| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : SOUTER -v- CONDOR DEVELOPMENTS PTY LTD [2011] WADC 212 (S) CORAM : O'NEAL DCJ HEARD : 16-18 & 26 MAY 2011 & 17 JANUARY 2012 DELIVERED : 30 NOVEMBER 2011 SUPPLEMENTARY
DECISION : 16 FEBRUARY 2012 FILE NO/S : CIV 891 of 2010 BETWEEN : CALLAN GEORGE SOUTER Plaintiff
AND
CONDOR DEVELOPMENTS PTY LTD
Defendant
Catchwords: Costs - Plaintiff and defendant each successful on separate causes of action - Turns on facts
Timing of assessment of damages - Interest as damages - Turns on facts Legislation: Rules of the Supreme Court 1971 O 66 r 1(1), r 1(2), r 1(3)
(Page 2)
Result: No award of interest
No order as to costs Representation: Counsel:
Plaintiff : Mr D H Solomon
Defendant : Mr D K Barker
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Chalmers Legal Studio
Case(s) referred to in judgment(s):
ABB Service Pty Ltd v Hetherington [2001] WASCA 417
Johnson v Perez (1988) 166 CLR 351
Keet v Ward [2011] WASCA 139
Permanent Building Society v Wheeler (No. 2) (1993) 10 WAR 569
Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd [2007] WASCA 276
Souter v Condor Developments Pty Ltd [2011] WADC 212.
(Page 3)
1 O'NEAL DCJ: On 30 November last year I handed down my reasons for decision in this action: Souter v Condor Developments Pty Ltd [2011] WADC 212. I found for the plaintiff in part and assessed damages for that part of the plaintiff's claim that was successful. It has now become necessary for me to resolve issues of interest on the damages awarded and costs.
Costs 2 The plaintiff, declaring victory, seeks the costs of the action from the defendant. The defendant says that given the relative importance of discrete issues where it prevailed, including a separate cause of action, the plaintiff should pay 70% of the defendant's costs and the defendant 30% of the plaintiff's costs. Alternatively, the defendant says there should be no order as to costs. 3 Despite the court's broad discretion with respect to costs, normally a successful party will recover his costs: O 66 r 1(1) Rules of the Supreme Court 1971. Some good reason must be demonstrated by an unsuccessful party for it to avoid an order that it pay the successful party's costs. 4 Order 66 r 1(1) is tempered by r 1(2) and r 1(3). Rule 1(3) is in the following terms: Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues. 5 As was said however by the court in Keet v Ward [2011] WASCA 139 [18] – [19]: … Notwithstanding O 66 r 1(3), courts are generally reluctant to apportion costs on the basis of success or failure on particular issues arising in the course of the trial. In Cretazzo v Lombardi (1975) 13 SASR 4, at 16, Jacobs J said:
'I would wish to sound a note of cautious disapproval of applications … to apportion costs according only to the success or failure of one party or the other on the various issues of fact or law, which arise in the course of a trial … trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.'
(Page 4)
His Honour noted that:
'There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.'
6 Order 66 r 2(a) is also invoked by the defendant here. That rule provides that- In the absence of any special order - (a) where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs should be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought … 7 Order 66 r 2(a) has been considered by a number of cases. The manner in which O 66 r 2(a) will ordinarily be applied however is conveniently summarised in the decision of the Court of Appeal in Keet v Ward at [24]: There are a number of cases which discuss O 66 r 2(a). From them the following propositions may be drawn: (a) the expression 'cause of action' in O 66 r 2(a) is a reference to a factual situation, the existence of which entitles the plaintiff to obtain a remedy: Letang v Cooper [1965] 1 QB 232, 242 (Diplock LJ); Permanent Building Society v Wheeler (No 2) (1993) 10 WAR 569, 572 (Anderson J); (b) the rule does not provide an inflexible rule which prescribes a mandatory approach to the awarding of costs in cases where there are multiple causes of action. The opening words 'in the absence of any special order' indicate that the court retains the discretion to make a special order departing from the rule in O 66 r 2(a): Kimpura Pty Ltd v JWH Group Pty Ltd [2004] WASCA 134 [12] - [15]; (c) however, where there are multiple causes of action and a party has succeeded on only one or some, the other party is prima facie entitled to costs on the others but the court will always attempt to (Page 5)
do substantial justice in the circumstances: Permanent Building Society v Wheeler (No 2), 574 - 575 (Anderson J); (d) it may not be appropriate to make a costs order in accordance with O 66 r 2(a) where there is in substance one contest, that is, where the causes of action arise from the one course of dealings, the one transaction or the same facts: Permanent Building Society v Wheeler (No 2) 574 - 575; R J Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2009] WASC 206(S); Witcombe v Talbot & Olivier [No 2] [2009] WASC 173(S) (Beech J).
The nature of the litigation 8 It is the case that all of the claims in respect of this litigation arose in respect of one transaction, the purchase of an apartment by the plaintiff from the defendant. In my view however it would be a gross generalisation obscuring the substantial matters at issue in this litigation to characterise everything that occurred between the plaintiff and the defendant or the defendant's agents and the claims advanced by the plaintiff as 'in substance one contest'. 9 In narrower conceptual terms there were three topics at trial around which the issues of fact revolved. The first was the plaintiff's cause or causes of action for breach of contract. The second was the plaintiff's causes of action for misleading and deceptive conduct. The third was the remedy sought by the plaintiff for each of its claimed causes of action.
Causes of action 10 The plaintiff's claims for breach of contract were divisible into claims for breach of express written terms and in one case an implied term on the one hand, and breach of terms said to be partly in writing and partly oral, on the other. These latter terms it was alleged stipulated that the plaintiff should have received a fully functioning air conditioning system for his apartment and a dedicated separate store room. 11 At trial, so far as the express terms which were said to have been breached, the only real issue was whether the terms of the contract allowed the defendant to depart from express stipulations as to the dimensions and features of the apartment. With respect to the term sought to be implied, the only real issue was whether that term was inconsistent with other terms in the contract, properly construed. 12 With respect to the claim for breach of terms said to be partly in writing and partly oral, as I found, the writing simply did not support the (Page 6)
terms claimed. The 'oral terms' were alleged to have arisen from alleged pre-contractual oral misrepresentations by Ms Thomas, a registered real estate sales representative employed by the defendant's real estate agent. 13 With respect to the claims of breach of contract then the plaintiff was partly successful. In respect of the express written terms the plaintiff succeeded on a legal argument that required no evidence other than the terms of the agreement. With respect to the issue of the implied term, the privacy screen on the balcony, the evidence necessary to demonstrate that the need for a privacy screen was so obvious as to go without saying occupied relatively little time. The allegation that there was an express oral agreement was disposed of when I was unable to accept the evidence of the plaintiff. 14 In my view, properly understood, the allegation that there were specific express contractual terms derived from oral representations of Ms Thomas constituted a separate cause of action. By way of example, if after the expiry of a limitation period the plaintiff had sought to add a claim for the breach of the alleged oral contractual terms to an existing claim for breach of the express written terms of the agreement, in my opinion the additional claim would be statute barred: ABB Service Pty Ltd v Hetherington [2001] WASCA 417. 15 On these issues, on the causes of action of breach of contract, while considerable time was occupied by legal argument as to the proper construction of the written terms of the agreement, little was required by way of evidence. By contrast, the issue of what was alleged to have been said by Ms Thomas and what was known to the defendant's agent as to the subject matter of those alleged oral representations took less time in argument but occupied much of the evidence. 16 There was a factual overlap in the case alleging a breach of express oral contractual terms and the plaintiff's case on misleading and deceptive conduct and I will refer further to that below. 17 The plaintiff's case on misleading and deceptive conduct divided into two parts. Each could be said to be a separate cause of action in the sense described by the Court of Appeal in ABB Service Pty Ltd v Hetherington. The first part relied on what were said to be the pre-contractual oral misrepresentations of Ms Thomas. I observe that while the plaintiff's pleading alleged only misleading and deceptive conduct, the plaintiff by his counsel did not hesitate to argue in closing that in fact Ms Thomas had fraudulently deceived the plaintiff. As set out in my reasons for decision (Page 7)
I rejected that argument and rejected the idea that Ms Thomas had misled the plaintiff in any way. The significance of allegations of this kind as against someone who earns their living as a registered real estate sales representative would be obvious. The defendant however does not rely on that as a basis for disentitling the plaintiff to costs and I do not therefore have regard to it. 18 The second part of the plaintiff's case in misleading and deceptive conduct was that, after executing the agreement for the purchase of his apartment but prior to settling on it, he had again been misled by the principal of the defendant's agent, Mr Wayne Briggs. That allegation was maintained until it was abandoned on the third day of trial: [74]. This particular cause of action did not overlap factually with any other cause of action. It relied upon the proof of the number of facts that were in dispute. It occupied only a modest amount of time at trial but it would have been a burden to the parties before the trial. 19 The evidence relied upon to try to prove express oral contractual terms, the alleged pre-contractual representations of Ms Thomas, was the same evidence relied upon to prove the misleading and deceptive conduct claim that the plaintiff pressed in his closing submissions. The evidence with respect to those matters and the argument of those matters occupied a considerable period of time at trial and no doubt in the parties' pre-trial preparation. The plaintiff failed entirely with respect to those issues. 20 The last of the three main topics at trial was the question of the remedies sought by the plaintiff in respect of his causes of action. The plaintiff sought damages for breach of contract and for misleading and deceptive conduct. He also sought remedies pursuant to the Trade Practices Act1974 (Cth) that would have effectively rectified the written agreement to reflect what the plaintiff said were the assurances that had been made to him orally by Ms Thomas. While counsel for the plaintiff advanced arguments as to the plaintiff's entitlement to these latter remedies it was ultimately not necessary for me to deal with them in my reasons for decision. 21 So far as the claims for damages for breach of contract were concerned some of them, including for example claims for the costs of an air conditioning system and the cost of replacing flooring, were either relatively straightforward and unchallenged or but faintly challenged. The latter was the case for the issue of the cost of providing storage space. No evidence was called by the defendant and the cross examination of the plaintiff's expert was economical. (Page 8)
22 The damages issue that dominated the evidence and ultimately the central factual issue so far as damages were concerned was the plaintiff's claim in respect of the value to be attributed to the 8 or 9 sqm that was lost by the plaintiff from his garage area. 23 The plaintiff's case was that he had effectively lost a space in which a car could be parked and his loss should be valued in that way. The defendant's argument, (characterised by plaintiff's counsel as 'rubbish' although it was supported by the expert opinion of an architect regularly engaged in high rise development projects in the City of Perth), was that the lost 8 or 9 sqm could not be used as a parking bay. That was because, as set out in my reasons for decision at [180] – [205] the long and thin area that had been taken from the plaintiff did not meet the requirements of the City of Perth reflected by the Australian Standard 2890.1: 2004 for a parking space. Nor was it practically possible to put any kind of motor vehicle in the extra space that should have been left to the plaintiff even if it could have done consistently with the requirements of the City of Perth. 24 This issue occupied considerable time at trial. With respect, for the reasons set out in my decision after trial, the vigour with which the argument was advanced on behalf of the plaintiff and the time consumed by the issue was in inverse proportion to its merits. 25 Depending precisely on how it is to be characterised, the plaintiff succeeded either in part on his cause of action in contract or in one of his causes of action in contract. 26 The plaintiff failed however and the defendant succeeded on the issue of the 'oral agreement'. Given that this claim required proof that contractual terms had come into existence by virtue of what Ms Thomas had said as opposed to from the plain words of the party's written agreement, in my opinion it is better characterised as a separate cause of action. 27 The defendant successfully opposed the plaintiff's claim based on the cause of action in misleading and deceptive conduct and the plaintiff abandoned a further cause of action in misleading and deceptive conduct on the third day of trial. 28 There was conduct on the part of both parties here that unnecessarily prolonged the trial. The defendant's late attempt to amend its defence is one. That however has to be balanced against the plaintiff's efforts to exclude references to AS2890.1 as 'irrelevant' when that particular Australian standard was expressly nominated as the standard for the (Page 9)
provision of parking spaces in the building licence tendered into evidence by the plaintiff, and was expressly relied upon by the plaintiff's expert witness in providing his opinion as to what the plaintiff had allegedly lost. 29 I have referred to the provisions of O 66 r 2(a). It is still necessary however, as his Honour Justice Anderson said in Permanent Building Society v Wheeler (No. 2) (1993) 10 WAR 569, 574 to have regard to the fact that orders of the kind set out in that rule are not to be made as a matter of course. As his Honour said 'the court will always look at the realities of the case and attempt to do substantial justice …'. 30 In this case there was an overlap in the facts relied upon and the evidence tendered in the cause of action in breach of contract, at least with respect to oral terms, and one of the causes of action for misleading and deceptive conduct. The plaintiff failed in establishing the facts relied on for both. As I have said, the plaintiff simply abandoned the second cause of action for misleading and deceptive conduct that relied on the alleged conduct of Wayne Briggs. 31 The defendant was successful in defending discrete causes of action. The time and effort devoted to the litigation of those causes of action were at least equal to that occupied in proving the matters upon which the plaintiff was successful. 32 Assessing the relative success of the parties here, the limited success of the plaintiff is in my view offset by the effort involved in pursuing causes of action that were either abandoned, based on unproven oral representations and an issue that was simply so unreasonable that it was bound to fail. 33 Apportioning costs by attributing them to particular issues- or causes of action- brings its own particular problems. In my view it is unnecessary in any event in this case. In my view fairness here requires that there be no order as to costs.
Interest 34 The plaintiff seeks an award of pre-judgment interest as damages. Interest is sought in respect of the damages awarded to compensate the plaintiff for the reduced size of his garage area, and the cost of providing a privacy screen across the common balcony and to remove carpet and replace it with bamboo flooring in his apartment. The plaintiff had not at the time of trial incurred any cost himself in respect of those matters. (Page 10)
35 Ordinarily damages for breach of contract are assessed as at the date of breach. That general rule will yield in particular cases to solutions best adapted to give the innocent party that amount in damages which most fairly compensates for the loss and damage caused by the breach: Rio Tinto Exploration Pty Ltd v Graphite Holdings Pty Ltd [2007] WASCA 276 per Buss JA at [93] and see Johnson v Perez (1988) 166 CLR 351, 355 – 356 (Mason CJ), 367 (Wilson, Toohey and Gaudron JJ), 371 (Brennan J). 36 The breach in this case occurred at the end of July 2009 at the time of settlement. The trial took place in mid-May 2011. The damages the plaintiff was awarded were based on estimates (exhibit 39, expert report of Kevin Windross, 19 November 2010) and a valuation (exhibit 40, expert report of Scott Bellerby, 23 December 2010) that were far closer in time to the date of trial than the date of breach. The valuation of the lost parking area was arrived at using a discount rate based on interest rates current in the last quarter of 2010. 37 No submission was made at trial with respect to the timing of the assessment of damages. The fact is however that the assessment that I made, based on the evidence referred to above, was an assessment at the time of trial. In the circumstances I decline to award prejudgment interest. The plaintiff is of course entitled to interest on the judgment.
|