Robertson v Vlahos (No 2)[2010] QSC 475

SUPREME COURT OF QUEENSLAND

[1] Margaret Wilson J: On 12 November 2010 I gave judgment on the defendants’ application for summary judgment against the plaintiff. I ordered that the plaintiff’s claim be dismissed.

[2] Since then I have received written submissions on costs. Also, the plaintiff has lodged an appeal against my order dismissing the claim.

[3] It is appropriate that I deal with the question of costs without regard to the appeal which has been lodged. My decision dismissing the claim stands unless and until it is set aside or varied by the Court of Appeal.

[4] The defendants seek costs of the whole proceeding, including reserved costs, on the indemnity basis. The plaintiff submits that there should be no order for costs.

[5] The proceeding was commenced on 2 December 2008. A notice of intention to defend and defence was filed on 12 January 2009, and a reply was filed on 21 January 2009.

[6] After the pleadings closed, there was no activity on the court file for some months. On 22 October 2009 a deputy registrar gave directions for the further conduct of the proceeding consequent on a case flow intervention notice. He made orders for the defendant to provide particulars by 23 October 2009, the plaintiff to provide an amended reply by 6 November 2009, mutual disclosure to be completed by 6 November 2009, and a request for trial date to be filed by 20 November 2009.

[7] It seems that none of those directions was complied with.

[8] The defendants changed solicitors about that time. A notice of change of solicitors was filed on 3 November 2009.

[9] On 14 December 2009 the defendant filed an application seeking orders that the claim and statement of claim be struck out and judgment be entered for them, costs, and further or alternative relief. That application was ultimately heard on 24 August 2010, when it was treated as an application for summary judgment.

[10] Before then, the application had come before the court on four occasions – 15 January 2010, 1 February 2010, 1 March 2010 and 22 March 2010. On the first occasion directions were given for the filing of further material by both parties and costs were reserved. On the second occasion the matter was adjourned because the applicant/defendants wanted to file further material, and costs were reserved. It is not apparent why the third adjournment was granted, but again costs were reserved. Similarly, it is not apparent why the fourth adjournment was granted, but on that occasion the court ordered that there be no order as to the costs thrown away by the adjournment.

[11] The applicant/defendants changed solicitors again, a notice of change of solicitors being filed on 23 April 2010.

[12] Pursuant to r 681 of the Uniform Civil Procedure Rules 1999 (Qld) ("UCPR") costs of a proceeding, including an application in a proceeding, are in the discretion of the court, but follow the event, unless the court otherwise orders. By r 693 the costs of a proceeding do not include the costs of an application in the proceeding, unless the court otherwise orders. By r 698, if the court reserves costs of an application in a proceeding, the costs reserved follow the event, unless the court orders otherwise.

[13] The costs are to be assessed on the standard basis unless the rules or an order of the court provides otherwise: r 702. The court may order costs to be assessed on the indemnity basis. When it does so, the costs which may be allowed are all costs reasonably incurred and of a reasonable amount having regard to (a) the scale of fees prescribed for the court; and (b) any costs agreement between the party to whom the costs are payable and the party’s solicitors; and (c) charges ordinarily payable by a client to a solicitor for the work: r 703.

[14] This proceeding related to an alleged contract with respect to four dogs. A critical factual issue was whether the dogs in question had been seized by the RSPCA. That question had been determined against the plaintiff in another proceeding in which she challenged the decision of the chief executive of the Department of Primary Industries and Fisheries to forfeit dogs seized from her premises. I found that it would be an abuse of process to allow the plaintiff to re-litigate this question. I also found that, if there were a contract in the terms she alleged, it would be unenforceable.

[15] Subject to what I shall say in the next paragraph, I consider that  the plaintiff should be ordered to pay the defendants’ costs of and incidental to the proceeding, including the application filed on 14 December 2009.

[16] Pursuant to r 26(4) an application should list the affidavits to be relied on by the applicant at the hearing. By r 27 an application must be filed and served on the respondent at least three business days before the day it is set for hearing, and by r 28 an affidavit to be relied on by the applicant at the hearing must be filed and served at least three business days before the day set for the hearing. Of course, the court has power to permit material which is served late to be used at the hearing. In the present case, a perusal of the court file indicates that the defendants continued to file fresh affidavit material up until 21 April 2010. In the circumstances, the order for costs in their favour should exclude costs of and incidental to the appearances on 15 January 2010, 1 February 2010, 1 March 2010 and 22 March 2010. (There may be no need for an order excluding the costs of the appearance on 22 March 2010, but lest there be any argument that the costs thrown away do not include the costs of the appearance, I shall expressly exclude those costs.)

[17] There is then the question of whether the costs which are to be allowed should be assessed on the standard basis or the indemnity basis.

[18] Costs will be allowed on the indemnity basis only where the case exhibits some special feature warranting the more generous allowance. In Di Carlo v Dubois[1], White J, with whom the other members of the Court of Appeal agreed, said:

"[37]There are numerous authorities which discuss the circumstances in which a court will be justified in making an order for indemnity costs. Two are regularly cited – Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd,[2] a decision of Woodward J, and Colgate-Palmolive.[3] From his review of the cases Sheppard J was able to derive a number of principles or guidelines. At pp 232-4 his Honour recognised that the categories in which the discretion may be exercised are not closed. Woodward J at 637 [sic] in Fountain said that there needs to be some special or unusual feature in the case to justify a court departing from the ordinary practice. Sheppard J instanced the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud; misconduct that causes loss of time to the court and the other parties; the fact that the proceedings were commenced at or continued 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 prolongation of a case by groundless contentions; the imprudent refusal of an offer to compromise; and costs against a contemnor.

[38]The New South Wales Court of Appeal in Rosniac v Government Insurance Office[4] noted at 616 that the discretion to depart from the usual party and party basis for costs is not confined to the situation of what Gummow J described as the 'ethically or morally delinquent party' in Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories.[5] Their Honours observed however, that:

'…the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule maker.'"

[19] Counsel for the applicant/defendants drew my attention to the following passage in the judgment of Woodward J in Fountain Selected Meats at 401 –

"I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion."

In J-corp Pty Limited v Australian Builders Labourers Federated Union of Workers (WA Branch)[6] French J referred to this passage from Fountain Selected Meats and said –

"[5] …Although there is said to be a presumption in such cases that the action was commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, it is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established. It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case..."

[20] Whether the re-litigation of a question would amount to an abuse of process does not turn simply on a finding or findings of fact; it is one which requires the exercise of judgement. Such an assessment is not lightly made.

[21] In all the circumstances of this case, I have determined that the costs payable to the applicant/defendants should be on the standard basis.

[22] Accordingly, I order that the plaintiff pay the defendants’ costs of and incidental to the proceeding, including the application filed on 14 December 2009, but excluding the costs of and incidental to the appearances on 15 January 2010, 1 February 2010, 1 March 2010 and 22 March 2010, to be assessed on the standard basis.

[23] In order for the costs to be assessed, the applicant/defendants should serve a costs statement in accordance with r 705 and the parties should follow the procedures contained within Part 3, Division 1 of the UCPR.