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Joelco Pty Ltd v Balanced Securities Limited[2009] QSC 304

Joelco Pty Ltd v Balanced Securities Limited[2009] QSC 304

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Application on the papers

ORIGINATING COURT:

DELIVERED ON:

23 September 2009

DELIVERED AT:

Brisbane

HEARING DATE:

26 August 2009

JUDGE:

Chief Justice

ORDER:

That paragraph 2 of the orders made on 26 August 2009 be amended to substitute the word “indemnity” for the word “standard”.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – award of indemnity costs

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, considered

COUNSEL:

M Byrne for the plaintiff

P A Travis for the defendant

SOLICITORS:

Lawrence & Associates for the plaintiff

Elliott May Lawyers for the defendant

[1] CHIEF JUSTICE: On 26 August 2009 I gave judgment in this proceeding, dismissing the plaintiff’s claim and ordering the plaintiff to pay the defendant’s costs to be assessed on the standard basis.  I reserved liberty to apply in relation to the costs order.  The defendant now seeks an order that those costs be assessed on the indemnity basis.  The defendant’s Counsel relied on submissions dated 2 September 2009.  The plaintiff made no response to those submissions.

[2] The first basis for the defendant’s application is cl 5.2 of the loan instrument, the so-called “Facility Agreement”, which provides that the borrower must pay the lender on demand:

“(a)The sum of all costs, expenses and outgoings of the lender of and incidental to:

 

(ii) any actual or contemplated enforcement of this agreement or the securities, or the actual or contemplated exercise, preservation, review or consideration of any rights, powers or remedies under this agreement or the securities in relation to the mortgaged property.  This includes legal costs and expenses on a full indemnity basis…:

[3] I accept the defendant’s submission that “since the legal costs and expenses of the defendant are ‘of and incidental to’ the enforcement of the Facility Agreement (in this case, by the plaintiff) or the ‘preservation, review or consideration of any rights, powers or remedies under’ the Facility Agreement, as required to be undertaken by the lender in defence of this proceeding”, the court should exercise its discretion by ordering that the plaintiff pay the defendant’s costs on the indemnity basis.

[4] Counsel for the defendant advanced the additional basis that the plaintiff’s claims were “hopeless and bound to fail”, referring to the analysis in such cases as Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225.  While in my obvious view the plaintiff’s position was weak, I would not go so far as to say it was completely hopeless.

[5] The third ground advanced for an order for indemnity costs is the plaintiff’s rejection of two offers to settle, on 22 June 2009 for $65,000 and costs, and on 4 August 2009 for $150,000 and costs.  Since the defendant succeeded entirely at trial, the plaintiff’s rejection would, taken alone, warrant indemnity costs from 29 June 2009, when (within time) the first offer was rejected, and standard costs up until that date.

[6] However the first basis advanced for the defendant warrants an order for indemnity costs in respect of the whole proceeding. 

[7] There will therefore be an order that paragraph 2 of the orders made on 26 August 2009 be amended to substitute the word “indemnity” for the word “standard”.

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Editorial Notes

  • Published Case Name:

    Joelco Pty Ltd v Balanced Securities Limited

  • Shortened Case Name:

    Joelco Pty Ltd v Balanced Securities Limited

  • MNC:

    [2009] QSC 304

  • Court:

    QSC

  • Judge(s):

    de Jersey CJ

  • Date:

    23 Sep 2009

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2009] QSC 23626 Aug 2009Plaintiff claimed damages for breach of contract, unconscionable conduct and contraventions of the Australian Securities and Investments Commission Act 2001 (Cth) relating to a facility agreement guaranteed by David Thomas; claim dismissed with costs assessed on the standard basis: de Jersey CJ
Primary Judgment[2009] QSC 30423 Sep 2009Application for order that plaintiff pay defendant's costs of [2009] QSC 236 on the indemnity basis; application granted: de Jersey CJ
Primary Judgment[2010] QDC 33703 Sep 2010Application for summary judgment in the amount of $113,515.37, being the defendant's costs incurred in [2009] QSC 236, against David Thomas as guarantor under the facility agreement; summary judgment granted: Dorney QC DCJ
Primary Judgment[2010] QDC 35522 Sep 2010Mr Thomas ordered to pay interest in the sum of $1,772.70 and costs of the summary judgment proceeding on the standard basis: Dorney QC DCJ
Appeal Determined (QCA)[2011] QCA 258 [2012] 2 Qd R 48227 Sep 2011Mr Thomas appealed against decision in [2010] QDC 337; appeal dismissed: White JA, M Wilson AJA and Martin J
Appeal Determined (QCA)[2011] QCA 27507 Oct 2011Mr Thomas ordered to pay the defendant's costs of the appeal assessed on the standard basis: White JA, M Wilson AJA and Martin J

Appeal Status

Appeal Determined (QCA)

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