Remely v O'Shea (No 4)[2009] QSC 204

SUPREME COURT OF QUEENSLAND

1. The second respondents have obtained orders against the applicant, Mr Remely, for costs.  On 27 April 2009 I heard four applications by Mr Remely relating to those orders.  I dismissed each of those applications and reserved the question of costs.  I have subsequently received written submissions from each side. 

2. The second respondents submit that the general rule should be followed, that is that costs follow the event and that in the circumstances here the assessment of costs should be upon the indemnity basis. It is necessary for the second respondents to obtain leave to make their submissions. I gave judgment dismissing the four applications on 12 May 2009 and directed that submissions be received by 19 May.  At that date no submissions had been received from the second respondents but were received shortly after the due date.  Mr Dickson of counsel who appears on behalf of the second respondents argues that leave should be given because the justice of the case requires it, the delay was slight and there was no prejudice to the applicant.  I have subsequently had Mr Remely appear at a callover of matters in the course of which he inquired about this outstanding judgment on costs and mentioned that the delay was neither here nor there.  In the circumstances leave is given to the second respondents to make their submissions.

3. I will deal with each of the applications in turn.

Costs of obtaining warrant

4. Mr Remely’s submission effectively is that my decision in respect of his application was wrong. Paragraphs 12, 15 and 16 of his submission reads:

“12.The decision to allow an argument that is clearly not in compliance with the UCPR is defective and unfair and unjust.

15.The orders relating to the costs of obtaining the costs warrant are so defective that they should be vacated and new orders made.

16. To award any costs particularly indemnity costs against the applicant for this application would be obscene and could not be justified to be in the interest of justice let alone in accordance with the requirements of the legislation.”

[Emphasis in the original]

5. Mr Remely’s remedy if he disagrees with the decision is to appeal it. Clearly his views as to the correctness of the decision are irrelevant on the issue of costs. No good reason is shown as to why costs should not follow the event.

6. I have power to order that costs be assessed on the indemnity basis.^[1]  The factors that Mr Dickson points to as justifying such an order are as follows:

1. I found that but for Mr Remely’s application the issue could and should have been dealt with cheaply and expeditiously by the registrar;

2. the amount in issue ($240) was trivial in the light of the monetary sum in issue in the costs order (the total amount of the various costs orders outstanding was in the order of $50,000 according to Mr Remely’s affidavit);

3. the second respondents had no alternative or cheaper way of defending their position;

4. the application was found to be without merit in any respect, there being no genuine issue of fact or law which needed judicial determination;

5. the application was one of a host of applications brought by the applicant solely to do with enforcement of orders for costs between the parties;

6. these applications have caused undue prolongation of the costs recovery process and by completely groundless contentions;

7. the applicant is no stranger to the litigation process and so well aware of the likely consequences of bringing groundless applications; and

8. the second respondents’ solicitors wrote to Mr Remely on 20 March 2009 advising that in fact the amount claimed was an undercharge (by $15).

7. I bear in mind the principles that have been discussed as applicable to the ordering of costs on the indemnity basis in cases such as Di Carlo v Dubois^[2]; Quinn Villages Pty Ltd v Mulherin^[3]; and Colgate-Palmolive Company v Cussons Pty Ltd.^[4]  Essentially there need to be special or unusual circumstances and some evidence of unreasonable conduct.  Such orders should not be seen as too readily available.

8. In Colgate-Palmolive the circumstances that were said warranted the exercise of a discretion to award costs on the indemnity basis included:

1. the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

2. evidence of particular misconduct that causes loss of time to the court and the other parties;

3. the fact that the proceedings were commenced with some ulterior motive;

4. the fact that the proceedings were commenced in wilful disregard of known facts or clearly established law;

5. the making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions;

6. an impudent refusal of an offer to compromise;

7. an award of costs on an indemnity basis against an contemnor.

9. Whilst that list is not exhaustive it is necessary that, before an award of indemnity costs is made, the facts be at least analogous to the categories nominated.^[5]

10. The essence of Mr Remely’s argument was that the appropriate scale that the registrar should have adopted was the Supreme Court scale and not the Magistrates’ Court scale. Oddly the Magistrates’ Scale allows a higher amount than the Supreme Court scale and, as Mr Dickson contended at the hearing that might well be an anomaly in the rules. I note that in their letter to Mr Remely the solicitors did not advance the precise argument which succeeded before me, namely that it was the Magistrates’ Court scale and not the Supreme Court scale that was appropriate.

11. In my view the special circumstances that are required for an indemnity costs order are not here present.

Variation of interest rates

12. In addition to the matters mentioned previously, Mr Dickson submits that there was a Calderbank letter in place offering a lower rate of interest than prescribed under the regulations and that one of Mr Remely’s arguments, that there was a taxation advantage to the respondents that ought to be brought into account, had been previously argued and lost by him in the Court of Appeal.^[6] 

13. The reference to the Calderbank letter is a reference to a letter dated 14 April 2009 wherein the respondents indicated that they were prepared to agree to an interest rate of nine per cent per annum rather than the 10 per cent stipulated under the regulations.  The offer was open for acceptance until 4.00 pm on 17 April 2009 – three days later.  In my view it is plain that an insufficient amount of time was allowed to Mr Remely to consider his position and accept the offer.  Thus in my view the offer is irrelevant to the costs issue.

14. The relevant factors therefore are that the argument advanced by Mr Remely was without merit and one aspect of it had already been considered and dismissed in the Court of Appeal.

15. Here Mr Remely was endeavouring to argue that current interest rates were significantly below the 10 per cent set by the regulations and that circumstance should result in an exercise of a discretion to reduce the interest rate applicable to his case.  Whilst I was against him in that argument, in my view it does not fall within any of the categories nominated in Colgate-Palmolive nor is it analogous to any of them.  Effectively Mr Remely had an argument which he wished the Court to determine and that was his right. 

16. In my view the ordinary rule should be applied here.

Production of documents

17. In addition to the factors originally mentioned Mr Dickson advances two further matters as relevant, namely:

1. the failure of Mr Remely to prove that it would be unduly burdensome to produce documents going back four years;

2. one aspect of Mr Remely’s arguments, namely that r 212(1)(b) UCPR exempts documents from being produced that go only to credit, had previously been considered and dismissed by Holmes JA.^[7]

18. Again, in my view, there was no warrant for the imposition of an order requiring that the costs be on the indemnity basis. Mr Remely’s arguments were principally based upon the construction of the relevant rules and their interaction with the Social Security (Administration) Act 1999 (Cth).  In my view it cannot be said that his arguments were in wilful disregard of clearly established law.  The question of how burdensome the requirement to produce documents might be was a simple question of fact on which minds could easily come to differing views.

19. Again I am of the view that the ordinary rule should apply.

Referral of enforcement hearing

20. Again Mr Dickson relies upon the matters first mentioned and in addition Mr Remely’s failure to adduce any evidence of bias in the registrar.

21. Effectively Mr Remely wanted a Justice of the Supreme Court to conduct the enforcement hearing rather than the registrar who would normally do it under the procedure laid down in the rules.  I held that there was no basis to take the matter away from the registrar.  The implication of Mr Remely’s arguments was that the registrar was either biased or incompetent.

22. I observe that this aspect of the matter took very little time. Essentially I held that there was no good reason to require that a Justice of the Supreme Court be involved in such a matter.

23. Again, in my view, there is no good reason shown why an order on the indemnity basis should be made.

24. I am, of course, conscious of the second respondents’ frustration at Mr Remely’s approach to what is intended to be a fairly simple procedure by which costs might be recovered.  The real argument that the second respondents advance is that Mr Remely is being deliberately obstructive.  If I had reached the view that these continual applications were being pursued for such an ulterior motive then it might be that even though individually each application may not warrant the imposition of an order that the costs be on the indemnity basis, my overall approach might be different.  However, I am not so persuaded.  Mr Remely’s approach is to take such points as occurs to him might be to his advantage and he endeavours to argue them as best he can, he being unrepresented.  The parties having engaged the legal process, each side is entitled to do precisely that.

25. Mr Dickson has suggested that one approach that I ought to take to the issue, in order to avoid further argument, is to adopt the form of order used by the Court of Appeal in Amos v Monsour Pty Ltd.^[8]  There the parties were directed to file witness submissions verified by affidavit establishing the amount of costs claimed as a realistic estimate and the Court determine to fix the costs itself.

26. In my view, given the history of the matter, that is an appropriate approach here. The orders therefore will be:

1. The applicant is ordered to pay the second respondents’ costs of and incidental to the applications the subject of my decision delivered on 12 May 2009, such costs to be assessed on the standard basis.

2. Unless the parties have earlier notified the registrar of an agreed amount for costs:

1. within 10 days the second respondents file and serve upon the applicant written submissions, verified by affidavit where practicable, directed to establishing that the amount of costs claimed by the second respondents is a realistic estimate of the amount of costs which would be assessed on the standard basis;

2. within seven days thereafter the applicant file and serve upon the respondents any submissions the applicant wishes to make concerning the amount of costs to be fixed by the Court, verified by affidavit where practicable;

3. except with the prior leave of the registrar, neither party is authorised to make submissions in response or in reply.

3. The parties have liberty to apply on the giving of three days notice to the other.