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Mallonland Pty Ltd v Advanta Seeds Pty Ltd[2021] QSC 132

Mallonland Pty Ltd v Advanta Seeds Pty Ltd[2021] QSC 132

SUPREME COURT OF QUEENSLAND

CITATION:

Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 132

PARTIES:

MALLONLAND PTY LTD ACN 051 136 291 (AS TRUSTEE FOR THE ANDREW JENNER FAMILY TRUST)

(First Plaintiff)

AND

ME & JL NITSCHKE PTY LTD ACN 074 520 228 (AS TRUSTEE FOR THE NITSCHKE FAMILY TRUST)

(Second Plaintiff)

v

ADVANTA SEEDS PTY LTD ACN 010 933 061

(Defendant)

FILE NO/S:

BS 4103 of 2017

DIVISION:

Trial Division

PROCEEDING:

Application for Costs

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

7 June 2021

DELIVERED AT:

Brisbane

HEARING DATE:

Defendant’s written submissions 20 April 2021; plaintiffs’ written submissions 4 May 2021; defendant’s submissions in reply 25 May 2021.

JUDGE:

Jackson J

ORDER:

The plaintiffs pay the defendant’s costs of the proceeding.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – EVENT: WHAT CONSTITUTES – where the principal judgment dismissed the plaintiffs’ claim – where the defendant submits that the plaintiffs should be ordered to pay the defendant’s costs of the proceeding because costs should follow the event – where the plaintiffs submit that the appropriate order is that they pay 50 per cent of the defendant’s costs because the defendant did not succeed on all the issues, being breach of duty of care, causation of loss and the limitations defence – where the plaintiffs submit that these issues took up a considerable part of the trial and the preparation of evidence – whether the word “event” in r 681(1) of the Uniform Civil Procedure Rules 1999 (Qld) may be read distributively so as to include the separate issues in a proceeding – whether, as a matter of discretion, there is a sufficient basis to depart from the usual order that costs follow the event being the dismissal of the plaintiffs’ claim

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENT – INFORMAL OFFERS AND CALDERBANK LETTERS – UNREASONABLE REFUSAL OF OFFER – where the defendant sent a letter to  the plaintiffs offering to settle the proceeding on 26 February 2020 – where the offer was expressly made in accordance with the principles enunciated in Calderbank v Calderbank [1976] Fam 93 – where the offer was open for acceptance until 6 March 2020 – where a condition of the offer was that within 15 business days of acceptance the plaintiffs would procure from their senior counsel or an alternative senior counsel a written recommendation that endorsed the acceptance for court sanction purposes – where the plaintiffs’ senior counsel was not prepared to make this recommendation – where the plaintiffs failed to accept the offer and made a counter-offer after 6 March 2020 – whether the plaintiffs’ failure to accept the Calderbank offer was unreasonable – whether the costs after 6 March 2020 should be assessed on the indemnity basis

Civil Proceedings Act 2011 (Qld), s 15

Uniform Civil Procedure Rules 1999 (Qld), r 353, r 354(1)(b), r 355, r 361(2), r 681(1), r 684(1), r 687, r 702(1), r 703(1)

Aion Corporation Pty Ltd v Yolla Holdings Pty Ltd [2013] QSC 216, cited

Calderbank v Calderbank [1976] Fam 93, cited

Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26, cited

Thiess v TCN Channel Nine Pty Ltd (No 5) [1994] 1 Qd R 156, cited

COUNSEL:

S Cooper QC and B Hall for the plaintiffs

P Dunning QC, E Goodwin and M Barnes for the defendant

SOLICITORS:

Creevey Russell Lawyers for the plaintiffs

Clifford Gouldson Lawyers for the defendant

  1. [1]
    Following the principal judgment on the claim,[1] the parties made written submissions and there was an oral hearing as to costs.
  2. [2]
    The defendant applies for an order that the plaintiffs pay the defendant’s costs of the proceeding to be assessed on the standard basis until 6 March 2020, and thereafter to be assessed on the indemnity basis.
  3. [3]
    The defendant submits that an order that the plaintiffs should pay the defendant’s costs is appropriate because costs should follow the event, unless the court orders otherwise.[2]  The event for the purposes of that submission is the dismissal of the claim.  As for the basis of assessment, unless the rules or an order provides otherwise, a costs assessor must assess costs on the standard basis[3] but the court may order the costs to be assessed on the indemnity basis.[4]  The defendant submits that the costs after 6 March 2020 should be ordered to be assessed on the indemnity basis because the plaintiffs unreasonably failed to accept a Calderbank offer[5] that was more favourable to the plaintiffs than the judgment they obtained.
  4. [4]
    The plaintiffs submit that they should be ordered to pay 50 per cent of the defendant’s costs, on the ground that the court should order the payment of 50 per cent as a specified percentage of the defendant’s assessed costs.[6]
  5. [5]
    The plaintiffs submit that the specified percentage of 50 per cent is appropriate because the defendant did not succeed on all issues, and in the circumstances of the case it is appropriate to treat the relevant events as being the issues on which the defendant succeeded, so that having regard to the issues on which the defendant did not succeed the specified percentage of 50 per cent is the appropriate order. 
  6. [6]
    As to the basis of assessment, the plaintiffs submit that no order should be made for costs to be assessed on the indemnity basis after 6 March 2020 because it was not unreasonable for the plaintiffs to fail to accept the Calderbank offer relied upon by the defendant.
  7. [7]
    The powers of the court to make an order for costs[7] are expressly provided to be “in the discretion of the court but follow the event unless the court orders otherwise”.[8]  The express powers also include that “the court may make an order for costs in relation to a particular question in, or a particular part of, a proceeding”.[9]
  8. [8]
    These provisions reflect the width of the powers to make an order for costs where each party can claim some success because the word “event” in r 681(1) may be read distributively, so that it includes both the judgment or order made upon the proceeding, or the separate questions (or issues) in a proceeding or particular parts of a proceeding.[10]  It is unnecessary to discuss the scope of the powers further in the present case.

Costs of the proceeding or a specified percentage thereof

  1. [9]
    The defendant submits that the usual approach to a judgment in a common law action for damages, such as the present case, is that the relevant event is success or failure on the claim, resulting in judgment for the plaintiff or the defendant.  The defendant submits that in the present case, the issues decided included whether the defendant owed a duty of care, whether the defendant breached a duty of care, whether the defendant engaged in misleading or deceptive conduct in failing to alert the plaintiffs and group members to the possibility of MR43 being contaminated or the need to prevent any shattercane or off-type plants from maturing and dropping seed, whether any loss was caused by negligence or misleading and deceptive conduct, whether the plaintiffs’ claim was barred by a relevant limitation period and the assessment of loss of the plaintiffs, sample group members and other group members.
  2. [10]
    The plaintiffs submit that they were successful on the questions of breach of the duty of care, causation of loss and the limitations defence. 
  3. [11]
    More accurately, in my view, the plaintiffs succeeded on two of the allegations of breach of duty of care[11] but failed on the other allegations of breach of that kind.[12] Further, the plaintiffs succeeded on the issue of causation of loss for those two allegations[13] but did not succeed otherwise on questions of causation.
  4. [12]
    The plaintiffs submit that the issues on which they succeeded took up a considerable part of the trial and the preparation of the evidence relied on at trial, including expert evidence. 
  5. [13]
    They submit further that the general position under r 681 is that the costs of those issues should follow the event.  That is, the defendant would be liable to pay the plaintiffs’ costs of those issues. 
  6. [14]
    In my view, those submissions should not be accepted. 
  7. [15]
    First, the limitations defence was not a matter that took up a considerable part of the trial or the preparation of the evidence relied upon at trial including expert evidence.  There was no evidence directed to the limitations issue, of which I am aware.  There was no factual contest as to when the plaintiffs or sample group members planted the contaminated MR43 or when they harvested the 2010/2011 summer season crop.  No substantial evidence was directed to when the off-type plants from the contaminated MR43 germinated, flowered or dropped further off-type plant seed.  Even the question of when expenses were first incurred in attempting to rogue or otherwise eradicate seed that had dropped from the off-type plants in the 2010/2011 summer season was not investigated with any particularity.  Otherwise the question of whether the limitations defence operated in respect of the alleged negligence or misleading and deceptive conduct causing loss or damage was purely a question of law. 
  8. [16]
    Second, the question of the evidence of breach of the duty of care (if a duty of care was owed) turned on the evidence as to rogueing the 2009/2010 summer season crop at Cavaso Farming for the production of MR43.  The witnesses who gave evidence directed to that subject matter were Mr Toscan and Mr Croker.   It was not in dispute at the trial or for some time beforehand, so far as I am aware, that the contaminated MR43 produced and sold by the defendant for the 2010/2011 summer season was produced from seed grown by Cavaso Farming.  The plaintiffs ran alternative cases as to what the source of the contamination was.  On one of those allegations, it failed.  On another, it succeeded.[14]  I do not consider that any significant or disproportionate expense in terms of the costs of the proceeding or a particular considerable part of the trial, including expert evidence, was devoted to the issue on which the plaintiffs succeeded. 
  9. [17]
    The plaintiffs submit that, nevertheless, the defendant should not have put that question of breach of the standard of care in issue because it appeared from Mr Croker’s draft staff update document that he was aware that the cause of the contamination was failure to properly rogue the Cavaso Farming seed production crop in early 2010.  Whilst I made findings critical of Mr Croker in terms of his explanations for deleting that part of his draft from the final document and for his inability to form a view as to any particular cause of the contamination,[15] I do not consider that is sufficient to treat the plaintiffs’ success on the issue of breach of duty of care in that respect as warranting a special order as to costs. 
  10. [18]
    Third, one of the questions of causation on which the plaintiffs succeeded is that had the Cavaso Farming production crop for the contaminated MR43 been properly rogued, the seed would not have been contaminated and the plaintiffs and other group members would not have suffered loss from planting the contaminated MR43 seed.[16]  No particular evidence in the case was devoted to that question that followed as a matter of inference from the success of the usual production processes including rogueing that were deployed by the defendant in the production of grain sorghum seed.  The other question of causation on which the plaintiffs succeeded was whether the loss would have been avoided by conducting a grow out of the seed grown by Cavaso Farming in the 2009/2010 summer season for the MR43 to be sold for the 2010/2011 summer season.[17]  Whilst there was an issue and disputed evidence on the last question, it was largely confined to Mr Croker’s evidence and did not cause significant wasted costs, in my view.
  11. [19]
    In the circumstances, as a matter of discretion, I do not consider there is a sufficient basis for a departure from the usual order that the costs of the proceeding should follow the event being the dismissal of the plaintiffs’ claim.

Indemnity costs after 6 March 2020

  1. [20]
    In the absence of a special order, the costs payable under an order of the court are the assessed costs[18] and unless the rules or an order of the court provides otherwise, a costs assessor must assess costs on the standard basis.[19]  Accordingly, the basis of assessment for the costs applied for by the defendant up to 6 March 2020 is that they be assessed on the standard basis.  After 6 March 2020, the defendant applies for an order that they be assessed on the indemnity basis because of the plaintiffs’ failure to accept a Calderbank offer.
  2. [21]
    On a date between 3 September 2019 and 22 November 2019, the proceeding was listed for trial for four weeks commencing 16 March 2020. 
  3. [22]
    On 26 February 2020, the defendant sent a letter to the plaintiffs offering to settle the proceeding, without prejudice save as to costs, commonly termed a Calderbank offer. The letter is lengthy, running to 24 pages, but need not be set out in any detail.  Two relevant features of the offer should be mentioned.
  4. [23]
    First, the defendant offered to pay an amount of $10 million plus costs and outlays on a standard basis (to be assessed if not agreed) on a number of terms and conditions.  The offer was open for acceptance until 5.00PM on Friday, 6 March 2020 and was expressly made in accordance with the principles enunciated in Calderbank v Calderbank.[20]
  5. [24]
    Second, one of the conditions of the offer was that within 15 business days of confirmation of the written acceptance of the offer, the plaintiffs would procure from their senior counsel who appeared at the trial of the proceeding or such other senior counsel as was prepared to so opine, a written recommendation that endorsed the acceptance of the offer for court sanction purposes. 
  6. [25]
    The offer was not accepted.  On 9 March 2020, the plaintiffs made a counter-offer. 
  7. [26]
    In accordance with their written submissions and submissions made orally, both the plaintiffs and the defendant adverted to the difficulties that are confronted in assessing whether it is unreasonable to fail to accept a Calderbank offer in a class action under the rules of court of this jurisdiction or similar jurisdictions.  However, in my view, it is unnecessary in this case to explore those questions and it is undesirable to do so unless it is necessary.  In my view, the resolution of the question of whether the plaintiffs’ failure to accept the Calderbank offer was unreasonable is able to be resolved more simply for two reasons.
  8. [27]
    First, the offer was only open for nine days - a relatively short time – and was made in the context of the looming date for the start of the trial. 
  9. [28]
    The rules of court make express provision for a party to a proceeding to serve on another party an offer to settle one or more of the claims in the proceeding on the conditions specified in the offer.[21]  They expressly provide that in a non-jury trial an offer may be served at any time before final relief is granted.[22]  Importantly, in an offer made under the rules, a party must specify a period ending not less than 14 days after the day of service of the offer, during which the offer is open for acceptance and the offer may not be withdrawn during that period without the court’s leave.[23]
  10. [29]
    The clear purpose of that provision is to require a party who wishes to obtain the benefit of an offer to settle made in accordance with the rules to make the offer in a timely way or, if the offer is made late in the piece, to accept the consequence that it still must remain open for 14 days.  There is a residual power by which the court may give leave for a party to withdraw the offer in appropriate circumstances.[24] 
  11. [30]
    If the offer is one made by a defendant and is not accepted by plaintiffs who do not obtain an order that is more favourable to them than the offer, provided the court is satisfied the defendant was at all material times willing and able to carry out what was proposed in the offer,[25] the rules provide that the court must order the defendant to pay the plaintiffs’ costs calculated on the standard basis up to and including the day of service of the offer and order the plaintiffs to pay the defendant’s costs calculated on the standard basis after the day of service of the offer, subject to an exception not presently relevant.[26]
  12. [31]
    In the present case, the defendant’s Calderbank offer sought to obtain the same benefits as would have been obtained by an offer to settle under the rules, but without making an offer that was open for 14 days as the minimum period. 
  13. [32]
    Second, one of the conditions of the offer was that the plaintiffs’ senior counsel appearing at the trial or some other senior counsel must provide a written recommendation that endorsed the acceptance of the offer for court sanction purposes.
  14. [33]
    In considering whether to accept the defendant’s offer, the plaintiffs’ solicitors enquired of their senior counsel for the trial whether he was prepared to opine or make a written recommendation that endorsed the acceptance of the offer for court sanction purposes.  He was not of that opinion.  The plaintiffs’ solicitors were also not of that opinion.  They did not seek the opinion of any other senior counsel whether they would provide a written recommendation that endorsed acceptance of the offer for court sanction purposes.  As previously mentioned, instead the plaintiffs made a counter-offer after 6 March 2020.
  15. [34]
    The breadth and complexity of the issues that were litigated in the case would have made it difficult, in any event, for the plaintiffs to have ascertained whether they would be able to procure an opinion from an alternative senior counsel before the offer period expired or, for that matter, within the additional 15 business days after acceptance allowed by the condition to obtain the opinion.
  16. [35]
    Having regard to the fact that the offer was not made as an offer to settle under the rules of court, in the first place, and to the fact that the plaintiffs’ senior counsel would not opine or make a written recommendation that endorsed the acceptance of the offer for court sanction purposes, in my view it cannot be said that it was unreasonable for the plaintiffs to fail to accept the Calderbank offer.   

Footnotes

[1]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74.

[2]Uniform Civil Procedure Rules 1999 (Qld), r 681(1).

[3]Uniform Civil Procedure Rules 1999 (Qld), r 702(1).

[4]Uniform Civil Procedure Rules 1999 (Qld), r 703(1).

[5]Calderbank v Calderbank [1976] Fam 93.

[6]Uniform Civil Procedure Rules 1999 (Qld), r 687(2)(a).

[7]Civil Proceedings Act 2011 (Qld), s 15; Uniform Civil Procedure Rules 1999 (Qld), ch 17A.

[8]Uniform Civil Procedure Rules 1999 (Qld), r 681(1).

[9]Uniform Civil Procedure Rules 1999 (Qld), r 684(1).

[10]Aion Corporation Pty Ltd v Yolla Holdings Pty Ltd & Anor [2013] QSC 216, [5]; Thiess v TCN Channel Nine Pty Ltd (No 5) [1994] 1 Qd R 156, 207-208; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26, [83]-[84].

[11]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [338]-[354] and [355]-[368].

[12]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [369]-[373] and [374]-[420].

[13]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [476]-[479] and [480].

[14]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [338]-[354].

[15]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [223]-[224].

[16]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [480].

[17]Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd [2021] QSC 74, [476]-[479].

[18]Uniform Civil Procedure Rules 1999 (Qld), r 687(1).

[19]Uniform Civil Procedure Rules 1999 (Qld), r 702(1).

[20]  [1976] Fam 93.

[21]Uniform Civil Procedure Rules 1999 (Qld), r 353.

[22]Uniform Civil Procedure Rules 1999 (Qld), r 354(1)(b).

[23]Uniform Civil Procedure Rules 1999 (Qld), r 355(1).

[24]Uniform Civil Procedure Rules 1999 (Qld), r 355(3).

[25]Uniform Civil Procedure Rules 1999 (Qld), r 361(1).

[26]Uniform Civil Procedure Rules 1999 (Qld), r 361(2).

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Editorial Notes

  • Published Case Name:

    Mallonland Pty Ltd & Anor v Advanta Seeds Pty Ltd

  • Shortened Case Name:

    Mallonland Pty Ltd v Advanta Seeds Pty Ltd

  • MNC:

    [2021] QSC 132

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    07 Jun 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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