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  4. Press Metal Aluminium (Australia) Pty. Ltd. v Total Concept Group Pty. Ltd. (Externally Administered) (No. 2) - [2015] QDC 4

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Press Metal Aluminium (Australia) Pty. Ltd. v Total Concept Group Pty. Ltd. (Externally Administered) (No. 2)[2015] QDC 4

Press Metal Aluminium (Australia) Pty. Ltd. v Total Concept Group Pty. Ltd. (Externally Administered) (No. 2)[2015] QDC 4

DISTRICT COURT OF QUEENSLAND

CITATION:

Press Metal Aluminium (Australia) P/L v Total Concept Group P/L (Externally Administered) & Anor (No 2) [2015] QDC 4

PARTIES:

PRESS METAL ALUMINIUM (AUSTRALIA) PTY LTD
(plaintiff)

v

TOTAL CONCEPT GROUP PTY LTD (EXTERNALLY ADMINISTERED)
(first defendant)

and

DANIEL McGEE

FILE NO:

186/2013

DIVISION:

Civil

PROCEEDINGS:

Claim and Counterclaim

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

3 February 2015

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers

JUDGE:

Judge Dorney QC, DCJ

JUDGMENT AND ORDERS:

  1. The judgment of the Court is that the second defendant pay to the plaintiff $91,940.96 on the claim and counterclaim (as set-off).
  2. The Court orders that:
  1. (a)
    the second defendant pay the plaintiff’s costs of the claim and counterclaim [except those referable to Order 2(b)], to be fixed at 60% of such costs (such costs to include costs “in the proceeding(s)” and costs “in the cause”);
  2. (b)
    the plaintiff pay the second defendant’s costs, if any, of the applications before Noud DCJ heard on 1 May 2014 and before Dorney QC DCJ heard on 15 May 2014;
  3. (c)
    the amount of the security for costs, including any accretions thereon, be discharged by the payment to the plaintiff of such sum as is assessed, or agreed, in satisfaction of such costs as have been ordered in its favour and the balance of the fund (if any) then be paid out to the second defendant.

CATCHWORDS:

Costs – whether standard or indemnity – finalising security for costs

LEGISLATION CITED:

Civil Proceedings Act 2011, s 58(3), s 58(4)(a)

Courts Fund Regulation 2009, s 8

Uniform Civil Procedure Rules 1999, r 676, r 677, r 681, r 684, r 687, r 689, r 702, r 703

CASES CITED:

Hanak v Green [1958] 2 QB 9

Mantonella Pty Ltd v Thompson [2011] QCA 108

Murdoch v Lake [2014] QCA 269

Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229

Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No 2) [2010] QSC 19

COUNSEL:

Mr N Cooke for the plaintiff

Mr M Bland for the second defendant

SOLICITORS:

Tucker & Cowan Solicitors for the plaintiff

QBM Lawyers for the second defendant

Introduction

  1. [1]
    On 12 December 2014 I gave leave to each of the plaintiff and the second defendant to make submissions on all matters raised in paragraph [184] of the Reasons then given, such to be filed and served by 4.00 pm on 19 December 2014.
  1. [2]
    Both the plaintiff and the second defendant have filed subsequent submissions, with the plaintiff also relying upon several affidavits to support issues raised.
  1. [3]
    Because there are a number of different issues which need to be the subject of some consideration, I will deal with them in turn.

Interest on claim awarded

  1. [4]
    The plaintiff has sought judgment for the plaintiff against the second defendant on the claim in the sum of $119,783.90. That particular sum has been calculated by it pursuant to the Interest Calculator on the Supreme Court website. Unfortunately, it actually calculates interest on interest and therefore it does not comply with s 58(4)(a) of the Civil Proceedings Act 2011, where costs are sought pursuant to s 58(3).
  1. [5]
    For its part, the second defendant has submitted that interest should be awarded on the outstanding sum under the guarantee for $92,430.72 but seeks that that be awarded only from the date of judgment against the first defendant on 29 August 2014 to the date of judgment here. The second defendant nevertheless concedes that interest be calculated at the rate of 10% per annum. This was the same rate of interest which was applied in the judgment against the first defendant on the same outstanding sum.
  1. [6]
    Accepting the rate of 10% per annum, the appropriate way to approach this matter is to calculate interest at 10% per annum (being $25.32 per day) for the 158 days between 29 August 2014 and the date of this judgment on the base sum of $92,430.72 and add it to the amount for which the judgment was given on 29 August 2014 against the first defendant (namely, $116,712.60).
  1. [7]
    Accordingly, since the calculation of interest on the principal sum for those 158 days is $4,000.56, when that is added to the sum of $116,712.60, the total amount of the judgment (including interest) is $120,713.16. But that is before any adjustment is made either for the set-off alleged or for a deducted counterclaim.

Interest on counterclaim awarded

  1. [8]
    I have concluded that the total sum awardable under the counterclaim is $27,470.99.
  1. [9]
    It has been contended by the plaintiff that the first notification of the item which formed the foundation of the second defendant’s only success on the counterclaim (involving the defective plastic doorstops) was in the Third Amended Defence and Counterclaim of the first defendant filed 13 May 2014. While it can be ascertained that there is a reference to defective doorstops as early as the Amended Defence and Counterclaim of the first defendant in the Magistrates Court at Southport filed 16 May 2013 [in paragraph 18(a)(i)], it can be accepted that it was not until the pleading of 13 May 2014 [again in paragraph 18(a)(i)] that the final details of the amount sought were identified. In particular, it was only then that the claimed amount of $1.50 per doorstop was alleged, with that particular item cost being the one adopted in my Reasons.
  1. [10]
    Accordingly, I intend to award interest using the relevant Interest Calculator pursuant to s 58 of the Civil Proceedings Act 2011 using the principal sum of $27,470.99 and calculating interest from 13 May 2014 until the date of judgment.  On that approach, the interest payable is $1,301.30, yielding a total amount awardable of $28,772.29.

Set-off?

  1. [11]
    In the leave which I gave to make submissions, I raised, in particular, the matter of how, after interest was calculated, the remaining amounts should be dealt with vis-a-vis each other. No specific submission has been made by either party, although I acknowledge that the plaintiff’s submissions have referred to the plaintiff having “won the day”. Nevertheless, that was in reference to r 681 Uniform Civil Procedure Rules 1999 (“UCPR”).  The “event” referred to there can encompass each of the outcomes, or discrete parts thereof, in the claim and the counterclaim, with each being a “proceeding” in its own right: see Murdoch v Lake [2014] QCA 269 at [19]-[24], and [27].
  1. [12]
    What has happened here is that the second defendant, subsequent to having assigned to him the right, title and interest in all causes of action held by the first defendant against the plaintiff arising from the H2O Project, has expressly alleged that he was entitled “to set off damages” in “total extinguishment of any liability he may have to the plaintiff”: see paragraph 9 of the Further Amended Defence and Counterclaim of the second defendant filed 1 September 2014. This was repeated in the Third Amended Defence and Counterclaim of the second defendant filed on the first day of the hearing (namely, 20 October 2014). The submissions of the second defendant do not seek to establish that the particular circumstances of the assigned rights sought in the counterclaim are not a proper matter for a set-off, even if it may be an equitable set-off only.
  1. [13]
    The plaintiff has taken the position that the Reasons leave “money owing to the Plaintiff by the Second Defendant”, thereby implicitly accepting that this is an appropriate case to apply a set-off.
  1. [14]
    To approach the mater in this way does raise for active consideration the applicability of r 684 of the UCPR.  In particular r 684(2) permits the court to declare what percentage of the costs of the proceeding are attributable to the question or part of the proceeding to which the order relates.  Where, as here, the second defendant has had some limited success – although far less significant than the final amount claimed on 20 October 2014 of $559,720.00 – and where, in particular, that success has been translated into a pro tanto reduction in the amount the plaintiff has otherwise succeeded in establishing against the second defendant, it is to my mind an appropriate provision to apply.  In the end, taking such an approach means that the result is not much different from the position where both a plaintiff and a defendant succeed in their respective claim and counterclaim and where each is awarded the cost of that respective proceeding.  But the conclusion that I reach has the advantage of overcoming the complex identification of potentially unseverable parts of the legal costs incurred in litigating the counterclaim.  The mirror image is exemplified by the decision of McMurdo J in Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No 2) [2010] QSC 19, relying on Hanak v Green [1958] 2 QB 9: at [6]-[7].
  1. [15]
    The advantage of this approach, as well, is that it can deal in a sensible way with the many orders made in this case which were framed in terms of, or similar effect to, “costs in the cause” (see, for instance, orders made on 7 June 2013 and 13 May 2014).
  1. [16]
    It, also, permits r 698 of the UCPR to generally take effect, thereby resulting in most the orders reserving costs to follow the event, with the “event” in this case necessarily being the result of the effect of the set-off, acknowledging r 684 through an overall percentage allocation.  Such an allocation is also permissible under r 687(2)(a).

Reserved costs

  1. [17]
    Even so, there are a few reserved costs that should be dealt with outside the purview of r 698.  The “costs” order made by Griffin SC DCJ on 5 February 2014 was (as endorsed on the order sheet) that it was “adjourned to 3 March 2014”.  The next hearing, a review by Robin QC DCJ, was on 20 March 2014.  It did not deal with the issue; and the record does not reveal any other dealing with it.  In any event, the affidavit material shows apparent late notification of the precise nature of the arguments raised by the defendants.  Hence, no further order will be made.  In the application before Noud DCJ on 1 May 2014 the plaintiff was seeking an indulgence – which was granted – for leave to withdraw deemed admissions.  It is appropriate in that circumstance that the second defendant should have the reserved costs of that application.  As for the hearing before me on 15 May 2014, although in general terms at least the defendants succeeded in defending the plaintiff’s application, there is no additional cost identified as incurred specifically by the second defendant.  But since there may be, I will allow costs of the application.  The adjournment of the trial (then set down) on 16 May 2014 suited all parties, especially where the subsequent history shows that the assignment between the defendants was imminent (leading to the judgment against the first defendant on 29 August 2014), and where the first defendant’s Third Amended Defence and Counterclaim was only filed on 13 May 2014.  The directions made on 22 July 2014 were, in a significant way, occasioned by the indulgence accorded to the second defendant to plead the newly assigned causes of action. In the hearing before me on 29 August 2014 - where costs other than on the application for security for costs were reserved - the plaintiff failed to obtain any of the additional orders sought.  But the second defendant was, also, granted leave to amend.  In consequence, the costs there will follow the event.

Other costs orders

  1. [18]
    Although the affidavit of Olivia Jane Roberts filed 19 December 2014 dealing with Exhibit “OJR-4” refers to a number of orders, it is not at all relevant for present purposes that certain costs orders were made but such have not been satisfied. And it is not important for present purposes that the judgment given on 29 August 2014 has, also, not been satisfied.
  1. [19]
    Furthermore, it is important when considering the application of r 684 that the second defendant was not himself involved in the incurring of any costs concerning the counterclaim until preparation was undertaken for the filing of the Amended Defence and Counterclaim of the second defendant on 12 August 2014. In the order of 29 August 2014 I gave the plaintiff the costs to that time of the counterclaim maintained by the first defendant.

Standard or indemnity costs on claim?

  1. [20]
    The plaintiff has raised the matter that relevant terms in the Guarantee dated as made 8 March 2010 stated that, relevantly, the second defendant “accepts” that all “legal costs involved in the collection of any overdue monies will be fully payable by” the second defendant” (emphasis added).
  1. [21]
    It is difficult to know exactly what to make of the word “accepts”, although it probably bears the meaning of “agrees”. It is noteworthy that the plaintiff did not seek, as against the first defendant in the judgment given on 29 August 2014, costs other than on the “standard” basis.
  1. [22]
    It is difficult to interpret what “fully payable” means given that the Guarantee made in 2010 was made more than 10 years after r 702 (dealing with costs assessed on a standard basis) and r 703 (dealing with costs assessed on an indemnity basis) were introduced. As Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229 has held, a Court will “usually” exercise the “discretion as to costs” to give effect to a contractual provision which “plainly and unambiguously” provides for another basis: at [6].  I find it difficult to detect such clarity here.
  1. [23]
    In the circumstances of this case which involve the failure to recover the full sum sought by the plaintiff by reason of the partially successful set-off, especially in circumstances where the costs sought against the first defendant were only a standard basis, and where I intend to make orders applying the relevant principles under r 684, the conclusion that I reach is that I will specify no basis, thereby permitting r 702(1) to take effect. See, also, r 687(1).

Offers to settle

  1. [24]
    In an affidavit filed by Olivia Jane Roberts on 12 December 2014, a number of “offers to settle” are exhibited. With respect to these, the plaintiff cannot have the advantage of the costs consequences which flow from the set-off without acknowledging the set-off’s consequences on the recovery of the amount it claimed under the Guarantee.
  1. [25]
    Dealing with the first and third of those offers (namely, ones contained in documents respectively dated 18 May 2012 and 1 August 2014), the offers, when properly analysed, seek a settlement sum greater than that now resulting from the set-off, in circumstances where both defendants were required by the terms of the offer, on acceptance, to (in non-technical terms) abandon the basis of the set-off.
  1. [26]
    With respect to the second of those offers contained in an offer made pursuant to Part 5 of Chapter 9 of the UCPR and dated 9 May 2014, although it deals simply with the claimed sum of $92,000.00, it takes no account of the effect of the set-off.  Accordingly, it is also rendered irrelevant for present purposes.

Finalising security

  1. [27]
    Rules 676 and 677 of the UCPR, in conjunction with s 8 of the Courts Fund Regulation 2009, deal with security for costs after a judgment is given concerning costs.  Here, the second defendant, as ordered, paid $20,000.00 into court on 26 September 2014.
  1. [28]
    Applying these provisions, as guided by Mantonella Pty Ltd v Thompson [2011] QCA 108, I will order: that the amount of the security for costs – which security was ordered for the purposes of the plaintiff’s defending the counterclaim in all of its manifestations – including any accretions thereon, be discharged by the payment to the plaintiff of such sum as is assessed, or agreed, in satisfaction of such costs as have been ordered in its favour; and that the balance of the fund (if any) be paid out to the second defendant.

Summary

  1. [29]
    Noting all of the above concerns which bear upon a principled application of r 681 and r 684 of the UCPR, apart from specific orders that I will make concerning certain reserved costs, in circumstances where neither party seeks that the costs orders should be other than on the District Court scale, I intend to make an order that the second defendant pay the plaintiff’s costs of both the claim and counterclaim, to be fixed at 60% of such costs. 
  1. [30]
    This limitation effected by the plaintiff’s costs only being ordered to be paid – apart from certain reserved costs – addresses:
  • the distinction between the first defendant’s costs – which were expressly not awarded on 29 August 2014 to it (but, rather, it had costs ordered against it on its counterclaim to that date) – and the second defendant’s costs of the counterclaim/set-off (particularly in light of the Deed of Assignment’s assignment being limited to “causes of action”);
  • the application of the set-off (rather than the claim’s judgment and costs being set-off against the counter-claim’s judgment and costs);
  • the fairly limited success of the counterclaim (especially where the majority of the “success” was based on the plaintiff’s engineer’s concessions, in the context of the rejection of the second defendant’s engineer’s evidence and much of his lay witnesses’ evidence);
  • the fact that I have not ordered costs against the plaintiff (apart from certain “reserved costs”) even though there was a partially successful “defence” (by way of counterclaim); and
  • the fact that the plaintiff’s costs with respect to the claim alone would be considerably less than those with respect to successfully “defending” those many discrete parts of the counterclaim/set-off.
  1. [31]
    As I have indicated in these Reasons, I intend to make specific orders with respect to certain of the costs reserved.
Close

Editorial Notes

  • Published Case Name:

    Press Metal Aluminium (Australia) Pty. Ltd. v Total Concept Group Pty. Ltd. (Externally Administered) & Anor (No. 2)

  • Shortened Case Name:

    Press Metal Aluminium (Australia) Pty. Ltd. v Total Concept Group Pty. Ltd. (Externally Administered) (No. 2)

  • MNC:

    [2015] QDC 4

  • Court:

    QDC

  • Judge(s):

    Judge Dorney DCJ

  • Date:

    03 Feb 2015

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2014] QDC 18605 Sep 2014Application for security for costs granted: Dorney QC DCJ.
Primary Judgment[2014] QDC 28012 Dec 2014Judgment for the plaintiff on its claim against the second defendant pursuant to an indemnity and guarantee; judgment for the second defendant on its counterclaim for breach of contract: Dorney QC DCJ.
Primary Judgment[2015] QDC 403 Feb 2015Form of order and costs of [2014] QDC 280: Dorney QC DCJ.
Notice of Appeal FiledFile Number: Appeal 1743/1519 Feb 2015-
Notice of Appeal FiledFile Number: Appeal 2205/1503 Mar 2015-
Appeal Discontinued (QCA)File Number: Appeals 1743/15 and 2205/1522 Jul 2015Appeals dismissed by consent.

Appeal Status

Appeal Discontinued (QCA)

Cases Cited

Case NameFull CitationFrequency
Hanak v Green (1958) 2 QB 9
2 citations
Jump To
Cite 1 - (1958) 2 QB 9
Cite 2 - (1958) 2 QB 9
Mantonella Pty Ltd v Thompson [2011] QCA 108
2 citations
Jump To
Cite 1 - [2011] QCA 108
Cite 2 - [2011] QCA 108
Murdoch v Lake [2014] QCA 269
2 citations
Jump To
Cite 1 - [2014] QCA 269
Cite 2 - [2014] QCA 269
Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229
2 citations
Jump To
Cite 1 - [2011] QCA 229
Cite 2 - [2011] QCA 229
Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [No 2] [2010] QSC 19
2 citations
Jump To
Cite 1 - [2010] QSC 19
Cite 2 - [2010] QSC 19

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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