Thomasson Earthmoving Pty Ltd v Cyonara Snowfox Pty Ltd (No 2)
[2010] QSC 77
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- Unreported Judgment
- Thomasson Earthmoving Pty Ltd v Cyonara Snowfox Pty Ltd (No 2)[2010] QSC 77
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Thomasson Earthmoving Pty Ltd v Cyonara Snowfox Pty Ltd (No 2)[2010] QSC 77
Thomasson Earthmoving Pty Ltd v Cyonara Snowfox Pty Ltd (No 2)[2010] QSC 77
SUPREME COURT OF QUEENSLAND
CITATION | |
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 12 March 2010 |
DELIVERED AT: | Supreme Court Rockhampton |
HEARING DATE: | 1 February 2010 |
JUDGE: | McMeekin J |
ORDER: | The respondent pay the applicant’s costs of and incidental to the application to be assessed on the standard basis. |
CATCHWORDS: | PROCEDURE – COSTS – GENERAL RULE – COSTS ON INDEMNITY BASIS – where both the applicant and the respondent applied for indemnity costs to be paid by the other side – whether there was any disqualifying behaviour on the part of the applicant – whether it should have been obvious to the respondent that the application would succeed PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – COSTS OF ISSUES – where prima facie position that costs follow the event is not displaced – whether costs should be awarded to the applicant on the standard or indemnity basis Austrac Rail P/L v Hunter Premium Funding Limited [2001] NSWSC 654 Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248; 46 FCR 225 Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd & Ors [2003] QSC 299 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Todrell Pty Ltd v Finch & Ors [2007] QSC 386 |
COUNSEL: | A Arnold for the applicant JH Pitman (solicitor) for the respondent |
SOLICITORS: | Grant and Simpson solicitors for the applicant Morgan Conley for the respondent |
[1] McMeekin J: Thomasson Earthmoving Pty Ltd (“the applicant”) successfully applied to set aside a statutory demand issued by the respondent, Cyonara Fox Pty Ltd, on the basis that the applicant had led sufficient evidence to prove there to be a genuine dispute as to the existence of an antecedent debt. I reserved the question of costs pending submissions from the parties which I have now received.
[2] The applicant seeks that its costs be paid on the indemnity basis. The respondent submits that despite its lack of success on the application its costs should be paid by the applicant and on the indemnity basis, or in the alternative, that there should be no order as to costs.
[3] Ordinarily, costs follow the event subject to any disqualifying behaviour on the part of the successful party. The respondent submits that there are present here circumstances analogous to those cited in Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248 at 249; 46 FCR 225 per Sheppard J. I disagree.
[4] Indemnity costs orders may be appropriate where proceedings are commenced or continued for some ulterior motive, or in wilful disregard of known facts, or clearly established law: Colgate-Palmolive Company (supra). In Rosniak v Government Insurance Office (1997) 41 NSWLR 608 the New South Wales Court of Appeal indicated that the court required some evidence of “unreasonable conduct”.
[5] Chesterman J (as he then was) in Todrell Pty Ltd v Finch & Ors [2007] QSC 386 at [4] expressed his view of these authorities:
“The defendants in Action 1308 of 2007... seek their costs of the trial which lasted four days on the indemnity basis. They do so on reliance upon the authorities which establish that, other things being equal, commencing proceedings in wilful disregard of clear law will result in an order for costs on the indemnity basis. The authorities include Colgate Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 and Di Carlo Dubois [2002] QCA 225. Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 decided that it was not necessary for a party seeking indemnity costs to establish ethical or moral delinquency by its opponent. It was enough that the opponent conducted itself unreasonably in some way. In Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd & Ors [2003] QSC 299 I pointed out that that test is inexact. The test which I myself adopted in that case, and others, was whether there was something irresponsible about the conduct of the losing party which exposed its opponent to costs but should, in fairness, be ordered on the indemnity basis. It is, of course, irresponsible to commence proceedings which cannot succeed because of a known legal impediment.”
[6] There is nothing irresponsible or unreasonable in the conduct of the applicant in seeking the setting aside of the statutory demand.
[7] I am satisfied that the applicant has not committed any behaviour of the kind that would result in costs being awarded against it. It is plain from the respondent’s contesting of the application that it was necessary that there be a determination of the dispute.
[8] The prima facie position that costs follow the event is not displaced here. The substantial question remains, however, as to whether those costs that should be awarded to the applicant should be on the standard or indemnity basis.
[9] The applicant submitted that given the modest threshold for having a statutory demand for payment set aside, it should have been patently obvious that its application would succeed. In support of this submission, the applicant relied on the decision of Santow J in the Austrac Rail P/L v Hunter Premium Funding Limited [2001] NSWSC 654 where his Honour found that given the low threshold to establish a genuine dispute and the “consistent trend in judicial decision upholding the substantial majority of applications to set aside statutory demands,” courts should award indemnity costs against a party who “should have appreciated both the ground that succeeded and the high probability of its success”: at [23].
[10] The significant difference between the circumstances in Austrac and those here is that in Austrac the applicant provided fair warning to the respondent of the ground successfully relied upon. I am mindful of the respondent’s submission that no communication between the parties in relation to the subject of the application occurred prior to the hearing of it. The respondent was therefore given no indication by the applicant either that there was a genuine dispute as to the existence of the antecedent debt or the argument that was to be relied upon. It is far from clear here that the respondent ought to have appreciated the ground that eventually succeeded.
[11] In the absence of any steps by the applicant to bring this to the attention of the respondent, I do not accept that there is any appropriate basis on which to award costs on the indemnity basis.
Order:
[12] The respondent pay the applicant’s costs of and incidental to the application to be assessed on the standard basis.