Parlin Pty Ltd v ChoiceOne Pty Ltd
[2012] WASCA 19 (S)
•31 JANUARY 2012
PARLIN PTY LTD -v- CHOICEONE PTY LTD [2012] WASCA 19 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASCA 19 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:82/2010 | 2 AUGUST 2011 & ON THE PAPERS | |
| Coram: | NEWNES JA MURPHY JA MAZZA JA | 31/01/12 | |
| 19/04/12 | |||
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Judgment for the appellant in the sum of $170,699.70 Application for indemnity costs dismissed | ||
| B | |||
| PDF Version |
| Parties: | PARLIN PTY LTD CHOICEONE PTY LTD |
Catchwords: | Practice and procedure Contribution proceedings Determination of monetary amount of judgment Whether appellant entitled to contribution by respondent to amount paid by appellant to plaintiff by way of costs Practice and procedure Indemnity costs Calderbank and O 24A offers Relevant principles No grounds for indemnity costs |
Legislation: | Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 7 Rules of the Supreme Court 1971 (WA), O 24A |
Case References: | Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381 Barns v Parlin [2010] WADC 92 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 (S) Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 Insurance Commission of Western Australia v Weatherall [2007] WASCA 264 (S) Parlin Pty Ltd v ChoiceOne Pty Ltd [2012] WASCA 19 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : PARLIN PTY LTD -v- CHOICEONE PTY LTD [2012] WASCA 19 (S) CORAM : NEWNES JA
- MURPHY JA
MAZZA JA
DECISION : 19 APRIL 2012 FILE NO/S : CACV 82 of 2010 BETWEEN : PARLIN PTY LTD
- Appellant
AND
CHOICEONE PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : YEATS DCJ
Citation : BARNS -v- PARLIN PTY LTD & ORS [2010] WADC 92
File No : CIV 1962 of 2005
(Page 2)
Catchwords:
Practice and procedure - Contribution proceedings - Determination of monetary amount of judgment - Whether appellant entitled to contribution by respondent to amount paid by appellant to plaintiff by way of costs
Practice and procedure - Indemnity costs - Calderbank and O 24A offers - Relevant principles - No grounds for indemnity costs
Legislation:
Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 7
Rules of the Supreme Court 1971 (WA), O 24A
Result:
Judgment for the appellant in the sum of $170,699.70
Application for indemnity costs dismissed
Category: B
Representation:
Counsel:
Appellant : Mr G R Hancy
Respondent : Mr M P Bruce
Solicitors:
Appellant : Jarman McKenna
Respondent : Bennett & Co
Case(s) referred to in judgment(s):
Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381
Barns v Parlin [2010] WADC 92
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 (S)
(Page 3)
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Insurance Commission of Western Australia v Weatherall [2007] WASCA 264 (S)
Parlin Pty Ltd v ChoiceOne Pty Ltd [2012] WASCA 19
(Page 4)
1 JUDGMENT OF THE COURT: On 31 January 2012, this court allowed an appeal against a decision of Yeats DCJ in the District Court in which her Honour had dismissed a claim for contribution by the appellant against the respondent: Parlin Pty Ltd v ChoiceOne Pty Ltd [2012] WASCA 19. At the time the reasons of this court were delivered, orders were made allowing the appeal and setting aside her Honour's decision but no orders were made as to the monetary sum to which the appellant was entitled or as to costs, pending submissions from the parties on those matters. Issues have now been raised as to the proper amount of the judgment sum and costs. Before turning to those issues it is appropriate to describe briefly the relevant background.
The background
2 The appeal arose out of an accident on the appellant's drilling rig in which a workman provided by the respondent, a labour hire company, was seriously injured. The workman (Mr Barns) brought an action for damages for negligence against the appellant, the respondent, and the owner of the mine at which the drilling rig was operating (Barrick). The appellant settled the action by the payment to Mr Barns of the sum of $1,013,498.50 by way of damages plus agreed costs of $30,000, a total sum of $1,043,498.50. The appellant then sought contributions from Barrick and the respondent, pursuant to s 7 of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) (the Act). Barrick settled the contribution claim by payment to the appellant of the sum of $190,000 (inclusive of the appellant's costs), but the respondent denied that it was liable to contribute. The appellant's contribution claim against the respondent went to trial.
3 Her Honour found that the respondent was not liable to make any contribution. However, in the course of considering the contribution claim, the primary judge made the observation that any contribution by the respondent fell to be calculated as a proportion of the sum of $1,013,498.50 less the $190,000 paid by Barrick, an amount of $823,498.50: Barns v Parlin [2010] WADC 92 [97]. Her Honour noted that the payment by Barrick apparently included an amount towards the appellant's costs but concluded that any such amount could not be determined and the appropriate course was simply to deduct it in full from the amount the appellant had paid to Mr Barns.
The appeal
4 This court held that the primary judge had erred in concluding that the respondent was not liable to contribute and found that the appellant
(Page 5)
- was entitled to a contribution of 20% to the damages paid by the appellant to the injured workman, less the sum of $190,000 paid by Barrick by way of contribution. The amount of the respondent's contribution was expressed in this court's reasons to be 20% of the sum of $1,013,498.50 less the $190,000 paid by Barrick, an amount of $823,498.50. The contribution was therefore the sum of $164,699.70.
The amount of the judgment sum
5 The appellant says that the respondent's contribution should extend to the costs of $30,000 which the appellant paid to Mr Barns by way of costs; that is, to the total sum of $1,043,498.50, rather than simply the amount of $1,013,498.50 paid by way of damages. The total amount of the respondent's contribution should therefore be $170,699.70, rather than $164,699.70. In support of that contention, the appellant points out that its pleaded claim was for contribution to 'the damages and costs paid to [Mr Barns]' and at trial counsel for the appellant had expressly put the claim to the primary judge on the basis that it was for contribution to the sum of $1,043,498.50 less the amount paid by Barrick.
6 The respondent does not contest that the appellant paid the total sum of $1,043,498.50 to Mr Barns or contend that the amount was unreasonable but it opposes an order that it contribute to the component of $30,000 paid by way of costs. It says that the question of a contribution in respect of the costs of $30,000 was not argued before the primary judge and her Honour's finding that any contribution was to be calculated as a proportion of the sum of $1,013,498.50 less the Barrick contribution was not challenged on the appeal. It is now too late to raise the matter.
7 That submission must be rejected. The appellant's claim was pleaded and put at trial on the basis that the appellant sought a contribution by the respondent to the total sum of $1,043,498.50 which the appellant had paid to Mr Barns less the contribution by Barrick (trial ts 102, 485 - 487). It is clear from an exchange at trial involving the primary judge and counsel on both sides in the course of the appellant's closing submissions that both parties were proceeding on the basis that the starting point was $1,043,498.50, not $1,013,498.50 (trial ts 485 - 487). We do not consider that the reference of the primary judge to the figure of $1,013,498.50 is of significance. Having regard to the way the appellant's case was pleaded and put at trial, it is, in our view, properly to be regarded as simply an error by her Honour.
8 Whilst the matter was not specifically addressed by either party on the appeal, in the course of argument counsel for the appellant referred to
(Page 6)
- the contribution sought from the respondent as being a proportion of the 'total amount' paid by the appellant of '[$]1,143,000', less the $190,000 paid by Barrick (ts 53). It can readily be accepted that counsel was referring to the sum of $1,043,498.50. In concluding that the contribution of 20% should apply to the damages of $1,013,498.50 less the Barrick contribution, this court simply repeated the error of the primary judge.
9 The respondent did not contend that it is not open to the court under the Act to order contribution in respect of the amount paid by the appellant to Mr Barns by way of costs. (As to which, see the discussion in Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381 [27], [115]). In the circumstances of this case it is just and equitable that the contribution by the respondent of 20% should apply to the total sum of $1,043,498.50, less the sum of $190,000 paid by Barrick. That contribution is an amount of $170,699.70.
Indemnity costs
10 The other matter in contention is the appellant's application for indemnity costs. That application is based on two offers made by the appellant before trial. The first was an offer made on 29 July 2008, pursuant to O 24A of the Rules of the Supreme Court 1971 (WA), in the sum of $156,525 plus costs to be taxed. That offer was made some considerable time before the trial, which commenced on 12 April 2010. The second was an offer made shortly before the trial, by letter dated 16 March 2010, in the sum of $140,000 plus costs of $45,000. The second offer was expressed to be open for acceptance until close of business on 18 March 2010. Both offers, it turned out, were significantly less than the sum of $170,699.70 which the appellant ultimately recovered on the appeal.
11 It is convenient to deal with the offers in turn. Before doing so it is necessary to observe that the O 24A offer related to the proceedings below and does not apply to the appeal, although it may be relevant to the exercise of the court's discretion as to the costs of the appeal: Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 (S). In our view, the same applies to the Calderbank offer.
12 Turning to the first offer, O 24A provides that where an offer made by a plaintiff is not accepted by a defendant and the plaintiff obtains a judgment more favourable than the terms of the offer, unless the court otherwise orders the plaintiff is entitled to an order for costs from the date of the offer on a party and party basis. However, whilst O 24A contemplates that ordinarily non-acceptance of an O 24A offer will lead to
(Page 7)
- an order for party and party costs, it does not follow that an order for indemnity costs can never be made. The court may make an order for indemnity costs if it is satisfied that there is some special or unusual feature of the case to justify the court exercising its discretion in that way. Thus such an order may be made where there has been some element of improper or unreasonable conduct by a party or the party's legal advisers: see Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233 (Sheppard J); Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9]; Insurance Commission of Western Australia v Weatherall [2007] WASCA 264 (S) [10]. Whether the conduct of a party in rejecting an O 24A offer is unreasonable will depend upon the particular facts and circumstances of the case. It is clear, however, that it will not be sufficient for the offeror simply to show that it obtained a judgment more favourable than the terms of the offer.
13 Moreover, even when conduct which would justify an indemnity costs order is made out, such an order will ordinarily be made only in circumstances where, in the absence of such an order, the successful party is unlikely to recover the full amount of their costs. While an order for indemnity costs reflects the court's disapproval of the conduct of the unsuccessful party (Flotilla Nominees [25]), such an order is intended to be more than simply an expression of judicial indignation. Its purpose is to provide substantive relief as to costs to the successful party.
14 In this case, nothing has been shown in connection with the respondent's non-acceptance of the O 24A offer which would justify a departure from the usual order that the costs of the trial be on a party and party basis. It is not sufficient for the appellant to contend, as it does in substance, that given the stage which the proceedings had reached (and the material therefore available to the respondent through the interlocutory processes) at the time the offer was made, the offer should have been accepted. There was nothing which took the respondent's rejection of the offer beyond the bounds of the sort of circumstances contemplated by O 24A and into the realm of the unreasonable. There is also nothing to suggest that in the absence of an order for indemnity costs the appellant is unlikely to recover the full amount of its costs.
15 It is necessary to turn then to the Calderbank offer made on 16 March 2010. We should say at the outset that it would be an odd result if a plaintiff was more likely to obtain an order for indemnity costs if the offer that was rejected was a Calderbank offer rather than an offer made under O 24A. We do not think that is the case. The effect of a
(Page 8)
- Calderbank offer must be considered in the context of the express provision in the Rules that ordinarily the rejection of an O 24A offer will lead to an order for party and party costs: see Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 [44] - [45]. As with O 24A, there can be no presumption that the rejection of a Calderbank offer gives rise to an entitlement to indemnity costs. A party which serves a Calderbank offer is not entitled to indemnity costs simply because it obtains a judgment more favourable than the terms of the offer. Rather, the offeror must satisfy the court that an order for indemnity costs is appropriate because the other party's conduct in rejecting the offer was unreasonable: Lo Presti [16] - [17]. Whether the offeree's conduct was unreasonable is to be determined by a consideration of all of the relevant facts and circumstances.
16 As with the appellant's O 24A offer, we do not consider that the conduct of the respondent was such as would justify an order for indemnity costs. The basis of the claim for indemnity costs is in essence no different to that advanced in respect of the O 24A offer. In addition, as we have said, there is nothing to indicate that there is likely to be a shortfall between the appellant's actual costs and its costs if taxed on a party and party basis, in the absence of which an order for indemnity costs is unnecessary to do justice between the parties.
17 We would dismiss the application for indemnity costs in respect of the trial. The appropriate order is that the respondent is to pay the appellant's costs of the trial to be taxed.
18 In respect of the costs of the appeal, the appellant is entitled to its costs of the appeal, save that there should be no order as to the costs of the current application, each party having been successful in part. For the sake of completeness, we would add that there is nothing which would justify an order for indemnity costs on the appeal.
Conclusion
19 We would make the following orders:
1. There be judgment for the appellant in the sum of $170,699.70;
2. The respondent pay to the appellant interest on the sum of $170,699.70 for the period from 26 February 2007 to 2 March 2011 at the rate of 6% per annum;
(Page 9)
- 3. The respondent pay the appellant's costs of the action in the District Court to be taxed;
4. Each party bear its own costs of the appellant's application on the appeal in relation to the amount of the judgment sum and for indemnity costs; and
5. The respondent otherwise pay the appellant's costs of the appeal to be taxed.
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