Lend Lease Infrastructure Services Pty Ltd v Whitehorse Trucks Pty Ltd (No. 2)
[2014] VCC 924
•25 June 2014 (revised later that day)
| IN THE COUNTY COURT OF VICTORIA | Revised (Not) Restricted |
AT MELBOURNE
COMMERCIAL LIST
EXPEDITED DIVISION
Case No. CI-10-00796
| LEND LEASE INFRASTRUCTURE SERVICES PTY LTD | Plaintiff | |
| v. | ||
| WHITEHORSE TRUCKS PTY LTD and HERCULES ENGINEERING PTY LTD | Defendants | |
JUDGE: | HIS HONOUR JUDGE ANDERSON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 June 2014 | |
DATE OF JUDGMENT: | 25 June 2014 (revised later that day) | |
CASE MAY BE CITED AS: | Lend Lease Infrastructure Services Pty Ltd v Whitehorse Trucks Pty Ltd & Anor (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 924 | |
REASONS FOR JUDGMENT
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Catchwords: Costs – “All-in” offer of compromise – Difficulty of quantifying the costs as at the date of the offers – Whether costs as between defendants, both of which were found to be liable to the plaintiff, should be apportioned.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W. Alstergren QC with Mr D. Briggs | Norton Rose Fulbright |
| For the First Defendant | Mr M. Roberts QC | Moray & Agnew |
| For the Second Defendant | Mr R. Andrew | Wotton & Kearney |
HIS HONOUR:
1 Judgment was given in this matter on 12 June 2014 in favour of the plaintiff for a proposed total sum of $530,141.10. There are a number of residual matters which need to be decided. The parties have filed written submissions and have today made oral argument so that the Court can make a determination.
2 The matters for decision are as follows:
a. confirmation of the amounts in respect of which judgment should be entered for the plaintiff against each defendant;
b. the period during which interest on the judgment should be awarded;
c. the costs orders to made, specifically:
i. whether the plaintiff is entitled to have costs taxed on an indemnity basis against the second defendant by reason of settlement offers served by the plaintiff;
ii. whether there should be exclusions from the plaintiff’s costs relating to certain interlocutory processes;
iii. whether there should be certification for two counsel in respect of the plaintiff’s costs;
iv. whether the second defendant should pay a proportion of the first defendant’s costs.
Amount of judgment
3 There is no dispute between the parties in relation to the amounts due in favour of the plaintiff by each defendant, being the sum of $106,028.21 as against the first defendant and the sum of $424,112.84 as against the second defendant.
Period from which interest is to run
4 The first and second defendants submit that interest should not run from the date of the issue of the proceeding, on 26 February 2010, but rather, from 1 February 2012, being the date when an amended statement of claim against both the first and second defendants was filed, or alternatively in relation to the second defendant, from 22 July 2011, when the Writ was amended by the plaintiff to join the second defendant.
5 In my view, interest against the first defendant should run from the issue of the proceeding for the following reasons:
a. the plaintiff had incurred the loss and damage prior to the issue of the proceeding;
b. the plaintiff’s primary claim was against the first defendant as the direct contractor;
c. it was for the first defendant to demonstrate that there was another party who should accept some responsibility for the loss and damage suffered by the plaintiff;
d. although it took some time for the joinder of the second defendant, the direct liability of the second defendant to the plaintiff remained a critical issue for determination at trial.
6 In relation to the second defendant, I consider that interest should be paid from the date the second defendant was joined by the plaintiff as a defendant on 22 July 2011. Interest should not be paid before that date by the second defendant because it was only participating in the proceeding as a third party, against whom the first defendant was claiming contribution. I do not accept that the date of the filing of the amended statement of claim on 1 February 2012 is the appropriate starting date for the payment of interest, largely for the reasons stated in paragraph 5.
Costs
7 Exclusion of certain interlocutory matters: The plaintiff conceded that it was appropriate that its costs exclude certain matters.
8 Certification of counsel: Mr Andrew for the second defendant, submitted that there should be no certification for both junior and senior counsel for the plaintiff on the basis that all parties had originally been represented by junior counsel, although since the commencement of the proceeding both plaintiff’s and first defendant’s counsel had been appointed senior counsel.
9 I am satisfied that the plaintiff’s solicitors were entitled to brief both senior and junior counsel, particularly for the trial of the proceeding. The case had considerable complexity including in both the evidentiary matters and the legal issues, and which involved the receipt of expert evidence from five major witnesses and further subsidiary witnesses.
10 I propose to certify for the briefing of two counsel in relation to the trial. As to the involvement of two counsel at other stages of the proceeding, and the quantification of counsels’ fees, those are matters more appropriately for agreement between the parties or determination by the Costs Court.
11 Offers of compromise: The plaintiff made a series of offers of compromise as follows:
a. on 3 July 2013, to accept $750,000 “all in”;
b. on 17 September 2013, to accept $750,000 “all in”;
c. on 23 April 2014, to accept $1 million “all in”.
12 The plaintiff submits that as a consequence of the second defendant’s “unreasonable” failure to accept the first, or a later, offer it should pay the plaintiff’s costs on an indemnity basis from the date of the relevant offer.
13 The Court was notified of the offers of compromise, in the plaintiff’s written submissions, before the issue of interest was determined. So far as the second defendant is concerned the interest, if payable from 26 February 2010 was $195,285.31, and if payable from 1 February 2012 was $107,413.08. This was a significant dispute which should have been decided before disclosure of the offers.
14 The plaintiff’s solicitors filed an affidavit stating that at the date of each offer, the plaintiff’s costs were “approximately”:
a. for the 3 July 2013 offer, $313,700;
b. for the 17 September 2013 offer, $405,000;
c. for the 24 April 2014 offer, $550,000.
15 These figures were reduced to 60% to reflect the approximate party-party costs at the time of each offer. As Mr Andrew submitted, these calculations are unsatisfactory as it is unclear what is the basis of the estimates and whether they include items which should be excluded.
16 I consider that it is not at all clear on the material presently before me that the recovery by the plaintiff in the proceeding against the second defendant is greater than any of the offers made. Further, it would not have been an easy matter for the second defendant at the time each offer was made to make an appropriate judgment about the costs component of the offer, particularly as the first offer was only open to be accepted for 12 days and the second offer for 3 days.
17 Accordingly, the plaintiff’s costs will be assessed on a party-party basis.
18 The first defendant’s costs: The first defendant seeks to have part of its costs paid by the second defendant. The first defendant joined the second defendant as a third party after the proceeding was issued, claiming contribution. The plaintiff later amended its claim to also seek relief against the second defendant. I found that both defendants are concurrent wrongdoers; with the first defendant 20% responsible, and the second defendant 80% responsible.
19 I consider that in this case, there should be a similar apportioning of the costs of the first and second defendants. The Court of Appeal in Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; (2010) 31 VR 46 suggested at paragraphs 111 and 112 that such an apportionment may not be inappropriate.
20 Certainly, before Part IVAA was introduced into the Wrongs Act 1958 (Vic), it is likely that the first defendant, upon determination of a third party proceeding in a similar manner as I have by the apportionment of the claim would have recovered part of its costs. There seems no reason, as a matter of principle, why this should not happen in the present circumstances.
21 First defendant’s counsel, Mr Roberts QC, submitted that his client should be paid 80% of its costs by the second defendant. He conceded that his client should be responsible for 20% of the second defendant’s costs. He suggested that there should be an offsetting so that, for example, the second defendant pay 60% of the first defendant’s costs.
22 I consider that there should be some offsetting but that Mr Roberts’ suggestion may unfairly work to the disadvantage of the second defendant. I will use an adjusted figure of 55%.
Orders
23 The orders I will make are as follows:
1.Judgment for the plaintiff against the first defendant for $106,028.21, with interest pursuant to statute from 26 February 2010 to today of $46,116.39, total judgment $152,144.60.
2.Judgment for the plaintiff against the second defendant for $422,112.84, with interest pursuant to statute from 22 July 2011 to today of $131,393.64, total judgment $556,506.48.
3.The first defendant pay 20% of the plaintiff’s costs of and incidental to the proceedings on a party/party basis (including all reserved costs), but excluding:
(a)the costs of:
(i)the plaintiff’s application dated 16 June 2010;
(ii)the directions hearings on 14 April 2011 and 16 June 2011; and
(b)the costs of and occasioned by the filing and service of the plaintiff’s amended statement of claim dated 1 February 2012.
4.The second defendant pay 80% of the plaintiff’s costs of and incidental to the proceedings upon a party/party basis (including all reserved costs), but excluding:
(a)the costs of:
(i)the plaintiff’s application dated 16 June 2010;
(ii)the directions hearings on 14 April 2011 and 16 June 2011; and
(b)the costs of and occasioned by the filing and service of the plaintiff’s amended statement of claim dated 1 February 2012.
5.Certify for the plaintiff’s two counsel in relation to the preparation for and the trial of the action.
6.The second defendant pay 55% of the first defendant’s costs of and incidental to the proceedings on a party/party basis.
7.This order is to be drawn up by the first defendant and signed by the Judge.
Certificate
I certify that these 7 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 25 June 2014 (and revised later that day).
Dated: 25 June 2014
Catherine Kusiak
Associate to His Honour Judge Anderson
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