Civil Mining & Constructions Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2023] QSC 92 (2023) 14 QR 323

SUPREME COURT OF QUEENSLAND CITATION: Civil Mining & Constructions Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2023] QSC 92 PARTIES: Civil Mining & Constructions Pty Ltd (Respondent/Plaintiff) v Wiggins Island Coal Export Terminal Pty Ltd (Applicant/Defendant) FILE NO/S: BS 6050 of 2013 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 5 May 2023 DELIVERED AT: Brisbane HEARING DATE: 3 April 2023 JUDGE: Martin SJA ORDER: Wiggins Island Coal Export Terminal Pty Ltd is to bring in minutes of order. CATCHWORDS: PROCEDURE – COSTS – SET-OFF OF COSTS – GENERALLY – where both parties have a costs order – where one costs order has had judgment entered and one costs order is to be assessed – where one costs order is sought to be set off against another costs order – where size and complexity of litigation causes the costs assessment to take longer than ordinary – whether the Court should exercise a set off discretion – whether there should be a stay of execution of a costs order – whether there has been any delay Uniform Civil Procedure Rules 1999 (Qld), r 741 Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812, approved Cameron v Nominal Defendant [2001] 1 Qd R 476, cited Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85, cited Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2020] QSC 1, cited Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453, applied -- 1 of 8 -- 2 Colburt v Beard [1992] 2 Qd R 67, cited Elphick v Elliot [2003] 1 Qd R 362, considered Lahoud v Lahoud [2012] NSWSC 284, cited Miller v Director of Public Prosecutions (No 2) [2004] NSWCA 249, considered Team Dynamik Racing Pty Ltd v Longhurst Racing Pty Ltd & Ors [2008] QSC 36, applied Wentworth v Wentworth (Supreme Court of New South Wales, Young J, 12 December 1994), considered Wiggins Island Coal Export Terminal Pty Ltd v Civil Mining & Construction Pty Ltd [2021] QCA 8, cited COUNSEL: P O’Shea KC and S Eggins for the applicant defendant B O’Donnell KC for the respondent plaintiff SOLICITORS: Corrs Chambers Westgarth for the applicant defendant Thomson Geer for the respondent plaintiff [1] After a lengthy trial concerning a complex construction dispute over works performed at a coal export terminal near Gladstone, Flanagan J gave judgment for the plaintiff (CMC) on its claim and judgment for the defendant (WICET) on its counterclaim.1 On 31 January 2020 his Honour ordered that WICET pay CMC’s costs of the claim and that CMC pay WICET’s costs of the counterclaim.2 A little over three years later, WICET seeks an order that the costs orders be set off against each other and that there be a stay of execution of the balance which WICET says it will owe CMC until WICET’s costs have been assessed. [2] CMC submits that the Court should not exercise is discretion in WICET’s favour on the basis that there has been undue delay by WICET in seeking these orders and that WICET has not shown it will be prejudiced should an order not be made. The history of this litigation since judgment [3] As delay is at the heart of this dispute, it is necessary to set out some of the steps which have been taken and when they were taken: Date Event 31.01.20 Order for costs of the claim by CMC to be paid by WICET and for the costs of the counterclaim to be paid by CMC to WICET. 29.01.21 An appeal by WICET against the costs orders made by Flanagan J was dismissed by the Court of Appeal.3 15.10.21 CMC delivered its costs statement. 1 [2017] QSC 85. 2 [2020] QSC 1. 3 [2021] QCA 8. -- 2 of 8 -- 3 29.07.22 WICET served a costs statement in respect of the costs it claims in the counterclaim pursuant to Uniform Civil Procedure Rules 1999 (UCPR) r 705. The primary sum claimed is $1,723,111.04. 15.08.22 WICET served a replacement costs statement after complaints made by CMC that the original statement did not comply with the rules. 31.10.22 CMC served its notice of objection under r 706. 04.11.22 WICET filed an application seeking an order appointing Mr Roberts to undertake the assessment of WICET’s costs of the counter-claim. 30.11.22 Boddice J ordered that WICET’s application concerning Mr Roberts be adjourned to be heard concurrently with the review by the court of his assessment of CMC’s costs of the claim. 13.03.23 The costs assessor, Mr Roberts, issued his final certificate on the order in favour of CMC in the sum of $6,605,189.25. 28.03.23 The Registrar ordered that WICET pay, in full, the costs order in CMC’s favour as assessed. That order took effect as a judgment of the court. [4] The costs assessor, Mr Roberts, was appointed by consent to deal with CMC’s costs claim. WICET has applied to have Mr Roberts appointed to assess its costs but that is opposed by CMC on the basis that both it and WICET have sought to review the assessment of CMC’s costs statement. The opposition is based on several complaints, including that Mr Roberts made inappropriate reductions and made them on an indiscriminate basis. [5] On 30 November 2022, Boddice J heard WICET’s application to appoint Mr Roberts to assess the costs of the counterclaim. His Honour declined to do so and said: “I am satisfied it is in the interests of justice that the present application be adjourned, to be heard at the review of the cost assessment of the plaintiff’s costs order. If that review is upheld, the process that is to be undertaken by the cost assessor will not only be better informed but so would the Court as to whether that person is an appropriate person to undertake the assessment of the current costs order in respect of the counterclaim.” [6] Boddice J ordered that the application for an order to appoint Mr Roberts be adjourned until 1 February 2023 to be heard with the application filed by CMC on 23 November 2022. The power to set off costs orders [7] It was not disputed that the court has the power to order that two sets of costs may be set-off against each other. For example, in r 741 of the UCPR it is provided that that can be done by the Registrar, but only when both sets of costs have been assessed. [8] In Elphick v Elliott,4 Dutney J proceeded on the basis that the court has a discretionary equitable jurisdiction to order that a judgment debt for damages be set off against unascertained costs awarded in the proceeding to the opposing party. That view was not adopted by Fryberg J in Team Dynamik Racing Pty Ltd v Longhurst Racing Pty 4 [2003] 1 Qd R 362. -- 3 of 8 -- 4 Ltd & Ors5 where he held that the reasoning of Dutney J was, in the circumstances of that case, “plainly obiter dictum”. He went on to say: “I do not think, as a matter of principle, that the power of the Court in relation to costs ought to be inhibited in the manner implicit in his Honour’s dicta. It seems to me that the Court’s inherent power in relation to costs is general. It is discretionary and that discretion ought not to be limited by a search through the categories of equity which, with great respect to his Honour, does not seem to me likely to be a process of greater clarity or certainty than the exercise of an undefined inherent jurisdiction.”6 [9] I prefer, with respect, the reasoning of Fryberg J. It has also been adopted by Perram J in Aristocrat Technologies Australia Pty Ltd v Allam7 with whose analysis I am in respectful agreement: “[11] As to the right to set off one costs judgment against another, the following propositions are relevant to this case. First, at least in Australia it now appears to be settled that the jurisdiction being exercised neither arises from statutory nor equitable origins but is instead an exercise of the Court’s inherent jurisdiction over its own suitors: see Wentworth v Wentworth (Unreported, Supreme Court of New South Wales, Young J, 12 December 1994) at 3–4 (‘Wentworth’); Australian Beverage Distributors v Evans & Tate Premium Wines Pty Ltd [2006] NSWSC 560; (2006) 200 FLR 332 (‘Australian Beverage Distributors’) at 347; [68]–[70] per White J; Sivritas v Sivritas [2008] VSC 374; (2008) 23 VR 349 at 390 [22] per Kyrou J; Team Dynamik Racing Pty Ltd v Longhurst Racing Pty Ltd [2008] QSC 36 at p 9 per Fryberg J; Lahoud v Lahoud [2012] NSWSC 284 (‘Lahoud’) at [72]–[79] per Ward J. Australian Beverage Distributors was referred to by the New South Wales Court of Appeal as authority for this proposition without disapproval, although the Court’s statement was not critical to the conclusion in the case: State of New South Wales v Hamod [2011] NSWCA 376 at [35]–[37] per Giles JA (Beazley and Whealy JJA agreeing). I proceed on the largely settled basis that the jurisdiction being exercised is inherent.” (emphasis added) [10] A set-off is also available where, as here, judgment has been entered for CMC’s costs but WICET’s costs are yet to be assessed.8 [11] WICET argued that where an unliquidated costs order is set-off against a liquidated costs order then the appropriate course is to stay the operation of the costs judgment pending the assessment of the unliquidated costs order. Support for this was found in the unreported decision of Young J in Wentworth v Wentworth:9 “ … he is entitled to an order under the inherent power that, because of the principles of fairness referred to in the authorities, there should 5 [2008] QSC 36. 6 Ibid at p 9. 7 [2017] FCA 812 at [11] – [12]. 8 Lahoud v Lahoud [2012] NSWSC 284 at [82]; Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812 at [12]. 9 (Supreme Court of New South Wales, Young J, 12 December 1994) at 12. -- 4 of 8 -- 5 be set-off against the various orders for costs one way or the other in these proceedings and there should be no execution until the taxation of all the bills is complete and it can be seen which way the balance lies. If through one person’s fault the taxations are needlessly prolonged, then it may be that one or other party can apply to the Court for leave to issue execution. However, apart from that matter the stay should be imposed.” [12] WICET also relied on this statement by Young J where, having considered the early authorities on this matter, he said: “The whole tone of the authorities on set-off is that ordinarily it is appropriate in the one piece of litigation where each party has been in receipt of a favourable order for costs and each party has been ordered to pay some costs, that there should be a set-off and that only the ultimate balance should be paid one way or the other.”10 The effect of delay [13] CMC did not argue that the Court could not order that there be a set-off; rather, it concentrated on opposing an order that there be a stay – mainly on the basis of WICET’s delay. [14] It has been open to WICET to seek an order setting off the two costs orders from the time those orders were made, that is, 31 January 2020. But, given that there was an appeal from the costs judgment, I consider that the “starting time” should be the date of the Court of Appeal’s decision – 29 January 2021. It has had opportunities since then to seek such an order. It did not deliver its Costs Statement until about 1½ years after the appeal decision. [15] WICET argues that the delay which has occurred is explicable. The size of the task of dealing with the costs statement and related matters is described by Mr Spiller (a partner at Corrs Chambers Westgarth with responsibility for this matter) in his various affidavits. A brief history gives a reasonable idea of the work which needed to be done: ▪ CMC’s costs statement (served on 15 October 2021) contained 19,434 items over 2,490 pages and claimed $10,729,265.15; ▪ an extension of time to serve a notice of objection was granted; ▪ the notice of objection (dated 19 March 2022) contended that the costs should be reduced to $4,278,473.55; ▪ on 10 May 2022, CMC provided a 214-page response to WICET’s notice of objection; ▪ on 16 June 2022, Mr Roberts was appointed as the costs assessor; and ▪ on 25 August 2022, WICET provided a 48-page submission in reply to CMC’s response. 10 Ibid at 9. -- 5 of 8 -- 6 [16] Mr Roberts issued a costs assessor’s certificate on 9 November 2022. After that there were numerous steps taken by both parties. Recourse was had to this Court and orders were made. The final certificate was issued on 14 March 2023. [17] On 4 November 2021 WICET had retained DGT Costs to prepare the objection referred to above and to prepare a costs statement in respect of WICET’s costs of the counterclaim. Mr Spiller deposes to his view that it made sense for DGT Costs to prepare the objection, as it required immediate attention because of the time constraints imposed by the UCPR. He also opined that the preparation of WICET’s costs statement would be informed by decisions made in the preparation of the notice of objection to CMC’s costs statement. [18] On 29 July 2022 WICET served its costs statement on CMC. Further steps were then taken and, on 4 November 2022, WICET applied for an order appointing Mr Roberts to assess the cost of the counterclaim. CMC contested that application. [19] It was argued that delay should be taken into account and that the benefit of the order obtained by CMC should not be dissipated when WICET did not take steps for over three years to protect its own position. In Miller v Director of Public Prosecutions (No 2)11 a delay of about three years in filing a memorandum for assessment of costs persuaded Sheller JA (with whom Young CJ in Eq agreed) to refuse an order allowing the set-off claimed in that case. [20] The circumstances in Miller were different in many ways but I accept that the general approach of discouraging delay should apply. [21] Delay is an element to be taken into account. But, in this case, I am satisfied that the extreme complexity and size of the various statements supporting the costs sought means that much more time than would ordinarily be acceptable should be allowed. WICET did delay in appointing DGT Costs after the decision in the Court of Appeal. Since then it has proceeded, if not expeditiously, then at a reasonable pace given all the circumstances of this case. Would a stay be granted? [22] A set-off is of no use to WICET unless there is a corresponding stay of the order in CMC’s favour. The order obtained by CMC for costs is a final order.12 [23] The circumstances in which a stay may be granted where an appeal has been instituted have been considered on a number of occasions. I am content to apply what was said by Keane JA (with whom McMurdo P and White AJA agreed) in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd:13 “[12] The decision of this Court in Berry v. Green suggests that it is not necessary for an applicant for a stay pending appeal to show “special or exceptional circumstances” which warrant the grant of the stay. Nevertheless, it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgments of 11 [2004] NSWCA 249. 12 Colburt v Beard [1992] 2 Qd R 67 at 68; Cameron v Nominal Defendant [2001] 1 Qd R 476 at [6]. 13 [2008] 2 Qd R 453 at [12]. -- 6 of 8 -- 7 the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation.” (emphasis added) [24] This case is not about an appeal, but the broad principle enunciated by Keane JA in Cook’s Construction should be borne in mind. To do otherwise would mean that the order relied upon would be treated as merely provisional. [25] But, where one party has had its costs assessed and judgment has been given, and it is ordered that the costs of the parties be set-off against each other, then to refuse a stay would be to render the set-off nugatory. [26] One reason which might support a refusal to grant a stay, notwithstanding an order for set-off, would be if the stay would cause prejudice to the party with the advantage of a court order. [27] On this point, Mr O’Donnell KC sought to rely on an affidavit by Deborah Woodroffe, the Chief Financial Officer of CMC. In paragraph [5] of her affidavit filed by leave, Ms Woodroffe says: “I am of the opinion, and believe to be true based on my role, that if the Court is minded to grant the Defendant a stay of $1,723,111.04 that will: (a) reduce the Plaintiff’s capacity to win and compete for future projects; (b) effect [sic] the Plaintiff’s eligibility to meet certain financial pre- qualification levels; and (c) limit the Plaintiff’s capacity to obtain security bonds such as bank guarantees for future projects.” [28] No factual foundation for the opinions expressed was provided. That absence renders those opinions inadmissible. The absence of any precision in the expression of the opinions meant that they would have been of no use in any event. [29] There is, then, no compelling evidence of any prejudice. [30] CMC has not demonstrated that it would be prejudiced by the granting of a stay with respect to the amount it claims it should receive by way after setting to one side the amount claimed by WICET for the costs of the counterclaim. For example, a stay would not, on the material before me, create any risk of irremediable damage. It was common ground that WICET would be able to pay whatever amount might be finally determined as owing by it. -- 7 of 8 -- 8 Orders [31] I will make an order in the terms sought in paragraphs 1 and 2 of the Application filed 29 March 2023. [32] WICET is to bring in minutes of order. [33] I will hear the parties on costs. -- 8 of 8 --