I L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd

[1999] QSC 347

IN THE SUPREME COURT

OF QUEENSLAND

No. 494 of 1997

Brisbane

Before the Hon. Justice Williams J

[I L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd]

BETWEEN:

I & L SECURITIES PTY LTD (ACN 061 852 355)

Plaintiff

AND:

HTW VALUERS (BRISBANE) PTY LTD (ACN 052 004 672)

Defendant

COSTS ORDERS – WILLIAMS J

Delivered 8 November 1999

CATCHWORDS:

PROCEDURE – COSTS – Offer to settle – defendant’s offer more favourable than judgment – issues narrowed by defendant’s admissions at trial – admissions do not affect consequence of offer – defendant entitled to assessed costs after offer.

Counsel:

Mr J Bell QC with Mr P McQuade for the plaintiff
Mr B O’Donnell QC for the defendant

Solicitors:

T F Wardrobe Esq as town agents for McLaughlins for the plaintiff
Thynne & McCartney for the defendant

Hea

Hearing Date:           26 July, 27 July

1. I published reasons for judgment in this matter on 22 October1999 and then announced that there would be judgment for the plaintiff against the defendant for $440,987.68.  Thereupon the parties requested that I adjourn consideration of an order for costs to a date to be fixed.  Subsequently, each party has submitted argument in writing relating to that issue and asked me to determine the matter on those submissions. 

1. It is accepted that the defendant made an offer to settle on 22 March 1999 which was more favourable to the plaintiff than the judgment.  In consequence it is broadly accepted by each party that the following orders for costs should be made:

(i)        the defendant pay the plaintiff’s costs assessed on the Supreme Court Scale calculated on the standard basis up to and including 22 March 1999;

(ii)           the plaintiff pay the defendant’s costs assessed on the Supreme Court Scale calculated on the standard basis from 23 March 1999.  

1. The outstanding issue between the parties is whether or not the defendant’s costs from 23 March 1999 should be limited to:

(a)        establishing the quantum of damages claimed by the plaintiff;

(b)        determining the issue whether the plaintiff made proper and appropriate enquiries about the borrowers capacity to service the loan. 

1. That question arises in this way.  The plaintiff, a moneylender, advanced a substantial sum of money to a borrower taking as security property which had been valued by the defendant.  After the borrower defaulted the security realized less than the amount owing to the plaintiff.  In the action the plaintiff claimed that the defendant had negligently valued the property, that it had breached a contract it had with the plaintiff, and that its conduct constituted deceptive and misleading conduct pursuant to the Trade Practices Act.  The defendant in its defence denied negligence, alleged contributory negligence, denied the existence of a contract, and denied the applicability of the Trade Practices Act.  All of those matters were in issue as at 22 March 1999.

1. The plaintiff made attempts from about 11 March 1999 to have the defendant advise with greater particularity what matters would be in issue at a trial.  There was no response from the defendant relevant for present purposes.

1. On the morning of the first day of trial, 26 July 1999, counsel for the defendant informed the court (in broad terms) that negligence was admitted, that the allegation of contributory negligence would be confined to certain particulars, and that the defendant’s conduct constituted misleading or deceptive conduct within the meaning of the Trade Practices Act.  That left for determination at the trial the issues (i) whether there was contributory negligence; (ii) whether there was a contract between the parties which had been breached; (iii) whether and on what basis there should be any reduction of the plaintiff’s claim under the Trade Practices Act; and (iv) the quantum of the plaintiff’s claim. 

1. The plaintiff had prepared for trial on the basis that the matters admitted on 26 July were still in issue and required proof.  It is in consequence of those considerations that the plaintiff contends that the costs to which the defendant is entitled after 23 March should be limited to costs associated with establishing the quantum of the plaintiff’s damages and determining the issue whether the plaintiff made proper and appropriate enquiries about the borrowers capacity to service the loan.  As my reasons of 22 October 1999 establish, it was because of that latter matter that a finding of contributory negligence was made and also a finding that the defendant’s deceptive and misleading conduct was not the sole cause of the plaintiff’s loss under the Trade Practices Act.

1. There is certainly some force in the plaintiff’s contention.  But it is met by the defendant’s submission that even if the defendant had contested all issues at trial, and lost on those which were admitted on the first day, the amount for which judgment would have been obtained would still have been less than the offer to settle. 

1. On the defendant’s approach one must consider the position globally.  The offer to settle in question was not limited in any way by reference to issues.  A lump sum figure was offered and ultimately the plaintiff did not obtain a judgment more favourable to it than the offer.  That would have been the position whether the late admissions were made or not. 

1. In those circumstances, I am of the view that the defendant’s contention is correct and that there should be no limitation on the costs the defendant is entitled to recover after 23 March 1999.

1. The orders for costs will therefore be:

(1)          Order that the defendant pay the plaintiff’s costs assessed on the Supreme Court Scale calculated on the standard basis up to and including 22 March 1999.

(2)          Order that the plaintiff pay the defendant’s costs assessed on the Supreme Court Scale calculated on the standard basis from 23 March 1999.