Pace Line Pty Ltd v Gobblygook Pty Ltd

[2019] QDC 138

DISTRICT COURT OF QUEENSLAND

CITATION:

Pace Line Pty Ltd v Gobblygook Pty Ltd [2019] QDC 138

PARTIES:

PACE LINE PTY LTD (ACN 613 226 556) as trustee for THE GRACE TRUST
(plaintiff)
v
GOBBLYGOOK PTY LTD as trustee for ACN 134 149 894
(defendant)

FILE NO:

D14/18

DIVISION:

Civil

PROCEEDING:

Application

DELIVERED ON:

9 August 2019

DELIVERED AT:

Maroochydore

HEARING DATE:

31 May 2019; written submissions received 7 June 2019 and 13 June 2019.

JUDGE:

Cash QC DCJ

ORDERS:

The applicant pay the respondents’ costs of the application to be assessed on the indemnity basis.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – APPLICATION FOR COSTS ON AN INDEMNITY BASIS – where applicant unsuccessfully applied to join defendants to a claim – whether circumstances exist to allow costs on the indemnity basis –whether the application was brought for an ulterior purpose – whether the application was brought in wilful disregard of known facts or clearly established law – whether other discretionary grounds exist to justify indemnity costs.

Uniform Civil Procedure Rules 1999 (Qld) rr 211, 444, 681, 701, 703

Colgate Palmolive v Cussons (1993) 46 FCR 225; 118 ALR 248; [1993] FCA 801 at [24]
Cosgrove v Johns [2000] QCA 157 at [8]-[9]
Di Carlo v Dubois [2002] QCA 225 at [37]-[38]
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants and Others (1988) 81 ALR 397 at 401
Re SCA Properties Pty Ltd (1999) 17 ACLC 1611; [1999] QSC 180 at [70]

COUNSEL:

K Eames (Solicitor) for the applicant
R D Green for the respondents

SOLICITORS:

Gold Law Hervey Bay for the applicant
McDuff and Guilfoyle Lawyers for the respondents

1. The applicant is the plaintiff in a claim made against Gobblygook Pty Ltd (“the defendant”). Mr Eames, who appeared for the applicant, is the director and shareholder of the applicant. In the claim the applicant seeks declarations and consequential orders which would have the effect of obliging the defendant to pay the applicant money. The claim arises from business arrangements between the applicant and defendant concerning a legal practice. The applicant made an application to join two further defendants, John Kelvin McDuff and McDuff and Guilfoyle Lawyers Pty Ltd (ACN 625 872 200) (“the respondents”). Mr McDuff is the natural person behind the entity who was in business with the applicant and McDuff and Guilfoyle Lawyers are a legal practice that in practical terms succeeded the legal practice in which the applicant was involved. The applicant also applied for an order apparently concerning disclosure. The proposed order anticipated the applicant would send a letter pursuant to r 444 of the Uniform Civil Procedure Rules 1999 and required the defendant and respondents comply with r 211 in response. On 31 May 2019 I dismissed the application and the respondents sought costs on an indemnity basis. I gave leave to the applicant and respondents to file submissions as to costs. For the following reasons I will order that the applicant pay the respondents’ costs of the application to be assessed on the indemnity basis.

2. Costs of proceedings, including applications, are in the discretion of the court.[1] The court has a discretion to order costs to be assessed on the indemnity basis.[2] The principles governing the exercise of the discretion are settled.[3] As costs assessed on the standard basis remain the norm there must be some special or unusual feature that justifies departure from the ordinary practice. Circumstances that might justify indemnity costs include where the proceedings were commenced for some ulterior motive or where the proceedings were commenced in wilful disregard of known facts or clearly established law. The respondents submit that the application suffered from both of these defects so as to justify costs assessed on the indemnity basis.

   [1] Uniform Civil Procedure Rules 1999 (Qld) r 681.

   [2] Uniform Civil Procedure Rules 1999 (Qld) r 703.

   [3] Colgate Palmolive v Cussons (1993) 46 FCR 225; 118 ALR 248; [1993] FCA 801 at [24]; Cosgrove v Johns [2000] QCA 157 at [8]-[9]; Di Carlo v Dubois [2002] QCA 225 at [37]-[38].

3. Some cases may be so obviously hopeless that the continuation of the proceedings raises a presumption that they were commenced or maintained for some ulterior motive.[4] The respondents seek to invoke not only the presumption but rely as well on what is said to be evidence the applicant was in fact moved by an ulterior purpose. The respondents point to material filed, and submissions made, by the applicant suggesting the motivation for the application included discovering documents in the possession of the respondents and also joining Mr McDuff because if he were joined “the court may make findings in relation to Mr McDuff’s conduct which could form the basis of a complaint to the Legal Services Commission”.[5]

   [4] Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants and Others (1988) 81 ALR 397 at 401; Re SCA Properties Pty Ltd (1999) 17 ACLC 1611; [1999] QSC 180 at [70].

   [5] Paragraph [8] affidavit of Kade Alistair Eames affirmed and filed 30 May 2019.

4. At the hearing, the applicant was unable to articulate any final order or relief that would be sought against the respondents were they to be joined. The applicant appeared to accept that a reason for the proposed joinder was to facilitate disclosure, despite there being no precise articulation of what material was in the possession of the respondents and why that material could not be secured under the ordinary rules of disclosure. Mr Eames expressed the view that one of the respondents should be joined because of the possibility his conduct might warrant a complaint to the disciplinary body. These matters indicate the application was misconceived at the outset. The respondents have been put to unnecessary trouble and expense responding to the application. These are factors that in my view support the order sought by the respondents.

5. One matter that has caused me some hesitation is the mention in some cases that there should ideally be timely warning to the unsuccessful party that an order for costs to be assessed on the indemnity basis will be sought.[6] While such a warning may be factor in exercising the discretion, the absence of a warning is not determinative. Finally, I note that Mr Eames, who both represented and in practical terms is the applicant, is a solicitor. The grace often extended to litigants in person[7] has no role to play in this application.

   [6] Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 at 249.

   [7] Mowen v Rockhampton Regional Council [2018] QCS 44 at [11]-[12].

6. Having considered the matters set out above it is in my view appropriate to depart from the usual order and to instead order costs of the application to be assessed on the indemnity basis.

   Orders

7. The applicant pay the respondents’ costs of the application to be assessed on the indemnity basis.