DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2025] QSC 216

SUPREME COURT OF QUEENSLAND CITATION: DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2025] QSC 216 PARTIES: DGR GLOBAL LTD ACN 052 354 837 (Plaintiff) v P.T. LIMITED ACN 004 454 666 AS TRUSTEE OF THE ARMOUR ENERGY SECURITY TRUST (First defendant) PERPETUAL CORPORATE TRUST LIMITED ACN 000 341 533 AS TRUSTEE FOR THE ARMOUR ENERGY NOTE TRUST (Second defendant) RICHARD SCOTT TUCKER AND ROBERT WILLIAM HUTSON IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF ARMOUR ENERGY LIMITED ACN 141 198 414, ARMOUR ENERGY (SURAT BASIN) PTY LIMITED ACN 607 504 905, ARMOUR ENERGY (VICTORIA) PTY LTD ACN 167 298 240, COERA PTY LTD ACN 636 658 574, HOLLOMAN PETROLEUM PTY LTD ACN 126 728 498, CORDILLO ENERGY PTY LTD ACN 636 904 204, MCARTHUR OIL AND GAS LIMITED ACN 648 622 404 AND MCARTHUR NT PTY LTD ACN 649 856 315 (ALL ADMINISTRATORS APPOINTED) (ALL RECEIVERS AND MANAGERS APPOINTED) (Third defendant) ADZ ENERGY PTY LTD ACN 672 466 198 (Fourth defendant) SHUNKANG HOLDING GROUP CO. LIMITED (a company incorporated in the People’s Republic of China) (Fifth defendant) BAKER & MCKENZIE (A FIRM) (Sixth defendant) FILE NO/S: BS 15575 of 2023 DIVISION: Trial Division PROCEEDING: Interlocutory applications ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 2 September 2025 DELIVERED AT: Brisbane -- 1 of 7 -- 2 HEARING DATE: On the papers JUDGE: Hindman J ORDERS: (a) The plaintiff is to pay the defendants’ costs of the leave to amend application filed 30 August 2024 (CDI 122) on the standard basis. (b) The plaintiff is to pay the first and second defendants’ costs of the disclosure application filed 13 September 2024 (CDI 168) on the standard basis. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INTERLOCUTORY PROCEEDINGS – GENERALLY – where the plaintiff had made an application for leave to amend its claim and statement of claim (Leave Application) – where the plaintiff was partially successful in its Leave Application – where the plaintiff had made an application seeking disclosure of documents from the first and second defendants (Disclosure Application) – where the plaintiff consented to orders that the Disclosure Application be dismissed following the outcome of the Leave Application – where the first and second defendants seeks their costs in respect of both applications from the plaintiff on an indemnity basis – where the first and second defendants submit that the Leave Application was unnecessarily protracted and unsubstantiated, and that the Disclosure Application was misconceived and unreasonably prosecuted – where the third to sixth defendants seek their costs of the Leave Application from the plaintiff on a standard basis – where the third to sixth defendants seek an order under r. 692(3) of the Uniform Civil Procedure Rules 1999 (Qld) that costs thrown away be assessable immediately – whether costs should be awarded against the plaintiff in respect of the Leave Application and/or the Disclosure Application – whether costs should be awarded against the plaintiff in respect of the Leave Application on an indemnity basis – whether an order should be made that costs thrown away be assessable immediately Uniform Civil Procedure Rules 1999 (Qld), r. 692 DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2024] QSC 90, cited DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2025] QSC 8, cited COUNSEL: J Peden KC with R Tooth and H Hadgraft for the plaintiff A O’Brien for the first and second defendants D de Jersey KC with M Ziebell for the third and fourth defendants P O’Higgins KC with L Gamble for the fifth defendant D O’Sullivan KC with S McCarthy for the sixth defendant SOLICITORS: DLA Piper Australia for the plaintiff -- 2 of 7 -- 3 Corrs Chambers Westgarth for the first and second defendants Johnson Winter Slattery for the third and fourth defendants Thomson Geer for the fifth defendant Hall & Wilcox for the sixth defendant Introduction [1] These reasons concern the costs of: (a) DGR’s application for leave to amend its claim and statement of claim to reflect the form of a proposed second further amended claim and third further amended statement of claim (Leave Application)1 (the substance of the application was the subject of the decision in DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2025] QSC 82); (b) DGR’s application for an order that Perpetual disclose certain privileged documents (Disclosure Application).3 [2] Perpetual seeks that DGR pay its costs of the Leave Application and the Disclosure Application on the indemnity basis. [3] The other defendants, ADZ, Shunkang and Baker McKenzie, seek that DGR pay their costs of the Leave Application, as well as any costs thrown away by the amendments that were permitted by that Leave Application, on the standard basis. These defendants seek a further order pursuant to rule 692(3) UCPR that the costs thrown away be assessed immediately rather than at the end of the proceeding. [4] The plaintiff opposes such costs order and submits that in respect of both applications, costs should be costs in the proceeding. [5] A general background to the proceeding can be found in DGR Global Ltd v P.T. Limited as trustee of the Armour Energy Security Trust [2024] QSC 90. Leave Application [6] The background to the Leave Application is set out in the previous decision from [4] to [24]. [7] Perpetual says the indemnity costs order it seeks against DGR in relation to the Leave Application is justified because: (a) DGR persisted with making serious allegations despite being warned by Perpetual; Perpetual says that DGR was unable to convince the court that there was “colour to the charge” of misleading and deceptive conduct; (b) DGR commenced the application contrary to known facts and established law and never identified the apparent basis underpinning the serious allegations of wrongdoing; 1 Application filed on 30 August 2024 (CDI 122). 2 Definitions used in that decision are adopted in this decision. 3 Application filed by leave on 13 September 2024 (CDI 168). -- 3 of 7 -- 4 (c) DGR unnecessarily increased the cost and duration of the litigation by: (i) failing to bring any of its proposed conspiracy cases until four months prior to the previously scheduled trial; (ii) knowingly permitting the defendants to incur substantial costs in pleading to a proposed case which it then abandoned; (iii) refusing or being unable to provide Perpetual with particulars requested, which if provided, would have resulted in Perpetual consenting to leave and may have saved the previously scheduled trial dates. [8] The other defendants say the costs order they seek against DGR in relation to the Leave Application is justified because: (a) by the application DGR sought an indulgence (which was insufficiently explained and close in time to the scheduled trial dates); (b) the defendants’ opposition was reasonable and they were entirely successful on some substantial issues; where unsuccessful those matters did not occupy a substantial portion of the hearing; (c) there are not special or exceptional circumstances that would justify any other order. [9] DGR says that the defendants’ applications for costs (on either basis) should be rejected and costs of the Leave Application should be costs in the proceeding because: (a) there is no rule that a party seeking an indulgence must pay costs; (b) there was mixed success; (c) the defendants pursued matters which, apart from being unsuccessful, ought not to have been maintained. [10] As is often the case with disputes about costs, general principles can pull in different directions. Ultimately the court is concerned to make the order for costs that the interests of justice require. And it can be particularly difficult to determine where those interests lie where the costs to be determined relate to interlocutory disputes which may not necessarily clarify or illuminate with any level of certainty where the ultimate merits of the proceeding lie (which may be a relevant consideration). [11] However, in this case I am satisfied that the appropriate costs order in relation to the Leave Application is that DGR pay the defendants’ costs of the application on the standard basis because: (a) it is a relevant factor that the application was one in which DGR was seeking an indulgence, where pleadings had been previously amended by DGR and where scheduled trial dates were pending; (b) whatever a numerical issues based approach to success on the application might suggest, on the real issues in the application and overall, the defendants had substantial success – a costs award on an issue by issue basis is not justified; -- 4 of 7 -- 5 (c) that substantial success for the defendants occurred in circumstances where there had been correspondence between the parties that gave DGR adequate opportunity to address any deficiencies in its application; (d) the application primarily concerned pleading matters (albeit pleading matters of a very serious nature in part) and was not determinative of the underlying merits of any claim; (e) the conduct of DGR about the application and the proceeding generally is not such that an indemnity costs order is justified; (f) nor was the conduct of the defendants in respect of issues, including those that they lost on, or about the proceeding generally, such as to deprive the defendants of their costs of the application considered as a whole; (g) whilst an order for costs to be in the proceeding (or even a parties’ costs in the proceeding) or reserved has some attraction, particularly so as to know where the true merits lie of the proceeding lie before costs are determined and so as not to distract the parties from the substantive proceeding, the Leave Application is sufficiently discrete and the outcome clear enough so that it is appropriate to make other cost orders now. Costs thrown away as a consequence of the granted leave to amend [12] ADZ, Shunkang and Baker McKenzie seek that DGR pay their costs thrown away by the amendments that were permitted in the Leave Application, on the standard basis, to be assessed immediately. [13] Rule 692 UCPR applies. It provides: (1) This rule does not apply to a party who amends a document because of another party’s amendment or default. (2) A party who amends a document must pay the costs thrown away by the amendment, unless the court orders otherwise. (3) However, unless the court orders otherwise or the parties otherwise agree, the costs mentioned in subrule (2) are not to be assessed, and are not recoverable, until the proceeding ends. [14] Rule 692(2) UCPR applies without any order being made by the court. DGR has not sought orders displacing the operation of that usual rule. [15] No specific reasons appear to be advanced by the relevant defendants for the court to make orders under rule 692(3) UCPR beyond those advanced in respect of the Leave Application generally. Without intending to be exhaustive, examples of the type of case where the court may be persuaded to make an order otherwise under rule 692(3) UCPR might be for example where there is evidence that: (a) the costs thrown away are readily identifiable; (b) the assessment of the costs thrown away is likely to be a straightforward matter that would not distract the parties from the progress of the substantive proceeding; -- 5 of 7 -- 6 (c) the receipt of such costs by the receiving party may be essential for that party to continue to fund the litigation; (d) there is some risk that delayed payment of such costs might ultimately result in non-payment. [16] This is not that type of case. I see no good reason to interfere with the default operation of the rules. I decline to make an order otherwise under rule 692(3) UCPR. [17] As stated above, rule 692(2) UCPR applies without any order being made by the court. Disclosure Application [18] Perpetual says the indemnity costs order it seeks in relation to the Disclosure Application is justified because DGR’s conduct about the application was unsatisfactory in that: (a) DGR initially challenged the claims of privilege based on the iniquity exception and an assertion that the underlying existence of the privilege had not been proved – but the latter assertion fell away as time went on; (b) DGR made differing submissions as to the effect of the applicable law; (c) DGR maintained the claims despite that Perpetual says that DGR was unable to convince the court that there was “colour to the charge” of misleading and deceptive conduct; (d) DGR failed to establish any basis to the conspiracy allegations. [19] DGR says that Perpetual maintained that the Disclosure Application should be determined only after the determination of the Leave Application, and Perpetual participated in prolonging the application. Therefore there is no proper basis for Perpetual to be awarded the costs of the Disclosure Application on an indemnity basis or otherwise. [20] I consider that DGR should pay Perpetual’s costs of the Disclosure Application on the standard basis because: (a) DGR brought the Disclosure Application; (b) sensibly the Disclosure Application was better considered after the determination of the Leave Application; (c) in the result of the Leave Application, DGR properly withdrew the Disclosure Application; (d) the court made no determination of the merits of the Disclosure Application and does not intend to do so now without the benefit of fulsome submissions which would simply incur additional costs without utility except in relation to costs; (e) there is no other conduct of DGR about this application that justifies an indemnity costs order. -- 6 of 7 -- 7 Conclusion [21] The orders will be: (a) The plaintiff is to pay the defendants’ costs of the leave to amend application filed 30 August 2024 (CDI 122) on the standard basis. (b) The plaintiff is to pay the first and second defendants’ costs of the disclosure application filed 13 September 2024 (CDI 168) on the standard basis. -- 7 of 7 --