J & M United Pty Ltd v Danaris Pty Ltd & Anor (No.2)
[2010] FMCA 756
•23 September 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| J & M UNITED PTY LTD v DANARIS PTY LTD & ANOR (No.2) | [2010] FMCA 756 |
| TRADE PRACTICES – COSTS – Where applicant made an open offer pursuant to O 23, r.3 of Federal Court Rules which was less than the amount finally determined in its favour. |
| Trade Practices Act1974 (Cth), ss.52, 82 Federal Court Rules Federal Magistrates Court Rules 2001 |
| Applicant: | J & M UNITED PTY LTD |
| First Respondent: | DANARIS PTY LTD |
| Second Respondent: | AVEDIS VARVARIAN |
| File Number: | SYG 3053 of 2009 |
| Judgment of: | Raphael FM |
| Hearing date: | 23 September 2010 |
| Date of Last Submission: | 23 September 2010 |
| Delivered at: | Sydney |
| Delivered on: | 23 September 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Williams The Law Firm |
| Solicitors for the Respondents: | Carneys Lawyers |
ORDERS
Order 2 of the Court’s orders dated 20 September 2010 will be vacated and in its place there will be an order that the respondents pay the applicant’s costs assessed, if not agreed, pursuant to Part 21, rule 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules 2001, up to and including 29 June 2010 and after that date to be taxed, if not agreed, upon an indemnity basis.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3053 of 2009
| J & M UNITED PTY LTD |
Applicant
And
| DANARIS PTY LTD |
First Respondent
| AVEDIA VARVARIAN |
Second Respondent
REASONS FOR JUDGMENT
In this proceeding brought for damages under s.82 of the Trade Practices Act1974 (Cth) (the “Act”) for an alleged breach of s.52 of the Act, I made an award in favour of the applicant in the sum of $50,120.00 together with interest. The applicant has advised the Court that, by way of a letter dated 30 June 2010, it made an open offer pursuant to Order 23, rule 3 of the Federal Court Rules, read with rule 1.05(2) of the Federal Magistrates Court Rules and schedule 3, part 2 of the Federal Magistrates Court Rules.
The effect of those references to the Federal Magistrates Court Rules is to bring within this Court’s rules certain rules of the Federal Court, including rule 23 of the Federal Court Rules. The offer which was made was to accept the sum of $50,000.00 payable within 28 days, together with the applicant’s party and party costs of the proceedings to the date of the offer, as agreed or assessed. The letter indicated that the offer was open for acceptance for a period of 14 days. On 12 July 2010 the respondents wrote to the applicant and indicated that they did not accept the offer and substituted for it a counter-offer of their own.
Order 23 of the Federal Court Rules provides that a party may make to another party an offer to compromise a claim. It describes the form of offer and gives certain further requirements, including some requirements concerning costs and the time for making the offer. Order 23, rule 11(4) states that if an offer is made by an applicant and not accepted by the respondent and the applicant obtains judgment on the claim to which the offer relates not less favourable than the terms of the offer then, unless the Court otherwise orders, the applicant is entitled to an order against the respondent for costs incurred in respect of the claim of party and party costs up to the date the offer was made and, after that date, costs to be taxed on an indemnity basis.
There does not appear to be any dispute that the offer complies with the provisions of Order 23. The offer was $120.00 less than the final amount awarded by me and it makes no reference to interest. There are provisions in the order for an offer to be inclusive or exclusive of interest. I do not propose to express any views about this because I do not believe it is necessary in the instant case where the substantive award was greater than the amount offered, even by a small amount. There has to be a cut-off point and the orders provided for in Order 23 should not be ameliorated to the benefit of a respondent just because the amount obtained is only slightly more than the offer made.
Mr Dawson, who appears for the respondent, urges the Court not to make the order on the grounds that, at the time the offer was made, not all the evidence was available. He points to the fact that two affidavits from Mr and Mrs Messina, the principals in these proceedings, were not filed until 27 July 2010. These affidavits were affidavits in response to the substantive affidavit of Mr Varvarian which was filed on 22 June 2010. But they were not the substantive affidavits of the applicants, those being two affidavits filed on 22 April 2010.
I am also aware that the matter went to mediation and the offer from the applicants was made two days after the conclusion of that mediation, at a time when the applicant says all the issues in the matter were known by the parties. This statement appears to be corroborated by the letter from the respondents’ solicitors dated 12 July 2010, making the counter-offer where it says:
“Given that at the mediation all the issues in relation to this litigation were ventilated…”
I am of the view that the respondents were in a position to give proper consideration to the offer by the applicant when it was made. My recollection of the two affidavits referred to is that they provided very little in the way of new evidence but were mostly concerned with denials of statements made by Mr Varvarian.
In those circumstances I see no reason why I should depart from the terms of the order. I believe that it is the responsibility of the respondents to convince me otherwise, and despite Mr Dawson’s helpful submissions, I am unable to say that he has done so.
Order 2 of the Court’s orders dated 20 September 2010 will be vacated and in its place there will be an order that the respondents pay the applicant’s costs assessed, if not agreed, pursuant to Part 21, rule 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules 2001, up to and including 29 June 2010 and after that date to be taxed, if not agreed, upon an indemnity basis.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 1 October 2010
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