Williams v Stone Homes Pty Ltd (No. 2)
[2014] QDC 81
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- Unreported Judgment
- Williams v Stone Homes Pty Ltd (No. 2)[2014] QDC 81
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Williams v Stone Homes Pty Ltd (No. 2)[2014] QDC 81
Williams v Stone Homes Pty Ltd (No. 2)[2014] QDC 81
DISTRICT COURT OF QUEENSLAND
CITATION: | Williams v Stone Homes P/L & Anor (No. 2) [2014] QDC 81 |
PARTIES: | VICKIE WILLIAMS and MARK WILLIAMS v STONE HOMES PTY LTD (ACN 115 467 439) and ACAME PTY LTD (ABN 28 002 465 072) |
FILE NO: | 676/12 |
DIVISION: | Civil |
PROCEEDING: | Costs Orders |
ORIGINATING COURT: | District Court |
DELIVERED ON: | 16 April 2014 |
DELIVERED AT: | Brisbane |
HEARING DATE: | On the papers |
JUDGE: | Dorney QC DCJ |
JUDGMENT AND ORDERS: | It is ordered that:
|
CATCHWORDS:
LEGISLATION CITED:
| Costs – third party claim – offer by third party concerning plaintiffs’ claim – where significant input by third party in defending plaintiffs’ claim – where third party primarily liable in third party claim Uniform Civil Procedure Rules 1999, r 355, r 356, r 357, r 361, r 361(1), r 361(1)(a), r 361(4), r 364, r 364(3), r 364(3)(a), r 364(3)(b), r 681, r 684, r 693(1), r 697(2), r 698 Civil Proceedings Act 2011, s 53(1) Darveniza v Darveniza & Drakos (No 2) [2014] QSC 49 J & D Rigging P/L v Agripower Aust Ltd & Ors [2014] QCA 23 Turkmani v Visvalingam (No 2) [2009] NSWCA 279 |
COUNSEL: | Self-representation by the plaintiffs G Coveney for the defendant B Codd for the third party |
SOLICITORS: | Graham Isles for the defendant Norton Rose for the third party |
Introduction
- [1]On 1 April 2014, besides giving judgments in this proceeding, I made orders as to the payment of the plaintiffs’ costs and gave both the defendant and the third party leave to file, and serve, submissions on what orders, including orders as to costs, should be made in accordance with the Reasons then given.
- [2]Both the defendant and the third party have made such submissions, in a timely way.
Defendant’s submissions
- [3]The orders, as to costs, that the defendant seeks are that:
- (a)the third party contribute 100% of the plaintiffs’ costs payable by the defendant;
- (b)the third party pay the defendant’s costs, as agreed or assessed; and
- (c)the third party bear its own costs.
- [4]But the defendant also proposed alternative orders. They were that:
- (a)the third party contribute 75% of the plaintiffs’ costs payable by the defendant;
- (b)the third party pay 75% of the defendant’s costs, as agreed or assessed; and
- (c)the third party bear its own costs.
- [5]The basis of these submissions is that it would lead “to an unfair result” should the third party not be ordered to pay, essentially, all the defendant’s costs. This is contended to flow from the assertion that the plaintiffs’ loss arises from plans for the plaintiffs’ kit home (sold to it by the defendant) being unsuitable (because of engineering reasons sheeted home to the third party), in circumstances where the third party executed a Compliance Certificate for Building Design or Specification on 18 June 2009 (showing the third party was then aware of the relevant wind category for region in question) and where the relevant Inspection Certificate (Form 16) for the concrete slab was issued on 12 August 2009, the latter being almost two months from the Compliance certification. Any other “facts” asserted were either not in evidence or not relied upon in submissions on contribution. The contentions also rely upon an assertion that a significant amount of court time (and related preparation costs) were incurred by reason of the third party contesting liability to the defendant on the basis that it should escape “entirely” the consequences “of its admitted liability”.
Third party’s submissions
- [6]The third party seeks orders that:
- (a)the defendant pay the third party 50% of the third party’s costs of and incidental to the proceeding up until 20 February 2014;
- (b)the plaintiffs pay the third party the third party’s costs of and incidental to the application of 12 August 2013;
- (c)the defendant pay the third party all of third party’s costs of and incidental to the proceeding after 20 February 2014; and
- (d)the third party indemnify the defendant to 75% of the plaintiffs’ costs “of preparing the claim and statement of claim and disclosure”.
- [7]The submissions put forward to support those orders, after deconstruction, involve four different considerations. The first is that the plaintiffs’ costs before the joinder of the third party should be addressed separately from the plaintiffs’ post-joinder costs. The second is that the reserved costs of the application filed on 12 August 2013 should, also, be separately addressed. The third deals with the costs of the defendant (particularly after the joinder of the third party). And the fourth deals with the several Offers to Settle; and the effect they should have on the defendant’s costs’ obligations and benefits.
- [8]As occurs in such cases, the joinder of the third party occurred after the plaintiffs had sued the defendant and elected not to sue the third party. The proceeding was commenced on 22 February 2012. The third party was joined pursuant to an order made on 30 April 2013. The Third Party Notice and Statement of Claim were filed 10 May 2013. The gist of the first consideration is that any costs of either the plaintiffs or the defendant which were incurred prior to 30 April 2013 were claimed to be mostly, if not totally, caused by the defendant’s “dilatory conduct” rather than any ordered approach to the litigation. The asserted percentage stated to be appropriately payable, overall, for the plaintiffs’ costs is 75% (though limited to the Claim, Statement of Claim and disclosure).
- [9]Turning then, to the reserved costs, being one of the orders made by me on 16 August 2013 (pursuant to the third party’s application filed 12 August 2013), the third party contends that, at the time of the later review in the proceeding on 28 October 2013, it was apparent that neither the defendant nor the third party had complied with all of the orders so made on that earlier occasion. It may be remarked that the orders that I made on 28 October 2013 also contained an order reserving costs. The result sought, on this matter, was simply that the plaintiffs ought to pay the third party its costs of, and incidental to, the interlocutory application filed on 12 August 2013.
- [10]The next consideration is of the costs incurred since the joinder of the third party in late April 2013. Instead of any liability that the third party might otherwise have to pay such costs (given the third party judgment against it), it is contended not only that the defendant should bear its own costs but that the defendant ought to pay 50% of the third party’s costs to the third party up until 20 February 2014. The basis of this contention is that it was the third party who conducted the real defence against the plaintiffs. This, in turn, is based upon the assertion that, in a practical sense, the third party was not called upon to acknowledge liability until its joinder in mid-2013 and that “the proceeding was always about quantum” (as to which it is asserted that the third party was the effective defendant as to the extent of that eventual quantum being limited). Additionally, it is asserted that the defendant “failed in its holdout against no liability”. After 20 February 2014, it is, then, submitted that the offers govern the outcome.
- [11]As to the last consideration, (namely, Offers to Settle) - the details of which are set out in the affidavit of Brianna Adele Edwards, filed with third party’s Submissions -it is contended that the third party “bettered” its Offer(s) to the defendant.
Reserved costs
- [12]Rule 698 of the Uniform Civil Procedure Rules 1999 (“UCPR”) states that, if the court reserves costs of an application in a proceeding, the costs reserved “follow the event”, unless the court orders otherwise.
- [13]I am not inclined to order otherwise in this proceeding. First, a failure to adhere later, strictly, to the orders made on 16 August 2013 cannot affect the reserved costs made earlier. Secondly, the application filed 12 August 2013 sought an indulgence on the third party’s part that specific trial dates, the subject of the orders of McGill SC DCJ made on 20 May 2013, be vacated. Although argued to be for good reason, as can be seen from the orders made on 20 May 2013, the third party appeared. Accordingly, the orders that I made on 16 August 2013 were, therefore, despite the circumstances, an indulgence sought by, and granted to, the third party. But, in any event, the impelling background to the orders made on 16 August 2013 were - pursuant to the proceeding being a Commercial List proceeding - directions for the proper conduct of the proceeding, including listing the matter for further review. In those circumstances, it is appropriate, considering that the plaintiffs did eventually succeed in obtaining a judgment for damages, that the costs so reserved follow the event. As earlier indicated, the third party seeks no order with respect to the reservation of costs on 28 October 2013. In any event, I would have, like I have just done, not otherwise ordered, since they were, substantially, further directions that were necessary, including the listing of the trial which did, in accordance with the orders then made, commence on 10 March 2014 before me.
Offers to Settle
- [14]The only Offer that purports to be pursuant to the UCPR is that made by the solicitors for the third party to the solicitors for the defendant by way of an email attachment on 25 February 2014, sent at 3.05pm. It is not asserted to be under r 361 or r 364 of the UCPR. One of the concerns that I have about it being correctly characterised as an offer being made in accordance with the UCPR under either rule is that the first part of the Offer is one to “indemnify the defendant” in a sum which will be “paid by our client” “to” the plaintiffs “following” the settlement of the proceeding between the plaintiffs and the defendant; and a further complication occurs in that the defendant is required by the Offer to bear “its own costs” (particularly where r 364 in its current form does not contemplate “contribution offers” and where the eventual third party judgment would militate against that at that time). The combination of those strongly suggests that r 361(1)(a) - if applicable rather then r 364 - would be difficult to apply in terms of obtaining “a judgment that is not more favourable” than the offer to settle (emphasis added), considering that judgment is limited to the third party claim. Furthermore, r 361(4) limits, where there is “more than 1 offer satisfying” r 361(1), consideration of the first as being the only offer for the rule. In the circumstances where an “earlier” offer, also by attachment to an email dated 20 February 2014 and sent at 5.45pm - and seemingly relied upon by the third party as the relevant (tipping point) date - exists, despite the absence in it of a particular reference to Chapter 9, Part 5 of the UCPR, it was, potentially, such an “offer”, being “made without admission of liability”. But in the end it is difficult to see that this earlier “offer” does satisfy r 361(1) on any characterisation of it - particularly the lack of 14 days. If so, it should be disregarded altogether, unless, perhaps it can be characterised as a Calderbank offer, although that is unlikely because of the terms and format of second Offer.
- [15]The significant problem about the purported UCPR Offer - assuming that it is under r 364 - is that it was “premised upon and conditional upon” the defendant “simultaneously settling the plaintiffs’ claim against it and the proceedings being disposed of in their entirety”. Accordingly, if, as seemingly happened here on the only information that I have been given on which I can rely, there was no settlement offered by the plaintiff and there was no prospect of a simultaneous settlement - where the Civil Proceedings Act 2011 prohibits any reference to mediation information in the circumstances conveyed to me [s 53(1)] - it is outside any kind of viable offer: see, though not quite analogously, Darveniza v Darveniza & Drakos (No 2) [2014] QSC 49 at [8] (concerning the agreement required of a “non-party”). This is because the particular “offer to contribute towards the settlement of the claim made by the plaintiff” does not allow the defendant time both to consider the offer and make an offer itself under the UCPR - given the minimum 14 day obligation under r 355 (at least insofar as the plaintiffs were concerned) - so as to “protect” itself. But, given the application, only, of rr 356 and 357 to r 364, there may still be some scope for considering r 364(3). As to those matters to which r 364(3) is directed, this second Offer was not accepted, so a proper “account” might still need to be “take(n)” of it. It includes both the plaintiffs’ costs and those of the third party in the claim against it: see rr 364(3) (a) and (b)
- [16]It is difficult to see in Calderbank terms what this later Offer to settle achieves in the circumstances in which I have determined the judgments in the ways that I have. As demonstrated by J & D Rigging P/L v Agripower Aust Ltd & Ors [2014] QCA 23, the failure to accept a Calderbank offer is a matter to which a court should have regard when considering whether to order “indemnity costs”. What is said to be of concern is whether a refusal of an offer to compromise warrants the exercise of a discretion to order “indemnity” costs rather than “standard” costs, with the critical question being whether the rejection of the offer was “unreasonable in the circumstances”: at [5]. Here, the offer is simply being treated as if it will affect the way in which costs are ordered, and not the basis of such an order. But it is possible that r 364 bends such principles to its own will. Even if it does, it would not have been unreasonable for the defendant to reject something which, necessarily, obviated its ability to protect itself.
- [17]Nevertheless, in the end, it would be impossibly torturous to consider the specific applicability of these Offer(s) in these particular circumstances, as my Reasons reflect, particularly where both these parties led scant evidence and made scant submissions regarding their contributory obligations. But I will “take account” of at least the second Offer as indicative of a willingness to negotiate a settlement of the third party proceeding on not - in part at least - dissimilar terms to the eventual judgment where the defendant now propounds a total denial of responsibility to contribute.
Costs on questions in, or particular parts of, the proceeding
- [18]It is permissible to take into account r 684 of the UCPR if a decision is made that the court “otherwise” orders under r 681 (where the usual course is that the costs of the proceeding, including an application in the proceeding, “follow the event”).
- [19]It is clear from, among many other cases, Turkmani v Visvalingam (No. 2) [2009] NSWCA 279, that the general effect of provisions such as r 681 is that an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. This is underpinned by a principled approach which is concerned with factors such as hardship, the percentage of time taken by the “unsuccessful” part of the proceeding and whether the question, or part, is clearly dominant or separable. It is not always the case that where there has been a lack of success on some contested questions in, or part of, the proceeding, r 684 comes, almost invariably, to be applied.
- [20]The particular reason for the lack of the plaintiffs’ success in its total quantum claim in this case was the failure of the plaintiffs, particularly on and from the time they became self-represented - though even before (as they had, seemingly, increasingly diminished contact with their solicitors) - to understand the way in which their claim had significantly been reduced in quantum terms, especially given their approach to disclosure of “quantum” documents. The way the preparation for, and conduct of, the trial proceeded after self-representation, noting, particularly, that the expert engineers’ consultative report was unfavourable to a significant part of the plaintiffs’ case, meant that it cannot be claimed that a major portion of the time thereafter was spent on contesting aspects of the case which were thereby excluded because of the plaintiffs’ obvious inability to establish a proper foundation in expert evidence or disclosed documentation.
- [21]Furthermore, the orders that I made at the beginning of the trial for the third party to participate in the trial to the fullest extent that it could, together with leave given to the third party to contest the plaintiffs’ pleaded claim against the defendant, go to show the significant difficulty in attempting to draw clear lines of demarcation between relevant questions, or parts, and their dominating position in the final determination.
- [22]The fact that the third party played a significant role in contesting the plaintiffs’ case – particularly in circumstances where there was a clear liability in both the defendant and the third party (apart, pre-judgment, from the extensively contested issues of statutory qualification or negation) – simply went to the reduction in the ultimate extent of the monetary liability that the third party had to face when the judgment for the plaintiffs was determined, with its flow-on effect on it. Thus, at least insofar as the third party ought to bear a share of the plaintiffs’ costs, the survey that I have undertaken in no way demonstrates that both the defendant and the third party should not each bear the same proportion of the plaintiffs’ costs as the contribution as to liability has determined [noting the particular effect of r 697(2) of the UCPR]. A third party who is joined by a defendant must, of necessity, if the defendant succeeds against it, be expected to meet a proportion of the plaintiffs’ costs from the beginning of the proceeding, absent quite unusual circumstances. It is not appropriate, as the third party has sought to do, to limit that to the costs “of preparing the claim and the statement of claim and disclosure”. This is particularly so in light of r 693(1) of the UCPR, as applicable to the costs of pre-joinder applications.
- [23]Accordingly, I do not intend to award costs on any particular characterisation of the questions, or parts, of this proceeding.
Payment of the plaintiffs’ costs
- [24]From the last two analyses undertaken above, I will order that the third party pay the defendant 75% of the plaintiffs’ costs of the proceeding as assessed.
Costs as between the defendant and the third party
- [25]No basis has been proffered, or otherwise established, in contract or under general legal or equitable principle for concluding that the defendant’s costs are other than those concerned with the third party claim. Hence, as I have indicated above, although the Offers to settle in this case are simply non-viable because of the failure of the simultaneous condition which was an essential part and parcel of the offers, I will pay the second such Offer some general attention, though only as a minor circumstance relevant to a costs determination on the third party claim.
- [26]Additionally, an aspect of the case which has been substantially downplayed by the third party is the extent to which its submissions as to bearing “no liability” at all, which were extensive and complex, were entirely unsuccessful and took a significant part of the actual “trial” time.
- [27]Nevertheless, it is also recognised that the defendant’s participation in the proceeding, particularly the difficulties it created by its pleadings, in the final determination of the extent to which the plaintiffs succeeded, also complicated the determination of the case. But it is not simply a matter of either the defendant or the third party being totally to blame or the defendant being ineffective in defending its position (such as is asserted by the third party against the defendant). The obtaining of experts’ reports was as much about defending the third party’s liability for the quantum of the defendant’s claim against it for contribution, although the eventual costs order that I will make does acknowledge the third party’s part in defending the defendant’s position as well.
- [28]The overall conclusion I reach is that – since I am not going to revisit the contribution between the defendant and the third party that I have determined – there be no order as to costs between the defendant and the third party on the third party claim.
Conclusions
- [29]In summary, I will order that:
- the third party pay to the defendant 75% of the plaintiffs’ costs of the proceeding (as assessed); and
- there be no order as to costs of the third party claim in the proceeding.