Mamap Pty Ltd v Sharpe

[2014] QDC 99

[2014] QDC 99

DISTRICT COURT OF QUEENSLAND

CIVIL JURISDICTION

JUDGE BAULCH SC

No. 3 of 2013

MAMAP PROPRIETARY LIMITED and
ANOTHER  Plaintiffs 

and

WILLIAM BENJAMIN SHARPE  Defendant

TOWNSVILLE

11.41 AM, TUESDAY, 15 APRIL 2014

JUDGMENT

HIS HONOUR:   On the 12^th of August 2011 the plaintiffs commenced an action against the defendant claiming $112,247.50 alleged to be owing pursuant to an agreement made under section 134 of the Properties Agents and Motor Dealers Act 2000.  Since that time, there have been no fewer than seven versions of the statement of claim and four versions of the defence. 

On the 28^th of November 2013, Judge Durward SC made an order by consent setting the matter down for trial and giving some further directions about amended pleadings.  It appears those further directions have been complied with, but the matter has not yet been assigned a trial date.  I was told that the matter was mentioned again before Judge Durward in February of this year. 

On the 24^th of March this year, the defendant’s solicitor delivered a costs statement to the plaintiff’s solicitors.  This was not done pursuant to any costs order made in the court, but in reliance upon an interpretation of Uniform Civil Procedure Rules 692 and 686.  Rule 692 provides as follows:

This rule does not apply to a party who amends a document because of another party’s amendment or default.

And then by subparagraph (2):

A party who amends a document must pay the costs thrown away by the amendment unless the Court otherwise orders. 

Rule 686 provides, relevantly, that costs may be assessed without an order for assessment having been made if under the rules a party must pay another party’s costs.  The defendant contended that the combined effect of those rules is that the party receiving an amended pleading can deliver a costs statement at any time after receiving the pleading without the need for any other order or preliminary step.  Not surprisingly, from my point of view, no authority is cited in support of that proposition, however, the defendant asserts that it is consistent with the ordinary meaning of those words in the rules.

It seems to me that the argument is misconceived for the following reasons. 

Chapter 17A provides that a party to a proceeding cannot recover any costs of the proceeding from another party other than under these rules or an order of the Court:  see rule 680.  The general rule is that costs follow the event:  see rule 681.  The relevant part of rule 686 provides that when a party must pay another party’s costs those costs might be assessed without an order for assessment having been made. 

It seems to me that absent any other order the appropriate time for costs to be considered is when the outcome of the case is known.  It is very common that all costs issues are dealt with when the event on which the award of costs will be based is known.  To treat rule 692 as giving a right of the sort of contended for would mean a costs statement could be delivered immediately upon the receipt of an amended and

could result in the repeated delivery of such statements and assessments of costs on the basis of them adding greatly to the cost of the litigation.

A reading of chapter 17A demonstrates that the words “unless the Court orders otherwise” preserves the Court’s power to deal with costs subject to the existence of a specified default position.  In that regard, see rules 693, 695, 696, 697 and 698. 

To read the rules in the way contended for the defendant in this case would deprive the party making the amendment of the opportunity to advance any submission as to why the Court should order otherwise.  That is so because the matters which might be relied upon to persuade a Court to order otherwise would often not be known until the outcome of the litigation was known.

Finally, it is my view that the natural meaning of the words “unless the Court otherwise orders” is only consistent with the entitlement referred to being one that is conditional in the sense that it states the default position which is subject to any order made subsequently during or at the conclusion of the proceeding. 

The defendant asserts that it is for the amending party to make an application to the Court for an order and that, absent such an application, the delivery of the amended pleading entitles the party affected by it to immediately embark on the exercise of assessing costs.  That is a proposition which is not only novel, but, as I’ve said, would add greatly to the costs of litigation and be entirely contrary to the spirit of the rules and, in particular, to rule 5.  The defendant’s application is, in my view, contrary to established practice, unsupported by authority or commonsense and cannot sit comfortably with the natural meaning of the whole of chapter 17A of the rules.

There was a good deal of correspondence between the parties, some of it somewhat acrimonious, in which the difficulty facing the defendant was pointed out.  It should have been obvious for the defendant that the position was unmeritorious in the extreme and that it was unlikely that he would succeed.  Nonetheless, he pressed ahead aggressively asserting the propositions that I have set out above.

The plaintiff seeks to have the costs of the application and to have those costs assessed on the indemnity basis. As is clear from Colgate‑Palmolive v Cussons 118 ALR 248 at 255 to 257, the categories of case in which indemnity costs might be appropriate are not closed. It is not necessary that the action or application had been commenced or continued for some ulterior motive or in wilful disregard of known facts or established law. The discretion will be enlivened where a party persists in what should on a proper consideration have been seen to be a hopeless case. Because the ordinary position is that costs are awarded on a party and party basis or the standard [indistinct] now, and because that has been the settled practice for centuries, Courts should not usually make an order for payment of costs on a basis other than that basis and special circumstances ought be shown to exist. The circumstances of the case must be such as to warrant a Court in departing from the usual course. There should be some special or unusual feature of the case to justify the Court departing from ordinary practice. There are many categories of case which

might justify the making of such an order.  The question will always be whether the particular facts and circumstances of the particular case warrant the making of an order for payment of costs other than on the party and party or standard basis.

The defendant in this case asserts that the plaintiffs were put on notice that costs would be sought.  The correspondence relied upon was a letter addressed to the plaintiff’s solicitors dated the 25^th of June 2013, which letter concluded with this sentence:

We put you on notice that our client will be seeking the costs of and caused by the amendments pursuant to rule 692 of the Uniform Civil Procedure Rules.

The matter of costs was not the subject of any other correspondence until almost eight months later when the costs statement was served under cover of a letter dated the 24^th of March 2014.  The costs statement was delivered without explanation and, it seems to me, inconsistently with the indication in the correspondence that costs caused by the amendment would be sought.  I would imply, as I think most practitioners would, that that meant by order of the Court. 

The matter had been before Judge Durward S C on two occasions for directions when the matter of costs could have been addressed in the way forecast in that letter.  That would have given the plaintiffs the opportunity to demonstrate why the Court should order otherwise, or to seek to have consideration of the question of costs deferred until the outcome of the litigation was known.  Such an approach would have accorded with ordinary and usual practice. 

The correspondence which passed between the parties following the delivery of the costs statement should have alerted the defendant to the following matters:  first, that the delivery of the costs statement in the way in which it had done was without precedent;  second, the delivery of the costs statement in the way it had done was premature;  third, that the defendant did not have a present entitlement to costs;  and, fourth, that to proceed in that way was to deprive the plaintiffs of an opportunity to contest the matter.

In my opinion, a proper consideration of the rules would have resulted in the costs statement not being delivered.  Whether or not that is right, reflection on the correspondence against the background of the rules should have led the defendant to abandon reliance upon the costs statement and I propose to award costs on the indemnity basis.

There were two draft orders provided to me.  It seems that both of them have orders that are, perhaps, unnecessary.  I’m inclined to the view that the only order that it’s necessary for me to make is that the costs statement served by the defendant’s solicitor on the plaintiff’s solicitor on the 24^th of March 2014 be struck out and that the defendant respondent pay the plaintiff applicants’ costs of and incidental to the application on the indemnity basis.

Is there any other order sought?

MS HILLARD:   No, your Honour.  Although I was wondering if your Honour could clarify.  I thought – forgive me, the line may have been a little unclear.  I thought your Honour had said, just to be clear, that the submission that I had sent through has not influenced your Honour’s decision at all.

HIS HONOUR:   That’s what I said and I disregarded it for the purpose of giving this decision, that the decision that I have read to you was read from notes that I prepared last night.

MS HILLARD:   Thank you, your Honour.

HIS HONOUR:   Yes.  Thank you.  There’s no other order required?

MR DICKSON:   No.  Thank you, your Honour.

HIS HONOUR:   Then you can terminate the connection, thank you.

MS HILLARD:   Thank you, your Honour.

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