Australia City Properties Management Pty Ltd v The Owners - Strata Plan No 65111 (No 2)

The case involved Australia City Properties Management Pty Ltd, which brought an action against The Owners – Strata Plan No 65111 in the Supreme Court of Victoria. The dispute centred on costs incurred during the litigation, specifically whether certain offers of compromise complied with UCPR r 20.26 and how the costs should be apportioned among the parties given the overlapping nature of the claims. The plaintiffs brought separate causes of action but the claims were closely related, leading to some overlap in the legal arguments and evidence presented.

The court had to determine whether the offers of compromise made by the defendant complied with UCPR r 20.26, which requires offers of compromise to be in writing and to detail the specific terms of the offer. The court found that the offers did not comply with the rule as they were not made jointly to each plaintiff but rather to the plaintiffs collectively. Given the separate nature of the causes of action, the court concluded that it was not unreasonable for either plaintiff to decline the offers. The court also considered the appropriate allocation of costs where the parties had varying degrees of success and failure. The court examined whether the costs incurred in relation to overlapping claims could be treated as if they were from a single proceeding, and whether certain issues were clearly separable.

The Supreme Court held that the offers of compromise did not comply with UCPR r 20.26 because they were not individually directed to each plaintiff. The court determined that it was not unreasonable for either plaintiff to reject the offers due to their non-compliance with the rule. In relation to the costs, the court decided that the costs incurred on issues that were clearly separable should be treated as such, and those that overlapped between the first plaintiff and the defendant should be considered together. The court ruled that neither the second plaintiff nor the defendant should bear the other party's costs, leading to an order that each party bear their own costs. This decision underscored the importance of compliance with procedural rules regarding offers of compromise and the nuanced approach to cost allocation in cases with overlapping claims.