Equititrust Limited v Tucker & Ors [2021] QSC 259

SUPREME COURT OF QUEENSLAND CITATION: Equititrust Limited v Tucker & Ors [2021] QSC 259 PARTIES: EQUITITRUST LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ON ITS OWN ACCOUNT AND AS TRUSTEE OF THE EQUITITRUST PREMIUM FUND ACN 061 383 944 (plaintiff) v DAVID ROBERT WALTER TUCKER (first defendant) TUCKERLOAN PTY LTD ON ITS OWN ACCOUNT AND AS TRUSTEE OF THE TUCKERLOAN TRUST ACN 101 109 157 (second defendant) DAVID ROBERT WALTER TUCKER AND RICHARD TERRICK COWEN CARRYING ON PRACTICE AS PARTNERS UNDER THE NAME TUCKER & COWEN SOLICITORS (A FIRM) (fifth defendants) TCS SOLICITORS PTY LTD ACN 610 321 509 (sixth defendant) FILE NO: BS 7399 of 2018 DIVISION: Trial Division PROCEEDING: Civil (Commercial List) DELIVERED ON: 13 October 2021 DELIVERED AT: Brisbane HEARING DATE: On the papers JUDGE: Bradley J ORDER: The parties’ costs of the application filed on 24 August 2021 (on behalf of the first and second defendants and first named fifth defendant) are their costs in the proceeding. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where the parties seek their respective costs of a strike out application – where the application was made on short notice and without the usual pre-application communications – where the plaintiff delivered a proposed amended pleading and the application was dismissed – where the amended pleading addressed some of the relief sought in the application – whether the applicants or the amending party should pay the costs of the strike out -- 1 of 4 -- 2 application or whether the parties’ respective costs should be their costs in the proceeding Uniform Civil Procedure Rules 1999 (Qld), r 681(1) COUNSEL: S C Russell (sol) for the plaintiff A G Psaltis for the first and second defendants and first named fifth defendant SOLICITORS: Russells for the plaintiff Bartley Cohen for the first and second defendants and first named fifth defendant [1] The first and second defendants and first named fifth defendant (the Tucker defendants) seek an order that the plaintiff (Equititrust) pay their costs of an application they filed in the proceeding on 24 August 2021 (the strike out application). Equititrust seeks an order to the reverse effect or an order that the parties’ costs of the application are their costs in the cause. [2] On 30 September 2021, the Tucker defendants and Equititrust provided written submissions on the appropriate costs order. On 1 October 2021, both of these parties advised the court that they consented to the court making a decision on the papers without an oral hearing. I am content to do so, as it is in accordance with the just, efficient and expeditious disposal of the case.1 These reasons address the matters raised in those written submissions. The strike out application [3] By the strike out application, the Tucker defendants sought an order pursuant to rule 171 of the Uniform Civil Procedure Rules 1999 (Qld), striking out parts of some words from paragraph 131(g) and the whole of paragraphs 112A, 112B, 112C and 134(a) of the fifth further amended statement of claim (the 5FASOC).2 [4] On 24 August 2021, when the Tucker defendants filed the strike out application, they made it returnable before the court on 26 August 2021. By an order made on 30 July 2021, that date had been fixed for the hearing of an application filed on 23 July 2021 on behalf of Equititrust seeking orders pursuant to rules 223 and 367 in respect of the disclosure made by the Tucker defendants. [5] On 26 August 2021, Equititrust’s application was heard and determined. The Tucker defendants’ application was not determined. This outcome was explained in ex tempore reasons delivered that day: “In the course of the hearing, submissions were made about a second application that was filed on behalf of the Tucker defendants. By it, they seek an order pursuant to rule 171 striking out some words in paragraph 131(g) and the whole of paragraphs 112A, 112B, 112C and 134(a) of the current statement of claim. Those matters in the 1 See: Practice Direction No 3 of 2002, [18](a). 2 The 5FASOC had been filed on 9 August 2021. The Tucker defendants had filed a defence to it on 23 August 2021. -- 2 of 4 -- 3 pleadings go to an allegation that the receivers of Equititrust paid an additional amount to MS Asia, that is, in addition to the funds that were remitted to MS Asia through the Tucker and Cowen trust account. I find the various parts of the present statement of claim dealing with this subject quite confusing. I have suggested to the parties that this application might be adjourned to allow Equititrust some time to consider those parts of its pleading and to determine what, if anything, it might wish to do with them. The application was filed with very short notice. It would be improper to expect Equititrust to be able to deal with it ‘on the fly’ today. If a resolution as to that matter is not reached between the parties within a reasonable time, then the Tucker defendants might consider bringing the application on for hearing on appropriate notice to Equititrust. So, the orders that I will make are that the application filed on 23 July 2021 is dismissed and the application filed 24 August 2021 is adjourned to a date to be fixed.” [6] On 6 September 2021, before the strike out application was listed for any further hearing, Equititrust delivered a proposed amended pleading. Paragraphs 112A and 112B were deleted and the figures pleaded in paragraphs 112C and 136(g) were amended. Paragraph 134(a) remained. Changes were made to paragraphs 88A and 96A(d). The effect of the amendments was that Equititrust withdrew an allegation that the receivers of Equititrust received $1,806,363.55 in addition to the sum the Tucker defendants admit the receivers received and withdrew an allegation that the Tucker defendants received one third of $646,269.34, formerly alleged to have been paid away from amounts received by the receivers. [7] On 20 September 2021 the strike out application was dismissed. [8] On 21 September 2021, the proposed pleading was filed and served as the sixth further amended statement of claim (6FASOC). Consideration of the submissions [9] I have considered the written submissions provided by the parties. [10] In short, Equititrust submits that, as the strike out application was dismissed, the Tucker defendants should be ordered to pay Equititrust’s costs of the application, in accordance with r 681(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). Alternatively, Equititrust contends that the “success” of the Tucker defendants was “mixed and insubstantial” so that they should pay the costs or “at best for them” they should be costs in the proceeding. [11] According to the Tucker defendants, in brief, the 6FASOC “addresses, substantively, the relief sought in the strike-out application”. They submit Equititrust ought to be ordered to pay their costs of the application, because it brought about an amendment to Equititrust’s pleading generally to the effect they sought. [12] The Tucker defendants brought the strike out application “in response to” Equititrust’s disclosure application. They frankly admit that they would not have incurred the expense of the strike out application had Equititrust not brought the -- 3 of 4 -- 4 disclosure application. The Tucker defendants filed the strike out application about a month after the disclosure application was filed, and only two days before it was to be heard. Equititrust contends the Tucker defendants served written submissions in relation to the strike out application the next day, 25 August 2021, which “for the first time” explained “the basis of the complaints” about its pleading.3 [13] The filing of an application to strike out part of a pleading is a serious matter. It would be usual for a party to employ the processes available under chapter 11 part 8 of the UCPR before doing so. Where, as here, the pleading was settled by counsel, professional courtesy would usually require some prior communication between counsel of the intention to bring such an application. [14] With the benefit of hindsight, it may be observed that, following the articulation of the specific challenges to paragraphs 112A-112C, 131(g) and 134(a), Equititrust was prepared to make amendments to its pleading to accommodate, to some considerable extent, the concerns raised by the Tucker defendants. [15] The strike out application was made on very short notice, without the usual pre- application communications. It is possible that the same outcome could have been achieved, without the filing of the strike out application, had those communications been employed. [16] The acute cause for the application was Equititrust’s disclosure application, but the underlying objection could have been pursued by the Tucker defendants more actively in correspondence at a considerably earlier time. In such a scenario, if the usual communications did not yield an outcome satisfactory to the Tucker defendants, a strike out application could then have been filed and the parties’ respective positions on costs would be different. [17] In the circumstances, I am not persuaded that, in the Tucker defendants’ words, “fairness dictates” that Equititrust “bears the liability for the costs” of the Tucker defendants. The appropriate order is the parties’ respective costs of the strike out application are their costs in the proceeding. 3 Those written submissions were filed by leave at the hearing on 26 August 2021. -- 4 of 4 --