Cardrona Property Pty Ltd v Cars.com.au Pty Ltd (No 2)
[2016] QDC 137
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- Unreported Judgment
- Cardrona Property Pty Ltd v Cars.com.au Pty Ltd (No 2)[2016] QDC 137
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Cardrona Property Pty Ltd v Cars.com.au Pty Ltd (No 2)[2016] QDC 137
Cardrona Property Pty Ltd v Cars.com.au Pty Ltd (No 2)[2016] QDC 137
DISTRICT COURT OF QUEENSLAND
CITATION: | Cardrona Property Pty Ltd & Ors v Cars.com.au Pty Ltd & Ors (No 2) [2016] QDC 137 |
PARTIES: | CARDRONA PROPERTY PTY LTD (first plaintiff) and TAYSIDE PTY LTD (second plaintiff) and DANNY SAMMUT (third plaintiff) v CARS.COM.AU PTY LTD (first defendant) and MICHAEL JOHN NORRIS (second defendant) and LEANNE NORRIS (third defendant) |
FILE NO/S: | D 4887/2013 |
DIVISION: |
|
PROCEEDING: | Civil Trial - Costs |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 3 June 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | (submissions in writing) |
JUDGE: | McGill SC DCJ |
ORDER: | Order the defendants pay the plaintiffs’ costs of the proceeding, to be assessed on the standard basis to 23 December 2015, and on the indemnity basis on and from 24 December 2015. |
CATCHWORDS: | COSTS – Departing from the general rule – indemnity costs – Calderbank offer – whether reasonable not to accept it. Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 130 – applied. Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298 – cited. Roberts v Prendergast [2013] QCA 89 – cited. Stewart v Atco Controls Pty Ltd (No 2) (2014) 252 CLR 331 – applied. |
COUNSEL: | K W Wylie for the plaintiffs. The second defendant appeared for the defendants. |
SOLICITORS: | R B Flinders Lawyers for the plaintiffs. The defendants were not represented. |
- [1]In this matter I gave judgment on 22 April 2016, that the defendants pay the first plaintiff $138,918.57, the second plaintiff $86,824.10 and the third plaintiff $43,412.05, for reasons that I then published: [2016] QDC 93. I was asked to accept written submissions in relation to costs, and written submissions have since been received from both sides, in each case supported by an affidavit.
- [2]The plaintiff relies on an offer made “without prejudice save as to costs”, on 16 December 2015, almost two months before the matter came on for trial, to settle the claim on the basis that the defendants pay the plaintiffs $185,000 inclusive of interest and legal costs, such payment to be made within 30 days of acceptance of the offer, which was open for acceptance until 23 December 2015.[1]It was not accepted. The offer was not made as an offer of settlement in accordance with the UCPR, perhaps because the plaintiffs are represented by solicitors who practice in Melbourne, and are not familiar with the requirements of those rules. The effect of the judgment is that the plaintiffs recovered substantially more than they would have recovered had that offer been accepted, so it clearly involved some element of significant compromise, and was one which with the benefit of hindsight ought to have been accepted.
- [3]The offer concerned was what is described as a Calderbank offer. The Court of Appeal has recently spoken about the approach when a Calderbank offer has been made, in Comgroup Supplies Pty Ltd v Products for Industry Pty Ltd [2016] QCA 130, where the Court adopted what was said by the High Court in Stewart v Atco Controls Pty Ltd (No 2) (2014) 252 CLR 331 at [4]:
“This Court has a general discretion as to costs. The non-acceptance of a Calderbank offer is a factor, in some cases a strong factor, to be taken into account on an application for indemnity costs. The respondent submits that its rejection of the offer was not unreasonable. If that be the test, it would appear to require at the least that the respondent point to a reason for not accepting the offer beyond the usual prospects of being successful in litigation.”
- [4]In that case the Calderbank offer was made in the context of an appeal to the Court of Appeal, and involved the payment of an additional sum to that found to be payable to the appellant by the trial judge, together with the appellant’s costs of the appeal on the standard basis. The Court in Comgroup said of the rejection of the respondent’s offer in that case at [7]:
“The fact that they made a Calderbank offer which was rejected is, in this case, a strong factor in favour of their application for indemnity costs. It appears that the primary reason the applicant did not accept the offer was that it thought it would be successful on the appeal. It was not. In all of the circumstances the applicant’s rejection of the offer was unreasonable. The compromise offered by the respondent in this was considerably more advantageous to the applicant than the decision made by the court.”
- [5]The Court added at [8]:
“Although appeal courts are reluctant to encourage these Calderbank approaches in appeals for fear that it might stultify the development of the law, the court concluded that an examination of the merits of the proposed amended notice of appeal showed that it was bound to fail and did not raise any significant questions of law but rather the application of well-established principles of law to the facts of the case.”
- [6]Their Honours went on to order that the applicant pay the respondent’s costs on the standard basis until the date on which the Calderbank offer was rejected, and the indemnity basis thereafter: [10]. That approach appears to me to indicate a greater willingness to order indemnity costs on the basis of a failure to accept a Calderbank offer than was the case previously, under the approach in, for example, Roberts v Prendergast [2013] QCA 89, applying Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298.
- [7]The Court in Comgroup appears to have accepted the approach that the onus is on the party not accepting the offer to show that its non-acceptance was reasonable. In the present case Mr Norris has submitted on behalf of the defendants a detailed outline of argument, supported by an affidavit. That affidavit and outline advanced three reasons which were put forward as reasons why it was reasonable not to accept the offer, though they are really formulated as criticisms of the conduct of the plaintiffs, and particularly the plaintiffs’ solicitors, in relation to the matter.
- [8]The first of these is that the plaintiffs had, prior to commencing this proceeding, commenced a proceeding in the County Court of Victoria which was not an appropriate forum. Ultimately that proceeding was discontinued, and the present proceedings commenced. There was no dispute before me that the District Court of Queensland was an appropriate forum, and I am prepared to accept for the purposes of the argument that the County Court of Victoria was not. Nevertheless, the costs recoverable by the plaintiffs, as costs of this proceeding, will not include the costs of the proceeding in the County Court of Victoria. Whether the defendants are entitled to recover any amount in respect of any costs they incurred in relation to that proceeding is not a matter I need to consider. That depends on the rules and practice of the County Court of Victoria. It does not seem to me that this factor is material to the question of whether the defendants acted reasonably in rejecting the offer of settlement relied on by the plaintiffs.
- [9]The next matter that was relied on was referred to under the heading “mediation” but did not refer to a mediation between the parties; I was referred to a series of telephone calls, or generally attempted telephone calls, between the solicitor for the plaintiffs and Mr Norris, in the course of which at one point an offer was made by the defendants to pay $90,000, over a period of 13 months.[2]This was not accepted but the solicitor for the plaintiffs who said that he would be prepared to suggest that there was a position in the middle. On 3 July 2016 the offer was increased to $100,000, payable over a period of nine months.[3]This however was met with a counter-offer which was more favourable to the plaintiffs, and indeed more favourable than the Calderbank offer now relied on.[4]
- [10]I do not consider the fact the solicitor for the plaintiffs at one stage suggested that it might be possible for the matter to be resolved on terms which may have been more favourable than the Calderbank offer that was ultimately made provides a good reason why it was reasonable, in December 2015, to reject the offer that was then made. There is also the consideration that the defendants’ offers at all times involved payment over a period of time, whereas the plaintiffs’ offer was for payment of the full amount within a short time. I do not consider, overall, that these matters showed that it was reasonable not to accept the Calderbank offer.
- [11]The third matter which was relied on is that it was submitted that the plaintiffs’ solicitors acted unreasonably in trying to force the matter on for trial at a time when the son of the second and third defendants, Mr Christopher Norris, was not well enough to give evidence. Mr Christopher Norris did in fact give evidence before me at the trial. The plaintiffs had been pressing to set the matter down since May 2015, and at one time the matter was set down for trial on 20 and 21 August 2015, but on 13 August 2015 another Judge vacated those trial dates, the matter was listed for trial at a civil call over I held on 4 November 2015, and ultimately came on for trial in February this year.
- [12]The defendants submitted that the plaintiffs acted improperly by seeking to bring the trial on earlier despite the fact that the plaintiffs had not yet provided all the particulars sought by the defendants at the time they applied for a trial date, and because Mr Christopher Norris was not in a fit state to give evidence at the earlier date.
- [13]In relation to Mr Christopher Norris’ evidence, this was related to an argument raised in the defence that as a result of certain things said by the third plaintiff and a director of the first and second plaintiffs to Mr Christopher Norris on 30 November 2013 there had been breaches of certain terms of agreements between the parties, with the consequence that the amounts claimed by the plaintiffs were not payable under the agreement between the parties on which the plaintiffs sued. This is a matter dealt with in my earlier reasons. In a reply filed 16 February 2014 the plaintiffs did not expressly dispute that the words alleged in the defence were said to Mr Christopher Norris, but pleaded reasons why they did not amount to breaches of the relevant terms of the relevant agreements, or were otherwise not of consequence. That position was maintained in further versions of the reply filed 23 March 2015 and 29 July 2015.
- [14]There was no dispute at the trial that the words referred to in the defendants’ defence had in fact been said. In those circumstances, I doubt very much whether Mr Christopher Norris was a necessary witness for the defendants at all, even apart from the fact that, for reasons I gave in rejecting this defence in my earlier reasons, that conversation did not provide a good defence to the defendants. In any case, the defendants were not put in the position of having to run a trial at a time when Mr Christopher Norris was not available to give evidence. As to the costs of the adjournment of the trial, the judge who de-listed the trial in August ordered that the costs thrown away be assessed by the trial judge to be the respondents’ costs, that is, the plaintiffs’ costs. That was a matter for him to decide, and I cannot go behind that order.
- [15]I am not persuaded that the plaintiffs’ solicitor was acting unreasonably in pressing to bring the matter on for trial in August 2015, or indeed earlier, but, in any event, well before the Calderbank offer was made, that issue had been resolved and the matter had been listed for trial in February 2016. The offer that was made was for a lump sum inclusive of interest and costs which is significantly less than the total of the three amounts for which judgment was given, inclusive of interest but without costs. Whatever the rights and wrongs of the plaintiffs’ conduct in pressing to set the matter down for trial, that issue was over by the time this offer was made, and the offer had the advantage of avoiding any arguments about costs because it was for a lump sum inclusive of costs. In those circumstances, I do not consider that the dispute as to when the trial should be held, and any supposed misbehaviour on the part of the plaintiffs’ solicitor in relation to the listing of the matter for trial last year, provided any good reason why the offer that was made in December was not accepted.
- [16]I suspect, though this is not expressly stated by Mr Norris in his affidavit, that the practical reason why that offer was not accepted was that the defendants did not have the funds available to satisfy it. The defendants have at all times, when they made offers, offered to pay over a period of time, and the defendants have in their affidavit sought to pay any final determination in relation to costs, and the amounts of the existing judgment, in equal instalments over 12 months “based on cash flow and funds that are expected to be available for the defendants during the next 12 month period”. That is not relevant to the question I have to decide. I do not regard this reference in an affidavit as an application under UCPR r 868.
- [17]Overall I do not consider that the defendants have shown that it was reasonable for them to refuse the Calderbank offer made to them in December 2015. I consider that in this case that is a strong factor favouring indemnity costs, from the date the offer expired. As well, there were no new developments in the case after the offer was made, the offer was clear and involved some real compromise of the plaintiffs’ claim, and there was ample time to consider it. It foreshadowed an application for indemnity costs if it was not accepted. No good reason has been shown not to make an order for costs on the indemnity basis. I therefore order that the defendants pay the plaintiffs’ costs of the proceeding to be assessed on the standard basis to 23 December 2015, and on the indemnity basis in respect of costs incurred on or after 24 December 2015.