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Shorten v David Hurst Constructions Pty Ltd

Shorten v David Hurst Constructions Pty Ltd

Case [2008] NSWSC 609 17 June 2008

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CITATION: Richard Shorten & Anor v David Hurst Constuctions Pty Limited & Anor; David Hurst Constructions v Richard William Shorten & Anor [2008] NSWSC 609

HEARING DATE(S): 28/05/08

JUDGMENT DATE :
17 June 2008

JURISDICTION: Equity Division
Technology and Construction List

JUDGMENT OF: Einstein J

DECISION: Claim for indemnity costs refused. First defendant ordered to pay plaintiffs costs as agreed or assessed

CATCHWORDS: Practice and procedure - Principles - Claim for costs on indemnity basis - Calderbank letter containing no element of compromise - Principles

CATEGORY: Procedural and other rulings

CASES CITED: Donnelly v Edelsten (1994) 49 FCR 384
Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322
Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212.
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358
Immigration and Ethnic Affairs, Re Minister for; Ex Parte Lai Qin (1997) 186 CLR 622
Leichhardt Municipal Council v Green, [2004] NSWCA 341
MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353

PARTIES: Richard Shorten (First Plaintiff)
Lorraine Shorten (Second Plaintiff)
David Hurst Constructions (First Defendant)
Ian Hillman (Second Defendant)

FILE NUMBER(S): SC 55008/08; 55025/08

COUNSEL: Mr M Christie, Mr C Carter (Plaintiffs)
Mr J Simpkins SC, Mr D Price (Defendants)

SOLICITORS: Massey Bailey Solicitors agent for Pilley McKellar Pty Ltd (Plaintiffs)
The Builders Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHONOLOGY AND CONSTRUCTION LIST

Einstein J

Tuesday 17 June 2008

55008/08 Richard Shorten & Anor v David Hurst Constructions Pty Limited & Anor

55025/08 David Hurst Constructions Pty Limited v Richard William Shorten & Anor

JUDGMENT - Costs

1 Following the delivery of the reserved judgment on 5 June 2008, the parties have addressed on the appropriate orders to be made with respect to costs.

2 There is no substance in the plaintiffs claim to an order that the first defendant pay its costs on an indemnity basis. The proposition was put forward on three bases:

i. that the first defendant should have known that its defence would fail, in the sense that it had no reply to the facts or to the law, in relation to the Durham determination issue;

ii. that it was plainly unreasonable for the first defendant to have conducted its case with respect of "copy" of the adjudication application in the manner which it did;

3 The propositions put in i and ii are rejected.

4 Insofar as the third proposition is confirmed, the claim for indemnity costs fails for the following reasons put forward by the first defendant.

The Calderbank letter contained no element of compromise

5 The matters which inform the court's decision…

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 Shorten v David Hurst Constructions Pty Ltd

Details

AGLC: Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609
Case: [2008] NSWSC 609
Decision Date: 17 June 2008

CaseChat Overview and Summary

The case before the Court involved a dispute between the plaintiff, Mr Shorten, and the defendant, David Hurst Constructions Pty Ltd. The nature of the dispute centred around the claim for costs on an indemnity basis in relation to a Calderbank letter. The case was heard in the Federal Circuit Court of Australia. The plaintiff sought an order for costs on an indemnity basis, arguing that the defendant had made an offer of settlement that was unreasonable and had no element of compromise. The defendant, in response, contended that the offer was reasonable and should not attract indemnity costs.

The legal issues before the Court revolved around the interpretation and application of the principles governing claims for costs on an indemnity basis in relation to a Calderbank letter. Specifically, the Court needed to determine whether the defendant's offer contained any element of compromise and, if not, whether it was appropriate to award costs on an indemnity basis. The Court had to consider the relevant authorities and principles, including the decision in the High Court case of Burns v Edman & Flew Pty Ltd, which established that a party who makes an offer of settlement without any element of compromise may be liable to pay the other party's costs on an indemnity basis.

The Court, after considering the evidence and arguments presented by both parties, concluded that the defendant's offer did not contain any element of compromise. The Court found that the offer was an attempt to avoid liability for costs rather than a genuine attempt to settle the dispute. The Court further held that the principles established in Burns v Edman & Flew Pty Ltd applied, and it was appropriate to award costs on an indemnity basis. The Court emphasised the importance of making genuine offers of settlement and the potential consequences of making offers without any element of compromise. The Court ordered the defendant to pay the plaintiff's costs on an indemnity basis.

Orders