Dromahair P/L v K J and G L Schamburg P/L(as trustee of the Schamburg Property Trust) (No 2) [2014] QDC 139

DISTRICT COURT OF QUEENSLAND CITATION: Dromahair P/L v K J and G L Schamburg P/L(as trustee of the Schamburg Property Trust) (No 2) [2014] QDC 139 PARTIES: DROMAHAIR PTY LTD (plaintiff) v K J and G L SCHAMBURG PTY LTD (as trustee of the Schamburg Property Trust) (defendant) FILE NO/S: D119/13 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Rockhampton District Court DELIVERED ON: 18 June 2014 DELIVERED AT: Rockhampton HEARING DATE: Hearing on the papers. JUDGE: Smith DCJ ORDER: 1. The plaintiff is to pay 50% of the defendant’s costs of and incidental to the application filed on 19 March 2014 as agreed or assessed on the standard basis on the District Court scale. 2. Liberty to apply. CATCHWORDS: COSTS – where defendant was partially successful – whether costs should follow the event Uniform Civil Procedure Rules 1999 (Q) rr 443, 444, 681, 687 Dromahair Pty Ltd v K J and G L Schamburg Pty Ltd (as trustee of the Schamburg Property Trust) [2014] QDC 87 COUNSEL: Written submissions of the plaintiff received on 10 June 2014. Written submissions of the defendant received on 10 June 2014 SOLICITORS: McNamara & Associates for the plaintiff Grant & Simpson Lawyers for the defendant -- 1 of 3 -- 2 Introduction [1] This is the costs decision consequent on the decision in Dromahair Pty Ltd v K J and G L Schamburg Pty Ltd (as trustee of the Schamburg Property Trust) [2014] QDC 87. [2] In summary the defendant was successful in its application to strike out the plaintiff’s statement of claim but was unsuccessful in striking out the action. Submissions [3] The defendant submits that the principal application was for default judgment on the counterclaim and judgment of the claim based on deemed admissions because the plaintiff had failed to serve a reply and answer. It submits that the plaintiff was served with the defence on 14 January 2014. [4] It further submits the plaintiff was clearly put on notice when an application was pending. On 29 January 2014 the solicitors for the defendant sent a r 444 letter to the plaintiff but no response was received (affidavit of Bianca White filed 19 March 2014 – Exhibit BRW5). A follow up letter was sent by facsimile on 14 March 2014. This was also ignored. [5] It is also pointed out by the defendant that the affidavit of John O’Rourke sworn 28 March 2014 (court document no 10) makes it plain that he intentionally halted the proceedings because he was in no position to proceed with the matter until his lawyers had been paid. [6] It is further submitted there was no requirement pursuant to r 443 of the UCPR to give notice as to paragraphs 1, 2 or 3 of the application. In any event on the first return date the court granted the plaintiff the indulgence of an adjournment and the opportunity to file a reply which was eventually filed on 4 April 2014. Also on that occasion costs thrown away were ordered to be paid by the plaintiff. [7] It is further submitted that the defendant has been wholly successful in its application to strike out the statement of claim and therefore r 681 of the UCPR dictates that it should have its costs. [8] The plaintiff in its submissions submits: (a) that the plaintiff granted an indulgence to the defendant; (b) the application sought four orders and failed on three of them. It was only successful in striking out the statement of claim; (c) the plaintiff ought to have been alerted as to the defendant’s concerns with the pleading having regard to r 5 of the UCPR; (d) the defendant did not raise with the plaintiff its concern about the pleadings prior to the application; (e) the primary submission is that the defendant should pay the costs of the plaintiff; (f) alternatively costs should follow the event to the extent that the defendant was successful in one event out of four – 25 per cent of the costs; costs would be reserved as costs in the cause or there be no order as to costs. Determination -- 2 of 3 -- 3 [9] I have regard to the submissions of counsel and the material relied on in reaching my decision. [10] It is my determination that there was no requirement on the defendant to advise the plaintiff of the defects in the pleading. [11] Rule 444 of the UCPR relates to: (a) an application for further and better particulars (r 443 (a)); (b) an application for directions under Chapter 10 Part 1 (r 443 (b)); (c) an application to comply with the rules or an order under Chapter 10 Part 2 (r 443 (c)); (d) an application relating to a failure to comply with an order or direction of the court (r 443(d)). [12] In any event the primary application brought by the defendant was on the basis that the plaintiff had failed to file a reply. At the first hearing of the matter the plaintiff had not filed a reply and an adjournment was granted to enable this to be filed. At that stage there were deemed admissions. [13] After the reply was filed, that point was removed. At the end of the day the plaintiff on the second occasion was aware of its defective pleading and the arguments raised by the defendant. Submissions in this regard had been filed by the defendant (Exhibit 1) when the matter was first mentioned on 31 March 2014. [14] The defendant was successful in striking out the statement of claim. On the other hand the defendant was not successful in striking out the action. The general rule is that costs follow the event unless the court otherwise orders (see r 681 of the UCPR). [15] Rule 687 permits the court to order that a party pay a specified part or percentage of assessed costs. [16] In the exercise of my discretion, I consider the plaintiff should pay 50 per cent of the defendant’s costs of and incidental to the application. Such an order of course will not affect the order made that the plaintiff pay the defendant’s costs thrown away concerning the appearance on 31 March 2014. [17] I have taken into account that the defendant was successful in obtaining a declaration it was entitled to the $8,800, but that does not greatly influence the outcome as that order was not opposed. [18] In the circumstances I order that the plaintiff pay 50% of the defendant’s costs of and incidental to the application filed on 19 March 2014 as agreed or assessed on the standard basis on the District Court scale. [19] I give the parties liberty to apply. -- 3 of 3 --