Fangyuan v Stockwell (No 2)[2025] QDC 5

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   On 27 November 2024, I delivered extensive reasons in a judgment (‘the Reasons’) for the applicant (‘Ms Fan’) in this proceeding. I assessed damages at $61,006, in circumstances where the parties agreed that this amount reflected the costs of demolishing the failed retaining wall, obtaining geotechnical and survey reports, replacing the failed retaining wall with an engineered concrete sleeper one and installing a timber paling fence on top of it. I apportioned 50 percent responsibility to the respondents (‘the Stockwells’). I found that the other material contributing factor to the failure of the retaining wall was the design and construction of it by the previous owner of Ms Fan’s property, which work was undertaken more than a decade prior to Ms Fan purchasing the property. I also dismissed the Stockwells’ cross-application against Ms Fan comprised of claims in nuisance, negligence and a breach of s 179 of the Property Law Act 1974 (Qld) (‘the PLA’).  I directed that any submissions in respect of the form of the orders and costs (or alternatively a draft order if the parties were agreed), be filed within seven days.^[1]

1. [2]
   The parties have been unable to agree on the form of the orders or costs and affidavits and further written submissions have been provided.  While no formal application has been made, in Ms Fan’s written submissions she seeks to re-open the hearing to adduce further evidence and to make further submissions as to damages.  This is opposed by the Stockwells.  As to the form of the orders, Ms Fan submits that because of the application to re-open her case, it is premature to make final orders.  As to costs, Ms Fan seeks orders that the Stockwells pay her costs on an indemnity basis.   This is also opposed by the Stockwells.  They seek orders that Ms Fan pay their costs on the standard basis from 22 April 2024, and otherwise there be no order as to costs. 
2. [3]
   I will address each of these issues in turn. 

Re-opening

1. [4]
   By Ms Fan’s written submissions dated 6 December 2024, she applies to re-open her case and to tender further evidence.  This request was made after the publication of my Reasons but before the orders have been entered.  
2. [5]
   The further evidence sought to be adduced is said to fall into the category of fresh evidence which was unavailable, or not reasonably discoverable prior to the application being made.   It includes a report of Colin Lynskey, dated 2 December 2024.   The report relates to an inspection by a structural engineer (from Lynskey Structural Consultants Pty Ltd) of the failed retaining wall on the same date.  The purpose of the inspection was to assess the extent of the damage to it and to “comment on make safe procedures” required to it, pending its replacement. There is also a quote from Gowrie Management Group Pty Ltd to carry out the recommended works as detailed in Mr Lynskey’s report.   Ms Fan deposes in her affidavit that the inspection was required after the retaining wall collapsed against her property on 1 December 2024. This was said to have occurred after two rain events, with the first one being between 11 and 23 November 2024 and the other being on 29 and 30 November 2024.
3. [6]
   In the quote, the estimate of the costs of emergency temporary works to the retaining wall is $26,400 (‘the temporary works’).  This includes an amount of $4,500, representing the costs of demolishing the failed retaining wall.  However, these costs were included in the $61,006 damages referred to in the Reasons.  Mr Lynskey’s quote also includes an amount of $4,050 for management fees.  It is not clear what this sum is intended to incorporate.  
4. [7]
   The reason why these temporary works were apparently required is because Mr Shaper (who provided the quote of $61,006 to demolish the failed retaining wall and rebuild a new concrete one) was not available to undertake this work until late January 2025 (at the earliest).  There is no evidence that attempts were made to engage another builder to carry out the work in accordance with Mr Schaper’s quote, so that the temporary works were not required.
5. [8]
   An application to re-open a case can be made pursuant to rule 367(1) of the Uniform Civil Procedure Rules 1999 (Qld) (the UCPR’).  It can be granted prior to an order being perfected.  The power is discretionary and there is no precise formula to be applied.  Different considerations may be relevant depending on whether the evidence sought to be adduced is new or fresh and the stage of the proceeding at the time the application is made.^[2]  When considering fresh evidence, the principles for allowing such evidence on appeal may provide a useful guide as to the manner in which the discretion should be exercised.^[3] Where reasons for judgment have been delivered, the power ought only to be exercised if there is some matter calling for a review.^[4]  Regard is to be had to the public interest in maintaining the finality of litigation.^[5]  Exceptional circumstances generally need to be shown, even where the further evidence sought to be adduced is confined to the quantum of damages.^[6]  It is the usual case that damages ought to be assessed once and for all at the time of the trial.^[7]   
6. [9]
   The Stockwells contend that there is no jurisdiction to re-open the proceedings and the Court is functus officio.  I do not accept this submission.   While the Reasons have been delivered, further submissions have been required with respect to the formulation of the orders and costs.   In these circumstances the orders are not final in nature and have not been perfected.
7. [10]
   Having said this, even if the evidence proposed to be adduced is fresh,^[8] in my view the justice of the case does not favour the grant of leave to re-open for the following reasons:

1. The late stage which the proceedings have reached.
2. There is no suggestion that there has been for example, some mistake in the Reasons, or that the findings expressed, or conclusions reached, were not open on the respective arguments at the trial.
3. The proposed evidence is directed to the question of damages, where the parties have already had a full opportunity to ventilate issues relevant to this.
4. If leave was to be granted, the course of the further litigation is uncertain in scope.  The proposed evidence to be called by Ms Fan is not necessarily uncomplicated.   The Stockwells may well be desirous of engaging other experts to carry out further inspections and provide further reports and the content of that evidence is unknown.  Further, it cannot be said with any certainty that it would be confined to expert evidence, in that Ms Fan and the Stockwells may need to be recalled.  As explained in paragraph 2 of the Reasons, in my view the trial has already been unnecessarily protracted with likely highly disproportionate costs. Granting leave will undoubtedly further delay the finality of these proceedings and will be productive of additional costs.      

Form of orders

1. [11]
   The primary relief sought by Ms Fan was an injunction requiring the Stockwells to demolish and remove the failed retaining wall and to then replace it.  However, I considered it was appropriate to make an award of damages in lieu of an injunction.   I assessed damages at $61,006 and apportioned 50% responsibility to the Stockwells. 
2. [12]
   I do not accept the submission by counsel for Ms Fan that it is premature to make final orders.   Appendix A of the Stockwells’ submissions provided on 6 December 2024 sets out the orders sought by them.   Given that I have not granted the injunction, it is not necessary to make orders in accordance with paragraphs 2 and 3 of Appendix A.  The appropriate order is that the respondents pay the applicant damages in the sum of $30,503.   Paragraph 4 of Appendix A relates to costs and is addressed below. 

Costs

1. [13]
   The starting point is rule 681 of 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.  This is because fairness dictates that the unsuccessful party typically bears the responsibility for the costs of the litigation.^[9] 
2. [14]
   The ordinary rule is that costs should be on the standard basis unless there is some special circumstance of the case warranting departure from this. It is accepted that litigation is very expensive and that a limited indemnity is provided to a successful party.  However, in Di Carlo and Dubois & Ors, White J said that this divergence between those costs which are actually incurred and those costs which can be recovered, “does not mean that it is open to a judge to award costs having regard to his or her own view as to the adequacy of party and party costs so fixed.”^[10]
3. [15]
   To make an award of indemnity costs, it is not necessary for the party seeking such an order to establish moral or ethical delinquency on the part of the opposing party.^[11]  It is sufficient to establish unreasonable or irresponsible conduct by the opposing party, which has exposed the successful party to costs, which in all fairness, should be ordered on an indemnity basis.^[12] 
4. [16]
   Further, the offer to settle provisions in Chapter 9, Part 5 of the UCPR confers an unfettered jurisdiction on the courts to make an order for costs other than on a standard basis.  Rule 360 of the UCPR sets out the costs consequences of an offer to settle made by an applicant and not accepted by a respondent.   For this rule to be engaged, the order obtained by the applicant must have been “no less favourable” than the offer made. Subsection (2) provides that the court must order that the respondent pay the applicant’s costs on the standard basis up to and including the day of the offer was served, and on the indemnity basis after that day. 
5. [17]
   Rule 361 regulates offers to settle made by a respondent.  Relevantly, subsection (3) provides that if a respondent makes an offer to settle which is not accepted by the applicant which then obtains a judgment that is less favourable than the offer, and the offer was made after the first day of trial, the applicant is entitled to costs on the standard basis up to the opening of the court on the day following the offer, and the respondent will be entitled to costs on the indemnity basis from that time.
6. [18]
   The costs results prescribed by rules 360 and 361 should be applied according to their terms.  Concepts such as reasonableness should not be imported into the application of these rules.^[13]  The usual effect of the rules should only be departed from for proper reasons which, in general, only arise in exceptional circumstances.^[14]
7. [19]
   Offers to settle under rules 360 and 361 should be in sufficiently clear to be capable of acceptance.  The assessment by the recipient of the benefits and burdens of the offer should not involve a prolonged examination of documents or costly analysis and consideration of other information.  It should usually be for a specified amount plus costs, rather than an amount inclusive of costs, because it can be difficult to assess whether the order is no less favourable than the “all up” offer.  Where judicial evaluation needs to be made of the effect of an offer, it must readily enable a comparison between the situation that would have been obtained had the offer been accepted and that arising from the judgment.^[15]  
8. [20]
   In addition, there are circumstances where an offer to settle that does not comply with the requirements of Chapter 9, Part 5 of the UCPR can be considered as a Calderbank offer in the exercise of the court’s general discretion as to costs.  The relevant principles which govern the exercise of this discretion where such offers are concerned, are well established.^[16] It is sufficient to demonstrate ‘unreasonable conduct’ of some sort.^[17]  Having said this, mere unreasonableness in not accepting an offer of settlement does not necessarily have the consequence of an indemnity costs order.^[18]
9. [21]
   Turning to the offer to settle made to Ms Fan by the Stockwells’ solicitor on 11 April 2024 (‘the April 2024 offer’), being after day three of the trial where it had been adjourned part-heard to a later date. It was expressed to be pursuant to Chapter 9, Part 5 of the UCPR, or alternatively to be a Calderbank offer.  The terms of the offer were numerous and included that:

1. The Stockwells pay Ms Fan the sum of $45,000 “in full and final settlement of and to be put towards the costs of reinstatement of the retaining wall and the dividing fence”.

2. The $45,000 be paid into a stakeholders account within 14 days of acceptance of the offer and to be released upon completion of the works.

3. Ms Fan would be responsible for demolishing the existing retaining wall and replacing it and the paling fence.

4. The parties would co-operate with respect to filing a notice of discontinuance and would be mutually released upon them completing their respective obligations.  

5. The offer would remain open for 14 days and needed to be accepted in writing.

6. Reliance would be placed on the offer on any question of costs, including indemnity costs.

1. [22]
   In my view there is a lack of clarity in expression with this offer, in that it is not clear whether the $45,000 is exclusive or inclusive of costs.  The Stockwells contend that it is the former and that it represents 73.7% of the assessed damages, being more favourable than the 50% responsibility apportioned to them in the Reasons.   Even if this is correct, the offer does not incorporate any amount for costs and it therefore cannot be said that it was more advantageous to Ms Fan than the judgment.  On the other hand, if the $45,000 is inclusive of costs, it remains the position that it cannot be said that the judgment was less favourable than this “all up” offer, particularly given the late stage of the proceedings when the offer was made.  
2. [23]
   Of note, even if the terms of the April 2024 offer were such as to engage the costs regime under the UCPR, there would be a further problem with the costs order sought by the Stockwells. This is that rule 361(3) prima facie requires the Stockwells to pay Ms Fan’s costs up to the date of the April 2024.  Instead, the Stockwells seek an order that there be no order as to costs up until this time, even though their submissions do not raise any exceptional circumstance or other proper reason that would justify such a departure from the usual effect of the rule.  
3. [24]
   As to the Stockwells reliance on the April 2024 offer as a Calderbank offer, for the reasons set out in paragraph 22 above, it could not be said that there was such an unreasonable failure by Ms Fan to accept it as to justify the costs orders sought by the Stockwells.
4. [25]
   Further, the Stockwells’ submissions do not raise any special circumstance justifying a departure from the usual rule that costs follow the event.^[19]   In arriving at this conclusion, I have not accepted several matters raised in the submissions.  One such example is the suggestion that Ms Fan is solely responsible for the unduly protracted nature of this litigation.  Another example is the assertion that the only reason why the Stockwells’ claims in nuisance and s 179 of the PLA failed was because those claims were based on “an omission on the part of Ms Fan”.  This is contrary to my findings in the Reasons.^[20]  A further example is the criticisms levelled against Ms Fan in paragraph 16 of the written submissions.  Additionally, the submission that the Stockwells were prejudiced by the granting of Ms Fan’s oral application made on 15 November 2024 to amend the originating application to include an alternative claim for damages, is contrary to my findings as addressed in paragraph 12 of the Reasons.  Finally, I do not accept the Stockwells’ characterisation of Ms Fan’s success at trial as being “limited”.  She was successful in her claim for damages (albeit apportioned) and was successful in defending each of the Stockwells’ claims in nuisance, negligence and a breach of s 179 of the PLA, and also their claim for $50,000 for loss of amenities.  
5. [26]
   Turning to the offer made by the solicitors for Ms Fan on 10 May 2024 (‘the May 2024 offer’), it relevantly included that:

1. There were two options, either of which could be accepted.

2. Option A was that the Stockwells would:

1. pay $5,000 towards the costs associated with demolishing the failed retaining wall and constructing the concrete retaining wall with the paling fence on top of it;

2. contribute 90% of any unexpected fees incurred beyond the amount quoted; and

3. pay Ms Fan’s costs to date on a standard basis. 

3. Option B was that the Stockwells would pay:

1. 10 percent of the total cost of the Works; and

2. Ms Fan’s costs to date on a standard basis. 

4. The proceeding would be stayed until the new retaining wall was constructed and all approvals and forms had been received.

5. The proceedings would be discontinued once the new retaining wall had been constructed and all approvals and forms have been received.
6. The offer would remain open for 14 days and needed to be accepted in writing.
7. Reliance would be placed on the offer on any question of costs, including indemnity costs.

1. [27]
   It cannot be said that the judgment is less favourable than either Option A or B. The two options are expressed in such a way that it is not possible to simply compare a figure in them against the judgment of $30,503. The comparisons are more complex than that. The adjusted rights of the parties in both options were expressed in percentage terms of an unspecified amount. Further, much depended on future events, namely, whether development approval would be granted for the proposed replacement retaining wall by NJA Engineering Design and if not, the nature, extent and cost of the modifications that may have been required.  This uncertainty was reflected in the expressions “unexpected fees incurred beyond the amount quoted” in Option A, and the “total cost of the Works” in Option B.  Further, both options required the Stockwells to be responsible for removing “any vegetation and structures affecting or impacting the Works”, in circumstances where there was an ongoing dispute between the parties as to whether the trees planted by the Stockwells and some of the structures built by them had affected or otherwise impacted the retaining wall.  These matters remained in issue and were the subject of findings at the trial.^[21]  Therefore, there was no clarity in the description of the benefits the Stockwells would derive from acceptance of either of the offers, making it difficult to evaluate their worth.  This has the consequence that the May 2024 offer by Ms Fan was ineffective in engaging the costs regime provided for in rule 360 of the UCPR. 
2. [28]
   The second basis for Ms Fan’s application for costs to be assessed on the indemnity basis is that she made five Calderbank offers to settle the proceeding between 18 May 2022 and 7 September 2023, each of which were unreasonably rejected by the Stockwells.  I am not persuaded by this submission.  The rejection of these earlier offers needs to be considered in the context of an ongoing dispute, which was evolving in several respects.  Further, as explained in paragraph 13 of the Reasons, the resolution of some of the issues depended on credibility findings to be made during the trial.   In addition, after these offers, further documents were disclosed which were tendered as exhibits and were also of significance in resolving some of these issues.  These documents were:

1. Mr Wong’s further report dated 8 September 2023;
2. Mr Van de Hoef’s responses to further questions from the Stockwells’ solicitor dated 12 February 2024; and  
3. Mr Schaper’s quote on which the damages assessment was made dated 29 February 2024.   

1. [29]
   Whilst one can understand Ms Fan’s frustration with her multiple attempts to resolve this matter, there is no justification for a conclusion that the Stockwells’ conduct in failing to accept these offers ought to be characterised as so improper or unreasonable as to justify the taking of the unusual step of ordering the costs on an indemnity basis.  Their prospects of success were reasonable as at the dates each of these offers were made.  It follows that Ms Fan should have her costs of the proceeding on the standard basis.

Conclusions

1. [30]
   Accordingly, I will order that:

1. Ms Fan’s application for leave to re-open her case is refused.
2. The Stockwells pay Ms Fan damages in the sum of $30,503.
3. The Stockwells pay Ms Fan’s costs of the proceeding on a standard basis.