FJ and PN Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2)
[2019] VSCA 273
•22 November 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0093
| FJ & PN CURRAN PTY LTD | Appellant |
| v | |
| ALMOND INVESTORS LAND PTY LTD | Respondent |
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| JUDGES: | WHELAN, NIALL and ASHLEY JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | On the papers |
| DATE OF JUDGMENT: | 22 November 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 273 |
| CASE MAY BE CITED AS: | FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2) |
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PRACTICE AND PROCEUDRE — COSTS — Costs of first instance proceeding and appeal — Appeal successful on some grounds — Late amendment of statement of claim at trial — Success of appeal significantly dependent on amendment — Offer of compromise by appellant prior to amendment — Offer refused — Pursuit on appeal of grounds evidently without merit — Refusal of offer of compromise warranted — Appellant awarded costs on the standard basis of first instance proceeding and appeal, but discounted in each instance.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J K Arthur | Cahills Solicitors |
| For the Respondent | Dr E Peden SC | Clear Lawyers |
WHELAN JA
NIALL JA
ASHLEY AJA:
On 22 October 2019 the Court published reasons for judgment, allowing the plaintiff’s appeal.[1] It gave time to the parties to see whether they could agree on the appropriate judgment sum, interest and costs. Their subsequent written submissions showed that they have agreed on the judgment sum and interest; but not costs.
[1]FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236 (‘Reasons’).
Agreed matters
The agreed judgment sum, inclusive of interest to 6 June 2018, the date on which the trial judge entered judgment, is $209,522.64. We say nothing as to the propriety of including interest to date of judgment below in the judgment sum.
The agreed interest from date of judgment below to 22 November 2019 is $30,596.04
Costs at first instance — submissions
The plaintiff seeks an order for its costs of the proceeding at first instance. It relies in part upon an offer of compromise, made by letter dated 23 August 2017 emailed to the defendant’s solicitors, by which it offered to accept $150,000 ‘all in’ to compromise the claim and counterclaim. The plaintiff submits that an order should be made that it have its costs on the standard basis until 25 August 2017,[2] and thereafter on an indemnity basis.
[2]See r 26.08(2)(b) of the County Court Rules.
The defendant submits that the Court should exercise its discretion and order that the plaintiff not receive all its costs of the first instance proceeding. In addition, the defendant seeks costs relating to a late-made and unsuccessful amendment application, for which, it is said, no separate costs order was made — because it did not need to be made — at the time when judgment was entered below.
With respect to the broad question of the costs of the first instance proceeding, the gravamen of the defendant’s submission is that the success of the appeal significantly depended upon a conversation between Frank Curran of the plaintiff and Graham Johns of the defendant in late 2007, and a further conversation between the two men in April 2010. The plaintiff did not seek to plead either conversation until the evening of the second day of the trial, that being the night before the plaintiff successfully sought to amend its claim by including reference to, and particularising, what was asserted to have been said in those conversations.[3] The application was made in circumstances where, at the end of Curran’s evidence, the judge commented to plaintiff’s counsel that the statement of claim should be regularised so as to reflect evidence given by Curran of conversation with Johns. The late amendments introduced paragraphs 5A and 6A of the amended statement of claim.
[3]See FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2) [2018] VCC 723 (‘the first amendment ruling’).
According to the defendant’s submission, the conversations set out in paragraphs 5A and 6A of the amended statement of claim were at all times matters within the knowledge of Curran, but not directly in the knowledge of the defendant. That was because the alleged conversations only involved Johns, who had since died, and Curran. Further, it is submitted, the 2007 conversation was never mentioned at all until Curran gave evidence about it at trial.
It is accepted by the defendant that the 2010 conversation between Johns and Curran was referred to by the latter in emails sent by him to the defendant in August 2011. Nonetheless, it is submitted, the plaintiff commenced the proceeding without calling the 2010 conversation in aid of its case. Again, the plaintiff had contemplated amending its statement of claim in January 2017 to include, relevantly, the 2010 conversation. But it did not pursue such an amendment at the time.
In all, the defendant submits that the order for costs of the first instance proceeding should reflect the fact that the plaintiff’s ultimate success resulted from amendments made in the course of the trial to plead circumstances of which it, and only it, knew, well before the trial commenced.
Specifically with respect to the costs of the plaintiff’s late-made, and refused, amendment application to include a claim for a collateral warranty,[4] the defendant submits that, the appeal having succeeded, it should nonetheless recover its costs of successfully resisting that application.
[4]See FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd (No 3) [2018] VCC 724 (‘the second amendment ruling’). This was the second occasion on which the plaintiff unsuccessfully sought to plead a collateral warranty.
Finally, the defendant submits that the offer of compromise was made prior to the amendments which inserted paragraphs 5A and 6A into the statement of claim, for which reason rejection of the offer was not unreasonable. This is said to be a special circumstance entitling the Court to ‘otherwise order’ for the purposes of r 26.08 of the County Court Rules.
In response to the defendant’s submissions, the plaintiff submits that the original statement of claim pleaded the so-called ‘AIL representation’ of April 2010. This supported the Johns representation made at that time.
Further, it is said, Curran gave evidence of the 2007 and 2010 conversations without objection. The trial judge invited the plaintiff to make the amendments contained in paragraphs 5A and 6A of the amended statement of claim after Curran had given evidence; and his Honour had granted the plaintiff leave to amend so that the pleadings would accord with the evidence and how the issues had been shaped by the parties.
Costs of the appeal — submissions
The plaintiff submits that it had enjoyed substantial success on the appeal, specifically with respect to the representations that founded the claim based upon estoppel by convention. It further submits that an understanding of the option deeds and leases was necessary to establish part of the factual matrix and context in which the circumstances giving rise to the estoppel by convention had to be understood.
The plaintiff further argues that it should receive its costs of the appeal on an indemnity basis, notwithstanding that no separate offer of compromise was made in respect of the appeal proceeding.
The defendant submits that there were 22 grounds of appeal, that leave was granted in relation to 11 of them, and the appeal was allowed in relation to six of them. So, it is submitted, the defendant enjoyed substantial success in the appeal judgment, successfully resisting 15 of the 22 grounds of appeal.[5] In consequence, the order of costs should reflect the fact that the defendant had been put to the expense of incurring costs on significant issues upon which it had succeeded. For that reason, the plaintiff should not recover all of its costs of the appeal.
[5]In fact, 16.
The defendant argues that apportioning costs provides a disincentive to parties bringing appeals on all points. To bring an appeal without discrimination increases costs to the parties and imposes an additional burden upon the Court.
Further, it is submitted, non-acceptance of the offer of compromise before trial could have no bearing on the costs of the appeal.
Analysis
Costs of the proceeding at first instance
The plaintiff’s success in this Court depended very significantly upon the amendments made on the third day of trial which inserted, by paragraphs 5A and 6A of the statement of claim, pleas alleging the late 2007 conversation between Curran and Johns and the April 2010 conversation between the same men.
It is true that, before the amendments, the plaintiff had pleaded the AIL representation — that is, the email of 30 April 2010 from Ms Overall of AIL, to Curran — which was a part of the circumstances upon which the claim of estoppel by convention succeeded.
It is also true that the defendant was aware, by reason of Curran’s emails of 24 and 29 August 2011[6] and Johns’ email to Ms Overall of 30 August 2011[7] that Curran was alleging a relevant conversation between himself and Johns in April 2010.
[6]Reasons [47], [49].
[7]Ibid [50].
It is further true that the defendant did not object to the admissibility of evidence which Curran gave about the late 2007 conversation and the April 2010 conversation;[8] and that, it seems, the defendant did not seek to recall Curran — for instance, to cross-examine him about the 2007 conversation.[9]
[8]FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2) [2018] VCC 723 [47].
[9]Ibid [29].
For all that, the fact remains that the basis upon which the plaintiff’s claim succeeded in this Court was very significantly advanced by the late amendments. To the extent that the defendant knew something about the 2010 conversation before the amendment, it was not obliged to speculate what the legal consequences might have been had the plaintiff pleaded that conversation.
The plaintiff’s claim in contract failed at trial. But the documentation was not easy to understand, as appears not only from its text but from some of the submissions advanced at trial by both parties.
The claims, other than in contract, which had their starting point in the conversations between Curran and Johns and in the AIL representation, also failed at trial. The judge’s conclusions about relevant aspects of Curran’s evidence doomed those other claims. Likewise, the plaintiff’s defence to the counterclaim was unsuccessful. We have concluded that the judge erred in each of those connections.
In all the circumstances, we consider that the plaintiff should recover costs of the proceeding at first instance, but discounted to some extent to reflect the late amendments which determined the ultimate fate of the litigation. We do not consider, however, that the discount should be very great. Although it turned out, on careful analysis, that the claim in contract failed, the documentation was such that, in the period leading up to the trial and in the trial itself, we think that it was not unreasonable for the plaintiff to have asserted an entitlement to a remedy in contract. Further, as ultimately formulated, the claim in estoppel by convention should have succeeded. Further again, the limitation defence to the counterclaim was pursued and should have succeeded.[10] All in all, we consider that the plaintiff should have 80 per cent of the costs of the proceeding at first instance, taxable on the standard basis. We consider that the plaintiff should not have the usual benefit of the offer of compromise. The offer was made when the claim which was ultimately successful was very largely unpleaded. Finally, the discount which we propose to apply will sufficiently recognise any entitlement of the defendant to costs with respect to the plaintiff’s unsuccessful second amendment application.
[10]See Reasons [269]–[270], [274]–[275].
Costs of the appeal
The plaintiff succeeded on the major issue whether Curran’s evidence of conversations with Johns in late 2007 and April 2010 should have been accepted; and upon the significance of acceptance of that evidence with respect to the claim laid in estoppel by convention. The plaintiff also succeeded in its attack on the judgment for the defendant on the counterclaim. The Court did not need to resolve the question whether the plaintiff should succeed in its promissory estoppel claim. The claims founded on alleged misleading or deceptive conduct and negligent misstatement were not orally agitated. Neither was the question of loss and damage so far as it related to those claims.
The plaintiff can be criticised for re-agitating the claim in contract, albeit that this Court determined that such claim should have failed on narrower grounds than it did at trial. The problems with the claim in contract should have been apparent at trial’s end.
It may be fairly said that, to fully understand the claim in estoppel by convention, it was necessary to illuminate the deficiencies in the contractual framework which led on to the critical conversations between Curran and Johns. But this does not mean that it was reasonable to re-agitate the contract claim. It was a claim which occupied a good deal of time in the preparation and hearing of the appeal and in the time of the Court in preparing its reasons for judgment.
Whilst it is true that in most cases a successful appellant will be awarded costs of the appeal without reduction despite failing on one or more grounds of appeal, in every case there needs to be a careful evaluation whether a ground of appeal is truly arguable. The indiscriminate raising of grounds of appeal which lack evident merit is to be discouraged.
In all the circumstances of this matter, we consider that the plaintiff should have 75 per cent of its costs of the appeal on the standard basis.
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