Alpine Pty Ltd v Brisbane City Council [2024] QSC 93

SUPREME COURT OF QUEENSLAND CITATION: Alpine Pty Ltd v Brisbane City Council [2024] QSC 93 PARTIES: ALPINE PTY LTD ACN 009 712 592 (applicant) v BRISBANE CITY COUNCIL (respondent) FILE NO: BS 2449 of 2023 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 17 May 2024 DELIVERED AT: Brisbane HEARING DATE: On the papers JUDGE: Muir J ORDER: The applicant is to pay the respondent’s cost of the application. CATCHWORDS: PROCEDURE – CIVIL PROCEEDING – COSTS – OFFERS TO COMPROMISE – CALDERBANK OFFER – where the applicant was unsuccessful in its judicial review application – where the respondent now seek indemnity costs –– where the applicant accepts it is appropriate to pay the costs on a standard basis – where the applicant opposed the order for costs on an indemnity basis – where there was a Calderbank offer sent by the respondents – whether the rejection of the offer was unreasonable Civil Proceedings Act 2011 (Qld), s 15 Judicial Review Act 1991 (Qld), s 49 Supreme Court of Queensland Act 1991 (Qld), s 21 Uniform Civil Procedure Rules 1999 (Qld) r 681, r 702, r 703 Alpine Pty Ltd v Brisbane City Council [2023] QSC 233 Bulsey v State of Queensland [2016] QCA 158 Calderbank v Calderbank [1975] 3 All ER 333 CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd & Anor [2016] QCA 130 Cretazzo v Lombardi (1975) 13 SASR 4 Doerr v Gardiner (No 2) [2024] QCA 21 -- 1 of 6 -- 2 Ford v Nominal Defendant [No 2] (2023) 105 MVR 276 Hadgelias Holdings and Waight v Seirlis [2014] QCA 325 Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 J & D Rigging Pty Ltd v Agripower Australia Limited [2014] QCA 23 Kitchen v Vision Eye Institute Ltd [2017] QCA 32 McGee v Independent Assessor &Anor [No 2] [2024] QCA 7 Mio Art Pty Ltd v Macequest Pty Ltd (No 2) [2013] QSC 271 Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281 SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd (No 2) [2020] QSC 323 Stewart v Atco Controls Pty Ltd (in liq) (No 2) (2014) 252 CLR 331 Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 COUNSEL: No appearance: Counsel’s submissions were heard on the papers No appearance: Counsel’s submissions were heard on the papers SOLICITORS: Colin Biggers Paisley for the applicant City Legal – Brisbane City Council for the respondent [1] On 6 October 2023, I delivered Reasons dismissing an application for judicial review of a decision by the respondent on 6 December 2022, confirming a decision to place a Vegetation Protection Order (VPO) over a Eucalyptus tree located on the applicant’s property.1 The parties could not agree on costs but subsequently consent directions were made for the exchange of written submissions on this issue. [2] The respondent submitted that the appropriate order is that the applicant pay its costs on the indemnity basis or, alternatively, on the standard basis.2 The applicant opposed an order for costs being made against it on the indemnity basis but accepts it ought to pay the applicant’s costs on the standard basis. [3] The only issue for my determination therefore is the basis upon which the applicant should be ordered to pay the respondent’s costs. [4] The application for costs is not made under section 49(1) of the Judicial Review Act 1991 (Qld) (“JR Act”). It follows that under s 49(4) of the JR Act, the rules of court apply to the awarding of costs in this instance. Those rules provide that the costs of proceedings are in the discretion of the court but follow the event unless the court 1 Alpine Pty Ltd v Brisbane City Council [2023] QSC 233. 2 Uniform Civil Procedure Rules 1999 (Qld) (UCPR) r 703 provides that the Court may order that costs be assessed on the indemnity basis. -- 2 of 6 -- 3 orders otherwise or the rules provide otherwise.3 Unless the rules or a court order provides otherwise, costs are to be assessed on the standard basis.4 The general rule is a "starting point" that is subject to the Court's discretion in light of the facts of the case.5 This discretion is wide and unfettered, but it must be exercised “judicially, not arbitrarily or capriciously” and not on grounds unconnected to the litigation.6 [5] One circumstance which may justify a departure from the usual rule and warrant the exercise of the discretion to award indemnity costs is the imprudent or unreasonable rejection or failure to accept a Calderbank offer to compromise.7 [6] The respondent’s claim for indemnity costs is underpinned by such an offer by reference to two letters sent to the applicant on 4 April 2023: (a) The first is an open letter, meandering over 38 paragraphs, setting out the respondent’s position that the grounds of the review were misconceived and unlikely to succeed because: (i) the evidence showed that in reaching the decisions to make and subsequently confirm the VPO, the respondent had proper regard to all of the relevant matters under the Natural Assets Local Law 2003; and (ii) the reasons adequately set out the actual path of reasoning by which the respondent had reached its decision. [7] The second letter was marked “without prejudice save as to costs” and relevantly stated as follows: “Offer to settle 9. Both your client and Council have now begun incurring potentially avoidable costs in this proceeding, 10. As we have also now (via our open letter) clearly drawn your client’s attention to the deficiencies in and limited prospects of success of its application, we consider that there is no justifiable basis upon which the parties should continue to incur any costs in this proceeding. 11. We are therefore instructed to make the following offer (Offer) in order to limit the parties’ further exposure to such costs: (a) Your client discontinue Supreme Court of Queensland matter no. 2449 of 2023 (Proceeding); 3 Section 15 of the Civil Proceedings Act 2011 (Qld): Section 21 (Schedule 1) of the Supreme Court of Queensland Act 1991 (Qld); UCPR r 681. 4 UCPR r 702. 5 Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10] (Brereton J). 6 Cretazzo v Lombardi (1975) 13 SASR 4, 11 (Bray CJ): cited with approval by Morrison JA and Livesay AJA in Doerr v Gardiner (No 2) [2024] QCA 21 at [16]. 7 Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [20] discussed by Bond J (as his Honour then was) in SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd (No 2) [2020] QSC 323 at [8]- [14] citing J & D Rigging Pty Ltd v Agripower Australia Limited [2014] QCA 23 at [5]-[6]; Hadgelias Holdings and Waight v Seirlis [2014] QCA 325 at [11]-[12]. -- 3 of 6 -- 4 (b) The parties agree to bear their own costs of and incidental to the Proceeding; (c) This offer will be open until 4.00pm on Wednesday, 12 April 2023, at which time it will lapse; (d) This offer must be accepted in writing via email to Mr Herbert of our office; and (e) This offer is made in accordance with the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333. Future conduct of the Proceeding 12. In the event your client does not accept the Offer, we reserve Council’s right to rely on this correspondence as to any future question of costs in the Proceeding. …” [8] The following six matters are frequently cited as instructive to a determination of whether a party’s rejection of a Calderbank offer was unreasonable:8 (a) First: The stage of the proceeding at which the offer was received; (b) Second: The time allowed to the offeree to consider the offer; (c) Third: The extent of the compromise offered; (d) Fourth: The offeree’s prospects of success, assessed as at the date of the offer; (e) Fifth: The clarity with which the terms of the offer were expressed; and (f) Sixth: Whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it. [9] In this case, the first, second and fifth matters are obviously in the respondent’s favour. As to the third matter: the extent of the compromise contained in the offer was one directed only to the question of costs in the event that the applicant capitulated from the outset and discontinued its application. The respondent clearly beat its offer. [10] The applicant pointed to the sixth matter and the fact that the offer did not state expressly that non-acceptance would found an application for indemnity costs as being in its favour. That, of course, is relevant but not determinative.9 In this case, the respondent is a model litigant and ought to have expressly stated that it would pursue an award of indemnity costs against the applicant. But that said, the applicant was legally represented and the potential costs consequences of an unreasonable rejection of a Calderbank offer are well established. I am therefore not satisfied that the respondent’s failure to expressly state that an award on the indemnity basis would 8 J & D Rigging at [5]-[6] citing the observations in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; recently approved in McGee v Independent Assessor & Anor [No 2] [2024] QCA 7 at [23] per Cooper J with whom Bond JA and Dalton JA agreed. 9 McGee at [28] with reference to Bulsey v State of Queensland [2016] QCA 158 at [54]; Ford v Nominal Defendant [No 2] (2023) 105 MVR 276, 284 [34]. -- 4 of 6 -- 5 be sought would have been a sufficient reason of itself to refuse an award of costs on such a basis (if I had otherwise been satisfied that such an award was an appropriate exercise of my discretion). Which, for the reasons discussed below – I am not. [11] The applicant referred to the requirement on a party resisting an order for costs on the indemnity basis to explain why it did not accept the offer beyond the usual prospects of being successful in litigation.10 I accept that no such explanation was proffered by the present applicant. But given the application was for a judicial review, it is difficult to know what further explanation could be given, apart from the applicant maintaining (as it did at the substantive hearing) that the respondent had failed to take into account a relevant consideration and had provided inadequate reasons under the Local Law for making the VPO. [12] Regardless, I do not accept the respondent’s submission that an award of indemnity costs automatically flows from the applicant’s failure to explain its refusal of the offer in the circumstances of this case;11 or that it somehow follows that the onus has shifted to the applicant. [13] It remains the case that it is the party seeking indemnity costs (in this case, the respondent) who must demonstrate that the other party acted “unreasonably or imprudently” in not accepting the offer.12 The eventual outcome in the case may go part of the way on the issue of reasonableness, but there is no presumption that ultimate success in the proceeding necessarily renders the rejection of an offer unreasonable.13 [14] The crux of the respondent’s submission is that the applicant unreasonably rejected the offer because, in the statutory context discussed in the Reasons and the matters set out in the 4 April open letter, the applicant ought to have appreciated from the outset that it had insufficient prospects of succeeding or obtaining a different outcome.14 [15] Again, the fact the respondent contended that the applicant’s grounds of review were not justified or had insufficient prospects of success, does not render the applicant’s non-acceptance of the offer unreasonable. As Hely J relevantly observed in Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281:15 “the policy of the law favours the sensible compromise of disputes ... there is also a policy against deterring parties from pursuing claims to which they reasonably believe themselves entitled.” 10 With reference to Stewart v Atco Controls Pty Ltd (in liq) (No 2) (2014) 252 CLR 331 at [4] - [6]; Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd & Anor [2016] QCA 130 at [7]; Kitchen v Vision Eye Institute Ltd [2017] QCA 32 at [11] - [12]. 11 Respondent’s submission in reply dated 8 November 2023 at [6]. 12 J & D Rigging at [5]. 13 CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75]. 14 The respondent also submitted that the applicant could have pursued other avenues if it wished to conduct work on its property; but I accept the applicant’s submission that this is not a relevant consideration to the determination of whether or not an order as to indemnity costs ought to be made. 15 289 - 290 at [46]. -- 5 of 6 -- 6 [16] At the substantive hearing, the applicant was represented by Kings Counsel, and the respondent by a senior experienced junior Counsel. The arguments were ventilated over a full day and raised a number of issues that required the construction of the Local Law. [17] My Reasons are 17 pages and reveal that I rejected all of the applicant’s arguments, and I also found that there was no reasonable basis to infer that on the regular administration of the Local Law, there was any realistic possibility of a different decision being made. But this does not mean that the review application was bound to fail or had insufficient prospects from its inception. This is particularly so where not all of the issues ventilated by the respondent were matters raised in the open letter dated 4 April 2024, and my findings included that the respondent was not required to give written reasons for its decision under the Local Law. Which, at least in the context of the facts before me, had not previously been judicially considered. [18] Overall, I am not satisfied that there was no reasonable basis for the judicial review application, or that in all of the above circumstances the applicant acted unreasonably or imprudently in rejecting the offer to walk away. I therefore decline to exercise my discretion in the way the respondent seeks. [19] I order that the applicant is to pay the respondent’s costs of the application.16 16 The respondent sought “costs of and incidental” to the application; but it is unnecessary for an order for costs to refer to “incidental costs”. Any costs actually, necessarily and reasonably incurred in relation to an application (including the cost of preparation), are recoverable under the orders as made. See Mio Art Pty Ltd v Macequest Pty Ltd (No 2) [2013] QSC 271 at [19], [20] and [21] per Jackson J. -- 6 of 6 --