Quach v Daly

[2024] QSC 98

SUPREME COURT OF QUEENSLAND

CITATION:

Quach v Daly [2024] QSC 98

PARTIES:

MICHAEL VAN THANH QUACH

(plaintiff)

v
KEVIN JOHN DALY

(first defendant)

AND

ROBIN DALY

(second defendant)

FILE NO:

BS 15806 of 2022

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

22 May 2024

DELIVERED AT:

Brisbane

HEARING DATE:

8 May 2024

JUDGE:

Freeburn J

ORDER:

The plaintiff pay the defendants’ costs of the application filed on 29 April 2024.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – where the plaintiff’s application for a defence to be filed and served was dismissed – where the statement of claim was challenged by the defendants – where the application served no utility – where the defendants’ sought costs on an indemnity basis – whether the plaintiff should be ordered to pay costs on an indemnity basis – whether the case is special or unusual to justify costs on an indemnity basis

COUNSEL:

The plaintiff was self-represented
BJD Lambert (solicitor) for the defendants

SOLICITORS:

The plaintiff was self-represented
Birch & Co Solicitors for the defendants

REASONS

1. On 8 May 2024 I heard an application by Mr Quach, the plaintiff, to compel the defendants to file and serve a defence. I dismissed that application but reserved my decision regarding costs.  The defendants sought costs on an indemnity basis. Mr Quach resisted any costs order.

The Pleading Battle

1. Mr Quach’s statement of claim is presently in its sixth version.  From the very beginning of this proceeding in December 2022 Mr Quach’s statement of claim has been under attack.  The latest version of the statement of claim was filed on 22 April 2024.  That was the day before a full day hearing before Martin SJA on 23 April 2024.

2. That brief chronology demonstrates that the parties are diametrically opposed.  Mr Quach wishes to proceed with his proceeding to enforce a contract[1] pursuant to which he alleges he purchased a property and nursery business at Mansfield. Mr Quach is frustrated by the defendants attempts to obtain summary judgment, or to have his claim or statement of claim struck out.  On the other hand, the defendants maintain that Mr Quach’s claim against them is baseless and embarrassing.

   [1]Or perhaps two contracts.

3. At the core of the dispute is Mr Quach’s claim that there was a concluded bargain when, on 25 July 2021, the parties executed what Mr Quach describes as a “binding written contract for sale”.  That document, which is attached to the statement of claim, is a handwritten document entitled “Provisional Contract of Sale”.  The document appears to be provisional both in its title and in its substance.  The price and other terms were still to be agreed: “Final consideration, terms and conditions of sale to be arranged.”

4. The contract price, of course, is an essential term. But the statement of claim does not allege that the price was agreed. Instead, the statement of claim contends that Mr Bristow, a valuer retained by the seller, had an obligation to value the property at market value,[2] and (presumably) breached that duty by valuing the property at something other than market value. Mr Quach alleges that the defendants “inflated” the value of the property, presumably relying on Mr Bristow’s valuation.

   [2]Presumably Mr Quach alleges that that duty was a duty owed to him.

5. That brief and tentative statement of the issues exposes the problem.[3]  An essential term appears not to have been agreed – even on Mr Quach’s version of the events.  He may not appreciate that, even if the parties were agreed that the property was to be taken off the market, and even if a deposit was paid, there is no concluded agreement unless the parties were agreed on the essential terms of their bargain. 

   [3]The statement of the issues is tentative because that issue was, presumably, fully argued before Martin SJA. His Honour’s judgment is reserved. The argument before me was limited to whether the defendants should be compelled to put on a defence.

6. They appear not to have agreed on a price.

7. It may be that because Mr Quach is self-represented that he does not appreciate that the nature of this inquiry is not whether the parties acted reasonably, or whether they arrived at an appropriate market value, but rather whether they actually came to an agreement on the price for the land and for the nursery business. Of course, the defendants were entitled to hold out for whatever price they wished – they were not bound to meet Mr Quach at any particular price point. The defendants were perfectly entitled to hold out for a ludicrous price. The real question is whether there was, in fact, a concluded agreement.[4]

   [4]The alleged contract included the sale of land. In such a case, quite apart from the question of the price, a number of important questions arise as to whether vacant possession is to be given, whether encumbrances such as existing mortgages are to be discharged prior to conveyance of title, the nature of the title the purchaser must accept and the time within which the transaction is to be completed by transfer of title and payment of the purchase price: Carter, Contract Law in Australia, 7^th ed at [3-09]. Of course, the parties to contracts for the sale of land do not normally intend to be bound until a formal contract is executed: Carter at [3-09].

8. The present statement of claim is not particularly clear, but Mr Quach seeks specific performance of a contract whereby the property was sold to him for “market value” and the nursery business was sold to him for $1,000,000.  But no contract to that effect appears to be pleaded.

9. In any event, Martin SJA has heard argument concerning Mr Quach’s pleading.  His Honour has reserved judgment.

The Costs Question

1. The question remains – what should be done about the costs of Mr Quach’s application to compel a defence?

2. On one view, Mr Quach’s application to compel the defence was never likely to succeed.  His latest pleading was filed and served on 22 April 2024 and so, under the rules, the defendants had until 20 May 2024 to file and serve a defence.  But in a sense that formal position is a little artificial.  The defendants have not pleaded to any of the five previous versions of the statement of claim. And the case has been supervised so that timetabling is subject to the court’s directions.

3. Of course, the fact that the statement of claim has been under constant attack does not stay a defendant’s obligation to plead.  And, as the defendants point out, earlier in this proceeding Kelly J expressly declined to make a direction for the defendants to file and serve a defence.  Again, though, all of that is a little artificial. 

4. There was, in the circumstances of this case, no utility in requiring a defence whilst the survival of the statement of claim was in doubt.  That is especially so given that the attacks on the statement of claim involved a central and vital foundation to Mr Quach’s claim – that is whether there was a concluded agreement or not.

5. As the application has been dismissed, and whilst costs are in the discretion of the court, costs should follow the event.[5]

   [5]See rule 681 of the Uniform Civil Procedure Rules 1999.

Indemnity Costs?

1. The question, though, is whether the court should order that Mr Quach pay the defendants’ costs on an indemnity basis.

2. As Sheppard J explained in Colgate-Palmolive Co v Cussons Pty Ltd:

   The discretion to award indemnity costs is absolute and unfettered but must, of course, be exercised judicially.  In general terms the discretion will be exercised where there is some special or unusual feature in the case to justify the court exercising its discretion in that way.  Examples are where allegations of fraud have been made knowing that they are false, or where the party bringing the proceeding (or the application), properly advised, should have known that he had no chance of success, or where the proceedings are commenced for an ulterior purpose.[6]

   [6](1993) 118 ALR 248 at 254.

3. The categories of cases where the court will exercise the discretion to award costs on an indemnity basis are not closed.

4. Here the defendants argue that the discretion should be exercised because:

   (a)There was no basis for the application; it was entirely misconceived because the defendant was within time because the latest and sixth version of the statement of claim was filed and served 22 April 2024;

(b)In July last year Kelly J expressly declined to direct a defence.

1. The fact that, in a supervised case, the time required by the rules has not yet expired, hardly qualifies this case as ‘special or unusual’ in the sense discussed by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd.

2. And large volumes of water have passed under the bridge since the argument before Kelly J in July. Certainly, it is not obviously unreasonable for a party to require his opponent’s pleading even whilst his own pleading is under attack. Here, though, the decisive fact is that the attack on Mr Quach’s pleading goes to the heart of the case. That means that the continuation of the pleadings and the other interlocutory steps lacks utility until the success of the attack is known.

3. For those reasons, whilst the submissions have some force as a reason for giving the defendants an award of costs on the standard basis, I am not satisfied that the case falls within the categories of case that Sheppard J described as ‘special or unusual’.

4. Incidentally, one factor I considered was whether it was worth reserving the decision on the costs of this application until the fate of Mr Quach’s statement of claim was known. On balance, though, the parties having fought the issue now,[7] it is appropriate to determine their entitlement to costs now.

   [7]Neither party sought an order that the costs be reserved.