Aion Corporation Pty Ltd v Yolla Holdings Pty Ltd & Anor [2013] QSC 216

**PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF QUESTIONS - where the applicant is successful on central event or question - where applicant unsuccessful upon consequential relief - whether the court should exercise discretion - whether costs of events or questions should be separately ordered - whether fraction of costs should be ordered

Civil Proceedings Act 2011 (Qld), s 15

Uniform Civil Procedure Rules 1999 (Qld) r 680, r 681, r 682, r 684

Integrated Resort Development Act 1987 (Qld), s 33**

BHP Coal Pty Ltd v O & K Orenstein and Koppel AG (No 2) [2009] QSC 64, cited

Cinema Press Ltd v Pictures & Pleasures Ltd [1945] KB 356, cited

Cocias v Mt Isa Mines Ltd [1967] QWN 22, cited

Emmanuel Management Pty Ltd (in liquidation) v Foster's Brewing Group Ltd [2003] QSC 299, cited

Interchase Corporation Limited (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26; [2001] QCA 191, cited

McFadzean & Ors v Construction, Forestry, Mining and Energy Union & Ors (2007) 20 VR 250; [2007] VSCA 289, cited

**Mickelburg v Western Australia [2007] WASC 140;

Mio Art Pty Ltd v Mango Boulevard Pty Ltd (No 3) [2013] QSC 95, cited

Potter v Dickenson (1905) 2 CLR 668; [1905] HCA 26

Todrell Pty Ltd v Finch (No 2) [2007] QSC 386**

**[1] JACKSON J: On 31 July 2013 I made a declaration that, within the meaning of s 33 of the Integrated Resort Development Act 1987 (Qld), lot 989 on survey plan 197707 is primary thoroughfare and the first respondent is the registered proprietor of the lot.

[2] However, I declined to make a declaration that the first respondent holds lot 989 on trust for the second respondent or an order that the first respondent transfer the lot to the second respondent.

[3] The applicant ("Aion") applies for an order that the first respondent ("Yolla") pay the applicant's costs of and incidental to the application to be assessed on the standard basis.

[4] The proceeding in which those orders were made was started by originating application ("the application"). Yolla applies for an order that the applicant pay the first respondent's costs of and incidental to the relief sought in paragraphs 2, 3 and 4 of the application and alternatively submits that any order for costs against the first respondent should be limited to the applicant's costs in relation to par 1 of the application.

[5] The relevant principles according to which the discretion as to costs is exercised are not in doubt. The statutory provisions (for costs are the creature of statute[1]) are in s 15 of the Civil Proceedings Act 2011 (Qld) and UCPR 680, 681, 682 and 684. The purpose of costs is compensatory. The width of the power where each party can claim some success is now reflected in UCPR 681 and 684. The word "event" in the former rule is to be read as including the plural "events", so that an order for costs may reflect the success of particular parties in respect of separate events decided in the proceeding.[2] As well, the latter rule refers to making an order for costs in relation to "a particular question in, or a particular part of, a proceeding" whereas the previous comparable rule referred to costs of several "issues", which had a potential confining affect.[3] It is unnecessary to further explore the operation of UCPR 681 and 684 together.

[6] Although the parties referred to several cases, it is not necessary to discuss them in detail.

[7] Aion submitted that a party should not be dissuaded by the risk of costs from canvassing all issues which might be material to the decision, so that unless there has been some unreasonable or inappropriate conduct by the successful party in relation to an issue it will be appropriate to order the costs of the proceeding to the successful party.[4] Yolla submitted that a defendant who has restricted the plaintiff's success may have an argument, the strength of which will depend on the circumstances, that it should pay only part of the other party's costs or indeed be paid part of its own costs.[5]

[8] In the present case, the central question argued in the proceeding was whether or not lot 989 was primary thoroughfare within the meaning of s 33 of the Integrated Resort Development Act 1987 (Qld). Aion was successful on that question and upon the related question of whether Yolla is a registered proprietor under s 33. Hence it succeeded on the relief sought in paragraph 1 of the application, in substance.

[9] Nevertheless, Yolla submits that because the case was difficult and novel, and Aion failed in respect of the relief sought in paragraphs 2, 3 and 4 of the application, Yolla should have the costs of and incidental to that relief.

[10] It seems to me that Yolla's approach fails to take into account that the costs of this proceeding are not likely to be readily divisible by reference to the costs of the particular paragraphs of the application. The oral hearing of the application occupied a single hearing day and only part of a day at that. Yolla submitted that perhaps a third of the time that was spent on the hearing was directed to paragraphs 2, 3 and 4. However, I am unable to accept that is so.

[11] Secondly, the application was conducted on evidence by affidavit. The affidavits were, for the most part, directed to the facts surrounding or necessary for the determination of the questions on which Aion was successful.

[12] In my view, an order which divided the costs according to the events of the relief sought in the separate paragraphs, or the questions raised on the separate paragraphs of the application would be difficult or potentially difficult to assess.

[13] Accordingly, I am not minded in the circumstances of this case either to make an order for costs in favour of Yolla on the questions raised by paragraphs 2, 3 and 4 of the application or to make an order for costs in favour of Aion which limits the costs to those incurred in relation to paragraph 1 of the application.

[14] Yet, it is true that Yolla has enjoyed some success, whether or not Aion describes that as "ancillary" to the "principal relief".

[15] In a number of cases prior to the introduction of the UCPR, courts expressed concern that taxation of issues often had disconcerting and unfair results, as well as being troublesome and difficult to carry out. A rough apportionment of costs "intelligently made", has been said to lead to a fairer result.[6]

[16] Given my impression as to where the costs in the proceeding are likely to have been incurred and because I think it is desirable to avoid the difficulties of assessment of costs based on separate events or questions decided in the application, in my view the appropriate order is that the Yolla pay 80% of Aion's costs of the proceeding to be assessed.

[17] Such an order, as a rough apportionment, should reflect the considerations that Aion should obtain the costs of the central question in the proceeding but that it was not entitled to the orders it sought by way of declaration of trust or transfer of the land.**

[1] Potter v Dickenson [1905] HCA 26; (1905) 2 CLR 668 at 678-679; [1905] HCA 26.

[2] See Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26 at [79]-[84]; [2001] QCA 191; Mio Art Pty Ltd v Mango Boulevard Pty Ltd and Ors (No 3) [2013] QSC 95 at [4].

[3] Todrell Pty Ltd v Finch (No 2) [2008] 2 Qd R 95; [2007] QSC 386 at [11]- [15]; BHP Coal Pty Ltd v O & K Orenstein and Koppel AG (No 2) [2009] QSC 64 at [7].

[4] Mickelburg v Western Australia [2007] WASC 140 at [43]; McFadzean v CFMEU [2007] VSCA 289; (2007) 20 VR 250 at [152]; [2007] VSCA 289.

[5] Emmanuel Management Pty Ltd (in liquidation) v Foster's Brewing Group Ltd [2003] QSC 299 at [85].

[6] Cinema Press Ltd v Pictures & Pleasures Ltd [1945] KB 356 at 363-364; Cocias v Mt Isa Mines Ltd [1967] QWN 22 at 38-39; cf McFadzean v CFMEU [2007] VSCA 289; (2007) 20 VR 250 at [157]- [160]; [2007] VSCA 289.