Armour Fire Protection Pty Ltd as the Trustee of the Armour Fire Unit Trust v Salandra & Salandra (No 2) - [2005] SADC 60

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
ARMOUR FIRE PROTECTION PTY LTD AS THE TRUSTEE OF THE ARMOUR FIRE UNIT TRUST v SALANDRA & SALANDRA (No 2)
Reasons of His Honour Judge Anderson
2 June 2005
PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE
Variation of judgment sum: DCR 84.12 applied

PROCEDURE - COSTS
Costs - order that there be no order.
Payment out of Court in terms as sought.

ARMOUR FIRE PROTECTION PTY LTD AS THE TRUSTEE OF THE ARMOUR FIRE UNIT TRUST v SALANDRA & SALANDRA (No 2)
[2005] SADC 60
JUDGMENT SUM

On 14 March 2005 I delivered reasons for judgment in this matter. After reconciling my findings on the claim and counterclaim, I entered judgment for the Plaintiff in the sum of $74,219 inclusive of interest (paragraph 141). Of that sum, as is indicated in paragraph 139 thereof, the principal was $50,019.
In paragraph 100 I acknowledged that the Defendants had paid to the Plaintiff the sum of $16,000 on 20 March 2000. By way of reconciliation of the findings and their financial sequelae, I set out in paragraph 138 the calculations which formed the rationale for the figure $50,019. In so doing, I omitted to bring to account the sum of $16,000. It is agreed by counsel that such an error was made and that that sum should be brought to account in the Defendants’ favour, thereby requiring the figure of $50,019 to be reduced to $34,019. It is upon this figure that interest is to be allowed.
In paragraph 140 I allowed interest on the principal sum at 9% for the period from mid‑August 2000.
In paragraph 138 I included in the reconciliation the sum of $13,250 as due by the Defendants to the Plaintiff for the whole period referred to in paragraph 4 hereof. As Mr Dal Cin of counsel for the Defendants has pointed out in his submissions, half of this sum was not due to be paid until March 2001. I agree. Thus, further allowance in this regard is to be made in the calculation of interest. On this adjusted basis, using the rate of 9% per annum applied to the sum of $34,019, I fix interest at $13,685.
Accordingly, pursuant to DCR 84.12, I vary the judgment sum to $47,704 inclusive of interest.
The Plaintiff’s counsel, Mr Lunn, submitted that there was a further error in the judgment in that the reconciliation failed to allow for a further sum of $15,000 due to the Plaintiff by the Defendants. He enlarged upon his submission in a subsequent written submission.
In paragraph 137 I made use only of the formal printed portion of the exhibit D20. I am not persuaded that the bases of my calculations has been shown to be incorrect, and I decline to make any further adjustment to the manner of reconciliation and, thus, the final figure. In any event, to adopt the course contended for would require a significant rewriting of part of the judgment and I am not of the view that that is an appropriate use of either DCR 53.10 or DCR 84.12.
COSTS
The Plaintiff was subject to an order for security for costs. They were paid in relation to each “half” of the trial.
An open offer was made by the Defendants in the total sum of $44,528.85, by way of an earlier payment into Court and a subsequent Calderbank offer, on 5 March 2004. It was not accepted and the Calderbank offer was subsequently withdrawn after the trial had commenced.
On 24 January 2005 the Plaintiff, through its counsel, offered, in open court, to accept the sum of $60,000 inclusive of costs in full and final settlement of this matter. That offer was not accepted and the trial continued to its conclusion.
Having regard to the quantum by then paid into Court by the Plaintiff as security for costs, Mr Lunn submitted that the effect of this offer was to offer to accept about $18,000 as principal, without costs (accepting that the sum paid in also approximated the Defendants’ costs). That offer having not been accepted, and the Plaintiff having exceeded that principal sum in the judgment (before interest), he submitted that from that time, i.e. for the second “half” of the trial, the Plaintiff should have indemnity costs from the Defendants.
I accept that such an open offer may be considered when exercising the general discretion in relation to the question of costs. However, in all of the circumstances of the trial, I am not of the view that such an order is presently appropriate. It is not my view that on 24 January 2005 the Defendants were required to assess their position, or face the consequence of what is essentially a penal order, on the basis Mr Lunn submitted. They were entitled to consider the offer as a whole against their assessment of the important part of the trial which had already passed.
Thus, unless there is some factor to the contrary, the Plaintiff is to have its costs on a party/party basis, having succeeded at the end of the day. This is the usual rule.
Mr Dal Cin submitted that in this case there is such a factor. It is said to be the manner in which the Plaintiff escalated its claim in July 2000 after the first account sent on 30 June 2000. This escalated claim was based upon a document which was found not to have been produced as Mr Carter, the principal of the Plaintiff, said in evidence. Indeed, I found that the relevant schedule was produced subsequently and backdated. This finding was the basis of an adverse finding in relation to Mr Carter’s credibility in regard to a significant portion of the trial.
The calculations based upon this document underpinned approximately three quarters of the Plaintiff’s claim. When regard is had to the subsequent findings adverse to the Plaintiff in relation to the expert report used to support this portion of the claim, on a broad‑brush basis, about half of the trial time is involved. The balance of the trial saw the Plaintiff succeed.
I agree that this is a factor relevant to the manner in which the discretion as to costs may be exercised. In my view, such a result from such a cause disentitles the Plaintiff to the usual order.
In these circumstances, the fairest and least expensive way in which to resolve the issue of costs is to decline the application of each party for costs. I am unable to see any merit in the Defendants’ claim for indemnity costs from the Plaintiff. It required significant insight into the final order by the Plaintiff which could not reasonably have been expected.
It is not appropriate to consider a detailed break up of trial time by issues, and to then order costs in favour of a party for such an issue thereby requiring those costs to be then assessed (and possibly taxed) and then offset. Such a course is an unnecessary expense and serves only to prolong the proceedings beyond reason.
I order that there be no order for costs.
I order that there be paid out of Court forthwith, to the Plaintiff’s solicitors, the total sum paid into Court by the Plaintiff on account of security for costs, together with any interest accrued thereon.
In addition, I order that the sum of $14,528.85 paid into Court by the Defendants on 20 February 2002, together with any interest accrued thereon, be paid out of Court to the Plaintiff’s solicitors forthwith. The Plaintiff’s solicitors are to advise the Defendants’ solicitors of the total sum received within seven days thereof in order that the Defendants may calculate and then pay the balance of the judgment sum.