Rapid Roofing P/L & Anor v Natalise P/L

SUPREME COURT OF QUEENSLAND

CITATION: Rapid Roofing P/L & Anor v Natalise P/L (as trustee for the St Ange Family Trust) & Anor [2008] QCA 237

PARTIES: RAPID ROOFING PTY LTD (first plaintiff/first respondent) ALLAN LEO GEORGE ERNESTINE AND MARY-ALISE PARQUETT ERNESTINE / (second plaintiffs/second respondents) v NATALISE PTY LTD ACN 094 771 954 (as trustee for the ST ANGE FAMILY TRUST) (first defendant/first applicant) JOSE ST ANGE AND MICHELLE ST ANGE (second defendants/second applicants)

FILE NO/S: Appeal No 8388 of 2006 / DC No 115 of 2002

DIVISION: Court of Appeal

PROCEEDING: Miscellaneous Application - Civil

ORIGINATING COURT: District Court at Southport

DELIVERED ON: 15 August 2008

DELIVERED AT: Brisbane

HEARING DATE: 5 August 2008

JUDGES: Keane and Holmes JJA and Dutney J / Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER: Application dismissedApplicants to pay the respondents' costs of this application to be assessed on the standard basis

CATCHWORDS: PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE – CORRECTION UNDER SLIP RULE – where the applicants were successful on appeal – where the respondents were ordered to pay 75% of the applicants' costs of the trial only – where the applicants seek a variation of the Court's order in respect of costs so to cover costs of the entire proceedings in the District Court – where the application is brought 18 months after the judgment of the Court was handed down – whether the order as to costs was a mere "slip" or error by the Court – whether the circumstances warrant the exercise of the discretion conferred on the Court under r 667(2)(d) of the Uniform Civil Procedure Rules 1999 (Qld) / Uniform Civil Procedure Rules 1999 (Qld), r 5, r 667(2)(d) / Newmont Yandal Operations Pty Ltd v The J Aron Corporation & Anor [2007] NSWCA 195, cited / Quality Corporation (Aust) Pty Ltd & Ors v Millford Builders (Vic) Pty Ltd & Ors [2005] QCA 137, distinguished / Rapid Roofing P/L & Ors v Natalise P/L & Ors / [2007] 2 Qd R 335; [2007] QCA 94, related / Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446, applied

COUNSEL: J C Faulkner for the applicants / T Matthews for the respondents

SOLICITORS: Ledger & Co Lawyers for the applicants / Stacks Gray for the respondents

KEANE JA: In February 2002 the plaintiffs brought proceedings against the defendants following the failure of a business relationship between the parties.

On 8 September 2006, after an eight day trial in the District Court, the plaintiffs' claims were upheld and counterclaims by the defendants were dismissed. From this decision the defendants appealed.

On 23 March 2007 this Court upheld the defendants' appeal.¹ The plaintiffs were ordered to repay to the first defendant the sum of $151,295 together with interest from 31 October 2001. Relevantly for present purposes, this Court "set aside the order for costs of the trial, and [ordered] instead that the plaintiffs pay 75 per cent of the defendants' costs of the trial". The order of the District Court which was set aside was in the following terms: "the Defendants … pay 75% of the costs of and incidental to the trial to be assessed on a standard basis."

On 5 September 2007 the plaintiffs' application to the High Court of Australia for special leave to appeal was refused.

The defendants now apply for a variation of an order made by this Court in respect of the costs of the proceedings in the District Court.

The parties' contentions

The defendants' complaints about this Court's order are two-fold: first, that it would not allow the defendants to recover the costs incurred by them in the action in the District Court prior to the trial itself; and, secondly, that, because they were wholly successful in the proceedings, there was no good reason for limiting the costs recoverable by them to 75 per cent.

The defendants submit that this Court may, and should, address these complaints pursuant to r 667(2)(d) of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR") which provides: "The court may set aside an order at any time if … the order does not reflect the court's intention at the time the order was made".²

The defendants argue that their matters of complaint are within the observations of McPherson JA in Quality Corporation (Aust) Pty Ltd & Ors v Millford Builders (Vic) Pty Ltd & Ors that:³

"The distinction between 'costs of trial' and 'costs of action' is well known, as can be seen by perusing, for example, Nally v Walsh (1898) 24 VLR 41, 47-48, and standard texts on costs, such as Pridmore & Scott, Guide to Costs (13th ed 1932), at 917, and Professor Dale Port's recently published Law of Costs (2003) at 10, in P19. In this instance it is clear that the intention of the Court was to award the costs of the action rather than simply the costs of the trial. There was no reason for limiting it in the way it was expressed so as to exclude the preliminary costs incurred. It is a slip that must be corrected."

The defendants argue that there is no reason to think that this Court intended that the defendants should not recover in full the costs incurred by them in the course of the four years during which the action progressed to trial as well as the costs of the trial.

The plaintiffs, for their part, do not dispute that this Court may, pursuant to r 667(2)(d) of the UCPR and its inherent jurisdiction, correct errors of the kind discussed in Millford Builders but argue that this case is distinguishable in that the present application is not for the correction of a "slip" but of "a conscious and deliberate order" so that the discretion conferred by r 667(2)(d) of the UCPR is not enlivened.

Discussion

It must be said immediately that it is unfortunate that the defendants allowed 18 months to elapse between the pronouncement of the order in question and this application to correct it. It is not conducive to the due administration of justice that the Court should be asked to revisit its decisions many months after they have been made.

It should be clearly understood that the practice of this Court is to seek to resolve issues as to costs at the same time as it determines the substantial questions in an appeal so far as it is able to do so. Where the parties indicate their wish to argue that the Court's orders as to costs do not meet the justice of the case, the Court's practice is to grant leave to the parties to make further submissions on the issue. This practise is recognised in paragraph 37A of Practice Direction No 1 of 2005. In this way, arguments relevant to the disposition of costs which have not previously been drawn to the Court's attention may be agitated and addressed. The circumstance that the defendants did not avail themselves of this practical opportunity to make a prompt application for this Court's reconsideration of the order in question militates strongly against accepting an invitation to reconsider the Court's orders after the lapse of so much time. If this Court's practice had been observed in this case, this application might not have been necessary. One cannot be certain about that, but that uncertainty is itself a difficulty in the way of an exercise of the discretion in favour of the defendants.

In this case, the period of the defendants' delay has been such that one of the members of the Court who decided the matter has retired. It may be that the intention of the Court to which its orders should be made to conform is the Court's intention objectively ascertained from its reasons, so that this circumstance is not of itself fatal to the defendants' application. It does, however, highlight the practical difficulty which confronts the Court in this case. That is particularly so because there is nothing in the Court's reasons for judgment which supports an affirmative conclusion that the Court's actual intention as to the proper disposition of costs was not reflected in the orders which were made.

The delay which has attended the making of this application has two consequences of present relevance. First, it makes the task of ascertaining whether there was a "slip" in the Court's original order unduly difficult: the Court must struggle to determine whether the occasion for the exercise of the discretion has arisen at all. And, secondly, if the discretion were otherwise enlivened, delay of the order which has occurred in this case affords good reason to exercise the discretion adversely to the defendants.⁴

As to the first of these difficulties, the discretion to make an order of the kind sought by the defendants does not arise unless the Court can be satisfied that proposed alteration is not "a matter upon which a real difference of opinion might exist".⁵

In this case, there are arguable reasons for the limited benefit of the order in question to the defendants. First, it is not correct to say that the defendants were entirely successful in the litigation. The learned trial judge made findings as to credibility which were adverse to the defendants.⁶ This Court held that these adverse findings were not decisive against the defendants; but the limitation on the costs of the trial recoverable by the defendants is explicable as a reflection of the defendants' lack of success at trial on these issues of credibility.

Secondly, the action took four years to come to trial. That the order for costs left the defendants to bear the burden of the languid progress of the proceedings to trial may be explicable as an expression of the Court's disapproval of the parties' delay. Rule 5 of the UCPR provides:

"Philosophy – overriding obligations of parties and court

(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.

Example–

The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court."

As the example given in the UCPR in respect of the potential operation of r 5(4) shows, the Court's disapproval of the failure of parties to litigation to proceed in an expeditious way may take the form of "a sanction as to costs".

The defendants argue that, in this case, they could have satisfied the Court that the reprehensible delay in bringing this case to trial was not their fault. If such an explanation had been given, as part of a prompt application for reconsideration of the Court's orders as to costs, it might well have been accepted by the Court. That did not happen. As a result, at best for the defendants, it may be said that the order made by the Court as to costs was less than fully informed. But it was not a slip.

Conclusion

I am not satisfied that this Court's order was not made on the basis of a deliberate and conscious decision. In any event, the delay which has occurred in this case in seeking the Court's reconsideration of an order for costs, which could and should have been done promptly after the delivery of the judgment of March 2007, is such that I would not be disposed to exercise the discretion conferred by r 667(2)(d) of the UCPR in favour of the defendants.

The defendants' application should be dismissed.

In accordance with the usual rule as to costs, viz, that costs follow the event,⁷ I would order that the defendants should pay the plaintiffs' costs of this application to be assessed on the standard basis.

HOLMES JA: I agree with the reasons of Keane JA and the orders he proposes.

DUTNEY J: I agree.

Footnotes

1. [2007] QCA 94. ↩

2. This discretion may be supplemented by the inherent jurisdiction of the Court. See Newmont Yandal Operations Pty Ltd v The J Aron Corporation & Anor [2007] NSWCA 195 at [75] – [80]. ↩

3. [2005] QCA 137. ↩

4. Cf Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446 at 453. ↩

5. Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446 at 453. ↩

6. [2007] QCA 94 at [10], [36] and [45]. ↩

7. Cf r 689 of the UCPR. ↩