Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd
[2024] QMC 22
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- Unreported Judgment
- Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd[2024] QMC 22
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Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd[2024] QMC 22
Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd[2024] QMC 22
MAGISTRATES COURTS OF QUEENSLAND
CITATION: | Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd and Ors [2024] QMC 22 |
PARTIES: | Peak Physique Franchisor Group Pty Ltd (Applicant) v Gravity Rebellion Pty Ltd (Defendant) Suzanne Burton (Defendant) Liam Burton (Defendant) Suzanna Jane Calava (Defendant) Michael Calava (Defendant) |
FILE NO/S: | 316/21 |
DIVISION: | Civil |
PROCEEDING: | Application for Costs |
ORIGINATING COURT: | Brisbane Magistrates Court |
DELIVERED ON: | 09/12/24 |
DELIVERED AT: | Brisbane |
HEARING DATE: | On the Papers |
MAGISTRATE: | Pinder |
ORDER: |
|
CATCHWORDS: | Interest of Judgement – s 59 Civil Proceedings Act 2011 (Qld) – Delta Pty Ltd v Mechanical & Construction Insurance Pty Ltd [2019] QCA 62 – Costs – r 681 & 702 UCPR – Indemnity or standard costs – Peter Carter Transport Pty Ltd v Swansaway No. 2 Pty Ltd (2021) QDC 109 |
SOLICITORS: | Morgan Mac Lawyers for Plaintiff No appearance by Defendant |
INTRODUCTION
- [1]I delivered a judgement in this matter on 27 February 2024 (Peak Physique Franchisor Group Pty Ltd v Gravity Rebellion Pty Ltd & Ors (2024) QMC 10). I gave judgement for the first, second, and third defendants (the Defendants) as against the plaintiff and the first and second defendants added by counterclaim in the sum of $150,000. In respect of interest and costs I directed the parties to file written submissions. Upon receipt of those written submissions the question of interest and costs was to be determined on the papers.
- [2]The first, second, and third defendants have provided submissions on costs. The plaintiff and the first and second defendants added by counterclaim have not.
- [3]The successful defendants contend for the following:
- –Interest fixed in the sum of $57,978.16
- –That the plaintiff and first and second defendants added by counterclaim pay the Defendants’ costs of the counterclaim to be assessed on an indemnity basis.
THE ORDINARY RULE AS TO COSTS
- [4]
- [5]Costs follow the event unless the court orders otherwise.[2] The defendants have succeeded on the counterclaim and following the general rule about costs, are entitled to their costs on the counterclaim.
BASIS FOR ASSESSMENT OF DEFENDANTS’ COSTS – STANDARD OR INDEMNITY
- [6]The defendants submit that the costs that the plaintiff and defendants by counterclaim ought be ordered to pay be assessed on an indemnity basis.
- [7]
- [8]Rule 703 (UCPR) provides:
- 703Indemnity basis of assessment
- The court may order costs to be assessed on the indemnity basis
Note –
Costs on the indemnity basis were previously solicitor and client costs – see rule 743S (Old basis for taxing costs equates to new basis for assessing costs).
- Without limiting subrule (1), the court may order that costs be assessed on the indemnity basis if the court orders the payment of the costs –
- Out of a fund; or
- To a party who sues or is sued by a trustee; or
- Of an application in a proceeding brought for noncompliance with an order of the court.
- When assessing costs on the indemnity basis, a costs assessor must allow all costs reasonably incurred and of a reasonable amount, having regard to –
- The scale of fees prescribed for the court; and
- Any costs agreement between the party to whom the costs are payable and the party’s solicitor; and
- Charges ordinarily payable by a client to a solicitor for the work.
- [9]Notwithstanding the “default” position, r 703 provides a basis for an order for costs to be assessed on an indemnity basis obviously involving the exercise of a discretion.
INDEMNITY COSTS – THE RELEVANT PRINCIPLES
- [10]The defendants’ submission refers to a recently published decision of this court in Pathak & Anor v Anna Wilshire & Ors[4] to support the contention that the plaintiff and defendants by counterclaim conduct enliven the consideration of exercising the discretion to order costs on an indemnity basis.
- [11]Pathak & Anor v Wilshire & Ors identifies and follows the principles of the Court of Appeal decision in Schache v GP No. 1 Pty Ltd.[5]
“There, Muir JA, noting the observations of Sheppard J in Colgate- Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 stated that:
“… the settled practice in Australia has been for costs to be awarded to the successful party to a proceeding on, what is in effect, the standard basis unless the circumstances warrant departure from that course. His Honour noted that some of the circumstances which has been through to warrant the making on an indemnity costs order were: … the engaging in misconduct that caused loss of time to the court and other parties; the commencement or continuation of proceedings for some ulterior motive ‘or in wilful disregard of known facts or clearly established law’; the making of allegations which ought never to have been made or the undue promulgation of a case by groundless contentions; and an imprudent refusal of an offer to compromise. Sheppard J concluded this list with the observation: ‘The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.”
THE PLAINTIFF AND DEFENDANTS BY COUNTERCLAIM – UNREASONABLE AND IMPROPER DELAY
- [12]The defendants’ submission identifies what they contend is conduct by the plaintiff and defendants by counterclaim which can be characterised as unreasonable and improper delay justifying an order for indemnity costs.[6]
- [13]The defendants’ contentions as to the chronology of the proceedings is supported by the pleadings and the orders that have been made. The plaintiff was certainly dilatory in pursuing this action and had failed to comply with orders of the court. That conduct ultimately saw the defendants obtaining judgement against the plaintiff on the claim on 21 November 2022.
- [14]The issue for consideration is the conduct of the plaintiff and defendants by counterclaims’ conduct in relation to the counterclaim which ultimately proceeded to trial.
- [15]The defendants’ contentions can be summarised as follows:
- –The defendants were required to obtain directions orders setting down the counterclaim for a one-day trial (listed for hearing 28 February 2023).
- –On 28 February 2023 the trial was adjourned on application by the plaintiff and defendants by counterclaim.
- –On 7 March 2023 the plaintiff and defendants by counterclaim filed an application seeking to set aside the orders made 21 November 2022 and 28 February 2023.
- –On 21 April 2024 that application was dismissed.
- –The plaintiff and defendants by counterclaim failed to appear on the date fixed for the hearing on 25 and 26 July 2023 and the matter was heard and determined in their absence.
- [16]In respect of the plaintiff and defendants by counterclaims’ conduct:
- –The plaintiff was ordered to pay the Defendant’s costs of the claim on a standard basis.
- –The plaintiff was ordered to pay the defendants costs of the application heard on 21 November 2022 (setting the counterclaim for a one-day trial on 28 February 2023) on an indemnity basis.
- –On 28 February 2023 the plaintiff and defendants by counterclaim were ordered to pay the defendants’ costs thrown away on a standard basis.
- –On 21 April 2024 the plaintiff and defendants by counterclaim were ordered to pay the defendants’ costs upon dismissal of the application
- [17]The defendants have already obtained the benefit of costs orders as against the plaintiff and the defendants by counterclaim to reflect conduct (including their costs of the claim, dismissed by the orders made on 21/11/2022).
- [18]The plaintiff and defendants by counterclaim did not appear at the trial of the action but the defendants have ultimately succeeded and obtained a judgement on the counterclaim. The plaintiff and defendants by counterclaims’ conduct on those facts and in the particular circumstances of this case do not warrant a departure from the usual orders for payment of costs on a standard basis.
- [19]The plaintiff and first and second defendants by counterclaim ought pay the defendants costs on the counterclaim on a standard basis.
ASSESSMENT OF THE DEFENDANTS’ STANDARD COSTS
- [20]The defendants seek that the costs be assessed.
- [21]The defendants’ submissions are silent as to assessment or fixing of costs.
- [22]In the Magistrates Court, the court may order that the costs of the proceedings be assessed by a costs assessor – if the Magistrate considers it is appropriate because of the nature and complexity of the proceedings.[7]
- [23]There is a presumption in favour of a Magistrate fixing costs of proceedings and it is only when a case falls into an exceptional category because of its nature and complexity that there might be an order for assessment of costs.[8]
- [24]The defendants have not sought to quantify their costs, to be fixed under r 683.
- [25]The defendants’ submission does not address the discretion to be exercised by the court in departing from the presumptive position of fixing costs.
- [26]The published reason for decision upon giving judgement for the defendants upon the counterclaim detail the chronology of the matter, the trial, and the affidavits (and other material) relied upon at trial.[9]
- [27]In considering whether the “nature and complexity of the proceedings” see this matter fall within the exceptional category warranting an order for assessment of costs, it can be observed:
- –The trial was a two-day hearing.
- –The material relied on at trial exceeded more than 2,000 pages.
- –The defendants’ claim under the Australian Consumer Law was complex and technical.
- –The defendants’ outline of argument at trial was 31 pages.
- [28]This is a matter where the nature and complexity of these proceedings warrant an order for the defendants’ costs to be assessed rather than fixed by the court.
INTEREST
- [29]The defendants seek interest on the judgement sum for the period 7 July 2017 (the date of cause of action) to 1 August 2024 (the date of judgement).
- [30]The courts power to award interest up to the date of judgement is provided by section 58 of the Civil Proceedings Act 2011 (CPA).
- [31]The court may order interest be paid at a rate the court considers appropriate.[10]
- [32]Unless there is a proper basis for departure the court commonly applies the interest rates set by practice directions.[11]
- [33]Magistrates Court Practice Direction 15 of 2013 prescribes the rates to be applied pursuant to s 59(3) CPA.
- [34]The plaintiff’s submissions at paragraph 30 set out correctly the applicable interest rates and the calculation of interest on the judgment sum.
- [35]I calculate the interest payable by the defendant on the judgment sum from 7 July 2017 to 1 August 2024 in the sum of $57,978.16.
DISPOSITION
- [36]I order as follows: -
- (1)The plaintiff and the first and second defendants by counterclaim pay the first, second and third defendants’ costs of the counterclaim on a standard basis to be assessed.
- (2)The plaintiff and first and second defendants by counterclaim pay the first, second, and third defendants’ interest on the judgement fixed in the sum of $57,978.16.
Magistrate J N L Pinder
09/12/24
Footnotes
[1]Defendant’s Submissions dated 12/08/2024, paras 1–3.
[2]r 681 (UCPR).
[3]r 702 (UCPR).
[4](2024) QMC 14.
[5](2012) QCA 233.
[6]Defendant’s submissions dated 12/09/2024, paras 6–20.
[7]r 683(3).
[8]Peter Carter Transport Pty Ltd v Swansaway No. 2 Pty Ltd (2021) QDC 109.
[9](2024) QMC 10, paras 5–15.
[10]Civil Proceedings Act 2011 s 58(8).
[11]Delta Pty Ltd v Mechanical & Construction Insurance Pty Ltd [2019] QCA 62.