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Strzelecki Holdings Pty Ltd v Jorgensen

Strzelecki Holdings Pty Ltd v Jorgensen

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Case Copied 4 July 2019 62 min read

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   STRZELECKI HOLDINGS PTY LTD -v- JORGENSEN [2019] WASCA 96
CORAM:   MURPHY JA
MITCHELL JA
PRITCHARD JA

HEARD:   6 NOVEMBER 2018
DELIVERED          :   4 JULY 2019
FILE NO/S:   CACV 25 of 2018
BETWEEN:   STRZELECKI HOLDINGS PTY LTD
Appellant
AND
STEPHEN LAURENCE JORGENSEN
ROBYN MIRIEL JORGENSEN
Respondents

ON APPEAL FROM:
Jurisdiction              :   DISTRICT COURT OF WESTERN AUSTRALIA
Coram:   EATON DCJ
File Number            :   CIV 1811 OF 2011

Catchwords:

Costs - Whether successful party who fails on particular issue should be deprived of costs of that issue - Relevant principles - Whether matter of unusual difficulty, complexity or importance

Costs - Indemnity costs - Calderbank offers - Whether rejection of offers unreasonable

Legislation:

District Court of Western Australia Act 1969 (WA)
District Court Rules 2005 (WA)
Legal Profession Act 2008 (WA)
Rules of the Supreme Court 1971 (WA)
Strata Titles Act 1985 (WA)
Supreme Court Act 1935 (WA)
Trade Practices Act 1974 (Cth)

Result:

Appeal upheld and costs orders made by the primary judge varied
Cross-appeal dismissed

Category: A

Representation:

Counsel:

Appellant	:	Mr M L Bennett
Respondents	:	Mr N Dillon

Solicitors:

Appellant	:	Bennett + Co
Respondents	:	Murcia Pestell Hillard

Case(s) referred to in decision(s):

Amaca Pty Ltd (formerly James Hardie and Co Pty Ltd) v Moss [2007] WASCA 162 (S)
Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S)
Calderbank v Calderbank [1975] 3 All ER 333
Cardno BSD Pty Ltd v Water Corporation [No 2] [2011] WASCA 161
EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59
Ford Motor Company of Australia Limited v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Frigger v Lean [2012] WASCA 66
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435
House v The King [1936] HCA 40; (1936) 55 CLR 499
Keet v Ward [2011] WASCA 139
McGarry v The Queen [2001] HCA 62; (2001) 207 CLR 121
Mickelberg v The State of Western Australia [2007] WASC 140 (S)
Naidoo v Williamson [2008] WASCA 179
Nikolaou v Papasavas, Phillips and Co (1989) 166 CLR 394
Norbis v Norbis (1986) 161 CLR 513
Oshlack v Richmond River Council (1998) 193 CLR 72
Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76 (S)
Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007] VSC 516
Re Bond Corporation Holdings Ltd (1990) 1 WAR 465
Sakari Resources Ltd v Purvis [2016] WASCA 24 (S)
Shire of Manjimup v Cheetham [2010] WASCA 225
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No. 2] [2017] WASCA 76 (S)
Souter v Condor Developments Pty Ltd [2012] WASCA 227
Strzelecki Holdings Pty Ltd v Jorgensen [2016] WASCA 177
Strzelecki Holdings Pty Ltd v Jorgensen [No 3] [2015] WADC 115
Strzelecki Holdings Pty Ltd v Jorgensen [No 4] [2018] WADC 19
Yara Australia Pty Ltd v Oswal [2012]…

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: [2019] WASCA 96
Decision Date: 4 JULY 2019

CaseChat Overview and Summary

In the matter of Strzelecki Holdings Pty Ltd v Jorgensen, the parties were engaged in a legal dispute concerning the costs incurred in a protracted legal battle. The case was heard in the Western Australian Court of Appeal, which was tasked with determining whether the costs orders made by the primary judge were appropriate and fair. The appeal was brought by Strzelecki, the plaintiff, who contested the primary judge's decision on the costs of the action. The defendants, Jorgensens, also filed a cross-appeal, arguing that they should have been awarded all of their costs from the commencement of the action up until 15 October 2013.

The primary legal issues the court had to decide revolved around the principles governing costs in litigation, specifically whether a successful party should be deprived of costs for a particular issue where they failed on another issue. The court also had to consider whether the matter was of unusual difficulty, complexity, or importance, which would warrant an indemnity costs order. Another significant issue was whether the rejection of Calderbank offers was reasonable. A Calderbank offer is an offer to settle a case made without admission of liability, and its rejection can impact the costs order.

The Court of Appeal found that the primary judge erred in making the costs orders. The court held that the order for Strzelecki to pay two-thirds of the Jorgensens' costs up to 15 October 2013 was unreasonable given the dominance of an unsuccessful issue in the proceedings. Regarding the indemnity costs order from 16 October 2013, the Court of Appeal determined that the primary judge incorrectly identified the offers as Calderbank offers and wrongly concluded that Strzelecki's rejection of these offers was unreasonable. Consequently, the appeal was allowed, and both costs orders were set aside. The court ordered that Strzelecki pay two-thirds of the defendants' costs, including the costs of specific hearings, to be taxed if not agreed. In respect of the cross-appeal, an extension of time was granted for the filing of the cross-appeal notice, but the cross-appeal itself was dismissed.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

After the Appeal Decision, the primary judge heard submissions from the parties in relation to the costs orders which should be made in respect of the Action. His Honour published a decision on the question of costs (Costs Decision)[3] and made the following orders (Costs Orders):1.The Plaintiff [Strzelecki] is to pay two thirds of the Defendants' [Jorgensens'] costs (including reserved costs) of the Action from commencement to 15 October 2013, the costs to be taxed if not agreed.2.The Plaintiff [Strzelecki] is to pay the Defendants' [Jorgensens'] costs (including any reserved costs) of the Action from 16 October 2013 on an indemnity basis so that the Defendants [Jorgensens] are to recover all of their costs incurred except insofar as they are of an unreasonable amount or have been unreasonably incurred so that, subject to those exceptions, the Defendants [Jorgensens] are completely indemnified for their costs, the costs to be taxed if not agreed.[3] Strzelecki Holdings Pty Ltd v Jorgensen [No 4] [2018] WADC 19. Strzelecki appeals against the Costs Orders on three grounds. They are set out below. In so far as the appeal against order 1 of the Costs Orders is concerned, Strzelecki's complaints, in essence, are that the primary judge erred in making an order that Strzelecki pay two thirds of the Jorgensens' costs to 15 October 2013, when an issue that the Jorgensens pleaded in their defence and counterclaim (DCC), but on which they were unsuccessful, dominated much of the pleadings, and of the trial, and that order 1 was plainly unreasonable and unjust in all of the circumstances. In so far as the appeal against order 2 of the Costs Orders is concerned, Strzelecki contends that the primary judge erred in concluding that an offer or offers to settle, made by the Jorgensens on, or shortly prior to, 15 October 2013, were Calderbank offers[4], and that his Honour erred in concluding that Strzelecki's rejection of the offer or offers was unreasonable, so as to justify an indemnity costs order. Strzelecki submitted that the indemnity costs order was plainly unreasonable and unjust in those circumstances. [4] Calderbank v Calderbank [1975] 3 All ER 333. The Jorgensens filed a cross-appeal in respect of the Costs Orders. They contend that the primary judge erred in respect of order 1 of the Costs Orders by ordering that Strzelecki pay only two thirds of their costs from the commencement of the Action to 15 October 2013. They contend that they should have been awarded all of their costs to that point, essentially on the bases that they were successful in the Action; that in so far as they pleaded, in their defence, a number of matters on which they were unsuccessful, those matters were not improperly or unreasonably raised; and that in those circumstances, order 1 was plainly unreasonable and unjust. Strzelecki and the Jorgensens sought leave to appeal, in respect of the appeal and cross-appeal respectively. The applications for leave to appeal in each case were referred to the hearing of the appeal and the cross-appeal. However, previous decisions of this Court have established that leave to appeal is not required because the appeal is from a decision of a judge of the District Court.[5] The Jorgensens require an extension of time within which to cross‑appeal, because they were one day late in filing their Notice of Cross Appeal. The Jorgensens' application for an extension of time in which to cross‑appeal was referred to the hearing of the appeal and cross‑appeal.[5] Cardno BSD Pty Ltd v Water Corporation [No 2] [2011] WASCA 161 [9] ‑ [11] (Martin CJ), [12] (Newnes JA), [95] - [102] (Murphy JA); Souter v Condor Developments Pty Ltd [2012] WASCA 227 [23] ‑ [25] (Newnes JA, Buss JA & Murphy JA agreeing).

Ratio Decidendi

Legal Principle Established

Strzelecki and the Jorgensens sought leave to appeal, in respect of the appeal and cross-appeal respectively. The applications for leave to appeal in each case were referred to the hearing of the appeal and the cross-appeal. However, previous decisions of this Court have established that leave to appeal is not required because the appeal is from a decision of a judge of the District Court.[5] The Jorgensens require an extension of time within which to cross‑appeal, because they were one day late in filing their Notice of Cross Appeal. The Jorgensens' application for an extension of time in which to cross‑appeal was referred to the hearing of the appeal and cross‑appeal.[5] Cardno BSD Pty Ltd v Water Corporation [No 2] [2011] WASCA 161 [9] ‑ [11] (Martin CJ), [12] (Newnes JA), [95] - [102] (Murphy JA); Souter v Condor Developments Pty Ltd [2012] WASCA 227 [23] ‑ [25] (Newnes JA, Buss JA & Murphy JA agreeing). For the reasons outlined below, the appeal should be allowed, both of the Costs Orders should be set aside, and in lieu thereof there should be an order in the following terms:1.The plaintiff is to pay two thirds of the defendants' costs (including reserved costs) of the Action, including the costs of the hearing on 27 July 2017 and 6 February 2018, those costs to be taxed if not agreed. In so far as the cross-appeal is concerned, an extension of time in which to cross-appeal should be granted, but the cross-appeal should be dismissed. The long history of this Action, and its outcome, are set out in the Primary Decision, and in the Appeal Decision. However, for ease of reference, the following summary provides some context for the discussion of the issues raised in the present appeal. The Jorgensens entered into the Contract with Strzelecki to purchase the Apartment in May 2007. The Contract was conditional upon certain events occurring, one of which was the registration of the proposed strata plan which was annexed to the Contract (Contract Plan). The Contract also contained a condition that 'the purchaser acknowledges that the property is zoned tourism which limits occupancy by any individual to a maximum of 90 days' (Use Restriction). That condition reflected the fact that the land on which the Complex was to be built was zoned for tourism under the relevant planning instruments. The Jorgensens paid the agreed deposit, and the balance of the purchase price was to be paid on settlement, after the Complex was built. Between 2008 and 2010, and before the registration of a strata plan for the Complex, Strzelecki endeavoured to secure a change in the Use Restriction which applied under the relevant planning instruments. It ultimately succeeded in securing the removal of the Use Restriction in respect of some of the apartments. Strzelecki also sought to achieve the same outcome by varying the strata plan it proposed to lodge in relation to the Complex. It lodged a strata plan for registration in which the Use Restriction applied only to those apartments that it had already sold (November Plan). However, the November Plan was never registered. The strata plan which was registered (December Plan) was endorsed with a Use Restriction which applied to all of the apartments.