Oakwood Constructions Pty Ltd v Wyndon Properties Pty Ltd
[2010] QDC 325
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Oakwood Constructions Pty Ltd v Wyndon Properties Pty Ltd[2010] QDC 325
- Add to List
Oakwood Constructions Pty Ltd v Wyndon Properties Pty Ltd[2010] QDC 325
Oakwood Constructions Pty Ltd v Wyndon Properties Pty Ltd[2010] QDC 325
[2010] QDC 325
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No 3470 of 2007
OAKWOOD CONSTRUCTIONS PTY LTD | Plaintiff |
and | |
WYNDON PROPERTIES PTY LTD | Defendant |
BRISBANE
DATE 13/08/2010
ORDER
CATCHWORDS | Uniform Civil Procedure Rules, r 360, r 681 Property Law Act 1974, s 197 Costs claimed by plaintiff which successfully sought an order vesting in it land of an innocent defendant on which it had constructed a house - court's reasons for the order intimated costs should not be awarded, but revelation of a pre-trial offer to settle which the defendant rejected required consideration of the plaintiff's application for indemnity costs - not possible to say offer (to accept money) was more favourable to defendant than the court's order - in any event, the defendant showed that a different costs order (i.e. no costs) was appropriate |
HIS HONOUR: Before the court is the plaintiff's application filed on 21 July 2010 seeking an order that the defendant pay its costs of this proceeding on an indemnity basis. The application also seeks that the costs of it be paid by the defendant.
The application refers to rule 681 which provides that the costs of a proceeding are in the discretion of the court but follow the event, unless the court orders otherwise.
The plaintiff was successful in its claim, an unusual one, in which the primary relief sought was compensation for the plaintiff's having constructed a house on the defendant's land, not at the request of the defendant, which, so far as the evidence went, was ignorant of these things, but at the request of an entrepreneur which had the site and other blocks under contract and never succeeded in completing.
In the Court's published reasons, which indicated that that relief would be granted pursuant to section 197 of the Property Law Act 1974 by way of vesting land in the plaintiff in exchange for the payment of its value at the time of the trial, namely, $95,000, it was also intimated that the plaintiff would not be awarded costs, given that the effect of the evidence was that everything that occurred was attributable to mistakes on the plaintiff's part.
The defendant's representation was, and remains today, such that it is not in a position to seek costs against the plaintiff.
The court's expectations about costs were confounded when it was revealed that there had been an offer made by the plaintiff before the trial which occurred in February 2010. The offer was made expressly pursuant to Chapter 9, Part 5 of the UCPR on 16 June 2008 and was one under which the plaintiff,
"would accept the sum of $60,000 inclusive of the plaintiff's costs in full satisfaction of the plaintiff's claim and the defendant's counterclaim, that sum to be paid (a) if Lot 24 (the property the subject of the claim) is sold and the settlement date is within 12 months of the date of this offer, at the date of settlement; (b) otherwise, within 12 months from the date of this offer."
The offer was open for acceptance for 14 days from service, following which it lapsed. The offer was rejected in the response dated the very next day on the basis that "we are unable to accept this offer...we will be proceeding to trial with this matter."
The court was obliged, given the terms of rule 360, to treat the issue of costs as open. The defendant was not represented on the occasion when the court convened for the making of formal orders, doubtless comforted by the strong intimations in the reasons for judgment that it was not at risk of any adverse order for costs.
The Ccurt, conscious that no order should be made against the defendant without its having an opportunity to be heard, made arrangements which permitted the present application to be brought. See [2000] QDC 283. The defendant has appeared, again represented ably by Ms Richards who is not yet legally qualified.
That said, the court agrees with Mr Barlow's criticisms of the affidavit of Mr Richards which was filed this morning. It contains, essentially, argument, and deposes to things which Mr Richards may not have had direct knowledge of and which, in some cases, may not be technically correct. These aspects were of more concern to Mr Barlow than to the court.
In the end, Ms Richards disavowed any reliance on the contents of the affidavit, which remained a useful way of placing the exhibited documents before the court. She repeated a good deal of the contents of the affidavit in her submissions, as she was entitled to do.
Rule 360 provides in subrule (1) that,
"if (a) the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle and (b) the Court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer, 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."
There is real difficulty here in the way of the Court concluding that the plaintiff's offer was less favourable to it than the court's judgment. The offer embodies a notion of recompense to the plaintiff for its building work.
There are difficulties in making comparisons with the way in which the proceeding ended which required not payment of money to the plaintiff, but rather, payment of money by it to acquire title to the relevant property, and that some years after the events which underlay the proceeding.
While I took Ms Richards to suggest that rule 360 is not applicable in proceedings of this kind, one detects no limitation in the terms of the rule. It seems to me it may well have been applicable if, for example, the plaintiff's offer had been to acquire the land for an amount in excess of $95,000.
My view is that the offer cannot be recognised as one coming within subrule 1(a). In case that assessment is wrong, it may be appropriate to go further.
Ms Richards made submissions calculated to persuade the court that the defendant was justified in not accepting the offer. One limb of that argument focused on the plaintiff's failure to make disclosure, in particular, of the construction contract under which it did the building work at the behest of a company called Fasta.
It may well be that disclosure of that document would enable the defendant to assess better how beneficial the offer was to the plaintiff. In a context such as the present, if not more widely, it seems to me irrelevant for purposes of rule 360 what the feelings of parties may be about which is getting the better deal and why. It may be a matter of emotional satisfaction to a party to feel that some ultimate standard of justice or fairness is being achieved but that is a consideration which it seems to me to stand outside the rule.
It was also drawn to the court's attention that, at the time of the offer, a Supreme Court proceeding was extant in which Fasta sought specific performance against the defendant of the contract of sale to it in which the price was $58,000.
The assertion seemed to be made that the defendant, if it failed in the Supreme Court proceeding (which ultimately went nowhere, presumably because the liquidators of Fasta have no money) it might lose its land in exchange for $58,000 from Fasta and yet have to pay $60,000 to the plaintiff pursuant to the offer. That is hardly an attractive proposition.
Mr Barlow sought to meet it by suggesting that the Supreme Court in its equitable jurisdiction would have framed orders to achieve more perfect justice, and also it seemed to be the case that the plaintiff might have had some redress against Fasta by way of payment for its work.
As I read rule 360, it does not depend, at least in its operation in the present context, on considerations of reasonableness of this kind.
I ought to interpolate here that in submitting that rule 360(1)(a) is applicable, Mr Barlow relied on valuation evidence which was referred to in the published reasons for judgment at [2010] QDC 080 paragraph [30]. That valuation evidence, by processes of subtraction, has the effect that improvements on the defendant's land for which, presumably, the plaintiff gets credit, were of a value exceeding $100,000, well in excess of the $60,000 amount of the offer.
I have been conscious of the discrepancy but, nonetheless, I have reached the view that I do about the difficulty, indeed, impossibility, of comparing the offer with the outcome of the proceeding.
Should it be the case that rule 360 is applicable, the court's obligation is to make the indemnity costs order which is referred to there in favour of the plaintiff. That is the case unless the defendant shows that some other order as to costs (including no order) is appropriate in the circumstances.
Ms Richards urged upon the court that no order for costs was the appropriate outcome. That is indeed my view if the plaintiff had got so far in its application for costs.
It remains the case that this is an extraordinary context created by the radical change in the law which section 197 brought about.
It remains the case that a defendant taken to be blameless is divested of its property and entirely because of what might be called the fault of others. It is a strong thing for those others to be awarded costs against a blameless defendant, indemnity costs, even more so. It is a strong thing to say that such a defendant ought to anticipate the court’s exercising a novel discretion against it, on pain of suffering a costs order of a punitive or disciplinary nature.
The result of all this is that the plaintiff's application filed 21 July is dismissed.