Timms v Stella Corporation Pty Ltd

[2003] QDC 384

[2003] QDC 384

DISTRICT COURT

CIVIL JURISDICTION

JUDGE DODDS

No 4 of 2003

GREG ASHLEY TIMMS	Applicant
and
STELLA CORPORATION PTY LTD	Respondent

MAROOCHYDORE

..DATE 08/10/2003

JUDGMENT

HIS HONOUR:  This is an appeal by a defendant, Timms, against orders made by a Magistrate on 3rd January 2003 in the Magistrates Court, Maroochydore.  The notice of appeal was filed on the 31st of January 2003. 

It is necessary to set out some history:

On 3rd November 2000 the plaintiff, Stella Corporation Pty Ltd (Stella) sued Timms for $17,803.50 due for painting work it had done for Timms and for which it had provided Timms with invoices. 

In his defence, amongst other things, Timms:

admitted Stella carried out some work and had rendered the invoices referred to by Stella;

said he gave notice to Stella of defects in the work done;

said Stella did not remedy defects so as to complete the work. Timms completed the work at a cost of $11,977.00;
said he agreed and agrees to pay Stella $4,005.52.

On the 27th of July 2001 Stella obtained judgment against Timms for $4,005.52, plus costs of $91.00.  An application to stay the judgment was rejected and the amount of the judgment was paid to Stella on 21st August 2001.

On 18 April 2002 Timms filed an amended defence and counterclaim.  It was more extensive and included a counterclaim in an amount of $4,263.05.  This amount was arrived at by deducting from $15,983.00 the cost to the defendant of defects in the Stella's work, plus the amount of $4,005.52 already paid.  Cost of the defects exceeded the amount of $15,983.00 by $257.53.   Because $4,005.52 had already been paid, the counterclaim was $4,263.05.

The matter was tried over two days on the 7th of June 2002 and the 23rd of August 2002.  Judgment was delivered on 3rd January 2003 and sent by facsimile to the parties.  The parties did not appear when judgment was announced.  Timms says he had no notice of the judgment.  This may have been due to the time of year.  Most law offices are closed.

The Magistrate found that Stella performed work on the sites claimed but that the amounts claimed by it had not been substantiated.  He accepted the evidence of Timms and rejected the evidence of Stella where there was conflict.  He found that the correct amount due for the work Stella had done was $15,983.00.  He found Timms' counterclaim proven in an amount of $14,099.25.  The difference was thus $1,883.75.  He held that he had no jurisdiction to interfere with the judgment of Stella against Timms for $4,005.52.  He gave judgment for Stella against Timms for $1,883.75. 

The Magistrate then dealt with costs.  He expressed the opinion the proceeding was unusual because the amount initially claimed by Stella had been reduced to the amount acknowledged by Timms and the amount of the counterclaim by Timms had been reduced.  He expressed a view the matter was one which may well have been settled by meaningful negotiation.  He ordered each party bear their own costs.

The grounds of appeal were:

That the Magistrate erred in failing to take into account the payment by Timms of $4,005.52 to Stella on 21 August 2001 in reduction of Stella's claim;

That the Magistrate did not give Timms an opportunity to be heard on costs.

It appears no submissions were called for on the question of an appropriate costs order.

On 29/05/2003 Timms filed his outline of submissions in accordance with the Practice Direction, with Practice Direction 5 of 2001. 

On 29 July 2003 the Registrar directed Stella file and serve its outline of argument within seven days.

On 5th August 2003 Stella sent by facsimile to the Court a document entitled outline of submissions.  It read:

"We have no argument on this matter and wish to come to a suitable arrangement of payments over next six months.  We are not prepared to pay any person's legal fees."

This document was under the hand of David Bailey, Director, Stella Corporation Pty Ltd.  It appears Stella had terminated the services of its solicitors.  At the hearing of the appeal I gave leave to Stella's solicitors on the record to withdraw.

It appears plain that the Magistrate should have brought into account the $4,005.52 already paid by Timms to Stella.  Had he done so, then Stella would have been entitled to judgment on its claim for $11,977.48 and Timms to judgment on his counterclaim for $14,099.25.  The difference should have resulted in judgment for Timms against Stella for $2,121.77.  Rule 181 Uniform Civil Procedure Rules (UCPR).

Cost of a proceeding are in the discretion of the Court and follow the event unless the Court considers another order is more appropriate. Rule 689(1) UCPR. Rule 689(2) UCPR states that Rule 689(1) applies unless the rules provide otherwise.

It appears that on 13 March 2002 Timms made an offer to settle pursuant to Chapter 9 Part 5 UCPR. The offer was that Timms pay $3,000 to Stella, payment to be on a date after 4th April 2002 "to finalise litigation between the plaintiff and the defendant", with each party to accept their own costs.

Rules 360 and 361 UCPR set out the costs consequences which may flow from an offer to settle by a plaintiff and by a defendant respectively. In this case the offeror was both a defendant to Stella's claim and in the position of a plaintiff for his counterclaim. The offer was to dispose of all the litigation.

In Christie v. Platt (1921) 2KB 17, the Court of Appeal on appeal from a Taxing Master's decision explained the approach to be taken regarding costs assessment when there is judgment for a plaintiff on a claim and judgment for a defendant on a counterclaim. In that case a plaintiff landlady had sued a tenant for rent. The tenant claimed the premises were uninhabitable and sued for damages. The plaintiff landlady obtained judgment for 200 pounds on her claim and costs. The tenant obtained judgment for $225 on the counterclaim and for costs. In the Court of Appeal it was held the correct approach on taxation in a case such as that was to tax the costs of the claim on the footing there was no counterclaim, and the costs of the counterclaim on the footing there was no claim, but subject to the over-riding condition that the Taxing Master must ascertain what were the costs really incurred by the plaintiff in establishing the claim and really incurred by the defendant in establishing the counterclaim. When that has been done "any costs save to the defendant by reason of there being a claim and counterclaim, instead of two separate and distinct proceedings commenced by two separate events and conducted as two separate actions are not to be allowed to the defendant because they are not costs incurred by the defendant but saved to him." (Pages 24 and 25)

Here Stella was entitled to judgment for $11,977.48 on its claim.  Timms was entitled to judgment on his counterclaim for $14,099.25.  In the final analysis, Timms was entitled to judgment for $2,221.77.  Timms offer to settle the litigation amounted to payment of an amount of $3,000 to Stella after 4 April 2002.

Costs are in the discretion of the Court. In the circumstances of this case, the way the Magistrate exercised his discretion was open to him in the state of his knowledge at the time, but he was not aware of the offer which was plainly a relevant matter. That cannot be the fault of either party because an offer is not to be disclosed until after questions of liability and relief to be given are decided. Rule 357 UCPR. And there was no opportunity to advise of the offer after the matter had been decided and before an order regarding costs was made.

This was a proceeding involving a relatively small amount of money.  It has already occupied an inordinate amount of time.  Rather than send the matter back to the Magistrate, I will make appropriate orders to finally dispose of the matter.

The appeal is allowed. The Magistrate's orders for judgment for Stella against Timms for $1,883.75 and that each party bear their own costs are set aside. In lieu, there will be judgment for Timms against Stella for $2,121.77. With respect to the costs of the proceedings before the Magistrate, I have had regard to the costs associated with both claim and counterclaim, to the philosophy behind Rules 360 and 361 UCPR, to the offer to settle and the date it was made and to the eventual outcome of the litigation. I order Stella pay Timms the amount of $2,980.00 for costs of the proceedings in the Magistrates Court.

I further order Stella pay Timms' costs of the appeal, fixed in an amount of $450.00.

‑‑‑‑‑