Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd & Ors (No 2) [2019] QSC 224

SUPREME COURT OF QUEENSLAND CITATION: Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd & Ors (No. 2) [2019] QSC 224 PARTIES: BERG ENGINEERING PTY LTD ACN 050 400 505 (Plaintiff) v TIVITY SOLUTIONS PTY LTD ACN 623 215 092 (First Defendant) AND BEN NATHAN GABLONSKI (Second Defendant) AND CRAIG VINCENT BOLAND (Third Defendant) FILE NO/S: BS No 4730 of 2018 DIVISION: Trial Division PROCEEDING: Application for costs of application filed 2 October 2018 ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 13 September 2019 DELIVERED AT: Brisbane HEARING DATE: Written submissions JUDGE: Jackson J ORDER: The order of the court is that: 1. The plaintiff pay the defendants’ costs of the application filed on 2 October 2018; 2. The costs of compliance with the execution of the search order made on 20 September 2018 and of the proceedings thereon are reserved. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – whether a special order should be made that the costs be assessed on the indemnity basis or equivalent – where it was held that the plaintiff pay the defendants’ costs of the application to set aside the search order of 20 September 2018 -- 1 of 4 -- 2 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No. 2) [2016] QSC 65, cited Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd & Ors [2019] QSC 68, cited Colgate-Palmolive Co. v Cussons Pty Ltd (1993) 46 FCR 225, cited Palaris Mining Pty Ltd v Short & Anor [2012] QSC 224, cited Re South Downs Packers Pty Ltd [1984] 2 Qd R 559, cited Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540, cited Vinod Chopra Films Private Limited v John Doe [2010] FC 387, cited Uniform Civil Procedure Rules 1999 (Qld) COUNSEL: D Kelly QC and D Clarry for the plaintiff SOLICITORS: Russells for the plaintiff Carter Newell for the defendants JACKSON J: [1] On 26 March 2019, in accordance with the reasons for judgment in Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd & Ors,1 I made orders on the defendants’ application to set aside the search order made on 20 September 2018. The question of costs was deferred until written submissions were made. Shortly after that, the plaintiff started an appeal from those orders. As well, the parties made their written submissions on the question of costs of the application for those orders and related proceedings. The appeal has now been heard, but not decided. Notwithstanding the unresolved appeal, the parties request that I decide the questions of costs of the application. [2] The defendants apply for an order that the plaintiff pay their costs of the application to set aside the search order and their costs of complying with the search order, on the indemnity basis. It is not clear precisely what form of order is sought, but in their written submissions the defendants contend that the entire exercise and the costs of compliance have been wasted and the defendants ought to have an order that the plaintiff pay their costs occasioned by the making of the search order, which would include not only compliance when the order was executed but also subsequent proceedings thereto. 1 [2019] QSC 68. -- 2 of 4 -- 3 [3] As to whether the costs should be ordered to be assessed on the indemnity basis, the defendants submit that in accordance with the well-known principles to order that a party pay indemnity costs,2 the matters of material non-disclosure identified in my reasons for judgment were obvious and the plaintiff ought to have known, properly advised, that its defence of the application to set aside the search order would not prevail. [4] As well, the defendants rely on a Canadian case: Vinod Chopra Films Private Limited v John Doe3 as being somewhat analogous. However, in my view, the decision in that case to set aside a “rolling” Anton Piller order, because of particular defects in the evidence described as being insufficient, careless and misleading evidence, is not a particularly close analogy to the present case. [5] The plaintiff submits that the appropriate order is that each party should bear their own costs of the application or there should be no order as to costs, or that any order for costs should be discounted because of the manner in which the application to set aside the search order was conducted, and the discounted amount or proportion should be ordered to be the defendants’ costs in the proceeding. The plaintiff makes no direct submission about what order for costs should be made in respect of the costs of complying with the execution of the search order or the subsequent proceedings thereto. [6] I take as the starting point that costs of an application in a proceeding are in the discretion of the court, but follow the event, unless the court orders otherwise.4 Second, the costs to which a party is entitled are to be assessed5 and, unless an order provides otherwise, must be assessed on the standard basis.6 The court may order costs to be assessed on the indemnity basis as a matter of discretion.7 It may also make an order for costs in relation to a particular question or particular part of a proceeding, including a proportion of a party’s costs.8 [7] Next, both the rules of court and comparable decisions9 suggest that unless a special costs order is made, an order that costs follow the event, in this case that the defendants succeeded on the application to set aside the search order, should be made. [8] The plaintiff’s opposition to such an order is founded on the submission that my reasons for judgment on the application acknowledged that there are substantive disputes between the parties which await determination at the trial, including the extent of the documents or computer files found on execution of the search order which can properly be described as the property of the plaintiff, or as containing the plaintiff’s confidential information, the commercial significance of those documents, and whether the defendants’ removal of or failure to produce to the plaintiff any such documents was inadvertent. [9] In my view, those points do not detract from the conclusion that the defendants have succeeded on the application. The orders made were that the search order made on 20 2 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No. 2) [2016] QSC 65, [4]; Colgate-Palmolive Co. v Cussons Pty Ltd (1993) 46 FCR 225. 3 [2010] FC 387. 4 Uniform Civil Procedure Rules 1999 (Qld), r 681(1). 5 Uniform Civil Procedure Rules 1999 (Qld), r 687(1) 6 Uniform Civil Procedure Rules 1999 (Qld), r 702(1). 7 Uniform Civil Procedure Rules 1999 (Qld), r 703(1). 8 Uniform Civil Procedure Rules 1999 (Qld), rr 684(1) and 687(2). 9 For example, Palaris Mining Pty Ltd v Short & Anor [2012] QSC 224, [48]. -- 3 of 4 -- 4 September 2018 was set aside and that the things and documents seized that were in the custody of the independent solicitor were to be returned to the defendants’ solicitors. [10] Accordingly, in my view, that there were questions sought to be ventilated by the plaintiff in opposition to those orders, that include questions still to be resolved at trial, that may produce a judgment adverse to the defendants in the proceeding, is not a reason either to defer the making of a costs order on this application or to decide that those costs should abide the result of the trial by an order that the costs of the application be made the defendants’ costs in the proceeding. [11] On the other hand, in my view, those parts of my reasons for decision also demonstrate that the defendants’ submission that the plaintiff ought to have known, properly advised, that its defence of the application would not succeed, to the extent that an order for indemnity costs should be made, overstates the strength of defendants’ position on the application, generally, and upon the question of costs of the application, particularly. [12] It may be that in some, or even many, cases of an injunction or search order set aside for material non-disclosure, a special costs order such as that costs be assessed on the indemnity basis is warranted, but there is by no means any general pattern of decisions that supports the conclusion that such an order will be made as of course. In a number of the material non-disclosure cases referred to in my reasons for decision, an order for costs was made without any special order that the costs be assessed on the indemnity basis or equivalent.10 [13] In the circumstances of this case, in my view, the appropriate order is that the plaintiff pay the defendants’ costs of the application to set aside the search order made on 20 September 2018. Because the rules provide for the order to be assessed on the standard basis, unless another order is made, it is unnecessary to expressly state in the order that the costs are to be assessed on the standard basis. Similarly, because the rules so provide, it is unnecessary to expressly state that the costs are to be assessed. [14] As to the costs of compliance with the execution of the search order and the subsequent costs of the proceedings in relation to the things and documents seized, in my view, it should be ordered that those costs be reserved, because of the unresolved questions previously mentioned. 10 Re South Downs Packers Pty Ltd [1984] 2 Qd R 559, 577; Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540, 545; Palaris Mining Pty Ltd v Short & Anor [2012] QSC 224, [48]. -- 4 of 4 --