Matthew Francis Rynne v Peter Bunn (No 2)
[2013] ACTMC 18
•13 August 2013
MATTHEW FRANCIS RYNNE v PETER BUNN (No 2) [2013] ACTMC 18
(13 August 2013)
COSTS – calderbank offer – whether plaintiff entitled to indemnity costs.
Magistrates Court Act 1930 (ACT) s 266A
Fair Trading Act 1992 (ACT)
Court Procedures Rules 2006 (ACT) rr 1616, 1722, 1723
Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358
MGICA (1992) Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236
Kelson v David Syme & Co Ltd [1998] ACTSC 87
Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435
No. CS 10686 of 2010
Magistrate: Morrison
Magistrates Court of the ACT
Date: 13 August 2013
IN THE MAGISTRATES COURT OF THE )
) No. CS 10686 of 2010
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:MATTHEW FRANCIS RYNNE
Plaintiff
AND:PETER BUNN
Defendant
DECISION
Magistrate: Morrison
Date: 13 August 2013
Place: Canberra
I gave judgement for the plaintiff against the defendant in this matter on 21 June 2013 in an amount of $11,856.83 and invited submissions as to costs.
Written submissions have been delivered.
By way of summary, the plaintiff claims costs on the basis that he has succeeded and that costs should follow the event and he further claims indemnity costs because of the delivery of a Calderbank offer on 17 October 2012.
On the other hand, the defendant says that the judgement of the plaintiff, excluding interest, is within the jurisdiction of the Civil and Administrative Tribunal of the Territory; that the plaintiff's claim was under three distinct heads and that he succeeded on one of them only and failed on the other two; that the plaintiff’s Calderbank offer was not a genuine offer of compromise and/or that the defendant's rejection of it was not unreasonable. Having regard to all of the above the defendant says that the court should order that each party pay their own costs.
The defendant in his written submissions referred me to section 266A of the Magistrates Court Act 1930. That section prohibits the commencement of proceedings in this court if an amount of not more than $10,000 is claimed. In this case the plaintiff's originating process filed on 26 October 2010 claimed an amount of $10,048 exclusive of interest. It follows that the prohibition in section 266A, which deals only with the amount claimed and not the amount recovered, is not determinative of any costs dispute.
The Court Procedures Rules 2006 clearly contemplate circumstances where costs will be ordered in Magistrates Court proceedings where there has been judgement for the plaintiff (and not just an amount claimed) of less than $10,000 — see rule 1722(4) and the definition of “relevant amount” in rule 1723.
The defendant correctly points out that the plaintiff failed completely in his claim based on repudiation of a rental agreement and also in his claim based on a breach of the Fair Trading Act 1992. They were claims which were quite separate from the loan agreement claim upon which the plaintiff succeeded. Litigating those unsuccessful claims prolonged the proceedings and put the defendant to some expense he would not otherwise have incurred. The defendant also seeks the costs of the amendment application whereby the Fair Trading Act claim was added.
The defendant also points to the significance of the concept of compromise and of the reasonableness of the defendant's non-acceptance in considering the significance of the Calderbank offer.
The plaintiff’s Calderbank offer was to accept $10,001.00 in satisfaction of all claims. The circumstances surrounding the amendment of the plaintiff's claim so as to include a claim under the Fair Trading Act, as well as the conclusion which I reached in relation to that claim and the claim based on repudiation of the asserted rental agreement point towards the plaintiff's offer not amounting in any real sense to giving anything away insofar as those failed claims are concerned — see Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358.
On the other hand the plaintiff’s claim included a claim for interest under rule 1616 of the Court Procedures Rules 2006 on the monies asserted to be owing for the school fees — that being the claim on which the plaintiff succeeded. The Calderbank offer, if accepted, would have compromised that interest claim also. Interest under rule 1616 is discretionary but that does not mean that it is to be disregarded in determining the extent of the compromise being offered. As at the date of the Calderbank offer, the plaintiff’s claim was for interest for a period of about 3 years and was a claim of not insignificant value. The compromise offered more or less had the effect of foregoing the whole of the interest claim.
In the end result I conclude that the plaintiff’s Calderbank offer did embody a significant element of compromise because of the significance of the interest claim.
The making of a costs order on an indemnity basis following recovery of an amount less than a Calderbank offer is by no means automatic — see MGICA (1992) Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 (at 240).
One relevant consideration is whether the non-acceptance of the plaintiff's offer was unreasonable, although again, unreasonable non-acceptance of a Calderbank offer does not of itself guarantee that costs will be awarded on an indemnity basis — see Kelson v David Syme & Co Ltd [1998] ACTSC 87.
In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, the Victorian Court of Appeal set out (at 442) a non-exhaustive list of factors a court might take into account in determining whether rejection of a Calderbank offer was unreasonable. They were:
1 the stage of the proceedings at which the offer was received;
2 the time allowed to the offeree to consider the offer;
3 the extent of the compromise offered;
4 the offeree’s prospects of success, assessed as at the date of the offer;
5 the clarity with which the terms of the offer were expressed;
6whether the offer foreshadowed an application for an indemnity costs [sic] in the event of the offeree’s rejecting it.
I have already dealt with the issue of the extent of the compromise offered for the purposes of item 3 in that list. In the present case there is nothing material for the purposes of items 1, 2, 5 or 6 in that list which supports an argument against indemnity costs.
Item 4 directs attention to the defendant's prospects of success assessed at the date of the offer. The judgement for the plaintiff is based upon my finding that monies were owed to him by the defendant under an express agreement between the plaintiff and defendant, the existence of which agreement has at all times been denied by the defendant. In the circumstances, the defendant’s prospects of success at the relevant time do not support an argument against indemnity costs.
Nevertheless, the plaintiff's arguments must be balanced against the defendant’s valid observation that the plaintiff succeeded on one only of his three heads of claim.
Pursuant to regulation 1722 of the Court Procedures Rules 2006 the prescribed percentage of recoverable solicitors costs in this case is 67 unless the Court otherwise orders. To balance the competing costs considerations referred to above I make the following costs orders:
a. I order that the defendant pay the plaintiff’s costs for work done for or in the proceedings up to and including 25 October 2012, but not including reserved costs of the amendment application filed 7 December 2011;
b. I order that the plaintiff pay the defendant’s costs for work done for or in the proceedings in connection with the amendment application filed 7 December 2011;
c. I order that the defendant pay the plaintiff’s costs for work done for or in the proceedings as and from 26 October 2012, including costs of this application, such costs to be assessed on the basis that the prescribed percentage for the purposes of rule 1722 is 100.
The intended effect of this order is not to give the plaintiff indemnity costs as sought but the plaintiff’s costs from the date of the Calderbank offer are to be assessed on the basis that he is entitled to 100% of the relevant scale and not the 67% which would otherwise apply.
There may be some uncertainty as to whether certain orders made by his Honour Magistrate Lalor in June 2011 were that costs be reserved or be costs in the cause. To the extent that it is necessary for me to do so I order that the costs which were the subject of the orders made by his Honour on 3 June and 14 June 2011 are to be costs in the cause.
In the course of preparing these reasons it came to my attention that I made a mistake in the interest calculation in the judgement. Interest is allowed at the rate of 14% from 13 August 2009 to 30 June 2010 and at the rate of 6% from 1 July 2010 to the date of judgment — see paragraph 43 of the reasons for judgment. The calculation which then appears at the end of that paragraph calculates interest at 6% from only 1 July 2011 to the date of judgment. To correct the mistake the interest calculation should be as follows:
a.Loan balance and fees $9550.00
b.Interest from 13 August 2009 to 30 June 2010
(321 days at $3.66 per day) $1174.86
c.Interest from 1 July 2010 to 21 June 2013
(1087 days at $1.57 per day) $1706.59
TOTAL $12431.45
Pursuant to the slip rule in reg 6906 of the Court Procedure Rules 2006, I correct the mistake accordingly.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the Reasons for Judgment of his Honour, Magistrate Morrison.
Associate: Gary Khoo
Date: 13 August 2013
Counsel for the Plaintiff: Mr S Whybrow
Solicitor for the Plaintiff: Colquhoun Murphy Solicitors
Counsel for the Defendant: Mr D Jenkins
Solicitor for the Defendant: Howes Kaye Halpin Solicitors
Date of hearing: 26 October 2012 and 24 April 2013
Date of decision: 21 June 2013
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