Milner v Conetip P/L

[2001] QSC 472

SUPREME COURT OF QUEENSLAND

CITATION:

Milner & Anor v Conetip P/L & Anor [2001] QSC 472

PARTIES:

BRUCE POUNTNEY MILNER
(first plaintiff)
ALAN RICHARD TAYLOR
(second plaintiff)
v
CONETIP PTY LTD (ACN 062 625 469)
(first defendant)
PALM SPRINGS VILLAGE PTY LTD (RECEIVER and
MANAGER APPOINTED) (ACN 010 721 445)
(second defendant)

FILE NO:

S4527 of 2000

DIVISION:

Trial Division

DELIVERED ON:

13 December 2001

DELIVERED AT:

Brisbane

HEARING DATE:

20 November 2001

JUDGE:

Chesterman J

ORDER:

The application to alter the costs order made on 20 November 2001 is refused

The plaintiffs are to pay the first defendant’s costs of responding to their application for indemnity costs, to be assessed on the standard basis

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – where successful plaintiff seek costs on an indemnity basis – whether sufficient evidence to support application

COUNSEL:

Dr D Smith and with him Mr A Cooper for the plaintiffs
Mr D Andrews SC for the first defendant

SOLICITORS:

John M O’Connor & Company for the plaintiffs
Barry Nilsson as town agents for Nash O’Neil Tomko for the first defendant

1. CHESTERMAN J:  I gave judgment in this matter on 20 November last.  Because of inefficiencies in the offices of the plaintiffs’ solicitors the plaintiffs were unrepresented when judgment was pronounced.  Senior counsel who appeared for the first defendant sought the costs of an interlocutory application which I had reserved but otherwise conceded that the plaintiffs should have their costs of the proceedings assessed on the standard basis.

The plaintiffs’ absence was an oversight.  No disrespect to the court was intended and a suitable apology has been proffered.   The plaintiffs did, however, wish to seek a different order for costs and on 30 November 2001 sought by way of written submissions an order for costs assessed on the indemnity basis. 

1. The submission appears to rest on four separate grounds: 

(i) the power of a court to fix receivers’ remuneration pursuant to s 425 of the Corporations Act 2001;

(ii)       the court’s power to fix receivers’ remuneration pursuant to UCPR 269;

(iii)      the right of the plaintiffs to be indemnified against costs pursuant to the mortgages and deeds of indemnity;

(iv)       the first defendant’s misconduct of its part of the litigation which was said to have prolonged it.

1. The first defendant objects to the first two grounds advanced in support of the orders sought  by the plaintiffs.  It points out that the plaintiffs are, in effect, making substantive applications by way of written submissions after judgment has been given in the proceeding.  I accept the submission.  If the plaintiffs wish to make an application pursuant to the Corporations Act or the Rules it should do so in the conventional manner.  It must be doubted whether an application to have the court fix receivers’ remuneration is apposite when what is wanted is an order for indemnity costs of an action in which the court has already determined the quantum of remuneration.  Moreover the first defendant may be right in its submission that an Anshun estoppel would prevent the plaintiffs now advancing a different basis on which their remuneration might have been fixed. 

1. The third ground is misconceived.  The plaintiffs in recovering fees owed to them for performing the receivership were not exercising powers vested in them for the purpose of the receivership.  Their right to a complete indemnity for costs incurred in connection with the receivership is a right with respect to costs or other liabilities which a receiver must pay in the course of, or arising out of, the receivership.  They are costs incurred to obtain a benefit for the creditor.  The costs in question in this application are those incurred by the receivers for their own personal benefit.  The securities do not confer any right to indemnity costs in that situation. 

1. The first defendant’s misconduct is said to lie in pleading complicated but untenable defences and counterclaims which were abandoned just before or during the trial with a consequent waste in the costs of preparation.   It is submitted that an allegation of waste made against the plaintiffs must have been fabricated. 

The difficulty with this ground for seeking indemnity costs is that there was no investigation at the trial of the facts which might support it.  The first defendant protests that it should not be penalised for reducing the number of issues contested in the trial, and that a realistic assessment of what points it should fight should not be construed against it as an admission that other points pleaded but not persisted in were known to be unmeritorious from their inception.

There may be some substance in this submission.  On the other hand it may be right that the pleading of allegations not persisted in was vexatious.  I do not know.  These points were not explored.  Certainly the abandonment of one defence followed a late amendment to the statement of claim which proposed an alternative basis for a significant part of the remuneration sought by the plaintiffs.  It would be wrong to conclude that the abandonment of that defence was evidence of bad faith. 

1. The court is reluctant to order indemnity costs.  They will do so only in clear cases.  There is insufficient evidence that this is such a case. 

1. Accordingly I decline to alter the costs order made on 20 November 2001.  The plaintiffs should pay the first defendant’s costs of responding to their application for indemnity costs.  The first defendant’s cost of responding to that claim should be assessed on the standard basis.