MCG Resources Pty Ltd (In Liquidation) v Greywolf Resources Nl
[2012] QLC 21
•23 May 2012
LAND COURT OF QUEENSLAND
CITATION:MCG Resources Pty Ltd (In Liquidation) v Greywolf Resources NL [2012] QLC 0021
PARTIES:MCG Resources Pty Ltd
ACN 129 717 531
(In Liquidation)
(Applicant)
v.
Greywolf Resources NL
ACN 139 304 911(Respondent)
FILE NO:MRA171-12
DIVISION:General Division
PROCEEDING: Application for costs
DELIVERED ON: 23 May 2012
DELIVERED AT: Brisbane
HEARD ON: By written submissions filed on 8 May 2012
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDER/S:1. That the respondent pay the costs of and incidental to the originating and general applications to the applicant on an indemnity basis.
2.This order, in accordance with s.34(3) of the Land Court Act 2000, is made an order of the Supreme Court and may be enforced in the Supreme Court.
3.The Court orders that the costs are to be assessed by the appropriate assessing officer of the Supreme Court of Queensland (being a person who is a “costs assessor” as that term is defined in Rule 679 of the Uniform Civil Procedure Rules) on the indemnity basis using the Supreme Court scale of costs current at the date of this order.
CATCHWORDS: COSTS – STANDARD OR INDEMNITY BASIS
Land Court Act 2000
Land Court Rules 2000, Rule 34Anderson v AON Risk Services Australia Limited & Anor [2004] QSC 180
Colgate-Palmolive Co & Anor v Cussons Pty Ltd (1993) 46 FCR 225
Di Carlo v Dubois & Ors [2002] QCA 225
Fick v Groves (No. 2) [2010] QSC 182
Keswick Developments Pty Ltd v Keswick Island Pty Ltd & Ors [2009] QSC 59
Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors [2012] QLAC 001
Mentech Resources Pty Ltd v MCG Resources Pty Ltd & Ors [2011] QLAC 0008
Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liquidation) & Ors [2011] QLC 0059
Thiess Pty Ltd v FLSMIDTH Minerals Pty Ltd(No. 2) [2010] QSC 120
Todrell Pty Ltd v Finch (No. 2) [2008] 2 Qd R 95
APPEARANCES: Mr MD Martin, instructed by ClarkeKann Lawyers for the applicant
Mr P Nagle, solicitor, for the respondent
Background and the applications
The applicant filed an originating application in this Court on 5 April 2012 seeking, inter alia, that caveat no. 1040010 lodged by the respondent on 12 February 2012 be removed. The caveat prevented any dealings with Exploration Permit for Coal (EPC) 1044. That permit had been the subject of litigation in this Court and in the Land Appeal Court.[1] In the application, the applicant sought an order that the respondent pay its costs on an indemnity basis. On the same day it filed a general application in the same matter, and seeking the same orders, the general application being returnable on 18 April 2012.
[1] Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors [2012] QLAC 001, in the Land Appeal Court.
Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liquidation) & Ors [2011] QLC 0059, in the Land Court.
The Court process
On 18 April 2012 Mr Daniel Flett, company secretary of the respondent, appeared on its behalf and the applicant was represented by Mr MD Martin of Counsel, instructed by Messrs ClarkeKann Lawyers. Mr Flett requested that the matter be adjourned so that legal advice could be obtained and the Court ordered that the respondent file in Court and serve on the applicant the material upon which it proposed to rely. This was to be accomplished by 4.00pm on 1 May 2012. A Request for Trial Date in accordance with Rule 34 of the Land Court Rules 2000 was ordered to be filed by 1 May 2012 and the matter was listed for review and directions on 2 May 2012. Costs were reserved and the parties were allowed liberty to apply upon giving two business days notice in writing to the other.
When the matter came before the Court on 2 May 2012 Mr Nagle, the respondent’s in-house lawyer, appeared on its behalf and informed the Court that the caveat will be withdrawn. In response to a question from the Court, Mr Nagle stated that he received those instructions at 3.30pm on 1 May 2012 and informed the applicant of them at the same time as he informed the Court, that is when he rose to his feet in Court. Mr Nagle did not accept the assertion made by Counsel for the applicant that the caveat was without merit. He argued that it was unnecessary for the applicant to have Counsel appearing and requested time to make written submissions. He was allowed until 4.00pm on 4 May 2012 to file and serve written submissions,[2] a time period he indicated would be sufficient. The applicant was allowed until 11 May 2012 to reply, should it wish to do so, Mr Martin having already made oral submissions in support of his costs application. The Court made an order for removal of the caveat. That order was made by consent of the parties.
[2] Qui statuit aliquid, parte inaudita altera, aequum licet statuerit, haud aequus est.
The one who decides in any case, without hearing the other side of the question, though he might determine justly, is not therefore just. Seneca.
The day of 4 May passed without the submissions on behalf of the respondent being filed. No request for further time in which to prepare them had been made. On 21 May 2012 the Court received a letter dated 11 May 2012 from the respondent stating that it will not be making any argument in relation to costs.
The legal representatives for the applicant have pointed out that they have not received any submissions on behalf of the respondent and have provided brief written submissions prepared by Mr Martin. The solicitors’ covering letter dated 7 May 2012 to the Court is also addressed to Mr Nagle and includes his e-mail address.
The applicant, as stated in its applications, seeks its costs on an indemnity basis as, it was submitted, it was completely unreasonable for the respondent to lodge this caveat. It submitted that while the discretion to order costs on an indemnity basis is broad there must be something beyond the merits of the case to justify such an order.
The applicant submitted that it must establish unreasonable or irresponsible conduct on behalf of the respondent.[3]
[3] Anderson v AON Risk Services Australia Limited & Anor [2004] QSC 180 per McMurdo J at [2] where His Honour cited Colgate-Palmolive Co & Anor v Cussons Pty Ltd (1993) 46 FCR 225 and Di Carlo v Dubois & Ors [2002] QCA 225 at [37].
Thiess Pty Ltd v FLSMIDTH Minerals Pty Ltd(No. 2) [2010] QSC 120 at [2] and [4] per McMurdo J.
Fick v Groves (No. 2) [2010] QSC 182 per Applegarth J at [3] and [4].
The Law
The principles governing an award of indemnity costs were compendiously stated by His Honour Applegarth J in Fick v Groves[4] as follows:-
[4] Fick v Groves (No. 2) [2010] QSC 182 at [3], [4].
“Principles governing an award of indemnity costs
[3] In Thiess Pty Ltd v FLSMIDTH Minerals Pty Ltd (No. 2),2 McMurdo J cited the leading authorities on the circumstances in which an order for indemnity costs may be justified. Some authorities require unreasonable conduct on the part of a litigant. Chesterman J in Todrell Pty Ltd v Finch (No. 2)3 preferred a criterion of ‘something irresponsible about the conduct of the losing party which exposed its opponent to costs which should, in fairness, be ordered on the indemnity basis’. As McMurdo J observed in Thiess Pty Ltd,4 whether the criterion is that of unreasonableness or irresponsibility, there must be something about the facts and circumstances beyond the demerit of a party’s case, as reflected in the outcome, before such an order is warranted.5
[4] The judgment of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd6 is frequently cited in this context. It is authority for the proposition that the circumstances which may be considered to warrant the exercise of the discretion to award costs on an indemnity basis include:
· the fact that proceedings were commenced or continued in wilful disregard of known facts;
· the making of allegations which ought never to have been made;
· the undue prolongation of a case by groundless contentions;
· evidence of particular misconduct that causes loss of time to the court and to other parties;
· any imprudent refusal of an offer to compromise.
___________________________________________________________________
2 [2010] QSC 120.
3 [2008] 2 Qd R 95 at 96 [4].
4 Supra at [4].
5 See also Anderson v AON Risk Services Australia Ltd [2004] QSC 180 at [2].
6 (1993) 46 FCR 225.”
In that case His Honour found that the plaintiffs persisted in proceedings without a proper foundation, failed to accept a reasonable offer of compromise and failed to disclose an important valuation that would have revealed their claim for substantial damages to be flawed. Persisting with an inflated and flawed case generated substantial costs for the defendant.[5] His Honour concluded that the defendants should be awarded indemnity costs from a date after which the plaintiffs ought to have discontinued their case.
[5] Ibid [37], [38].
In Keswick Developments Pty Ltd v Keswick Island Pty Ltd & Ors,[6] His Honour McMeekin J ordered that the respondents pay the applicant’s costs in relation to an application, including the costs of Brisbane Counsel in the matter, which was heard in Mackay, on the indemnity basis. In that case the Counsel who appeared had been briefed in several other matters involving the parties, a situation comparable to that in the present case where Counsel for the applicant appeared in the previous proceedings concerning EPC1044.
[6] [2009] QSC 59.
The present respondent was not a party to the earlier proceedings involving the same permit and a caveat forbidding the registration of dealings over it, but the caveator in the earlier case is a wholly owned subsidiary of the respondent. That caveat was ordered to be removed after proceedings in this Court.[7]
[7] MCG Resources Pty Ltd (In Liquidation) v Mentech Resources Pty Ltd [2011] QLC 0059.
The alleged caveatable interest in the present case is the same interest as was claimed by the respondent’s subsidiary company in the previous litigation, in which it was unsuccessful. It was argued on behalf of the applicant that the respondent cannot now reasonably make the same claim in order to support a fresh caveat relating to the same permit. The evidence in the earlier case was that money had been paid by Mentech Resources Pty Ltd (Mentech) whereas in support of the new caveat it is contended that the same money was paid by the respondent. Only one of these claims can be true.
It was pointed out on behalf of the applicant that Mentech applied for and obtained a stay of the Land Court’s order that its caveat be removed pending its, unsuccessful, appeal to the Land Appeal Court.[8] Mentech has now applied for leave to appeal to the Court of Appeal but has not applied for a stay pending the hearing of that application. Mr Nagle stated that those proceedings may not be going to continue.
[8] Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liquidation) & Ors [2011] QLAC 0008.
It was submitted that the respondent’s caveat, in the circumstances, constitutes an abuse and it ought to have sought a stay from the Court of Appeal. The baselessness of the caveat is made plain by the fact that the respondent claims the same interest as its subsidiary claimed in the earlier proceedings.
I accept these submissions and find that the caveat could not have been properly lodged as the basis claimed for it was not sustainable. In addition, it was not a proper means to employ if the purpose was to secure the efficacy of an appeal to the Court of Appeal. There are two bases for this. Firstly, the proper means was to seek an order from the Court of Appeal and secondly, the caveator/respondent was not the correct party.
The respondent has lodged a caveat which had no prospects of being able to be successfully defended and on a basis in clear conflict with the claims made by its subsidiary Mentech.
In view of the on-going litigation involving this permit it was reasonable for the applicant to be represented by the Counsel who had been representing it in that litigation.
The respondent has not complied with this Court’s order made on 18 April 2012 to file its material by 1 May 2012 and did not inform the applicant of the intention to withdraw the caveat until it did so in Court. The applicant had a sound basis to be represented by Counsel on 2 May 2012 as it had no knowledge until then that the caveat was proposed to be withdrawn. I do not accept Mr Nagle's submission that the lawyers who appeared for the applicant should be put to proof that they held proper instructions to do so. No authority was provided in support of that concept.
Taking into account all of the circumstances in this case I am satisfied that an order for indemnity costs is justified. It was unreasonable and irresponsible for the caveat to be lodged by the respondent and I am satisfied that it did so in wilful disregard of known facts, namely that it was claiming an interest previously claimed by Mentech. The applicant ought to be indemnified for its costs of and incidental to these proceedings. This is not a case where lodging a caveat was unsuccessful but rather a case where a caveat was improperly lodged.
Orders
1.That the respondent pay the costs of and incidental to the originating and general applications to the applicant on an indemnity basis.
2.This order, in accordance with s.34(3) of the Land Court Act 2000, is made an order of the Supreme Court and may be enforced in the Supreme Court.
3.The Court orders that the costs are to be assessed by the appropriate assessing officer of the Supreme Court of Queensland (being a person who is a “costs assessor” as that term is defined in Rule 679 of the Uniform Civil Procedure Rules) on the indemnity basis using the Supreme Court scale of costs current at the date of this order.
WA ISDALE
MEMBER OF THE LAND COURT
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