F J & P N Curran Pty Ltd v Almond Investors Land Pty Ltd (No 4)
[2018] VCC 793
•6 June 2018
| THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-16-00543
| F J & P N CURRAN PTY LTD | Plaintiff |
| v | |
| ALMOND INVESTORS LAND PTY LTD | Defendant |
---
JUDGE:HIS HONOUR JUDGE COSGRAVE
WHERE HELD: Melbourne
DATE OF HEARING: The parties provided written submissions to the court on 31 May 2018
DATE OF JUDGMENT: 6 June 2018
CASE MAY BE CITED AS: F J & P N Curran Pty Ltd v Almond Investors Land Pty Ltd (No 4)
MEDIUM NEUTRAL CITATION: [2018] VCC 793
REASONS FOR JUDGMENT
---
Subject:COSTS – INTEREST
Catchwords: Costs – offer of compromise by defendant – offer refused – Order 26 of the County Court Civil Procedure Rules – whether defendant’s offer of genuine compromise in circumstances where it made no mention of counterclaim
Interest – recovery of interest on counterclaim – from date of filing of counterclaim
Legislation Cited: County Court Act 1958 (Vic); County Court Civil Procedure Rules2008 (Vic); Penalty Interest Rates Act 1983 (Vic); Supreme Court Act 1968 (Vic)
Cases Cited:Enerka Apex Belting Pty Ltd v Vickers Systems Pty Ltd (No 2) [2002] VSC 409; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Arthur | Cahills Solicitors |
| For the Defendant | Dr E Peden | Clear Lawyers |
HIS HONOUR:
Background
1 The trial in this proceeding ran for five days in November 2017. I delivered reasons for judgment on 5 May 2018 (“the principal reasons”). At the time I gave judgment, I directed the parties to file and serve by 31 May 2018 any material with respect to the form of final orders and costs. These reasons assume familiarity with the principal reasons and adopt the same terminology.
2 In the principal reasons, I summarised my conclusions with respect to the merits of the case in the following way:
(a) The construction of clause 20 of the June 2011 lease and clause 6 of the Further Amended Option Deed is such that Curran was not entitled to receive, and AIL was not obliged to pay, annual compensation payments in relation to CA2.
(b) AIL did not engage in misleading or deceptive conduct towards Curran. Nor was AIL negligent in its dealings with Curran.
(c) Even if Curran had established misleading or deceptive conduct and/or negligence, it did not prove its claim for loss and damage.
(d) Curran’s claim based on equitable estoppel failed;
(e) Curran’s claim based on conventional estoppel failed. There were legal impediments to bringing this claim. Apart from that, the argument failed on its merits.
(f) AIL’s claim based on mistake succeeded. The counterclaim was not statute barred.
3 In response to my direction about filing further material, Curran submitted proposed orders as follows:
(a) The plaintiff’s claim is dismissed.
(b) Judgment for the defendant on its counterclaim in the sum of $241,706.
(c) The plaintiff pay the defendant’s costs to be taxed on a standard basis.
(d) Stay of 30 days.
4 AIL made more detailed submissions. Given that AIL succeeded in its defence and in its counterclaim, the orders sought on those matters were unexceptional. However, in relation to costs, the position was more complicated because AIL relied upon an offer of compromise within Order 26 of the County Court Civil Procedure Rules2008 (Vic) (“the Rules”). The offer of compromise was dated 16 June 2016 and was made in the following terms:
“This offer of compromise is served in accordance with Order 26 of the County Court Civil Procedure Rules (2008). The defendant makes the following order of compromise to the plaintiff:
1.The parties discontinue the proceedings within 14 days of the plaintiff’s acceptance of this offer
2.The parties pay their own legal costs of and incidental to the proceedings.
3.The parties enter into a deed of settlement whereby the parties give mutual releases of each other.
This offer is made in full and final settlement of all of the plaintiff’s claims against the defendant in these proceedings, is inclusive of costs, and is subject to the parties entering into a deed of settlement reflecting these terms. This offer is only open for acceptance until 4:00pm on 30 June 2016.”
5 Initially I considered that the offer of compromise was such that the adverse cost consequences which often flow from such offers would apply to Curran. On its face the offer was that the parties “walk away” and bear their own costs. Thus, Curran would not recover the $180,000 which it sought and AIL would likewise forego its counterclaim of $241,000. Especially in circumstances where the defendant’s counterclaim was greater than the plaintiff’s claim, this appeared to be a genuine compromise by AIL – something which, pursuant to rule 26.08(8) the Court needs to examine. However, after reading AIL’s submissions, and reflecting upon the offer, I consider that the position is more complicated and it would not be in the interests of justice to require Curran to pay AIL’s costs on an indemnity basis from June 2016.
6 Paragraph 18 of AIL’s submissions made clear that, at the time AIL served the offer of compromise, it had not filed its counterclaim. Hence, although under the terms of the offer the contemplated mutual releases would have included the counterclaim, there is no evidence that Curran was aware of it. Curran was being asked to simply capitulate and forego any claim against AIL. Also, from Curran’s perspective at the time, AIL was not giving anything away because it had no claim against Curran and merely pleaded a defence to Curran’s claim. This position was reinforced by the terms of the offer which stated that it was in full and final settlement of the plaintiff’s claims against the defendant. The offer made no reference to the counterclaim.
7 As noted above, in order to constitute an effective order of compromise within the Rules, the offer must represent a genuine compromise. As Giles J said in Hobartville Stud Pty Ltd v Union Insurance Co Ltd:[1]
“Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away and I do not think it can claim to have placed itself in a more favourable position in relation to costs unless it does so.”
[1](1991) 25 NSWLR 358.
8 Also, in Enerka Apex Belting Pty Ltd v Vickers Systems Pty Ltd (No 2),[2] the court held that an offer of the plaintiff to accept $300,000 in satisfaction of a claim for $319,000 was not an offer of a genuine compromise.
[2][2002] VSC 409.
9 The position in this case was analogous. AIL was offering to bear its own costs to the time of the offer but otherwise, it required Curran to wholly abandon its claim. The evidence did not establish, for example, that AIL had explained the situation in detail to Curran; that AIL had told Curran of its proposed counterclaim; that the counterclaim was significantly larger than Curran’s claim; that AIL had explained its defence or interpretation of the relevant documents to Curran to elucidate the problems in Curran’s construction argument. In all the circumstances, I do not consider it appropriate that Curran be responsible for any of AIL’s costs of the proceeding on a higher scale than usual.
Interest
10 AIL sought interest on its counterclaim which it filed on 28 November 2016. Pursuant to section 50 of the County Court Act 1958 (Vic), which incorporates by reference section 60 the Supreme Court Act 1968 (Vic), AIL is entitled to interest at the rates set out from time to time in section 2 of the Penalty Interest Rates Act1983 (Vic) from the filing of the counterclaim until the date of judgment. On the currently specified rate of interest, AIL says that interest is running at a daily rate of $66.22. Curran did not contest or dispute that figure. Nor did Curran make any complaint about, or query, any of the other figures submitted by AIL in relation to interest. So, as at 6 June 2018, AIL is entitled to interest of $36,603.64. This figure was arrived at as follows:
· from 28 November 2016 to 31 January 2017 (65 days) at 9.5% per annum in the sum of $4,089.15;
· from 1 February 2017 to 25 May 2018 (479 days) at 10% per annum in the sum of $31,719.85;
· from 26 May 2018 to 6 June 2018 (12 days) at $66.22 per day in the sum of $794.64.
Conclusion
11 Accordingly, having regard to the material before me, I make the following orders:
(a) The plaintiff’s claim be dismissed.
(b) Judgment for the defendant against the plaintiff in the sum of $241,706.59 together with interest from 28 November 2016 until 6 June 2018 in the sum of $36,603.64.
(c) The plaintiff pay the defendant’s costs of the proceeding, including the claim and counterclaim together with reserved costs, such costs to be taxed on a standard basis in default of agreement.
(d) There be a stay of the judgment for 30 days.
0
2
0