DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
HALL & ANOR v HALCROW
[2021] SADC 114
Judgment of his Honour Judge Burnett
19 October 2021
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS
EQUITY - GENERAL PRINCIPLES - EQUITABLE DOCTRINES AND PRESUMPTIONS - CONTRIBUTION
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - EFFECT OF JUDGMENTS
The applicants claim the respondent is liable for one half of the costs and liabilities incurred in prosecuting certain judicial review proceedings including costs and liabilities incurred after the respondent had discontinued his claim.
The applicants owned a property at Mount Osmond. A developer, City Apartments Pty Ltd (City Apartments) in about 2000 commenced a development over a property near the applicants. The applicants opposed the development. On 21 March 2005, the City of Burnside granted development approval to the proposed development and on 4 March 2005 a private certifier, Katnich Dodd, granted provisional building rules consent to the development. In November 2005, the applicants were contemplating instituting judicial review proceedings against City Apartments and City of Burnside in relation to those approvals. The applicants sought to include the respondent as a co-plaintiff in those judicial review proceedings. The respondent resided in Glen Osmond, downhill from the proposed development and would be directly affected by any safety or engineering issues that might arise from the proposed development.
In the period between 5 November 2005 and 28 January 2006, the applicants and the respondent entered into discussions about the proposed judicial review proceedings.
The applicants claim that they and the respondent entered into an agreement on 28 January 2006 whereby they agreed to share equally the liabilities incurred to any person or entity in consequence of the pursuit of the judicial review proceedings. They further claim that those liabilities included not only a liability for their own costs (whether incurred during the period in which the respondent was a party to the proceedings or after) but also all liabilities to City Apartments and the City of Burnside in respect of these judicial review proceedings, again whether those liabilities were incurred before or after the period during which the respondent was a party.
The judicial review proceedings were instituted on 31 January 2006. The applicants and the respondent were plaintiffs in those proceedings.
The judicial review proceedings required an extension of time to issue the proceedings. An order granting such an extension was initially made in March 2006, but in September 2006 the Full Court allowed an appeal against that order and refused to extend time. The applicants and respondent issued an application for special leave to appeal to the High Court.
After the loss in the Full Court in September 2006, the respondent sought to settle the proceedings. Advice was received from senior counsel, junior counsel and their solicitor that a settlement would be advantageous. In May 2007 a mediation was held between the applicants, the respondent, City Apartments…
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- Hall v Halcrow [2021] SADC 114
- Case
- [2021] SADC 114
- Decision Date
CaseChat Overview and Summary
The legal issues the court had to decide included whether the agreement between the parties was valid and binding, the interpretation of the agreement's terms, and the applicability of the doctrine of equitable contribution in the context of the costs incurred during the judicial review proceedings. The court also had to determine whether the respondent could be held liable for costs incurred after the agreement was terminated and whether there was a common obligation that could justify a claim for equitable contribution.
The court found that the parties had indeed intended to create a contract when the respondent agreed to share all liabilities on 28 January 2006. However, the court emphasised that post-contractual conduct could not be used to determine the meaning of the terms, but only to ascertain whether a contract existed and what terms formed part of it. The agreement was interpreted to be limited to the period when both parties were involved in the judicial review proceedings, ending on 28 June 2007. The respondent was also found to be entitled to terminate the agreement, which he did on the same date when he discontinued his proceedings. The court ruled that the respondent was liable for half of the costs incurred by both parties during the period he was a party to the proceedings, as well as half of the liability incurred by the applicants for work undertaken by City Apartments or City of Burnside in defending the judicial review proceedings from 5 November 2005 to 28 June 2007. However, the respondent was not responsible for costs incurred by the applicants after 28 June 2007 or for any liability they might have in relation to work undertaken by City Apartments or City of Burnside after that date.
The court further found that the claim for equitable contribution based on joint participation in the judicial review proceedings failed, as there was no liability for costs until an order for costs was made. The release of the respondent from liability under the Deed of Settlement did not create a co-ordinate liability necessary for equitable contribution. However, the applicants had a good claim for equitable contribution to the extent of one half of the liability of the applicants in respect of work undertaken by City Apartments or City of Burnside in the period from 5 November 2005 to 28 June 2007. The quantum of the applicants’ claim would be determined in further hearings.
Orders
Orders of the court
Held:
1. The parties intended to create a contract on 28 January 2006 when the respondent agreed to share all liabilities. Post contractual conduct can be used to determine whether a contract exists, including what terms form part of the contract, but cannot be used to determine the meaning of the terms: Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 applied.
2. On a proper construction, the agreement only extended for the period when both the applicants and the respondent remained parties to the judicial review proceedings. The agreement therefore ended on 28 June 2007. The agreement also only concerned the judicial review proceedings.
3. In any event, the respondent was entitled to terminate the agreement which he did on 28 June 2007 when he discontinued his proceedings against City Apartments and the City of Burnside.
4. The respondent was liable for half of the costs incurred by the applicants and the respondent during the period that he was a party to the proceedings (which have all been paid) and further half of the liability incurred by the applicants for work undertaken by City Apartments or City of Burnside in defending the judicial review proceedings in the period from 5 November 2005 to 28 June 2007.
5. The respondent is not responsible for costs incurred by the applicants after 28 June 2007 or for any liability that the applicants may have in respect of work undertaken by City Apartments or City of Burnside after 28 June 2007.
6. Equitable contribution is founded on the notion of equality of burden amongst those having a common obligation. The common burden requires there to be co-ordinate liability to make good the one loss. A liability is co-ordinate if the fulfilment by one party discharges the liability of the other: Friend v Brooker (2009) 239 CLR 129 applied. The doctrine of equitable contribution can extend to costs that were incurred by a co-obligee in discharging the common burden: Morgan Equipment Co v Rodgers (No 2) (1993) 32 NSWLR 467 applied.
7. The claim for equitable contribution based on joint participation in the judicial review proceedings fails. There is no liability for costs, even on a contingent basis, until an order for costs is made: Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 applied. At the time that the costs order was made, the respondent had been released from all liability to the City of Burnside for costs under the Deed of Settlement and therefore had no co-ordinate liability to that entity. In relation to City Apartments, the Deed provided for a release of the respondent but reserved the right of City Apartments to pursue the applicants for costs. In respect of existing costs orders the release of the respondent should therefore be construed as a covenant not to sue: Mercantile Bank of Sydney v Taylor (1891) 12 LR (NSW) 252 and Walker v Bowry (1924) 35 CLR 48 applied. In relation to future costs, there was no reason to construe the release as a covenant not to sue.
8. The applicants, based on the agreement, have a good claim for equitable contribution to the extent of one half of the liability of the applicants in respect of work undertaken by City Apartments or City of Burnside in the period from 5 November 2005 to 28 June 2007.
9. The quantum of the applicants’ claim will be determined in further hearings.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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