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Guirguis Pty. Ltd. & Another v Michel's Patisserie System Pty. Ltd. & Ors (No. 3)[2019] QDC 41

Guirguis Pty. Ltd. & Another v Michel's Patisserie System Pty. Ltd. & Ors (No. 3)[2019] QDC 41

DISTRICT COURT OF QUEENSLAND

 

CITATION:

Guirguis Pty Ltd & Another v Michel’s Patisserie System Pty Ltd & Ors (No 3) [2019] QDC 41

PARTIES:

GUIRGUIS PTY LTD
ACN 151 423 577
(first plaintiff)

and

FREDERICK GUIRGUIS &

KAREN GRACE GUIRGUIS
(second plaintiffs)

v

MICHEL’S PATISSERIE SYSTEM PTY LTD

ACN 132 424 947
(first defendant) 

and

MICHEL’S LEASING PTY LTD

ACN 130 002 023
(second defendant) 

and

RFGA MANAGEMENT PTY LTD

ACN 071 765 609
(third defendant) 

and

TRENT DELLIT
(fourth defendant) 

and

APLUS BUSINESS BROKERS PTY LTD

ACN 098 689 840
(fifth defendant) 

and

GEORGE METZAKIS
(sixth defendant) 

FILE NO/S:

2515 of 2015

DIVISION:

Civil

PROCEEDING:

Trial

DELIVERED ON:

4 April 2019

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers – Written submissions received 1, 15 and 25 March 2018

JUDGE:

Rosengren DCJ

ORDER:

  1. The Franchise Agreement, the First Guarantee, the Outlet Agreement, the Second Guarantee, and the Fitout Construction Agreement (as those terms are defined by the statement of claim) are declared void ab initio.
  2. The first, second and third defendants pay the first plaintiff $423,389.76 inclusive of interest.
  3. The first, second and third defendants pay the female second plaintiff $54,672.80 inclusive of interest.
  4. The first, second and third defendants pay the male second plaintiff $83,173.92 inclusive of interest.
  5. The plaintiffs’ claims against the fourth defendant be dismissed.
  6. The first, second and third defendants pay 95% of the plaintiffs’ costs of the first trial of proceeding against the first to fourth defendants to be assessed on the standard basis, if not agreed.
  7. The first, second and third defendants pay the plaintiffs’ costs of the retrial to be assessed on the standard basis, if not agreed.

CATCHWORDS:

INTEREST – RECOVERABILITY OF INTEREST – IN GENERAL – where damages were awarded to the plaintiffs for breaches of the first to third defendants’ obligations under the Australian Consumer Law for misleading and deceptive conduct – where the plaintiffs submit that interest on trading losses should accrue from when the business commenced operation – where the first to fourth defendants submit that interest on such losses should accrue from when the first plaintiff abandoned the business – period for which interest is payable.

COSTS – where the plaintiffs abandoned claim against fourth defendant after the retrial – whether the plaintiffs should pay the fourth defendant’s costs – where the fourth defendant represented by the same solicitors as the first to third defendants – where there were no separate pleadings.

COSTS – whether the plaintiffs can recover the costs of the first trial – whether these costs were determined by the Court of Appeal – whether there is an estoppel by convention.

COSTS – INDEMNITY COSTS – offer to settle – offer under the rules – where separate offer made to each defendant – whether offer authorised by rule 363.

COSTS – INDEMNITY COSTS – Calderbank offer to settle – where judgment no less favourable than the offer only because of the accrual of interest since the offer – failure to accept the offer – whether conduct plainly unreasonable.

Appeal Costs Fund Act 1973 (Qld) s 16

Civil Proceedings Act 2011 (Qld) s 58(3)

Competition and Consumer Act 2010 (Cth) Sch 2

Uniform Civil Procedure Rules 1999 (Qld) rr 335, 353, 360, 363, 684(2), 681

Alborn v Stephens [2010] QCA 58

Bulsey v State of Queensland [2016] QCA 158

Butler & Ors v The State of Queensland [2014] QSC 19

Cashmere Bay Pty Ltd v Hastings Deering (Australia) Ltd (No. 2) [2011] QSC 134

Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd & Ors [2002] QSC 319

DTM Constructions Pty Ltd trading as QA Developments v Poole & Anor [2017] QSC 246

GEJ & MA Geldard Pty Ltd v Mobbs & Ors (No 3) [2011] QSC 297

Guirguis Pty Ltd & Anor v Michel’s Patisserie System Pty Ltd & Ors [2017] QCA 83

Halzeldene’s Chicken Farm Pty Ltd (CAN 004 381 346) v Victorian WorkCover Authority (No 2) [2005] VSCA 298

J & D Rigging Pty Ltd v Agripower Australia Ltd [2014] QCA 23

Kerle v BM Alliance Coal Operations Pty Ltd & Ors (No 2) [2017] QSC 7

Kitchen v Vision Eye Institute Ltd [2017] QCA 32

MBP (SA) Pty v Gogic (1991) 98 ALR 193

Mitchell v Pacific Dawn Pty Ltd [2003]QCA 526

Remely v O'Shea & Anor [2008] QCA 111

Rivergate Marina & Shipyard Pty Ltd v Morphett (No 2) [2017] QDC 180.

Stanley v Phillips (1966) 115 CLR 470

Todrell Pty Ltd v Finch and Ors [2007] QSC 386

COUNSEL:

R S Ashton QC and P O'Brien for the plaintiffs

D Chesterman for the first, second, third and fourth defendants

SOLICITORS:

Thomson Geer for the plaintiffs

Thynne & Macartney for the first, second, third and fourth defendants

  1. [1]
    On 15 February 2019, I gave judgment in this matter for the first plaintiff in the sum of $297,491, for the second female plaintiff in the sum of $41,000 and for the second male plaintiff in the sum of $64,000. I gave the parties leave to make further submissions as to the form of the orders, interest and costs.
  1. [2]
    Further written submissions were made by the parties. The plaintiffs’ submissions were provided on 1 March 2019. Submissions were provided on behalf of RFG on 15 March 2019. The submissions on behalf of RFG raised a number of issues that were not addressed in the plaintiffs’ submissions. For this reason the plaintiffs were requested to and provided further written submissions on 25 March 2019. A request was made by me for the covering letter in relation to an offer made by the plaintiffs in October 2013 (which is addressed below) and it was provided on 1 April 2019.

Form of the judgment

  1. [3]
    The parties consent to the following orders being made:
  1. The Franchise Agreement, the First Guarantee, the Outlet Agreement, the Second Guarantee, and the Fitout Construction Agreement (as those terms are defined by the statement of claim) are declared void ab initio.
  2. The first, second and third defendants pay the first plaintiff $297,491.00.
  3. The first, second and third defendants pay to the female second plaintiff $41,000.00.
  4. The first, second and third defendants pay to the male second plaintiff $64,000.00.
  5. The plaintiffs’ claims against the fourth defendant be dismissed.
  1. [4]
    This leaves the questions of interest and costs.

Interest on the judgment sum

  1. [5]
    The parties agree that interest is to be calculated pursuant to s 58 of the Civil Proceedings Act 2011 (Qld) (‘the CP Act’).
  1. [6]
    The only issue that remains to be dealt with is the point of time at which interest should accrue on the damages awarded for the first plaintiff’s trading losses in the sum of $37,361. This is a component of the total damages awarded to the first plaintiff in the sum of $297,491.
  1. [7]
    The court has power under s 58(3) of the CP Act to order that there be included in a judgment amount, interest for all or part of the amount and for all or part of the period between the date when the cause of action arises and the date of judgment.
  1. [8]
    In MBP (SA) Pty v Gogic[1] the High Court stated that:

“The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period”.

  1. [9]
    Courts have adopted a flexible approach given the wide discretion afforded by s 58(3). The nature of the damages awarded to the successful party and the date at which the relevant loss was sustained are considered relevant in determining the correct point at which interest should accrue.[2]
  1. [10]
    In this case the trading losses were sustained over time. The plaintiffs contend in their written submissions dated 1 March 2019 that the interest calculation on these losses should accrue from 28 May 2012 when the Patisserie commenced operating. On the other hand, RFG contends that they should accrue from some 14 months later, in July 2013 when the Guirguises abandoned the Patisserie. I consider that a sensible approach here is to allow interest to run from the midpoint of the period, being 1 January 2013. This is an approach which has been adopted in other cases.[3]This results in a figure of $14,225.96.  
  1. [11]
    Therefore, I am satisfied that the following awards of interest should be added to the judgments in the amounts of:
  1. (i)
    $128,898.76 in relation to the first plaintiff;
  1. (ii)
    $13,672.80 in relation to the second female plaintiff; and
  1. (iii)
    $19,173.92 in relation to the second male plaintiff.

Costs of the fourth defendant

  1. [12]
    It is submitted on behalf of RFG that it is appropriate that the plaintiffs pay the fourth defendant’s costs of the proceeding. This is in circumstances where the first plaintiff’s claim against him for being knowingly involved in contraventions of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (‘the ACL’) was abandoned at the end of the retrial.  This left the plaintiffs with no claim against the fourth defendant.
  1. [13]
    The fourth defendant’s position in the proceeding arose really because he made some of the subject representations. His position within RFG and his role in making the representations were central issues in the case. There is no suggestion that the costs of the first to fourth defendants were not simply costs incurred by each of them in relation to the joint conduct of the litigation. They have been represented by the same solicitors. There have been no separate pleadings. The issue of accessorial liability was a small part of the first plaintiff’s case. There is no evidence that the fourth defendant is funding the litigation. Given these factors, I see no reason to make a separate order in relation to the fourth defendant’s costs.

Costs of the fifth and sixth defendants

  1. [14]
    The plaintiffs discontinued their claims against the fifth and sixth defendants on 18 May 2018, just prior to the commencement of the retrial.
  1. [15]
    According to RFG, in circumstances where there is no evidence as to what proportion of the plaintiffs’ costs are attributable to these discontinued claims, there ought to be an abstract percentage apportionment. This is to avoid the other defendants from being required to reimburse the plaintiffs for those costs which they incurred in their claims against the fifth and sixth defendants. It is submitted that an appropriate reduction would be 25% taking into account that the fifth and sixth defendants were separately represented, had separate pleadings and undertook separate disclosure. The plaintiffs accept that an apportionment ought to be made but contend that an appropriate reduction is 10%.
  1. [16]
    I am not persuaded by these submissions. The costs payable to the plaintiffs by the first to third defendants would not include the costs incurred by the plaintiffs of proceeding against the fifth and sixth defendants. They are separate costs that can be apportioned by the costs assessor. To the extent that it may assist the costs assessor, there would not appear to be any additional evidence which would have been called by any party directed specifically to the issues relevant to the separate claims against the fifth and sixth defendants.

Costs of the first trial

  1. [17]
    There is currently no order as to the costs of the first trial and the plaintiffs seek to recover these costs. RFG opposes such an order for two principal reasons.
  1. [18]
    The first reason is that although the Court of Appeal made no order as to the costs of the first trial, Fraser JA (with whom McMurdo JA and Boddice J agreed) said:

“Because the order for a retrial is required by errors of law made by the primary judge to which no party contributed, an indemnity certificate should be granted in favour of the respondents under s 15 of the Appeal Costs Fund Act 1973. The effect of such an indemnity certificate is to entitle the unsuccessful respondents to be reimbursed any amounts they pay for the appellants’ costs of the appeal and of the new trial and for the respondents’ own costs incurred in the appeal and the new trial, in each case subject to the provisions of the Act, but the Act does not confer any power upon the Court to order reimbursement of any parties’ costs of the first trial.  There being no basis in this case upon which the Court could properly order any party to pay another party’s costs of the trial, the regrettable fact is that those costs must lie where they fall.”[4]

  1. [19]
    RFG contends that in light of the abovementioned observations of the Court of Appeal, there is no need to make an order for costs of the first trial. It is further submitted by RFG that the absence of any such order means that there was no order as to costs and each party was to bear their own costs of the first trial.
  1. [20]
    I am not persuaded by this submission. Courts commonly order that the costs of the first trial abide the event of the retrial. The case Fraser JA cited, namely Mitchell v Pacific Dawn Pty Ltd[5]in support of his observations, is not authority for RFG’s contention in this regard.   Rather, the effect of that decision is to make it clear that under the Appeal Costs Fund Act 1973 (Qld) (‘the Act’), there is no power in the Court of Appeal in the granting of an indemnity certificate to provide for the costs of the first trial.  
  1. [21]
    As much can be found in s 16 of the Act, which provides that the granting of such a certificate entitles the unsuccessful respondent to the appeal, who is RFG in these proceedings, to be paid from the fund an amount equal to the appellant’s costs of the appeal and of a new trial had in consequence of an order made upon an appeal for a new trial. The Court of Appeal made an order that RFG pay the costs of the appeal. It made no order as to the costs of the first trial or the retrial. If an order is to be made by me that RFG pay the plaintiffs’ costs of the retrial, then the granting of the indemnity certificate by the Court of Appeal will entitle RFG to recover from the fund at least some of the costs of the retrial.
  1. [22]
    Given that the Court of Appeal ordered that there be a new trial of all claims and counter-claims, other than the first plaintiff’s claims against the first defendant for damages for breach of contract and breach of warranty, and the first plaintiff’s claim against all defendants for damages for negligent misrepresentation, the District Court proceedings were not concluded until the judgment in the retrial was delivered. This leaves for determination the costs of the first trial and the retrial.
  1. [23]
    The second reason why RFG opposes any order as to the costs of the first trial is that following the Court of Appeal decision, it is said that the parties conducted their settlement negotiations on the footing that neither party could recover the costs of the first trial. In these circumstances, RFG submits that there is an estoppel by convention with the consequence that the plaintiffs cannot obtain their costs of the first trial.
  1. [24]
    I am not satisfied that such a doctrine has any application to this matter. There are a few reasons for this. First, the history of the exchange of offers between the parties following the Court of Appeal decision does not indicate there was any such convention. Second, even if there was, the fact that the parties may have assumed a certain outcome as to costs from the Court of Appeal judgment does not give rise to an estoppel by convention. Third, any such assumed state of affairs is not an assumption of fact but rather an assumption as to the legal effect of Fraser JA’s observations referred to above. Fourth, the dispute between the parties as to the costs of the first trial was not resolved and thereby there was no detriment to RFG.

Costs of issues the plaintiffs lost at the first trial

  1. [25]
    The starting point is rule 681 of the Uniform Civil Procedure Rules 1999 (Qld) (‘the UCPR’), which provides that costs of a proceeding are in the discretion of the court, but follow the event, unless the court orders otherwise. Rule 684 provides an exception to this and enables the court to make an order for costs of a particular question in, or a particular part of, a proceeding and by r 684(2), a court may declare what percentage of the costs of the proceeding is attributable to that question or part. 
  1. [26]
    RFG contends any costs order in favour of the plaintiffs with respect to the first trial ought to be reduced by 5% to reflect the fact that while the Court of Appeal allowed the appeal in relation to the plaintiffs’ claims under the ACL, it did not allow the appeal in respect of the orders dismissing the first plaintiff’s claim against the first defendant for damages for breach of contract and breach of warranty and the first plaintiff’s claim against all defendants for damages for negligent misrepresentation.
  1. [27]
    Ordinarily, the fact that a successful party fails on particular issues does not have the consequence that the party is inevitably, or even, perhaps, normally deprived of some of its costs.[6]The modern approach has generally been that a plaintiff having succeeded to a significant extent in relation to its claim, should receive its costs of the proceeding.  
  1. [28]
    RFG contends that these claims which were not again litigated at the retrial were substantial issues of fact and law at the first trial and that the claims for breach of contract and breach of warranty were legally and factually discrete. However, it would seem that little time or evidence in the first trial would have been devoted to these claims. Essentially it was an exercise in characterising what flowed from the evidence of the Guirguises and the available documents. However, given that the plaintiffs accept that a 5% reduction is appropriate, I will order a reduction in this percentage.

Costs of two counsel

  1. [29]
    The plaintiffs seek certification for the costs of two counsel for the trials. The question is whether the case by reason of any of its features made it reasonably necessary or proper that the services of two counsel be engaged for the court to do justice between the parties.[7]
  1. [30]
    This is ultimately a decision for the costs assessor and I am therefore not prepared to make the order sought by the plaintiffs in this regard. Having said this, to the extent that this may assist the costs assessor, in my view the factual and legal complexities together with the voluminous material justified the retention of senior and junior counsel for the trials.

Offers to settle

  1. [31]
    Prior to the rehearing, the plaintiffs made five offers to settle the proceedings. Those relevant to the issue of indemnity costs are detailed below.
  1. [32]
    On 11 October 2013, the solicitor for the plaintiffs made an offer to settle to each defendant (‘the October 2013 offer’). So far as is relevant, the offer was expressed to be pursuant to Chapter 9, Part 5 of the UCPR and an offer to fully and finally settle the claims made by them. The terms of the offer to each defendant were that:
  1. The defendant agreed to pay the plaintiffs the sum of $358,400.00 (inclusive of interest) and the plaintiffs costs of the proceedings, to be assessed on a standard basis if not agreed;
  1. The plaintiffs agreed to provide the defendants with a signed notice of discontinuance upon payment of the settlement sum;
  1. It would remain open for acceptance for a period of 14 days after the date of service upon the defendant.[8]
  1. [33]
    Each offer was accompanied by a letter from the plaintiffs’ solicitors which read as follows “We act for the plaintiffs in the above proceedings and now serve on you Offer to Settle.”
  1. [34]
    The first trial was heard in the District Court at Brisbane for 10 days commencing on 11 April 2016. Judgment was delivered on 27 May 2016 dismissing the plaintiffs’ claims and entering judgment for the first, second and third defendants on their counterclaim against the plaintiffs for $650,552.24. The plaintiffs appealed this decision and on 9 May 2017, the Court of Appeal allowed the appeal and ordered a retrial.
  1. [35]
    By letter dated 23 August 2017, the solicitors for the plaintiffs forwarded correspondence to the solicitors for RFG detailing the findings of the Court of Appeal. They made a further offer for the defendants to pay $550,000 for damages and interest, together with costs of the District Court proceedings to be taxed or agreed. The offer was open for acceptance for 14 days until 6 September 2017. The letter was stated to be ‘Without Prejudice Save As To Costs’ (‘the August 2017 offer’).
  1. [36]
    On 1 February 2018, the plaintiffs’ solicitors forwarded further correspondence to the solicitors for RFG enclosing another offer to settle. On this occasion it was a single offer to all defendants. The offer was expressed to be pursuant to Chapter 9, Part 5 of the UCPR and an offer to settle all claims in this proceeding. The terms of the offer were that:
  1. The defendants agreed to pay the plaintiffs the sum of $550,000.00 for damages and interest;
  1. The plaintiffs’ costs of and incidental to the action including reserved costs (excluding some costs associated with the first trial), to be assessed on the standard basis.
  1. It would remain open for acceptance for a period of 14 days after the date of service (‘the February 2018 offer’).  
  1. [37]
    In the plaintiffs’ written submissions dated 1 March 2019, the plaintiffs sought costs on an indemnity basis in reliance on the October 2013 offer, August 2017 offer or February 2018 offer. They abandoned their reliance on the February 2018 offer on page 7 of their later submissions dated 25 March 2019. I have discussed issues relevant to the other two offers below.

October 2013 offer

  1. [38]
    The plaintiffs contend that the failure of RFG to accept the October 2013 offer entitles them to an order for indemnity costs of the first trial and the rehearing pursuant to rule 360 of the UCPR.
  1. [39]
    Pursuant to rule 353 of the UCPR, a party to a proceeding may serve an offer to settle the claim on conditions specified in the offer. The offer must be in writing and contain a statement that it is made under Part 5 of Chapter 9 of the UCPR. Rule 335 relevantly provides that a party must specify in the offer a period not less than 14 days after the day of service of the offer, during which the offer is open for acceptance. The offer may not be withdrawn during that period without the court’s leave.
  1. [40]
    Rule 360 of the UCPR provides:

“360 Costs if offer by plaintiff

  1. (1)
     If—
  1. (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
  1. (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.”
  1. [41]
    Where there are multiple defendants rule 363 provides:

“363 (1)  If there are 2 or more defendants, the plaintiff may make an offer to settle with any defendant, and any defendant may offer to settle with the plaintiff.

 (2)  However, if defendants are alleged to be jointly or jointly and severally liable to the plaintiff and rights of contribution or indemnity may exist between the defendants, this rule applies to the offer to settle only if –

(a)  for an offer made by the plaintiff – the offer is made to all of the defendants and is an offer to settle the claim against all the defendants; or

       (b)  … ”

  1. [42]
    To satisfy the first limb of the condition in rule 363(2), only some of the liabilities of the defendants are required to be joint or joint and several. It is not necessary for the statement of claim to allege that the liabilities are joint or joint and several. It is sufficient that the pleading alleges a liability which is in law a joint or joint and several liability. Not all causes of action alleged against the defendants need to give rise to joint or joint and several liability.[9]A review of the claim and statement of claim filed on 18 September 2013 reveals that this limb is satisfied in relation to the declaration sought against the first, second and third defendants and the claims for damages and compensation against these defendants.  
  1. [43]
    As to the second limb of the condition, there are no claims for indemnity or contribution made by the defendants and there has been no determination of the question whether they had any such rights. However, there is no requirement in the rule for a claim to have been made or a right to have been determined. If such rights may exist, that is sufficient to justify the second limb of the condition. In my view this second limb is also satisfied.
  1. [44]
    The plaintiffs concede that the 10 October 2013 offer to each defendant was not expressed as an offer to settle against all defendants. They contend that the non-compliance was an irregularity and that the meaning of the offer was plain in the circumstances of what was communicated.
  1. [45]
    I am not persuaded by the plaintiffs’ submissions in this regard. On the face of it, the October 2013 offer was to each individual defendant. It is difficult to characterise it as an offer to fully and finally settle the claims made against all defendants. To be effective it should not have been made separately to each defendant. The requirements of subparagraph (a) are not met and this has the effect of taking the offer outside of the rule.[10]  It follows that insofar as the notices constitute offers to settle the claim, they were not authorised by r 363. They were therefore not offers to settle made under pt 5 of ch 9 and more particularly, rule 360 of the UCPR.  This has the consequence that the prima facie mandatory effect of an offer under the UCPR, that a plaintiff should receive its costs on an indemnity basis, does not apply. 
  1. [46]
    Even though rule 360 does not apply, the October 2013 offer also stands as a Calderbank offer.  An order for indemnity costs incurred after the offer was made can result if there was such an unreasonable failure to accept the offer as to justify it.[11]Mere unreasonableness in not accepting an offer of settlement does not necessarily have the consequence of an indemnity costs order.[12]
  1. [47]
    The factors to be considered are the stage of the proceedings when the offer was received; the time allowed for acceptance of the offer; the extent of the compromise offered; the offeree’s prospects of success, assessed at the date of the offer; the clarity with which the terms of the offer were expressed; and whether an application for indemnity costs was foreshadowed in the event that the offer was not accepted.[13]
  1. [48]
    I am not satisfied RFG acted unreasonably or imprudently in not accepting the October 2013 offer given that it was made less that one month after proceedings were instituted. At the time it expired, pleadings had not been closed, there had been no disclosure and there were no expert reports supporting the plaintiffs’ claims. This would have made it difficult, at least to some extent, for RFG to have assessed the reasonableness of it.

August 2017 offer

  1. [49]
    Given the abovementioned position in relation to the October 2013 offer, the plaintiffs in the alternative seek an order for indemnity costs on the basis that the failure of RFG to accept the August 2017 offer entitles them to an order for indemnity costs of the first trial and the rehearing.
  1. [50]
    The offer was not one made under the UCPR, so rule 360 of the UCPR has no application.
  1. [51]
    It was not foreshadowed in the August 2017 offer that there would be an application for indemnity costs. This omission is a relevant consideration, although not to be viewed as a major factor.[14]
  1. [52]
    An issue to be determined is whether the judgment in the plaintiffs’ favour is less than the August 2017 offer. The judgment of $564,236.48 is no less favourable than the August 2017 offer of $550,000 only because of the accrual of additional interest since the offer was made. The judgment is less favourable, in the sum of approximately $45,000 if the interest accrued subsequent to the August 2017 judgment is omitted from the calculation.
  1. [53]
    In Rivergate Marina & Shipyard Pty Ltd v Morphett (No 2)[15], McGill SC DCJ made the following observations in relation to an analogous situation with respect to a rule 360 offer:

“As a general proposition however, in circumstances where the judgment is no less favourable than the offer because of something that has happened or something that has changed after the time when the offer was made, that can readily be seen as a ground which would make some other order appropriate. In my opinion that general proposition extends to a situation where the judgment is no less favourable only because of the accrual of additional interest.”

  1. [54]
    I see no reason why such a general proposition would not have application to a Calderbank offer.  In these circumstances, the fact that the judgment sum is more favourable than the August 2017 offer only because of the accrual of interest since the August 2017 offer was made, leads me to the conclusion that RFG did not act unreasonably in not accepting it.  
  1. [55]
    Further, the extent of the compromise offered was not substantial, particularly with the benefit of hindsight. Recent Court of Appeal decisions have placed considerable weight on the extent of any compromise.
  1. [56]
    In all the circumstances, there is no justification for a conclusion that RFG’s conduct in not accepting the August 2017 offer ought to be characterised as so improper or unreasonable as to justify taking the taking of the unusual step of ordering the costs on the indemnity basis.

Footnotes

[1] (1991) 98 ALR 193.  

[2] See Cashmere Bay Pty Ltd v Hastings Deering (Australia) Ltd (No. 2) [2011] QSC 134; Butler & Ors v The State of Queensland [2014] QSC 19; GEJ & MA Geldard Pty Ltd v Mobbs & Ors (No 3) [2011] QSC 297.

[3] For example see DTM Constructions Pty Ltd trading as QA Developments v Poole & Anor [2017] QSC 246.

[4] Guirguis Pty Ltd & Anor v Michel’s Patisserie System Pty Ltd & Ors [2017] QCA 83 at [61].

[5] [2003]QCA 526 at [18].

[6] Alborn v Stephens [2010] QCA 58 per Muir J at [8]; Todrell Pty Ltd v Finch and Ors [2007] QSC 386 by Chesterman J.

[7] Stanley v Phillips (1966) 115 CLR 470 at 479-480.

[8] Affidavit Anthony Conaghan, Exhibits AJC-1 to 6.

[9] Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd & Ors [2002] QSC 319.

[10] Kerle v BM Alliance Coal Operations Pty Ltd & Ors (No 2) [2017] QSC 7 at [21].

[11] J & D Rigging Pty Ltd v Agripower Australia Ltd [2014] QCA 23; Kitchen v Vision Eye Institute Ltd [2017] QCA 32.

[12] Remely v O'Shea & Anor [2008] QCA 111. 

[13] Halzeldene’s Chicken Farm Pty Ltd (CAN 004 381 346) v Victorian WorkCover Authority (No 2) [2005] VSCA 298.

[14] Bulsey v State of Queensland [2016] QCA 158.

[15] [2017] QDC 180.

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Editorial Notes

  • Published Case Name:

    Guirguis Pty. Ltd. & Another v Michel's Patisserie System Pty. Ltd. & Ors (No. 3)

  • Shortened Case Name:

    Guirguis Pty. Ltd. & Another v Michel's Patisserie System Pty. Ltd. & Ors (No. 3)

  • MNC:

    [2019] QDC 41

  • Court:

    QDC

  • Judge(s):

    Rosengren DCJ

  • Date:

    04 Apr 2019

Appeal Status

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