Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd (No 2)
[2016] QDC 65
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- Unreported Judgment
- Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd (No 2)[2016] QDC 65
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Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd (No 2)[2016] QDC 65
Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd (No 2)[2016] QDC 65
DISTRICT COURT OF QUEENSLAND
CITATION: | Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd (No 2) [2016] QDC 65 |
PARTIES: | MOTORLINE SOUTH CITY PTY LTD ACN 004 555 088 Plaintiff v COSMETIC SUPPLIERS PTY LTD ACN 000 303 391 Defendant |
FILE NO/S: | 3780/2012 |
DIVISION: | Civil |
PROCEEDING: | Trial |
DELIVERED ON: | 31 March 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | On the papers – written submissions filed on 24 March 2016 |
JUDGE: | Bowskill QC DCJ |
ORDER: | 1.Judgment for the plaintiff against the defendant in the sum of $213,553.08, including interest. 2. The defendant’s counterclaim is dismissed. 3.The defendant pay the plaintiff’s costs of the claim, assessed on the indemnity basis. 4.The defendant pay the plaintiff’s costs of the counterclaim, assessed on the standard basis. |
CATCHWORDS: | PRACTICE AND PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – GENERALLY – where the plaintiff was successful in its claim, and entitled to judgment, taking into account small amount by way of set-off – where the counterclaim was dismissed – whether the plaintiff entitled to costs of the claim and counterclaim – appropriate basis for assessment of costs, where plaintiff made formal offer to settle under chapter 9, part 5 of the Uniform Civil Procedure Rules. Uniform Civil Procedure Rules 1999 (Qld), rr 360, 361, 681, 684 Alborn & Ors v Stephens & Ors [2010] QCA 58 Allianz Australia Insurance Ltd v Swainson [2011] QCA 179 Australian Prudential Regulation Authority v Holloway [2000] FCA 1245 BHP Coal Pty Ltd & Ors v O & K Orenstein & Koppel AG & Ors (No 2) [2009] QSC 64 Murdoch v Lake [2014] QCA 269 Tabtill Pty Ltd v Creswick; Creswick v Creswick & Ors [2012] QCA 78 Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor [2008] 2 Qd R 95 Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No. 2) [2010] QSC 19 Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 164 |
COUNSEL: | P J McCafferty for the Plaintiff B McGlade for the Defendant |
SOLICITORS: | McCullough Robertson Lawyers for the Plaintiff Colin Biggers & Paisley for the Defendant |
- [1]On 10 March 2016, I gave judgment for the plaintiff, with final orders to be made, including as to costs, after the parties had an opportunity to consider my reasons: Motorline South City Pty Ltd v Cosmetic Suppliers Pty Ltd [2016] QDC 45.
- [2]The parties have each submitted a proposed draft order, with supporting submissions. As to the substantial relief, they are agreed. The only dispute is as to costs.
- [3]It is appropriate that judgment be given for the plaintiff against the defendant for $213,553.08, including interest, calculated as follows:
- (a)rental arrears for the period 1 May 2012 to 4 September 2012 of $23,728.06 (including GST), under clause 13.1(2)(a) of the lease;
- (b)interest on the rental arrears of $14,475.70, under clause 13.5 of the lease;
- (c)lost rent for the period 4 September 2012 to 31 October 2014 of $138,776.16 (not including GST), under clause 13.1(2)(b) of the lease;
- (d)interest on the lost rent of $22,437.48, pursuant to s 58 of the Civil Proceedings Act 2011;
- (e)$3,206.56 for legal costs under 13.1(2)(c)(iv) of the lease;
- (f)$3,769.12 for expenses incurred in attempting to re-let the premises, under clause 13.1(2)(c)(iii) of the lease;[1] and
- (g)$7,160 as costs of making good the premises, calculated as the allowed claim ($12,000) minus the set-off amount of $4,840.[2]
- (a)
- [4]The plaintiff seeks an order that the defendant pay its costs of the proceeding on the indemnity basis, relying on r 360 of the Uniform Civil Procedure Rules. The defendant opposes that, firstly, on the basis that r 360 does not apply and, secondly, even if it does, on the basis that another order is appropriate in the circumstances (namely, that the defendant pay two-thirds of the plaintiff’s costs of the proceeding on the standard basis; or the defendant pay the plaintiff’s costs of its claim on the standard basis, and the plaintiff pay half the defendant’s costs of the counterclaim on the standard basis).
- [5]I will start with the appropriate order for costs, and then turn to the basis of assessment.
- [6]The general rule is that costs of a proceeding are in the discretion of the court, but follow the event, unless the court orders otherwise: r 681(1) UCPR. Rule 684 provides an exception,[3] permitting the court to make an order for costs in relation to a particular question in, or a particular part of, a proceeding (and for that purpose to declare what percentage of the costs of the proceeding is attributable to the question or part of the proceeding to which the order relates). As McMurdo J said in BHP Coal at [7], “[n]ecessarily the circumstances which would engage r 684 are exceptional circumstances, and the enquiry must be: what is it about the present case which warrants a departure from the general rule?” His Honour also referred to Chesterman J’s approval of the observation that “[n]otwithstanding that the court has power to deprive a successful party of costs, or even order a successful party to pay costs, that is a course to be taken in unusual cases and with a degree of hesitancy”.[4]
- [7]In Murdoch v Lake [2014] QCA 269 at [24] Morrison JA (with whom Boddice J agreed), reiterated an earlier Court of Appeal’s[5] approval of the following passage from the decision of Toohey J in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136:
“1.Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.
- Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.
- A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.”
- [8]The events here are the judgment in the plaintiff’s favour on its claim (taking into account the small set-off amount), and the consequent dismissal of the counterclaim.
- [9]Applying the general rule, the plaintiff is entitled to recover its costs of the claim. It was wholly successful, save for a minor issue concerning the amount claimed for making good the premises. I do not regard it as necessary or appropriate in this case to delve into the various factual issues agitated at the hearing, to tally the “wins and losses” of the plaintiff or the defendant.[6] Those are not matters appropriately dealt with as separate “events” for the purposes of r 681(1).[7] There are no special circumstances justifying any other order.
- [10]In relation to the counter-claim, the event being the dismissal of the counterclaim, the plaintiff ought to recover its costs of that also.[8] The issue on which the defendant succeeded, and which resulted in the set-off of $4,840, was one also pleaded in defence of the claim (breach of an implied term, requiring the plaintiff to return the defendant to premises with materially the same physical appearance). There is no basis, in my view, to deal separately with the costs of this issue in so far as it arises on the counterclaim.
- [11]Turning then to the basis of assessment of the costs.
- [12]The plaintiff made a written offer to settle the proceedings on 27 November 2013.[9] The offer was described as made under chapter 9, part 5 of the UCPR, “in full and final satisfaction of the dispute between the parties”. The terms of the offer were that:
- (a)the defendant pay to the plaintiff $150,000 in full and final settlement of the plaintiff’s claim, plus costs assessed on the standard basis; and
- (b)the defendant’s counterclaim against the plaintiff be discontinued with no order as to costs.
- (a)
- [13]The defendant ignored the offer.[10]
- [14]Under r 360(1) of the UCPR if:
- (a)the plaintiff makes an offer that is not accepted by the defendant and the plaintiff obtains an order no less favourable than the offer; 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;
- (a)
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.
- [15]I am satisfied of the matter in r 360(1)(b).[11] The plaintiff has obtained an order more favourable than the offer.
- [16]In so far as the claim is concerned, there is no basis for denying the prima facie operation of r 360(1). The plaintiff should have its costs of the claim on the indemnity basis.
- [17]However, rule 360 has no relevant application in relation to the plaintiff’s costs incurred as a defendant to the counterclaim. It cannot be given such an operation merely because the plaintiff’s offer to settle dealt with both.[12]
- [18]The plaintiff submitted that even if the Court should find that r 360 is not enlivened (having regard to the conclusion already reached, this applies only to the counterclaim), an order for indemnity costs should be made because the defence and counterclaim “unnecessarily complicated the Plaintiff’s case”; the refusal of the offer and continuation of the defendant’s case “meant that the litigation has been unnecessarily and unduly prolonged” and the plaintiff made a further Calderbank offer, in June 2015,[13] which was also for an amount less than the judgment, and was rejected by the defendant.
- [19]I do not accept that an order for indemnity costs of the counterclaim is appropriate. It is true that the defence and counterclaim raised a number of matters that considerably “complicated” the proceedings. However, that is primarily in terms of the defence itself, which is taken into account by the order made in respect of the claim.[14] Similarly, the other points made substantially concern the continued defence of the claim.
- [20]The appropriate orders are therefore:
- (a)the defendant pay the plaintiff’s costs of the claim, assessed on the indemnity basis; and
- (b)the defendant pay the plaintiff’s costs of the counterclaim, assessed on the standard basis.
- (a)
Footnotes
[1]As to the amounts at (a) to (f), see the Reasons at [258]. See also the plaintiff’s submissions as to final orders and costs at [6]; interest calculations set out in the affidavit of Xavier Milne affirmed on 24 March 2016; and the defendant’s post-trial submissions at [1] (noting what seems to be a typographical error in the amount of rental arrears referred to in footnote 2).
[2]See Reasons at [259]-[265]; see also r 184 UCPR (as to the appropriateness of giving judgment for the balance in favour of the plaintiff only).
[3]BHP Coal Pty Ltd & Ors v O & K Orenstein & Koppel AG & Ors (No 2) [2009] QSC 64 at [7] per McMurdo J (as his Honour then was).
[4]Todrell Pty Ltd v Finch & Ors; Croydon Capital Pty Ltd v Todrell Pty Ltd & Anor [2008] 2 Qd R 95 at [21], referring to the observation made by Einstein J in Mobile Innovations Ltd v Vodaphone Pacific Ltd [2003] NSWSC 423 at [4]. See also Alborn v Stephens [2010] QCA 58 at [7]-[8] per Muir JA; Allianz Australia Insurance Ltd v Swainson [2011] QCA 179 at [4]-[5] per Fraser JA.
[5]Sochorova v Commonwealth of Australia [2012] QCA 152 at [13] per Margaret Wilson J, Fraser and Muir JJA agreeing.
[6]See Australian Prudential Regulation Authority v Holloway [2000] FCA 1245 at [51] per Mansfield J; see also Tabtill Pty Ltd v Creswick; Creswick v Creswick & Ors [2012] QCA 78 at [9].
[7]Cf Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No. 3) [2003] 1 Qd R 26 at [84].
[8]See Yara Nipro Pty Ltd v Interfert Australia Pty Ltd (No. 2) [2010] QSC 19 at [3], [7]-[8] per McMurdo J, referring to Hanak v Green [1958] 2 QB 9. See also Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 164 at [10], per Muir and Fraser JJA and Ann Lyons J (reversing the order made, because of the appeal, but based on the same principles as were applied by McMurdo J).
[9]Annexure XJM-1 to Mr Milne’s affidavit.
[10]Mr Milne at [6].
[11]Mr Milne at [5(d)].
[12]Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 164 at [12].
[13]Annexure XJM-2 to Mr Milne’s affidavit.
[14]See Smith v Madden (1946) 73 CLR 129 at 133-4.