Austech Concrete Constructions Pty Ltd v Crown Consultants Pty Ltd & Anor (No 2) [2013] QDC 294

DISTRICT COURT OF QUEENSLAND CITATION: Austech Concrete Constructions Pty Ltd v Crown Consultants Pty Ltd & Anor (No 2) [2013] QDC 294 PARTIES: AUSTECH CONCRETE CONSTRUCTIONS PTY LTD (Plaintiff) v CROWN CONSULTANTS PTY LTD (First defendant) and JAMES ROBERT JOHNSTONE (Second defendant) FILE NO/S: 4015/12 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane District Court DELIVERED ON: 27 November 2013 DELIVERED AT: Brisbane HEARING DATE: On the papers JUDGE: Farr SC DCJ ORDERS: 1. The defendants’ pay the plaintiff’s costs of the application for disclosure which includes the application made pursuant to r. 223(2) Uniform Civil Procedure Rules (UCPR). 2. The issue of costs regarding the joinder application is adjourned to a date to be fixed. 3. The defendants’ pay the plaintiff’s costs of the security for costs application incurred after 23 August 2013. CATCHWORDS: CIVIL – APPLICATION – COSTS – application for disclosure – application for joinder – application for security for costs COUNSEL: G E Coveney for the plaintiff. N H Ferret for the defendants. -- 1 of 5 -- 2 SOLICITORS: H W Litigation for the plaintiff. Turner Freeman Lawyers for the defendants. [1] Three applications came before the court on 28 August 2013. The first was brought by the plaintiff and sought orders relating to disclosure. That application was allowed and the requested orders were made including an order pursuant to r. 223(2) of the Uniform Civil Procedure Rules (“UCPR”). [2] The second and third applications were brought by the defendants. The first sought to join the plaintiff’s director as a party. That application was adjourned to a date to be fixed. The second was for security for costs. That application was dismissed.1 [3] The only remaining issue is costs. The plaintiff seeks the following orders: 1. That the defendant’s pay the plaintiff’s costs of the disclosure application; 2. That the costs of the joinder application be the plaintiff’s costs in any event; and 3. That the defendant’s pay the plaintiff’s costs of the security for costs application. [4] The orders sought by the defendants are: 1. The costs of the disclosure application be reserved; 2. The costs of the joinder application be adjourned; and 3. The parties bear their own costs for the security for costs application. The disclosure application [5] The defendants’ position regarding this matter is based on the following submission: 1. when the application for disclosure was filed it did not seek an order under r. 223(2) UCPR. That relief was only sought as a result of correspondence after the application was filed and was therefore not sought until approximately six weeks post filing; 2. the order under r. 223(2) was not made as a result of any default, delay or lack of candour by the defendants, but because there was no prejudice to the defendants if the order was made; 3. the documents the subject of the order for discovery are relevant to serious allegations against the defendants including allegations of forgery and fraud and the recent invention of evidence. Accordingly, it is submitted that if the plaintiff is eventually unsuccessful in establishing these allegations there would be an element of unfairness to the defendants if the plaintiff obtained the costs of an application seeking disclosure of the documents; 4. given the serious allegations, the defendants’ caution regarding disclosure is understandable; and 5. the court could not be satisfied that the disclosure application was not premature, and therefore the court ought not encourage parties to be quick to 1 Austech Concrete Constructions Pty Ltd v Crown Consultants Pty Ltd & Anor (2013) QDC 272. -- 2 of 5 -- 3 bring disclosure applications by awarding costs if the court is not satisfied that the parties have made whole hearted attempts to resolve disclosure requests. [6] The plaintiff has referred to and relies upon r. 681(1) UCPR which provides that the costs of an application in a proceeding are in the discretion of the court, but follow the event unless the court orders otherwise. The plaintiff submits that : 1. the relief sought under r. 223(2) UCPR did not require the parties to file any further material and became relevant only due to the ongoing investigations and correspondence which ensued after the application was filed; 2. there is no element of unfairness in the plaintiff obtaining an order for costs because whether or not the plaintiff is ultimately successful is irrelevant. What is relevant is that the defendants’ resistance to the application failed; 3. the defendants submission that its cautious approach to further disclosure was reasonable, is without evidentiary foundation; and 4. the plaintiffs conduct in filing the application was appropriate given that its position was outlined in correspondence on 26 June 2013 and no response was received by 8 July 2013, the date of filing. Furthermore, it is submitted that the defendants continued resistance to the application is the primary consideration. [7] In my opinion the defendants have failed to demonstrate why the order for costs should not follow the event. The r. 223(2) issue, whilst being relief sought only after the application for disclosure was filed, was nevertheless resisted by the defendants, despite ample notice being provided that such relief was sought. Additionally I can perceive of no unfairness to the defendants if a costs order is made now even if the plaintiff’s claim is ultimately unsuccessful. This application relates to a discrete factual issue and accordingly it is appropriate for costs to follow the event. Finally, I do not accept that the application for disclosure was made prematurely. Whilst the plaintiff’s r.444 UCPR letter dated 26 June 2013 seeking disclosure unreasonably required a response within three business days, the fact is that the documents the subject of the application were not disclosed at any time and the application was strenuously resisted. In such circumstances it is appropriate that costs follow the event. Joinder application [8] The defendants have submitted that no costs should be ordered regarding this issue until the disposition of that application. [9] The plaintiff has submitted that as the joinder application was brought on two distinct bases, one of which was unsuccessful and the other being adjourned to enable the defendants to properly plead the material facts to support the proposed application, it is appropriate that the defendants pay the plaintiff’s costs of the application. [10] Whilst the plaintiff may be correct in that submission, it is my view that resolution of this issue is best reserved until the application is decided. Accordingly, the issue -- 3 of 5 -- 4 of costs regarding this matter should be adjourned until resolution of the joinder application. Security for costs [11] The defendants had been seeking information regarding the plaintiff’s financial position since December 2012. The application for security for costs was filed on 30 July 2013. Up until that time the solicitors for the plaintiff had resisted providing any financial information to the defendants that would demonstrate that the plaintiff would be able to meet a costs order, relying instead upon the rather bland assertion in correspondence that their client had sufficient means to meet any such order. [12] Of course, after the application was filed the plaintiff caused affidavits from its accountant (Mr Vile) and a valuer (Mr Webber) to be prepared. They were filed on 23 August 2013. I note that Mr Vile had been the plaintiff’s accountant for some time. [13] The defendants have submitted that they were quite entitled to not rely upon the assertion in the solicitors correspondence and were justified in bringing the application. I agree. As I observed in the reasons for my judgment, one wonders whether this application would have been brought if the plaintiff’s solicitors had advised that their assertion that their client had adequate means was based upon the company accountants opinion rather than their client’s instructions. [14] Nevertheless, the defendants’ decided to continue with the application notwithstanding the fact that these affidavits clearly demonstrated that the plaintiff had adequate means. Ultimately, the application failed when the defendants’ failed to show that the jurisdiction to award security for costs had been enlivened. [15] The plaintiff has submitted that there was no obligation on it to provide the defendants with any material prior to the application being filed. Whilst that is correct, it is also relevant to note that on the evidence then available, the defendants were quite justified in their concern as to the plaintiff’s financial capabilities. Furthermore, it would not have been difficult or unreasonable or contrary to the plaintiff’s interests to have provided information that would reasonably have been expected to allay the defendants’ concerns. [16] In my view, whilst it is appropriate to make a costs order in favour of the plaintiff given its success on the contested application, such an order should only apply from the date of filing of the affidavits of Mr Vile and Mr Webber. Orders 1. The defendants’ pay the plaintiff’s costs of the application for disclosure which includes the application made pursuant to r. 223(2) Uniform Civil Procedure Rules (UCPR). -- 4 of 5 -- 5 2. The issue of costs regarding the joinder application is adjourned to a date to be fixed. 3. The defendants’ pay the plaintiff’s costs of the security for costs application incurred after 23 August 2013. -- 5 of 5 --