Consortium Holdings Pty Ltd v Maybell 1 Pty Ltd (No 2) [2015] QSC 97

SUPREME COURT OF QUEENSLAND CITATION: Consortium Holdings Pty Ltd v Maybell 1 Pty Ltd (No 2) [2015] QSC 97 PARTIES: CONSORTIUM HOLDINGS PTY LTD ACN 133 192 659 ATF CONSORTIUM HOLDINGS TRUST (applicant) v MAYBELL 1 PTY LTD ACN 158 837 971 (respondent) FILE NO/S: BS10233/14 DIVISION: Trial Division PROCEEDING: Application DELIVERED ON: 27 April 2015 DELIVERED AT: Brisbane HEARING DATE: 9 March 2015 JUDGE: Jackson J ORDER: The order of the court is that the applicant pay 75 per cent of the respondent’s costs of the proceeding. CATCHWORDS: PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – CONDUCT OF PARTIES – OTHER CONDUCT – where the applicant brought proceedings to wind-up the respondent on the ground of insolvency – where the respondent was successful at trial – where the applicant submits that the respondent should only be entitled to costs up to the date where evidence was adduced for solvency – where the applicant also submits that the respondent should pay two thirds of the applicant’s costs due to the abandonment of a ground of opposition at trial – whether the respondent should be awarded costs of the proceeding on a standard basis Uniform Civil Procedure Rules 1999 (Qld), r 681(1) Allianz Australia Insurance Ltd v Swainson [2011] QCA 179, cited Consortium Holdings Pty Ltd v Maybell 1 Pty Ltd [2015] QSC 55, cited Cocias v Mt Isa Mines Ltd [1967] QWN 22, cited Interchase Corporation Pty Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 29; [2001] QCA 191, -- 1 of 3 -- 2 cited McFadzean & Ors v Construction, Forestry, Mining and Energy Union & Ors (2007) 20 VR 250; [2007] VSCA 289, cited Tabtill Pty Ltd v Creswick; Creswick v Creswick & Ors [2012] QCA 78, cited Yara Nipro Pty Ltd v Interfelt Australia Pty Ltd [2010] QCA 164, cited COUNSEL: S Coulson for the applicant C Muir for the respondent SOLICITORS: Morgan Conley for the applicant Steadfast Solicitors for the respondent [1] Jackson J: On 24 March 2015 I made an order dismissing the proceeding.1 On 30 March 2015 and 1 April 2015, the parties made written submissions as to costs [2] The proceeding was an application for an order that the respondent be wound up on the ground of insolvency. The ground was based on the respondent’s non- compliance with a statutory demand. [3] The respondent’s opposition to the application was based on five grounds set out in the entry of appearance filed 1 December 2012. Only two of them need be mentioned, because the others do not appear to have been the cause of any delay or waste of costs. [4] The application was dismissed because the respondent proved that it was solvent. The event in the proceeding, namely dismissal of the application to wind up, turned on that question. The Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), r 681(1) provides that the costs of a proceeding follow the event, unless the court orders otherwise. The applicant submits that the respondent ignored the statutory demand and did not put on evidence as to its solvency until 10 February 2015. Accordingly, the applicant submits the respondent should pay the applicant’s costs of the proceeding up until 10 February 2015. [5] In my view, this submission is not persuasive. First, the respondent’s evidence showed that it did not ignore the statutory demand – it did not know about it because Ms May failed to clear the relevant post box to which it had been sent. Secondly, there was no delay or undue delay in the respondent’s preparation and provision of evidence to show positively that it was solvent. [6] The applicant also submits that the respondent should be ordered to pay two thirds of the applicant’s costs because the respondent also opposed the application on the ground that the proceeding was an abuse of process. That ground of opposition was abandoned during the trial. The applicant submits that the bulk of the evidence in preparation for trial and the events of trial concerned this ground. It submits that the affidavit material from both sides overwhelmingly addressed this issue and that the 1 Consortium Holdings Pty Ltd v Maybell 1 Pty Ltd [2015] QSC 55. -- 2 of 3 -- 3 ground was doggedly pursued by the respondent in both its material and at hearing, including almost all of the cross-examination of the applicant’s witnesses. [7] The respondent disputes the extent to which the affidavit material addressed the abuse of process ground. I agree that the applicant has to some extent overstated the extent of the affidavit material that went only to that ground. But the point remains that a significant part of the affidavit material did go to it. The respondent also submits that the abuse of process ground of opposition was abandoned prior to addresses. I accept that is true, but the point remains that it took up a significant part of the day of hearing. The respondent submits that the costs that could be said to have arisen as a result of the abuse of process issue are minimal. I do not know on what basis either party has formulated its view as to the relevant apportionment of the costs incurred on that issue. [8] I do not consider that it is appropriate to treat the abuse of process ground as a separate event in this case, even though that could be done.2 Where a party is successful, there is a tendency not to treat a failed alternative ground of claim or defence as a separate event so as to deprive it of the benefit of an order for the costs of the claim or application that it would otherwise have.3 [9] In my view, in the context of the proceeding overall, the costs that may have been associated with the abuse of process issue are not such as to deprive the respondent of an order for costs that follows the event. [10] Nevertheless, it does seem to me that the parties’ costs were increased by the abuse of process ground and that on the evidence that was tendered at the hearing, it was always an unlikely prospect that the abuse of ground prospect might succeed. [11] Accordingly, in my view, it is proper to deprive the respondent of the benefit of an order for costs intended to indemnify it for the whole of the costs of the proceeding on the standard basis. The conclusion to which I have come is that it is appropriate to make an order that the applicant pay 75 per cent of the respondent’s costs of the proceeding, as a rough estimate of the appropriate apportionment.4 2 Interchase Corporation Pty Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 29, 60- 61 [82]-[84]. 3 Tabtill Pty Ltd v Creswick; Creswick v Creswick & Ors [2012] QCA 78, [6]; Allianz Australia Insurance Ltd v Swainson [2011] QCA 179, [4]; Yara Nipro Pty Ltd v Interfelt Australia Pty Ltd [2010] QCA 164, [8]. 4 Cocias v Mt Isa Mines Ltd [1967] QWN 22 at 38-39; McFadzean & Ors v Construction, Forestry, Mining and Energy Union & Ors (2007) 20 VR 250, 291-293 [157]-[160]. -- 3 of 3 --