EPAS Ltd v James & Ors [2007] QSC 49

SUPREME COURT OF QUEENSLAND CITATION: EPAS Ltd v James & Ors [2007] QSC 49 PARTIES: EPAS LIMITED (ACN 010 642 314) (respondent/plaintiff) v TERRANCE ROBERT JAMES (first defendant) and JOHN KENNETH SHEILDS (second defendant) and JEFFREY JOHN JAMES (third defendant) and GERALD LEONARD PARKER (fourth defendant) and HENRY ANTHONY GREENROD (fifth defendant) and MERVYN J HEAD, JOHN R CHEEL and KENNETH J THOMPSON (sixth defendants) and OMITTED (seventh defendant) and AMP GENERAL INSURANCE LIMITED (ACN 008 405 632) (applicant/eighth defendant) AMP GENERAL INSURANCE LIMITED (ACN 008 405 632) (applicant) v MICHAEL BURNETT (respondent) AMP GENERAL INSURANCE LIMITED (ACN 008 405 632) (applicant) v MARGARET HOCH (respondent) -- 1 of 6 -- 2 AMP GENERAL INSURANCE LIMITED (ACN 008 405 632) (applicant) v CORRS CHAMBERS WESTGARTH LAWYERS (respondent) AMP GENERAL INSURANCE LIMITED (ACN 008 405 632) (applicant) v ROGER MARC DERRINGTON (respondent) FILE NO/S: S3544 of 2000 DIVISION: Trial Division PROCEEDING: Application DELIVERED ON: 7 March 2007 DELIVERED AT: Supreme Court, Brisbane HEARING DATE: 6 March 2007 JUDGE: Wilson J ORDER: Application dismissed. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – BY LEAVE OF COURT – COSTS ORDERS – principles for granting leave to appeal costs orders – whether to grant leave to appeal Supreme Court Act 1995 (Qld) s 253 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, applied Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd [2003] QSC 484, considered Grundmann v Georgeson [1996] QCA 189, considered Morrison v Hudson [2006] QCA 170, cited COUNSEL: P L O'Shea SC and S E Brown for the applicant J H Dalton SC for the respondents SOLICITORS: Minter Ellison for the applicant Corrs Chambers Westgarth Lawyers for the respondents [1] Wilson J: This is an application pursuant to s 253 of the Supreme Court Act 1995 (Qld) for leave to appeal against the following costs orders which I made yesterday – -- 2 of 6 -- 3 “1) That the applicant eighth defendant pay the respondents’ costs of and incidental to the 4 disqualification applications (document numbers 85, 86, 87 and 88 in S3544 of 2000) to be assessed on the indemnity basis. 2) That the eighth defendant pay the costs thrown away by reason of the applications filed on 9 February 2007 and 13 February 2007 (in S3543 of 2000 and S3544 of 2000) not proceeding on 21 and 22 February 2007 to be assessed on the standard basis.” See EPAS Ltd v James & Ors.1 [2] The making of an order as to costs involves the exercise of judicial discretion on a procedural question. By s 253 an appeal against such an order may be brought only with the leave of the judge who made the order. In Morrison v Hudson2 Keane JA (with whom the other members of the Court of Appeal agreed) approved the observation of Chesterman J in Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd3 – “The evident purpose of s 253 is to limit appeals ‘as to costs only’. This is because decisions on costs afford a prime example of a discretionary judgment which parliament has recognised should be left to the trial judge.” [3] Leave to appeal is not had for the asking. As Dowsett J observed in Grundmann v Georgeson4 – “Leave to appeal against an order as to costs is not given as a matter of course. A trial Judge, when asked to grant such leave, should not be expected to accede to such a request simply because his or her own order is to be attacked. Leave should not be given unless the applicant demonstrates that there is a cogent argument against the order. It will not usually be enough to assert dissatisfaction or the Judge may not have correctly applied a well-established principle.” In Emanuel Chesterman J said – “A trial judge who is asked for leave to appeal should not be defensive about the orders made or overly reluctant to give leave. Nevertheless the cases make it clear that leave should not be given unless there is an arguable case that, applying the principles of House v The King the discretion will be overturned on appeal. That means there must be an arguable case that the judge committed an error of law, or misapprehended the facts or that the result is inexplicably inconsistent with the facts.”5 1 [2007] QSC 47. 2 [2006] QCA 170. 3 [2003] QSC 484, [30]. 4 [1996] QCA 189, p 29. 5 [2003] QSC 484, [41]. -- 3 of 6 -- 4 In Morrison v Hudson Keane JA described the task facing a primary judge in determining such as application for leave this way – “Whether leave to appeal should be granted will usually depend on the primary judge’s view as to the balance of competing arguments, whether those arguments relate to matters of legal principle or disputed questions of fact, the importance and difficulty of such arguments, and, on occasion, the amount of money involved.”6 [4] Mr O’Shea SC for AMP (the applicant for leave) submitted that I erred in the exercise of my discretion in a number of respects: (a) in not considering what the position would have been had the disqualification applications filed on 20 February 2007 been filed earlier; (b) in taking into account the matters in para [22] of my reasons for judgment on the costs application; (c) in rejecting the submission that it was the choice of the legal practitioners to have the disqualification applications considered first; and (d) in that the circumstances set out in the reasons for judgment were not analogous to those outlined by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd.7 [5] With respect to the first of these points, Mr O’Shea submitted that – (i) unless the costs of defending the disqualification applications were affected by the late filing of those applications, there was no basis for using late filing as a reason for awarding indemnity costs; and (ii) similarly, unless the late filing of the disqualification applications caused the adjournment of the other applications, there was no basis for an order as to the costs of the adjournment. He submitted that in neither case had the costs been shown to have been affected by the late filing. However, Ms Dalton SC for the respondents demonstrated that this contention is without factual foundation: because of the late filing of the disqualification applications, and the need for her to prepare her response, the hearing which ultimately took half a day took up one and a half days. Further, the order with respect to the costs of the adjournment of the other applications referred only to the costs thrown away, and they could be expected to relate largely to the fees charge by Mr. Derrington SC and Ms Hoch of counsel who had been briefed by Corrs on the other applications and whose work could have been halted at an earlier time with less expense had the disqualification applications been filed earlier. She 6 [2006] QCA 170, [24]. 7 (1993) 46 FCR 225, 233-234. -- 4 of 6 -- 5 submitted that had the disqualification applications been filed earlier, more orderly arrangements for the use of Court time might have been made. [6] Para [22] of my reasons for judgment on the costs application was as follows – “The allegations made in AMP’s solicitors’ letter of 15 February 2007 were very serious ones. While, as Mr O’Shea submitted, that letter was cast in terms of an invitation to allay concerns, Corrs responded promptly and at some length justifying their position and that of counsel. There was no substantive response to Corrs’ letter until shortly before the Court convened on 21 February 2007 when a copy of AMP’s written submissions was given to Ms Dalton. Only then was it revealed that AMP would desist from relying on misuse of confidential information, and that while there would not be an argument based on actual breach of the fiduciary duty of loyalty, the perception of there being such a breach if the legal practitioners continued to act for EPAS as well as TCSSL in closely intertwined proceedings would be relied on as relevant to the exercise of the Court’s discretion.”8 Mr O’Shea submitted that the relevant question on the leave application is – how would matters have been different if the allegation of misuse of confidential information had been dropped more promptly (in correspondence)? He said I might have ordered his client to pay costs of that issue, but that the late dropping of that allegation was not a basis for awarding indemnity costs. But the first sentence of para [22] makes the point that the three grounds raised (the danger of misuse of confidential information, breach of the fiduciary duty of loyalty and concern for the due administration of justice through the Court’s control of the legal practitioners who were its own officers) were all very serious. Ms Dalton effectively answered Mr O’Shea’s point when she submitted that had due consideration been given to the making of such allegations, AMP would have realised that the disqualification applications had to be heard first and that the other applications would be derailed. [7] Mr O’Shea submitted that it was the choice of the legal practitioners to have the disqualification applications heard first. He submitted that after they were apprised of the allegations against them on (Thursday) 15 February, they continued to act for the plaintiffs, that they could have ceased to act immediately, and that the filing of the disqualification applications made no difference. Given the short time between their first receiving notice of the allegations and the dates fixed for hearing the other applications (Wednesday 21 and Thursday 22 February), and given their prompt response by letter the next day, I do not consider this point seriously arguable. [8] Mr O’Shea submitted that the circumstances were not analogous to those in Colgate-Palmolive. Ms Dalton responded that AMP’s conduct had been unreasonable and had resulted in a waste of Court time and practitioners’ time. Mr O’Shea submitted that a waste of Court time is not a basis for affecting a costs order. I do not regard it as seriously arguable that the circumstances were not analogous to (as opposed to identical with) some of those listed by Sheppard J; for example, the making of an allegation which ought never have been made and the undue prolongation of the case by a groundless contention – the alleged misuse of 8 [2007] QSC 47, [22]. -- 5 of 6 -- 6 confidential information – and conduct causing loss of time to the Court and other parties. [9] Mr O’Shea made a further submission, which I understood to be along the following lines. The time for filing an appeal against my decision on the substantive application has not yet expired. If AMP does appeal against the substantive decision, and if the appeal is successful, the costs orders will fall. But if it appeals against the substantive decision and loses, it will still want to argue that the costs orders were wrongly made, and it will not be able to do so without my leave. There might be some force in this argument if there were an appeal pending against the substantive decision, but there is not, and I think it would be wrong to take it into account on a hypothetical basis. [10] Ms Dalton made the following submission with respect to the amount in issue. If leave were granted and if AMP won on the costs appeal, it would recover its costs of that appeal on the standard basis. The difference between what it would recover on that basis and what it would actually expend would be comparable to what it is arguing about on the present application. Whether that would be so I cannot determine, and I do not accept this submission. [11] Upon consideration of the submissions of counsel, I am not persuaded that I should grant leave to appeal against the costs orders. The application is dismissed. -- 6 of 6 --