Stevenson Group Investments P/L v Nunn
[2012] QPEC 7
•17/02/2012
PLANNING & ENVIRONMENT COURT
OF QUEENSLAND
CITATION:
Stevenson Group Investments P/L v Nunn & Ors [2012] QPEC 7
PARTIES:
STEVENSON GROUP INVESTMENTS PTY LTD
A.C.N. 101 112 127(Applicant)
v
GRAHAM NUNN
(Respondent)
and
CODD STENDERS
(First Respondent)
and
TANGALOOMA PTY LTD
A.C.N. 010 997 707(Second Respondent)
and
TANGALOOMA ISLAND RESORT PTY LTD
A.C.N. 010 170 902(Third Respondent)
and
BRISBANE CITY COUNCIL
(Fourth Respondent)
and
R J and R M LEVER PTY LTD
(Fifth Respondent)
and
HIDEBOURNE PTY LTD
A.C.N. 010 652 436 (TRUSTEE)(Twelfth Respondent)
and
TANGALOOMA PHOTO SHOP PTY LTD
A.C.N. 113 674 427(Seventeenth Respondent)
and
TANGALOOMA MORETON ISLAND RESORT
A.C.N. 122 809 812(Eighteenth Respondent)
FILE NO/S:
1861/09
DIVISION:
Planning and Environment
PROCEEDING:
Application
ORIGINATING COURT:
Brisbane
DELIVERED ON:
17/02/2012
DELIVERED AT:
BRISBANE
HEARING DATE:
JUDGE:
Searles DCJ
ORDER:
1. That the applicant pay the costs of the respondent, first, second, third, fifth, twelfth and eighteenth respondents of an incidental to the proceeding on a standard basis;
2. That the applicant pay the costs of the fourth respondent thrown away by the adjournment of the trial on 26 May 2011 on a standard basis.
CATCHWORDS:
Costs of frivolous or vexatious proceeding – Whether on indemnity or standard basis – UCPR 4.1.23
COUNSEL:
Applicant:
S.Keim SC & D Fahl (Stevenson Group Investments)Respondents:
D.Kelly SC & M Johnston (Nunn & Ors Tangalooma Resort)
M.Williamson (BCC)SOLICITORS:
Clinton Mehr Lawyers
Hopgood Ganim Lawyers
Brisbane City Legal Practices
There are two applications for costs pursuant to s 4.1.23 of the Integrated Planning Act 1997 (IPA) resulting from an order for summary judgment made against the applicant (Stevenson) on 22 December 2001. The first application is that of the Tangalooma Respondents being the abovementioned respondent and first, second, third, fifth, twelfth and eighteenth respondents (Tangalooma). The other is by the Brisbane City Council. Both Tangalooma and Stevenson delivered extensive written submissions. The Council, which seeks only the costs thrown away on the adjournment of the hearing on 26 May 2011, put in a short submission but relied upon sections of Tangalooma’s submissions. This judgment should be read with the principal judgment.
Tangalooma’s primary submission is that Stevenson pay its costs of and incidental to the entire proceeding pursuant to IPA s 4.1.23(2)(b) on the grounds that the proceedings were frivolous or vexatious. Further it seeks those costs on an indemnity basis.
Power of Court to Order Costs
The usual position with costs in this court is to be found in IPA s 4.1.23(1) which provides, in effect, that each party will bear its own costs of any proceedings. However s 4.1.23(2) details circumstances where the court is empowered to make an order for costs in specified circumstances. One such circumstance is where the court considers the proceeding or part of the proceeding to have been frivolous or vexatious and, for that reason, considers it appropriate that a costs order be made.
Meaning of Frivolous or Vexatious
In Mudie v Gainriver Pty Ltd (No. 2)[1] McMurdo P and Atkinson J, in dealing with an earlier relevantly identical provision, said:-
[35] The words “frivolous or vexatious” are not defined in the Act and should be given their ordinary meaning, unfettered by their meaning in the very different context of striking out or staying proceedings for an abuse of process…The Macquarie Dictionary defines “frivolous” as “of little or no weight, worth or importance; not worthy of serious notice: a frivolous objection. 2. characterised by lack of seriousness or sense: frivolous conduct…” and “vexatious” as “1. causing vexation; vexing; annoying…”.
[36] Unquestionably, something much more than lack of success needs to be shown before a party’s proceedings are frivolous or vexatious. Although in a different context, some assistance can be gained from the discussion of the meaning of these words in Oceanic Sun Line Special Shipping Company Inc v Fay[2] where Deane J states that “oppressive” means seriously and unfairly burdensome, prejudicial or damaging and “vexatious” means productive of serious and unjustified trouble and harassment, meanings apparently approved by Mason CJ Deane, Dawson and Gaudron JJ in Voth v Manildra Flour Mills Pty Ltd.[3] Those meanings are apposite here.
[37] Whether proceedings are vexatious or oppressive will turn on the circumstances of the case and will include public policy considerations and the interests of justice.”[4]
[1][2003] 2 Qd R 271 at [35] to [37].
[2](1998) 165 CLR 197, 247.
[3](1990) 171 CLR 538.
[4]Citing Ashmore v British Coal Corporation [1990] QB 338, 352.
The third member of the court Williams JA[5] referred to the shorter Oxford English Dictionary definition of “frivolous” as being:-
[5]Paragraphs 59 to 62.
“1.Of little or no value or importance, paltry; (of a claim, charge, etc.) having no reasonable grounds.
2.Lacking seriousness or sense; silly.”
As to “vexatious” it was defined as:-
“1.Causing or tending to cause vexation, annoyance or distress; annoying, troublesome.
2.In law. Of an action; instituted without sufficient grounds for winning purely to cause trouble or annoyance to the defendant.”
His Honour said:[6]
[6]Paragraph 61.
“Section 7.6 of the Local Government (Planning & Environment) Act 1990 clearly could apply to the situation where an appeal was struck out because it was groundless, but there is no reason to so limit the operation of the provision. If it was only to apply to the striking out of an appeal then it would have been easy for the legislation to have so provided. In this area of the law it quite often happens that more than one party is dissatisfied with the decision of a local authority which may be the subject of an appeal. In those circumstances it is often merely an accident that a particular party is the appellant for purposes of the appeal. Once the appeal is instituted other affected parties may raise additional issues for determination by the court. If a party resisted such an appeal by relying on assertions which were groundless then there is no reason why that party’s conduct should not be described as being “frivolous or vexatious”. To adapt the phraseology of Dixon J (in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91) in such circumstances there has been an abuse of process in that the court’s time and resources have been employed in exposing a groundless basis for resisting the appellant’s claim. Further, the meaning attributed to the word vexatious by Deane J in Oceanic Sunline Special Shipping Company Inc. v Fay (1988) 165 CLR 197 at 247 also covers that situation; there it was said:
‘Vexatious should be understood as meaning productive of serious and unjustifiable trouble and harassment.’
A developer and local authority clearly produce unjustifiable trouble and harassment when they resist in court the setting aside of void decisions and seek to justify unlawful conduct of wholly unmeritorious grounds. Such resistance would, in ordinary parliaments, be described as frivolous and vexatious.”
The abovementioned reference to serious and unjustifiable trouble and harassment refers to the impact of the proceedings and not its motivation[7]
[7]DTTMR v Brisbane City Council & Orb Holdings Pty Ltd (2011) QPEC 108 at [1-7] – [1-8]
In Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council[8] Chesterman JA said, in reference to IPA s 4.1.23(2)(b) here under consideration:-
“The notion underlying this elucidation of the section is that a proceeding will be frivolous if it lacked substance, so there was no reasonable basis for starting it so that its prosecution produced unjustifiable trouble for the other party.”
Tangalooma’s Costs
[8][2011] QCA 15 at [7].
Tangalooma’s Grounds for Asserting Proceeding Frivolous or Vexatious
Tangalooma relies on three grounds to justify its claim that the proceeding was frivolous or vexatious:-
(a) The fact that summary judgment was given in its favour on the basis that all facts alleged by Stevenson were assumed to be true which, it is said, demonstrates that the proceeding was wholly unmeritorious and devoid of any prospect of success or utility;
(b) Stevenson proceeded with the action in the face of notice from Tangalooma as to its view as to the poor prospects of success and that costs would be claimed; and
(c) The history of the conduct of the proceeding demonstrates disregard by Stevenson for its obligations for implied undertakings to the court[9] consistent with the proceeding being run for Stevenson’s own convenience.
[9]UCPR Rule 5; Planning and Environment Court Rules 2010 Rule 4
Turning to each of those:-
(a) Summary Judgment given against Stevenson
Tangalooma relies upon the findings of this court in entering judgment. There is no need to repeat those findings;
(b) Stevenson was on notice as to costs that the proceeding was frivolous or vexatious.
Tangalooma relies upon the following correspondence from its solicitors to Stevenson’s solicitors to make out this ground:-
(i) Letter 29 July 2009
This was written 26 days after the original application was filed on 3 July and in relation to Stevenson’s application filed 7 July 2009 to amend its original application. It enclosed a proposed order from Tangalooma detailing the manner in which Stevenson’s original pleading should be regularised to comply with the court rules. It relevantly provided:-
“If it becomes necessary for such an application to be made, our clients will seek costs arising from such an application and this correspondence will be tendered in support of that application.”;
(ii)On 17 August 2009 Tangalooma wrote again complaining of shortcomings in the Stevenson pleading, advising that the Amended Originating Application failed to rectify the deficiencies identified at the hearing on 31 July, was embarrassing, and liable to be struck out. It then detailed with particularity the asserted defects and said:-
“Our client has wasted significant costs of and incidental to your client’s deficient OA (in its original and amended form). Our client reserves their rights to seek costs against your client pursuant to s 4.1.23 at the next hearing. Further, should your client fail to further amend its OA such that it complies with rule 7 and 8 of the Court Rules, our clients reserve their right to apply to strike out the amended OA (or parts thereof) and to seek costs.”;
(iii)On 8 September Tangalooma again wrote advising that the further amended First Amended Originating Application still failed to rectify the pleading deficiencies. On the costs issue, Tangalooma said:-
“Our client has wasted significant costs of and incidental to your client’s deficient OA (in its original, amended and first amended form). Our clients reserve their rights to seek costs against your client pursuant to s 4.1.23 at the hearing on 11 September 2009 or subsequent to that hearing. …We wish to indicate that should your client fail to further amend its first amended OA such that it complies with the court rules by the time of the proposed adjourned hearing, our client reserves their right to apply to strike out the first amended OA (or parts thereof) and to seek costs.”;
(iv)On 14 September 2009 Tangalooma again wrote, referring to the review of the matter on 11 September. As to costs the letter read:-
“We note that on 11 September 2009 His Honour made no orders with respect to the issue of costs. In this respect we refer to our letters to the applicant’s solicitors dated 29 July 2009, 17 August and 8 September 2009. Further, having regard to the concessions made by Counsel for the Applicant on 11 September 2009 regarding the deficiencies in all versions of the originating applications, we reserve our client’s right to seek costs against the applicant pursuant to s 4.1.23 of the Integrated Planning Act 1997.”;
(v) By letter of 27 November 2009 Tangalooma sent its defence and said:-
“The application as pleaded in the Statement of Claim dated 30 October 2009 has such low prospects of success that the proceeding ought properly be considered frivolous or vexatious. Our clients, therefore, reserve their rights with respect to the costs to be incurred in the further conduct of these proceedings. Further, we note that we may seek to rely on this letter with respect to such costs.”;
(vi)On 17 September 2010 Tangalooma again wrote a letter enclosing its Amended Defence. That letter contained an identical paragraph to (v) above;
(vii)On 10 December 2010 the letter enclosing Tangalooma’s Further Amended Defence provided:-
“In our view, the application is now pleaded and the Second Further Amended Statement of Claim dated 26 November 2010 retains such low prospects of success and lack of utility that the proceedings ought properly be considered frivolous or vexatious, as we have previously stated. Our clients, therefore, again reserve their rights with respect to costs. Further, we note that we may seek to rely on this letter with respect to costs. We invite your client to consent to an order dismissing the proceedings to avoid further unnecessary costs.”
(c)Stevenson’s Conduct of the Proceedings
On this ground Tangalooma points to the following:-
(i)The original application of 3 July 2009 and the two versions following dated 7 and 25 August 2009 respectively were all effectively struck out on 11 September when the court ordered Stevenson to file and serve a Statement of Claim;
(ii)The Statement of Claim of was filed on 30 October 2009. A further version was filed on 2 March 2010 and 1 July 2010;
(iii)On 2 July 2010 the court struck out part of the Statement of Claim;
(iv)On 10 September 2010 a further version of the Statement of Claim was filed;
(v)On 10 December 2010 a further version of the Statement of Claim was filed;
(vi)The matter was listed for trial for seven days on 26 May 2011 when Stevenson was granted an adjournment to introduce new expert evidence and to further amend its Statement of Claim. The expert’s report in question was served one business day prior to the commencement of the trial on 26 May 2011;
(vii)On 30 May Stevenson served the Further Statement of Claim making amendments beyond the court’s limited leave of 26 May 2011;
(viii)Four days later on 3 June 2011 Stevenson served yet another amended Statement of Claim making further amendments beyond the leave granted on 26 May 2011 and seeking to re-agitate an allegation earlier abandoned on 26 May;
(ix)On 10 June 2001 Tangalooma complained to Stevenson that the proposed amendments went beyond the leave granted and advised that leave would be required;
(x)Two months later on 10 August 2011 Stevenson made application for leave to amend the current Statement of Claim some three months after urgent leave to amend was granted on 26 May 2011; and
(xi)The new allegations sought to be relied upon by Stevenson at that late stage were raised when Stevenson knew of them and could have pleaded them much earlier.
It is for the above reasons that Tangalooma asserts that Stevenson, in breach of the implied undertaking in rule 5 of the Uniform Civil Procedure Rules 1999 (UCPR) and rule 4 of the Planning & Environment Court Rules 2010 effectively treated the obligations of the court’s processes as optional, to be observed when convenient. That resulted in what Tangalooma describes as a scatter gun approach to the running of the case, significantly increasing costs and producing serious and unjustified trouble and harassment to Tangalooma.
Anticipating that Stevenson may seek to avoid costs sought on the basis that Tangalooma could have brought the application for summary judgment earlier in the proceedings, Tangalooma relies on the following:-
(a) The timing of the summary judgment application does not alter the proper characterisation of the proceedings as frivolous or vexatious for reasons above outlined;
(b) Seeking summary judgment is not a process normally invoked in this jurisdiction; it would be unusual even in the civil jurisdiction given the nature of the discretionary relief sought by Stevenson;
(c) It is unorthodox to make a summary judgment application with a hearing time of two days as against a trial estimated to run seven days;
(d) Tangalooma was entitled to expect Stevenson to comply with its obligation and the implied undertakings in rules 5 and 4 mentioned above;
(e) Tangalooma was in a position to meet the case by way of a trial on 26 May 2011 but the point was reached in terms of Stevenson’s conduct of proceedings where Tangalooma was meeting an evolving case, where the unorthodox step seeking summary judgment became an appropriate way to bring the proceeding to an end;
(f) Had the application for summary judgment not been made a full trial would have ensued with the same result and with Stevenson facing an application for costs of an entire trial; and the only relevance of the summary judgment application is that it averted a long trial and further unnecessary costs for all concerned.
Stevenson’s Response to Tangalooma
Stevenson commences by asserting that it is self-evident that any reasonable person involved in litigation finds it costly and often vexing and troubling. Hence the questions here for determination are whether the proceeding was motivated and conducted other than in good faith, or without any reasonably arguable basis and thus whether it caused cause “unjustified” and “trouble and harassment” to Tangalooma.
I should say at the outset that I am not prepared to find that the proceeding was commenced other than in good faith, however misplaced that may have been.
Stevenson argues that the proceeding could not be characterized as patently unarguable or by any similar characterization because it involved significant legal argument from both parties and consideration by the court which did not express the view that it was in any way contrived, incompetent or baseless. Further, Stevenson was represented by competent counsel, who presented properly founded arguments in a complex area of law.
In Stevenson’s view the question which needs to be asked is whether its argument was reasonably open to be made and points to the evidence relied upon to support the allegation that the alleged failure by the assessment manager had fire safety consequences. From there it is said that its submission was far from illusory. Further it says that the relief sought by it was not unusual in this jurisdiction such that it could be suggested that the claim was baseless.
As to the court’s finding on discretionary considerations, whilst it accepts that the court found overwhelmingly favoured Tangalooma, Stevenson argues that it was entitled to litigate the issues it did which were proper matters for the court’s consideration and intervention, based on fact and not on whimsy or pedancy. The discretionary considerations raised by it were legitimate, had a basis in fact and were not rejected by the court. Rather the court found other matters too overwhelming resulting in a finding that the proceeding had no real prospects of success.
On the issue of utility which the court found was lacking, Stevenson says that it had an arguable position on the issue that the building approval could be revisited and corrected so that a fresh application was not an unusual consequence when a decision of the type under challenge was set aside. It says that is the case, notwithstanding that the building was constructed.
As to the notice from Tangalooma in expressing its opinion as to the poor prospects of success of the proceeding and raising the prospect of a costs claim, Stevenson says such letters are not unusual in court proceedings but are more relevant in circumstances where the proceeding under attack is, as a matter of fact and law, patently unarguable. Such a case it said was Uniper Development Corporation Pty Ltd v Jewry[10] where the applicant was put on notice as to a fundamental legal flaw in his claim, fatal to the application. This is not such a case it is said because at all times Stevenson had a reasonably arguable case and did not proceed in deliberate ignorance of any fatal point raised by Tangalooma.
[10][2005] QPEC 097
As to its conduct of the proceedings, Stevenson rejects the criticism of Tangalooma and says that the matters raised by it do not support a finding that the proceeding was frivolous or vexatious. It refers to its submissions in the proceeding explaining the various delays. As to the adjournment of the trial it says that this resulted from a change of mind on the part of its expert Dr Campsey as deposed to by him resulting from an erroneous assumption he made in relation to the joint report. This, it is said could hardly be attributed to some wanton or reckless conduct indicative that Stevenson was using the proceedings for its own convenience
Alleged disentitling conduct of Tangalooma
As was anticipated by Tangalooma in its submissions, Stevenson points to its conduct of the proceedings. It says that a relevant factor in the exercise of the court’s discretion on the issue of costs is to consider whether Tangalooma has, by its own conduct, contributed to or failed to avoid the incurring of costs. It makes the following points:
(a) the case ultimately put by Tangalooma in the summary judgment application was available to it at a very early stage in the proceedings;
(b) that Tangalooma had formed its view as evidenced in the correspondence relied on by Tangalooma; and
(c) notwithstanding the view it had formed as to the proceeding, it nevertheless prepared for trial and did not make application for judgment until after the trial was adjourned on 26 May 2011.
In short the application for judgment could have been sought after the filing of Tangalooma’s defence on 7 November 2009 yet no compelling explanation has been given as to why it was not. As a result of its decision to apply for judgment earlier, Tangalooma continued to incur costs. The circumstances were that no other avenue to avoid costs was available to it.
Conclusion re Tangalooma’s Costs
It is now relevant to consider whether the proceeding was frivolous or vexatious within IPA s 4.1.23(2) (b) as Tangalooma asserts. Having regards to the meaning of those terms in the authorities I’ve referred to, I consider the proceeding does attract that categorisation. In seeking the declaration the arguments made that the relevant non-compliance rendered the decision of the assessment manager void ab initio and of no legal affect, and that the building was thereby unlawfully constructed, were such that I consider there was no reasonable basis for starting it. It had no reasonable prospects of success from the outset, caused Tangalooma serious and unjustified trouble and harassment having regard to its impact not its motivation.[11]
[11]DTTMR v Brisbane City Council & Orb Holdings Pty Ltd (2011) QPEC 108 at [1]-[7] – [1]-[8]
Should Stevenson Pay Tangalooma’s Costs?
Having found that the proceeding to be frivolous and vexatious, the next question is whether I should order Stevenson to pay Tangalooma’s costs.
Stevenson on Notice
Tangalooma first put Stevenson on notice as to costs on 29 July 2009, 26 days after the proceeding was commenced, and again on 17 August 2009, 8 September 2009, 14 September 2009 and 27 November 2009, 17 September 2010 and 10 December 2010. Admittedly some of those letters related to costs of a specific application. But Tangalooma’s concern as to costs and its intention to seek to hold Stevenson accountable was made obvious early in the proceeding and repeated throughout.
Further, in its letters of 27 November 2009 and 10 December 2010 Tangalooma put Stevenson on notice that it considered the proceedings to be frivolous or vexatious within s 4.1.23. Given what Tangalooma saw as its low prospects of success and the lack of any utility in the declaration sought. The letter of 10 December 2010 invited Stevenson to consent to an order dismissing the proceeding to avoid further unnecessary costs.
In its present submission, Stevenson says that such letters are common place in the course of litigation and, in any event, Tangalooma did not give it notice of any point fatal to the proceeding. As to the first point, true it may be that such letters are commonly written but there are two things which may be said about that. Firstly, the incidence of use of such letters generally does not, in appropriate circumstances, detract from the force of such a letter in a particular case. Secondly, all letters are written for a purpose and, for a party to ignore the content of a letter might be at its ultimate peril.
As to the argument that Tangalooma did not raise a fatal point, it is true that it did not articulate a particularised argument as to why it considered the proceeding frivolous or vexatious. It was not obliged to do so. Stevenson brought the proceeding. What Tangalooma did do was identify the concept of a frivolous or vexatious proceeding which, as at its first notice on 27 November 2009, had been the subject of consideration by the Court of Appeal in Mudie v Gainriber Pty Ltd (No. 2).[12]The letter of 27 November 2009 was a clear invitation to Stevenson to revisit the proceeding by reference to the meaning of that term. Stevenson continued with the proceeding in the face of that notice. That same letter delivered a copy of Tangalooma’s defence which in paragraphs 11, 12 and 18 raised the very issue of construction the subject of the principal judgment.
[12](2003) 2 QD.R 271 at [35] and [59[-[62]
Alleged Disentitling Conduct of Tangalooma
Stevenson complains that Tangalooma could have, and should have moved earlier for judgment but elected to join issue on the factual issues raised. Doubtless there will be cases where a respondent’s conduct will disentitle it to costs to which it may otherwise be entitled. This is not such a case.
Tangalooma was faced with an application for discretionary relief in the form of a declaration. Even had it thought an earlier application was warranted, it was faced with repeated pleading amendments right up to trial. That aside, it is always a question of judgment as to whether one should move for summary judgment. As I said in the principal judgment, it is a serious step for a court to take. The fact that, in hindsight, at another point in the proceeding there may have been afforded an opportunity to make application for summary judgment which was not availed of, does not, without more, render the party disentitled to costs it may otherwise be entitled to.
I am not satisfied that the disentitling conduct alleged by Stevenson has been made out. What eventually forced the issue was the obvious exasperation of Tangalooma with the conduct of the proceeding culminating in amendment on the first day of the trial on 26 May 2011 resulting in an adjournment. One can understand why Tangalooma, at that point, may have thrown any previously entertained caution to the wind and decided to seek to bring the proceedings to an end by applying for judgment. Even after adjournment of the trial, Stevenson sought to further amend its claim outside the purview of the limited leave to amend granted at the aborted trial.
Conscious of the importance of the public policy considerations behind s 4.1.23 I am, nevertheless, satisfied that the circumstances of this case warrant the payment of Tangalooma’s costs by Stevenson.
Basis of Assessment of Tangalooma’s Costs
The Council seeks its costs on a standard basis which I consider appropriate. Tangalooma seeks costs on an indemnity basis. In Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd[13] Shepherd J viewed the authorities dealing with the circumstances for the awarding of indemnity costs and distilled the following relevant principles:-
[13](1993) 46 FCR 225 at [24].
(a) The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis;
(b) In consequence of the settled practice, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. Various tests have been described such as “as and when the justice of the case might so require” or “that there should be some special or unusual feature in the case”;
(c) Some instances of circumstances which would warrant the exercise of the discretion to depart from the usual practice were:-
(i) making allegations of fraud knowing them to false;
(ii) evidence of particular misconduct causing loss of time to the Court and to the other parties;
(iii) the commencement or continuation of proceedings for some ulterior motive;
(iv) the making of allegations which ought never to have been made;
(v) the undue prolongation of the case by groundless contentions; or
(vi) the imprudent refusal of an offer to compromise.
(d) Finally, even though circumstances may exist warranting the exercise of the discretion to award indemnity costs, that does not mean that the Court is necessarily obliged to exercise that discretion to make such an order.
Tangalooma’s argument for indemnity costs
Tangalooma says that there are three grounds which make this an appropriate case for indemnity costs:-
(a) the proceeding was commenced or continued for some unidentified motive;
(b) it lacked legal substance and was unduly prolonged by untenable contentions; and
(c) it involved the making of allegations which ought never to have been made.
Stevenson’s response
I have already said that I do not consider the proceeding was commenced other than in good faith. Stevenson, in response makes the following points against the awarding of costs on an indemnity basis:-
(a) the proceeding did not involve pointless or groundless contentions asserted by Tangalooma;
(b) whilst it accepts some criticism for the running of the proceedings to be levelled at it, the delays do not evidence agitation of a groundless claim or deliberate delays or antagonistic behaviour; and
(c) the proceeding involved complex issues of fact and law and the amendments to the pleadings are several in number, do not depict a litigant changing paths or acting oppressively.
Conclusion re Indemnity Costs
The only base in Colgate-Palmolive I consider may be relevant in this case is the undue prolongation of the proceeding and the imprudent refusal of an offer to compromise that offer being the invitation by Tangalooma on 27 November 2009 and again on 10 December 2010 to discontinue the proceeding. In all the circumstances however, I do not consider that the granting of indemnity costs is appropriate and I accordingly order that Tangalooma’s costs be paid on a standard basis along with those of the Council.
Councils Costs
The Council seeks its costs thrown away on the adjournment of the trial on 26 May 2011 on a standard basis .UCPR 4.1.23(d) allows costs to be awarded to a party where it has not been given reasonable notice of intention to apply for an adjournment of the proceeding, in this case, the trial. There is no doubt that no reasonable notice was given by Stevenson and I consider the Council is entitled to its costs for that reason.
Orders
I accordingly order:-
1. That the applicant pay the costs of the respondent, first, second, third, fifth, twelfth and eighteenth respondents of an incidental to the proceeding on a standard basis;
2. That the applicant pay the costs of the fourth respondent thrown away by the adjournment of the trial on 26 May 2011 on a standard basis.
4