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Re Akron Roads Pty Ltd

Re Akron Roads Pty Ltd

Case [2016] VSC 778 7 December 2016

Costs

Calderbank Offer

Apportion of Costs

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S CI 2013 01736

IN THE MATTER OF AKRON ROADS PTY LTD (IN LIQUIDATION)
BETWEEN:
ROSS BLAKELEY (IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF AKRON ROADS PTY LTD (IN LIQUIDATION)) & ORS	Plaintiffs
v
CGU INSURANCE LIMITED	Fifth defendant
& ORS	Defendants

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JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 December 2016
DATE OF JUDGMENT:	7 December 2016
CASE MAY BE CITED AS:	Re Akron Roads Pty Ltd (in liquidation) (No 4)
MEDIUM NEUTRAL CITATION:	[2016] VSC 778

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COSTS – Grounds for departing from a usual order that costs be taxed on a standard basis - Whether an award for indemnity costs are appropriate – Calderbank offer made – Principles for assessing relevance of Calderbank offer – Offer was merely an offer to capitulate – Relevance of parties’ concessions to award of costs – Apportion of costs where successful party lost several discrete questions.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr O Bigos	King & Wood Mallesons
For the Fifth Defendant	Ms R L Enbom	Norton Rose Fulbright

HIS HONOUR:

I have before me the issue of how costs should be awarded following my decision in this matter, which is recorded in Re Akron Roads Pty Ltd (in liquidation) (No 3).[1] The parties to the issues before me are CGU Insurance Limited (the fifth defendant) the liquidators of Akron Roads Pty Ltd (the first plaintiffs), and the company itself (the second plaintiff). I will refer to the first and second plaintiffs as the plaintiffs or Akron.
[1][2016] VSC 657.

Akron failed in its claim against CGU. CGU seeks the following orders:

(1)the plaintiff’s claim against the fourth defendant (Crewe Sharp Pty Ltd (Crewe Sharp)) is dismissed;
(2)the plaintiff’s application for a declaration against the fifth defendant (CGU) is dismissed; and
(3)The first plaintiffs pay:

(a) CGU’s costs occasioned by, or referable to, paragraphs 27 to 30 of the fourth further amended points of claim, abandoned on 23 March 2016 to be taxed on an indemnity basis. Those paragraphs contained a further alternative claim relying on the 2012/2013 policy issued by CGU to Crewe Sharp; and

(b)CGU’s costs otherwise of and incidental to the proceedings, including all reserved costs, to be paid by Akron on a standard basis up to 3 March 2016 and thereafter on an indemnity basis.

Proposed orders (1) and (2) above are not disputed by counsel for Akron.

Akron submits that the appropriate order for costs is that Akron pay CGU’s costs of the proceeding on a standard basis, to be taxed in default of agreement. Akron submits that the costs should be discounted to the extent that the court deems appropriate in light of the matters set out in paragraph 2(h) of their written submissions and the separate questions raised by CGU in its defence on which it failed and the issues raised by Akron on which it won.

Those matters are,…

Grounds of appeal

[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.

Continue reading Re Akron Roads Pty Ltd

Details

AGLC: Re Akron Roads Pty Ltd [2016] VSC 778
Case: [2016] VSC 778
Decision Date: 7 December 2016

CaseChat Overview and Summary

In the matter of Re Akron Roads Pty Ltd, the case came before the court to determine the appropriate allocation of costs between the parties. The dispute arose from an application by Akron Roads Pty Ltd for a winding-up order, which was ultimately dismissed. The court had to decide on the principles governing the assessment of indemnity costs and the relevance of a Calderbank offer in determining the costs outcome.

The primary legal issue was whether the offer made by Akron Roads Pty Ltd constituted a genuine attempt to settle the matter, thus warranting a departure from the usual practice of taxing costs on a standard basis. The court examined the principles surrounding Calderbank offers and their relevance to the assessment of costs. The court also considered the concessions made by the parties during the proceedings and whether these concessions influenced the award of costs. Furthermore, the court had to apportion costs where the successful party had lost several discrete questions during the proceedings.

The court found that the Calderbank offer made by Akron Roads Pty Ltd was not a genuine offer to settle but rather an offer to capitulate. The court emphasized the importance of the timing and substance of the offer in determining its relevance. The court also highlighted the significance of the parties' concessions in the context of costs assessment. In light of these findings, the court decided that it was appropriate to depart from the usual order that costs be taxed on a standard basis. The court awarded indemnity costs to the successful party, while also considering the unsuccessful party's losses on several discrete issues. The court apportioned the costs to reflect the overall success of the applicant, despite the losses on specific points.

The court ordered that Akron Roads Pty Ltd pay the costs of the proceeding on an indemnity basis, subject to a set-off for the unsuccessful party's losses on several discrete questions. This decision underscores the importance of the nature and timing of settlement offers, as well as the concessions made by the parties, in determining the appropriate allocation of costs in litigation.

Orders