Fortron Automotive Treatments Pty Ltd v Eurotime Holdings Pty Ltd
[2001] WASCA 384
•27 NOVEMBER 2001
FORTRON AUTOMOTIVE TREATMENTS PTY LTD -v- EUROTIME HOLDINGS PTY LTD & ORS [2001] WASCA 384
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 384 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:176/2000 | 27 NOVEMBER 2001 | |
| Coram: | MALCOLM CJ STEYTLER J WHEELER J | 27/11/01 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Order that the third respondent pay the appellant's costs of the action on an indemnity basis from 30 March 2000 | ||
| B | |||
| PDF Version |
| Parties: | FORTRON AUTOMOTIVE TREATMENTS PTY LTD EUROTIME HOLDINGS PTY LTD ANTON VUKNIC ROGER JOHN MORRIS |
Catchwords: | Procedure Costs Offer of settlement prior to trial under O 24A of the Rules of the Supreme Court 1971 Offer to accept capital sum claimed free of interest rejected by third respondent Judgment for appellant no less favourable than the terms of the offer being for capital sum plus interest A discretion should be exercised by making an order for indemnity costs from the date of the offer |
Legislation: | Rules of the Supreme Court 1971 (WA), O 24A r 10(4) |
Case References: | Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 Malliaros v Moralis (1991) 2 VR 501 New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : FORTRON AUTOMOTIVE TREATMENTS PTY LTD -v- EUROTIME HOLDINGS PTY LTD & ORS [2001] WASCA 384 CORAM : MALCOLM CJ
- STEYTLER J
WHEELER J
- Appellant
AND
EUROTIME HOLDINGS PTY LTD
First Respondent
ANTON VUKNIC
Second Respondent
ROGER JOHN MORRIS
Third Respondent
Catchwords:
Procedure - Costs - Offer of settlement prior to trial under O 24A of the Rules of the Supreme Court 1971 - Offer to accept capital sum claimed free of interest rejected by third respondent - Judgment for appellant no less favourable than the
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terms of the offer being for capital sum plus interest - A discretion should be exercised by making an order for indemnity costs from the date of the offer
Legislation:
Rules of the Supreme Court 1971 (WA), O 24A r 10(4)
Result:
Order that the third respondent pay the appellant's costs of the action on an indemnity basis from 30 March 2000
Category: B
Representation:
Counsel:
Appellant : Mr G A Rabe
First Respondent : No appearance
Second Respondent : No appearance
Third Respondent : Mr S B Watters
Solicitors:
Appellant : Stables Scott
First Respondent : No appearance
Second Respondent : No appearance
Third Respondent : McCallum Donovan Sweeney
Case(s) referred to in judgment(s):
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721
Malliaros v Moralis (1991) 2 VR 501
New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100
Case(s) also cited:
Nil
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1 MALCOLM CJ: This was a notice of motion dated 21 August 2001. The notice sought an order that the issue of contribution and/or indemnity between the third defendant and the first and second defendants not having been determined at trial, the issue of the third defendant's notice of contribution and/or indemnity be remitted to Judge Greaves for determination and a stay of proceedings in the meantime. That application was not pursued before us, except to the extent of a stay of proceedings. The application was for an order that the costs of the action ordered to be paid by the third respondent to the appellant be taxed on an indemnity basis from 30 March 2000 pursuant to the liberty to apply in the order of this Court dated 8 August 2001.
2 This appeal was heard on 8 August 2001. On that date the Court ordered that the appeal be allowed, the judgment of the District Court set aside to the extent by which the appellant's claim against the third respondent was dismissed and the appellant was ordered to pay the third respondent's costs. Judgment was given for the appellant against the third respondent in the sum of $179,792.
3 It was also ordered that:
(2) the third respondent pay the appellant the appellant's costs of the action in proceedings against the third respondent, to be taxed on a party and party basis up to 29 March 2000, such costs to include the costs of administering interrogatories against the third respondent;
(3) there be liberty for the appellant to apply for an order for costs on an indemnity basis from 30 March 2000;
(4) the costs payable by the third respondent include the costs of administering interrogatories against the third respondent;
(5) the third respondent pay the appellant's costs of the appeal to be taxed;
(6) the third respondent have liberty to apply in respect of the contribution notice.
4 On 30 March 2000 the appellant, then the plaintiff in the District Court, made an offer to the third respondent under O 24A of the Rules of the Supreme Court 1971. Receipt of the offer was duly acknowledged by the third respondent. Under O 24A r 10(4), where an offer is made by a plaintiff and not accepted by a defendant and the plaintiff obtains judgment on the claim to which the offer relates no less favourable to him than the terms of the offer, the plaintiff is entitled to an order against the
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- defendant for his costs in respect of the claim from the date upon which it was made, taxed on an indemnity basis, in addition to his costs incurred before that date taxed on a party and party basis. Rule 10(9) provides that subrule (4) shall apply unless the Court is satisfied that the party making the offer was at all material times willing and able to carry out what that party offered.
5 The appellant submits that there is no good reason why an order should not be made that the third respondent pay the appellant its costs of the District Court action against the third respondent to be taxed on an indemnity basis from 30 March 2000, to include the cost of administering interrogatories to the third respondent. The third respondent submits that it should not have to pay indemnity costs in accordance with O 24A on the basis of the offer for settlement made on 30 March 2000. The action against the third respondent was for a capital sum of $105,975.21, together with interest at the rate of 6 per cent per annum and costs. That sum was sought against the three respondents. Order 24A offers of settlement in the same or similar terms were made to each of the defendants in the action at the same time. The respondent submits that an order should not be made under these provisions because the only compromise in the O 24A notice was in regard to the appellant's claim for interest and that the appellant was otherwise seeking the full amount of its claim plus costs.
6 It is also submitted that the purpose behind O 24A was to encourage a party to whom a fair and reasonable offer of compromise had been made to accept the offer and thus bring proceedings to an end, so freeing the Court from the time that is taken by such proceedings: Malliaros v Moralis (1991) 2 VR 501 at 505.
7 Finally, it is submitted that the third respondent had a reasonable prospect of success in the action, as was evidenced by the finding of Greaves C at the trial. In my opinion, as a matter of plain logic, given the fact that this Court overruled that decision on the basis that it was wrong in law, nothing can be drawn by the third respondent from the temporary success which the defence received in the District Court.
8 It is true that the intention of O 24A was to promote an early and realistic offer of compromise by a party: Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724. The question is not whether the offer was fair and reasonable. The question is whether, having regard to the full amount of the claim, the offer was one which, in all the circumstances, ought in retrospect to have been accepted. At the time the
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- offer was made it was an offer to settle for the capital sum which was owing as at 30 March 2000. Interest would have accrued at that time at least to the extent of somewhere in the vicinity of $40,000. As it was, by the time judgment was entered in the action, the total amount of interest was in the vicinity of $79,000. This was, in my view, a genuine offer of compromise precisely of the kind contemplated by O 24A.
9 For those reasons, the effect should be given to the provisions of the Order as it applies unless the Court otherwise directs. Here, prima facie, the judgment which the appellant ultimately obtained on the appeal was no less favourable to the appellant than the terms of the offer. In fact it was of course much more favourable to the appellant than the terms of the offer. This is, in my opinion, a plain and obvious case in which full effect should be given to O 24A.
10 STEYTLER J: I agree and would add only a reference to the case of New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100, in which the Court of Appeal in New South Wales rejected the proposition that a discretion should be exercised against making an order for indemnity costs in any case in which it was reasonable for the defendant to take the view that it had a good chance of successfully defending the action.
11 The court there said at 102 that the prima facie consequence which will apply in the ordinary case is that in the circumstances postulated by the Rule an order for indemnity costs will be made. As has been said by the Chief Justice, this was a case in which that prima facie consequence should follow.
12 WHEELER J: I am in agreement with the observations of the Chief Justice and of Steytler J and those are my reasons for joining in the decision.
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