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- Unreported Judgment
SUPREME COURT OF QUEENSLAND
The Star Entertainment Qld Limited v Wong  QSC 81
THE STAR ENTERTAINMENT QLD LIMITED
YEW CHOY WONG
BS1909 of 2020
Application in a proceeding
Supreme Court of Queensland
23 April 2021
On the papers
The plaintiff’s cost of the application filed 31 August 2020 are reserved.
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – where the court dismissed the defendant’s application to stay or dismiss the proceeding – where costs of the application should follow the event – where the defendant is bound by a contractual obligation to pay the plaintiff’s costs in certain circumstances on the equivalent of the indemnity basis – where the plaintiff’s right to recover indemnity costs of the application depends upon the success of its claim – whether the plaintiff’s costs should be reserved
Uniform Civil Procedure Rules 1999 (Qld), r 681(1), r 693(1), r 698, r 703(1)
Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2)  Ch 171, followed
In re Adelphi Hotel (Brighton) Ltd  1 WLR 955 Ch D, followed
Kyabram Property Investments Pty Ltd v Murray  NSWCA 87, cited
Lee v Australia and New Zealand Banking Group Ltd  QCA 284, cited
Perpetual Trustees Australia Ltd & Ors v Barker (2004) 1 BFRA 130;  SASC 58, followed
Platinum United II Pty Ltd v Mortgage Management Ltd (in liq)  QCA 229, cited
Re A Solicitor’s Bill of Costs: In Re Shanahan (1941) 58 WN (NSW) 132, cited
F Y Lubett of counsel for the plaintiff
Solicitor for the defendant
King & Wood Mallesons for the plaintiff
Russells for the defendant
- On 31 March 2021, the court dismissed an application by the defendant (Dr Wong) to stay or dismiss the proceeding brought by the plaintiff (Star). In the reasons for that decision, it was proposed that the costs of the application should follow the event.
- On 14 April 2021, the parties provided written submissions as to costs.
- It is common ground that Dr Wong should be ordered to pay Star’s costs of the application, in accordance with r 681(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). However, Star seeks an order that Dr Wong pay those costs to be assessed on the indemnity basis. Neither party provided any indication of the likely difference between the amount recoverable on each basis.
- Dr Wong resists an indemnity costs order on two bases.
A plainly and unambiguously expressed agreement
- Where there is a contractual right to costs on an indemnity (or other) basis, the court should ordinarily exercise its discretion to reflect that contractual right. The contract must be one in which the parties have “plainly and unambiguously expressed” their agreement for the recovery of costs on other than the standard basis.
- Of course, the matter is discretionary and a party bound by a plain and unambiguous contractual obligation to pay costs on the indemnity basis may seek to persuade the court to exercise the discretion in a way that does not correspond or give effect to the counter party’s contractual right.
- Star submits the court should make an order to give effect to cl 6 of the Cheque Cashing Facility Agreement (CCF), being an agreement on which it sues. Dr Wong submits that cl 6 does not plainly and unambiguously provide for him to pay Star’s costs of the application on the indemnity basis.
- The provision is in these terms:
“I agree to indemnify The Star for all reasonable losses, liabilities & costs including, but not limited to, reasonable legal costs incurred by The Star on a solicitor & own client basis, in relation to the enforcement of any rights under the CCF or in relation to my deposit accounts or in relation to the proceedings to recover monies owing by me to The Star as the result of a cheque being dishonoured.”
- For Dr Wong, it was submitted that:
“Resistance of the application did not constitute enforcement of any rights under the CCF – it was primarily concerned with the defendant’s claim that the Court lacks jurisdiction or ought to halt proceedings as an abuse of process.”
- By cl 6, amongst other things, Dr Wong agreed to indemnify Star for reasonable legal costs incurred by Star on a solicitor and own client basis in relation to the enforcement of any rights under the CCF or in relation to the proceedings to recover monies owing by him to Star as a result of a cheque being dishonoured. Adopting the language of Street J in Re A Solicitor’s Bill of Costs: In Re Shanahan, it is difficult to think of words of a more general application. The intention of the parties was undoubtedly to extend the right of Star to recover its relevant costs beyond those that would be assessed on the standard basis and to allow Star to recover all costs which would be payable by it to its own solicitor if those costs were assessed on a “solicitor and own client” basis.
- In his unsuccessful application, Dr Wong sought to prevent Star from enforcing rights under the CCF. I reject Dr Wong’s submission that Star’s opposition to the application “did not constitute enforcement of any rights under the CCF” as contrary to common sense and authority. In any event, the application was brought in a proceeding commenced by Star to recover monies Star alleges are owed by Dr Wong to Star as a result of the dishonouring of Dr Wong’s replacement cheque.
- The costs Star incurred in opposing the application are costs in relation to the enforcement of its alleged rights under the CCF and are also costs in relation to a proceeding to recover monies alleged to be owed as a result of a cheque being dishonoured. It follows that, if Star has those alleged rights or is owed the sum alleged, then Star has a plain and unambiguous contractual entitlement to recover from Dr Wong its costs of the application on the solicitor and own client basis; and Dr Wong will have a corresponding obligation to pay those costs to Star.
- Costs on a solicitor and own client basis were the fullest indemnity available under the now repealed Rules of the Supreme Court 1900 (Qld). For Dr Wong, there is no dispute that the equivalent under the UCPR is an award of costs on the indemnity basis.
Whether the costs should be reserved
- Dr Wong’s second basis for opposing an indemnity costs order at this time was put in this way:
“An order for standard costs now will not deprive [Star] of indemnity costs, should it recover judgment in the proceedings. If it then secures an order for indemnity costs, that will doubtless compensate it for any difference between standard and indemnity costs of this application. Equally, an award of indemnity costs on this application will not accord with the position that will obtain if the defendant successfully defends the proceeding”
- Concealed in this submission may lie an understanding of an issue identified above: that Star’s right to recover these costs on the more generous basis depends upon Star succeeding in its claim that it has the alleged rights and is owed the sum alleged.
- Dr Wong has not filed a defence in the proceeding. There is no admission (or denial) of the material facts constituting Star’s claim. Nor has there been any determination by the court of those matters. The Singapore proceeding, referred to in the substantive decision on the application, did not determine Star’s allegations or rights.
- If the court now makes the usual order - for the payment of the costs of the application to be assessed on the standard basis – that would finalise the parties’ rights and obligations with respect to the costs of the application. It seems unlikely that Star could recover any additional (indemnity) costs of the application under the guise of a later order about the costs of the proceeding.
- The other means of effecting Dr Wong’s suggestion would be an order allowing costs on the standard basis and reserving Star’s right to seek those costs on the indemnity basis. That would be unusual. It would allow Star to assess its costs of the application on the standard basis and, if it obtains judgment, assess the same costs on the indemnity basis. Such double-handling might be thought contrary to the purpose of avoiding undue expense.
- To avoid such an outcome, the court could reserve Star’s costs of the application. Those reserved costs would follow the event of the proceeding. Star would recover them if it prevails in the proceeding.
- In these unusual circumstances, the preferable approach is to reserve Star’s costs of the application, and so allow Star to seek them on the more generous basis, should it prove the relevant allegations made in its statement of claim.
  QSC 67 at .
 pursuant to UCPR r 703(1).
 This is the second of five principles stated by Scott LJ for the Court of Appeal in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2)  Ch 171 at 194, followed by Kyabram Property Investments Pty Ltd v Murray  NSWCA 87 at  (Beazley JA; Hodgson and Ipp JJA agreeing) and approved in Lee v Australia and New Zealand Banking Group Ltd  QCA 284 at  (PD McMurdo J; Fraser JA and Atkinson J agreeing). See also: Platinum United II Pty Ltd v Mortgage Management Ltd (in liq)  QCA 229 at  (Fraser JA; Chesterman JA and Fryberg J agreeing).
 See In re Adelphi Hotel (Brighton) Ltd  1 WLR 955 Ch D at 961 (Vaisey J).
 (1941) 58 WN (NSW) 132 at 136.
 Perpetual Trustees Australia Ltd & Ors v Barker (2004) 1 BFRA 130;  SASC 58 at - (Duggan J; Doyle CJ and Anderson J agreeing).
 See: UCPR r 693(1).
 UCPR, r 5(2).
 UCPR, r 698.
- Published Case Name:
The Star Entertainment Qld Limited v Wong
- Shortened Case Name:
The Star Entertainment Qld Limited v Wong
 QSC 81
23 Apr 2021