R and K Services Pty Ltd v Di Stasio Pty Ltd (No. 3)
[2017] VCC 1630
•13 November 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Not Suitable for Publication |
Case No. CI-15-02351
| R & K SERVICES PTY LTD | Plaintiff |
| v | |
| DI STASIO PTY LTD | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF JUDGMENT: | 13 November 2017 | |
CASE MAY BE CITED AS: | R & K Services Pty Ltd v Di Stasio Pty Ltd (No. 3) | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 1630 | |
REASONS FOR JUDGMENT
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Subject: Form of Judgment
Legislation Cited: Civil Procedure Act 2010
Cases Cited:R & K Services Pty Ltd v Di Stasio Pty Ltd [2017] VCC 502; [2017] VCC 1358; Nicholson v Little [1956] 1 WLR 829
Judgment: (1) In accordance with Rule 10.09 of the County Court Civil Prodedure Rules 2008 judgment for the plaintiff against the defendant after taking into account the defendant’s counterclaim in the sum of $96,452.15 inclusive of interest. (2) The defendant pay plaintiff’s costs of the proceeding to be assessed in default of agreement on the standard basis. (3) The plaintiff pay the defendant’s costs of and incidental to the plaintiff’s summons dated 2 June 2017. (4) The defendant pay the plaintiff’s costs of and incidental to the defendant’s summons dated 23 June 2017.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S. Smith, Solicitor | S. Smith & Associates |
| For the Defendant | Mr R. Garratt QC with Mr M. Sharkey | Peer Legal |
HIS HONOUR:
Background
1 On 19 May 2017, I published my substantive determination in this proceeding [2017] VCC 502. This entailed determinations as to a claim by the plaintiff builder (R & K) and a counterclaim by the defendant proprietor (Di Stasio). I directed the parties to bring in short Minutes to give effect to the reasons.
2 On 2 June 2017, the plaintiff’s solicitors issued a Summons seeking to re-open my determination. That Summons was heard on 16 June. I granted the application and permitted the plaintiff to amend its Statement of Claim and introduce a further affidavit into evidence.
3 The plaintiff’s claim, based on its second progress payment, had been determined against it by reason of a failure to establish compliance with the procedural regime laid down by the relevant contract of sale for the making of progress claims. The affidavit deposed to the taking of the further steps by way of rendering a tax invoice after the publication of the Reasons for Judgment.
4 The defendant then issued a Summons on 23 June seeking to re-open the re-opening. Both the applications by plaintiff and defendant were based upon alleged inadvertence by their legal representatives. The defendant’s application eventually came on for hearing on 11 September. I granted the defendant’s application to re-open the re-opening but, nevertheless, reached the same conclusion as I had in June. [2017] VCC 1358.
5 The parties being unable to agree on orders to give effect to my determination, I made an order in chambers on 28 September 2017 establishing a regime for the filing of written submissions and proposed Minutes, which have now been filed by the parties.
Plaintiff’s claim
6 As a result of my determination on 25 September 2017, the parties are agreed that there should be judgment for the amount of the second progress claim which, allowing for part of the amount invoiced having been paid directly to the relevant sub-contractor, leads to an entitlement on the part of the plaintiff for judgment in the sum of $78,904.45.
7 The parties are agreed that the sum which should be awarded to the plaintiff before interest and before any set-off is made, should be $110,271.41 inclusive of Goods and Services Tax (GST). (See Exhibit PLM 23 to the affidavit of Mr Peter Moran affirmed 27 October 2017.)
8 As to Di Stasio’s counterclaim, with regard to the pasta cooker cooling tanks, at [215] of the principal judgment I said, “The counterclaim relative to the cooling tanks for the pasta cookers succeeds.”
9 R & K had claimed to recover the cost of its work entailing installation of the pasta cooker cooling tanks. At [190] I rejected this claim. I concluded that the pasta cooker installation initially made by R & K fell short of the required standard of workmanship under the contract. Clause 15(e) of the Stage 1 contract, which I quoted in part at [153] of the principal judgment, had the effect that R & K was not entitled to payment for the cost of making good defective work. The finding that the work was defective necessarily entitled the proprietor, Di Stasio, to damages for any loss which it had suffered as a result of that defective work. Hence, the statement as to the success of the counterclaim on this matter which I have already quoted.
10 According to the submissions on behalf of Di Stasio as to the orders to give effect to these findings, it was said:
“It is apparent from a plain reading of paragraph 190 that in order to rectify the Plaintiff’s defective workmanship a competent qualified plumber was required to design and carry out those works.”
11 The submission goes on to cost outlays made by R & K to its maintenance plumber, Mr Taylor, at $10,406 inclusive of GST. According to the defendant counterclaimant, the final judgment should reflect its entitlement to recover those amounts.
12 Mr Smith, on behalf of R & K, resisted the allowance in favour of Di Stasio of this amount. He observed, correctly, that with respect to other counterclaim items I held, at [228]-[239], [246] and [248], that the damages allowable to counterclaimant, Di Stasio, would not extend to outlays to pay for Mr Taylor in a merely supervisory capacity.
13 As to each of the amounts making up the total claimed, save for amounts of $1,560 and $440, Mr Smith’s submission was that the claim either did not pertain to the pasta cooker cooling tanks or were for supervisory work only which, in accordance with the principle I had adopted, ought not to be awarded to Di Stasio. With respect to the two other items, he said:
“No itemisation or break-up of costs to identify any specific component related to the fabrication of the temporary floor hatch and the cost of $1,560 includes an amount for attending a site meeting and supervision. The claim for $440 also includes attendance at a site meeting which is not work performed or claimable as it is supervisory in nature.”
14 According to the defendant’s submissions as to the form of the final judgment:
“…paragraph 215 is to be understood by reference to [the summary of defects and costs], which was accepted by the Court. The sum awarded therefore is the sum of $9,460 plus GST.” (viz $10,406)
15 The defendant’s submissions continued:
“The Defendant’s counterclaim for this item, and the sums in the invoices relied on, are for Mr Taylor to perform [the design] and performance of the works.”
16 The findings in the principal judgment entitled Di Stasio to damages for any loss which it can establish relative to this item. The general principle which is evident in the paragraphs quoted by Mr Smith, with respect to other specific items of the counterclaim, nevertheless applies. If Mr Taylor’s involvement were to be regarded as supervisory only, the outlays made to him would not be recoverable.
17 I turn, therefore, to the various items.
18 The first item of $160 exclusive of GST derives from Mr Taylor’s invoice number 8456 rendered 31 January 2014.(CB 387) The descriptor is:
“SITE MEETING ROBERT SIMIONE [scil Simeoni]
RE – VENTILATION & PASTA COOKER DRAIN/COOLING TANK & PUMP WASTE DISCHARGE
* COOLING TANK TO BE VENTED TO ATMOSPHERE”
19 Plainly, the amount of this charge does not relate solely to the pasta cooker cooling tanks.
20 Asked in evidence-in-chief about this invoice, Mr Taylor said:
“That was a site meeting with Robert Simeoni and it was reventilation or make up air to is the kitchen and the pasta cooker drain o'clock (sic) and we discussed then a cooling tank and a pump waste discharge. (T614, L13-17)
21 Shortly after, he said of the invoice, “that is in relation to that site meeting with Mr Simeoni”.
22 It would seem, therefore, that at the meeting Mr Taylor discussed two subjects with the architect. First, the issue of “make up air”, which was the subject of an unsuccessful counterclaim and, secondly, the pasta cooker cooling tank.
23 At [228] of the principal judgment, relative to claims for reimbursement of outlays to Mr Taylor in connection with various electrical problems, I said:
“Reference to his invoices shows that for the most part these attendances relative to electrical matters were attendances at site meetings and the like. If the defendant, and plaintiff by counterclaim, were a natural person, one might have expected that he or she would have made those attendances or perhaps dispensed with them. In another scenario, with a corporate defendant and plaintiff by counterclaim, a director or other corporate officer would have been in attendance. In those circumstances there would not, so far as I can see, have been any question of this time being remunerated at the expense of the builder.”
24 This principle would appear likewise to apply to this invoice and so that amount ought not be allowed to Di Stasio.
25 The next two items claimed derive from Mr Taylor’s tax invoice 8462 dated 28 February 2014. The items being, according to that invoice (CB 388):
“SITE MEETING – VENTILATION, COOLING TANK FOR PASTA COOKER. CONTACT HAROLD – CANOPIES AIR OUT. SEELER (sic Seeley) – VAP COOLER – AIR SUPPLY IN. CONTACT MARK & BRUCE $490.”
26 Mr Taylor’s explanation of this item was as follows:
“Had site meeting with Mr Hartman and possibly Jeremiah about ventilation, a cooling tank and a cooling tank installation for the pasta cooker. I contacted Harold from Sharpline Industries about the canopies, to try and evaluate how much air the canopies were taking out of the room. We then contacted Seeley - - -
Who is Seeley... The evap cooler, they manufactured an evaporative cooler which was there to try and calculate how much air supply was coming in.
Who is Mark and Bruce?---Mark Humphrey is Mr Simeoni's associate.
Do you recall who Bruce is?---No.
Thank you. You said this is a site meeting with Mr Hartman and possibly Mr Mierke regarding the ventilation for the cooling tank, do you recall what you said to either Mr Hartman or Mr Mierke?---That the cooling tank had to be installed and we discussed how we could go about doing it. We contacted Pioneer Plastics which maybe that is Bruce, and organised a site meeting. He came out and assessed the installation.” (T616, L23 – T614, L12)
27 Insofar as the site meeting dealt with ventilation issues, it had nothing to do with the counterclaim relative to the pasta cooker cooling tanks. Insofar as it dealt merely with the site meeting for the reasons already given, it would not be allowable as damages for this breach. However, insofar as it related to organising materials for rectification, liaising with Pioneer Plastics for instance, this would seem to be a compensable outlay. The time spent dealing with Seeley, a manufacturer of evaporative coolers, appears to relate to the ventilation issue. Doing the best I can, I believe this item should be allowed at $100 exclusive of GST.
28 The next item is “INSTALL ACCESS HATCH INTO KITCHEN FLOOR. START EXCAVATION FOR TANK ON SITE – PIONEER PLASTICS - MEASURE TANK $570”. According to Mr Taylor’s evidence, that was “for supervision works”. (T617, L28) He elaborated, “Supervision of the access hatch, a meeting with Pioneer Plastics and then calculating and organising the cooling tank”. (Ibid, L29-31)
29 For reasons already given, I do not believe that R & K should be responsible for Mr Taylor’s time simply supervising R & K’s employees or contractors. However, insofar as he attended a meeting with Pioneer Plastics and organised the cooling tank, this would appear to be properly regarded as rectification work and recoverable. Doing the best I can, I would allow this item at $285, exclusive of GST.
30 The next items derive from Mr Taylor’s tax invoice 8463 dated 28 February 2014. (CB 389) The first item is “EXCAVATE & INSTALL COOLING TANK BELOW FLOOR $610”. Mr Taylor said, “I did do probably about five or ten minutes of it [the excavation] and the rest of the time I was up on a higher level”. (T621, L21-23) The rest of the time, presumably, was supervision. I would allow that item at $100 exclusive of GST.
31 The next item is from the same tax invoice “CONNECTING TO COOLING TANK $690”. Mr Taylor described the installation of the cooling tank as follows:
“R&K Services and I think I gave them a hand to lower it in or to position it. Just, you know, ten minutes, 15 minutes and then they reconstructed the subfloor timbers and put the floor back down and the hatch, and it was left like that until the next day when they started doing the connections on the cooling tank.
And in the course of that day did the temporary copper pipe remain in place?---Yes, it was in place.
You said the next day the connections, is that the next item on that invoice?---Yes.
Who made the connections to the cooling tank?---Gary the plumber was there, I don't know whether he may have had an assistant, another plumber there.
Did you do any of that work?---No.
How long were you on site with Gary the plumber for?---On that day?
Yes?---Maybe three or four hours.” (T624, L4-21)
32 Given that Mr Taylor was entirely in a supervisory role, this item should not be allowed.
33 The next item, again on the same tax invoice, is described as “EXPLORITORY (sic) WORKS FOR 50MM VENT PIPE INSTALLATION – CUT 3 ACCESS HATCHES – CEILING $500”. According to Mr Taylor’s evidence:
“On the next item, 28 February at 5 a.m., there is installation of a 50 millimetres vent pipe from the cooling tank, who installed that pipe?---That was Gary the plumber was there doing that.
And there is installation of one access hatch?---That was in the ceiling, an access hatch in the ceiling.
For what purpose?---Well, they had to cut a section of the ceiling out or a hole in the ceiling to get the pipe work in. So in lieu of patching the ceiling, a prefabricated access hatch was put in lieu. So - - -
Is that what is commonly called a manhole?---Yes.
So for those items charged on that invoice, are they for supervising these rectifications works or being on tools, or a combination?---There is only probably a total of half an hour on the tools included in that, the rest of it was supervision works.” (T625, L3-18)
34 It would seem that there was only half an hour non-supervisory work involved. This item should be allowed at $100 exclusive of GST
35 The next two items are from Mr Taylor’s tax invoice 8468 dated 31 March 2014. (CB 390) $360 is claimed. “7.30AM PIONEER PLASTICS COOLING TANK & ALARM PANEL”. Mr Taylor said:
“That was what was installed so that if there was an issue with the pump from the cooling tank, rather than have it overflow an alarm and a warning light was installed in a panel and phone numbers for a maintenance technician from pioneer plastic and my phone number were affixed on the alarm panel.” (T625, L22-28)
36 According to Mr Taylor, his involvement at this point was “To provide access to supervise the installation [by the technician from Pioneer Plastics]”. (T626, L3-4) Since this is once again a matter of simple supervision, this amount ought not be allowed.
37 The next item from the same tax invoice is “S/STEEL BOXING TO 50MM VENT PIPE – COOLING TANK, PUMP ALARM $380”. This was installed by R & K. (T626, L16) Once again, I infer that Mr Taylor’s involvement was supervisory only. This item is not allowed.
38 The next claimed item is from Mr Taylor’s invoice 8474 dated 30 April 2014. (CB 392) “PASTA PUMP DISCHARGE LINE BLOWN APART. PUMPING UNDER FLOOR. REPAIRS TO PUMP LINE & WASTE TRAP, $1020”. Mr Taylor said of this matter:
“A strong sewerage (sic) smell and we erected an access panel which was adjacent to the stairs leading from the lower kitchen to the upper kitchen and located the pump line from the pasta cooker had blown apart, there was a bend there which had never been glued and the water was discharging under the floor. Each time the pump kicked in to drain the pasta tank, the water is draining under the floor.” (T641, L30 – T642, L6)
39 Mr Taylor said that he removed the panel, investigated it, and repaired it. (T642, L7-8) This was the occasion on which, according to Mr Taylor, “Garry the plumber got the red card”. (Ibid, L12) This appears to be work “on the tools” and this amount should be allowed.
40 The next item is from Mr Taylor’s tax invoice 8516 dated 30 September 2014. (CB 404) “SITE MEETING MARK/JOHN/KEN LIST OF REPAIRS & FLOOR HATCH $520”. The meeting was said to have occurred “26/8”
41 Mr Taylor’s evidence as to this was as follows:
“There was a site meeting on 26 August, the invoice is dated 20 September 2014, and on 26 August you had a site meeting; who was present at that site meeting?---Mark Humphrey, Mr Hartman and myself.
What was that meeting in relation to?---We went through the list of repairs which had been done and which still had to be done. We then looked at the floor hatch and tried to determine what we could do with the floor hatch.
Do you recall what was discussed in relation to the floor hatch, who said what?---No, I don't recall but we were trying to determine - trying to locate a company who could make a floor hatch suitable for - a lot of the companies make floor hatches but they are all external hatches and we were trying to get a non-slip floor hatch, non-slip cover on it which was suitable for in the kitchen.
Just to assist the court, how many floor hatches did you have to conduct work with?---There was one temporary floor hatch which was modified a number of times. Then we located a company which made external floor hatches which you could lift the lid off quite easily. Mr Hartman contacted them or Mr Humphrey contacted them but they didn't make hatches which would be suitable with a frame to put into the vinyl floor, or into the timber floor.
Is there more than one floor hatch in the restaurant?---No, just one.
And this floor hatch is where?---Over the top of the pasta cooling tank.” (T684, L27 – T685, L25)
42 This was not merely a site meeting, but it appears that some issues of design were discussed which would have called upon Mr Taylor’s expertise as a plumber. In the circumstances, this item should be allowed at $260 exclusive of GST.
43 The next item is from Mr Taylor’s tax invoice 8523 dated 31 October 2014, $660. (CB 405) The descriptor is:
“3/10 SITE MEETING – JOHN, JOHN, JERIMAH, KEN
S/STEEL PANELS, FLOOR HATCH SAMPLE.
R.D. FLOOR HATCH? RETURN HATCH SAMPLE TO ROBERT SIMIONE – CARLTON.
SAMPLE P/POINT MOUNTING BOX, FLAT PLUG”
44 As to what transpired at the meeting, according to Mr Taylor, the discussion was about:
“Mainly the floor hatch, I was given a sample of a floor hatch - actually I think that other John may have been from Mr Simeoni's office because Mr Humphrey was on leave and a floor hatch sample was given to me to see if we could modify it, work it in and was suitable for the floor hatch over the pasta cooker. (T690, L1-6)
45 This appears to entail design work rather than mere supervision. This item should be allowed.
46 The next item is from Mr Taylor’s tax invoice 8533 dated 30 November 2014. (CB 409) The descriptor is:
“10/11 SITE MEETING, MARK, JOHN, KEN
FLOOR HATCH PROTOTYPE
CONTACT – R.D, ROBERT, MARK, JOHN
FABRICATE FLOOR HATCH FRAME & PINCH SEAL TO SUPT TERRA FIRMA LID $1560”
47 Asked what was discussed at the meeting, Mr Taylor replied:
“The floor hatch, it was proposed to make a prototype or modify a sample floor hatch that was given to us by a supplier, by the name of Terrafirma and I fabricated a floor hatch to suit the lid supplied - or the top of the removal hatch by Terrafirma and delivered the prototype floor hatch to Carlton where we had a meeting with Mr Humphrey, Mr Hartman and myself. (T693, L11-18)
48 Once again, this entailed work beyond mere supervision by Mr Taylor, including fabrication of a floor hatch and design work. This item should be allowed.
49 The next item is from the same invoice. Its descriptor is “DELIVER PROTOTYPE FLOOR HATCH TO CARLTON. MEETING – MARK, JOHN, KEN $440”. Again, this item appears to involve work beyond mere supervision and includes design work. The item should be allowed.
50 The final item is from Mr Taylor’s tax invoice 8539 dated 23 December 2014. (CB 411) The descriptor is:
“17/12 4.30AM. REMOVE EXISTING FLOOR HATCH IN KITCHEN. RE INFORCE FLOOR & INSTALL CUSTOM BUILT FLOOR HATCH IN LIEU
VINYL FLOOR REPAIRS AROUND HATCH $890”
51 According to Mr Taylor, the work on this occasion was done by “Mr Hartman and Jeremiah” (Mr Mierke). His capacity was “supervision”. (T696, L10-12) This item is not allowed.
52 In the result, the damages awarded to Di Stasio under its counterclaim relative to the pasta cooker cooling tanks is a total of $4,575, together with GST of $457.50, making a total of $5,043.50.
Carpet
53 I allowed an amount of $360 exclusive of GST for attendance by Mr Taylor “to check carpets and try to arrange a site meeting”. I reject the plaintiff’s contention that this is a typographical error. This amount is allowed, as the relevant paragraph states.
Costs on re-opening and re-opening the re-opening
54 On behalf of the plaintiff, Mr Smith conceded that the costs of the plaintiff’s Summons dated 1 June 2017 should be paid by the plaintiff “on a standard basis”. He submitted that the costs of the amendment to the plaintiff’s Statement of Claim should be the plaintiff’s costs in the proceeding. He referred to Order 63A.17.
55 Mr Garratt and Mr Sharkey made the same submission as to the costs of the Summons. The plaintiff should pay the defendant’s costs of its Summons.
56 Mr Garratt and Mr Sharkey said the plaintiff should also pay the defendant’s costs “of and incidental to the defendant’s Summons dated 23 June 2017”. They said that this Summons “stands on a different footing to the plaintiff’s Summons”. They noted that the defendant “put on evidence and was successful on its Summons in setting aside the orders made on 16 June 2017 over the opposition of the plaintiff”. Therefore, it was “appropriate” that R & K pay Di Stasio’s costs. They said:
“If the court takes the view that there was fault on both sides on 16 June 2017 and is not minded to make such an order, the defendant respectfully submits that the only appropriate order is that there be no order as to the costs of the defendant’s Summons”.
57 Mr Smith submitted that the defendant was unsuccessful insofar as ultimately the orders made in June were re-imposed following the application to re-open the re-opening. He said:
“It is submitted that these costs should be ordered to be paid on an indemnity basis as the defendant’s application was primarily based on a false premise of responsibility, which had no real prospect of success, and the justice of the plaintiff’s claim for payment was always perfectly clear, even, it is submitted, to the defendant.”
58 The basis upon which I was persuaded to “re-open the re-opening” upon the defendant’s Summons was an affidavit sworn by defendant’s trial counsel and its sole counsel at the re-opening in June, Mr Sharkey, that he did not do justice to his client’s case upon the re-opening due to inadvertence. The result is that the plaintiff’s representative was inadvertent at trial and the defendant’s representative was inadvertent at the initial re-opening application. The honours are even.
59 The logic that says the plaintiff should pay the costs of its own Summons since it was seeking an indulgence as a result of the inadvertence of its own legal representative applies likewise to the defendant.
60 I am not persuaded that the fact that the defendant “put on evidence” in support of its Summons makes any difference. I was prepared, on the hearing of the first application, to draw an inference of inadvertence based solely upon what I was told from the Bar table.
61 As to Mr Sharkey’s affidavit, as Mr Uren observed on the hearing of the second Summons, the source of the misapprehension in June may be traced to the written outline filed by the defendant and its counsel. Nevertheless, I see no reason to award the costs in favour of the plaintiff on the defendant’s Summons on any basis other than the standard.
Costs of the proceeding
62 Mr Smith said, “the Plaintiff’s claims were relatively straightforward and occupied significantly less time than the hearing of the Defendant’s counterclaims”. He said that whilst the trial took 10 days, the defendant’s claims for consequential loss “were abandoned either due to evidence being inconsistent with the claims (receipts for scented candles) or the lack of documentary evidence being supported to support such claims”. He said that the claim for the re-installation of the switchboard, which was a major item and occupied significant court time, was unsuccessful. Insofar as amounts invoiced by Mr Taylor were claimed, they were successful to only the rate of 10-25 per cent.
63 Accordingly, he submitted, “the Plaintiff has been substantially successful and it ought be entitled to the costs of the proceeding”. The counterclaim, he submitted, was successful in relation to defects, and therefore “had the character of a defence or set-off rather than a cross-action”. It was “more akin to a shield than a sword”.
64 He submitted there should be a judgment for the balance between the claim and the counterclaim in favour of the plaintiff. He referred to Rule 10.09. He referred to Nicholson v Little [1956] 1 WLR 829, in which case the judge reduced the plaintiff’s judgment by the amount due on the counterclaim, dismissed it and gave judgment to the plaintiff for the balance with costs.
65 Mr Smith continued:
“an award of costs for the Plaintiff in the proceeding and award of costs for the Defendant on the counterclaim would result in the Plaintiff being substantially deprived of the fruits of its judgment”.
66 He said the main issues occupying the greatest part of the court time were “the non-relocation of the switchboard, the odours from the latent sewer pipe and the make up air claim”. The costs, he submitted, should be “on a party/party basis” (viz the standard basis). He submitted it was not appropriate for the court to “make costs orders on an issues based approach”. He said:
“It is submitted that the Defendant has principally been responsible for having brought about this litigation in the failure to pay the Plaintiff for work and labour done and materials supplied back in 2013-14. Notwithstanding, any technical defect in the Plaintiff’s claim No. 2 the justice of the case is that the Plaintiff should have been paid something for its work, and in the circumstances the Defendant paid nothing in what the court has ultimately adjudged in the Plaintiff’s favour. This is what is principally responsible for bring[ing] about the proceedings.”
67 Mr Garratt and Mr Sharkey submitted that the upshot of the principal judgment was that $37,428.52 inclusive of interest was awarded to R & K, and Di Stasio recovered $24,020.05 inclusive of interest. The result, they said, was a balance in favour of R & K of $13,408.46 inclusive of interest, which they said was:
“a sum less than one-half of the amount of the jurisdictional limit of the Magistrates’ Court. Even without set off, the Plaintiff’s award was less than one-half the amount of the jurisdictional limit of the Magistrates’ Court.”
68 Accordingly, if the matter of costs were to be determined based upon the principal judgment, the proper orders would have been that Di Stasio pay R & K’s costs on Magistrates’ Court Scale `D’ “less the additional costs incurred by the defendant by reason of the proceeding having been brought in this Court having regard to Order 63A.24” and that R & K should pay Di Stasio’s costs of the counterclaim on County Court Scale.
69 They noted an Offer of Compromise under Order 26 dated 12 January 2017 for Di Stasio to pay R & K $30,000 inclusive of costs and a Calderbank Offer of the same date to similar effect. They continued that by operation of Rule 63A.24, “no costs would have been awarded to the Plaintiff on its claim at 12 January 2017, in light of the findings in the May reasons”. This was because, on the basis of the May reasons, R & K had not obtained an outcome better than the terms of the offer. Further, R & K ought pay Di Stasio’s costs from 13 January 2017 on an indemnity basis. The plaintiff’s Summons to re-open should not be considered for the purposes of making this determination.
70 They concluded:
“It was no fault of the Defendants that the Plaintiff could not obtain at trial the judgment later obtained on the basis of the success of a claim first made on evidence brought into existence after the publication of the reasons for judgment”.
71 They said the overarching obligations imposed by the Civil Procedure Act 2010 encouraged parties to settle litigation and that this could be only “on the basis of the issues pleaded and the evidence led or likely to be led in respect of the issues at the time the offer is under contemplation”. This objective would tend to be nullified if the outcome on costs “could be reversed as a result of indulgences granted by the Court after publication of its reasons for judgment”.
72 The defendant’s calculation will not precisely accord with the result which I reach based upon the matters referred to above, which will of course have a consequential effect upon the parties’ calculations of interest. In broad terms, the defendant’s point remains that the plaintiff will only be seen to have bettered the offer made as a Calderbank Offer “without prejudice save as to costs” and under Order 26 of the Rules if account is taken of the amounts recovered as a result of the re-opening of the plaintiff’s case, the amendment of its pleadings and the service of a further invoice.
73 The re-opening was no doubt an indulgence, but it was an indulgence as to a matter which might be regarded as the merest technicality not a technicality imposed by statute between the commercial party and a consumer Parliament saw as entitled to special protection, but rather deriving from the terms of a contract between two commercial parties. R & K had a strong moral claim to the amount which it sought for Progress Claim No. 2. In those circumstances, I believe it is appropriate to consider the ultimate outcome for the purposes of making the costs determination in this proceeding.
74 It is inappropriate, I think, to consider what might have happened had there been a costs application based solely upon the outcome in the principal judgment. No doubt, R & K would have pressed to have its re-opening Summons heard before such an application was made though, in the event, it did not come to that. The question of costs is being determined here, as is customary, after there has been a final determination of the substantive issues. I will consider the costs outcome based upon the ultimate substantive disposition of the proceeding.
75 The effect is that R & K will be successful in an amount exceeding the settlement offer made by Di Stasio in January. Since the Plaintiff’s judgment exceeds one-half of the Magistrates Court jurisdictional limit, Order 63A.24 is not engaged.
76 I accept Mr Smith’s contention that the matters urged by way of counterclaim were very closely related to the plaintiff’s claim. I agree that an award of costs to the defendant on its counterclaim, and the plaintiff on its claim, would be inappropriate. It would be very difficult for the Costs Court to disentangle what matters properly pertained to the claim, as distinct from the counterclaim. All of the costs pertain to a single dispute in which R & K has, on balance, been the winner.
77 I accept Mr Smith’s contention that the costs of the late amendment to the Statement of Claim should be the plaintiff’s costs of the proceeding.
78 I agree with Mr Smith’s contention that most of the time at trial was taken up in considering the counterclaim by Di Stasio, which proved, in monetary terms, less successful than the plaintiff’s claim.
79 In those circumstances, costs should follow the event and the plaintiff should have its costs of the proceeding to be assessed in default of agreement upon the standard basis.
Costs of transcript
80 Mr Garratt and Mr Sharkey submitted on behalf of Di Stasio that R & K should be ordered “to reimburse [Di Stasio] for 50% of the costs of the transcript”. They said this should be “uncontroversial” because Di Stasio had “obtained the transcript of the trial from the outset and was, accordingly, able to assist the Court (and, at times, the submissions of [R & K]) in the conduct of the trial”. They complained that R & K had refused to contribute to the purchase of the transcript contrary to “the convention in this jurisdiction”. They said that Di Stasio’s purchase of the transcript assisted the court in the preparation of all relevant determinations. They continued, “[R & K] has now had the benefit of at least parts of the transcript for the applications and should reimburse the Defendant for the expense incurred”.
81 In the Supreme Court, it has been determined “the transcript is required for all trials” (Practice Note PNG7, clause 5.1). The following clause of the Practice Note requires both parties to sign a purchase order to a “preferred supplier”. That Practice Note does not apply to this Court.
82 In this Court, Practice Note No 4 of 2013 specifically contemplates that there may be cases “in which there has not been an authorised recording of the proceeding”. Whatever may be said as to the situation of a self-represented litigant or a represented private individual litigating as to matters in his or her private life, it is plainly unreasonable for a trading corporation to launch a commercial proceeding and not agree to contribute half of the cost of a transcript. This is especially so in a building case.
83 The analysis which I have been required to undertake of the evidence of Mr Taylor earlier in these Reasons for Judgment indicates how difficult it would have been to determine this proceeding without a transcript. I would have been reduced to replaying an audio record of the proceeding without the benefit of any computerised indexing processes, such as exist when a written transcript has been prepared or, alternatively, to rely simply upon my own notes – which could scarcely capture the full detail of matters such as this.
84 It may be objected that in earlier eras courts were required to determine even complex building cases without the benefit of a written transcript or, indeed, an audio recording. In bygone years, road building and other construction work was done without the benefit of modern earthmoving equipment and power tools. To make that observation does not make good the contention that it would be unreasonable to require these pieces of apparatus for such work today or that it would be reasonable to require it to be done without them.
85 In refusing to fund a half share in the transcript cost, R & K has deprived its representative, Mr Smith, of the opportunity to make close-grained submissions based upon the precise words which were given as evidence in the course of the trial. It deprived R & K of the advantage of these submissions and me of the assistance which they could have provided. Had this proceeding ended with a determination of claim and counterclaim which favoured Di Stasio, such that a costs order for the costs of the proceeding would follow that event, Di Stasio could have recovered from R & K the whole cost of the transcript. If there had been any doubt on that subject in the scenario described, I would have been prepared to make a specific order or direction to that effect. As it is, however, the adjudication of claim and counterclaim has, on balance, gone in favour of R & K. I have determined that R & K should have its costs of the proceeding and that Di Stasio should bear its own.
86 Accordingly, despite the general observations which I have made and the thrust of the submissions made by Di Stasio, which I generally accept, this is not an occasion on which it is appropriate to order R & K to pay any part of the costs of transcript.
Form of judgment
87 Rule 10.09 of the Courts Rules provides:
“Where the plaintiff succeeds on the claim and the defendant succeeds on the counterclaim and a balance in favour of one of them results, the Court may give judgment for the balance.”
88 Mr Smith submitted that judgment should be entered in that form. The form of judgment submitted by the defendant dealt with claim and counterclaim separately. In my view, it is proper that the judgment be given in accordance with Rule 10.09 for the balance payable to the plaintiff, R & K Services Pty Ltd, before any offset and allowance for interest. The plaintiff’s claim, according to the written submissions of the defendant and the plaintiff, both dated 27 October 2017, is $110,271.41. Mr Smith calculated the interest on the plaintiff’s claim before offset to 27 October as $10,465.13. In their submissions on behalf of the defendant, Mr Garratt and Mr Sharkey put that figure at $11,976.85.
89 I adopt the higher figure favoured by the defendant, which yields a figure as at 27 October of $113,247.29 payable upon the plaintiff’s claim. Bringing that forward to the date of judgment, namely 13 November, the figure payable to the plaintiff is $113,760.86. The penalty interest rate applicable for the period 28 October to 13 November is 10 per cent, giving a daily rate of $30.21 and a total additional interest of $513.57.
90 The amounts awarded by way of counterclaim to the defendant total $13,415 exclusive of Goods and Services Tax. This figure is less than the defendant’s calculation of $18,300 because I have not allowed the entire amount sought by way of counterclaim relative to the pasta cooker cooling tanks referred to at [215] of my principal judgment. The Goods and Services Tax payable on this amount is $1,341.50, making a total of $14,756.50. According to the defendant’s submissions, which I accept on this point, interest pursuant to s60 of the Supreme Court Act 1986 became payable on the amount of the defendant’s counterclaim from 16 June 2016. Calculated to 13 November 2017, this interest totals $2,038.64, making a total payable on the counterclaim inclusive of interest of $16,795.14. When that figure is deducted from the figure of $113,247.29 payable to the plaintiff on its claim, the amount payable by the defendant to the plaintiff therefore, following set off in accordance with Rule 10.09 and after allowing for statutory interest, is $96,452.15.
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