JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : LANDTEC PROJECTS CORPORATION PTY LTD -v- SPIERS EARTHWORKS PTY LTD [2010] WADC 74 (S) CORAM : WAGER DCJ HEARD : 9-13 & 16-19 MARCH 2009 DELIVERED : 20 MAY 2010
SUPPLEMENTARY
DECISION : 9 JUNE 2010 FILE NO/S : CIV 495 of 2007 BETWEEN : LANDTEC PROJECTS CORPORATION PTY LTD (ACN 110 704 875) Plaintiff
AND
SPIERS EARTHWORKS PTY LTD (ACN 112 057 977)
Defendant
Catchwords: Interest on counterclaim - Costs - Partly successful claim Legislation: Nil
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Result: Defendant to pay the plaintiff's costs of the claim to be taxed
No order as to costs for the counterclaim Representation: Counsel:
Plaintiff : Mr A Metaxas
Defendant : Mr B P Wheatley
Solicitors:
Plaintiff : Metaxas & Hager
Defendant : Mossensons
Case(s) referred to in judgment(s):
Cretazzo and Lombardi (1975) 13 SASR 4
Mannex v Laumbos Pty Ltd [2000] NSWCA 32
Miles & Anor v Palm Bridge Pty Ltd [2001] WASC 42
Ritter v Godfrey [1920] 2 KB 47
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1 WAGER DCJ: On 20 May 2010 I handed down my reasons for decision in this action. I reserved three issues, namely the relevant dates from which interest would accrue in respect of the partly successful counterclaim, the form of the costs order and the form of the final orders. Although it is not a matter that I reserved the defendant submits that I should recalculate the interest in relation to the plaintiff's claim. Specifically the defendant submits that the remedial work for James Eden Drive was not paid for prior to 31 March 2008 and the rectification of the Telstra conduits was not paid for prior to 16 January 2006. I do not accept that I should vary the dates upon which interest has been originally calculated in respect of these two heads of damages. I do not vary my findings from 20 May 2010.
Interest on the counterclaim 2 In my reasons for decision I found that the sum of $131,704.85 was due and owing to the defendant. The counterclaim was otherwise dismissed. 3 It is submitted by the plaintiff that no interest on this sum was due and owing until 31 March 2008 because the first contract and the second contract both incorporated the AS 2124-1992 General Conditions and the counterclaim consisted of sums arising under both the first contract and the second contract. 4 Pursuant to condition of the first contract the principal (plaintiff) may deduct from any monies due to the contractor (defendant) any monies owed by the contract. 5 Pursuant to cl 44.6 of the first contract cl 42.10 the defendant was not entitled to any further payments unless a payment became due under cl 44.6 of the contract. No payment became due under cl 44.6 of the first contract. There is no evidence that the Superintendent certified an amount for such a payment. The Superintendent could have issued a certificate following the rectification works on James Eden Drive that were completed by 31 March 2008. It is submitted that interest should therefore accrue from 31 March 2008. 6 The defendant submits that its entitlement to interest should run from the date of the last payment certificate, namely 17 May 2006, Exhibit 1.69. I do not accept this as being the correct date because it ignores cl 44.6. The plaintiff's submissions in relation to the date when interest becomes due and owing are in accordance with both my findings of fact and the terms of the first contract. I accept the plaintiff's calculation. (Page 4)
Interest on $120,842.85 is due and owing from 31 March 2008 until 20 May 2010. The defendant submits that the interest should be at a rate of 10 per cent consistent with cl 42.9 of the first contract. I accept that the rate of 10 per cent applies. Interest for a period of 780 days at $33.10 being $25,824 applies. The combined counterclaim and interest in respect of the first contract is $157,529. 7 The outstanding sum in relation to the second contract is $10,862. I accept that a rate of 10 per cent should apply for a period of four years and 140 days being $4,760. The total sum in respect of the second contract is $15,085. Given my assessment the combined counterclaim and interest is $173,151. The plaintiff's claim including interest is for a sum of $188,236. $15,085 is the sum to flow from the defendant to the plaintiff. 8 Given my assessment of the plaintiff's claim including interest, the sum to flow from the defendant to the plaintiff is $24,219.18.
Costs order 9 The plaintiff submits that, as the successful party the defendant should pay the plaintiff's costs (however the defendant submits that the plaintiff should pay the costs of the counterclaim). The plaintiff submits that generally the whole of the costs should be awarded in its favour. Reference is made to Miles & Anor v Palm Bridge Pty Ltd [2001] WASC 42 Hasluck J at [51]: "It emerges from this review of the authorities that in circumstances where the Arbitrator has been dealing with various claims and cross-claims under a building contract, the general rule is that the successful party is the party who secures a judgment for the balance, that is to say, the party to whom there is a final flow of money. The party identified as the successful party upon that basis will generally be awarded the whole of the costs, unless there are special circumstances which justify a ruling to the contrary. If the Arbitrator acknowledges the general rule in favour of the successful party, but is then able to identify special circumstances to the contrary referable to the conduct of the dispute, or the outcome, and his reasoning in that regard appears on the face of the award, then a Court will not normally interfere with the exercise of his discretion." 10 The plaintiff submits that although the Court has discretion to order a successful party to pay the other party's costs, such an order would only (Page 5)
be made if the successful party had done something wrong connected with the institution or the conduct of the action or has done a wrongful act in the course of the transaction the subject of the suit (see Cretazzo and Lombardi (1975) 13 SASR 4 at 11); Ritter v Godfrey [1920] 2 KB 47 at 60, 61; Mannex v Laumbos Pty Ltd [2000] NSWCA 32; Rules of the Supreme Court 1971, O 66, r 2. It is submitted that there is no misconduct on the part of the plaintiff in this case and I accept that there has been no misconduct. The plaintiff therefore submits that the unsuccessful litigant should pay the costs of the successful litigant in full. 11 The plaintiff further submits that a chronology shows that by 31 March 2008 the remedial works to James Eden Drive had been completed, however it was only one week prior to trial that the defendant disclosed test certificates relevant to the construction of James Eden Drive and that the certificates were only produced for the plaintiff's inspection on 5 March 2009. 12 The plaintiff also submits that although Registrar Kingsley had ordered on 6 March 2009 that amended papers for the Judge were to be prepared by the defendant, this order was not complied with by the date required. The defendant sought to amend its pleadings at the commencement of trial and again during the course of the trial on 12 March 2009 and 16 March 2009. The defendant would not consent to the tender of the plaintiff's bundle of documents causing the unnecessary and time consuming process of tendering each document page by page. 13 Further, it is submitted that on 17 March 2009, being eight days into the trial, the defendant's counsel opened its case consistent with the sums pleaded in the counterclaim, however he then sought to amend the counterclaim two days later on 19 March 2009 and again on 11 June 2009 after the case had closed. 14 The plaintiff submits that the plaintiff was successful or partly successful on each head of damages whereas the defendant was unsuccessful on five of its claims and that the defendant relied almost entirely on the plaintiff's documentation relevant to its counterclaim to support that part of the claim that was successful. 15 It is also submitted by the plaintiff (and supported by the affidavit of Mr Palermo sworn on 27 May 2010) that an informal offer was put by Mr Palermo to Mr Spiers during the first day of the trial for a sum in excess of the counterclaim order ultimately made on the basis that each party bear their own costs and that the defendant rejected the offer and the (Page 6)
matter proceeded to trial. The defendant submits that because the offer was not in the form of a Calderbank offer and no leave for the affidavit of Mr Palermo was sought that any informal offer cannot be the subject of consideration in relation to an application for costs. Putting aside the usual considerations in respect of costs in a Calderbank situation that I do not take into account the fact that the informal discussions of some type occurred at a very early time of the trial yet there was no disclosure or application to amend the counterclaim at that time is a matter that I will take into account. 16 I accept that the defendant properly defended its claim leading to a reduction of the claim allowed to the plaintiff and the partly successful counterclaim. Nevertheless the plaintiff's case occupied five days of trial and the defendant's case occupied two and a half days of trial. The presentation of the counterclaim and the failure by the defendant to advise the plaintiff of the nature of Mrs Spiers' evidence by applying to amend or providing a summary at the earliest opportunity lengthened the trial process. Ultimately the defendant's counterclaim was based substantially on the figures calculated by the plaintiff as set out in Sch A of the plaintiff's re-amended reply filed 23 January 2009. 17 It would not be doing justice to make an order for costs in respect of the counterclaim. For the reasons I have outlined, no order is made as to the costs of the counterclaim. The defendant is however to pay the plaintiff's costs of the claim to be taxed. 18 I adopt my factual findings and the orders from [218] of the reasons delivered on 20 May 2010 and publish my reasons for judgment. 19 Specifically the orders are as follows: 1. The defendant pay the plaintiff the sum of $67,748 being liquidated damages of with interest at the rate of 10 per cent per annum from 26 July 2005 until the date of judgment being $100,084. 2. The first contract is inclusive of GST. 3. The defendant pay the plaintiff the sum of $44,229.75 with interest at the rate of 6 per cent per annum from 17 June 2005 until the date of judgment being $57,302 in respect of the rectification of James Eden Drive. 4. The defendant pay the plaintiff's claim in respect of the rectification of the Telstra conduits in the sum of $11,906.40 with (Page 7)
interest at a rate of 6 per cent per annum from 17 June 2005 until the date of judgment being $15,425. 5. The plaintiff's claim be otherwise dismissed. 6. The plaintiff pay the defendant the sum of $120,842.85 with interest at a rate of 10 per cent per annum from 31 March 2008 until the date of judgment being $157,529. 7. The plaintiff pay the defendant damages of $10,862 with interest at the rate of 10 per cent per annum from 1 January 2006 until the date of judgment being $15,622. 8. There be no order for costs in relation to the costs of the counterclaim. 9. The defendant pay the plaintiff's costs of the plaintiff's claim to be taxed.
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