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- Unreported Judgment
DISTRICT COURT OF QUEENSLAND
Pacific Crown Helicopters Pty Ltd v Helistar Aviation Pty Ltd (No. 2)  QDC 115
PACIFIC CROWN HELICOPTERS PTY LTD (ACN 106 330 689)
HELISTAR AVIATION PTY LTD (ACN 102 789 355)
1137 of 2017
District Court at Brisbane
10 June 2020
Written submissions on 2 and 4 June 2020
Defendant pay Plaintiff’s costs of and incidental to the action to be assessed on the standard basis.
COSTS – whether to award indemnity costs- Calderbank offer – where offer included transfer of ownership of a chattel –where there was no evidence of the value of the chattel – where ownership of the chattel was not part of the Judge’s order - whether not accepting the offer was reasonable – cost awarded on a standard basis
Balnaves v Smith  QSC 408
Elite Protective Personnel Pty Ltd & Anor v Salmon  NSWCA 322
Dover Beach Pty Ltd v Geftine Pty Ltd  VSCA 248
- Having provided a copy of my reasons for giving judgement for the plaintiff in the trial of this matter to the parties, counsel for the plaintiff sought an order for costs on the indemnity basis. I gave the parties leave to provide written submissions.
- Having considered them, I have determined that the appropriate order is that the defendant should pay the plaintiff’s costs of and incidental to the action, to be assessed on the standard basis. My reasons for so concluding are as set out hereafter.
- The plaintiff’s counsel’s submission that costs should be on an indemnity basis was in reliance on a Calderbank offer made on 6 September 2017. The offer was, effectively, in the following terms:
- (i)the defendant was to transfer title in the original engine, together with relevant records and log books, to the plaintiff;
- (ii)the defendant was to deliver up the replacement engine, and relevant records and log books, to the plaintiff;
- (iii)the defendant was to pay the plaintiff $US150,000.
- Counsel for the defendant opposed the order submitting:
- (i)there was no indication in the letter of offer whether the offer was made on the basis of a mutual release of liability or in full and final settlement of all claims, or only some claims;
- (ii)in the proceeding the plaintiff did not seek any orders as to ownership of the original engine, yet the purported Calderbank offer required transfer of title to that engine. In such circumstances, the defendant said it could not be said the plaintiff succeeded, at trial, to a greater extent than the offer;
- (iii)the monetary amount sought in the offer was $US150,000 and this was not, in September 2017, so significantly more than the amount then owed by it to the plaintiff pursuant to the reasoning of the judgment that the decision to reject the offer could be said to be unreasonable;
- (iv)the defendant’s position at trial was reasonably arguable and the rejection of its case “followed only an extensive and detailed analysis of the factual and legal issues raised”;
- (v)further it was said the parties were not, in September 2017, in a position to make a full assessment of prospects given the “need for findings of credit by the court to reach a final conclusion”.
- In relation to consideration of a Calderbank offer, and its relationship to rr. 360 and 362 of the UCPR Byrne SJA in Balnaves v Smith  QSC 408 said:
“ To be effective for that purpose, the offer must permit fairly ready comparison between the nature and extent of the advantages (and any disadvantages) arising from the judgment with the situation that would have been obtained had the offer been accepted. As the contest will be about costs only, the assessment of the ramifications of the offer should not involve prolonged examination of documents or costly exploration of other information. The UCPR are to be applied with the objective of avoiding undue expense. Determining a contest about costs should not increase them substantially.
 So an offer to settle should be clear in its terms. And its effect should be capable of prompt, comparatively inexpensive, assessment – by the recipient, and, where a judicial evaluation needs to be made of the relative benefits and burdens of offer and judgment, by the court.”
- In this case at the end of August 2017, being the month immediately prior to the offer of 6 September 2017, the amount then due and owing by way of rental on the replacement engine was:
Invoices 5745 and 5936 $44,840
26 months, at $8,800 plus GST, from 1.7.15 to 31.8.17 $251,680
- Interest on that sum would also have been recoverable. Using a uniform rate of 5.75% per annum as an approximate rate (the relevant rate varied over the relevant time from 5.5% to 6.0%) an approximate interest sum of $US18,634 is arrived at ($300,080 at 5.75% per annum for 2.16 years multiplied by 0.5, since the capital sum increased progressively at a relatively uniform rate over this period).
- The amount then owed of about $318,714US is $168,714 greater than the monetary component of the offer. Using the exchange rate of approximately $USD1.00 equals $AUD1.25, as at September 2017, this amounts to a then debt of approximately $AUD210, 000 more than the offer.
- It is certainly possible this is greater than the value of the original engine, which was then of course in parts in the USA. But there is no evidence before me as to the value of this, or any, engine and so it is not possible to form a conclusion about such matters.
- The only evidence that I recall of relevance to the possible value of the motor is that the insurer paid to the defendant a sum of a little under $100,000 pursuant to its obligation to repair the engine following the hot start. In addition, a quote for repair of 11 August 2014 (see p 244 of the trial bundle) in the sum of $USD146, 785.01 (or $AUD183, 481) was given by EuroTec. This suggests the matter was a valuable item, as might be expected.
- Accordingly in my view I am not able on the material before me to make a proper assessment of the reasonableness or otherwise of the defendant’s conduct in not accepting the offer which involved payment of $US150, 000, but also transfer of title of the original engine.
- Moreover acceptance of the offer would not have been able to be relied on by the defendant if EuroTec had taken action against it for costs associated with the work it had done in transporting and stripping down the original engine. Whether it might seek such a sum was then unknown.
- In the whole of the circumstances in my view it is not appropriate to make an order for indemnity costs.
- I will therefore order that the defendant pay the plaintiff’s costs of and incidental to the action to be assessed on the standard basis.
- Published Case Name:
Pacific Crown Helicopters Pty Ltd v Helistar Aviation Pty Ltd (No 2)
- Shortened Case Name:
Pacific Crown Helicopters Pty Ltd v Helistar Aviation Pty Ltd (No 2)
 QDC 115
10 Jun 2020