to (pages 441-442) of the Hazeldene’s Chicken Farm case and affirmed it as authority to support the principle that refusal of an offer to compromise does not warrant the exercise of the discretion to award indemnity costs without more. Rather, that the critical question is whether the rejection of the offer was unreasonable in the circumstances.
Plaintiff’s conduct of the proceedings
In LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305 at [22] Boddice J confirmed the position that indemnity costs require some special or unusual feature of the case and also that the general rule is that costs orders ought not to “be allowed to diminish to the extent that an unsuccessful party will be at risk of an order for costs assessed on an indemnity basis, absent some blameworthy conduct on its part.”
- [13]In Mowen v Rockhampton Regional Council [2018] QSC 44 at [9] McMeekin J considered an application concerning costs in light of his the reasons for judgement. He stated -
The granting of costs on an indemnity basis should be reserved “for unusual cases or cases involving unreasonable conduct” established on “clear grounds”: Mizikovsky v Queensland Television Ltd [2013] QCA 68; Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 at [113].
- [14]In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Sheppard J identified circumstances that would support ordering indemnity costs as including proceedings commenced in wilful disregard of known facts, making allegations that ought never to have been made, and / or prolonging a case by groundless contentions. The decision of Sheppard J in this case is often referred to as the usual authority when indemnity costs are being considered.
Consideration (by chronology of events)
- [15]The chronology of events in these proceedings has taken a tortuous course. The following list of events is not intended to be exhaustive but are the most crucial in determining whether or not indemnity costs are to be ordered:
| 18 April 2013 | The incident the subject of the proceedings occurred at Beaudesert. |
| 12 May 2014 | The plaintiff (Swan Transport) commenced proceeding 4173/14. Notice that Sellar (the driver of the rear pilot vehicle), was not a party to this proceeding. Proceedings against Sellar were commenced in March 2017. |
| 23 May 2016 | Settlement conference between (some) of the parties did not resolve the claim. |
| 1 June 2016 | The plaintiff (O'Sullivan and others) commenced proceeding M52121/16. |
| 26 Sept 2016 | Settlement conferences between (some) of the parties did not resolve the claim. |
| 8 Nov 2016 | Ribana and Spencer solicitors wrote to the plaintiffs a lengthy letter setting out their frustrations and accusing that the plaintiff’s allegations were unsupported by any evidence and that the claims were “speculative in nature and unsubstantiated”[1]. |
| 31 Jan 2017 | Plaintiff Swan solicitors informed Sellar solicitors that on 24 May 2016 plaintiff Swan Transport had been granted leave to join Sellar to the Swan proceedings, and file and serve an amended claim and amended statement of claim within 14 days. This was filed on 6 June 2016 but never served on Sellar (amounting to non-compliance with a court order). |
| 17 Feb 2017 | Magistrate Hay orders (inter alia) the two proceedings be heard together and that evidence led be evidence in both proceedings. |
| 27 Apr 2017 | Report of Mr Kennedy (the plaintiffs’ expert witness) is served on the defendants. Defendants form the view that given the report did not provide evidence to prove the plaintiffs’ claims and the claims did not plead a mechanism for the incident and the pleading relying on res ipsa loquitur was against all four defendants indiscriminately it did not require any response by way of a responding expert opinion. |
| 6 June 2017 | Plaintiff Swan Transport files an amended claim and statement of claim (inter alia) adding Sellar as a party. |
| 22 June 2017 | In correspondence defendant Sellar sets out frustrations with the continued absence of evidence to explain the mechanism of the collision, the deficiencies in the plaintiffs’ claims and reliance on Mr Kennedy’s report written some 4 years after the incident when Mr Kennedy had not witnessed the collision or sighted the collision scene or the damaged vehicles immediately after the collision. Sellar offers to resolve the dispute by paying to each of the plaintiffs $5,000 (a total of $10,000) in full and final settlement of both proceedings[2]. This offer was rejected by the plaintiffs. |
| 2 Nov 2017 | Plaintiffs O'Sullivan and others filed an amended claim and statement of claim introducing a pleading at paragraph 4 that Sellar was negligent particularising contradictory pleadings without further explanation as follows:
4.2 failed to assume control of the jinker trailer at an appropriately and/or opportune time; 4.3 steered the jinker trailer in a manner which caused it to collide with the plaintiff’s premises; and also (at paragraph 4B), as an alternative, that the plaintiff relied on the doctrine of res ipsa loquitur. |
| 3 Nov 2017 | Plaintiff O'Sullivan signed a request for trial date. |
| 8 Nov 2017 | Plaintiff Swan signed a request for trial date. |
| 13 Nov 2017 | Sellar files his amended defence stating (at paragraph 4(c)(ii) –
[Sellar] denies that the doctrine of res ipsa loquitur has any application in these proceedings, particularly in circumstances where the plaintiffs have issued proceedings against four defendants without particularising how the incident was caused by the negligence of each defendant. |
| 13 Dec 2017 | The second or supplementary report of Mr Kennedy dated 14 November 2017 is disclosed to defendants. |
| 10 May 2018 | Sellar makes a formal offer to resolve the dispute on the basis each party walk away and bear their own costs.[3] This offer was rejected by the plaintiffs. |
| 2 July 2018 | Sellar’s solicitor speaks with Terrence Casey, expert engineer about providing an opinion on the issues identified in Mr Kennedy’s reports. |
| 20 July 2018 | Mr Casey report received by Sellar’s solicitor and served on all parties. |
| 27 July 2018 | Plaintiffs advise all parties of their intention to object to any application by Sellar for leave to rely on the report of Mr Casey and if unsuccessful to seek an adjournment of the trial with costs. |
| 30 July 2018 | Sellar solicitor receives instructions to not proceed with above application on account of the plaintiff’s threat to seek an adjournment with costs. |
| 30-31 July 2018 | Two day trial completed. |
Discussion
- [16]The plaintiffs submits on the basis there has been no unreasonable or blameworthy conduct on its part in pressing ahead to trial on the evidence presented at trial in particular through Mr Kennedy upon whom the plaintiffs’ cases rested almost exclusively.
- [17]Compared to this position the chronology shows that as early as November 2016 the plaintiffs were on notice, by a lengthy letter from the solicitors for the defendants Ribana and Spencer about the absence of evidence to support the plaintiffs’ claims and the defendants’ frustrations with the “speculative” and “unsubstantiated” manner of the plaintiffs’ claims.
- [18]This situation did not change. The plaintiffs knew or ought to have known that Mr Kennedy’s first report in April 2017 was not providing support for the plaintiffs’ claims against any of the defendants. However, the plaintiffs do nothing in response to that situation.
- [19]By the 22 June 2017 letter from Sellar’s solicitors, the plaintiffs were put on notice in a very detailed way about the continued absence of evidence to explain the mechanism of the collision, the deficiencies in the plaintiffs’ claims and reliance on Mr Kennedy’s report with its limitations. However, the plaintiffs do nothing about that until November 2017 when the plaintiffs file another amended statement of claim pleading Sellar was negligent and as an alternative that the plaintiffs rely on the doctrine of res ipsa loquitur. These pleadings were not accompanied by particulars or explanation to account for the contradictions apparent in the pleadings as between paragraph 4.2 and 4.3 of the amended claim.
- [20]Also in November 2017 by the amended defence filed by Sellar with its additional statement in paragraph 4 that “particularly in circumstances where the plaintiffs have issued proceedings against four defendants without particularising how the incident was cause by the negligence of each defendant”, the plaintiffs are warned again of the deficiency of their evidence.
- [21]On 13 December 2017 the second or supplementary report of Mr Kennedy dated 14 November 2017 is disclosed to the defendants. However, it does not overcome any of the deficiencies of the earlier report. The evidence at trial established it was not possible for Mr Kennedy to provide any more evidence than what he provides about the disassembled jinker trailer parts he saw to provide his very limited opinions. This was a fulsome finding against the plaintiffs.
- [22]The defendants (Sellar) submits correctly that the plaintiffs would have been in a much more favourable position had they accepted the offer to settle in June 2017. The same applies to the 10 May 2018 offer to settle which occurred after the second report of Mr Kennedy had been disclosed.
- [23]The defence submit it is apparent from the plaintiffs’ conduct of the proceedings they engaged in a “scatter gun” approach to find someone to blame for the accident, is I find an accurate description the plaintiffs’ conduct in this case.
- [24]The chronology of events also shows that it was because of the persistence of the plaintiffs relying on Mr Kennedy’s reports and not anything else, that Sellar engaged its own expert, Mr Casey, to provide a reply. In my opinion that is entirely allowable under the UCPR and necessary in the circumstances where the plaintiffs were not forthcoming with any other evidence and continued to rely exclusively on Mr Kennedy’s reports. Furthermore, I accept that both the contents of the Casey report and the time spent conferring with Mr Casey despite he was not ultimately called as a witness, were significant contributing factors to the extensive and technical cross-examination of Mr Kennedy, and the ultimate findings of the court related to his expert testimony.
Conclusion
- [25]Plaintiffs commence claims which later require some amendment and in the ordinary course that is accepted within the standard costs orders. The plaintiffs made a number of amendments to their claims yet none to address the absence of particulars in the statement of claim in each case.
- [26]The plaintiffs made allegations in the statements of claim (and amendments of it) which ought never to have been made without associated particulars. The trial has found there was no evidence upon which the plaintiffs could rely to press their claims.
- [27]At trial no evidence of eye witnesses to the accident were called by the plaintiffs. Rather, the plaintiffs relied on Mr Kennedy who viewed only the disassembled parts of the jinker trailer some four years after the accident. The relevant parts had also been moved a number of times after the accident. Mr Kennedy did not investigate the remote control device at all. Mr Kennedy’s expert testimony was found to be well short of what is required to support the doctrine of res ipsa loquitur. In these circumstances the plaintiffs knew or ought reasonably to have known that their claims were bound to fail. Yet they persisted no doubt hoping that the deficiencies in the plaintiffs’ cases would be fixed by some evidence obtained from cross-examination of defence witnesses – at least that is the only conclusion I can draw from the plaintiffs’ behaviour.
- [28]The plaintiffs were imprudent in their refusals to withdraw or at the very least compromise when a reasonable view of the reports provided by Mr Kennedy showed there needed to be other evidence produced if the plaintiffs were to comply with the onus on them to prove their case.
- [29]In the face of reasonable and early warnings from the defendants about the omission of pleadings particularising the claims the plaintiffs’ conduct persisting in the proceedings amounts to unreasonable behaviour on the part of the plaintiffs.
- [30]It is the persistence to trial with a dearth of evidence to support the plaintiffs’ claims that brings the plaintiffs into the category of blameworthy conduct supporting an indemnity costs order against them for all costs of and incidental to the proceedings.
I ORDER
- [31]The plaintiffs pay the defendants’ costs of and incidental to the proceedings in both M4173 / 14 and M52121 / 16 on the indemnity basis to be agreed or failing agreement to be assessed in accordance with Magistrates Court Practice Direction 10 of 2010.