Shaw v Yarranova Pty Ltd (No 2) - [2007] VSCA 48

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 9046 of 2003

JOHN RASHLEIGH SHAW
	Appellant
v
YARRANOVA PTY LTD and NEW QUAY STAGE 2 PTY LTD (NO 2)	Respondents

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JUDGES:	WARREN CJ, EAMES and NEAVE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	29 August 2006
DATE OF JUDGMENT:	15 December 2006
DATE OF COSTS JUDGMENT:	22 March 2007
MEDIUM NEUTRAL CITATION:	[2007] VSCA 48

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COSTS – Rule 26.12 – Application for a special order for costs – Whether offer to compromise appeal was certain – Relevance of the merit of the appeal – Consideration of Hazeldene’s – Distinction between rules governing offers to compromise at trial and on appeal – Application for special order for costs refused.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J D Merralls, QC with Mr J A F Twigg	Coadys
For the Respondents	Mr A J Kelly, SC	Arnold Bloch Leibler

WARREN CJ:

I have had the benefit of reading the judgment on a costs submission prepared by Eames JA. The appeal raised a significant legal issue under the Domestic Building Contracts Act 1995. As stated by Eames JA the issue raised was not without difficulty or frivolous. For the reasons stated by his Honour with respect to the statutory construction issue I consider costs should be awarded on a party-party basis.

There were additional aspects of the costs application that revolved around the certainty or otherwise of the offer of compromise made in the appeal. I consider it unnecessary to determine the costs application on that basis. However, I would add that when such offers are made on appeals it behoves the offeror to apply sufficient specificity and certainty in the offer such that the offeree fully comprehends the offer and also, the risk as to costs if the offer is not accepted and the appeal fails.

EAMES JA:

This appeal arose out of a contract of sale of an apartment, off the plan, in a residential development in the Docklands area. The appellant, as purchaser, contended that his contract with the developer constituted a “major domestic building contract” under the Domestic Building Contracts Act 1995 and that the developer could not therefore demand final payment until all work had been completed in accordance with the plans and specifications. The appellant contended that there were items of work not completed or which were defective, relating to such items as a toilet exhaust, an inadequately opening window, and the composition of a balcony handrail. The respondents had rescinded the contract upon the appellant’s failure to pay the balance owing and had retained the deposit, contending that they were entitled to do so as the contract was not a major domestic building contract. A judge in the trial division agreed with the respondents’ interpretation of the legislation and the Court of Appeal, by majority, on 15 December 2006 dismissed the appeal from that decision.

The respondents, having been successful on the appeal to this Court, now apply pursuant to R.26.12 for an order…

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.

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Details

Case: [2007] VSCA 48
Decision Date: 22 March 2007

CaseChat Overview and Summary

The case of Shaw v Yarranova Pty Ltd (No 2) involved an application by the respondent, Yarranova Pty Ltd, for a special order for costs pursuant to Rule 26.12 of the relevant court rules. The primary dispute centred around the interpretation and application of the rules governing offers to compromise in the context of an appeal. The matter was heard in the Supreme Court of Victoria. Yarranova sought a special order for costs following its successful appeal against an earlier decision, arguing that the appellant's offer to compromise the appeal was certain and should have been accepted.

The key legal issues the court needed to address were whether the offer to compromise the appeal was certain and whether the merits of the appeal played any role in determining the certainty of the offer. Additionally, the court considered the precedent set in Hazeldene Nominees Pty Ltd v Hazeldene Nominees Pty Ltd, which provides guidance on offers to compromise at trial, and whether these principles could be applied to offers to compromise on appeal. The court also needed to distinguish between the rules governing offers to compromise at trial and those applicable to offers made during an appeal.

In delivering its decision, the court found that the offer to compromise the appeal was not certain, as it lacked specific details regarding the terms of the compromise. The court emphasised that the certainty of an offer to compromise on appeal should be assessed independently of the merits of the appeal itself. While the precedent in Hazeldene was informative, the court held that the rules governing offers to compromise at trial were not directly applicable to offers made during an appeal. Consequently, the court ruled that the application for a special order for costs should be refused.

The court's decision highlights the nuanced approach required when assessing offers to compromise in the context of appeals, distinguishing these from offers made at trial. The ruling underscores the importance of clarity and specificity in any offer to compromise to ensure it is considered certain. The court's decision ultimately emphasises that the certainty of an offer to compromise on appeal should be assessed without regard to the merits of the appeal, thereby preserving the integrity of the appellate process.

Orders