Ligon Sixty-Three Pty Ltd v ClarkeKann (No 2)

[2015] QSC 274

SUPREME COURT OF QUEENSLAND

CITATION:

Ligon Sixty-Three Pty Ltd v ClarkeKann & Ors (No 2)  [2015] QSC 274

PARTIES:

LIGON SIXTY-THREE PTY LTD
ACN 002 954 065

(plaintiff/applicant)

v
CLARKEKANN

(defendant/first respondent)
BEAZLEY SINGLETON LAWYERS
(second respondent)
HAMILTON ISLAND ENTERPRISES LIMITED
(third respondent)

FILE NO:

SC No 7108 of 2013

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

23 September 2015

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGE:

Philip McMurdo J

ORDERS:

1.   The defendant pay the plaintiff’s costs of the plaintiff’s application to strike out parts of the amended defence.

2.   The plaintiff pay to Beazley Singleton Lawyers its costs of the plaintiff’s application to join it as a defendant, to be assessed upon the standard basis.

3.   The plaintiff pay to Hamilton Island Enterprises Ltd its costs of the plaintiff’s application to join it as a defendant, to be assessed upon the standard basis.

CATCHWORDS:

PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – question of the costs of an interlocutory application to join two parties as defendants or alternatively to have that part of the defence pleading proportionate liability of the proposed defendants struck out – where the joinder was refused and the relevant parts of the defence were struck out – where the defendant was ordered to pay the plaintiff’s costs of its application to strike out parts of the defence – where the proposed defendants argued the plaintiff should pay their costs of the applications for joinder on the indemnity basis – where the plaintiff pursued the joinder applications in case the defendant’s case about the proposed defendants’ proportionate liability succeeded and there was no suggestion of impropriety – where the plaintiff’s rejection of offers of compromise by the proposed defendants was not so unreasonable as to warrant an award of indemnity costs – where the plaintiff argued defendant should pay the proposed defendants’ costs because the defendant’s plea of concurrent wrongdoing compelled the plaintiff to apply for joinder – where the plaintiff was able to make its own assessment of its joinder applications and was ordered to pay the proposed defendants’ costs upon the standard basis

Ligon Sixty-Three Pty Ltd v ClarkeKann & Ors [2015] QSC 153, cited
Roberts v Prendergast[2013] QCA 89, cited

Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53, cited

COUNSEL:

R J Anderson for the plaintiff/applicant

P K O’Higgins for the defendant/first respondent
T Pincus for the second respondent

G Sheahan for the third respondent

SOLICITORS:

Bennett & Philp Lawyers for the plaintiff/applicant

Bartley Cohen for the defendant/first respondent
K&L Gates for the second respondent

Gadens for the third respondent

1. In this proceeding the defendant pleaded that it was a concurrent wrongdoer for the purpose of the proportionate liability provisions of the Civil Liability Act 2003 (Qld), the other concurrent wrongdoers being Beazley Singleton Lawyers (Beazley Singleton) and Hamilton Island Enterprises Limited (HIE). Prompted by that plea, the plaintiff sought to join Beazley Singleton and HIE as defendants. Each opposed the joinder, upon the basis that the case against it was bound to fail. The plaintiff’s alternative position was that if Beazley Singleton and HIE were correct, that part of the defence of the present defendant which pleaded the proportionate liability provisions should be struck out.

2. In an earlier judgment[1], I refused the joinder of Beazley Singleton and HIE and struck out the relevant parts of the present Defence.  This judgment deals with the costs of those interlocutory applications. 

   [1]     Ligon Sixty-Three Pty Ltd v ClarkeKann & Ors [2015] QSC 153.

3. The plaintiff seeks an order that the defendant pay its costs of the plaintiff’s application to strike out the relevant parts of the Defence.  Understandably, the defendant does not resist such an order being made.

4. Beazley Singleton and HIE submit that the plaintiff should pay their costs of the applications to join them.  It is apparently conceded by the plaintiff that, as the successful parties in those applications, they should have their costs.  However, Beazley Singleton and HIE seek those costs upon the indemnity basis, which the plaintiff resists. 

5. Each of these proposed defendants, upon being served with the application for its joinder, offered to compromise that application by an order that the application be dismissed with no order as to costs.  Beazley Singleton made its offer on 2 December 2014.  HIE made its offer on 8 December 2014.  The applications had a first return date of 9 December 2014.  The applications were ultimately set down for hearing in the Civil List.  It may be said that these offers involved a real compromise in that some costs must have been incurred by the offerors which they were willing to forego.[2]  But a further relevant circumstance, which is in favour of the plaintiff, is that the costs which the proposed defendants were offering to forego must have been relatively small at that very early stage of the applications against them. 

   [2]     See e.g. Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 [125]-[146].

6. The starting point is that costs should be assessed on the standard basis unless there is some good reason for an assessment upon the indemnity basis.  The fact that the outcome for a party is better than that which was proposed by its offer of compromise does not require a conclusion that costs be assessed on the indemnity basis.  Rather the relevance of such an offer is that in the circumstances of a particular case, it might result in the unsuccessful party’s continued conduct of the litigation being characterised as so unreasonable as to warrant indemnity costs.[3]  The plaintiff’s applications against Beazley Singleton and HIE each failed because, as a matter of law, the proposed claim against it was bound to fail.   That legal position was, in each case, the result of established case law.  Those circumstances support the arguments for indemnity costs.  However there is also the circumstance that the plaintiff was prompted to make these applications by the defendant’s plea of concurrent wrongdoing.  Its applications to join these parties as defendants has an obvious explanation which excludes any suggestion of impropriety on the part of the plaintiff.  The joinder applications were pursued out of an abundance of caution, in case the defendant’s case about proportionate liability was successful.  That was an incorrect forensic decision.  But I am not persuaded that the plaintiff’s rejection of these offers was so unreasonable as to warrant, in either case, an award of indemnity costs.

   [3]     Roberts v Prendergast [2013] QCA 89.

7. The plaintiff then seeks to shift to the defendant the burden of the costs which the plaintiff must pay Beazley Singleton and HIE.  It argues that it was, in a practical sense, compelled to apply to join them because of the defendant’s plea of concurrent wrongdoing.  As I have held, that explanation for the joinder applications is relevant in considering the reasonableness or otherwise of the plaintiff’s pursuing those applications.  But it is another thing to say that the plaintiff was effectively bound to do so.  The plaintiff made its own decision as to the relative merit of the defendant’s plea of concurrent wrongdoing.  The defendant argues that as this was the choice of the plaintiff, it is the plaintiff which should bear the costs of that forensic decision.

8. The defendant did not seek to defend the merits of its plea (except in relation to a distinct question of whether Beazley Singleton, if immune from suit by the plaintiff, was nevertheless a concurrent wrongdoer for the purpose of reducing the defendant’s liability).  Nevertheless, the primary responsibility for the costs which resulted from the unsuccessful joinder applications must lie with the plaintiff as the applicant.  The outcome of those applications was going to turn on questions of law rather than matters of fact.  In other words the plaintiff was able to make its own assessment of the merits of its joinder applications.  I am not persuaded that the defendant should bear the costs of the plaintiff’s applications to join these parties. 

9. Therefore the orders will be:

   (1)The defendant pay the plaintiff’s costs of the plaintiff’s application to strike out parts of the amended defence.

   (2)The plaintiff pay to Beazley Singleton Lawyers its costs of the plaintiff’s application to join it as a defendant, to be assessed upon the standard basis.

   (3)The plaintiff pay to Hamilton Island Enterprises Ltd its costs of the plaintiff’s application to join it as a defendant, to be assessed upon the standard basis.