JLG Industries Inc v Teetree Pty Ltd
[2002] QDC 31
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- Unreported Judgment
- JLG Industries Inc v Teetree Pty Ltd[2002] QDC 31
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JLG Industries Inc v Teetree Pty Ltd[2002] QDC 31
JLG Industries Inc v Teetree Pty Ltd[2002] QDC 31
DISTRICT COURT OF QUEENSLAND
CITATION: | JLG Industries Inc v. Teetree Pty Ltd [2002] QDC 031 |
PARTIES: | JLG INDUSTRIES INC (Plaintiff) v. TEETREE PTY LTD (Defendant) And NATIONAL MARINE INSURANCE AGENCY LIMITED (Third Party) |
FILE NO/S: | D4867 of 1999 |
DIVISION: |
|
PROCEEDING: | Argument as to costs |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 4 March 2002 |
DELIVERED AT: | Brisbane |
HEARING DATE: | (Submissions in writing) |
JUDGE: | McGill DCJ |
ORDER: | Defendant to pay the plaintiff’s costs of the action to be assessed on an indemnity basis |
CATCHWORDS: | COSTS – Offer to settle – plaintiff’s offer – plaintiff recovering greater amount – whether reason to order otherwise – whether offer involved real compromise – Uniform Civil Procedure Rules r. 360 PRACTICE – Costs – offer to settle by plaintiff – whether good reason to order otherwise – Uniform Civil Procedure Rules r. 360 |
COUNSEL: | S.C. Derrington for the plaintiff P.F. Mylne for the defendants |
SOLICITORS: | Murrell Stephenson for the plaintiff Wonderley & Hall for the defendant |
- [1]In this matter I gave judgment on 19 December 2001 that the defendant pay the plaintiff $176,772, which included $34,214 by way of interest. Reasons were published and I invited submissions as to costs.
- [2]The plaintiff has subsequently submitted that costs should be on an indemnity basis, because on 22 February 2000 the plaintiff made an offer in accordance of Part 5 of Chapter 9 of the Uniform Civil Procedure Rules to settle the action for the sum of $142,588 together with costs to be assessed if not agreed. That offer was not accepted. The amount of the offer was virtually the same as the amount which I gave judgment apart from interest; damages, the amount of which was not contentious and apparently had never been contentious between the parties, were assessed at $142,558. In effect, the offer was one to settle the action for the full amount of the claim plus costs.
- [3]The action had been commenced in 1999, and related to a cause of action which arose in December 1998. Interest was allowed for a period of 3 years, that is from the time when the cause of action arose, in accordance with the usual practice.
- [4]The defendant did not dispute that the offer was made and not accepted, but submitted that it was not appropriate to award costs on an indemnity basis, because the offer was artificial and involved no degree of compromise. It is true that the purpose of these rules is to encourage parties to attempt to compromise litigation before trial, and such objective is not really assisted by rewarding with indemnity costs a plaintiff who simply offers to settle for the full amount of the claim plus costs. In the case of an action where the amount of quantum is not in dispute, and the outcome of a trial will be either that the plaintiff recovers a particular amount of money which both parties know in advance, or the plaintiff will lose, there is no compromise in the plaintiff’s offering to agree to take the full amount of the claim plus costs.
- [5]In order to further the objective of encouraging compromise, the rules should only reward with indemnity costs a plaintiff who has made an offer which involves some element of compromise. Otherwise, the making of such an offer would, in such a case, be an automatic step and indemnity costs would be recovered automatically by those plaintiffs who were successful. I agree that that was not the intention or purpose of the rules, and that it is not appropriate for a plaintiff who simply offers to accept the full amount of the claim plus costs to recover indemnity costs if ultimately the plaintiff is successful to that extent. Although the rule applies in cases where quantum is not in dispute, the rule was formulated in the context of cases where there will be an issue, possibly the only issue in the action, about how much the plaintiff is to recover.
- [6]Accordingly, in my opinion, there was a good deal of force in the submission made on behalf of the defendant. The one difficulty with it however is that the offer which was made in February 2000 did involve some element of compromise, in that it involved acceptance of the amount of the claim without interest. In effect, the plaintiff was offering to abandon its claim for interest. That was not a claim to an amount owing as of right, but in circumstances where there was a reasonable expectation that if the plaintiff was successful interest would be payable, it is, I think, something of sufficient value that giving it up involves some compromise. At that stage just over one year’s interest would have accrued, about $12,000. It was the prospect of recovering this the plaintiff was offering to give up in return for payment of the claim plus costs.
- [7]Although that was not in the circumstances very much of a compromise on the part of the plaintiff, on the whole I think it was a sufficient compromise to take the case outside the situation where it would be appropriate to order otherwise under r. 360 on the ground that the formal offer did not involve any element of compromise and was therefore not the sort of offer the making of which it was the purpose of the rule to encourage. In my opinion the defendant’s argument would be right in a case where the offer made by the plaintiff did not involve any real compromise, but in this case on the whole I think there was enough being given up to amount to a real compromise, and therefore there is no reason to depart from the ordinary consequence specified in r. 360.
- [8]I therefore order the defendant to pay the plaintiff’s costs of and incidental to the action to be assessed on an indemnity basis.