Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) (No 2)
[2017] QSC 266
•15 November 2017
SUPREME COURT OF QUEENSLAND
CITATION:
Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) & Ors (No 2) [2017] QSC 266
PARTIES:
AKLIA HOLDINGS PTY LTD
ACN 116 390 295(plaintiff)
v
THE CARTER GROUP PTY LTD (IN LIQ)
ACN 127 625 209(first defendant)
ADVISOR SOLUTIONS PTY LTD
ACN 156 181 609(second defendant)
SUCCESSION & ESTATE PLANNERS PTY LTD
ACN 110 596 891(third defendant)
THE TOPAZ CORPORATION PTY LTD
ACN 144 046 766(fourth defendant)
PETER ESAU SA
(fifth defendant)
CRAIG STEVEN BALL
(sixth defendant)
SATVIR SINGH BIRK
(defendant by counterclaim)
FILE NO/S:
SC No 12296 of 2014
DIVISION:
Trial Division
PROCEEDING:
Costs application
DELIVERED ON:
15 November 2017
DELIVERED AT:
Brisbane
HEARING DATE:
On the papers.
JUDGE:
Bond J
ORDERS:
The orders of the Court are:
1. The plaintiff must pay two thirds of the defendants’ costs of the plaintiff’s application filed 18 April 2016, to be assessed on the standard basis.
2. The defendant by counterclaim must pay two thirds of the defendants’ costs of the application by the defendant by counterclaim filed 16 August 2016, to be assessed on the standard basis.
3. The plaintiff must pay half of the defendants’ costs of the defendants’ application filed 28 July 2016, to be assessed on the standard basis.
CATCHWORDS:
PROCEDURE – COSTS – RECOVERY OF COSTS – where each party enjoyed partial success on its interlocutory application – whether costs should be reserved – whether costs should follow the event
Uniform Civil Procedure Rules 1999 (Qld), r 171, r 293, r 681
Aklia Holdings Pty Ltd v The Carter Group Pty ltd (in liq) [2017] QSC 75, cited
Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 168, cited
Interchase Corporation Limited (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26, cited
Sequel Drill & Blast P/L v Whitsunday Crushers P/L (No 2) [2009] QCA 239, citedThiess v TCN Channel 9 Pty Limited (No 5) [1994] 1 Qd R 156, cited
SOLICITORS:
TVP Law for the plaintiff
Nathan Lawyers for the second, third, fourth, fifth and sixth defendantsPotts Lawyers for the defendant by counterclaim
My judgment in Aklia Holdings Pty Ltd v The Carter Group Pty ltd (in liq) [2017] QSC 75 disposed of three interlocutory applications, namely:
(a)an application by the plaintiff, Aklia, for summary judgment pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld), or alternatively an order pursuant to r 171 striking out the counterclaim of the second, third, fourth, and fifth and sixth defendants (the defendants) so far as it claimed damages against Aklia;
(b)an application by the defendant by counterclaim, Mr Satvir Birk, for summary judgment pursuant to r 293 on the counterclaim brought against him by the defendants; and
(c)an application by the defendants for summary judgment pursuant to r 293 in respect of certain parts of Aklia’s statement of claim, or alternatively an order pursuant to r 171 that the paragraphs be struck out.
The present question is what orders should be made in respect of the costs of the applications. I have received written submissions from each of the parties on this question, with a view to making an order on the papers.
It is appropriate to first identify the principles which will guide the exercise of my discretion.
The following summary of general principle derives from Thiess v TCN Channel 9 Pty Limited (No 5) [1994] 1 Qd R 156 at 208-209, Interchase Corporation Limited (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26 at [84], Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd (No 2) [2009] QCA 239 at [3]-[7], and Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 168 at [1]:
(a)Costs of an application in a proceeding are in the discretion of the Court but follow the event unless the court orders otherwise: UCPR r 681.
(b)The word “event” is to be approached distributively with the consequence that it refers to the event of an issue or of each separate issue, if there is more than one, in the proceeding.
(c)The application of the general principle may lead to costs orders which reflect different results on separate events or issues, unless the Court considers that some other order is more appropriate.
(d)The circumstances which a Court might consider in determining whether some other order is more appropriate, and, if so, its form include:
(i) the preference to avoid the complicated form of assessment that would follow if different issues are determined in different directions as between the parties and costs were to be awarded in respect of issues in the technical sense;
(ii) the possibility of taking the approach of identifying heads of controversy or “units of litigation” (rather than what might technically be regarded as issues on the pleadings) as the criterion for awarding costs;
(iii) where a party has succeeded on one of two ways to the same outcome in a particular unit of litigation, a court might regard the costs of the second way on which that party failed as not so distinct conceptually or practically as to warrant making a costs order which reflected that party’s failure on the second avenue of success; and
(iv) on the other hand, where, in a particular unit of litigation, there are multiple issues which are determined in different directions as between the parties, a court might form an overall impression having regard to the significance of the issues, the way they were determined, and the amount of time and cost spent on them, and order one party to pay a proportion of another party’s costs as a way to reflect fairly the parties’ comparative success or failure in the outcome which was obtained.
None of the parties supported the notion of an order of costs on an issue by issue basis in relation to the applications. I agree with that choice. The complexity which would be involved in the costs assessment which such a form of order would necessitate makes that a most unattractive outcome. In this case the better approach is to make an order in respect of the costs of the application, but to award a proportion of costs in the manner referred to in [4](d)(iv) above
Against that background, I will deal with the costs of each application under separate headings below.
Aklia’s application
Aklia sought summary judgment on the counterclaim, or alternatively an order striking out the counterclaim. The nature of the issues which arose on Aklia’s application are described in my earlier judgment at [49]-[52].
Aklia obtained very limited success, namely a strike out of four paragraphs of the counterclaim on the basis that they asserted rolled up conclusions which were deficient for failure to plead the material facts which would make them good. And that success was a point which only arose during argument as opposed to an issue which formed the basis of the application. However it must be noted that a third challenge to the counterclaim was only not advanced because of late amendments to the pleading under challenge, and the plaintiff had been forced to prepare for that challenge.
On the other hand, the defendants successfully resisted both of the principal challenges to the counterclaim which were argued, namely the “in trade and commerce” issue and the reflective loss issue. Those two issues took up a significant part of the written submissions and most of the oral submissions in relation to the application. Success in relation to the first issue turned on substantive amendments made on the day before the application was argued (although the point was argued notwithstanding the late amendment).
The defendants sought an order that Aklia pay its costs of the application. Aklia submitted that I should (1) reserve the costs of the application, or (2) make an order that there be no order as to costs, or (3) order that the defendants pay 50% of the plaintiff’s costs of the application.
I see no merit in postponing consideration of costs by reserving the question of costs. Bearing in mind the relative success that occurred, it does seem to me that the defendants should get a costs order in their favour in relation to the plaintiff’s application, but that it should not be an order requiring the plaintiff to pay all of the defendants’ costs.
The appropriate order is that the plaintiff should pay two thirds of the defendants’ costs of the plaintiff’s application, to be assessed on the standard basis.
There was overlap between the defendants’ costs of defending this application and their costs of defending the application by Mr Birk, but the appropriate response to the factual considerations is a matter for the costs assessor.
The application by Mr Birk
Mr Birk sought summary judgment on the counterclaim. The nature of the issues which arose on his application were essentially the same as those which arose on Aklia’s application.
Mr Birk obtained very limited success, namely a strike out of four paragraphs of the counterclaim on the basis that they asserted rolled up conclusions which were deficient for failure to plead the material facts which would make them good.
The defendants sought an order that Mr Birk pay either all or 75% of the defendants’ costs of the application by the defendant by counterclaim. The reduction conceded was said to reflect the relative extent of their success. Mr Birk submitted that I should order that costs be reserved.
The issues affecting the question of the costs order which should be made on this application are substantially the same as in relation to the plaintiff’s application.
The appropriate order is that Mr Birk should pay two thirds of the defendants’ costs of the application by Mr Birk, to be assessed on the standard basis. The observation made at [13] above also applies to this order.
The defendants’ application
The defendants applied for summary judgment in respect of certain parts of Aklia’s statement of claim, or alternatively for an order that the paragraphs be struck out.
The defendants failed in relation to their application for summary judgment but succeeded in relation to part of their strikeout application. Although that success was significant, the issues on which the defendants failed were also very significant and involved conceptually different arguments. In particular, I thought that the defendants’ application for summary judgment founded on the proposition that Aklia’s case was factually unsustainable, was an ambitious one.
The defendants submitted their success was sufficiently significant to warrant an order that Aklia pay the defendants’ costs of the defendants’ application or, alternatively, that the Aklia pay 75% of the defendants’ costs of the defendants’ application. Aklia submitted that I should (1) reserve the costs of the application, or (2) make an order that there be no order as to costs, or (3) order that Aklia pay 50% of the defendants’ costs of the defendants’ application.
Again, I see no merit in postponing consideration of costs by reserving the question of costs. Bearing in mind the relative success that occurred, it does seem to me that the defendants should get a costs order in their favour in relation to their own application, but that it should not be an order requiring the plaintiff to pay all of their costs.
The appropriate order is that the plaintiff should pay half of the defendants’ costs of the defendants’ application, to be assessed on the standard basis.
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