Earl Covington & Associates v Bondley P/L

[2003] QDC 238

[2003] QDC 238

DISTRICT COURT
CIVIL JURISDICTION

JUDGE DODDS

No 49 of 1999

EARL COVINGTON AND ASSOCIATES	Plaintiff
and
BONDLEY PROPRIETARY LIMITED	Defendant
MAROOCHYDORE ..DATE 16/04/2003
JUDGMENT

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16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ)

HIS HONOUR: These reasons relate to costs	1
On 10 December 2001 the plaintiff sought orders that a further amended defence and counterclaim of the defendant be struck out for failure to provide particulars for judgment for the

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plaintiff on its claim; alternatively, that nominated
paragraphs of the further amended defence and counterclaim be
struck out for want of adequate particulars, or as
embarrassing, or prejudicing, or delaying the fair trial of

the action; alternatively, the defendant's counterclaim be

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tried separately and the plaintiff's claim be placed on the

callover list.

On 10 December 2001, the application was adjourned until 11

March 2002 to be listed for a period of two hours. Orders

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were made that the parties provide written submissions and
directions given for the exchange of those submissions. The
costs of the application were reserved. The matter was then

heard on 11 March 2002.

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On 17 May 2002, orders were made that the further amended defence and counterclaim in issue be struck out and the defendant have leave to replead on certain terms. It was determined that the further amended defence and counterclaim, the subject of the application, was deficient in its

50

particulars. That defence and counterclaim, the subject of
the application, was the fourth defence and counterclaim that
had been filed. During submissions on the application it

appeared that a further draft defence and counterclaim, said

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to address alleged deficiencies in particulars, was in	1
existence.
With the agreement of the parties, directions required that the defendant deliver to the plaintiff the repleaded defence

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and counterclaim within 12 days and within a further 21 days, the plaintiff deliver to the defendant written advice whether there was any objection to any part of a pleading specifying
the part on the bases for the objection. In the event of an

objection which could not be resolved within a further period

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of 21 days, the matter to be listed before the application's Maroochydore. If there was no unresolved objection by the plaintiff, the defendant was to file the repleaded defence and counterclaim forthwith, and the parties, or one or other of

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them, make application to the Court for directions.

On the 10 February 2003, the defendant filed an application for orders that it have leave to file and serve an amended defence and counterclaim within 14 days and that the plaintiff

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pay its costs of and incidental to the application. The
application was returnable on 10 March 2003. What emerged on
the return date was that the defendant had forwarded to the
plaintiff its repleaded defence and counterclaim on or about

14 October 2002, to which the plaintiff maintained a number of

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objections, which were the subject of a lengthy letter form
the plaintiff's solicitor to the defendant's solicitor dated

31 October 2002.

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On 10 March 2003, further submissions were made by both	1
parties regarding the adequacy of the most recent version of the defence and counterclaim and its particulars. It was ordered that further particulars of aspects of the pleading be provided. A time limit was imposed on their provision. Leave

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was given to the defendant to file the further amended defence and counterclaim. It was directed the parties provide written submissions regarding costs orders with respect to the
application returnable 10 March 2003, and the prior

application within 14 days. Those submissions have been

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provided.

The plaintiff has asked for costs of both applications on an indemnity basis. The defendant conceded the plaintiff was entitled to costs of the first application, but only on the

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standard basis. With respect to the costs of the second
application, it submitted the proper order was that costs be

reserved.

It may be useful to set out some of the history leading up to

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the application of 10 December 2001. On 21 May 2001, the
defendant applied to the Court for directions as to the future
conduct of the action and for an order that the plaintiff
provide further and better disclosure in accordance with its

request of 15 November 2000. On 12 June 2001, there was a

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consent order that the plaintiff advise the defendant within
21 days of any objections the plaintiff had to the defendant's
then further amended defence and counterclaim, which was to be

filed that day. Further, that the plaintiff advise the

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defendant within seven days whether the plaintiff proposed to	1
correspondence from the defendant's solicitor, dated 15
provide further and better particulars requested in correspondence within 14 days specifying in detail each

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party's position as to particular paragraphs of the further
amended defence and counterclaim, that is, whether they should
be struck out as disclosing no cause of action or dismissed
because the plaintiff had a defence pursuant to provisions of

the Limitation of Actions Act 1974. Further, that the

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plaintiff advise the defendant within 14 days of any other
issues the plaintiff contended should be dealt with

interlocutory proceedings.

The matter was adjourned until 16 July 2001 and the costs of

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the application reserved. On 16 July 2001, various orders
were made requiring the parties to undertake certain steps and
provide certain advices. Time limits were set and costs of
the appearance reserved. The matter was further adjourned

until 3 September 2001.

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On 3 September 2001, further orders were made that the defendant file and serve any further and better particulars within 14 days, the plaintiff file and serve its reply and answer within 21 days of receipt of the further and better

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particulars or an amended pleading, the plaintiff file any
application it wished to bring within 21 days of the receipt

of the further and better particulars, the matter be further

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reviewed on 9 November 2001, and costs of and incident to the	1
application be reserved.
On 9 November 2001, further orders were made that the plaintiff file and serve its reply within 14 days, that the

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plaintiff file any application in respect of the defendant's filed its application returnable on 10 December 2001, referred
pleading within 14 days to be returnable on 10 December 2001,
and that the matter be further reviewed on 10 December 2001.

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to above.

It was submitted, costs on an indemnity basis were justified. in a rule 444 letter, the plaintiff set out a detailed

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analysis of deficiencies in the defendant's pleading. Some of history of which is set out briefly above.)
those deficiencies were rectified in the course of
correspondence between the parties' solicitors thereafter.

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Moreover, the order of 17 May 2002 ordered the defendant's then current version of the its defence and counterclaim be struck out. Rule 171(2) provides power to order costs be calculated on the indemnity basis when all or part of a

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pleading is struck out. It should be noted that rule 171(1),

however, limits the application of the rule.

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Rule 704 is the general rule dealing with costs on an	1
indemnity basis. Ordinarily, costs are to be assessed on the standard basis, rule 703. The Court, however, may order they be assessed on the indemnity basis, rule 704(1). Rule 704(2) provides instances where costs may be ordered to be assessed

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on the indemnity basis, but does not constrain the general
jurisdiction provided for in rule 704(1).

The plaintiff also relies upon one of the instances provided in rule 704(2). It submitted the defendant is a trustee,

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referring to an affidavit of Graham Wight, a director of the
defendant, filed by leave on 1 August 2001, in which Mr Wight
deposes that the defendant is a trustee for the Bondley Unit

Trust.

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To exercise the jurisdiction to order costs be assessed on the indemnity basis, there must be some sufficient reason justifying departure from the usual (standard) basis for assessment. In Tector v. FAI General Insurance Co 2000, QCA 426, appeal 7391/99, Judgment 8, December 2000, the Court of

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Appeal said that the usual basis should only be departed from where the conduct of the party against whom the order is sought is plainly unreasonable.

The order of 17 May striking out the further amended defence

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and counterclaim was made because of the amendments which had
been made to that point in time resulting in amendments upon
amendments to the pleading, to which yet further amendments

were required. It was considered better to start afresh with

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an adequate pleading. In an attempt to limit further	1
interlocutory disputing, the Court, at the suggestion of the parties, made the further directions set out above. In the result, there has been further interlocutory activity, which has now resulted in orders being made for specific further and

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better particulars. The failure to provide these further
adequate particulars will likely have significant consequences

for the defence and counterclaim and for the defendant.

Not without some hesitation, I would not order costs be

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assessed on the indemnity basis up to this stage, based upon
either or both the rule 444 submission or the striking out
submission. I am not persuaded I should depart from the usual
order for costs. Nor, am I so persuaded because of the

description of the defendant as a trustee of the Bondley Unit

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Trust.

I order the defendant pay the plaintiff's costs of and
incidental to the plaintiff's application filed 6 December

2001. I order the defendant pay the plaintiff's costs of and

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incidental to the defendant's application filed 10 February
2003. This application was brought after the plaintiff had
raised in detail in its solicitor's letter, issues about the
adequacy of the defendant's repleaded pleading. Leave to file

the repleaded defence and counterclaim was ultimately granted,

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but orders were made for further and better particulars of a number of aspects of the pleading, reflecting aspects raised in the plaintiff's solicitor's letter of 31 October 2002.

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JUDGMENT

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