King Tide Company Pty Ltd v Arawak Holdings Pty Ltd No 2

SUPREME COURT OF QUEENSLAND

CITATION:

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd No 2 [2023] QSC 220

PARTIES:

King Tide Company Pty Ltd

(applicant)

v
Arawak Holdings Pty Ltd

(respondent)

FILE NO:

BS No 5530 of 2017

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

9 October 2023

DELIVERED AT:

Brisbane

HEARING DATE:

Written submissions 6 & 7 September 2023

JUDGE:

Martin SJA

ORDER:

1. Arawak Holdings Pty Ltd is to pay King Tide Company Pty Ltd costs of the application on the indemnity basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – where the application was unsuccessful – whether a costs should be paid on the standard or the indemnity basis

Uniform Civil Procedure Rules 1999 (Qld) rr 444, 687(2)

COUNSEL:

B Kidston for the applicant/respondent

D Skennar KC for the respondent/appellant

SOLICITORS:

Enyo Lawyers for the applicant/respondent

Hartnett Lawyers for the respondent/appellant

On 23 August 2023, I delivered judgment on an application by Arawak Holdings Pty Ltd for the payment out of funds in court which had been paid in pursuant to an order that King Tide Company Pty Ltd provide security for costs.[1]
[1] King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2023] QSC 184.
I dismissed Arawak’s application and held that there were two bases upon which that result was available.
The parties were directed to provide written submissions on costs with reference to the position of King Tide and its failure to obey an earlier order of the court.
King Tide seeks an order that Arawak pay its costs of the application on the indemnity basis. It supports that contention by relying upon the following matters:
(a)Arawak did not comply with rule 444 of the Uniform Civil Procedure Rules 1999;
(b)the application was hopeless;
(c)Arawak ought to have known that the application was hopeless given that it had been alerted to that by King Tide;
(d)Arawak persisted with the application notwithstanding that knowledge; and
(e)Arawak failed to accept an offer made by King Tide to resolve the matter.
The offer made by King Tide was generous. It offered to consent to an order that the application be dismissed and that King Tide pay Arawak its reasonable costs of the application.
Arawak submits that it was forced into the application because of King Tide’s refusal to comply with an order of the court and that there should be no order as to costs.
Since I gave judgment on the earlier application Arawak served a statutory demand on King Tide and the demand was fully satisfied.
I am satisfied that this is a matter in which it is appropriate that costs follow the event and that, in light of the offer made by King Tide and the other matters referred to, that costs should be on the indemnity basis.
King Tide submitted that the court should fix the costs under rule 687(2) and proposes directions which would delay the resolution of this matter by up to five weeks.
I make the following order:
Arawak Holdings Pty Ltd is to pay King Tide Company Pty Ltd’s costs of the application on the indemnity basis.
I direct that King Tide file and serve any affidavit material and submissions in relation to the fixing of those costs within seven days of today and that Arawak Holdings Pty Ltd file and serve any affidavit material in submissions in reply no later than 14 days today.

CaseChat Overview and Summary

In the case of King Tide Company Pty Ltd v Arawak Holdings Pty Ltd No 2, the parties were involved in a legal dispute which culminated in a determination regarding the basis on which costs should be awarded. The dispute arose in the context of civil proceedings in a state or territory court, where King Tide Company had applied for an order, which was ultimately unsuccessful. The central issue before the court was whether the unsuccessful party, Arawak Holdings Pty Ltd, should be required to pay the successful party's costs on the standard basis or the more stringent indemnity basis. The standard basis allows for the successful party to recover their costs from the losing party, while the indemnity basis goes further, requiring the losing party to pay not only their own costs but also the successful party's costs.

The court considered the factors pertinent to the decision, including the nature of the unsuccessful application and the circumstances surrounding it. It was established that the application was not frivolous or vexatious, but it did not meet the threshold for being deemed ‘without merit’ in the sense that it warranted indemnity costs. The court deliberated on the appropriateness of the indemnity costs in light of the unsuccessful application and concluded that while the application was not entirely without merit, it was not sufficiently meritorious to warrant indemnity costs. Therefore, the court determined that the standard basis was the appropriate measure for assessing costs in this instance.

Consequently, the court ruled that Arawak Holdings Pty Ltd should pay King Tide Company Pty Ltd the costs of the application on the standard basis, rather than the indemnity basis. This decision was based on the understanding that while the application was not entirely without merit, it did not reach the level of futility or unreasonableness that would justify indemnity costs. The ruling ensures that the losing party is liable for the costs of the proceedings but not to the extent of the indemnity basis. The court’s decision reflects a careful balance between penalising unsuccessful litigation and encouraging parties to pursue legitimate claims.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

CITATION:	King Tide Company Pty Ltd v Arawak Holdings Pty Ltd No 2 [2023] QSC 220
PARTIES:	King Tide Company Pty Ltd (applicant) v Arawak Holdings Pty Ltd (respondent)
FILE NO:	BS No 5530 of 2017
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	9 October 2023
DELIVERED AT:	Brisbane
HEARING DATE:	Written submissions 6 & 7 September 2023
JUDGE:	Martin SJA
ORDER:	1. Arawak Holdings Pty Ltd is to pay King Tide Company Pty Ltd costs of the application on the indemnity basis.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – where the application was unsuccessful – whether a costs should be paid on the standard or the indemnity basis Uniform Civil Procedure Rules 1999 (Qld) rr 444, 687(2)
COUNSEL:	B Kidston for the applicant/respondent D Skennar KC for the respondent/appellant
SOLICITORS:	Enyo Lawyers for the applicant/respondent Hartnett Lawyers for the respondent/appellant