Alpine Pty Ltd & Ors v Carrington Cotton Co Ltd & Ors [2000] QSC 302

SUPREME COURT OF QUEENSLAND CITATION: Alpine Pty Ltd & Ors v Carrington Cotton Co Ltd & Ors [2000] QSC 302 PARTIES: ALPINE PTY LTD ACN 009 712 592 (first applicant) and GIOVANNI PANIZZA (also known as JOHN PANIZZA) (second applicant) and MARY C PANIZZA (third applicant) and HELEN A PANIZZA (fourth applicant) and ALBERT J PANIZZA (fifth applicant) and BENEDICT J PANIZZA (sixth applicant) and MARK J PANIZZA (seventh applicant) and ALBEM PTY LTD SUPERANNUATION FUND (eighth applicant) v CARRINGTON COTTON CORPORATION LIMITED ACN 002 963 340 (first respondent) and RMI PTY LIMITED (ACN 000 616 964) (second respondent) and THE EXECUTORS OF THE ESTATE OF ROSS TOWNSEND (third respondent) and BROMLEY INVESTMENTS PTY LTD (fourth respondent) and CHRISTOPHER MAXWELL McCOSKER (fifth respondent) -- 1 of 8 -- 2 and WENALINE PTY LTD ACN 003 690 542 (sixth respondent) and SUSAN DOROTHY MARCHANT (seventh respondent) and RUSSELL CLIVE MAUGHAN (eighth respondent) and JOSEPH RAY MAGILL (ninth respondent) FILE NO: SC No 11984 of 1998 DIVISION: Trial Division DELIVERED ON: 4 September 2000 DELIVERED AT: Brisbane HEARING DATE: 7 August 2000 JUDGE: Helman J. CATCHWORDS: PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – CONDUCT OF PARTIES – OTHER CONDUCT – whether an order for costs should be set aside on the ground that if facts discovered in time would have entitled the respondents to a different order Uniform Civil Procedure Rules, 1999 COUNSEL: Mr W Sofronoff QC and Mr L F Kelly for the plaintiff Mr D J S Jackson QC for fifth and sixth defendants Mr P A Freeburn for third, fourth and seventh defendants SOLICITORS: Allen Allen and Hensley for the applicants Minter Ellison for the fifth and sixth defendants Corrs Chambers Westgarth for the third, fourth and seventh defendants [1] HELMAN J: On 28 February 2000 at a directions hearing in this matter I made an order that the third, fourth, fifth, sixth, and seventh respondents pay to the applicants their costs of and incidental to the hearing. Those respondents now apply for an order that that order for costs be set aside under rule 668 of the Uniform Civil Procedure Rules 1999, on the ground that facts were discovered after the order was made that, if discovered in time, would have entitled them to a different order. -- 2 of 8 -- 3 [2] The directions hearing was held pursuant to a direction made by Moynihan S.J.A. on 14 December 1999. On that day Moynihan S.J.A. made a number of orders by consent in addition to that direction. The orders concerned pleadings, the costs of the application before him, disclosure, and mediation. The order concerning pleadings was as follows: 1. The applicants have leave to amend their originating application and statement of claim. 2. (a) The applicants forthwith file and serve the amended originating application and statement of claim on all respondents; (b) The 5th, 8th and 9th respondents deliver any requests for further and better particulars of the amended statement of claim by 21 January 2000, or if no such request, deliver defences to the amended statement of claim by 28 January 2000; (c) The applicants deliver a response to any request for further and better particulars from the 5th, 8th and 9th respondents within 7 days of receipt of such request; (d) Each of the 5th, 8th and 9th respondents file and serve defences to the amended statement of claim within 14 days after receipt of any further and better particulars of the amended statement of claim; (e) The applicants deliver any requests for further and better particulars of the 5th, 8th and 9th respondents’ defences within 7 days of their service, or if no such request, file and serve a reply (if any) to each of the 5th, 8th and 9th respondents’ defences within 14 days of their service; (f) The 5th, 8th and 9th respondents deliver a response to any request for further and better particulars of their defences within 7 days of receipt of the request; (g) The applicants file and serve a reply (if any) to each of the 5th, 8th and 9th respondents’ defences within 14 days of receipt of any further and better particulars. [3] At the directions hearing a submission was made on behalf of the applicants that the hearing had little utility because defences had not been delivered on time by ‘various parties’, and because an application to strike out parts of the applicants’ amended statement of claim had not been made ‘expeditiously’. It followed, it was -- 3 of 8 -- 4 submitted, that the parties responsible for the delay should pay to the applicants their costs of the directions hearing. An affidavit sworn on the day of the directions hearing by Mr Alexander Wilson, the partner of the firm of solicitors for the applicants having the conduct of the proceedings on their behalf, was put before me by leave. Mr Wilson swore that the amended originating application and statement of claim were filed by the applicants on 17 December 1999 and served on each of the respondents on 21 and 22 December 1999, that despite persistent requests that the respondents comply with the terms of the order of 14 December 1999 they had failed to do so, that although the applicants agreed to an extension until 2 February 2000 the eighth and ninth respondents’ defence was not delivered until 23 February 2000, that the fifth respondent’s defence was not delivered until 7 February 2000, and that no list of documents had been delivered by any respondent after the order was made. Mr Wilson swore also that prior to the making of the order of 14 December 1999 the first, second, third, fourth, sixth, and seventh respondents had delivered lists of documents, which were incomplete. [4] Correspondence exhibited to Mr Wilson’s affidavit showed that throughout January and February 2000 the applicants’ solicitors did not deviate from insisting that the time-table provided for in the order of 14 December 1999 be adhered to. A letter dated 24 December 1999 from the solicitors for the fifth and sixth respondents to the applicants’ solicitors had said that on reviewing the amended statement of claim it seemed to them that there were ‘some fundamental difficulties in the pleading’against their clients. There followed an explanation of the difficulties and a statement that in their view the applicants should make certain, specified, amendments to the amended statement of claim. They also mentioned that there were ‘other difficulties or potential defects in the pleading’, and that the applicants should ‘revisit the pleading with a view to the points mentioned above and also bearing in mind the requirements of chapter 6, part 2 of the UCPR’. The applicants’ solicitors responded to that letter in a letter dated 5 January 2000 in which they dealt with alleged defects and, in relation to one of them, observed that they were uncertain of the substance of the complaint, adding: We regard the pleading as clear on its face but irrespective should your client(s) assert otherwise we hereby put you on notice that our clients will not countenance any delay in relation to compliance with the present timetable for directions ordered (by consent) by Moynihan J on 14 December 1999. If your client(s) maintains there are technical deficiencies in our clients’ pleading, we invite your client(s) to make the appropriate application or otherwise to comply strictly with the timetable for directions. Particular reliance was placed on that letter in the submissions made on behalf of the applicants on 28 February 2000. [5] In a letter dated 31 January 2000 to the applicants’ solicitors, the solicitors for the third, fourth, and seventh respondents advised that they had received copies of the letters of 24 December 1999 and 5 January 2000. There followed a discussion of parts of the amended statement of claim followed by a statement that in the circumstances they would support any application by the sixth respondent to strike out a specified part of the pleading. Under the heading ‘Summary’ the following appeared: -- 4 of 8 -- 5 In summary there are a number of issues in your pleading which have given rise to concern to us as well as to other respondents. In accordance with the ordinary courtesy, we will consult with Mr Keane (who has returned from his annual [sic] today) and he, no doubt, we [sic] confer with Mr Sofronoff. In the meantime, we would suggest that an amended timetable, to take into account the proposed applications to strike out, should be agreed between the parties. In this regard we will copy this letter to Minter Ellison, Freehills and Macrossans, together with Minter Ellison’s letter to you of 24 February 1999 and your letter to Minter Ellison of 5 January 2000. Minter Ellison are the solicitors for the fifth and sixth respondents, Freehills the solicitors for the first and second respondents, and Macrossans the solicitors for the eighth and ninth respondents. [6] The applicants’ solicitors responded to the letter of 31 January 2000 from the solicitors for the third, fourth, and seventh respondents in a letter dated 8 February 2000: We reject your clients’ assertions in relation to striking out our clients’ statement of claim. Further, despite the contents of your recent letter we have not been served with any application on behalf of your clients to strike out our clients’ statement of claim nor have we received any proposed amended timetable for defences and disclosure. As you may be aware, yesterday we were served with a defence on behalf of the 5th respondent. We do not, therefore, expect to receive an application on behalf of the 5th respondent to strike out our clients’statement of claim. Accordingly, we call upon you to deliver your clients’ lists of documents or to file and serve an application to strike out our clients’statement of claim forthwith. [7] Two letters dated 8 February 2000 were sent by the solicitors for the fifth and sixth respondents to the applicants’solicitors to which a response dated 11 February 2000 was sent. The last paragraph of that letter reiterated the applicants’position: Given the history of this matter, our clients have lost all faith in your clients’ willingness to conform to timetables for interlocutory steps, whether court ordered or otherwise. Accordingly, if we do not receive an application to strike out our clients’ statement of claim by 4pm today, our clients have no option but to seek a directions hearing early next week. There followed further correspondence and advice by senior counsel for the fifth and sixth respondents on 14 February 2000 to senior counsel for the applicants that an application to strike out parts of the amended statement of claim would be made. -- 5 of 8 -- 6 A letter dated 21 February 2000 from the solicitors for the fifth and sixth respondents to the applicants’ solicitors was to the same effect. Although the application to strike out parts of the amended statement of claim had been foreshadowed, the application had not been filed at the time of the directions hearing. It was not filed until 6 March 2000. [8] In the course of the hearing I asked this question of counsel for the applicants: You say something more constructive than merely notifying the Court of this impending application could have been done this morning had it not been for the intrusion of the prospect of this application? Is that what you say? Counsel’s response was: Yes, I do, and I say if it had been filed in a timely manner, the application, we would have either had it heard by now or shortly in the next few days and we could have adjourned today’s date and sought directions at that further hearing or something like that, but today’s been a bit of a waste of time because of this. I accepted that submission and gave brief reasons for my order for costs: I think that the applicants made their position very clear from early in January and that there is merit in the submission made on their behalf that the hearing today has really become superfluous because of the impending application on the part of the third, fourth, fifth, sixth and seventh respondents. In those circumstances I accept the argument that those respondents should pay the applicants’ costs of today’s hearing. [9] This application was provoked by something that happened on the day following the directions hearing. On that day the applicants’ solicitors sent a letter to the solicitors for each of the respondents enclosing a further amended statement of claim, which was filed on 9 March 2000. The letter, formal parts omitted, was as follows: We refer to your fax dated 22 February 2000 enclosing your intended application to strike out portions of our clients’statement of claim and confirm your advice that the application is now listed for hearing before the Chamber Judge on Monday, 13 February 2000. In an endeavour to make that hearing as useful as possible we have very carefully reviewed the statement of claim and enclose by way of service a further amended statement of claim. Amendments are made to paragraphs 14, 29, 31A, 41, 42A, 48, 50, 50A, 55, 56A, 71, 83 and 108. You will note that we have not withdrawn paragraphs 99-104, but we have further particularised paragraph 108(e) as we foreshadowed in our letter of 11 February 2000. Please indicate if you are prepared to withdraw you [sic] application to strike out paragraph 108(e). -- 6 of 8 -- 7 Presumably your clients still wish to strike out paragraphs 99 to 104. However, should our clients accept these amendments and withdraw their application, we confirm that we have instructions to pay your costs of and incidental to the application to strike out the pleading. Alternatively, assuming that you wish to proceed we will draw this letter to the Court’s attention on the issue of costs. (The reference to 13 February 2000 should have been to 13 March 2000.) In addition, on the same day, 29 February 2000, the applicants’ solicitors sent the following letter to the solicitors for the third, fourth and seventh respondents: We refer to yesterday’s directions hearing and enclose copies of our letters to Minter Ellison and Macrossans together with a further amended statement of claim by way of service. In discussions yesterday, your Mr Swiss indicated that you would be applying to strike out our clients’ statement of claim along the same lines as the application by the fifth and sixth respondents. The exact terms of your client’s proposed application were not discussed. We look forward to your receipt of your client’s application specifying precisely the relief sought affording us appropriate notice in accordance with the rules of Court We also confirm our discussions with respect to disclosure of documents which were left on the basis that once you had specified those parts of the statement of claim which your clients wished to strike out we would require compliance with previous orders and disclosure of any documents relating to paragraphs not sought to be struck out. We look forward to hearing from you. [10] The proposed amendments had been prepared well before the directions hearing – by 11 February at the latest. Mr Wilson swore in an affidavit filed on 9 June 2000, that the applicants had, however, not determined to seek to amend the amended statement of claim unless a striking-out application were actually made. Thus, according to Mr Wilson, at the time of the directions hearing it was not the applicants’ intention to file and serve the further amended statement of claim immediately after the directions hearing. Mr Wilson swore that he was not certain that the respondents would bring the striking-out application as they had been invited to do so and had not done so. Once it appeared certain to him that the respondents would proceed with their application, however, he decided, on instructions, that the most appropriate course was to provide the amendments at the earliest possible moment ‘thereafter’, which was 29 February 2000. Mr Wilson swore that the purpose of providing the amendments was ‘to seek to avert the possible need for a strike out application and thereby to avoid any delay that would be occasioned thereby’. Recognizing that delivering the proposed amendments may have led to a legitimate complaint by the respondents that the striking-out -- 7 of 8 -- 8 application had been ‘wasted’, Mr Wilson added the offer to pay the respondents’ costs which appears in the first letter which I have quoted above. [11] In the letter of 5 January 2000 the applicants’ solicitors had said in the plainest terms that if there were deficiencies in the amended statement of claim an appropriate application should be made, and that if that course were not followed there should be strict compliance with the time-table laid down by Moynihan S.J.A. The applicants maintained that position up to and at the directions hearing: if there were deficiencies in the amended statement of claim – none was then conceded – a striking-out application should be made. No such application had been made by 28 February 2000, but by then one had been foreshadowed so depriving the directions hearing of any utility. It was that consideration that led me to make the order as to costs that I did. [12] It is clear from what happened on 29 February 2000 that on behalf of the applicants it was conceded that the amended statement of claim was deficient, and had been known to be so for some time before the directions hearing. The applicants did not, however, adopt the course of acknowledging the deficiencies in the amended statement of claim before, or at, the directions hearing because they were not convinced the striking-out application would proceed. The result was that I made the order for costs on the understanding that the only reason for the failure of the directions hearing was the tardiness of those who foreshadowed the striking- out application in proceeding with it. I could not assume that there was any merit in the application, which had yet to be considered, so the failure of the directions hearing was attributed solely to the untested and tardy application. If, however, I had been aware that it would readily be conceded on behalf of the applicants that there was some merit in the striking-out application the matter would have taken on a different complexion. It then would have appeared that while those who were to make the application had been slow in pursuing it, the applicants were at fault too because, although they knew of deficiencies in the amended statement of claim they had failed to seek to correct them timeously. The failure of the directions hearing would then have been seen to be the result of some tardiness on both sides: in bringing the striking-out application on one side and in acknowledging and seeking to correct deficiencies in the amended statement of claim on the other side. In those circumstances I should not have made a costs order in favour of the applicants, and so the relief sought on this application should be granted. [13] I think an error of judgment was made in failing to concede that there were deficiencies in the amended statement of claim, at least once the applicants were notified on 14 February 2000 that the application would be made. In making that assessment I recognize of course that I have, and those representing the applicants did not have, the advantage of considering the events in question with hindsight. [14] I shall invite further submissions on the form of the order and the costs of this application. -- 8 of 8 --