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GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2)[2022] QSC 224

GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2)[2022] QSC 224

SUPREME COURT OF QUEENSLAND

CITATION:

GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2) [2022] QSC 224

PARTIES:

GGPG PTY LTD ACN 609 675 505 (RECEIVERS & MANAGERS APPOINTED)

(plaintiff)

v

GOLDEN EAGLE PROPERTY GROUP PTY LTD ACN 614 218 852

(first defendant)

AND

DAVID ALEXANDER JOHN WHITEMAN

(second defendant)

AND

MARC ANDREW CLANCY

(third defendant)

FILE NO/S:

3647 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

19 October 2022

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers (written submissions received on 05 October 2022 and 12 October 2022)

JUDGE:

Freeburn J

ORDER:

Each parties’ costs of the applications be their costs in the cause.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – NATURE OF COSTS: INDEMNITY DOCTRINE – where the defendants succeeded on their application to transfer the proceeding from the Supreme Court to the Federal Court – where the cross-application was not pressed – whether costs should follow the events – whether the court ought to depart from the general rule

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 137, r 681(1)

Butler v Crowley [2000] QSC 120, considered

Quinlan v Rothwell [2002] 1 Qd R 647, considered

Page v Central Queensland University [2006] QCA 478, applied

COUNSEL:

MJ Downes (plaintiff)

AG Psaltis (defendants)

SOLICITORS:

Thynne + Macartney (plaintiff)

Bartley Cohen (defendants)

REASONS

  1. [1]
    The defendants have succeeded on their application to transfer the proceeding from the Supreme Court to the Federal Court of Australia.[1] The cross-application for default judgment was not pressed. Because they have enjoyed success the defendants seek the costs of both applications.
  2. [2]
    Ordinarily the defendants would have a powerful argument that they ought to have the costs of the applications on the basis of the principle that costs follow the event under rule 681(1) of the Uniform Civil Procedure Rules 1999 (UCPR). The defendants contend that there is no basis upon which the court ought to depart from the general rule that costs should follow the event.[2] On the other hand, the plaintiff contend that a departure from the general rule is warranted for five reasons which they have listed.[3]
  3. [3]
    A number of issues are relevant. The first is that, in applying the general rule that costs ought to follow the event, it is necessary to bear in mind that these were interlocutory applications where the core dispute was whether the issues ought to be litigated in this court or in the Federal Court.[4] The court was asked to decide which forum was more appropriate. That decision was part of the court’s management and supervision of the litigation coming before it. On the other hand, it must be borne in mind that either party may succeed at trial. For example, at trial it may be found that the defendants breached their fiduciary and director duties to the plaintiff.
  4. [4]
    The second issue, relevant to the discretion, is that the issues regarding which is the most appropriate forum were reasonably complex.  It could not be said that the attitude of the plaintiff was unreasonable.
  5. [5]
    The third issue, emphasised by the defendants, is that they were successful on both applications. In my view, little turns on this. The plaintiff sought to progress the proceeding. The defendants refused to proceed and required that the proceeding be transferred to the Federal Court. In substance, there were cross-applications. It is difficult to criticise the plaintiff for seeking to proceed with litigation that it quite properly brought in this court, particularly in circumstances where the defendants refused to put on a defence.
  6. [6]
    The fourth issue, also pressed by the defendants, is that the result achieved by the defendants was at least as good as their offer on the day of the hearing. However, that offer, made at 11am of the day of the hearing, was that the default judgment application be dismissed with costs fixed at $5000, and that the proceeding be transferred to the Federal Court with costs to be in the cause in the Federal Court.[5]
  7. [7]
    Of course, if the plaintiff had acted unreasonably in refusing that offer, that may be a proper basis for applying the general rule, and even for ordering costs on an indemnity basis. However, the offer was very late. And, some caution needs to be exercised where offers are made to resolve an interlocutory skirmish. In this skirmish, for example, the central issue was the appropriate forum. It was an issue that was not easily susceptible to compromise. Looked at broadly, the offer made by the defendants was really an invitation to capitulate, and to do so in respect of an issue on which minds might sensibly differ. There is also the problem that the invitation came with a price tag of $5000. In those circumstances, the court cannot conclude that the plaintiff was acting unreasonably in rejecting that rather late offer.  
  8. [8]
    The fifth issue to consider is put by the defendants in this way:

The plaintiff abandoned its default judgment (which the court found, in any event was futile[6]). It also did not seek to amend that application to seek relief requiring the delivery of a defence (which could have been done given its position in correspondence). Its abandonment of the default judgment application, despite pressing for it to be dealt with to the exclusion of the transfer application on 20 June 2022, emphasises that the defendants were justified in resisting it.[7] 

  1. [9]
    That is a bold position. The circumstances were that the defence was overdue. The UCPR required the defence by 10 June 2022.[8] The defendants were not simply in breach of the rules; they were refusing to comply with the rules. Of course, the defendants wished to have their transfer application dealt with and, as the reasons of 28 September 2022 make clear, it was a transfer application with merit. However, the reality was that there was an impasse because of the defendants’ stance. Thus, the reality was not that the plaintiff abandoned its attempts to have the defendants defend, but rather that the plaintiff recognised the reality of the defendants’ stance that it was not going to put on a defence until the transfer application was decided. In those circumstances, it is unfair to portray the plaintiff as having abandoned its application, or its desire to proceed with the action.
  2. [10]
    Of course, there is some irony in the defendants’ complaining that the plaintiff did not seek an order requiring the delivery of the defendant’s overdue defence. Such an order would require the defendants to comply with a deadline already imposed by the UCPR, and in circumstances where the defendants were expressly refusing to comply with the rules.
  3. [11]
    The sixth issue, raised by the plaintiff, was that the transfer application was filed after the time for the defence had already elapsed.  This is not a substantive point. The defence was due on 10 June 2022. The defendants wrote suggesting a transfer on the same day. Cross applications were filed on 15 and 17 June 2022.[9] Neither party has been dilatory in making the applications.
  4. [12]
    Seventh, as I have explained in the reasons of 28 September 2022, the defendants took the view that they would not file and serve a defence because of its stance that the case should be transferred to the Federal Court.  That view was taken despite the requirement of the UCPR that a defence be filed within 28 days,[10] and despite the implied undertaking to proceed in an expeditious way.
  5. [13]
    In some cases, of course, a defence might need to be delayed – for example if the substance of the plaintiff’s case has changed or is likely to change.  This was not one of those cases.  The impending transfer application did not mean that the proceeding should come to a full stop. Indeed, as can be seen from the reasons, the defendants’ refusal to plead was an impediment to a proper comparison of the issues raised by the two sets of proceedings.
  6. [14]
    Eighth, the defendants contend that the forum of the proceeding was relevant to the preparation of the defence because the rules for defences differ and because Mr Clancy has different solicitors in the two forums. Those are not, in my view, significant problems. Both forums require a pleading that properly informs the parties and the court of the issues in dispute. And, it is difficult to see why one or other of Mr Clancy’s solicitors could not prepare a defence. Given that this proceeding was commenced in March 2022, and the statement of claim was filed on 13 May 2022, a reasonable assumption is that the present solicitors on the record for Mr Clancy had a least started the process of preparing the defence prior to 10 June 2022.
  7. [15]
    Ninth, it is important to note the defendants’ submission that costs orders are directed to indemnifying a successful party. Costs are not awarded to punish the unsuccessful party.[11] That underlying purpose of a costs order is an important principle. However, the discretion to order costs is a wide discretion. Giving the successful party an indemnity for its costs may not be appropriate if that party does not comply with the UCPR,[12] or if that party’s conduct is unreasonable.[13] Similarly, as explained, the wide discretion encompasses having regard to the fact that these were interlocutory applications where the core dispute was which forum was more appropriate – the Supreme Court or the Federal Court. The ultimate decision was to transfer this more confined dispute to the Federal Court where it could be heard beside a wider dispute. Thus, the interlocutory decision had a case management character and involved a balancing exercise, in circumstances where the ultimate justice of the case is not yet known. That consideration has led some Australian jurisdictions to depart from the general rule that costs follow the event in interlocutory applications.[14]
  8. [16]
    That leads to another irony. The defendants sought the transfer of this proceeding to the Federal Court, and sought the costs of its application to transfer to that court on the basis of the general rule that costs follow the event, but the Federal Court has no such general rule. The Federal Court has a broad discretion as to costs, not guided by an equivalent to UCPR 681(1).[15] The usual order in the Federal Court is to make the costs of an interlocutory application each parties’ costs in the cause.[16] That usual order may not apply where a party seeks an indulgence of the court such as leave to amend, or where a party has taken an unreasonable stance and so the costs of the successful party have been incurred unnecessarily.[17] The rationale for the Federal Court’s approach is that it is appropriate to wait and see who has won or lost in the main action, before allocating the costs of the proceeding including the costs of interlocutory applications.[18]
  9. [17]
    Here, of course, not only is the ultimate outcome of the proceeding an unknown, but the management of the two proceedings in the Federal Court is not yet resolved. The Federal Court may decide to consolidate the proceedings, or it may decide to hear them separately. Indeed, one of the defendants’ arguments for transfer was that there was an efficiency in having the disputes heard in the same court, even if that court ultimately kept the disputes separate.
  10. [18]
    For all of those reasons, the appropriate order is that each parties’ costs of the applications be their costs in the cause. The rules of both courts give the Federal Court power to make appropriate orders for costs, including the costs before transfer.[19]
  11. [19]
    Even if I were not of that view it seems to me that, having regard to UCPR 5(4), the defendants ought not to obtain an indemnity for their costs.  Their conduct has meant that the proceedings in this court stalled. Had the defendants complied with the philosophy in UCPR 5, this proceeding would be further advanced, and the parties would each know the case they had to meet. As Atkinson J explained in Butler v Crowley:[20]

Litigation is generally commenced when people have what they assert are rights which they wish to vindicate and the dispute cannot be settled other than by resort to litigation. The purpose of commencing litigation then is to bring a just resolution to the dispute as expeditiously as possible. This is recognised by the Uniform Civil Procedure Rules 1999 (“UCPR”) … A person therefore who commences proceedings in court must be prepared to prosecute those proceedings expeditiously and this is recognised by r 5(3) of the UCPR which provides that “[i]n a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.” The court has developed rules to aid in the fair, just and expeditious resolution of disputes by providing for pleadings which crystallise the real issues in dispute and the disclosure of relevant material so each party can be fully informed of the other's case.

  1. [20]
    No doubt the defendants would take comfort from the remarks of Thomas JA in Quinlan v Rothwell:[21]

At the same time the rules of court are not an end in themselves. They do not exist for the discipline of practitioners or clients, or for the protection of courts from inefficient litigants, but rather as a means of ensuring that issues will be defined in an orderly way and that the parties have the opportunity of full preparation of their case before the trial commences.

  1. [21]
    However, whilst acknowledging that the court is reluctant to act in a punitive manner, there is no bar upon the court expressing its opinion that a failure to properly prosecute a proceeding, in addition to non-compliance with r 5, involves an element of vexation.[22] That is the rationale in the reasons of Keane JA in Page v Central Queensland University:[23]

The appellant chose to prosecute the proceedings at a pace of his own choosing, and did not devote sufficient energy to the prosecution of the action in compliance with r 5 of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR"). It was, therefore, open to the primary judge to describe the appellant's approach, which involved the visiting of the burdens and inconvenience of delayed litigation on the respondent, as involving an element of vexation.

  1. [22]
    Here, to adapt the words of Keane JA, the defendants chose to defend ‘at a pace of (their) own choosing’, and to delay the crystallisation of the real issues in dispute. They chose to do so in the face of the time for pleading prescribed by UCPR 137, and in the face of the philosophy and overriding obligations of UCPR 5. And so, for that reason I am disinclined to make an order which, in advance of any final determination, indemnifies the defendants for the costs of the applications.
  2. [23]
    In all the circumstances, the most appropriate order is that the parties’ costs of the application fall to be determined once there is a hearing of the claims on their merits. 

Footnotes

[1] GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd [2022] QSC 205.

[2] Defendants’ submissions on costs at [7].

[3] Plaintiff’s submissions on costs at [6].

[4]  This issue is dealt with in a little more detail, and by reference to the authorities, later in these reasons.

[5]  The full offer is summarised in the defendants’ costs submissions at [3(f)]. Note also that the rules of both courts provide for the transferee court to decide the costs incurred in the transferor court: UCPR 688; Federal Court Rules 2011 (Cth) at r 40.05.

[6]  The footnote at this point in the submissions refers to the reasons of 28 September 2022 at [76]. However, it is worth viewing that paragraph in the context of the paragraphs that precede and succeed that paragraph.

[7]  Defendants’ submissions on costs at [9(b)].

[8]  UCPR 137.

[9]  The defendants first applied to extend the time for their defence and then amended that application to add an application for transfer.

[10]  UCPR 137.

[11] Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J).

[12]  UCPR 5(4).

[13]  An unreasonable refusal of an offer to resolve the application is an example.

[14]  See, for example the discussion by Martin J in TTE Pty Ltd v Ken Day Pty Ltd (1990) 2 NTLR 143 at 145.

[15] Federal Court of Australia Act 1976 (Cth) s 43.

[16] Australian Securities and Investments Commission v Whitebox Trading Pty Ltd (No 2) [2017] FCA 385 at [6] (Gleeson J). See also James v Commonwealth Bank of Australia (No 2) [2015] FCA 599 at [20] (Katzmann J).

[17]  The failure to accept a reasonable offer is one example.

[18]  See the discussion in Whitebox Trading (supra) at [8].

[19]  See UCPR 686 and Federal Court Rules 2011 (Cth) at r 40.05.

[20]  [2000] QSC 120 at [1]–[3].

[21]  [2002] 1 Qd R 647 at [29]. 

[22] Civil Procedure Queensland (Lexis Nexis service) at [5.20].

[23]  [2006] QCA 478 at [21].

Close

Editorial Notes

  • Published Case Name:

    GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2)

  • Shortened Case Name:

    GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2)

  • MNC:

    [2022] QSC 224

  • Court:

    QSC

  • Judge(s):

    Freeburn J

  • Date:

    19 Oct 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Australian Securities and Investments Commission v Whitebox Trading Pty Ltd (No 2) [2017] FCA 385
1 citation
Butler v Crowley & Greenhalgh [2000] QSC 120
2 citations
GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd [2022] QSC 205
1 citation
James v Commonwealth Bank of Australia (No 2) [2015] FCA 599
1 citation
Oshlack v Richmond River Council (1998) 193 CLR 72
1 citation
Page v Central Queensland University [2006] QCA 478
2 citations
Quinlan v Rothwell[2002] 1 Qd R 647; [2001] QCA 176
2 citations
TTE Pty Ltd v Ken Day Pty Ltd (1990) 2 NTLR 143
1 citation

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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