Sutherland v Jot Property Solutions Pty Ltd (No 2)
[2015] QSC 328
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- Unreported Judgment
- Sutherland v Jot Property Solutions Pty Ltd (No 2)[2015] QSC 328
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Sutherland v Jot Property Solutions Pty Ltd (No 2)[2015] QSC 328
Sutherland v Jot Property Solutions Pty Ltd (No 2)[2015] QSC 328
SUPREME COURT OF QUEENSLAND
CITATION: | Sutherland & Anor v Jot Property Solutions Pty Ltd (No 2) [2015] QSC 328 |
PARTIES: | RODERICK MACKAY SUTHERLAND and TRAJAN JOHN KUKULOVSKI AS LIQUIDATORS OF BLUECHIP PROPERTY SERVICES PTY LTD (IN LIQ) (ACN:108514245) (Respondent/Plaintiff) |
FILE NO/S: | SC 58 of 2014 |
DIVISION: | Trial |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Mackay |
DELIVERED ON: | Friday, 20 November 2015 |
DELIVERED AT: | Cairns |
HEARING DATE: | 16 October 2015 and subsequent submissions in writing. |
JUDGE: | Henry J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON AN INDEMNITY BASIS – where the fourth defendant applied to have the plaintiff’s statement of claim struck out – where the fourth defendant sought a declaration in the alternative that the plaintiff lacked standing - where the plaintiff’s statement of claim was struck out because it failed to disclose a reasonable cause of action – where the costs should follow the event – where the fourth defendant’s application was successful in the event – whether the fourth defendant’s costs should be assessed on an indemnity basis – whether the circumstances are sufficiently special or unusual to justify indemnity costs – where the plaintiff should have identified its lack of standing problem on the filing of conditional notices of intention to defend by the first, second, third and fourth defendants – where the plaintiff persisted with its existing claim – where the fourth defendant should have its costs of its application on an indemnity basis PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – CONDUCT OF PARTIES – OTHER CONDUCT – whether the first, second and third defendants should have their costs of their application on an indemnity basis – where the first, second and third defendants’ application sought orders for security for costs and for the undertaking of an inquiry by the court into the actions of the plaintiff as liquidators – where the orders made did not include rulings on those components of the first, second and third defendants’ application – whether a costs order should be made when part of an application is yet to be determined – where the parties will have an opportunity to address the costs order at a future hearing - where further consideration of the first, second and third defendants’ costs will be given after the hearing Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 46 FCR 225; (1993) 118 ALR 248, applied Sutherland & Anor v Jot Property Solutions Pty Ltd [2015] QSC 249, cited Property Law Act 1974 (Qld) s 228 Uniform Civil Procedure Rules 1999 (Qld) r 681, r 703(1) |
COUNSEL: | A I O'Brien for the Applicant First, Second and Third Defendants |
SOLICITORS: | McKays Solicitors for the Applicant First, Second and Third Defendants Morrow Petersen Solicitors for the Applicant Fourth Defendant Nelson McKinnon Lawyers for the Respondent Plaintiff |
[1] On 25 August 2015 I struck out the statement of claim in this matter because of the plaintiff’s lack of standing and the consequent failure of the statement of claim to disclose a reasonable cause of action.[1] I refrained at that time from entirely extinguishing the proceeding lest there existed some legitimate argument in support of re-pleading, amending the claim or including, substituting or removing a party. I listed the matter to hear the parties on 16 October 2015 as to what further orders should be made.
[2] On 16 October 2015 the belatedly engaged solicitors for the plaintiff sought an adjournment of the further hearing, in summary because of the unavailability of counsel formerly involved in the matter and the last minute retainer of the solicitors appearing for the plaintiff. I was disinclined to adjourn what presented as an uncomplicated hearing of submissions as to costs in connection with my decision of 25 August 2015 but was persuaded to adjourn the hearing of other argument as to further orders in the matter to 11 December 2015.
[3] In respect of the costs argument I directed that the parties file and serve any further submissions as to costs in writing.
[4] Submissions in writing have been filed by the counsel acting for the first, second and third defendants and the solicitor acting for the fourth defendant. The solicitors acting for the plaintiff have informed the court they do not wish to make any submissions as to costs.
[5] It is convenient to consider the costs position of the fourth defendant before then turning to the position of the first, second and third defendants.
Fourth defendant
[6] The fourth defendant applied to have the statement of claim struck out and in the alternative sought a declaration that the plaintiff lacked standing to prosecute the proceeding. Whilst those orders were sought in the alternative they were sought on the same basis, namely the plaintiff’s lack of standing. As my reasons demonstrate, I found it unnecessary to make a declaration that the plaintiff lacked standing in light of my order that the statement of claim be struck out.
[7] It follows that, in “the event”, the fourth defendant’s application was successful. Rule 681 of the Uniform Civil Procedure Rules 1999 (Qld) provides that the costs of an application in a proceeding “are in the discretion of the court but follow the event, unless the court orders otherwise”. No reason has been advanced nor can I identify any reason why the costs of the fourth defendant’s application should not follow the event.
[8] The fourth defendant submits its costs ought be ordered to be assessed on the indemnity basis. The court has discretion to make such an order pursuant to r 703(1). Rule 703(1) does not circumscribe the circumstances under which costs should be ordered to be assessed on an indemnity basis. It is well established that while the circumstances under which the discretion to award costs on an indemnity basis are not closed, the circumstances should be sufficiently special or unusual as to justify a departure from the ordinary practice of ordering costs on the standard basis.[2]
[9] The circumstances here include the absence of any pleading that the plaintiff liquidator was a person prejudiced by the alienation of property, a defect incapable of being cured by re-pleading by reason of the fact the liquidator did not suffer a prejudice occasioned by the alienation of property within the meaning of s 228 Property Law Act 1974 (Qld). Had the pleading of the prejudice been properly considered the plaintiff may in turn have apprehended the lack of standing problem, a problem which should have been identified by an insolvency practitioner as fatal to the action as advanced. In any event this fatal difficulty was expressly drawn to the attention of the plaintiff by the first, second and third defendants’ conditional notice of intention to defend filed 15 January 2015. The fourth defendant’s conditional notice of intention to defend filed 29 January 2015 did likewise. It should not have taken the plaintiff acting reasonably any more than a further fortnight beyond the point in time when one of the parties’ pleadings first identified the problem on 15 January 2015 to discontinue the proceeding or address this apparently fatal problem for its existing claim in some other way. It chose not to do so.
[10] The fourth defendant should never have been put to the costs of any component of its application, which was not filed until 12 February 2015. The plaintiff’s persistence with its existing claim in the face of express forewarning as to lack of standing is a circumstance justifying a departure from the usual course.
[11] The fourth defendant should have its costs of its application on the indemnity basis.
First, second and third defendants’ costs
[12] On the face of the above reasoning it at first blush appears the first, second and third defendants should have their costs of their application on an indemnity basis, at least from 30 January 2015. However their position is slightly complicated by the fact that their application also sought orders for security for costs and for the undertaking of an inquiry by the court into the actions of the plaintiff as liquidators.
[13] In my reasons of 25 August 2015 I refrained from making rulings on those components of the first, second and third defendants’ application.[3] It may sensibly be argued that it is inappropriate to distinguish, in any costs order made, between the costs of that component of the first, second and third defendants’ application, that has been determined, and that which has not to date needed to be finally determined. However the safer course, particularly in the absence of this specific issue being expressly addressed in any submissions as to costs, is to postpone the costs decision in respect of the first, second and third defendants’ application until 11 December 2015 when this matter will be back before me and the parties will have an opportunity, should they wish to exercise it, to specifically address this issue.
Orders
[14] My orders are:
1. The plaintiff pay the fourth defendant’s costs of its application filed 12 February 2015 on the indemnity basis.
2. Further consideration of the first, second and third defendants’ costs of their application filed 19 January 2015 is adjourned to 10.00 am 11 December 2015.