DISTRICT COURT OF QUEENSLAND
CITATION:
Nicholas & Anor v Sambrook Grant Lawyers & Anor [2017] QDC 307
PARTIES:
ANITA GLADYS NICHOLAS
(first plaintiff)and
ANITA GLADYS NICHOLAS (NEE STEVENS) & BRADLEY SMOLING AS TRUSTEE OF THE GEOFFREY NICHOLAS FORTRESS TRUST
(second plaintiff)v
SAMBROOK GRANT LAWYERS (ABN5700519089)
(first defendant)and
ADAM MARK SAMBROOK
(second defendant)FILE NO/S:
D313/2016
DIVISION:
Civil
PROCEEDING:
Application for Costs
ORIGINATING COURT:
Southport
DELIVERED ON:
15 December 2017
DELIVERED AT:
Brisbane
HEARING DATE:
1 December 2017
JUDGE:
Muir DCJ
ORDER:
1. The plaintiffs pay the defendants’ costs of the defendants’ application filed 9 November 2017
2. There is no order as to costs in relation to the plaintiffs’ application filed 28 November 2017
CATCHWORDS:
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW THE EVENT– Where plaintiffs and defendants resolved substantive applications before the court by agreed consent orders – where plaintiffs submitted costs should be reserved – where defendants submitted plaintiffs should pay the costs of and incidental to both applications – what are the appropriate costs orders in the circumstances
Succession Act1981 (Qld) s 41
Uniform Civil Procedure Rules 1999 (Qld) r 232(2), 223, 320, 468, 681, 702(1)Alborn v Stephens [2010] QCA 58, considered
Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26, followed
Mio Art Pty Ltd v Macequest Pty Ltd & Anor No. 2 [2013] QSC 271, followedCOUNSEL:
D.A. Savage QC with B Strangman for the plaintiffs
R.P.S. Jackson QC for the defendants
SOLICITORS:
Lee Lawyers for the plaintiffs
Bartley Cohen for the defendants
The application
On 1 December 2017, I made orders by consent, resolving the substantive issues in relation to two applications listed for hearing before me that day. The first application was by the defendants for orders for disclosure under Uniform Civil Procedure Rules 1999 (Qld) r 223.[1] The second application was by the plaintiffs for orders for referral to mediation under UCPR r 320 and for an expedited trial under UCPR r 468.[2]
[1]Application filed 9 November 2017.
[2]Application filed 28 November 2017.
The sole issue for my determination remained the appropriate costs orders to be made in light of the consent orders.[3]
[3]There was some to and froing about the most just and expeditious way to deal with the costs arguments. This included whether leave ought to be given to the defendants to file and read a nine page affidavit of Rebecca Louise Scott and if so, whether it was necessary to stand the matter down or adjourn the hearing of the argument as to costs. The opportunity to file written outlines in relation to costs or to rely on further material was also given. Ultimately Ms Scott’s affidavit was not relied upon and no adjournment was sought by either party and the respective costs arguments were ventilated before me by way of oral argument on 1 December 2017.
The defendants submitted that the appropriate costs orders are that the:
(a) plaintiffs pay the defendants’ costs of and incidental to the defendants’ application; and
(b) plaintiffs pay the defendants’ costs of and incidental to the plaintiffs’ application.
The plaintiffs submitted that the appropriate orders are that the costs of the defendants’ application and the plaintiffs’ application be reserved.
In order to determine this issue, it is necessary to consider the respective arguments in the context in which the applications were made and resolved. This includes a general overview of the pleadings to the extent it is necessary.
The applications in context
The pleadings
The current proceeding was commenced in December 2016.[4] The first plaintiff is the widow and the second wife of the late Geoffrey Nicholas. The second plaintiff is Anita Nicholas and Bradley Smoling as the trustee of a testamentary trust constituted by the last will of Mr Nicholas. By the current proceeding, together, the plaintiffs claim that the first or second defendant was retained by Mr Nicholas to draw his will and protect his estate from claims he apprehended would be made by his estranged son from his first marriage (Timothy Nicholas), after his death.
[4]With an amended statement of claim being filed on 21 April 2014 after the first plaintiff was granted leave to withdraw admissions in her reply and to add parties.
Indeed, after Mr Nicholas’ death, a claim that adequate provision be made out of the estate of Mr Nicholas under s 41 of the Succession Act1981 (Qld) was made by his son Timothy in the Toowoomba Supreme Court. This claim was settled in June 2015 in reliance upon advice from counsel specialising in succession law, that the arrangements advised by the defendants were ineffective in resisting the claim.
The plaintiffs in this proceeding claim a loss of $738,212.13, being the settlement sum in the Toowoomba family provision proceeding, plus the legal fees paid to the solicitors and barristers in that proceeding, together with accounting and real estate fees related to the settlement.[5]
[5]Paragraph 41 of the amended statement of claim. The amount claimed includes a reduction for stamp duty, capital gains and some other fees.
The defendants currently plead non-admissions to the fees said to have been paid on the basis they have made reasonable enquiries but remain uncertain as to the truth or otherwise of the allegations. They also do not admit that all of the legal fees said to have been paid to the solicitors and/or barristers in defence of the Toowoomba family provision proceeding were reasonably incurred or related to that proceeding.
The defendants’ application for disclosure
By the defendants’ application, the following orders were sought:
“1. Pursuant to r 223 of the Uniform Civil Procedure Rules 1999 (Qld), within 14 days of the date of the Court’s order the plaintiffs disclose all documents within the following categories, by delivering copies of all such documents to the solicitors for the defendants:
(a) With respect to the fees claimed by the plaintiffs in paragraph 41 of the amended statement of claim and described as “Legal Fees solicitors, Defence”, Legal Fees barrister, Defence”, “Legal Fees, transactional solicitors” and “Accountant real estate other fees”:
i. The complete files of the following persons or entities relating to and concerning such fees:
(A) Caite Brewer;
(B) Martin Taylor;
(C) WMS Accountants;
(D) Kerr Lawyers;
(E) Ellice Tanner Hart;
(F) Brown Pennell;
(G) Hiscocks Lawyers; and
(H) Lee Lawyers;
ii. Any costs agreements or client agreements (or like documents) entered into by the plaintiffs or any of them with those persons or entities identified in subparagraph 1(a)(i) of this application;
iii. Detailed time billing records for the following entities;
(A) WMS Accountants;
(B) Kerr Lawyers;
(C) Ellis Tanner Hart;
(D) Hiscocks Lawyers; and
(E) Lee Lawyers;
iv. Documents evidencing the payment of the fees rendered by those persons or entities identified in subparagraph 1(a)(i) of this application, including by whom the fees were paid and when;
(b) Documents evidencing the reasons why the second plaintiffs (in their capacities as executors of the estate of Mr Geoffrey Nicholas) settled Supreme Court of Queensland proceeding 13/14 (Toowoomba registry), including the terms on which the proceeding was settled, including:
i. Documents evidencing communications between the plaintiffs in relation to such settlement (including emails and notes);
ii. Documents evidencing communications between the plaintiffs and their advisors in relation to such settlement; and
iii. Documents made by any of the plaintiffs concerning their views with respect to settlement of Supreme Court of Queensland proceeding 13/14 (Toowoomba registry) including the terms of settlement; and
(c) Documents evidencing the distribution of the estate of Mr Geoffrey Nicholas.
2. Disclosure of the above categories of documents occur by way of bundles and without the plaintiffs preparing a list of documents which identifies each document within each such category.
3. ….”
The consent orders reached, relevant to the defendants’ disclosure application, were as follows:
“1. Within 7 days the plaintiffs disclose all documents within the following categories, by delivering copies of all such documents in their possession or control to the solicitors for the defendants, with respect to the fees claimed by the plaintiff in paragraph 41 of the amended statement of claim:
(a) The complete files of the following persons or entities relating to and concerning such fees:
i. Lee Lawyers;
ii. Kerr Kawyers;
iii. Ellice Tanner Hart; and
iv. Hiscocks Lawyers
(b) Costs agreements or client agreements, tax invoices, detailed time billing records (including identification of the person who did the work, their role, the rate charged and time spent on each item of work) and documents evidencing the payment of fees for the following persons or entities and concerning such fees:
i. Caite Brewer;
ii. Lee Lawyers;
iii. WMS Accountants;
iv. Kerr Lawyers;
v. Ellice Tanner Hart; and
vi. Hiscocks Lawyers;
2. Within 7 days the first plaintiff and Bradley Smoling swear affidavits confirming that the plaintiffs were given no advice by Caite Brewer other than as reflected in the written advice of Ms Brewer dated 19 June 2015 disclosed in this proceeding.”
Senior Counsel for the defendants identified that the application for disclosure concerned two categories of documents.
The first, the “advice” upon which the plaintiffs allege they settled the underlying Toowoomba family provision proceeding. The unchallenged submission of Senior Counsel for the defendants, which I accept, was that this issue was resolved by reason of consent order 2, namely an affidavit under UCPR r 232(2) to the effect that a particular document never existed.
The second category of documents sought were those going to some of the damages claimed by the plaintiffs.[6] In particular, to allow the defendants to make a sensible assessment of aspects of the quantum of the case, to satisfy themselves that the costs claimed actually related to the Toowoomba family provision proceeding (and not to other estate matters), and that they were reasonable. It was uncontroversial that these were matters the plaintiffs would have to prove in this case. The defendants argued that the plaintiffs’ solicitors have provided “dribs and drabs” of disclosure of such documents since they were first asked on 29 March 2017[7] and that more documents have been provided since the application was filed and now, more have been agreed to be provided by the consent orders.
[6]As pleaded in paragraph 41 of the amended statement of claim.
[7]Affidavit of Rebecca Louise Scott filed 9 November 2017; Exhibit A at pages 17 and 18.
Senior Counsel for the plaintiffs accepted that 900 pages of documents had been produced since the defendants’ application for disclosure was filed. He argued that whilst it would be right to say that the defendants’ application for disclosure was partly successful, whether or not it was “helpfully” successful depended on the disclosure actually made. It was submitted there may only be a few further documents disclosed under the consent orders and the extent to which they are relevant will only be apparent when the proceeding is further advanced.
The plaintiffs’ application for mediation and an expedited trial
The plaintiffs’ application for mediation orders and an expedited trial was filed some two and a half weeks after the defendants’ application for disclosure.
It is unnecessary to set out in full, the terms of the consent orders insofar as they concerned the mediation, except to say that the parties agreed they would attend, participate and act reasonably and genuinely in a mediation prior to 21 February 2018; and the mediator and his fee were agreed, together with the documents to be provided to him.[8]
[8]Paragraph [3] of the Consent Order.
Two points were made on behalf of the defendants in relation to the mediation orders reached. First, it was contended that the matter is still not ready for mediation. Second, that the application was quite inappropriate given that all along the defendants had set out clearly in correspondence that at an appropriate time, (once disclosure was made and has been considered) they were “perfectly willing to participate in mediation”. The defendants argued that the fact that an application for mediation was made in circumstances where the supporting affidavit provided disclosure should “tell” against whether that application (for mediation) ought to have been made. It was argued that once disclosure was agreed to be provided within a certain timeframe, consistent with what the defendants had stated all along, they agreed to orders to mediate.
The plaintiffs submitted that the compromise by way of the consent orders advanced the litigation because the orders puts to rest the contention that the mediation could not proceed without the further documents, and facilitated the terms of the mediation. The expedited trial application was not pursued because the plaintiffs were informed by the Registry that the earliest trial date available was August 2018.[9]
[9]It was drawn to Senior Counsel for the plaintiffs’ attention that if this issue had been pressed it was possible that a trial date in February 2018 could have been allocated (due to a trial having just settled).
Analysis
The starting point is UCPR r 681 which provides that costs of an application in a proceeding are in the discretion of the court, but follow the event, unless the court orders otherwise. The authorities establish that “the event” is not determined merely by reference to the overall result or outcome, but is to be determined by reference to “the events or issues, if more than one, arising in the proceedings”.[10] Relevantly, Muir JA observed in Alborn v Stephens [2010] QCA 58 at [8] that:
“…a party which has not been entirely successful is not inevitably, or even, perhaps, normally deprived of some of its costs”.
[10]Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 3) [2003] 1 Qd R 26 at 60.
The evidence referred to during the course of argument clearly reveals, in my view, that the defendants made every attempt to articulate the basis upon which they alleged the plaintiffs’ disclosure was deficient and that the plaintiffs resisted providing many of these documents until they were faced with an application for disclosure. [11] It was only after this application was filed that further documents were provided and have been agreed to be provided.
[11]Affidavit of Rebecca Louise Scott filed 9 November 2017; Exhibit A; Affidavit of Anita Nicholas filed 28 November 2017.
It is true that the form of order sought in the application is to some extent different to what has been agreed and that not all of the categories of documents originally sought have been pressed by the defendants. But, in my view, the defendants had no choice but to bring the application. Upon the bringing of the application, the plaintiffs could have maintained the position they had for the last six or so months. They chose not to. Instead they made a tactical decision to compromise. Senior Counsel for the plaintiffs argued it was “a compromise between parties to prevent an argument”. Later, in response to a question asked by me as to why the documents that had now been agreed to be disclosed had not been disclosed earlier, it was submitted that the documents disclosed are “simply the subject of a compromise to avoid the argument which was listed for an hour and a half which is about as long [sic] as this costs argument” (which took one hour and 20 minutes).
The crux of the plaintiffs’ argument was that they did not have an obligation to provide all the documents sought in the application and that they only agreed to provide various classes of documents, to the extent they had them, so that a mediation could be agreed due, it seems, to the first plaintiff’s health problems.
I do not accept the plaintiffs’ argument that because there was a compromise to prevent an argument, the defendants who were mostly successful by the terms of this compromise, ought to be deprived of their costs. I also do not accept the plaintiffs’ argument that it is necessary to wait to see if the documents can be found or are relevant to the proceeding, in order to determine the issue of costs. In my view, whether the categories of documents agreed to be disclosed end up being determinative of any settlement is not relevant for present purposes. Finally, I do not accept the plaintiffs’ submission that it is an unorthodox approach to make orders for costs where there is a mediation order because that will “infect” the mediation process and the prospects of settlement because the costs will not be quantified. If this is perceived to be a potential issue at the mediation, I would expect it to be a relatively straight forward exercise for an experienced solicitor to swear an affidavit setting out an estimate of the costs of the application on the standard basis, (as is the practice when costs are fixed by the court).
I do not consider that deferring the issue of costs is in the interests of justice or a correct approach to the exercise of my discretion in this case.
Conclusion
The defendants were largely successful in their application for disclosure. On the above analysis, it follows in my view, that costs ought to follow that event. In the circumstances of this case, I do not consider that the defendants ought to be deprived of any of those costs. So there is no confusion, the costs include the costs of arguing the issue of costs before me on 1 December 2017.
In relation to the plaintiffs’ application, there is some force to the defendants’ submission that given they have always intimated a willingness to mediate, subject to the provision of certain documents, the application was unnecessary. But in my view, given the difficulties the parties in this case seem to have in agreeing on matters advancing the proceeding, without lengthy correspondence and affidavit material being generated, the mediation orders reached will assist in the just and expeditious resolution of the proceeding. This is obviously a matter where resolution at mediation needs to be explored before a trial date is allocated.
In my view, balancing all of these factors, the appropriate order for costs in relation to the plaintiffs’ application is that there be no order as to costs.
UCPR r 686(a) provides that costs may be assessed without an order for assessment having been made if the court orders a party to pay another party’s costs. In other words, it is not necessary to seek an order that costs be assessed.[12]
[12]Mio Art Pty Ltd v Macequest Pty Ltd & Anors No. 2 [2013] QSC 271 at [11] per Jackson J.
Further, UCPR r 702(1) expressly provides that “[u]nless these rules or an order of the court provides otherwise, a cost assessor must assess costs on the standard basis”. Again it is unnecessary to seek an order that costs be assessed on the standard basis.[13]
[13]Ibid at [12].
It is also unnecessary in an order for costs to refer to “incidental costs”. Any costs actually, necessarily and reasonable incurred in relation to an application (including the cost of preparation), are recoverable under the orders as made.[14]
[14]Ibid at [19], [20] and [21].
Orders
Accordingly, I order that:
1. The plaintiffs pay the defendants’ costs of the defendants’ application filed 9 November 2017.
2. There is no order as to costs in relation to the plaintiffs’ application filed 28 November 2017.