Palmer v Gibson [No 2][2025] QSC 187

SUPREME COURT OF QUEENSLAND

Introduction

1. [1]
   This is the costs decision consequent on the decision I gave in Palmer v Gibson & Anor.^[1]

Submissions

First Defendant’s Submissions

2. [2]
   The first defendant submits that she should have her costs of the interlocutory application and her costs thrown away in relation to the plaintiffs claims that have been dismissed or struck out. It is submitted that costs should follow the event and there is no disentitling conduct on the part of Ms Gibson to justify the departure from the usual approach. The event for the present purposes is the determination of the interlocutory applications, which resulted in the order.
3. [3]
   Her costs in the proceedings also included the costs thrown away by the plaintiffs claims which had been dismissed and the pleadings which had been struck out. Given that there is a temporary stay, any further amended statement of claim will not be filed for some indeterminate time into the future and Ms Gibson should not be held out from her costs until then. The costs should be assessed immediately.

Second Defendant’s Submissions

4. [4]
   The second defendant submits that Mr Palmer should pay ASIC’s costs on an indemnity basis. It is submitted that ASIC succeeded concerning its application and costs should follow the event. The fact that ASIC intervened in the proceeding does not affect its entitlement to costs. It is submitted that an award of indemnity costs serves the purpose of compensating a party fully for the costs incurred when a court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.
5. [5]
   It will be unreasonable for a party to subject a successful party to the expenditure of costs where the unsuccessful party’s case was clearly foredoomed to fail and they knew this. The way in which an unsuccessful party has conducted a proceeding is relevant.
6. [6]
   In this case, Mr Palmer ought to have known that his claims would be dismissed or stayed by reason of the fact the proceeding has the effect of fragmenting the criminal process. Numerous decisions quoted make this clear. Additionally, the court found that the proceeding amounted to a collateral attack on the criminal proceedings directly. Also, it was conceded by Mr Palmer that breaches of the Human Rights Act 2019 (Qld) (HRA) would not render the complaint or summons invalid. Even constitutional invalidity would not in itself amount to exceptional circumstances.
7. [7]
   On 3 March 2025, ASIC wrote to Mr Palmer indicating that it would apply to have the proceeding dismissed or stayed on the basis that the proceeding amounted to a fragmentation of the criminal process and inviting him to discontinue the proceedings. Mr Palmer contested ASIC’s right to intervene and then commenced an appeal concerning this but later discontinued it.
8. [8]
   It is also noteworthy that Mr Palmer did not plead how his human rights were limited or breached by the decisions made by Ms Gibson. Mr Palmer effectively conceded that the amended statement of claim was defective.
9. [9]
   The bringing of the proceeding should be considered in the context of this matter, being the latest in a series of proceedings brought by Mr Palmer which have had the effect of fragmenting the criminal process. The other proceedings brought have been stayed or dismissed on fragmentation grounds.
10. [10]
    In those circumstances, indemnity costs should be awarded.

Plaintiff’s Submissions

11. [11]
    The plaintiff accepts that both defendants were substantially successful as to their applications, but neither of them were wholly successful. It is to be noted that the court did not order the proceedings be summarily terminated or dismissed. Important aspects of the plaintiff’s claim, including the misfeasance in  public office and breach of duty, remain on foot, although stayed, until the determination of the criminal proceedings.
12. [12]
    It is accepted that costs should follow the event, but ASIC’s application for costs on an indemnity basis is opposed. It is submitted it was reasonable for the plaintiff to defend against the defendant’s applications, including the summary termination or  stay.
13. [13]
    The plaintiff’s arguments were not entirely bereft of merit so as to justify the ordering of indemnity costs.^[2] It was reasonable for the plaintiff to contend that the court ought to determine the plaintiff’s claim for declaratory relief, having regard to the court’s supervisory jurisdiction of criminal proceedings in lower courts.
14. [14]
    It was also reasonable to contend that the proceedings did not fragment the criminal process on the basis that the relief sought was materially different to that sought in the other cases. The plaintiff did not change his position. He accepted there was some nexus between the present proceedings and the criminal proceedings. His position has been consistent throughout.
15. [15]
    An issue did arise as to whether the plaintiff could agitate his HRA claim before the Magistrate or under s 590AA of the Criminal Code. The court found consistently with the plaintiff’s position that the HRA issues could not be argued in the Magistrates Court but could be raised as part of a stay application under s 590AA in the District Court.
16. [16]
    In all of the circumstances, it was not unreasonable for the plaintiff to resist the defendant’s applications. It was not unreasonable for him to refuse to discontinue the proceedings, bearing in mind the damages claims have not been dismissed or terminated.
17. [17]
    It is irrelevant for ASIC to draw attention to the other proceedings as the plaintiff was entitled at law to commence these proceedings.
18. [18]
    It is appropriate he pay costs of and incidental to the defendant’s applications on the standard basis.

Discussion

19. [19]
    Rule 681 of the UCPR provides:

“681 General rule about costs

1. Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise.

2. Subrule (1) applies unless these rules provide otherwise.”

20. [20]
    In Oshlack v Richmond River Council^[3] it was noted at [44] that costs are not made to punish an unsuccessful party.  McHugh J at [67] noted that the usual order as to costs embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour.  The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant.  Costs are not awarded to punish an unsuccessful party.  The primary purpose of an award of costs is to indemnify the successful party. 
21. [21]
    Although costs usually follow the event, there is a wide discretion on the court to make a different order provided the discretion is exercised judicially.^[4]
22. [22]
    In this particular case, there is no reason to my mind to depart from the general rule. The real issue is whether indemnity costs should be awarded against Mr Palmer.
23. [23]
    On the issue of indemnity costs, the following propositions may be discerned from the cases:

    1. Costs orders are not made to punish an unsuccessful party but there may be some circumstances revealing a “delinquency” on the part of the unsuccessful party leading to a costs order on an indemnity basis which more adequately compensates the successful party. ^[5]
    2. The categories in which indemnity costs orders are made are not closed but there needs to be some unusual or special feature of the case justifying the order, including prolongation of a case by groundless contentions or the imprudent refusal of an offer of compromise. ^[6]

    3. The award of indemnity costs should not be too readily available.^[7]

    4. The ordinary rule is that costs be ordered on a party/party basis however there can be cases where the court will depart from this rule. ^[8]
    5. The question is exercised having regard to the relevant principles and the particular circumstances of the case.^[9]
24. [24]
    In my opinion, there are a number of factors which militate against the awarding of the indemnity costs in this case, as follows.
25. [25]
    First, there was some evidence that Ms Gibson did not turn her mind to the HRA when the complaint and summons was issued. There is therefore an arguable case based on s 58(1) of the HRA.
26. [26]
    Second, the submission was available that if the court declared the complaint and summons unlawful, that might have a significant effect upon the course of the committal hearing. As it turns out, that submission was not accepted by reason of the provisions of s 58(6) of the HRA but the submission that it was an unlawful decision was still available to the plaintiff.
27. [27]
    Third, there was a real issue about whether these matters could be raised in the Magistrates Court or the District Court. That was an arguable point about which authority was needed.
28. [28]
    Fourth, I did not strike out the claims in their entirety. Bearing in mind the principles involved with striking out claims and the reluctance of courts to readily do so, the cause of action concerning misuse in  public office and breach of duty were retained. So Mr Palmer did have some success in that regard. On the other hand of course, I agree that the pleading was fairly “hopeless” and was struck out as not disclosing a reasonable case.
29. [29]
    Whilst it is true Mr Palmer has brought other challenges, the fact is each claim needs to be assessed on its own merits.
30. [30]
    In the end, in the exercise of my discretion, I do not think this is a case where I should grant indemnity costs.

Order

31. [31]
    In those circumstances I make the following orders:

1. I order the plaintiff pay the costs of the first and second defendants of and incidental to the applications (dated 6 January 2025 and  24 April 2025)  on the standard basis.
2. I order the plaintiff to pay the first and second defendants’ costs (on the standard basis) thrown away by reason of:
   1. The dismissal of the claims for declaratory relief;
   2. The dismissal of the claim under section 38 of the Justices Act 1886 (Qld).