Arnold & Anor v Commonwealth Bank of Australia [2025] QDC 101

DISTRICT COURT OF QUEENSLAND CITATION: Arnold & Anor v Commonwealth Bank of Australia [2025] QDC 101 PARTIES: SCOTT MICHAEL ARNOLD (first applicant) & NICOLE MAREE ARNOLD (second applicant) v COMMONWEALTH BANK OF AUSTRALIA (respondent) FILE NO/S: BD 1160/24 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 23 July 2025 DELIVERED AT: Brisbane HEARING DATE: On the papers – 14 July 2025 JUDGE: Grigg DCJ ORDER: 1. The Defendants pay the Plaintiff’s costs of and incidental to the Application on an indemnity basis. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – indemnity costs under Uniform Civil Procedure Rules 1999 (Qld) r 704(1) LEGISLATION: Uniform Civil Procedure Rules 1999 (Qld) r 704(1) CASES: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Grealy v State of Queensland [2022] QDC 231 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2) [2016] QSC 65 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Smits v Tabone [2007] QCA 337 -- 1 of 5 -- 2 Blue Coast Yeppoon Pty Ltd [2007] QCA 337 APPEARANCES: Applicants self-represented Gadens Lawyers for the respondent Introduction [1] On 8 July 2025, judgment was entered in this Court in favour of the plaintiff against the first and second defendants’ application to set aside a default judgment and enforcement warrant for an outstanding debt and for the recovery of possession of a property at Loganlea (Property). [2] Following judgment, I directed the parties to provide written submissions as to costs. The plaintiff provided its written submissions on 14 July 2025. The defendants have provided no submissions. [3] The plaintiff submits that the costs of the defendants’ application should be paid by the defendants on an indemnity basis. [4] The starting point is that costs usually follow the event and are ordered to be paid on a standard basis.1 However, costs may be ordered to be paid on an indemnity basis under rule 704(1) of the Uniform Civil Procedure Rules 1999 (Qld). [5] The issue is whether the circumstances of this matter warrant an indemnity, as opposed to a standard costs order. [6] Principles relevant to the exercise of a discretion to order indemnity costs are set out in numerous authorities including Smits v Tabone [2007] QCA 337. In Smits, Callinane J summarised the principles by reference to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows: The normal order for costs is on the standard basis and some special reason is required for any departure from that. 1 Rule 702, UCPR -- 2 of 5 -- 2 Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 discussed the subject generally and identified categories of cases in which it would be appropriate to make such an order. These categories were not meant to be exhaustive: "Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davis J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs of an indemnity basis against a contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports. [7] In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, the New South Wales Court of Appeal sounded a cautious note at 616: "… the Court requires some evidence of unreasonable conduct, albeit that it need not rise as high or vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker." [8] In Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359, Powell J expressed the view that an order for indemnity costs was warranted where in effect the proceedings had no reasonable prospect of success. -- 3 of 5 -- 3 [9] Rolfe A/JA (as he then was) in Huntsman Chemical Company Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 273 after reviewing the authorities, said: "In my opinion the authorities support the proposition that where a party persists in a hopeless case, that justifies, for all the reasons given, the making of an order for costs on an indemnity basis." [10] See also cases such as Di Carlo v Dubois & Ors [2002] QCA 225. (emphasis added) [11] In Grealy v State of Queensland [2022] QDC 231, Rosengren DCJ noted that authorities establish that: [31]…the type of misconduct that would justify [an order for indemnity costs] include proceedings commenced or continued in wilful disregard of established facts or clearly established law, commencing proceedings for some ulterior motive, or misconduct causing the loss of time to the court and the other parties.2 [12] The application brought by the defendants: (a) had no arguable foundation; (b) was made to disrupt or stall the enforcement of the default judgment; and (c) was made in circumstances where the defendants had ignored all previous court orders and service of proceedings. [13] It was not until the enforcement warrant was attempted to be enforced that the defendants engaged with the Court. Because of this behaviour, the plaintiff incurred considerable expenses in terms of: (a) having to commence proceeding in circumstances where the defendants were in default of their payment obligations – that is, there was no defence to the claim made; (b) numerous attempts to serve the defendants with relevant court documents; and 2 Citing Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2) [2016] QSC 65; Smits v Tabone; Blue Coast Yeppoon Pty Ltd v Tabone [2007] QCA 337 at [45] per Cullinane J.. -- 4 of 5 -- 4 (c) unnecessary expense preparing for and attending at Court on this hearing of the defendants’ application. [14] The defendants’ conduct since the proceeding was filed included refusing to accept service, denying their identity, purporting to cast blame on the Court, and making applications lacking any foundation. This behaviour was obstructive and mischievous. The defendants’ attempt to delay the progress of the matter has occurred in circumstances where no arguable basis for defending the claims has been raised. This application was a continuation of that unreasonable behaviour. [15] In those circumstances, the respondents in each of these appeals should be awarded costs on an indemnity basis. Conclusion [16] The Defendants should pay the Plaintiff’s costs of and incidental to the Application on an indemnity basis. -- 5 of 5 --