Mohamed v Adrija Pty Ltd (No 3) - [2022] ACTSC 256

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Mohamed v Adrija Pty Ltd (No 3)
Citation:	[2022] ACTSC 256
Hearing Dates:	26 August 2022
DecisionDate:	20 September 2022
Before:	McWilliam AsJ
Decision:	1. The respondent is to pay the appellants’ costs of the appeal. 2. The appellants are to pay 10% of the respondent’s costs of the proceeding in the court below.
Catchwords:	COSTS – APPLICATION FOR COSTS – whether a special costs order should be made – where appellants were successful on appeal – where a Calderbank offer was made in relation to the proceeding in the court below – where respondent awarded damages on appeal – where quantum of damages awarded exceeded the earlier offer of settlement – whether it was unreasonable for the appellants to reject the settlement offer – whether respondent ought be deprived of its costs where the only claim on which the respondent succeeded occupied a minor part of the proceeding in the court below
Legislation Cited:	Court Procedures Rules 2006 (ACT) r 1721
Cases Cited:	Calderbank v Calderbank[1975] 3 All ER 333 Cooper v Singh [2017] ACTCA 21 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Gray v Richards (No 2) [2014] HCA 47; 315 ALR 1 Hazeldene’s ChickenFarm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] NSCA 298; 13 VR 435 Hulanicki v Walton (No 2) [2015] ACTCA 45 Mohamed v Adrija Pty Ltd (No 2) [2022] ACTSC 89 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Perisher Blue Pty Limited v Chubb Fire Safety Limited [2014] ACTCA 43 Rural & General Insurance Broking Pty Limited v Australian Prudential Regulation Authority [2009] ACTSC 67; 231 FLR 199 Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338; 254 ALR 328
Parties:	Abdiwahaab Barkhadle Mohamed (First Appellant) Sagal Ahmed (Second Appellant) Adrija Pty Ltd (ACN 119 998 720) (Respondent)
Representation:	Counsel A Bartzis (Appellants) S Onitiri (Respondent)
Solicitors Starnet Legal Pty Ltd (Appellants) WMG Legal (Respondent)
File Number:	SCA 2 of 2020

McWilliam AsJ:

The application before the Court concerns the costs orders to be made following the judgment delivered in respect of an appeal from the Magistrates Court: see Mohammed v Adrija (No 2) [2022] ACTSC 89. The underlying dispute between the parties was a residential building dispute. The builder (the respondent) claimed moneys following the contract coming to an end, and the owners (the appellants) counter-claimed against the builder in relation to the work that was carried out.

The appeal was successful. The judgment in the court below (in the sum of $244,703.56) was set aside. Judgment was instead entered for $88,058.00, plus interest payable in the sum of $55,623.83. The details and issues that were in dispute and how they were resolved will not be repeated here.

Following that result, the respondent has sought that the parties each pay their own costs of the appeal and that the appellants pay…

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: [2022] ACTSC 256
Decision Date: 20 September 2022

CaseChat Overview and Summary

Mohamed v Adrija Pty Ltd (No 3) involved an application for costs arising from a successful appeal by the appellants. The dispute centred on whether a special costs order should be made, given that the appellants had been awarded damages on appeal that exceeded an earlier settlement offer. The respondent had made a Calderbank offer in the proceeding in the court below, which the appellants had rejected. The legal issues before the court included whether it was unreasonable for the appellants to reject the settlement offer and whether the respondent should be deprived of its costs due to the minor nature of the successful claim.

The court examined the principles governing costs in the context of a Calderbank offer. It considered the circumstances surrounding the offer and the appellants' decision to reject it. The court noted that the rejection was not unreasonable given the potential for a more favourable outcome on appeal. Additionally, the court assessed the proportion of the proceeding that the successful claim occupied. It concluded that the successful claim was a minor part of the overall proceeding and, therefore, the respondent should not be deprived of its costs.

In its reasoning, the court highlighted the importance of proportionality in assessing costs orders, particularly in relation to Calderbank offers. It determined that the appellants' success on appeal did not warrant a departure from the usual costs order, where the successful party is entitled to costs. The court found that the appellants' rejection of the settlement offer was reasonable and that the respondent should not be penalised for the minor nature of its successful claim.

The final orders were that the respondent was to pay the appellants’ costs of the appeal and that the appellants were to pay 10% of the respondent’s costs of the proceeding in the court below. This outcome reflected the court's consideration of the principles of proportionality and the reasonableness of the appellants' decision to reject the settlement offer.

Orders

Orders of the court

1. The respondent is to pay the appellants’ costs of the appeal.

2. The appellants are to pay 10% of the respondent’s costs of the proceeding in the court below.

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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