IW and CA Price Constructions Pty Ltd v Australian Building Insurance Services Pty Ltd

[2018] QCA 76

SUPREME COURT OF QUEENSLAND

CITATION:

IW & CA Price Constructions Pty Ltd v Australian Building Insurance Services Pty Ltd & Anor [2018] QCA 76

PARTIES:

IW & CA PRICE CONSTRUCTIONS PTY LTD
ABN 50 301 203 933 as trustee for COASTAL BUILDING INSURANCE CLAIMS & REPAIRS TRUST
(appellant)
v
AUSTRALIAN BUILDING INSURANCE SERVICES PTY LTD
ACN 162 498 599
(first respondent)
BRUCE WILLIAM CARRIGAN
(second respondent)

FILE NO/S:

Appeal No 3961 of 2017
SC No 9993 of 2013

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal – Further Orders

ORIGINATING COURT:

Supreme Court at Brisbane – [2017] QSC 39 (A Lyons J)

DELIVERED ON:

20 April 2018

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGES:

Gotterson and Morrison and McMurdo JJA

ORDERS:

1.   Further vary the orders under appeal by deleting Order 3 and substituting the following order:

“3.The plaintiff pay to the first defendant 80% of its costs of the proceedings, including all reserved costs (but excluding Third Party Proceedings costs) to be assessed on the standard basis up until 13 April 2016 and from that date, on the indemnity basis.”    

2.   The first respondent pay the appellant one-third of its costs of the appeal on the standard basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – where the first respondent was awarded damages for lost profits and lost goodwill caused by the appellant’s breach of contract – where, on appeal, the award of damages was varied by excluding damages for lost goodwill – where the issue of lost goodwill was a significant one at trial – where only one of the four grounds of appeal succeeded – where the damages payable to the first respondent were reduced by approximately ten per cent – whether the first respondent should pay the appellant’s costs of the appeal – whether the costs orders made at trial should be varied

COUNSEL:

R J Anderson QC, with B A Vass, for the appellant
R G Bain QC, with P Travis, for the respondents

SOLICITORS:

North Coast Law for the appellant
Axia Litigation Lawyers for the respondents

1. GOTTERSON JA:  Orders were made in this appeal on 19 December 2017.  One of the orders required the parties to make submissions in writing, which they have done, with respect to the costs at first instance and of the appeal.  These reasons concern the costs.

1. At trial, and on appeal, the first respondent pressed claims for damages for both loss of profits and loss of goodwill caused by the appellant’s breach of contract.  The damages awarded at first instance included elements of lost goodwill ($95,000 together with interest) and lost profits ($598,675 together with interest).  These awards, and the underlying finding of breach of contract causative of both elements of loss, were challenged in this Court.

1. On appeal, the award of damages was varied by excluding any damages for lost goodwill.  Allowing for interest, the damages were thereby reduced by some $114,999.77 to $1,181,440.92.  Otherwise, the appeal failed.

1. The issue of lost goodwill was a significant one at trial both in terms of the amount claimed for it and the time taken to litigate it.  Some indication of that is illustrated by the revisions of the loss on the first respondent’s case, from an initial $916,890 to $462,505, and then to $213,586, together with the ultimate assessment of it at a lower amount of $95,000.  Nevertheless, it was an issue that was separately identifiable from the others in terms of both evidence and principles of law applicable to it.

1. Litigating this issue, on which the first respondent lost, did require the appellant to incur costs.  It is reasonable that that be reflected in the costs at first instance that the latter is ordered to pay.  In my view, an appropriate order is that it pay 80 per cent of the first defendant’s (first respondent’s) costs below.

1. So far as costs of the appeal are concerned, the justification for appealing is demonstrated by success.  However, the success was limited to just one of the four issues raised by way of appeal and to a reduction in damages of the order of about 10 per cent.

1. In the event, the appellant should have an award of costs in its favour.  Given that argument on all issues occupied less than one day, a fair order is that the appellant recover from the first respondent one-third of its costs of the appeal.

1. In addition to the order made on 19 December 2017, I would therefore make the following orders:

1.        Further vary the orders under appeal by deleting Order 3 and substituting the following order:

“3.     The plaintiff pay to the first defendant 80% of its costs of the proceedings, including all reserved costs (but excluding Third Party Proceedings costs) to be assessed on the standard basis up until 13 April 2016 and from that date, on the indemnity basis.”

2.        The first respondent pay the appellant one-third of its costs of the appeal on the standard basis.

1. MORRISON JA:  I agree with the reasons of Gotterson JA and the orders his Honour proposes.

1. McMURDO JA:  I agree with Gotterson JA.