Earl Covington & Associates v Bondley P/L [2003] QDC 238

1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 [2003] QDC 238 DISTRICT COURT CIVIL JURISDICTION JUDGE DODDS No 49 of 1999 EARL COVINGTON AND ASSOCIATES Plaintiff and BONDLEY PROPRIETARY LIMITED Defendant MAROOCHYDORE ..DATE 16/04/2003 JUDGMENT WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. -- 1 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 2 1 10 20 30 40 50 60 HIS HONOUR: These reasons relate to costs On 10 December 2001 the plaintiff sought orders that a further amended defence and counterclaim of the defendant be struck out for failure to provide particulars for judgment for the plaintiff on its claim; alternatively, that nominated paragraphs of the further amended defence and counterclaim be struck out for want of adequate particulars, or as embarrassing, or prejudicing, or delaying the fair trial of the action; alternatively, the defendant's counterclaim be tried separately and the plaintiff's claim be placed on the callover list. On 10 December 2001, the application was adjourned until 11 March 2002 to be listed for a period of two hours. Orders were made that the parties provide written submissions and directions given for the exchange of those submissions. The costs of the application were reserved. The matter was then heard on 11 March 2002. On 17 May 2002, orders were made that the further amended defence and counterclaim in issue be struck out and the defendant have leave to replead on certain terms. It was determined that the further amended defence and counterclaim, the subject of the application, was deficient in its particulars. That defence and counterclaim, the subject of the application, was the fourth defence and counterclaim that had been filed. During submissions on the application it appeared that a further draft defence and counterclaim, said -- 2 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 3 1 10 20 30 40 50 60 to address alleged deficiencies in particulars, was in existence. With the agreement of the parties, directions required that the defendant deliver to the plaintiff the repleaded defence and counterclaim within 12 days and within a further 21 days, the plaintiff deliver to the defendant written advice whether there was any objection to any part of a pleading specifying the part on the bases for the objection. In the event of an objection which could not be resolved within a further period of 21 days, the matter to be listed before the application's Judge at the next available day in the District Court in Maroochydore. If there was no unresolved objection by the plaintiff, the defendant was to file the repleaded defence and counterclaim forthwith, and the parties, or one or other of them, make application to the Court for directions. On the 10 February 2003, the defendant filed an application for orders that it have leave to file and serve an amended defence and counterclaim within 14 days and that the plaintiff pay its costs of and incidental to the application. The application was returnable on 10 March 2003. What emerged on the return date was that the defendant had forwarded to the plaintiff its repleaded defence and counterclaim on or about 14 October 2002, to which the plaintiff maintained a number of objections, which were the subject of a lengthy letter form the plaintiff's solicitor to the defendant's solicitor dated 31 October 2002. -- 3 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 4 1 10 20 30 40 50 60 On 10 March 2003, further submissions were made by both parties regarding the adequacy of the most recent version of the defence and counterclaim and its particulars. It was ordered that further particulars of aspects of the pleading be provided. A time limit was imposed on their provision. Leave was given to the defendant to file the further amended defence and counterclaim. It was directed the parties provide written submissions regarding costs orders with respect to the application returnable 10 March 2003, and the prior application within 14 days. Those submissions have been provided. The plaintiff has asked for costs of both applications on an indemnity basis. The defendant conceded the plaintiff was entitled to costs of the first application, but only on the standard basis. With respect to the costs of the second application, it submitted the proper order was that costs be reserved. It may be useful to set out some of the history leading up to the application of 10 December 2001. On 21 May 2001, the defendant applied to the Court for directions as to the future conduct of the action and for an order that the plaintiff provide further and better disclosure in accordance with its request of 15 November 2000. On 12 June 2001, there was a consent order that the plaintiff advise the defendant within 21 days of any objections the plaintiff had to the defendant's then further amended defence and counterclaim, which was to be filed that day. Further, that the plaintiff advise the -- 4 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 5 1 10 20 30 40 50 60 defendant within seven days whether the plaintiff proposed to provide further and better particulars requested in correspondence from the defendant's solicitor, dated 15 November 2000. Further, that the parties exchange correspondence within 14 days specifying in detail each party's position as to particular paragraphs of the further amended defence and counterclaim, that is, whether they should be struck out as disclosing no cause of action or dismissed because the plaintiff had a defence pursuant to provisions of the Limitation of Actions Act 1974. Further, that the plaintiff advise the defendant within 14 days of any other issues the plaintiff contended should be dealt with interlocutory proceedings. The matter was adjourned until 16 July 2001 and the costs of the application reserved. On 16 July 2001, various orders were made requiring the parties to undertake certain steps and provide certain advices. Time limits were set and costs of the appearance reserved. The matter was further adjourned until 3 September 2001. On 3 September 2001, further orders were made that the defendant file and serve any further and better particulars within 14 days, the plaintiff file and serve its reply and answer within 21 days of receipt of the further and better particulars or an amended pleading, the plaintiff file any application it wished to bring within 21 days of the receipt of the further and better particulars, the matter be further -- 5 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 6 1 10 20 30 40 50 60 reviewed on 9 November 2001, and costs of and incident to the application be reserved. On 9 November 2001, further orders were made that the plaintiff file and serve its reply within 14 days, that the plaintiff file any application in respect of the defendant's pleading within 14 days to be returnable on 10 December 2001, and that the matter be further reviewed on 10 December 2001. Costs were reserved. Then, on 6 December 2001 the plaintiff filed its application returnable on 10 December 2001, referred to above. It was submitted, costs on an indemnity basis were justified. The submission referred to that as long ago as 3 November 2000 in a rule 444 letter, the plaintiff set out a detailed analysis of deficiencies in the defendant's pleading. Some of those deficiencies were rectified in the course of correspondence between the parties' solicitors thereafter. Others remained and ultimately resulted in Court orders (the history of which is set out briefly above.) Moreover, the order of 17 May 2002 ordered the defendant's then current version of the its defence and counterclaim be struck out. Rule 171(2) provides power to order costs be calculated on the indemnity basis when all or part of a pleading is struck out. It should be noted that rule 171(1), however, limits the application of the rule. -- 6 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 7 1 10 20 30 40 50 60 Rule 704 is the general rule dealing with costs on an indemnity basis. Ordinarily, costs are to be assessed on the standard basis, rule 703. The Court, however, may order they be assessed on the indemnity basis, rule 704(1). Rule 704(2) provides instances where costs may be ordered to be assessed on the indemnity basis, but does not constrain the general jurisdiction provided for in rule 704(1). The plaintiff also relies upon one of the instances provided in rule 704(2). It submitted the defendant is a trustee, referring to an affidavit of Graham Wight, a director of the defendant, filed by leave on 1 August 2001, in which Mr Wight deposes that the defendant is a trustee for the Bondley Unit Trust. To exercise the jurisdiction to order costs be assessed on the indemnity basis, there must be some sufficient reason justifying departure from the usual (standard) basis for assessment. In Tector v. FAI General Insurance Co 2000, QCA 426, appeal 7391/99, Judgment 8, December 2000, the Court of Appeal said that the usual basis should only be departed from where the conduct of the party against whom the order is sought is plainly unreasonable. The order of 17 May striking out the further amended defence and counterclaim was made because of the amendments which had been made to that point in time resulting in amendments upon amendments to the pleading, to which yet further amendments were required. It was considered better to start afresh with -- 7 of 8 -- 16042003 T9-10/TM M/T MCY1&2/2003 (Dodds DCJ) JUDGMENT 8 1 10 20 30 40 50 60 an adequate pleading. In an attempt to limit further interlocutory disputing, the Court, at the suggestion of the parties, made the further directions set out above. In the result, there has been further interlocutory activity, which has now resulted in orders being made for specific further and better particulars. The failure to provide these further adequate particulars will likely have significant consequences for the defence and counterclaim and for the defendant. Not without some hesitation, I would not order costs be assessed on the indemnity basis up to this stage, based upon either or both the rule 444 submission or the striking out submission. I am not persuaded I should depart from the usual order for costs. Nor, am I so persuaded because of the description of the defendant as a trustee of the Bondley Unit Trust. I order the defendant pay the plaintiff's costs of and incidental to the plaintiff's application filed 6 December 2001. I order the defendant pay the plaintiff's costs of and incidental to the defendant's application filed 10 February 2003. This application was brought after the plaintiff had raised in detail in its solicitor's letter, issues about the adequacy of the defendant's repleaded pleading. Leave to file the repleaded defence and counterclaim was ultimately granted, but orders were made for further and better particulars of a number of aspects of the pleading, reflecting aspects raised in the plaintiff's solicitor's letter of 31 October 2002. ----- -- 8 of 8 --