Alison Jane Whittle and ROZILIE Patricia Munday v Filaria Pty Limited ACN 056 933 843 and Independent Group Pty Limited ACN 008 659 792 and DAVID SHEARER and Millie Phillips; Henry Posch v Filaria Pty Limited Acn

[2005] ACTCA 27

ALISON JANE WHITTLE and ROZILIE PATRICIA MUNDAY v FILARIA PTY LIMITED ACN 056 933 843 and INDEPENDENT GROUP PTY LIMITED ACN 008 659 792 and DAVID SHEARER and MILLIE PHILLIPS

HENRY POSCH v FILARIA PTY LIMITED ACN 056 933 843 and INDEPENDENT GROUP PTY LIMITED ACN 008 659 792 and DAVID SHEARER and MILLIE PHILLIPS

IAN DONALDSON JOHNSTON v FILARIA PTY LIMITED ACN 056 933 843 and INDEPENDENT GROUP PTY LIMITED ACN 008 659 792 and GRAHAME O’BRIEN and MILLIE PHILLIPS

[2005] ACTCA 27 (5 August 2005)

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA  1-2005

No. SC  853 of  1999

No. ACTCA  2-2005
No. SC  868 of  1999

No. ACTCA  3-2005
No. SC  980 of  1999

Judges:         Higgins CJ, Gray and Marshall JJ
Court of Appeal of the Australian Capital Territory
Date:            5 August 2005

IN THE SUPREME COURT OF THE       )          No. ACTCA  1-2005
  )          No. SC 853 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:ALISON JANE WHITTLE and ROZILIE PATRICIA MUNDAY

Appellants

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:DAVID SHEARER

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

IN THE SUPREME COURT OF THE       )          No. ACTCA  2-2005
  )          No. SC 868 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: HENRY POSCH

Appellant

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:DAVID SHEARER

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

IN THE SUPREME COURT OF THE       )          No. ACTCA  3-2005
  )          No. SC 980 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:IAN DONALDSON JOHNSTON

Appellant

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:GRAHAME O’BRIEN

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

ORDER

Judges:  Higgins CJ, Gray and Marshall JJ
Date:  5 August 2005
Place:  Canberra

THE COURT ORDERS THAT:

1. The appeal be allowed with costs.

IN THE SUPREME COURT OF THE       )          No. ACTCA  1-2005
  )          No. SC 853 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:ALISON JANE WHITTLE and ROZILIE PATRICIA MUNDAY

Appellants

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:DAVID SHEARER

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

IN THE SUPREME COURT OF THE       )          No. ACTCA  2-2005
  )          No. SC 868 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: HENRY POSCH

Appellant

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:DAVID SHEARER

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

IN THE SUPREME COURT OF THE       )          No. ACTCA  3-2005
  )          No. SC 980 of  1999
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:IAN DONALDSON JOHNSTON

Appellant

AND:FILARIA PTY LIMITED

ACN 056 933 843

First Respondent

AND:INDEPENDENT GROUP PTY LIMITED

ACN 056 933 843

Second Respondent

AND:GRAHAME O’BRIEN

Third Respondent

AND:MILLIE PHILLIPS

Fourth Respondent

Judges:  Higgins CJ, Gray and Marshall JJ
Date:  5 August 2005
Place:  Canberra

REASONS FOR JUDGMENT

THE COURT:

1. This is an appeal from a judgment of a single judge of the Supreme Court of the ACT.  His Honour made an order for indemnity costs on the trial of this action in favour of the defendants (the respondents to this appeal) on and from 5 May 2003.

1. The appellants in this appeal were the plaintiffs in three separate matters concerning their purchase of units in the Canberra International Hotel.  The first defendant, Filaria Pty Ltd, was the seller, the second defendant, Independent Group Pty Ltd, was the selling agent and the named third respondent was the particular employee of the selling agent responsible for the sales.  They comprise the respondents to this appeal. 

1. The matters were heard together in a hearing that commenced on 19 May 2003 and which was heard over some 28 days.  The plaintiffs each claimed essentially that as a consequence of false and misleading representations they entered into contracts to purchase the units and that they suffered loss and damage as a consequence.  Judgment was given on 11 June 2004 dismissing the appellants’ claims.  That judgment was the subject of an appeal to this court in Ian Donaldson Johnston v Filaria Pty Ltd & Ors;  Henry Posch v Filaria Pty Ltd & Ors;  Alison Jane Whittle and Rozilie Patricia Munday v Filaria Pty Ltd & Ors [2005] ACTCA 16 (28 April 2005). That appeal was dismissed.

1. Argument on the question of costs was heard by the trial judge on 7 December 2004 and his judgment was given on 17 December 2004 which ordered that the plaintiffs pay the costs of all defendants with those costs incurred after 15 May 2003 being assessed on an indemnity basis.  The order of indemnity costs was the subject of this appeal to this court. 

1. The primary judge’s essential reasoning for making such an order was his view that the plaintiffs had unreasonably declined to negotiate a settlement and that their claims were, in any event, tenuous.

1. We are unable to agree with his Honour’s conclusion in either respect.  The material before the court contains the correspondence flowing between the parties on the question of a possible settlement.  That correspondence reveals a confused and confusing position.  The parties vacillated over the period leading up to the trial in their proposals to resolve the matter.  Counsel for the second and third respondents, Mr Foster, fairly described the material as a “mess”.

1. On 2 May 2003, the defendants made an offer to the plaintiffs which was rejected without putting a counter offer in response.  However, further offers were made by the second and third defendants on 12 May 2003 and by the first defendant on 16 May 2003.  The making of these offers indicates to us that the defendants did not consider that the position had been reached where the plaintiffs were obstinately refusing to negotiate, although the second and third defendants wished to characterise their offer as being made to settle only the matters before the court.  They required the plaintiffs to discontinue all their actions and such offers were not constituted with the general tenor of the earlier negotiations which related to the other 56 plaintiffs which had commenced actions of a like kind.

1. The second and third defendants’ offer of 12 May 2003 itself showed a reluctance to negotiate much further for a few days, saying that their offer would lapse on 16 May 2003.  That offer was met with a further offer by the plaintiffs on 14 May 2003, which self-evidently revealed that the plaintiffs had not closed the door on a settlement by their terse response on 9 May 2003.  On 15 May 2003, the second and third defendants responded with yet another offer, which they said would remain open until “4.45 pm” the next day and then “lapse forever”.  It was not accepted as the plaintiffs’ solicitor was unable to get instructions in time, given that the trial was due to commence the following Monday, 19 May 2003. 

1. Notwithstanding this development, the first defendant made another offer to the plaintiffs on 16 May 2003 (being the most generous offer put to date).  That offer was put on the assumption that an offer by the second and third defendants of $50,000.00 per unit together with costs to be  assessed in these and the related actions was open.  This, in fact, misstated the position adopted by the second and third defendants who had refused their offer from $50,000.00 per unit to $40,000.00 per unit plus $50,000.00 towards costs.  The plaintiffs’ solicitors had already replied to that offer indicating it could not be accepted in time before Monday. 

1. We do not think that this review of the correspondence supports the trial judge’s conclusion of an unreasonable refusal on the part of the plaintiffs to negotiate a settlement of their claims.  In the flurry of activity just prior to the matter coming on for hearing, it is apparent that there was confusion as to the standing of the other matters and their role in any possible settlement.  Although in the letter of 14 May 2003, the plaintiffs’ request for payment of indemnity costs and payment of the costs of the other actions may well be said to be an unreasonable requirement.  Standing alone, the gravamen of the plaintiffs’ response cannot be so construed and, in any event, it clearly did not preclude further response being made by the defendants.

1. In the above circumstances, we consider that the trial judge’s discretion miscarried when he found that the plaintiffs had declined to negotiate.  In fact, negotiations continued up to shortly before the trial and later but to no avail.

1. His Honour also appears to have been influenced by the “tenuous” prospects of the claims succeeding.  That observation was made with hindsight and would not have been an obvious conclusion to draw before relevant findings of fact were made.

1. For the above reasons, we consider that the appeal should be allowed with costs.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Date:        5 August 2005

Counsel for the appellant:  Mr G McArthur SC with Mr I Gillespie-Jones
Solicitor for the appellant:  Gillespie-Jones & Co
Counsel for the first respondent:  Mr J C Kelly SC with Mr D J C Mossop
Solicitor for the first respondent:  Phillips Fox
Counsel for the second and third respondents:           Mr L G Foster SC with Mr I R Pike
Solicitor for the second and third respondents:           Sparke Helmore
Date of hearing:  26, 27, 28 April 2005
Date of judgment:  5 August 2005