Maclag (No 11) Pty Ltd v Chantay Too Pty Ltd
[2010] QSC 396
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- Unreported Judgment
- Maclag (No 11) Pty Ltd v Chantay Too Pty Ltd[2010] QSC 396
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Maclag (No 11) Pty Ltd v Chantay Too Pty Ltd[2010] QSC 396
Maclag (No 11) Pty Ltd v Chantay Too Pty Ltd[2010] QSC 396
SUPREME COURT OF QUEENSLAND
CITATION: | Maclag (No 11) Pty Ltd as Trustee for the Burns Family Trust and Anor v Chantay Too Pty Ltd as Trustee for the Chantay Trust (No 2) [2010] QSC 396 |
PARTIES: | MACLAG (NO 11) PTY LTD ACN 010 611 631 AS TRUSTEE FOR THE BURNS FAMILY TRUST (First plaintiff) and LARRY MARK LAZARIDES (Second plaintiff) v CHANTAY TOO PTY LTD ACN 099 086 521 AS TRUSTEE FOR THE CHANTAY TRUST (Defendant) |
FILE NOS: | BS 9219 of 2008 BS 1104 of 2009 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 22 October 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 25-26 August 2010 |
JUDGE: | McMurdo J |
ORDER: |
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CATCHWORDS: | PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – CONDUCT OF PARTIES – OTHER CONDUCT – where the principal proceedings were determined in favour of the defendant – where the defendant seeks its costs upon the standard basis – where the plaintiffs argue that the defendant should not have all of its costs because of what they say is disentitling conduct both prior to and during the course of the litigation – whether the defendant is entitled to its costs. Uniform Civil Procedure Rules 1999 (Qld) r 681(1) Maclag (No 11) Pty Ltd as Trustee for the Burns Family Trust and Anor v Chantay Too Pty Ltd as Trustee for the Chantay Trust [2010] QSC 299 Oshlack v Richmond River Council (1998) 193 CLR 72 Todrell Pty Ltd v Finch (No 2) [2008] 2 Qd R 95 Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 164 |
COUNSEL: | A P J Collins for the plaintiffs D Savage SC and C A Wilkins for the defendant |
SOLICITORS: | Frampton Legal for the plaintiffs Cronin Litigation Lawyers for the defendant |
- This judgment concerns the costs of the proceedings which I have determined in favour of the defendant. It seeks its costs upon the standard basis. The plaintiffs argue that the defendant should not have all of its costs because of what they say is disentitling conduct, both prior to and during the course of the litigation. Although the plaintiffs argue in terms of disentitling conduct, the ultimate question is whether there are circumstances which warrant a departure from the ordinary rule, expressed in UCPR r 681(1), that costs should follow the event.
- The plaintiffs are critical of the defendant’s conduct in pleading certain points which, they argue, the defendant had no intention of pursuing at the trial. The first of these is what is described as the financial capacity point, by which the defendant pleaded that the plaintiffs were financially incapable of contributing what would have been necessary for the acquisition by the partnership of the Leon Hill property. The point was pleaded in purported response to paragraph 12 of the statement of claim which complained that certain conduct of the defendant had denied the partnership of the opportunity to acquire that land and the Littlejohn property, to the detriment of the partnership. Paragraph 12 of the Defence denied those allegations and set out a number of matters which were said to be grounds for that denial. One of them, pleaded in paragraph 12(b)(viii), was as follows:
the reason the plaintiffs did not make the deed was that each refused to give away any entitlement each of them then imagined they had to expel the defendant from the partnership and neither had nor could obtain finance necessary to contribute to the purchase of the Leon Hill property in the event the defendant chose to sell same.
The allegation by the defendant was directed to their incapability of contributing to the acquisition of the Leon Hill property from the interests of Dr Rackemann who had purchased it. It was not an allegation that the plaintiffs lacked the capacity to contribute to a development of the Miami properties which included the Leon Hill property, a point which was explored, albeit briefly at the trial. The matter pleaded in paragraph 12(b)(viii) was not the subject of any evidence or argument at the trial.
- The financial capacity point was relied upon by the defendant as the basis for a notice of non-party disclosure which it caused to be issued against the National Australia Bank, by which it sought financial information relating to the plaintiffs. It also resulted in more extensive disclosure by the plaintiffs. Ultimately, the plea remained within the Defence throughout the trial, although the point was not pursued.
- In hindsight the financial capacity point could give the impression that it was raised as a tactic to embarrass the plaintiffs in their dealings with their bank. Ultimately however, I am not persuaded that the point was pleaded for that improper purpose. I infer that it would not have been pleaded absent some factual basis within the pleader’s instructions. I infer also that the disclosure from the plaintiffs and their bank made the defendant’s advisers decide to abandon the point. The abandonment should have been expressed, either at the outset of the trial or by an amendment of the pleading. But that omission does not warrant a departure from the ordinary rule as to costs.
- Secondly there is what the plaintiffs refer to as the stamp duties point. The defendant pleaded that the option contained within cl 21(a) of the Partnership Deed was “of no legal effect by reason of section 487 of the Duties Act 2001 (Qld)”. The allegation was abandoned shortly prior to the trial. This was well after the plaintiffs had pleaded in their Reply that the relevant documents had been submitted for assessment and stamping. No time was taken at the trial on this question and no costs were occasioned by the fact that the point remained on the pleadings.
- The plaintiffs refer to the conduct in seeking documentation and information in an application made on 30 April 2009 upon an argument that this was required for a proposed valuation. In the principal judgment[1] I was critical of the defendant for not disclosing the valuations which had already been obtained. But I also said that I was unable to assess whether those valuations might have been made more accurate or reliable with the benefit of the further information and documents which were sought. In any case, the defendant, as a member of the partnership, was entitled to that information.
- Next there is a complaint that the defendant wrongly put in issue the allegation of its breach of duty in the acquisition of the Leon Hill property. The fact that a successful defendant has relied upon other defences, upon which it would not have succeeded had they been the only defences, does not usually lead to a departure from the usual rule that costs follow the event.[2] As McHugh J said in Oshlack v Richmond River Council[3] the usual order as to costs is a principle which is grounded in reasons of fairness and policy because “[i]f the litigation had not been brought … by the unsuccessful party the successful party would not have incurred the expense which it did”. In Todrell Pty Ltd v Finch (No 2),[4] Chesterman J said that cases in which a successful defendant will be deprived of its costs by its conduct will be rare. In this instance, the nature of the issue is one which makes the plaintiffs’ argument comparatively strong. Put another way, the defendant’s conduct in disputing what was a serious breach of its duties as a partner makes its case for the recovery of costs which include the litigation of this issue comparatively less attractive. But ultimately the plaintiffs have not demonstrated a sufficient reason to depart from the ordinary rule as to costs by this argument. Their only basis for making this breach by the defendant relevant in their attempt to acquire the defendant’s partnership share was an estoppel which could not be made out even upon their own evidence.
- The plaintiffs are critical of the defendant’s late disclosure (April 2010) of a diary page which the defendant’s solicitor had received from the defendant in January 2008. And there were emails concerning the issue involving Mr Mahuika which were not disclosed until January 2010. However, I am unable to conclude that these documents were deliberately withheld in the knowledge that they should be disclosed; nor did their non-disclosure significantly affect the costs of the case.
- The plaintiffs also criticise the defendant for delivering the witness summary of Dr Rackemann only a few days prior to the trial. That is a proper criticism, but again it did not substantially contribute to costs. It does not seem that the plaintiffs would have abandoned the litigation or any part of it had that summary been provided when it should have been.
- The plaintiffs also criticise the defendant’s conduct in some respects prior to the commencement of the litigation. It is unnecessary to set out the particulars of those complaints. In effect, each of these matters was a complaint which was discussed within the principal judgment. Taken together they do not warrant a departure from the ordinary rule as to costs.
- The outcome is that the plaintiffs should be ordered to pay the defendant’s costs of the proceedings, including reserved costs (if any) upon the standard basis. There is also the matter of the proceedings between the same parties which were commenced in 2009, which were brought in reliance upon the second notice given by the plaintiffs. That case was not prosecuted after I directed that the entirety of the plaintiffs’ claims be pursued within the 2008 proceedings. In the 2009 proceedings it will be ordered that the claim be dismissed and that the plaintiffs pay the defendant’s costs of and incidental to that proceeding to be assessed on the standard basis.