MVO Industries Pty Ltd v Towers

[2002] QSC 414

SUPREME COURT OF QUEENSLAND

CITATION:

MVO Industries Pty Ltd v Towers & Ors [2002] QSC 414

PARTIES:

MVO INDUSTRIES PTY LTD
(Plaintiff)

PETER JOHN TOWERS, DAVID JOHN HART and ROBERTO TARDIANI
(Defendants)

AMP GENERAL INSURANCE LIMITED
(Third Party)

FILE NO/S:

S114 of 1996

DIVISION:

Trial

PROCEEDING:

Orders relating to costs

ORIGINATING COURT:

Supreme Court, Townsville

DELIVERED ON:

7 November 2002

DELIVERED AT:

Cairns

HEARING DATE:

12 September 2002

JUDGE:

Jones J

ORDER:

1.   In respect of the respective applications of the defendants, the defendants pay the plaintiff’s costs of defending the applications as though they were combined as one application such costs to be assessed on a standard basis

2.   In respect of the application by the third party, the costs of and incidental to the application will be costs in the cause on the third party proceedings.

CATCHWORDS:

COUNSEL:

SOLICITORS:

1. Each of the respective applications made respectively by the second and third defendants, by the first defendant and by the third party were unsuccessful.  The plaintiff now seeks costs against the defendants on their respective applications and the second and third defendants seek costs against the third party.

1. The respective applications of the defendants failed because I found there was a genuine conflict in the factual circumstances which might give rise to liability such that I could not be affirmatively satisfied that the plaintiff had no real prospects of success.

1. This was not the first occasion that the Court had had to deal with the issues between these litigants.  On 3 February 2000 the second and third defendants joined with the first defendant to make an application for summary judgment. At that time the defendants’ pleading did not include an allegation that the first defendant, in his dealings with the plaintiff, was acting in his own right.  The essence of the application related to the liability of the defendants given that sequestration orders had been made against their estates because of their bankruptcy.  The defendants were unsuccessful in their application. 

1. On 17 April 2000 the second and third defendants joined with the first defendant in an application to strike out the plaintiff’s Statement of Claim.  That application was also unsuccessful and costs were ordered to be the parties’ costs in the cause.

1. Since then the first defendant has altered his position by amending his defence to admit that he was at all material times acting on his own behalf and not as a principal of the accountancy firm.  Whilst that represented a change for the defendants, the plaintiff’s pleaded position has never changed.  The defendants were, or ought to have been, aware that they were confronting the factual issues which arose from the plaintiff maintaining the stance that it always had, namely, that at the relevant time it was dealing with the accountancy firm.  The resolution of those factual issues could only be resolved upon trial.

1. The defendants point to the fact that the affidavit of Kevin O’Keefe, filed on behalf of the plaintiff, was only delivered on the morning of the application and until that time there was no evidence upon which the plaintiff’s contentions were based. Even without this evidence, in bringing this application, the second and third defendants were aware that they carried the onus of persuading the Court that the plaintiff had no real prospects of success.  The evidence which they led in support of their arguments was not so compelling as to defeat the plaintiff’s stated position.

1. It has been decided in a number of cases that even though an application for summary judgment is unsuccessful, if it is found to have been properly brought costs will be costs in the cause or reserved.  In this case, however, having regard to constancy of the plaintiff’s position and the fact that the conflict between that position and what the defendants contend were the circumstances, it seems to me that the applications were bound to fail.  In those circumstances the plaintiff/respondent is entitled to its costs in defending the respective applications of the second and third defendants and of the first defendant.  The plaintiff’s costs should be assessed on the basis of defending one application and each defendant should be jointly and severally liable for the payment of those costs.

1. The question of costs between the second and third defendants and the third party raises different considerations.

1. The third party brought its application for summary judgment against the second and third defendants on the basis that they were entitled to be heard on the issue raised in the second and third defendants’ application against the plaintiff.  In so contending the third party relies upon Rule 192(c) and Rule 203 of the UCPR.  The latter rule relevantly provides:-

“(2) At the trial, the issues between the defendant who included the third party and the third party must be tried concurrently with the issues between the plaintiff and the defendant, unless the Court otherwise orders.”

The obvious point to be made is that the application brought by the second and third defendants against the plaintiff was not a trial.  It permitted only two consequences - either that judgment would be entered against the plaintiff, in which event the third party proceedings would come to an end or, that the application would be unsuccessful, in which event the position of the third party would remain unchanged.  That being the case, it was unnecessary for the third party either to be represented in the second and third defendants’ application, nor was it necessary in my view for it to bring an application in its own right.

1. In opposing the third party’s application for costs against them the second and third defendants refer to an email transmission to the third party’s solicitors of 3 September 2002 in which they offered to engage in discussions as to the future conduct of the third party proceedings if their application was successful.  In those circumstances it seems to me that the third party is not entitled to the costs of its application rather, that the costs should become costs in the cause in the third party proceedings.

Orders

1. The orders of the Court are:-

1.          In respect of the respective applications of the defendants, the defendants pay the plaintiff’s costs of defending the applications as though they were combined as one application such costs to be assessed on a standard basis.

2.          In respect of the application by the third party, the costs of and incidental to the application will be costs in the cause on the third party proceedings.