Walker v Richards

[2002] QDC 171

DISTRICT COURT OF QUEENSLAND

CITATION:

Walker v Richards & Ors [2002] QDC 171

PARTIES:

RICHARD ELLIS WALKER
Plaintiff

And

MARK CAMERON RICHARDS
t/as MC RICHARDS & ASSOCIATES
Defendant

And

VICCA MILIGAN (a firm)
First Third Party

And

SOUTHERN CROSS INVESTMENT GROUP PTY LTD
ACN 061 773 493
Second Third Party

And

MARTIN JOSSELYN
Third Third Party

And

MARK BORRILL
Fourth Third Party

And

ALLIANZ AUSTRALIA INSURANCE LIMITED
ACN 000 122 850
Fourth Party

FILE NO/S:

D4064 of 2000

DIVISION:

Civil jurisdiction

PROCEEDING:

Application for costs on an indemnity basis

ORIGINATING COURT:

District Court Brisbane

DELIVERED ON:

31 May 2002

DELIVERED AT:

Brisbane

HEARING DATE:

14 May 2002

JUDGE:

Judge Boulton

ORDER:

Order for costs in favour of the Plaintiff on standard basis

CATCHWORDS:

Indemnity costs – Offer to settle – Risk of insurer invoking QC Clause – Abuse of process

COUNSEL:

Mr S. Couper Q.C. for the Plaintiff Applicant; Mr D. Clothier for the Respondent

SOLICITORS:

Quinn & Scattini for the Plaintiff
Phillips Fox for the Defendant

FURTHER REASONS FOR JUDGMENT

1. This is an application made on behalf of the plaintiff for an order for indemnity costs in the proceedings.

1. On 7 May 2002 I handed down judgment in the action.  In my reasons for judgment I observed:

“Unless persuaded to the contrary I propose to order that the defendant pay the plaintiff’s costs of and incidental to the action to be assessed.” 

Mr Clothier, Counsel for the defendant, was not present at the handing down of judgment.  I gave both parties liberty to apply.

1. This application then was made on 14 May 2002. It was made on two bases – firstly that the plaintiff was effectively deterred from making an offer to settle under pt 5 of ch 9 of the UCPR. Secondly it is suggested that there was a special or unusual feature in the case in that the defendant had deliberately raised false issues. In such circumstances it is open to a court to depart from the usual course of ordering costs on a standard basis.

1. The plaintiff relies upon an affidavit of Dominic John Wing filed on 10 May 2002.  Mr Wing is a solicitor who acted on behalf of several plaintiffs in actions against the defendant which were due to be heard in the District Court in April 2000.

1. Mr Wing refers to the making of offers to settle by the plaintiffs and of their rejection by the defendant.  The details of the offers are not sought to be disclosed.  The facts of the making of offers and their rejection are plainly not privileged though the reasons said to have been advanced by the defendant in refusing may well be so.  The later consequences in the form of the invoking of the QC clause by the insurer and its implications for the plaintiff are not privileged.

1. Mr Wing at para 16 of his affidavit deposes as follows:

“On or about 4 January, 2002 the defendant entered into an arrangement with his creditors pursuant to part X of the Bankruptcy Act 1966. The plaintiff apprehended that the defendant would be unable to satisfy any judgment from his own assets.”

1. Mr Wing exhibits to his affidavit a copy of the terms and conditions of the Solicitors’ Professional Indemnity Insurance Policy.

1. Even leaving aside the events of April 2000 it would have been obvious to the plaintiffs’ legal advisers in the present instance that the making of an offer to settle was too risky to contemplate.

1. However, concerns by plaintiffs about the financial capacity of defendants and their insurance arrangements are not unusual.  The fact of the matter is that no offer was in fact made.  Whether such an offer, if made, would have been less than or equal to the amount of the judgment is conjecture.  The amount of the judgment was less than the sum contended for by the plaintiff on trial.

1. The plaintiff in the present case was vindicated in my published Reasons. One can readily sympathise with him in the predicament brought about by clause 4(a) (ii) of the abovementioned policy. Such a tactical decision, however, does not, in the absence of compliance with pt 5, support an application for indemnity costs.

1. As to the second ground advanced, Counsel for the plaintiff refers to the decision of Holland J in Degmam Pty Ltd (In LIQ) v Wright (No 2) (1983)2 NSWLR 354 where at page 358 His Honour made the following comments in respect of a defendant’s conduct of litigation:

“It is sufficient to say that the allegations of fact she made as the basis of her defences and causes of action were in my opinion false and deliberately concocted by her in an attempt to deny the plaintiff its rights and to shift all blame and legal liability to the plaintiff from herself to the second cross-defendant.  As well as that, she so conducted herself in the proceedings, by multiplying allegation upon allegation and by prevaricating in the witness box, as grossly to prolong the litigation, thereby to cause the other parties to incur liability for solicitor and client costs far beyond what they could reasonably have expected to incur in litigation of genuine issues.  The discretion which the court has as to costs is, as has been said many times, to be exercised judicially, that is to say upon proper grounds and the court will not likely depart from standard practice in the awarding of costs.”

1. The decision in Degman was referred by Moynahan J in Re Talk Finance and Insurance Services Pty Ltd 1994 1 QdR 558. The passage to which I have referred is quoted in full in the decision of Shepherdson J in Naomi Marble and Granite Pty Ltd v FAI General Insurance Company Limited (No 2) 1999 1 QdR 518 at 534.

1. In my Reasons for Judgment delivered on 7 May 2002 I made reference to the behaviour of the defendant in the latter half of 1999 in attempting to forestall later claims and in failing to provide clients, including the plaintiff, with vital information concerning their legal rights.  I also referred to the abandonment by the defendant of a potentially significant allegation that subsequent to his interview with the plaintiff on 6 August 1997 it was expected that the plaintiff would receive further accounting advice concerning his investment.

1. However, these later efforts on the part of the defendant went merely to credit and the outcome of the case depended upon findings as to what occurred in the meeting of 6 August 1997.  Those findings were emphatically in favour of the plaintiff.  It could not be said that the defendant’s actions to which I have referred prolonged the litigation to any extent.  His later behaviour was always going to be the subject of searching cross-examination.  That cross-examination was all the more effective as a result.

1. In a case though that turned on issues of credit as to the contents of the meeting of 6 August 1997 it was always fairly open to the defendant to advance his version of events.  It is not appropriate in such circumstances to visit him with indemnity costs even though that version was emphatically rejected.

1. I therefore make the order that I previously foreshadowed.  I order that the defendant pay the plaintiff’s costs of and incidental to the action to be assessed on a standard basis.  That includes of course the handing down of judgment on 7 May 2002.  This application might well have been made on that day but was not because of the absence of Mr Clothier.  Because of that fact and the merits disclosed on the part of the plaintiff, I make no order as to the costs of the application.