Colormode Pty Ltd v Civic Construction Group Pty Ltd (No 2)

[2024] QDC 175

DISTRICT COURT OF QUEENSLAND

CITATION:

Colormode Pty Ltd v Civic Construction Group Pty Ltd (No 2) [2024] QDC 175

PARTIES:

COLORMODE PTY LTD
(Plaintiff)

v

CIVIC CONSTRUCTION GROUP PTY LTD

(Defendant)

FILE NO/S:

BD 1924/21

DIVISION:

Civil

DELIVERED ON:

10 October 2024

DELIVERED AT:

Brisbane

HEARING DATE:

8, 9, 10, 26 April 2024; judgment 13 September 2024; further submissions 20, 27, 30 September 2024

JUDGE:

Barlow KC, DCJ

ORDERS:

1.   IN ADDITION TO THE JUDGMENT GIVEN ON 13 SEPTEMBER 2024, THERE BE FURTHER JUDGMENT FOR THE PLAINTIFF, BY WAY OF INTEREST TO THE DATE OF THAT JUDGMENT, IN THE SUM OF $16,220.93.

2.   THE PLAINTIFF PAY 50% OF THE DEFENDANT’S COSTS OF THE PROCEEDING, INCLUDING RESERVED COSTS.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – DEPRIVING SUCCESSFUL PARTY OF COSTS – OTHER CASES – substantial failure – whether costs should follow the event where parties had mixed success – judgment given was substantially less than claimed – judicial discretion necessary to apportion costs based on success where success was nominal -  whether success of the plaintiff resulted in a pyrrhic victory – whether nominally successful plaintiff should be deprived of its costs and ordered to pay a proportion of the defendant’s costs

Uniform Civil Procedure Rules 1999, r 681, r 689, r 698

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Colormode Pty Ltd v Civic Construction Group Pty Ltd [2024] QDC 148
Karamaroudis v Queensland Police Service [2023] QSC 101
Oshlack v Richmond River Council (1998) 193 CLR 72

COUNSEL:

Mr G Coveney for the plaintiff

Mr J Hastie for the defendant

SOLICITORS:

KeyPoint Law for the plaintiff

Shand Taylor Lawyers for the defendant

1. On 13 September 2024, I gave judgment for the plaintiff and published my reasons.[1]  I invited written submissions on interest and costs, which I have since received.  In these reasons I consider how those issues should be decided.

   [1]Colormode Pty Ltd v Civic Construction Group Pty Ltd [2024] QDC 148.

2. Colormode seeks costs in its favour on the Magistrates Court scale appropriate to the amount of the principal judgment.  Civic contends that Colormode should pay 50% of Civic’s costs of the proceeding. 

3. Neither party relies on having beaten any offers to settle.  Nor has either party made any submission about treating any reserved costs differently from other costs.  Civic submitted that any reserved costs should be treated identically with the general costs of the proceeding.[2]

   [2]As appears to be the intention of Uniform Civil Procedure Rules 1999, r 698.

4. Colormode made claims under three separate contracts.  In brief, its claims were for payment for work done under alleged variations to the contracts, if necessary an estoppel to prevent Civic relying on the contracts to exclude a right to payment for variations, together with a claim for return of retention or security moneys kept by Civic under the contracts.

5. Colormode failed on every aspect of its claims under two contracts and all but the retention money under the other.

6. The bulk of the evidence was about whether the works were done, if so whether they were variations and, if so, whether the parties conducted themselves in ways consistent with non-contractual bases for Colormode to be entitled to payment.  On all of those matters, Colormode failed.

7. On legal issues, too, Colormode failed: as to compliance with the contract, the effects of non-compliance and the effects of the time limits imposed on claims (apart from the retention money under one contract).

8. Civic, therefore, succeeded on all those matters.

9. Civic failed in its set-off claims, by which it sought payment of liquidated damages under each contract for delay in completion of the works.  Its claims totalled $1,674,500.  The evidence and legal submissions about those claims, and my consideration of them, were very short in comparison to the time and effort put into the proof and consideration of Colormode’s claims.

10. While there was overlap between the three contracts, it was necessary to consider each separately, both factually as to what happened and what, if any, variations were proved by Colormode, and legally as to the proper construction of each contract and their effects in the light of the findings of fact and as to the other bases for Colormode’s claims.  The time and effort involved in the evidence, addresses and consideration of the different issues are reflected, broadly, in the length of my reasons on each issue.  As to that:

    ·the reasons on the Ferry Road variation claims were approximately 14 pages;

    ·the reasons on the Habitat variation claims were approximately 3 pages;

    ·the reasons on the Soko variation claims were approximately 14 pages;

    ·the reasons on the retention claims were approximately 2 pages;

    ·the reasons on issues common to all contracts were approximately 15 pages; and

    ·the reasons on Civic’s claims for liquidated damages were approximately 3 pages.

11. That is, 31 pages of my reasons concerned issues on which Colormode failed, 5 pages concerned issues on which it succeeded in its claim and in defeating Civic’s offsetting defence and 15 pages concerned common issues on which Colormode substantially lost.

12. In my view, the issues in the respective parts of the proceeding were mostly separable and those on which Colormode failed vastly outweighed those on which it succeeded, both in effort in the proceeding and financially (in terms of both costs incurred and the ultimate result).

13. Colormode submitted that, in order for the court to make a costs order other than that costs follow the ultimate event,[3] in the sense of judgment for one party, there must be exceptional circumstances.[4]  With respect, while it is unusual for a party in whose favour judgment has been given to be ordered to pay some or all of the other party’s costs – and in that way such an order, and the facts on which it is based, might be described as exceptional - nothing in the rules places such a gloss or restriction on the proper exercise of a court’s discretion.  But I do accept that there must be good reasons for the court to exercise its discretion, whatever the result: it must exercise it judicially.

    [3]See UCPR, rr 681, 689.

    [4]Referring, in that regard, to Wilson J’s summary of principles in Karamaroudis v Queensland Police Service [2023] QSC 101 at [16]-[21].

14. Colormode submitted that there are few, if any exceptions to the usual order as to costs outside the area of disentitling conduct.[5]  However, one of those exceptions, referred to specifically by McHugh J in the very paragraph to which Colormode referred, is that:

    The Court may award costs in favour of a defendant where the plaintiff has obtained only nominal damages. However, this practice can be justified on the basis that, in reality, the successful party lost the litigation and the unsuccessful party won.[6]

    [5]Referring to Oshlack v Richmond River Council (1998) 193 CLR 72 at [70].

    [6]Oshlack at [70] (footnotes in the original omitted.

15. That description, with respect, amply applies to the extent of the parties’ respective success in this proceeding.  Colormode’s success can accurately be described as a Pyrrhic victory.

16. The principles for the consideration of appropriate costs orders where the parties have had mixed success were helpfully summarised by the New South Wales Court of Appeal in a case cited by Civic in its submission on costs.  In particular:[7]

    Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed.  Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.

    …

    Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory.  The exercise of the discretion depends upon matters of impression and evaluation.

    [7]Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].

17. Here, Colormode’s success was very limited, both in amount and in the time and effort involved by the parties and the court in considering the issues.  Civic’s success in defeating the vast majority of Colormode’s claims was extensive.  Although Colormode obtained judgment for a small amount of its claims, it cannot realistically be said that, overall, it was the successful party.  It must be kept in mind that Civic, as well as Colormode, will have incurred considerable costs in defending the claims on which Civic was successful.

18. I consider that the appropriate order is that Colormode pay 50% of Civic’s costs of the proceeding.  Such an order reflects the outcome and gives due allowance for Colormode’s costs of the issue on which it succeeded.

19. The parties have agreed on the calculation of interest, based on the rates prescribed for default judgments.  I am prepared to adopt those rates.  Interest should be calculated to the date on which I gave judgment for the principal.