[1] On 20 June 2024, the first, second and third plaintiffs (collectively, the plaintiffs) commenced proceedings against the defendant for damages for breach of contract, or alternatively, negligence. At the time proceedings were commenced, all three plaintiffs were represented by Bennett & Philp Lawyers.
[2] At some point, the first and third plaintiffs changed their representation and, from at least 27 September 2024, were represented by Alexander Law. The solicitor in the then-employment of Alexander Law who had carriage of the matter was Mr Jacob O'Shaughnessy. A notice of change of solicitors was filed on 8 October 2024 confirming the Alexander Law acted on behalf of the first and third plaintiffs. Then, on 19 November 2024, a notice was lodged informing the Court and the parties that the second plaintiff was now acting in person.
[3] On 24 April 2025, an incomplete (missing pages) amended statement of claim was filed by Alexander Law. The amended statement of claim provided that it was filed on behalf of the "plaintiffs" (emphasis added). There was no indication on the amended statement of claim that it was filed on behalf of the first and third plaintiffs only.
[4] Four months later, on 28 August 2025, a notice of change of solicitor was filed. That notice provided that Wright Law now acted in place of Alexander Law. The notice stated that it was filed on behalf of the "plaintiffs". The notice of change of solicitor was signed by Wright Law with the following description: "solicitor for the first and second plaintiff".
[5] At this stage there had been no notice lodged that Alexander Law was no longer acting for the third plaintiff, and no notice lodged that Alexander Law was now acting for the second plaintiff. Mr O'Shaughnessy was still the solicitor with the carriage of the file, albeit he was now engaged by Wright Law.
[6] In September 2025, two requests for subpoena were filed and requested to be issued on behalf of the first, second and third plaintiffs. The subpoena requests were prepared by Wright Law. One of the subpoenas was directed to a Director of the defendant, Mr George Zammit. Mr Zammit is not a party to the proceeding. Mr Zammit, having received a personal subpoena, applied to the court for an order that the subpoena to produce documents be set aside. Shand Taylor Lawyers, solicitors for the defendant, informed the Court that Wright Law did not provide them with a copy of the Subpoena, or any notice that a Subpoena had been issued in relation to these proceedings.
[7] On 16 September 2025, Wright Law, purportedly on behalf of all of the plaintiffs, also filed several notices of non-party disclosure.
[8] Mr Zammit's application to set aside the subpoena was listed for hearing on 24 September 2025.
[9] On 24 September 2025, the Court sought clarity from Mr O'Shaughnessy as to which of the three plaintiffs Wright Law represented. A review of the Court file showed that Wright Law is only on the record as acting for the first and third plaintiffs. There had been nothing filed to indicate Wright Law was acting for the second plaintiff. Despite this, email correspondence sent from Mr O'Shaughnessy to the Court on 24 September 2025 stated he acted for the second plaintiff. Mr Zammit responded that he would like verification of this before proceeding further and that he was confused. The defendant's confusion was understandable.
[10] The Court was not informed that Wright Law was not acting on behalf of all plaintiffs at the 24 September 2025 hearing. Upon becoming aware of this, the Court informed the parties that until the issue of representation was resolved, the directions and orders discussed at the hearing could not be finalised. The second plaintiff had not had an opportunity to appear and be heard at that hearing.
[11] The second plaintiff, Mr Jackson, emailed the parties on 25 September 2025 and informed the Court that he had:
[2]
(a) never spoken to, or paid, Mr O'Shaughnessy;
(b) never agreed to being represented by Mr O'Shaughnessy; and
(c) had no legal representation.
[3]
[12] The Court notified the parties that there appeared to be two errors in the Notice of Change of solicitor dated 28 August 2025. First, it named Mr Zammit personally as the first defendant. There has been no application made to the Court to join Mr Zammit to the proceeding (as would have been required pursuant to the Uniform Civil Procedure Rules 1999 (UCPR) rule 69). Second, the notice stated that Wright Law ILP, in the place of Alexander Law, now acts for the first and second plaintiff. This notice was consistent with the email from Mr O'Shaughnessy dated 24 September 2025 but contradicts the correspondence the Court received from Mr O'Shaughnessy on 25 September 2025 stating that Wright Law ILP does not act for the second plaintiff.
[13] Owing to the ongoing confusion in this matter, the Court brought the matter back on for review on 29 September 2025 to remove the confusion and to permit the second plaintiff to be heard on the proposed applications and directions (the Review Hearing).
[14] At the Review Hearing on 29 September 2025, Mr Jackson appeared and confirmed he had not been made aware of the 24 September 2025 hearing and that Wright Law was not acting on his behalf. Mr Jackson confirmed that he had mailed a notice of discontinuance to the Court, and the defendant confirmed they had consented to the discontinuance by the second plaintiff. Mr O'Shaughnessy confirmed he made errors in his communications with the court and with respect to the Court documents filed. Mr O'Shaughnessy apologised for the errors and agreed to file an affidavit to explain the cause of the errors. The Court noted that it would have been stressful for Mr Zammit to have been suddenly named as a personal defendant in the matter (the plaintiffs are claiming $1,060,000).
[15] Mr O'Shaughnessy again acknowledged that naming Mr Zammit as a party to the proceeding on a Court document was an error.
[16] Mr O'Shaughnessy communicated with the Court concerning the Application and other procedural matters regarding the proceeding on:
[4]
(a) 23 September 2025 at 1:41pm;
(b) 24 September 2025 at 2:50pm;
(c) 24 September 2025 at 4:24pm; and
(d) 25 September 2025 at 9:11am .
[5]
[17] Shand Taylor Lawyers, solicitors on record for the defendant, were not copied into any of those communications referred to above. Shand Taylor Lawyers submits those communications were made without regard to regard to rule 22.5 of the Australian Solicitors' Conduct Rules 2023 which prohibits a solicitor from communicating with the Court about the substance of a case without the opponent being present and having proper notice.
[18] In accordance with the orders made on 29 September 2025, Mr O'Shaughnessy filed and served an affidavit on 3 October 2025 explaining the errors that have been made in the court documents filed and served including that:
[6]
(a) Mr Zammit had been personally named as a defendant in the proceeding in circumstances where he had not been joined to the proceeding;
(b) the references to notices of non-party disclosure and request for subpoenas being issued in the names of the first second and third plaintiffs in circumstances where Wright legal does not act for the second plaintiff; and
(c) in the notice of change of solicitor filed 27 August 2025, it describes Wright Legal as acting for the first and second plaintiffs, in circumstances where Wright Legal does not act for the second plaintiff.
[7]
[19] Mr O'Shaughnessy explained that some of the above errors arose during the transition of his clients' file from Alexander Law to Wright Law.
[20] Mr O'Shaughnessy explained that Alexander Law had gone into receivership in August 2025 and that initially he was locked out of the firm's client management system and had no access to client files. There was a stressful period of trying to physically move files and obtain client authorities during this time under the guidance of the Queensland Law Society. Mr O'Shaughnessy says he was finally provided access to digital files on 3 September 2025 and that the errors occurred during this highly disruptive and challenging transition period when files were being migrated from Alexander Law to Wright Law. Mr O'Shaughnessy describes the errors as administrative and clerical mistakes. Mr O'Shaughnessy says he has taken steps to correct those errors. On 2 October 2025, Wright Law filed an amended notice of change of solicitor to correctly reflect that Wright Law is only representing the first and third plaintiffs. Mr O'Shaughnessy has apologised to the court, to the parties and to Mr Zammit for the errors and has also acknowledged that the errors should have been identified and rectified during the review process.
[21] In response to the explanation provided, the defendant submitted:
[8]
"12. While the defendant acknowledges that the transition may have presented certain challenges, it is noted that:
[9]
(a) Mr O'Shaughnessy of Wright Law has had conduct of the file since at least September 2024:
(b) the eCourt portal was available to Mr O'Shaughnessy and have been used to confirm the identity of the parties to the proceeding;
(c) there was no apparent urgency to advance the matter in the circumstances alleged, particularly if access to the plaintiffs' file was limited; and
(d) the explanation does not justify the unnecessary time and expense incurred by the defendant's solicitor in seeking to identify and address the number of errors and advise the defendant as to their nature and implications.
[10]
The defendant submits that the need for addressing the various errors and receiving advice to the nature and implications of the errors described above, arose because of the conduct on the part of the plaintiffs', or alternatively, the plaintiffs' solicitor, Mr O'Shaughnessy, in failing to exercise appropriate diligence and facilitate the just and expeditious resolution of the real issues in the proceeding at a minimum of expense to the parties in accordance with rule 5 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).
The defendant ought to have its costs of and incidental to the application, on the indemnity basis of assessment, or alternatively on the standard basis of assessment.
Further, if her Honour Judge Grigg considers that the defendant's costs have been incurred by reason of the plaintiff's solicitor's conduct, the Court may consider making an order under rule 690 of UCPR."
[11]
[22] Following receipt of Mr O'Shaughnessy's affidavit, the parties were then given the opportunity to address on the costs of and incidental to the Review Hearing.
[23] The defendant submits that the costs of the review hearing should be paid by the applicant on an indemnity basis and, further, or alternatively, that Mr O'Shaughnessy pay those costs personally.
[24] The defendant proposed the following orders be made:
[12]
(a) the plaintiffs pay the costs of and incidental to the Review Hearing on an indemnity basis; and/or
(b) the plaintiffs' solicitor repay the plaintiffs' costs ordered to be paid to the defendant pursuant to rule 690 of the UCPR.
[13]
[25] No submissions were received from the first and third plaintiff or Mr O'Shaughnessy regarding costs.
[14]
[26] The starting point is that costs usually follow the event and are ordered to be paid on a standard basis.[1] However, costs may be ordered to be paid on an indemnity basis under r 704(1) of the UCPR.
[27] The issue is whether the circumstances of this matter warrant an indemnity, as opposed to a standard, cost order.
[28] Principles relevant to the exercise of a discretion to order indemnity costs are set out in numerous authorities, including Smits v Tabone[2007] QCA 337 (Smits). In Smits, Cullinane J summarised the principles by reference to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows:
[15]
"42. The normal order for costs is on the standard basis and some special reason is required for any departure from that.
[16]
Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 discussed the subject generally and identified categories of cases in which it would be appropriate to make such an order. These categories were not meant to be exhaustive:
[17]
"Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes(1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davis J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson(1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2)(1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs of an indemnity basis against a contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports."
"... the Court requires some evidence of unreasonable conduct, albeit that it need not rise as high or vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker.""
[20]
[29] With the above caution in mind, the issue comes down to whether the first and third plaintiffs' conduct, engaged in through their solicitor, was conduct warranting an indemnity costs order.
[30] The defendant submitted it was unnecessarily put to the inconvenience and cost of instructing its solicitors to prepare for and appear at the Review Hearing to address the various errors in the documents filed and served by the plaintiffs.
[31] Correct contact details for parties need to be maintained and this did not happen here. Notices of change of solicitors contain relevant address and contract details for service of relevant material so that all other parties, and the court, are appropriately and accurately informed.[2] This prevents confusion and delay. Failure to keep contact and representation details up to date and accurate has the potential to deny a party procedural fairness, as could have occurred here.
[32] It is clear that, at the very least, costs should follow the event and that a costs order in favour of the defendant is warranted in this instance. The issues are whether it should be an order for indemnity costs as pressed by the defendant and against whom such an order should be made.
[33] Is the conduct on behalf of the first and third plaintiffs, and/or their representative, unreasonable enough to depart from the ordinary order as to costs?
[34] In Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd[2020] FCA 598 (ACCC v Colgate-Palmolive), Bromwich J said unreasonable conduct alone is not sufficient:[3]
[21]
"The unreasonableness must be not only present, but sufficient to warrant a departure from the ordinary award of costs..."
[22]
[35] The Court in ACCC v Colgate-Palmolive described the level of the unreasonable conduct required, as a "high hurdle to surmount".[4]
[36] There is no explanation provided from the first or third plaintiffs, as Wright Law has shouldered the entire blame for what has occurred.
[37] The conduct of Wright Law was not in wilful disregard of the law or motivated by some ulterior purpose, but it did cause delay, distress, and unnecessary inconvenience and expense to the second plaintiff, the defendant and Mr Zammit. The discretion to award indemnity costs might be exercised where there is what is referred to as a "relevant delinquency": Oshlack v Richard River Council[1998] HCA 11(1998) 193 CLR 72, at [44]. In Bale v Kimberley Developments Pty Ltd (No 2)[2022] NSWSC 1009, Ward CJ explained that ""relevant delinquency" does not mean moral delinquency or some ethical shortcoming, but delinquency bearing a relevant relation to the conduct of the case".[5] Ward CJ set out circumstances in which indemnity costs may be awarded, including:[6]
[23]
"... where a party has made allegations that ought never to have been made; where an action has been commenced or continued where the plaintiff, properly advised, should have known the applicant had no chance of success; and where proceedings have been commenced in wilful disregard of known facts or clearly established law. An award of indemnity costs serves the purpose of compensating a party fully for costs incurred when the Court takes the view that it was unreasonable for the party against whom the order was made to have subjected the innocent party to the expenditure of the case."
[24]
[38] Martin J in The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd[2009] QSC 84; [2009] 2 Qd R 356, observed that the discretion to order costs must be exercised judicially in accordance with general legal principles pertaining to the law of costs. The exercise of the discretion comes down to a "fact-specific inquiry informed by various relevant considerations".[7]
The court may order a lawyer to repay to the lawyer's client all or part of any costs ordered to be paid by the client to another party if the party incurred the costs because of the lawyer's delay, misconduct or negligence."
[28]
[40] The errors resulted in two hearings being required instead of one, or none.
[41] While the circumstances here could not be described as a serious dereliction of duty, such as failure to properly investigate facts or law, they could be described as inattentive mismanagement, or administrative failure that has resulted in unnecessary litigation costs being incurred by the defendant.
[42] I consider the errors and delay resulting from the administrative oversight, or failure to take sufficient care, constitute carelessness and failure to pay due attention. It is unreasonable for the defendant to have been subjected to this totally unnecessary expenditure.
[43] In my view, this matter is an appropriate situation in which to order indemnity costs.
[44] The Court notes that Mr O'Shaughnessy has taken the necessary steps to correct the record and that the requests for leave to issue the subpoenas have been withdrawn.
[45] It is clear from Mr O'Shaughnessy's affidavit that the first, second, and third plaintiffs are not responsible for the errors in the filed court materials. It may therefore seem unfair to order that the first and third plaintiffs are responsible for the costs incurred by the defendant as a result of these errors and issues having to be addressed. In my view, Wright law should compensate the first and third plaintiffs for these costs orders.
[46] I believe an appropriate order is one along the lines made by Reid DCJ in Wallis v Hunt[2019] QDC 33, that within seven days of receipt of these reasons, Wright Law is to provide to the first and third plaintiffs a copy of these reasons.
[29]
[47] In the circumstances, the first and third plaintiffs should pay the defendant's costs as thrown away by reason of the review on an indemnity basis.