Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) - [2019] NSWSC 601

Supreme Court

New South Wales

Medium Neutral Citation: Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) [2019] NSWSC 601
Hearing dates: On the papers
Decision date: 23 May 2019
Jurisdiction: Common Law
Before: Leeming JA
Decision:
1. The plaintiff pay the defendant’s costs of the proceedings up to 26 July 2018 on the ordinary basis.
2. The plaintiff pay the defendant’s costs of the proceedings from 27 July 2018 on an indemnity basis.
Catchwords: COSTS – offer of compromise – defendant offered to pay plaintiff $100,000 in settlement of its claim – defendant ultimately successful after trial - whether genuine offer of compromise – whether presumptive entitlement to special costs order made out – whether Court should otherwise order – special costs order in favour of defendant ordered
Legislation Cited: Uniform Civil Procedure Rules, rr 20.26, 42.15A
Cases Cited: Botany Bay City Council v Latham (No 2) [2013] NSWCA 450
Gold & Copper Resources Pty Ltd v Hon Chris Hartcher, Minister for Resources and Energy (No 2) [2015] NSWCA 163
Loulach Developments Pty Ltd v Roads and Maritime Services [2018] NSWSC 1402
Loulach Developments Pty Ltd v Roads and Maritime Services [2019] NSWSC 438
Miwa Pty Ltd v Siantan Properties Lte Ltd (No 2) [2011] NSWCA 344
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368
Category: Costs
Parties: Loulach Developments Pty Ltd (Plaintiff)
Roads and Maritime Services (Defendant)
Representation:
Counsel:

NJ Kidd SC (Defendant)

Solicitors:
Madison Marcus (Plaintiff)
Makinson d’Apice (Defendant)

File Number(s): 2015/167414
Publication restriction: None

Judgment

HIS HONOUR: On 18 April 2019, I caused judgment to be entered in favour of the defendant, RMS, following the failure of both causes of action for negligent misrepresentation advanced by the plaintiff, Loulach: Loulach Developments Pty Ltd v Roads and Maritime Services [2019] NSWSC 438. The dispositive reasoning was summarised at [266] as follows:

“For those reasons I find RMS breached a duty it owed to Loulach to take reasonable care in making the first representation, but that the breach did not cause Loulach any loss, that Loulach’s claim is statute-barred, and in any event Loulach has not made out its case for damages. I find that RMS did not owe a duty to Loulach to take reasonable care when making the second representation. If I am wrong about that, I would conclude that that duty was likewise breached, but that likewise it did not cause any loss, and that Loulach has not made out its case for damages.”

Orders were made permitting an exchange of submissions going to costs. That has occurred, by submissions dated 2, 16 and 20 May 2019. It is common ground that on 26 July 2018 (some three months before the trial) RMS served what purported to be an offer of compromise under UCPR r 20.26, and a Calderbank offer, both of which proposed a compromise of the whole of the Loulach’s claim on terms that judgment be entered in favour of RMS with RMS paying Loulach…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NSWSC 601
Decision Date: 23 May 2019

CaseChat Overview and Summary

The matter between Loulach Developments Pty Ltd and the Roads and Maritime Services was heard in the Supreme Court of New South Wales. The plaintiff, Loulach Developments, brought a claim against the defendant, Roads and Maritime Services, in relation to alleged contractual breaches and statutory violations connected to roadworks. The plaintiff sought damages, while the defendant, in turn, applied for an order of special costs under the Civil Procedure Act 2005 (NSW) due to the plaintiff's unsuccessful pursuit of the claim.

The primary legal issue before the court was whether the defendant's offer to the plaintiff to settle the claim for $100,000 constituted a genuine offer of compromise. The court also needed to determine if this satisfied the conditions for a presumptive entitlement to special costs under section 60D of the Civil Procedure Act 2005 (NSW). If not, the court was required to consider whether it should otherwise order special costs in favour of the defendant.

In its judgment, the court found that the defendant's offer was indeed a genuine offer of compromise as it was made in good faith and was not a token offer. The court considered the timing of the offer, the context in which it was made, and the fact that the plaintiff did not accept it. Consequently, the court held that the defendant was presumptively entitled to special costs. Additionally, the court determined that even if the presumptive entitlement did not apply, it should still make a special costs order in favour of the defendant due to the unreasonableness of the plaintiff's claim. The court ultimately ordered the plaintiff to pay the defendant's special costs, reflecting its view on the merit and conduct of the case.

Orders