Kemp v Ryan

Case [2011] ACTSC 42

GRAHAM RONALD KEMP V MICHAEL J RYAN & ANOR
[2011] ACTSC 42 (11 March 2011)

PRACTICE AND PROCEDURE – costs – building case resolved by consent orders – costs unresolved – plaintiff seeking indemnity costs consequent on Calderbank offer – Calderbank offer not unambiguously clear – Calderbank offer not capable of being accepted and thereby creating binding contract – order for costs on party-and-party basis only

Court Procedures Rules 2006 (ACT), rr 1616, 1617, 6700(1), 6701.

Zammit v EL-Khoury [2010] ACTSC 6
Calderbank v Calderbank [1976] FAM 93
Quirk v Bawden (1992) 112 ACTR 1
Heywood v Miller [2005] ACTSC 12
Andonaros v Titcume [2005] ACTSC 38
Cairns v Woolworths Ltd [2006] ACTSC 17
Becker v Queensland Investment Corporation and Bovis Lend Lease Pty Ltd (No 2) [2009] ACTSC 147
John Goss Projects Pty Ltd v Thiess Watkins White Constructions Ltd (in liq) [1995] 2 Qd R 591
Grbavac v Hart [1997] 1 VR 154
M T Associates Pty Ltd v Aqua-Max Pty Ltd (No 3) [2000] VSC 163
Evans Shire Council v Richardson (No 2) [2006] NSWCA 61

No.  SC 126 of 2008

Judge:             Master Harper
Supreme Court of the ACT

Date:              11 March 2011

IN THE SUPREME COURT OF THE     )
  )          No.  SC 126 of 2008
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN:GRAHAM RONALD KEMP

Plaintiff

AND:MICHAEL J RYAN

First Defendant

SARA RYAN

Second Defendant

ORDER

Judge:  Master Harper
Date:  11 March 2011
Place:  Canberra

THE COURT ORDERS THAT:

  1. The plaintiff’s application for an order that costs be assessed on an indemnity basis be dismissed.

  1. There be no order as to the costs of the application.

  1. This is a plaintiff’s application for a more favourable order as to costs than the usual order, following the settlement of a building case.

  1. The plaintiff is a builder. The defendants, who are both lawyers, owned a house at Curtin and in July 2007 they signed a contract with the plaintiff to carry out extensions and alterations to their house.

  1. After some work had been carried out, there was a falling out between the parties. In February 2008 the plaintiff commenced proceedings in this court. He claimed the difference between the value of work carried out and progress payments he had received, a difference of $64,228.00. In addition he claimed interest at 20%, said to have been the agreed interest rate for late payments.

  1. The defendants filed a defence through the first defendant’s law firm. In essence the defendants said that the plaintiff had failed to carry out the work in a proper and workmanlike manner, and that they had been put to expense to have the work rectified. They made a counterclaim for unspecified damages.

  1. In June 2008 the plaintiff amended his statement of claim to include a quantum meruit count. In August 2008 the defendants, by then represented by Meyer Vandenberg, filed an amended defence and counterclaim. Also in August 2008, a Scott Schedule was filed setting out details of the disputed items of work. The parties appear…

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AGLC
Kemp v Ryan [2011] ACTSC 42
Case
[2011] ACTSC 42
Decision Date

CaseChat Overview and Summary

The case of Kemp v Ryan involved the plaintiff, Kemp, seeking indemnity costs from the defendant, Ryan, following the resolution of a building dispute through consent orders. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was whether Kemp was entitled to indemnity costs based on a Calderbank offer made by Ryan. A Calderbank offer is a written offer to settle a case on terms that include a provision for indemnity costs if the offer is not accepted and the offeree ultimately obtains a more favourable outcome. The court needed to determine whether Ryan's offer was sufficiently clear and unambiguous to be capable of acceptance and thereby create a binding contract.

In considering the nature of the Calderbank offer, the court held that Ryan's offer did not unambiguously specify the terms on which indemnity costs would be payable. The offer lacked clarity regarding the precise conditions under which indemnity costs would apply, making it impossible for Kemp to accept the offer in a manner that would create a binding contract. Consequently, the court found that Ryan's offer was not capable of being accepted, and therefore, Kemp was not entitled to indemnity costs. The court also declined to order costs on a party-and-party basis, emphasising the need for clear and unambiguous terms in such offers to avoid potential disputes over their enforceability.

In light of the above, the court dismissed Kemp's application for an order that costs be assessed on an indemnity basis. Additionally, the court ruled that there should be no order as to the costs of the application. This decision underscores the importance of precision and clarity in drafting Calderbank offers to ensure they can be effectively accepted and enforced as binding agreements.

Orders

Orders of the court

1. The plaintiff’s application for an order that costs be assessed on an indemnity basis be dismissed.

2. There be no order as to the costs of the application.

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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