(The Honourable Justice Debelle, The Honourable Justice Besanko and The Honourable Justice White)
29 July 2005
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE - OFFER OF COMPROMISE MADE
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - DEMAND, OFFER AND CONSENT
Appeal against orders for costs following a trial in the District Court - judgment sum awarded to successful plaintiff less than amount offered by defendants in a Calderbank letter dated 1 May 2003 which was open for acceptance for seven days only - trial Judge ordered defendants to pay plaintiff's costs of action up to 15 May 2003 and plaintiff ordered to pay defendants' costs of action after 15 May 2003 - whether correct to give the defendants' Calderbank offer the same effect as an offer filed in accordance with Rule 40 - held that regard may be had to a Calderbank offer in the determination of the issue of costs even where a Rule 40 offer could have been lodged - held, by majority, for effect to be given to a Calderbank letter it should be framed in terms consistent with the spirit and intent of Rule 40 - defendants' Calderbank offer was couched in terms significantly different from those required for an offer lodged under Rule 40 - whether a party failing to observe the fundamental obligation of making adequate discovery can have the benefit of a Calderbank offer - the discretion by the trial Judge with respect to costs miscarried - trial Judge's orders for costs set aside - the plaintiff to have his costs of action taxed on the District Court scale - appeal allowed.
[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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AGLC
Morris v McEwen [2005] SASC 284
Case
[2005] SASC 284
Decision Date
CaseChat Overview and Summary
In the matter of Morris v McEwen, the parties were involved in a commercial dispute which was adjudicated in the District Court of Victoria. The plaintiff, Morris, sought recovery of a net balance of moneys owed by the defendants, McEwen, following the breakdown of a commercial relationship. The trial resulted in a judgment for the plaintiff, but the focus of the appeal was on the costs awarded. The defendants had made a settlement offer via a Calderbank letter dated 1 May 2003, which was open for acceptance for only seven days. The trial Judge ordered that the defendants pay the plaintiff's costs up to 15 May 2003, and the plaintiff pay the defendants' costs after that date, effectively apportioning the costs based on the timing of the settlement offer.
The legal issues before the court were whether the Calderbank offer could be considered in determining the costs, and if the trial Judge's discretion in ordering costs was exercised correctly. Specifically, the court needed to determine if the Calderbank offer should be treated similarly to an offer made under Rule 40 of the Supreme Court of Victoria's Civil Procedure, and if the plaintiff's failure to adequately discover relevant information could affect the defendants' entitlement to benefit from the Calderbank offer. Additionally, the court had to assess if the trial Judge's order for costs was appropriate given the parties' conduct during the proceedings.
The court found that while a Calderbank offer could be considered in determining costs, it must be framed in terms consistent with Rule 40 to have the same effect. The defendants' Calderbank offer was not framed in accordance with Rule 40, and thus, could not be given the same weight. Furthermore, the court held that the plaintiff's failure to adequately discover information did not preclude the defendants from benefiting from the Calderbank offer. However, the court held that the trial Judge's discretion with respect to costs was misapplied. Consequently, the orders for costs made by the trial Judge were set aside, and the plaintiff's costs of action were to be taxed on the District Court scale. The appeal was allowed on the basis that the trial Judge's orders for costs were incorrect.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
I reject the second submission made by the plaintiff.Conclusion In my opinion, the appeal should be dismissed.WHITE J: The circumstances giving rise to this appeal are set out in the judgment of Besanko J. I adopt, with respect, his Honour’s statement of those circumstances. The claims determined by the trial Judge were raised in the plaintiff’s claim and in the defendants’ respective counter-claims. However, as the plaintiff acknowledged on appeal, the matter involved, in effect, a taking of accounts following the breakdown of the commercial relationship which had subsisted between the parties before April 2001. After hearings extending over 17 days, the trial Judge found moneys to be owed to the plaintiff by the defendants and by the plaintiff to the defendants. There was a net balance in favour of the plaintiff. Accordingly, the trial Judge entered a single judgment for the plaintiff against the defendants for the amount of the balance in addition to interest, and dismissed the defendants’ counter-claims. Given the nature of the dispute between the parties, this was a sensible way of giving effect to the Court’s determination of the parties’ dispute. The trial Judge stipulated that the entry of the judgment in that form was to be without prejudice to the position of the parties with respect to costs. In the submissions to the Judge with respect to the costs, various matters were pressed. It is not necessary to note those matters in detail. The defendants emphasised the trial Judge’s disbelief of the plaintiff on a number of important matters and referred the Judge to the letter of offer of settlement from the defendants’ solicitors dated 1 May 2003. The plaintiff pressed on the Judge the fact that claims of the defendants had been raised by them for the first time during the cross-examination of the first defendant, and further, that the defendants’ pre-trial discovery, which might have revealed the basis for those claims, had been deficient. It is plain that the defendants’ letter of offer dated 1 May 2003 was the decisive consideration in the order for costs which was made. It is also plain that the trial Judge took the view that the other matters which had been emphasised by the parties did not warrant any adjustment to an order for costs in the plaintiff’s favour. This is apparent from the following passage in the Judge’s reasons:In my view, based on the large number of cases that I have now heard over the years, there was nothing particularly remarkable in the conduct of either party which would lead me to depart from what I would regard as the fairly routine order for costs that should be made in a case of this nature.In all of those circumstances, the plaintiff will have costs on a party-party basis up to and including 15 May 2003. The defendant will have costs on the same basis thereafter. Those costs will be on the District Court scale, notwithstanding the fact that the ultimate judgment was for only some $12,500.Thus, it seems that were it not for the letter of 1 May 2003, the trial Judge would have ordered the defendants to pay the plaintiff’s entire costs of action on the District Court scale.