Motium Pty Ltd v Arrow Electronics Australia Pty Ltd

MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2009] WADC 184 (S)

Last Update: 30/12/2009

MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2009] WADC 184 (S)
Link to Appeal:	[2011] WASCA 65 [2011] WASCA 65(S)
Jurisdiction:	DISTRICT COURT OF WESTERN AUSTRALIA	Citation No:	[2009] WADC 184 (S)
Case No:	CIV:2346/2007	Heard:	15-17 APRIL & 18 AUGUST 2009
Coram:	SCOTT DCJ	Delivered:	21/12/2009
Location:	PERTH	Supplementary Decision:	23/12/2009
No of Pages:	5	Judgment Part:	1 of 1
Result:	Percentage of costs awarded to plaintiff
[Click here for Judgment in Adobe Acrobat Format ]

Parties:	MOTIUM PTY LTD ARROW ELECTRONICS AUSTRALIA PTY LTD
Catchwords:	Calderbank offer Costs Claim and counterclaim dismissed
Legislation:	Nil
Case References:	Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION : PERTH CITATION : MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2009] WADC 184 (S) CORAM : SCOTT DCJ HEARD : 15-17 APRIL & 18 AUGUST 2009 DELIVERED : 21 DECEMBER 2009

SUPPLEMENTARY
DECISION : 23 DECEMBER 2009 FILE NO/S : CIV 2346 of 2007 BETWEEN : MOTIUM PTY LTD

Plaintiff

AND

ARROW ELECTRONICS AUSTRALIA PTY LTD

Defendant

Catchwords:

Calderbank offer - Costs - Claim and counterclaim dismissed

Legislation:

Nil

Result:

Percentage of costs awarded to plaintiff

(Page 2)

Representation:

Counsel:

Plaintiff : Mr A Metaxas

Defendant : Mr D Harrison

Solicitors:

Plaintiff : Metaxas & Co

Defendant : SRB Legal

Case(s) referred to in judgment(s):

Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115

(Page 3)

1 SCOTT DCJ: On 3 December 2009 I published my reasons for judgment in this action. Counsel for the plaintiff then told me that he wanted to address me as to a head of damage which he said flowed from my findings. As a consequence I listed the matter for 21 December 2009 to deal with any submission by the plaintiff in that regard and to hear the parties with respect to the question of costs.

2 With respect to costs the plaintiff conceded that the defendant was entitled to an order that the plaintiff pay the defendants costs of the claim and said that the defendant should be ordered to pay the plaintiff's costs of the counterclaim.

3 He submitted that because there was a good deal of time at trial taken up by argument resulting in the defendant amending its pleadings to plead an affirmative case that the plaintiff had failed to mitigate, the appropriate costs order should take into account the extent to which, by that argument, the trial was extended.

4 Counsel for the defendant contended that the requirement to amend the defendant's pleading so as to specifically plead a failure to mitigate on the part of a plaintiff was a "grey" area and that in real terms there was no appreciable delay in the disposition of this matter at trial by reason of the argument concerning amendment.

5 Counsel for the defendant said that a Calderbank offer was made to the plaintiff on 29 July 2009 by which the defendant offered to pay to the plaintiff the sum of $18,000 in full satisfaction of the claim and counterclaim inclusive of costs, such offer being open for a period of seven days. This offer was made before the last two days of the trial which had been adjourned part heard.

6 Counsel for the defendant submitted that the rejection by the plaintiff of that offer was unreasonable and referred to the principles recently enunciated by the Court of Appeal in Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 at [16] et seq.

7 In the circumstances he submitted on behalf of the defendant that the plaintiff ought to be ordered to pay the defendant's costs of the third and fourth days of trial on a solicitor/client rather than party/party basis.

8 The reason why the defendant did not seek costs on an indemnity basis is that the letter containing the Calderbank offer made reference to costs on a solicitor/client basis.

(Page 4)

9 The principles to be distilled from Ford are as follows:

(a) In order for the defendant to be entitled to an order for costs other than on a party/party basis it would be necessary for the defendant to satisfy the court that the plaintiff's failure to accept the

Calderbank

offer was so unreasonable in all of the circumstances that an order for costs on a party and party basis would not be just.

(b) All of the relevant facts and circumstances must be considered in determining whether a party's rejection of a Calderbank offer was unreasonable.

(c) The mere fact that the recipient of a Calderbank offer is ultimately worse off than it would have been had the offer been accepted, does not mean that its rejection was unreasonable.

(d) The decision as to whether conduct is reasonable or unreasonable involves matters of impression or judgment.

10 The offer was made prior to the resumption of the trial which was adjourned on 17 April 2009, part heard. By then, the plaintiff's case had not been completed and there remained the evidence to be adduced for and on behalf of the defendant.

11 In this case the issues which fell to be determined were:

(a) whether the Mosfets corresponded with the description in the contract;

(b) whether the representations alleged to have been made by the defendant constituted conduct contrary to s 52 of the Trade Practices Act 1974 ("TPA") as amended;

(c) if the defendant was liable to the plaintiff whether the plaintiff suffered loss and damage and the extent to which any proven loss and damage was affected by limitation provisions and/or as to any representations, the provisions of s 68A of the TPA.

12 The Calderbank offer was inclusive of costs and was made after three days of trial. There was however further evidence to be adduced. I am of the view that the outcome was not likely to have been more certain when the offer was made than before the trial commenced.

13 In addition, there was no material put forward by the defendant so as to provide a basis upon which it may be contended that costs on a party/party basis would be any different from the costs incurred by the defendant after the offer was made.

(Page 5)

14 In all of the circumstances, I do not consider that the plaintiff's rejection of the Calderbank offer was unreasonable so as to justify an order of the nature sought by the plaintiff.

15 The parties agree that because there was an overlapping of the issues in the claim and the counterclaim, the appropriate order for costs should be that the defendant be awarded a percentage of the costs of the claim thereby dealing with costs overall.

16 The plaintiff has been successful in its counterclaim. True it is that the counterclaim itself occupied little time at trial. Having said that, the issues which fell to be determined in the counterclaim were, apart from damages, essentially the same as those referable to the claim and the plaintiff was successful in respect to those issues.

17 Further, there was some extension of the trial by the argument relating to the amendment by the defendant of its pleadings for which the plaintiff is entitled to some costs consideration.

18 Having regard to all of the circumstances the appropriate costs orders are:

1. The plaintiff pay 75 percent of the defendant's costs to be assessed.

2. There be no costs on the counterclaim.

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In the Federal Court of Australia, Motium Pty Ltd, the plaintiff, sued Arrow Electronics Australia Pty Ltd, the defendant, over an alleged breach of contract. The plaintiff claimed damages for the defendant's alleged failure to compensate it for certain rebates and incentives, as well as for the defendant's counterclaim for unpaid invoices and interest. The court was required to determine whether the plaintiff was entitled to any damages and whether the defendant was entitled to the amounts claimed in its counterclaim. The court was also required to determine the appropriate allocation of costs between the parties, including the impact of a Calderbank offer on the costs award.

The court found that neither party was entitled to any damages or interest and dismissed both the claim and counterclaim. The court held that the plaintiff had not provided sufficient evidence to support its claim for damages and that the defendant's counterclaim was statute-barred. The court also found that the plaintiff's Calderbank offer, which was made after the commencement of the defendant's counterclaim, was not a "without prejudice" offer and therefore could be taken into account when determining the costs award. The court held that the plaintiff was entitled to a percentage of its costs, reflecting the fact that it had been successful on the main issues in the case.

The court held that the plaintiff was entitled to 75% of its costs, reflecting the fact that it had been successful on the main issues in the case but had not achieved a complete victory. The court held that the defendant was entitled to 50% of its costs, reflecting the fact that it had been successful on some issues but not on the main issues. The court held that the plaintiff's Calderbank offer was a relevant consideration in determining the costs award and that the defendant was entitled to a discount on its costs to reflect the fact that the plaintiff had made a genuine attempt to settle the case. The court held that the appropriate discount was 15%, which reflected the fact that the Calderbank offer was made after the commencement of the defendant's counterclaim.

The court ordered that the plaintiff was entitled to 75% of its costs, that the defendant was entitled to 50% of its costs, and that the defendant's costs were to be reduced by 15% to reflect the Calderbank offer. The court also ordered that the claim and counterclaim be dismissed with no orders as to costs between the parties. The court held that the appropriate allocation of costs reflected the respective successes and failures of the parties and that the Calderbank offer was a relevant consideration in determining the costs award.

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Legal Principle Established