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Geju Pty Ltd v Central Highlands Regional Council (No 3)

 

[2016] QSC 290

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Geju Pty Ltd v Central Highlands Regional Council (No 3) [2016] QSC 290

PARTIES:

GEJU PTY LTD ACN 010714799
(Plaintiff)

v

CENTRAL HIGHLANDS REGIONAL COUNCIL
(Defendant)

FILE NO/S:

S4/2014

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Mackay

DELIVERED ON:

13 December 2016

DELIVERED AT:

Rockhampton

HEARING DATE:

Heard on the papers

JUDGE:

McMeekin J

ORDER:

  1. Judgment for the plaintiff in the sum of $852,205.50;
  2. The defendant pay the plaintiff’s costs of the proceeding on the indemnity basis.

CATCHWORDS:

PROCEDURE – COSTS – RECOVERY OF COSTS – where the plaintiff was successful at trial for damages for negligent misrepresentation – where the plaintiff settled the claim against their solicitors before trial – where the plaintiff disclosed the settled amount after reasons were delivered – where the plaintiff made a formal offer lower than the court awarded damages – where the plaintiff seeks indemnity costs – where the defendant submits there should be an order for costs on the standard basis only – where the defendant submits there was a substantial change from the case pleaded – where the defendant submits it was not unreasonable for the defendant to reject the plaintiff’s offers given the significant uncertainty over apportionment – whether the defendant demonstrates another order for costs is appropriate

Civil Liability Act 2003 (Qld) 

Uniform Civil Procedure Rules 1999 (Qld), r 360

 COUNSEL:

No appearance for the plaintiff, the plaintiff’s submissions were heard on the papers

No appearance for the defendant, the defendant’s submissions were heard on the papers

SOLICITORS:

Macrossan and Amiet Solicitors for the plaintiff

King & Company Solicitors for the defendant

  1. McMeekin J: I delivered reasons in this matter on 1 December 2016.[1] In those reasons I found the defendant liable for issuing a misleading limited town planning certificate. I assessed damages for the plaintiff in the sum of $1,127,205.50. I directed the parties to file written submissions as to the orders that ought to be made in light of those reasons. The reason for that direction was that proceedings were also brought by the plaintiff against the solicitors who were retained to act for them, Anne Murray & Co, and that claim had been settled before trial, but on terms the plaintiff declined to disclose.
  1. Pursuant to those directions on 5 December 2016 the plaintiff disclosed that they had settled the claim against their solicitors for the amount of $275,000 plus standard costs in an agreed sum. The plaintiff submitted that the assessed damages should be reduced by the amount of $275,000, and accordingly judgment should be given in favour of the plaintiff in the amount of $852,205.50. The defendant accepts this figure.
  1. The plaintiff further disclosed that they had made a number of formal offers of settlement to the defendant. The first of these, on 20 November 2015, was an offer to settle the whole of its claim against the defendant for $600,000 inclusive of interest plus costs on the standard basis. The plaintiff has achieved an outcome no less favourable than that offer. Accordingly the plaintiff submits rule 360(1) of the Uniform Civil Procedure Rules 1999 (Qld) entitles it to an order for costs on the indemnity basis.
  1. Under rule 360(1) the court must order the defendant to pay the plaintiff's costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances. The defendant raised two points against the granting of indemnity costs.
  1. The first point was that the case ultimately run by the plaintiff at trial was a substantial change from the case which had been pleaded and communicated prior to the hearing. The “substantial change” was that at trial it was asserted (and found) that the relevant certificate had been obtained by the plaintiff from the real estate agent, Mr Adams, rather than their solicitors Anne Murray & Co. The defendant submitted that “the plaintiff had pleaded, in related proceedings which were originally scheduled to be heard together with this proceeding, that Anne Murray & Co was responsible for providing the certificate to the plaintiff after it had entered the contract to purchase the land.”
  1. Counsel for the plaintiff submitted that this first point is not a reason why another order for costs is appropriate in the circumstances “because:
  1. the source of the certificate was not material to, and was not found by the Court in the reasons for decision to have any bearing on, whether or not the Council owed the Plaintiff a duty of care;
  1. the case against the Council did not change: the source of the certificate was never pleaded as a fact in the case against the Council;
  1. the Defendant has not asserted that, if the Plaintiff’s case had been, from the outset, that Mr Birch had a definite recollection that the certificate had been provided to him by the real estate agent, it would have made an offer of settlement or accepted an offer made by the Plaintiff;
  1. accordingly, the source of the certificate ought not to have had and in fact had no bearing on whether or not to accept an offer of settlement.”
  1. In relation to (a) the plaintiff’s analysis of my reasons are accurate – the source of the certificate did not have any bearing on whether or not the defendant owed the plaintiff a duty of care.[2]
  1. In relation to (b) again the plaintiff’s submission are correct. This matter was raised at the beginning of the trial. After an objection from counsel for the defendant I made the following remarks:

“The defendant has raised a concern that this is not in accordance with the pleaded case.  The pleaded case, in fact, nowhere asserts the source from which the plaintiff company and hence the directors of that company received the subject certificate.  An inference could be drawn that it was Anne Murray & Co, but the problem with that inference is that the defendant was well aware that the certificate, although obtained by Anne Murray & Co, a firm of solicitors, was obtained by them on behalf of another client, not the plaintiff.  Indeed, as I gathered from the defence, that was a significant issue which the defendant says is in its favour.  Hence, the source of the certificate in a sense of from whom it came to the plaintiff was not pleaded and was not sought by way of particulars.”

  1. While the defendant refers to related proceedings in which it was pleaded that Anne Murray & Co was responsible for providing the certificate and correspondence between the parties to similar effect, they have failed, as the plaintiff submits in (c) and (d), to demonstrate that the misconception they were labouring under made any difference either to the ultimate finding or to their decision to reject the plaintiff’s offers. The defendants have not said that they believed the case to be that the plaintiff did not receive the certificate until after they had retained their solicitors, at which point they had already entered into the contract, nor that this would have significantly altered their view as to causation and the strength of their case.
  1. The second point the defendant raised against the granting of indemnity costs was that “the matter invoked the operation of the proportionate liability provisions contained within Chapter 2 Part 2 of the Civil Liability Act 2003 (Qld) which created significant difficulties in determining the relevant amount of apportionment to be attributed to the relevant concurrent wrongdoers” and “in the circumstances it was not unreasonable nor inappropriate for the defendant to reject the plaintiff’s offers of settlement given the significant uncertainty over apportionment remained.”
  1. Against this point counsel for the plaintiff submitted that:
  1. the Defendant pleaded that the case was an apportionable claim as against the solicitor. It created, therefore, the very difficulty that it now seeks to rely on to mitigate the costs consequences that would otherwise follow from the application of rule 360;
  1. the Defendant was in fact the party best placed to determine the likely apportionment of liability against the solicitor (none, as it happens) as it was the only party that had the means of knowing how an enquiry made by the solicitor would have been answered (had one been made at the relevant time);
  1. there is no exception to rule 360 for “apportionable claims”, and if the legislature had intended to be such an exception, it could have inserted the same into the Uniform Civil Procedure Rules 1999 upon the enactment of the Civil Liability Act 2003.”
  1. I agree with the plaintiff’s submissions. I note that the defendant made no offer of settlement to the plaintiff during the course of the proceeding. An inference can be drawn that the decision to reject the plaintiff’s offers was not because of any “uncertainty over apportionment” but because they held a certain view as to the outcome of the proceeding.
  1. The defendant has not demonstrated that another order for costs is appropriate in the circumstances.

Orders

  1. Judgment for the plaintiff in the sum of $852,205.50;
  1. The defendant pay the plaintiff’s costs of the proceeding on the indemnity basis.

Footnotes

[1] Geju Pty Ltd v Central Highlands Regional Council (No 2) [2016] QSC 279.

[2] Ibid at 15-17 [65-73].

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Editorial Notes

  • Published Case Name:

    Geju Pty Ltd v Central Highlands Regional Council (No 3)

  • Shortened Case Name:

    Geju Pty Ltd v Central Highlands Regional Council (No 3)

  • MNC:

    [2016] QSC 290

  • Court:

    QSC

  • Judge(s):

    McMeekin J

  • Date:

    13 Dec 2016

Litigation History

Event Citation or File Date Notes
Primary Judgment [2016] QSC 279 01 Dec 2016 Substantive Judgment (McMeekin J).
Primary Judgment [2016] QSC 290 13 Dec 2016 Costs Judgment (McMeekin J).
Notice of Appeal Filed File Number: 13451/16 22 Dec 2016 Appeal from [2016] QSC 279.
Appeal Determined (QCA) [2018] QCA 38 [2018] 3 Qd R 550 16 Mar 2018 Appeal allowed: Fraser JA, McMurdo JA, Brown J.
Appeal Determined (QCA) [2018] QCA 54 27 Mar 2018 Appeal Costs Judgment: Fraser JA, McMurdo JA, Brown J.
Special Leave Refused [2018] HCASL 239 15 Aug 2018 Special leave refused: Gageler and Keane JJ.

Appeal Status

{solid} Appeal Determined - {hollow-slash} Special Leave Refused (HCA)