Cosgrove & Anor v Johns [2000] QCA 157

SUPREME COURT OF QUEENSLAND CITATION: Cosgrove & Anor v Johns [2000] QCA 157 PARTIES: JENNIFER MARGARET COSGROVE (first defendant/first appellant) CHEVRON QUEENSLAND LIMITED (second defendant/second appellant) v DALLAS MIDGLEY JOHNS (plaintiff/respondent) FILE NO/S: Appeal No 453 of 1998 SC No 599 of 1993 DIVISION: Court of Appeal PROCEEDING: Personal Injury – Liability and Quantum (Leave granted) ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: Judgment delivered 5 May 2000 Further Order delivered 6 June 2000 DELIVERED AT: Brisbane HEARING DATE: 18 February 2000 JUDGES: de Jersey CJ, McMurdo P and Thomas JA. Separate reasons for judgment of each member of the Court, McMurdo P and Thomas JA concurring as to the orders made, de Jersey CJ dissenting FURTHER ORDER: The respondent plaintiff pay the appellants’ costs of and incidental to the appeal including the costs of the proceedings before Fryberg J and the costs reserved by this court by orders of 23 February 1998 and 29 May 1998, and that the respondent plaintiff pay the defendants their costs of and incidental to the proceedings before Derrington J, to be assessed. CATCHWORDS: PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – CONDUCT OF PARTIES – MISCONDUCT, ETC – GENERALLY – new trial ordered because of fraud of respondent – whether respondent should pay costs of first trial and of appeal on indemnity basis -- 1 of 4 -- 2 Uniform Civil Procedure Rules r 703 and r 704 Cicic v Snowy Mountains Hydro-Electric Authority [1964-5] NSWR 178, considered Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 118 ALR 248, considered John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201, considered McCann v Parsons (1954) 93 CLR 418, considered Nicholls v Carpenter [1974] 1 NSWLR 369, considered Young v Symons [1972] VR 611, considered COUNSEL: SC Williams QC, with TD North SC for the appellants CE Hampson QC, with GW Diehm for the respondent SOLICITORS: Gadens Lawyers for the appellants Standfield & Smith for the respondent [1] de JERSEY CJ: I have read the reasons for judgment of Thomas JA in relation to the question of ordering an assessment of costs on an indemnity basis. [2] I consider the obviously special and unusual circumstance that a further trial is necessitated by established fraud on the part of this previously successful plaintiff, very strongly favours an order that costs be assessed on an indemnity basis. That should cover both the cost of the first trial and the necessary appeal. [3] This is a case where the court should strive, and be seen to strive, to ensure that the inevitable consequent disadvantage to the other parties, the victims of the fraud, is nevertheless minimised, and to that end ordering indemnity costs is amply warranted. [4] Account may be taken of the reservation that some of the material prepared for the first trial may be used again, reducing the cost of the retrial (cf. Thomas JA’s para 11), by an appropriate direction to the Registrar or by reserving to the second trial judge the question of the extent of the costs in relation to which the indemnity assessment should apply. [5] I would order as follows: 1. that the respondent plaintiff pay the appellants’ costs of and incidental to the appeal including the costs of the proceedings before Fryberg J and the costs reserved by this court by orders of 23 February 98 and 29 May 98; 2. that the respondent plaintiff pay the appellants’ costs of and incidental to the proceedings before Derrington J; 3. that subject to para 4, all costs in para 1 and 2 be assessed on an indemnity basis; 4. reserve to the judge conducting the retrial the issue of whether, and if so to what extent, the costs otherwise to be paid by the respondent plaintiff should be -- 2 of 4 -- 3 reduced, to allow for any reduction in the scope of the retrial because of preparation already done for the first trial. [6] McMURDO P: I agree with the further reasons and orders proposed by Thomas JA. [7] THOMAS JA: Further submissions have now been received on costs. [8] The successful appellant now seeks indemnity costs although the Notice of Appeal merely sought an order "that the respondent pay the appellant's costs of and incidental to (a) the proceedings; and (b) this appeal". The Court has a discretion to order that costs be assessed on an indemnity basis. The Uniform Civil Procedure Rules recognise a "standard basis" of assessment and also an "indemnity basis" of assessment, and contain nothing inconsistent with what are now recognised principles in the awarding of such costs1. [9] The relevant principles were usefully articulated by Sheppard J in Colgate Palmolive2 and by Hill J in John S Hayes3. The ordinary consequence for the unsuccessful party is an order to pay party and party costs. Some unusual circumstance is required to warrant the court departing from that course. The categories in which the discretion may be exercised are however not closed. Sheppard J noted particular instances where the discretion had been exercised, including the making of allegations of fraud against the other party, knowing them to be false; where there is evidence of particular misconduct that causes loss of time to the court and to other parties; where proceedings are commenced for an ulterior motive (ie abuse of process) or in wilful disregard of known facts; and where a case is unduly prolonged by groundless contentions. None of those instances is in point here, although it was submitted that the present circumstances are no less serious than those in the examples given. [10] No case was referred to in which such an order has been made when a retrial is ordered by reason of proven fraud on the part of the initially successful party. A perusal of cases where such retrials have been ordered suggests a relatively conservative approach on the part of the courts. This may well stem from realisation that the final merits as between the parties have not yet been determined in the present case, despite the reprehensible conduct of the miscreant party. Whether this plaintiff can yet establish a valid case against the other parties remains to be known. Even so, the fraud for which he became a party has necessarily led to an appeal and to a setting aside of the original judgment. Not all of the preparation for the original trial will have been wasted, and some aspects of the eventual trial may be abridged by reason of what emerged at the first trial. Bearing this in mind it seems to me that it would be an excessive response to order the plaintiff to pay on an indemnity basis the whole of the costs of the proceedings before Derrington J as well as the whole of the costs of the appeal. [11] Examination of costs orders in past cases where a party has been guilty of fraud leading to the necessity of a retrial reveal not only the absence of any order for indemnity costs, but also at least in some instances orders that the costs of the first 1 Uniform Civil Procedure Rules r 703 and r 704. 2 Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 118 ALR 248. 3 John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201, 203. -- 3 of 4 -- 4 trial be determined by the judge in the second trial or follow the event of the second trial. I do not propose to recount all the cases to which I have referred but mention in particular Cicic v Snowy Mountains Hydro-Electric Authority4, Young v Symons5, McCann v Parsons6, and Nicholls v Carpenter7. [12] In all the circumstances I consider that the appropriate order will be that the plaintiff should pay the costs of the first trial and of the appeal (including the proceedings before Fryberg J) and that the standard basis of assessment is appropriate. [13] The order will therefore be that the respondent plaintiff pay the appellants’ costs of and incidental to the appeal including the costs of the proceedings before Fryberg J and the costs reserved by this court by orders of 23 February 1998 and 29 May 1998, and that the respondent plaintiff pay the defendants their costs of and incidental to the proceedings before Derrington J, to be assessed. 4 [1964-5] NSWR 178. 5 [1972] VR 611. 6 (1954) 93 CLR 418. 7 [1974] 1 NSWLR 369. -- 4 of 4 --