Pertzel v Qld Paulownia Forests Ltd & Anor

PARTIES: BERT ALFRED PERTZEL (plaintiff/respondent) v QLD PAULOWNIA FORESTS LTD (first defendant/not a party to the appeal) ALLIANZ AUSTRALIA INSURANCE LIMITED ABN 15 000 122 850 (second defendant/appellant)

FILE NO/S: Appeal No 2073 of 2008 / DC No 1084 of 2004

DIVISION: Court of Appeal

PROCEEDING: Application for leave s 118 DCA (Civil) – Further Order

ORIGINATING COURT: District Court at Brisbane

DELIVERED ON: Judgment delivered on 19 September 2008 / Further Order delivered on 31 October 2008

DELIVERED AT: Brisbane

HEARING DATE: Heard on the papers

JUDGES: Keane JA, Mackenzie and Lyons JJ / Judgment of the Court

FURTHER ORDER: Application to vary order for costs made on 19 September 2008 refused

CATCHWORDS: PROCEDURE – COSTS – RECOVERY OF COSTS – where the appellant was successful on appeal – where the Court ordered the respondent to pay one-quarter of the appellant's costs of the appeal to be assessed on the standard basis – where the utility of the successful outcome for the appellant was limited – where the argument advanced by the appellant on appeal involved an issue of public importance – whether the order as to costs made by the Court was in all of the circumstances appropriate / Uniform Civil Procedure Rules 1999 (Qld), r 681, r 684 / Pertzel v Qld Paulownia Forests Ltd & Anor [2008] QCA 287, affirmed

COUNSEL: D B Fraser QC, with M J Liddy, for the appellant / R J Douglas SC, with C J Cilento, for the respondent

SOLICITORS: Deacons for the appellant / Jensen McConaghy for the respondent

1. THE COURT: The Court delivered judgment in this matter on 19 September 2008. On that occasion, the Court ordered that the respondent pay one-quarter of the appellant's costs of the appeal to be assessed on the standard basis. The respondent has sought a different order as to costs, submitting that the existing order should be set aside and, in its place, the appellant should be ordered to pay either three-quarters or one-half of the respondent's costs of the appeal to be assessed on the standard basis.

2. The general rule about costs is contained in r 681 of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR"). It is that the "[c]osts of a proceeding … are in the discretion of the court but follow the event, unless the court orders otherwise." Rule 684 of the UCPR provides that "[t]he court may make an order for costs in relation to a particular question in, or a particular part of, a proceeding."

3. The thrust of the argument put on behalf of the respondent is that the respondent was substantially successful on the appeal, and this substantial success should be reflected in the Court's disposition of the costs of the appeal. On behalf of the respondent, it is acknowledged that the appellant was successful on appeal on the Trade Practices Act issue, but the respondent argues that the respondent's lack of success on this issue did not mean that, overall, the outcome of the appeal was any less valuable to the respondent, so far as the ultimate outcome of the respondent's action is concerned, than the position established by the decision at first instance. The respondent points in this regard to his success in the appeal on the "estoppel issue", this success being apt to ensure that his claim in the action for damages will ultimately be successful.

4. The proceeding before the learned primary judge involved, not the trial of the action brought by the respondent, but the determination of a number of issues which the parties had prevailed upon the primary judge to determine as separate issues. The learned primary judge's decision was reversed on one of these issues. The appellant was obliged to appeal in order to achieve that success. The appeal was, therefore, successful even though that success, and its ultimate utility, was limited.

5. In deciding whether the appellant was relevantly successful on the appeal, the Court is not bound to concern itself with the ultimate "value" of the outcome of the appeal to the action for damages brought by the respondent. The issue on which the appellant succeeded on appeal was an issue of public importance, with ramifications beyond the result in this action between the parties. It was an issue raised in the action by the respondent. The correction of the erroneous determination of this issue in the respondent's favour at first instance was a significant public service. The erroneous decision below would have remained uncorrected had there been no appeal.

6. Accordingly, the Court approached the disposition of the costs of the appeal on the basis that, although each party had enjoyed a measure of success on the appeal, the bringing of the appeal was justified by the need to correct an erroneous view of the law on an important issue for which the respondent must bear responsibility.

7. The order initially made by this Court in relation to costs was intended to acknowledge that the appellant had achieved important, albeit limited, success in the appeal which it was obliged to pursue in order to achieve even that limited success. While it is true to say that, in the end, the success achieved by the appellant on the appeal may be of little utility as between the parties, the appeal itself was not concerned with the ultimate result of the action. That this is so is a consequence of the choice of the parties to proceed to the determination of separate issues rather than to proceed to a trial.

8. For these reasons, the Court considers that the order as to costs pronounced on 19 September 2008 was an appropriate exercise of its discretion in relation to the disposition of the costs of the appeal; and the Court declines to vary that order.