Peter Wilson trading as Sutket Farm v Umilo Bria (No 2)

[2020] VCC 1112

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-17-01125

PETER WILSON trading as Sutket Farm	Plaintiff
v
UMILO BRIA	Defendant

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JUDGE:	LEWITAN
WHERE HELD:	Melbourne
DATE OF HEARING:	Determined on the papers
DATE OF JUDGMENT:	29 July 2020
CASE MAY BE CITED AS:	Peter Wilson trading as Sutket Farm v Umilo Bria (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VCC 1112

REASONS FOR JUDGMENT
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Subject:         Terms of order, interest and indemnity costs application  

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Z Partos	Vinci Solicitors and Conveyancers
Defendant in person

HER HONOUR:

1       On 22 June 2020 I published my reasons for judgment (the judgment)[1] and ordered the plaintiff to file submissions on the question of costs, interest and the terms of the order by 24 June 2020.  I also ordered the defendant to file his submissions in reply by 26 June 2020.  On 25 June 2020 the defendant requested an extension of 14 days to comply with these orders.  On 26 June 2020 I ordered that the time for filing the defendant’s submissions in reply be extended for a further period of 14 days until 10 July 2020.  I also ordered that  the plaintiff file any submissions in reply within 7 days.  The parties have complied with those orders.

[1] Peter Wilson trading as Sutket Farm v Umilo Bria [2020] VCC 853.

Indemnity Costs – Calderbank offer

2       The plaintiff seeks an order that the defendant pay the plaintiff’s costs of the proceeding and the counterclaim (including reserved costs) on a standard basis up until 27 August 2018 and thereafter on an indemnity basis.

3       In seeking costs after 27 August 2018 on an indemnity basis the plaintiff relies on a letter dated 27 August 2018 which was sent by the plaintiff’s former solicitors to the then solicitors for the defendant (the offer).  The plaintiff offered to resolve the proceeding for the sum of $200,000.  The offer was expressed to be open for acceptance for fourteen days.

4       The plaintiff submits that the offer was a substantial compromise of the plaintiff’s claim.  The plaintiff submits that having regard to the circumstances that existed at the time of the offer, the defendant’s failure to accept the offer was unreasonable.

5       The plaintiff submits that the proceeding was well advanced by the date of the offer.  The defendant was at that time represented by solicitors.[2]  Mediation had been held on 10 August 2018.  The plaintiff had filed further particulars to its statement of claim on 28 March 2018 which provided particulars of the services the subject of the plaintiff’s claim.  The plaintiff submitted that the defendant was in a good position to make a realistic assessment of the offer.  The offer was made after the defendant had filed an amended defence and counterclaim on 3 August 2018.

[2] The defendant’s solicitors had leave to withdraw on 11 October 2018.

6       A court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:

(a)      the stage of the proceeding at which the offer was received;

(b)      the time allowed to the offeree to consider the offer;

(c)       the extent of the compromise offered;

(d)      the offeree’s prospects of success, assessed as at the date of the offer;

(e)      the clarity with which the terms of the offer were expressed;

(f)       whether the offer foreshadowed an application for indemnity costs in            the event of the offeree’s rejecting it.[3]

[3]Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435, 442.

7       The plaintiff submitted that at the time the offer was made, there was no substantive defence to the plaintiff’s claim and the defendant “would have been aware that the merits of the counterclaim were poor”.

8       The defendant submits that it was reasonable for the defendant to reject the offer. The defendant submitted that the offer did not address the defendant’s counterclaim.  The defendant’s counterclaim alleged that the plaintiff “was under a duty as bailee for reward of the Mares and their progeny, to take reasonable care of them and to return them to Bria on demand.”[4]

[4]Amended defence and counterclaim, paragraph 22.

9 I accept the defendant’s submission that the offer did not address the defendant’s counterclaim that the plaintiff breached its duty as bailee for reward of the mares and their progeny. The offer did not contain any discussion as to why that aspect of the counterclaim had no real prospects of success. At that stage neither party had referred to Part 4.2 of the Australian Consumer Law and Fair Trading Act 2012.

10      The onus of showing unreasonableness is on the offeror.[5]  I have considered each of the factors referred to in Hazeldene’s Chicken Farm v Victorian Workcover Authority (No 2)[6].   Taking all of those factors into account, I am not satisfied that the offeror’s onus has been discharged. I refuse the plaintiff’s application for the payment of costs on an indemnity basis after 27 August 2017.

[5]Trueenergy Pty. Ltd. v Dispute Resolution Panel (No 2) [2009] VSC 612, para 8; Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd (No.2) (2002) 190 ALR 121, 125 and 127.

[6](2005) 13 VR 435, 442.

Interest

11 The plaintiff claims interest pursuant to s58 of the Supreme Court Act 1986 (Supreme Court Act) and s50 of the County Court Act 1958 (County Court Act) from 24 November 2016 which is the date of the final account.

12 Section 58(1) of the Supreme Court Act provides that “if in a proceeding a debt or sum certain is recovered, the Court must on application, unless good cause is shown to the contrary, allow interest to the creditor on the debt or sum” …” from the time when demand of payment was made”.

13 The County Court has power to award interest under s58 of the Supreme Court Act by virtue of s50 of the County Court Act.

14 The defendant contends that a reduction in the interest payable under s58(1) should be ordered to account for the delays in the conduct of the proceeding attributable to the plaintiff. The defendant submits that undue delay on the part of a successful plaintiff is capable of amounting to “good cause” for the purposes of s58(1). The defendant referred to Nemur Varity Pty Ltd v National Australia Bank Ltd [7] and PGA Group Pty Ltd v Idamaneo (No 789) formerly Symbion Health Ltd (No 2) (PGA Group).[8]

[7] [1999] VSC 366.

[8] [2011] VSC 420.

15      The defendant submits that the plaintiff’s failure to file further and better particulars within the time first ordered by the Court resulted in a delay of 112 days between 6 December 2017 (the date for compliance with Judicial Registrar Tran’s order of 6 November 2017) and 28 March 2018, when the plaintiff supplied those further and better particulars.  After the non-compliance with the orders of 6 December 2017, the trial date of 23 April 2018 was vacated and the trial re-listed for 9 October 2018.

16      On 6 November 2017 Judicial Registrar Tran ordered:

6.  By 4pm on 6 December 2017, the Plaintiff is to file and serve Further and Better Particulars of its Statement of Claim including:

a.Further and Better Particulars of the agreement alleged in paragraph 3; and

b.a Scott Schedule in the form of an Excel spreadsheet specifying:

i.each horse alleged to have been agisted;

ii.the name of that horse;

iii.if that horse is alleged to be the progeny of a horse referred to in paragraph 2 of the Statement of Claim, the name of the horse which it is said to be the progeny of;

iv.the date at which the Plaintiff commenced to provide agistment for that horse;

v. the date at which the Plaintiff ceased to provide agistment for that horse, if any;

vi.the fees for agistment with respect to that horse;

vii.any further fees such as horse husbandry and incidentals with respect to that horse;

viii.the invoices in which fees are recorded with respect to that horse.

c.Further and Better Particulars of any fees paid by the Defendant.

7.By 4pm on 20 December 2017, the Defendant file and serve any Amended Defence and any Counterclaim.

17      In PGA Group  Davies J considered the circumstances when “good cause” is shown so as to deprive the plaintiff of its right to interest pursuant to s58 of the Supreme Court Act. She stated :

What constitutes good cause in any given case will depend on the particular facts and circumstances.  I have to be satisfied on the material before me that there is good reason not to apply the general rule in favour of awarding interest to PGA from 2 July 2001.[9]

[9] [2011] VSC 420, [4].

18 I accept the defendant’s submission that whilst delay on the part of a plaintiff is capable of amounting to “good cause” for the purposes of s58(1), the cases cited by the defendant demonstrate that delay is often manifested in an unreasonable delay in commencing proceedings. In this case there is no suggestion that there was an unreasonable delay in commencing proceedings. Indeed the evidence was that the defendant discouraged the plaintiff from instituting proceedings.[10]

[10] See paragraphs 15 – 39 of the Judgment.

19      The plaintiff’s spreadsheet the subject of the further and better particulars was a substantial and complicated document reconstructing many years of services provided by the plaintiff to the defendant.  The reasons for the delay in preparing those further and better particulars included the intervening Christmas period, the reduced financial resources suffered by the plaintiff as a result of the defendant’s failure to pay the plaintiff for services rendered and the poor health of Peter Wilson’s wife who had been diagnosed with cancer.

20      In this case the defendant did not file his amended defence and counterclaim until 3 August 2018.

21      In the circumstances of this case, I am not satisfied that the delay of 112 days in supplying further and better particulars of the plaintiff’s case amounted to a “good cause” so as to deprive the plaintiff of its right to interest during that period.

22      The defendant also claims that “the loss of 3 July 2019 trial date was (at least in part) caused by the need, identified by the plaintiff’s counsel, to remedy deficiencies in the plaintiff’s Court Book before the trial.  The trial did not ultimately commence until 25 February 2020, some 237 days later.

23 I reject the defendant’s submission that the adjournment of the trial on 3 July 2019 amounted to a “good cause” for the purposes of s58(1). By that time both parties had been unrepresented by solicitors. On 15 October 2018 Judicial Registrar Tran gave the defendant’s solicitors leave to file a Notice of Ceasing to Act. On 13 November 2018 Judge Woodward gave the plaintiff’s solicitors leave to file and serve a Notice of Ceasing to Act. The plaintiff then secured new legal representation. I accept the plaintiff’s submission that far from constituting a failure by the plaintiff to prosecute its case, the adjournment ensured that all case management steps were completed, transcript secured, discovery completed and the matter ready to proceed on 25 February when the case was refixed for trial.

24      In this case the plaintiff had been kept out of monies owed to him for some time[11].  As stated in PGA Group[12]

The good cause requirement has to be measured against the purposes of the statutory power to award interest.  Those statutory purposes have been recognised as twofold.  First to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money and deprived of its use during the relevant period.  Secondly to encourage the early resolution of litigation. (citations omitted)

[11] Paragraphs 11 – 47 of the Judgment..

[12] [2011]VSC 420, [4]  per Davies J.

25      In its final account dated 24 November 2016, the plaintiff forwarded a demand for payment to the defendant.[13] Interest under s58 of the Supreme Court Act  is calculated as follows:

[13] Exhibit 35.

Start Date	End date	Days	Rate	Amount Per Day	Total
24/Nov/2016	31/Jan/2017	69	9.5%	$67.2640	$ 4641.22
01/Feb/2017	22/Jun/2020	1238	10%	$70.8837	$87753.99
Total	1307	$92395.20

26 I propose to order that defendant pay the plaintiff the sum of $258,824.80 plus interest pursuant to s58 of the Supreme Court Act and s50 of the County Court Act from 24 November 2016 to the date of judgment in the sum of $92,395.20.

27      Orders

(1) Judgment for the plaintiff for the sum of $258,824.80 plus interest pursuant to s58 of the Supreme Court Act and s50 of the County Court Act from 24 November 2016 to the date of judgment fixed at $92,395.20.

(2)      The defendant’s counterclaim is dismissed.

(3)      The plaintiff pay the defendant’s costs of the summons filed 28 February 2018 on a standard basis to be taxed in default of agreement.

(4)      Other than the costs referred to in the above paragraph 3, the defendant pay the plaintiff’s costs including reserved costs on a standard basis to be taxed in default of agreement.