CQ Field Mining Services Pty Ltd v Deguara [2022] QDC 76

DISTRICT COURT OF QUEENSLAND CITATION: CQ Field Mining Services Pty Ltd v Deguara [2022] QDC 76 PARTIES: CQ FIELD MINING SERVICES PTY LTD (appellant) v WAYNE MICHAEL DEGUARA (respondent) FILE NO: D49/21 DIVISION: Civil PROCEEDING: Appeal – Justices Act 1886 (Qld) s 222 ORIGINATING COURT: Magistrates Court of Queensland at Brisbane DELIVERED ON: 1 April 2022 DELIVERED AT: Brisbane HEARING DATE: Determined on the papers JUDGE: Loury QC DCJ ORDER: 1. The respondent pay the appellant’s costs; 2. The respondent is granted an indemnity certificate pursuant to s 15(2) of the Appeal Costs Fund Act 1973 (Qld). CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where the appellant was successful on appeal – whether costs follow the event and be granted on the standard basis or the appellant pay the respondent’s costs – whether the respondent should pay the appellant’s costs – where there was an error of law by the learned Magistrate – whether the appellant’s success was based on point of law not argued in Magistrates Court – whether the appellant’s success based on evidence not presented – whether the appellant already paid for an indulgence – whether the respondent should be granted an indemnity certificate LEGISLATION: Appeal Costs Fund Act 1973 (Qld) s 15(2) CASES: Courtney v Chalfen [2021] QCA 25 Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd [2021] QCA 198 -- 1 of 4 -- 2 Vella v Larson [1982] Qd R 298 COUNSEL: S McLennan for the appellant M De Waard for the respondent SOLICITORS: McKays Solicitors for the appellant Kelly Legal for the respondent Background [1] In CQ Field Mining Services Pty Ltd v Deguara [2022] QDC 42 I gave judgment in favour of CQ Field Mining Services Pty Ltd, setting aside orders made in the Magistrates Court and giving the appellant leave to withdraw deemed admissions and extending time within which to file a second amended reply to 9 July 2021. I indicated that I would hear the parties as to costs. I have received written submissions from each party, both seeking the payment of their costs. [2] The appellant submits the respondent should pay its costs of the appeal and that there is nothing special or exceptional in the circumstances to warrant departure from the general rule that costs follow the event. [3] The respondent is seeking the appellant pay the respondent’s costs of the appeal or that they be the defendant’s costs in the proceeding. In the alternative, the respondent seeks an indemnity certificate be granted to him. [4] The general rule is that costs follow the event, unless the court orders otherwise.1 In Courtney v Chalfen2 Morrison JA said that the general rule that costs follow the event should only be departed from in the event of special or exceptional circumstances, the rationale for that being that costs are not awarded to punish a party but as a means of indemnifying the successful party. [5] The respondent contends that he should be paid his costs of the appeal because the appellant’s success on appeal was based on a point of law not argued in the Magistrates Court or was based on evidence not presented below. He contends that the appellant’s argument, if leave to withdraw the deemed admissions were not granted there would be a substantial injustice to the appellant, in that it would have its claim reduced by approximately 80 percent, was not something argued before the learned Magistrate. [6] The decision of the learned Magistrate refusing leave to withdraw the deemed admissions involved the exercise of a discretion concerning questions of practice and procedure. That is, it was an interlocutory decision. In order to succeed on appeal, the appellant needed to establish, in addition to an error of principle that the order appealed against, would work a substantial injustice to it.3 The appellant argued in that context that by refusing the application to withdraw the deemed admissions, the appellant’s claim would be reduced by 80 percent which would amount to a substantial injustice to it. 1 Uniform Civil Procedure Rules 1999 (Qld) r 681(1). 2 [2021] QCA 25 [4]. 3 Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd [2021] QCA 198 [13]. -- 2 of 4 -- 2 [7] At first instance, before the learned Magistrate the appellant argued that, if leave to withdraw the deemed admissions were not granted, the defendant (respondent to the appeal) would be able to apply for summary judgment. Accordingly, a refusal to grant leave, it was argued, would be fatal to the plaintiff’s case. Whilst it was not necessary for the appellant to establish at first instance that there would be a substantial injustice to it if the deemed admissions were not withdrawn, the substance of that argument formed part of the basis for the application. I do not consider that the appellant’s success on appeal was based on a point of law not argued before the learned Magistrate. The finding I made was that the learned Magistrate failed to give any reasons for refusing the application to withdraw the deemed admissions which failure amounted to an error of law. The consequence of that failure meant that the basis upon which the discretion was exercised was unknown to the parties and to me. The discretion necessarily had to be exercised again. [8] The respondent further argues that the appellant’s success was based at least partially on evidence not presented below. The respondent relies upon a reference in my judgement at paragraph [32] that there were attempts made to resolve the matter without the need to bring the applications before the learned Magistrate. As the appellant correctly points out it did not seek leave to rely upon new evidence at the hearing of the appeal. The material upon which I considered the appeal was that which was before the learned Magistrate which included an affidavit filed by the appellant’s solicitor explaining the reasons for the delay in filing the second amended reply. That is the reference in paragraph [32]. This explanation (which was not the only explanation provided) was referred to in submissions before me. The respondent did not contend that the submission made, that there were attempts to resolve the matter without the need for a hearing, was without foundation or unsupported by the evidence before the learned Magistrate. [9] The respondent further argues that the appellant is being granted an indulgence and accordingly, as a general rule, the party seeking the indulgence pays the cost of obtaining it. The appellant was ordered to pay the costs of bringing the application in the Magistrates Court. The appellant did not appeal against that costs order. The appellant had therefore already paid for the indulgence. [10] The appellant and the respondent were each entitled to reasons for the learned Magistrate’s decision. The giving of adequate reasons lies at the heart of the judicial process. Failure to provide reasons promotes a “sense of grievance” and denies “both the fact and the appearance of justice having been done”.4 It was the absence of any reasons having been given which meant that neither party could understand the basis upon which the discretion had been exercised. The respondent accepted that the delay was not a significant one before the learned Magistrate. He knew that the facts were in dispute by the service of a notice disputing facts. Despite that and despite the absence of any reasons by the learned Magistrate the respondent nonetheless argued that the reasons were sufficient. [11] The appellant has already paid for the indulgence. The appeal was necessary as the reasons given for the exercise of the discretion were inadequate. The cases upon which the respondent relies are costs decisions on interlocutory applications5 and do 4 Mifsud v Campbell (1991) 21 NSWLR 725, 729. 5 Pollock v Thiess Pty Ltd & Ors [2014] QSC 22; Citimax Henderson Pty Ltd v Cobblestone Constructions [2018] QDC 186. -- 3 of 4 -- 3 not in my view guide the exercise of the discretion on appeal. There is nothing in the conduct of the appellant on appeal which would disentitle it to costs in accordance with the ordinary rule. [12] In the alternative, the respondent applies for an indemnity certificate pursuant to section 15(2) of the Appeal Costs Fund Act 1973 (Qld). Such an indemnity certificate may be granted where an appeal to the District Court succeeds on a question of law. The conduct of the respondent in the court below and their responsibility, if any, for the erroneous decision of law in question is relevant to the exercise of the discretion. The purpose of indemnifying a respondent for costs has been said to relieve a party who becomes liable for costs because of an error of law on the part of the court.6 However, merely showing that the appeal succeeded on an error of law is not sufficient; there must be “some ground calling for the exercise of the discretion in his favour”.7 [13] The appellant succeeded because of an error of law made by the learned Magistrate in failing to provide reasons for the exercise of his discretion. There was nothing in the conduct of the respondent that contributed to that error. Without reasons it is impossible to determine the basis of the learned Magistrate’s decision and the extent to which the arguments of the respondent have been understood and accepted. This is therefore an appropriate case in which to grant the respondent an indemnity certificate. As to whether the appellant’s costs ought to be limited to the amount of the indemnity certificate, my order that the respondent pay the costs of the appellant’s appeal is not intended to punish the respondent but rather to indemnify the appellant. Accordingly I do not, in the absence of some authority, consider that I ought to limit the appellant’s costs to an amount that is unknown to me. [14] I make the following orders: 1. The respondent pay the appellant’s costs; 2. The respondent is granted an indemnity certificate pursuant to s 15(2) of the Appeal Costs Fund Act 1973 (Qld). 6 Acquilina v Dairy Farmers Co-Op Milk Co Ltd (No 2) [1965] NSWR 772,773. 7 Vella v Larson [1982] Qd R 298, 301. -- 4 of 4 --