Drill Engineering & Pastoral Company Pty Ltd v Seymour & Anor [2022] QDC 165

DISTRICT COURT OF QUEENSLAND CITATION: Drill Engineering & Pastoral Company Pty Ltd v Seymour & another [2022] QDC 165 PARTIES: DRILL ENGINEERING & PASTORAL COMPANY PTY LTD (Plaintiff) V ANNE SYEMOUR (First Defendant) AND MICHAEL SYEMOUR (Second Defendant) FILE NO: 21/2020 DIVISION: Civil PROCEEDING: Trial ORIGINATING COURT: Brisbane District Court DELIVERED ON: 27 July 2022 DELIVERED AT: Brisbane JUDGE: Porter QC DCJ ORDERS: 1. The defendants pay the plaintiff interest of $75,201.14. 2. The defendants pay the plaintiff’s costs of the proceedings on an indemnity basis. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS – COSTS – Where judgment was entered on the plaintiff’s claim and the defendant’s counterclaim was dismissed – Where the plaintiff made two offers to settle prior to the commencement of trial – Where the plaintiff is entitled to their costs on an indemnity basis unless the defendants can show that, in the circumstances, another order is appropriate – Where costs are awarded on an indemnity basis. COUNSEL: S. B. Whitten and Y. Araki for the Plaintiff -- 1 of 4 -- 2 W. Markwell for the First and Second Defendants SOLICITORS: Swanwick Murray Roche for the Plaintiff W J Markwell & Associates for the First and Second Defendant [1] On 16 June 2022, I handed down judgment in this matter (Drill Engineering & Pastoral Company Pty Ltd v Seymour & another [2022] QDC 136). For the reasons given there, I ordered that judgment be entered on the plaintiff’s claim and that the defendant’s counterclaim be dismissed. I sought submissions on interest and costs. There is no dispute that interest of $75,201.14 is payable. I order judgment for interest in that sum. [2] The plaintiff claims costs on an indemnity basis. The plaintiff relies on two offers made under the relevant rules in the Uniform Civil Procedure Rules 1999 (‘UCPR’) to sustain that claim. [3] The plaintiff’s first offer was made on 18 August 2020, some four months after commencement of the proceedings. The second offer was made on 28 January 2022, some six weeks before the commencement of the trial. Both offers had a substantial component of compromise as compared to the claim, the latter offer being more favourable to the defendants than the former. [4] Rule 360 of the UCPR provides: (1) If— (a) the plaintiff makes an offer that is not accepted by the defendant and the plaintiff obtains an order no less favourable than the offer; and (b) the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer; the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances. (2) If the plaintiff makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule. [5] The judgment was more favourable to the plaintiff than both of the plaintiff’s offers. The consequence is that the plaintiff is entitled to its costs on an indemnity basis unless the defendants can show that another order is appropriate in the circumstances. The defendants contend that an order for costs on the standard basis is appropriate despite the offers, relying on the following circumstances: (a) That the defendants established the inclination and deviation of the bore hole at 790 metres. The defendants submit that this is relevant because it justifies the defendants’ concerns that “something was not right” with the bore hole. -- 2 of 4 -- 3 (b) The defendants contend that there was no impropriety in the defendants’ conduct of the litigation and that the defendants conducted the case as model litigants. (c) Finally, they rely on a contention that the bore hole was shown to be non- compliant with the relevant construction standard. [6] None of these matters comprise circumstances which show that standard costs is the appropriate order despite the prima facie position established by the rejection of the plaintiff’s offer. For the most part, those matters amount to an attempt to rehash arguments which failed at trial. While the defendants’ case was arguable, it failed. If advancing specific points in defence which were reasonably arguable, but ultimately failed, was an appropriate circumstance under Rule 360, it would substantially undermine the efficacy of the process provided for under that rule. [7] The same is true of the contention that there was no impropriety in the conduct of the case. Impropriety in the form of dishonesty or deception by a party or misuse of the Court’s process can be a factor which itself justifies an order for indemnity costs, regardless of whether an offer was made. The absence of misconduct, however, is not a circumstance which shows that the ordinary consequence of rejecting a favourable offer is not appropriate. [8] It might also be observed that the conduct of the litigation by the defendants was far from perfect. The Court and the plaintiff were burdened with a great deal of evidence from the defendants’ expert which was outside his expertise and/or ultimately entirely irrelevant.1 [9] The plaintiff is entitled to its costs on an indemnity basis under Rule 360. [10] The defendants also made submissions to the effect that the cost of only one counsel should be allowed for this litigation. The invitation by the Court for submissions on orders for costs of the proceedings was not an invitation to the defendants to make submissions on the approach to be adopted to a particular outlay in the assessment of costs under the order ultimately made (in this case fees for two counsel). That is an issue for the assessment of the order for costs actually made. However, as the issue has been raised in the defendants’ submissions and responded to by the plaintiff, I will make some observations about it. [11] The defendants seem to contend that I should make an order that the costs of only one counsel should be allowed, despite the making of an order for indemnity costs. They contend, in effect, that the case was not of sufficient complexity to justify two counsel. That contention is too simplistic. [12] First, I do not accept the defendants’ characterisation of the case as a simple one. Although it involved only three days of evidence, that occurred only because 1 See for example Mr Mann’s first expert report on the depth and location of the artesian aquifers (exhibit 22.1) which I consider at paragraphs [101] to [112] in Drill Engineering & Pastoral Company Pty Ltd v Seymour & another [2022] QDC 136. -- 3 of 4 -- 4 evidence in chief was on affidavit. Further, the defendants greatly complicated the case by leading very extensive expert evidence, much of which was irrelevant or inadmissible. [13] Second, whether two counsel are appropriate for a particular case depends not just on the number of counsel, but on the seniority of those counsel and the manner in which they divide the tasks required by the trial. For example, retaining two silks might not be justified in circumstances where retaining a senior junior and a more junior counsel is justified. [14] These points tend to show that whether fees for two counsel can be recovered depends very much on the circumstances not just of the case, but of the seniority of the counsel and manner of work of those counsel. Further, the difference in cost between using just one counsel, charging at a very high rate, and using two counsel at modest rates can be illusory. [15] In this case, the plaintiff made use of a relatively senior junior counsel working with a very junior counsel. It is impossible, in my view, given the circumstances of this trial, to conclude that it is somehow unreasonable for the plaintiff to have retained those particular counsel together to conduct the trial. [16] I refuse to make an order that the costs of only one counsel be allowed to the plaintiff. That does not necessarily mean that all costs of both counsel must be allowed. Ultimately in deciding on the amount to award for indemnity costs, the costs assessor must assess the costs claimed by the plaintiff by reference to the relevant principles applicable to assessment on the indemnity basis. -- 4 of 4 --