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[2023] QCA 140
This case considered costs pursuant to UCPR rr 360 and 361, for an appellant who had made written offers to settle the proceeding at first instance pursuant to Ch 9 Pt 5 of the UCPR. The Court made several noteworthy observations about the application of those rules.
Morrison and Dalton JJA and Bradley J
14 July 2023
Background
In December 2022, the Court of Appeal allowed an appeal by the appellant from orders made by the primary judge. [1]. The appellant was awarded judgment in the amount of $3,424,888.90 plus interest of $2,084,628.23. [1] At first instance the appellant had been the plaintiff, and respondent to a counterclaim. The issue remaining to be dealt with was the appropriate orders for costs of the proceeding in the trial division. [2].
The costs dispute between the parties centered on offers made by the appellant pursuant to Ch 9 Pt 5 of the UCPR. [7]. For the purposes of UCPR r 360 (which concerns costs where an offer is made by a plaintiff), the Court found that the appellant had obtained an order “no less favourable than the offer” it had made. And for the purposes of UCPR r 361 (which concerns costs where an offer is made by a defendant), the Court found that the respondent had not obtained an order that was “more favourable” than the offer made by the appellant. [16]. The respondent nonetheless sought to resist the cost consequences that would appear to flow from those rules.
Noteworthy observations of the Court
The Court made several noteworthy observations about costs under the UCPR.
1.The Court noted that for the purposes of r 360 and r 361, r 360(2) and r 361(4) provided that it was the first offer which is to be considered. [17]. Further, where those rules apply, the court “must” make the orders there set out unless it is shown that “another order for costs is appropriate in the circumstances”. [18]. Although r 681 UCPR recognises that the court has a wide discretion in awarding costs, their Honours considered that the mandatory language in rr 360 and 361 meant that where they are engaged “they apply according to their terms”. [18].
2.Their Honours also noted that to comply with the UCPR “an offer must be clear in its terms”. [19]. However, their Honours rejected the contention of the respondents that because the offer to settle included an offer to rectify certain defects, the offer in this case was unclear. [19]. Further, their Honours rejected a contention that a failure to specify how much of an overall offer (of $3.1 million) was for payment of the claim, and how much was interest on the claim, meant that the offer was unclear. [20].
3.The Court observed that, in cases with multiple issues, “the court will not generally attempt to differentiate between issues on which a party was successful, and those on which it failed, unless a particular issue or group of issues is clearly separable and occupied a significant part of a trial” (citing BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64). [27]. Thus, despite the respondent suggesting that it had successes on numerous issues, the Court did not enter into this analysis, and instead focused on the “ultimate sum due” on the judgment. [27].
4.The Court rejected the respondent’s submission that it was relevant that “it was reasonable for it [the respondent] not to accept the offers made by the appellant”. [29]. Their Honours said that the costs results prescribed by rr 360 and 361 “should be applied according to their terms” and “concepts such as reasonableness … should not be imported into this application” (citing Heeley v Horton [2016] QCA 253). [29].
In the result, applying rr 360 and 361 UCPR, the Court ordered that the respondent pay the appellant’s costs of the claim in the trial division on an indemnity basis, and the costs of the counterclaim in the trial division on a standard basis from the date of its costs offer. [33].
W Isdale of Counsel