Burrows v A.W. Bale & Son Solicitors (No. 2) - [2022] QDC 155

DISTRICT COURT OF QUEENSLAND

CITATION:

Burrows v A.W. Bale & Son Solicitors & Anor (No. 2) [2022] QDC 155

PARTIES:

KENNETH PATRICK BURROWS

(plaintiff)

v

A.W. BALE & SON SOLICITORS

(first defendant)

and

ANDREW BALE

(second defendant)

FILE NO/S:

1872 of 2017

DIVISION:

Civil

PROCEEDING:

Costs application

ORIGINATING COURT:

District Court, Brisbane.

DELIVERED ON:

14 July 2022

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers. Submissions received 10 June 2022 and 24 June 2022.

JUDGES:

Byrne QC DCJ

ORDER:

1.   Leave granted to file and read the affidavit of Andrew Orr dated 8 June 2022.

2.   The plaintiff is pay the defendants’ costs of and incidental to the proceedings on the standard basis to and including 9 September 2019.

3.   The plaintiff is to pay the defendants’ costs of and incidental to the proceedings on the indemnity basis from and including 10 September 2019.

4.   These orders are to be read subject to any earlier orders made in relation to costs at any earlier stage of the proceedings.

5.   Liberty to apply.

CATCHWORDS:
LEGISLATION:
CASES:

TORTS – NEGLIGENCE – PROFESSIONAL NEGLIGENCE – BREACH OF RETAINER – APPLICATION FOR COSTS – where the defendants were wholly successful in defending an action for professional negligence – where the defendants seek their costs of the proceeding on the indemnity basis – where the plaintiff concedes that the defendants should receive their costs but on the standard basis – where the action had poor prospects of success, particularly in relation to proof of causation of loss – where allegations were made by the plaintiff of fraudulent concealment which did not succeed at trial - where the plaintiff rejected a Calderbank offer almost three years prior to trial.

Limitation of Actions Act 1974 (Qld)
Public Trustee Act 1978 (Qld)
Uniform Civil Procedure Rules1999 (Qld)

Burrows v A.W. Bale & Son Solicitors & Anor [2022] QDC 117
Calderbank v Calderbank [1975] 3 All ER 333
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Greer v Greer [2021] QCA 174
Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No. 2) [2005] 13 VR 435
J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23
Johnston & Anor v Herrod & Ors [2012] QCA 361
Oshlack v Richmond River Council (1998) 193 CLR 72
Stewart v Atco Controls Pty Ltd(in liq) (No. 2) (2014) 252 CLR 331

COUNSEL:

Mr. M. Donovan for the plaintiff.
Mr P. McCafferty QC for the defendants.

SOLICITORS:

Brisbane Criminal Lawyers form the plaintiff.
McInnes Wilson for the defendants.

Background

The plaintiff sought damages for what was, in effect, alleged to be professional negligence and a breach of the implied terms of a retainer. I found for the defendants[1] (“the earlier reasons”), and the issue of costs is now in dispute. Both parties (correctly) agree that costs should follow the event and be awarded to the defendants. The plaintiff submits they should be on the standard basis while the defendants submit they should be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] QDC 155
Decision Date: 14 July 2022

CaseChat Overview and Summary

In Burrows v A.W. Bale & Son Solicitors (No. 2), the plaintiff, Mr. Burrows, brought an action against the defendants, A.W. Bale & Son Solicitors, alleging professional negligence. The defendants successfully defended the action, and subsequently sought their costs on the indemnity basis. Mr. Burrows conceded that the defendants should receive their costs but on the standard basis. The court had to determine the appropriate basis for awarding the defendants' costs, considering the rejection of a Calderbank offer by Mr. Burrows and the overall prospects of success of his claims.

The legal issues before the court were whether the rejection of the Calderbank offer by Mr. Burrows was unreasonable or imprudent, and if so, whether this warranted an order for indemnity costs. The court had to balance the rejection of the Calderbank offer against the prospects of success of Mr. Burrows' claims, particularly in relation to the proof of causation of loss and allegations of fraudulent concealment. The court also had to consider the timing of the rejection of the Calderbank offer and the circumstances surrounding it.

The court found that Mr. Burrows' rejection of the Calderbank offer was unreasonable and imprudent. The court noted that the claim had poor prospects of success, particularly in relation to the proof of causation of loss and the allegations of fraudulent concealment. The court was also critical of Mr. Burrows for rejecting the Calderbank offer almost three years prior to trial. The court concluded that Mr. Burrows' conduct in rejecting the Calderbank offer and continuing with the proceedings was unreasonable and suggestive of being continued in wilful disregard of known facts and established law. Accordingly, the court ordered that Mr. Burrows pay the defendants' costs on the indemnity basis from 10 September 2019, and on the standard basis to and including 9 September 2019.

These orders were to be read subject to any earlier orders made in relation to costs at any earlier stage of the proceedings. The court granted liberty to apply for further orders if necessary.

Orders

Orders of the court

1. Leave granted to file and read the affidavit of Andrew Orr dated 8 June 2022.

2. The plaintiff is pay the defendants’ costs of and incidental to the proceedings on the standard basis to and including 9 September 2019.

3. The plaintiff is to pay the defendants’ costs of and incidental to the proceedings on the indemnity basis from and including 10 September 2019.

4. These orders are to be read subject to any earlier orders made in relation to costs at any earlier stage of the proceedings.

5. Liberty to apply.

Background

Background to the litigation

Indemnity costs should only be ordered following a rejection of a Calderbank offer if the Court is satisfied that the rejecting party acted unreasonably or imprudently in rejecting the offer; something more than the mere refusal is often required to establish unreasonableness or imprudence,[8] but something more than prospects of success in the litigation may be required for a refusal to be not unreasonable or not imprudent.[9] Relevant considerations in considering an indemnity costs order on the basis of a refusal of a Calderbank offer are outlined in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No. 2).[10] [8]J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23, [5]-[6].[9]Stewart v Atco Controls Pty Ltd(in liq) (No. 2) (2014) 252 CLR 331, [4].[10][2005] 13 VR 435, [25] cited favourably in J & D Rigging at [6].Some further facts These reasons should of course be read in light of the earlier Reasons, but there are some further pertinent facts adduced by way of affidavit on behalf of the defendants on the costs application, none of which have been disputed by the plaintiff. As noted in the earlier reasons, the proceedings were commenced on 16 September 2016, after which there was the usual exchange of pleadings. On 1 February 2017, the defendants notified the plaintiff of their intention to apply for summary judgment based primarily on the proposition that the plaintiff’s claim was statute barred under the Limitation of Actions Act 1974. The defendants suggested resolving the claim on the basis that the claim be discontinued and the parties each bear their own costs. It is not suggested that it was a Calderbank offer, and it was not accepted by the plaintiff. The application for summary judgment was listed for hearing on 10 April 2017. On that date, at 8.18am, the plaintiff served an unsealed Amended Statement of Claim, together with its submissions on the summary judgment application. The Amended Statement of Claim introduced for the first time the allegation that the defendants had fraudulently concealed the asserted breach of duty. As I understand it, the application did not proceed that day. On 23 May 2018, the parties participated in a mediation. On 26 August 2019, the defendants served a Calderbank offer, in the following terms: (1)The defendants pay the plaintiff $20,000 inclusive of interest and costs within 28 days of the agreement being signed;(2)The plaintiff discontinues the claim against the defendants within seven days of receipt of the settlement sum;(3)The defendants waive their entitlement to a costs order made earlier in their favour; and(4) The defendants bear their own costs of the proceedings.This offer was expressed to remain open for 14 days, and hence would expire on 9 September 2019, and it was expressly stated that it would be relied on for the purposes of seeking indemnity costs if the need arose.[11][11]Affidavit of Andrew Orr dated 8 June 2022, Exhibit “AO-1”, page 58

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

On 11 October 2019, the plaintiff’s solicitor again emailed the defendants’ solicitor formally notifying the rejection of the offer. No further reason was provided.[14] [14]Affidavit of Andrew Orr dated 8 June 2022, Exhibit “AO-1”, page 78.Consideration I broadly accept the plaintiff’s submission that the commencement of the proceedings must be seen in light of some unusual features. Accepting that the plaintiff was not actually aware that the property had been forfeited to the State until told by a police officer on 1 December 2015,[15] the proceedings were then commenced with reasonable expedition after the ruling by Ann Lyons J consolidated the position at law. [15]The earlier reasons, [34]. It is, I think, telling that I did not find the plaintiff had been dishonest in denying having signed the written instructions dated 15 November 2004. In fact, in cross-examination he accepted that he might have done.[16] It is feasible that he did not, by the time the proceedings were commenced, remember that he had signed the instructions and had received the advice that I found he did receive. The commencement of the proceedings must be seen in that context for present purposes. In those circumstances, and while also accepting the proceedings were, even at that early stage, obviously susceptible to failure on the grounds ultimately found for the defendants, I am not satisfied they were brought with some ulterior motive or other than in good faith. [16]The earlier reasons, [32]. The real possibility that the plaintiff had forgotten the advice he received and the instructions he gave on or about 15 November 2004 is also important in assessing the allegation of fraudulent concealment for the purposes of this application. My finding that he had received the advice and signed the instructions was central to accepting that the possibility of automatic forfeiture had not been concealed from the plaintiff.[17] That was not a matter of factual agreement between the parties and was reasonably put in dispute at trial.[17]The earlier reasons, [113]. It does not assist the plaintiff for present purposes that the allegations of dishonesty were raised on the foundation of an obviously dubious ability to recall events of so many years earlier. Nor does it assist him that the other allegations of dishonesty were pressed in relation to filing affidavits and the receipt of Legal Aid funding when, on any view of it, those proceedings were pending. However, I would not be inclined to deviate from an order for costs on the standard basis if things had remained only at the raising of and pursuit of the allegations. They did not. In my view, the rejection of the Calderbank offer was unreasonable and imprudent and the continuation of the proceedings thereafter was unreasonable and suggestive of being continued in wilful disregard of the known facts and clearly established law. It is also suggestive of the proceedings being continued for some ulterior motive. Even allowing for the real possibility that the plaintiff did not recall giving the instructions on or about 15 November 2004 and receiving advice on the same day, it must have been obvious to anyone advised by a legal practitioner exercising the reasonable care, diligence and skill of a reasonably competent practitioner that the fraudulent concealment case was unlikely to succeed, and that the case on causation had very little, if any, merit at all.

CITATION:	Burrows v A.W. Bale & Son Solicitors & Anor (No. 2) [2022] QDC 155
PARTIES:	KENNETH PATRICK BURROWS (plaintiff) v A.W. BALE & SON SOLICITORS (first defendant) and ANDREW BALE (second defendant)
FILE NO/S:	1872 of 2017
DIVISION:	Civil
PROCEEDING:	Costs application
ORIGINATING COURT:	District Court, Brisbane.
DELIVERED ON:	14 July 2022
DELIVERED AT:	Brisbane
HEARING DATE:	On the papers. Submissions received 10 June 2022 and 24 June 2022.
JUDGES:	Byrne QC DCJ
ORDER:	1. Leave granted to file and read the affidavit of Andrew Orr dated 8 June 2022. 2. The plaintiff is pay the defendants’ costs of and incidental to the proceedings on the standard basis to and including 9 September 2019. 3. The plaintiff is to pay the defendants’ costs of and incidental to the proceedings on the indemnity basis from and including 10 September 2019. 4. These orders are to be read subject to any earlier orders made in relation to costs at any earlier stage of the proceedings. 5. Liberty to apply.
CATCHWORDS: LEGISLATION: CASES:	TORTS – NEGLIGENCE – PROFESSIONAL NEGLIGENCE – BREACH OF RETAINER – APPLICATION FOR COSTS – where the defendants were wholly successful in defending an action for professional negligence – where the defendants seek their costs of the proceeding on the indemnity basis – where the plaintiff concedes that the defendants should receive their costs but on the standard basis – where the action had poor prospects of success, particularly in relation to proof of causation of loss – where allegations were made by the plaintiff of fraudulent concealment which did not succeed at trial - where the plaintiff rejected a Calderbank offer almost three years prior to trial. Limitation of Actions Act 1974 (Qld) Public Trustee Act 1978 (Qld) Uniform Civil Procedure Rules1999 (Qld) Burrows v A.W. Bale & Son Solicitors & Anor [2022] QDC 117 Calderbank v Calderbank [1975] 3 All ER 333 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 Greer v Greer [2021] QCA 174 Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No. 2) [2005] 13 VR 435 J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23 Johnston & Anor v Herrod & Ors [2012] QCA 361 Oshlack v Richmond River Council (1998) 193 CLR 72 Stewart v Atco Controls Pty Ltd(in liq) (No. 2) (2014) 252 CLR 331
COUNSEL:	Mr. M. Donovan for the plaintiff. Mr P. McCafferty QC for the defendants.
SOLICITORS:	Brisbane Criminal Lawyers form the plaintiff. McInnes Wilson for the defendants.