Brake v Graham Ross Bendeich as trustee for B & Graham Ross C Trust [2012] QDC 76

1 [2012] QDC 76 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No 302 of 2006 PAUL NEWTON BRAKE Plaintiff and GRAHAM ROSS BENDEICH AS TRUSTEE FOR B & GRAHAM ROSS C TRUST and SANCHO PTY LTD First Defendant Second Defendant SOUTHPORT ..DATE 10/04/2012 ORDER CATCHWORDS Uniform Civil Procedure Rules r 444 Defendants in default under order to deliver amended pleading - their delay minor when compared to plaintiff's in the proceeding generally (for which he had suffered in costs) - Rule 444 letter not received (once on account of defendant's erroneous statement of address for service, once on account of plaintiff's like error) - contention that court lacked jurisdiction to award costs to plaintiff rejected -- 1 of 6 -- 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: The proceeding has been underway since 2006. It arises in consequence of the break up of a firm of insolvency practitioners. The plaintiff contends considerable amounts are owing to him. Whether the proceeding should be allowed to go ahead at all was raised by the defendants in December last year. The outcome was Judge Wall's determination that the defendants' application should be dismissed. The plaintiff had come up with a revised pleading consequent upon a change of lawyers to Mr Treherne's firm. Contrary to the defendants' submissions, his Honour thought that the changes were not significant. His Honour ordered that the plaintiff be given leave to proceed, so that the efficacy of his lawyer's tactic of sending out notices of intention to take a step shortly before the expiration of each 12 month period was never tested. The plaintiff was ordered to pay the defendant's costs which may be substantial as the defendants had engaged senior counsel. His Honour listed the matter before him for directions two weeks later. On that occasion, he made an order requiring the defendants to file and serve their amended defence by the 3rd of February 2012. The defendants got into default in meeting the time limit and indeed are still in default. -- 2 of 6 -- 3 ORDER 1 10 20 30 40 50 60 Although Ms Stoker says that the amended pleading can be produced very quickly, what is before the court is the plaintiff's application filed on the 3rd of April seeking that the defendants file and serve a defence within seven days of the order which it was doubtless anticipated would be made on the return date of the interlocutory application, namely today. Costs were sought. Ms Stoker, appearing for the defendants, is amenable to an order that the amended defence be filed and served by the end of the business week. Indeed, I took her to be offering an earlier date. She is also amenable to an order being made that the parties provide disclosure by a date which I think we are yet to work out. It would be wrong, in the circumstances, to make an order for disclosure that refers to the defendants only rather than the parties generally. It certainly hasn't been demonstrated to the court today that there's any default in respect of disclosure, the parameters of which are going to be affected by what's contained in the amended pleadings. What date should that be? MR TREHERNE: Your Honour, there should be an allowance for a reply, so my suggestion might be the end of May. HIS HONOUR: Let’s just take by the 31st of May? MR TREHERNE: Yes, your Honour. -- 3 of 6 -- 4 ORDER 1 10 20 30 40 50 60 HIS HONOUR: The next aspect of the court's order, which isn't contentious, is that the first and second defendants should file and serve an amended notice of intention to defend showing their correct address for service by the 13th of April 2012. The intention of that order is to correct a minor misstatement of the email address for service given on the document originally filed. The consequences of the error have been definite and regrettable. Mr Treherne's attempts to use that address for service to send out a rule 444 letter failed. Of this he became aware through notification that his message had failed to arrive. He then took steps to resend the rule 444 letter. This time the minor error in statement of an email address was his, Mr Litster, the appropriate recipient being named as Mr Lister. Such are the rigidities of the digital world that this communication failed entirely, whereas in “the good old days” there would doubtless be a person attending to incoming mail capable of identifying the appropriate addressee. The consequences of the confusion just described are that Ms Stoker submits that costs ought not to be awarded against her clients who on this occasion are the ones responsible for delay, and indeed are in default under court directions they have effectively consented to. Ms Stoker says that if the rule 444 letter arrived the amended defence could have been got out quickly and her clients would not have to pay costs. She submits that a gap of a month delay can't be compared with -- 4 of 6 -- 5 ORDER 1 10 20 30 40 50 60 years of delay on the other side. To the extent that she was submitting that there is no rule 444 letter so that the court somehow lacks jurisdiction to order costs against her client, I am not persuaded that on that technical ground what might otherwise be entitlement to a costs order has been lost by the plaintiff. Reference has been made by Mr Treherne to BTU Group v. Noble Informations Pty Limited [2002] QCA 505 which refers to an earlier decision of Meredith v Palmcam Pty Ltd [2001] Qd R 645. In my view, the circumstances are ones in which costs are at large. The plaintiff's entitlement to costs gains some strength from the defendants having taken advantage of being in a position to get costs orders in their favour. As it happens, I think a more appropriate order for costs is one which has delayed effects depending on the outcome of the proceeding. That's what appealed to the Court of Appeal in BTU Group. In my opinion a just outcome in respect of costs of and incidental to the application is that the plaintiff's costs of and incidental to the application to be assessed on the standard basis should be his costs in cause. If he proves to have a good claim against the defendants, then he ought to get costs. So, the order is this. (1) The first and second defendants file and serve an amended defence by 13 April 2012. -- 5 of 6 -- 6 ORDER 1 10 20 30 40 50 60 (2) The parties provide disclosure by 31 May 2012 or within two weeks from the close of pleadings if earlier [that allows the reply]; (3) The first and second defendants file and serve an amended notice of intention to defend showing their correct address for service by 13 April 2012. (4) The plaintiff’s costs of and incidental to the application to be assessed on the standard basis be his costs in cause. ----- -- 6 of 6 --