Rushton v Rushton
[2001] QDC 194
•29th August 2001
DISTRICT COURT OF QUEENSLAND
CITATION: Rushton & Anor v Rushton & Anor [2001] QDC 194 PARTIES: RUSHTON (QLD) PTY LTD
ACN 079 140 364
AND
SENMEAD PTY LTD
ACN 053 308 008
Plaintiffs
v
RUSHTON (NSW) PTY LTD
ACN 079 164 202
First Defendant
AND
RUSHTON (SA) PTY LTD
ACN 079 164 177
Second DefendantFILE NO/S: D5024 of 1999 DIVISION: Civil Jurisdiction PROCEEDING: ORIGINATING COURT: Brisbane DELIVERED ON: 29th August 2001 DELIVERED AT: Brisbane HEARING DATES: 15, 18, 19, December 2000, and 21, 22, 23, 24, 25, 30 & 31 May 2001, 25 June 2001 and 24 August 2001 JUDGE: Judge Forde ORDER: Order in terms of the draft dated 24th August, 2001,
initialled by me and placed with the file.CATCHWORDS: COSTS – Uniform Civil Procedure Rules rr 682, 699 – claim – counter-claim
Smith v Madden (1946) 73 CLR 129;
Colburt v Beard (1992) 2 Qd R 67COUNSEL: L. Bowden for Plaintiffs
R. Perry for DefendantsSOLICITORS: Bennett & Philp for Plaintiffs
Macrossans for Defendants
The reasons for judgment were delivered in this matter on 20th July, 2001. The proposed orders are set out on pages 52-53 of the reasons. They provide as follows:
“1. That there be judgment in the action for the plaintiffs against the defendants in the sum of $7,293.79 together with interest at the rate of nine (9) per centum from 22nd December, 1999 to the date of judgment.
2.The judgment given on 8th May, 2000 and as varied on 18th July, 2000 for the plaintiff against the first defendant is set aside and judgment will be given for the plaintiffs against the first and second defendants in such further sum subject to further submissions.
3. That the stay of execution on the sum of $26,177.91 be removed.
4. That there be judgment on the counter-claim for the first defendant
against the plaintiffs in the sum of $15,000.00 together with interest at the rate of nine (9) per centum from 25th January, 2000 to the date of judgment.
5. It is ordered that the second plaintiff do contribute one-third of
such sums awarded against the defendants in the action and one-third of the defendants’ costs as from 11th April, 2001.
6. It is further ordered that the second plaintiff do contribute one-third
of the defendants’ solicitor/client costs from 11th April, 2001.
7. Liberty to apply is given in relation to the appropriate orders and
quantum on the summary judgment application and costs including costs of the action.”
Counsel for the defendants has provided a draft pursuant to the liberty to apply provision which provides as follows:
“1.There be judgment on the claim for the plaintiffs against the defendants in the sum of $7,293.79 together with interest at the rate of 9% from 22 December 1999 to the date of judgement;
2.The judgment of 8 May 2000 as varied on 18 July
2000:
(a) is set aside; and
(b)in lieu thereof judgment for the plaintiffs against the defendants in the sum of $26,177.91 together with interest at the rate of 9% from 22 December 1999 to the date of judgment;
3.Judgment on the counterclaim for the first defendant against the plaintiffs in the sum of $15,000 together with interest at the rate of 9% from 25 January 2000 to the date of judgment;
4.The second plaintiff to pay the defendants by way of contribution:
(a)the sum of $8,725.97 together with interest at the rate of 9% from 22 December 1999 to the date of judgment; and
(b)one-third of any costs payable by the defendants to
the plaintiffs;
5.The defendants recover from the second plaintiff:
(a)the sum of $4,878.87 together with interest at the rate of 9%:
(i)on the sum of $3,527.71 from 20 May 2000; and
(ii)on the sum of $1,351.16 from 18 July 2000;
until the date of judgment.
(b)one-third of all costs awarded to date to the first plaintiff against the first defendant in the proceedings.
6.The second plaintiff contribute one-third of the defendants’ solicitor/client costs from 22 December 1999:-
(a)as agreed between the parties within a period of 14 days;
(b)failing agreement within the stipulated time period, as assessed by Greg Ryan, Costs Assessor.”
Counsel for the plaintiffs does not consent to the orders, proposed in the draft conceding that they are consistent with the reasons for judgment and the Deed of Partnership (Exhibit 88). I propose to order that Senmead Pty. Ltd. pay the costs from 22nd December, 1999 and not the date of joinder. Senmead Pty. Ltd. should have been a party from the commencement of the proceedings and is therefore liable as a partner. The main argument on costs, therefore, relates to the costs of the action and the counter-claim.
The plaintiffs submit that the usual rule should apply, that is, that the plaintiffs should get the costs of the action and the defendant the costs of the counterclaim to be taxed in accordance with ordinary principles: Smith v. Madden (1946) 73 CLR 129. The gloss to that submission is that the court has power to make an order on a specific question. The plaintiffs submit that as “70% of the trial was taken up with the counterclaim” that the plaintiff should get its costs of that issue. It was not disputed by the plaintiffs, that the first defendant was entitled to the sum $15,000.00. being the group expenses incurred by the first defendant after 30th June, 1999. The major issue on the counter claim was whether the first defendant was entitled to such group expenses for the years ended 30th June, 1998 and 30th June, 1999. There was extensive accounting evidence in this respect.
The evidence in relation to the construction point was also extensive. There were “mixed questions” (Smith v. Madden op.cit 136-7) of what fees were owing and what should be set off permeating the evidence of the witnesses from both sides. Both the plaintiffs and the defendants were largely unsuccessful in relation to each of their claims recovering a similar percentage of their respective claims. For example, the plaintiffs claimed the sum of $132,008.82 in their action and the defendants claimed the sum of $235,000.00 in their counter-claim. Relevantly, they recovered $7,293.79 and $15,000.00 respectively. The general impression that I have is that a similar amount of time was spent on these issues in the trial which lasted for some 11 days including the need to adjourn to allow amendments and prepare submissions. There was the additional amount of $26,177.91 for work done after 30th June, 1999 relating to the State Transit job. The plaintiffs were successful on that point and judgment entered. It was previously the subject of the summary judgment application.
The defendants argue that if the matter had been heard in December, 2000, that the first named plaintiff would not have succeeded as there was a need to join Senmead Pty. Ltd. as a party. This was realised in December, and both parties had to consider their position The result was that Senmead Pty. Ltd. was joined as a party as it was a partner with the first named plaintiff and the first defendant as was Rushton (SA) Pty. Ltd. with the first named defendant and Senmead Pty. Ltd. The first named plaintiff applied to join both which necessitated the defendants seeking indemnity from Senmead Pty. Ltd. as it was a partner to both sides. In my view, this was a technical matter. It required no further evidence save for the tendering of the partnership deeds. Once the first named plaintiff was aware of the problem, it would not have lost on that technicality. The philosophy of the Uniform Civil Procedure Rules is to avoid such technical difficulties as expeditiously as possible (rule 5 and notes thereto in Butterworth’s Uniform Civil Procedure Rules). The principals, Mr. Holzberger and Mr. Rogan were involved in the management of the parties added. As pointed out by me at the time, with some cooperation, the joinder of the parties could have occurred with minimum disruption to the hearing of the action. That view has been confirmed.
As at February, 2001, the counter-claim was for the sum of $26,177.91. It was increased to the larger sum of $203,466.00 in April, 2001. This was the first notice that the plaintiffs had that the pre-30th June, 1999, group expenses were being sought. If in fact that trial had proceeded in December, with the addition of the relevant parties, then a similar result would have occurred.
The plaintiffs also contend that the State Transit Job took about 10-15% of the time of the trial. It certainly took a significant period with witnesses from both sides. It would be fair to say that it took a day or so of hearing time including submissions.
It must be remembered that the pleadings were amended at a late point to plead a separate agreement and towards the end of the trial ratification or unjust enrichment. On the other hand, the defendants have succeeded on the rectification issue which is related to the question of the intention of the parties. This was an issue which the plaintiffs lost apart from the pure construction point which also was decided against them. The indemnity claim against Senmead Pty. Ltd. took as much time in evidence as it did in legal argument. I doubt if that would have exceed one hour. I am satisfied having considered the evidence in this case, the submissions and the relevant findings that four or so days was spent on the construction point including the intention of the parties and a similar amount of time on the set off arrangements involving detailed accounting evidence. In some ways, the affidavit and oral evidence touched upon both issues at the same time particularly the meetings in Sydney and Melbourne.
The defendants say that once the pleadings were put in order then each party was successful to a limited extent in respect of their own claims and in successfully defending each others. It follows, it is submitted, that each party pay its own costs from that time. Certainly, the defendants had not formulated their substantial counter-claim until April, 2001. It was not finally quantified until late May, 2001 (Ex. 76).
Prior to that time, the defendants contend that the first defendant should have its costs as it was “improperly sued and successful in defending the plaintiffs’ claim” and “was also successful in pursuing its own counter-claim as it was pleaded up to that date”. Subsequent events detract from that submission. The plaintiffs rely on the approach of Dixon J. in Smith v. Madden and particularly the comments at 137 whereby each party gets its costs of its claim or counter-claim. The plaintiffs contend that they should have 80% of the costs of the trial in addition to the costs of the action. In light of the previous observations an apportionment does not seem appropriate in the circumstances. It would also add considerably to the task of the taxing officer if a hybrid order were to be made. The reason for this is that most of the affidavit material had been filed by December, 2000. The affidavits formed the basis of the evidence in chief from each side which was relevant on all issues. Having regard to the robust approach taken by the Full Court in Colburt v. Beard (1992) 2 Qd R. 67 at 75, I propose to make no order as to costs of the claim or counter-claim. Both sides have lost substantially on the issues claimed by each of them. The entitlement to fees claimed by the plaintiffs and group expenses claimed by the defendants after 30th June, 1999 were not disputed by either side. Each recovered these. The other issues can be notionally set off. This will avoid a complicated assessment of costs which would be required to give effect to an order recognizing the entitlement to costs of the plaintiffs and the defendants.
Reserve costs
These costs were not the subject of submissions. However, in order to avoid the necessity of further expense, it is desirable that they be dealt with at this point. The costs should follow the event: r. 699. The question is more difficult where there were joint applications by the parties. It is not necessary to deal with those occasions where costs were specifically ordered or where the costs were the plaintiffs’ or defendants’ costs in the cause.
.
18th July, 2000
On this occasion the order of 8 May, 2000 was varied. There was an additional sum of $4,053.48 payable to the plaintiff. A stay was granted in the sum of $26,177.91. This is to be removed as part of these orders. Otherwise, there were mutual orders for discovery and inspection. On balance, the plaintiffs should have these costs.
13th September, 2000
The defendant was ordered to deliver a supplementary list of documents and a date set for inspection. Both parties were ordered to exchange affidavits and reports by a date later than previously ordered. This order and the other orders were by consent. In the circumstances, no order is made in relation to costs.
19th December, 2000
The matter was part heard at this point. This was the third day of hearing. Both parties had realised that perhaps not all partners were parties to the action. As a result, the first named plaintiff joined Senmead Pty. Ltd. as a plaintiff and Rushton (SA) Pty. Ltd. as a defendant. Thereupon, for completeness, the defendants claimed contribution from Senmead Pty. Ltd. as their partner. The adjournment gave the plaintiffs time to regularise the proceedings. In the circumstances, the plaintiffs ought to pay the costs occasioned by the amendment.
1st March, 2001.
The orders made on this day reflected the ongoing complexities of this case. Both sides had amended their pleadings and agreed that the matter ought to go to mediation. This meant that the trial could not proceed. Consequential orders were necessary in view of the amendments. It was ordered that costs be costs in the cause.
21st May, 2001.
Both parties were given leave to amend their pleadings once again. The amendment to the Claim related to the State Transit job. The plaintiffs were successful in establishing a separate agreement which was pleaded on 21st May for the first time. The Second Further Amended Defence pleaded for the first time the involved partnership structure and the substantial counter claim for group expenses. The defendants recovered only $15,000.00 of what at that stage was a claim for $203,466.00. The plaintiffs were therefore successful on their amendment and the costs of the amendment should be paid for by the defendants.
As with the orders made in relation to the action and consistent with the approach in Colburt v. Beard, it would be appropriate that the orders in relation to reserve costs be notionally set off against each other.
Orders
The orders shall be in terms of the draft dated 24th August, 2001, initialled by me and placed with the file.
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