Anstead Constructions P/L v Stillwater Investments P/L [2010] QDC 38

DISTRICT COURT OF QUEENSLAND CITATION: Anstead Constructions P/L v Stillwater Investments P/L [2010] QDC 38 PARTIES: Anstead Constructions Pty Ltd ABN 55 097 667 411 (Plaintiff) v Stillwater Investments Pty Ltd ABN 53 082 165 151 (Defendant) FILE NO/S: No: 2732 of 2006 DIVISION: Civil PROCEEDING: Application for costs and interest ORIGINATING COURT: District Court of Queensland DELIVERED ON: 24 February 2010 DELIVERED AT: Brisbane HEARING DATE: Written submissions – 16 February 2010 JUDGE: Andrews SC DCJ ORDER: JUDGMENT FOR THE PLAINTIFF IN THE SUM OF $36,620.35 INCLUSIVE OF INTEREST ORDER THAT THE DEFENDANT PAY THE PLAINTIFF’S COSTS OF THE PROCEEDING ON AN INDEMNITY BASIS TO AND INCLUDING 9 FEBRUARY 2010 TO BE ASSESSED CATCHWORDS: Supreme Court Act 1995 (Qld) s 47 Uniform Civil Procedure Rules 360(1) Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 applied COUNSEL: G Coveney for the Plaintiff L A Jurth for the Defendant SOLICITORS: John Nagel & Co for the Plaintiff Mahoney Lawyers for the Defendant [1] On 9 February 2010 I gave reasons indicating an intention to give judgment for the plaintiff in this proceeding in the sum of $26,102.73. The plaintiff was not then ready to argue interest and costs. The issues of interest to be included in the judgment and costs were reserved pending written submissions from the plaintiff -- 1 of 4 -- 2 and the defendant was given liberty to provide written submissions. Each party has provided written submissions. Interest [2] The plaintiff applies for interest pursuant to s 47 of the Supreme Court Act 1995 (Qld) (“the Act”). It seeks simple interest at nine per cent per annum from 13 October 2005 to 30 June 2007 and at 10 per cent per annum from 1 July 2007 to the date of judgment. The defendant makes no submissions as to the plaintiff’s method of calculation or the rates of interest. Instead the defendant relies upon the terms of the contract, submitting that no interest should be allowed. [3] Clause 11.9 of the contract provided: “11.9 Interest payable on outstanding payments If the Owner fails to make any payment to the Builder within the time for payment under this Contract the Builder is entitled to interest on the outstanding amount at the rate specified in Item 24 of the Schedule, payable from the time for payment until the date of payment”. At Item 24 of the Schedule to the contract the parties inserted the figure “0.0”. By that, they indicated their intention to agree that no interest would be payable pursuant to the contract if the defendant failed to make payment to the plaintiff within the time for payment under the contract. [4] The contract was terminated on 5 October 2005. The plaintiff claims interest from 13 October 2005. The plaintiff instituted proceedings in the Commercial and Consumer Tribunal. The proceedings ended in that Tribunal after the defendant brought a claim for relief under the Trade Practices Act 1974 (Cth). Because of that claim proceedings were instituted in this court. The claim under the Trade Practices Act was abandoned by the defendant during the trial. The plaintiff instituted proceedings in this court on 20 September 2006. [5] By the contract the parties did not expressly exclude the operation of s 47 of the Act. Should a term be implied? In a case, like the present, where the parties have attempted to reduce their agreement to a formal contract complete on its face, the five conditions for the implication of a term are settled. 1 A term excluding the operation of s 47 of the Act would fail to satisfy three of the five conditions for implication of a term. It is not equitable to deprive parties of a statutory right to interest where the court in exercising its discretion to award interest will necessarily consider what is equitable. It is not necessary to give business efficacy to the contract and the contract is effective without it. It is not so obvious that the parties intended to exclude the operation of s 47 of the Act that “it goes without saying”. I find that it was not the intention of the parties to exclude the operation of s 47 of the Act. If the parties in this case had made it clear that their intention was that neither party should be liable to the other party for interest pursuant to s 47 of the Act, that intention would be a relevant matter for the court to consider. The parties did not. 1 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 per Mason J with Stephen and Wilson JJ concurring -- 2 of 4 -- 3 The wording of the contract suggests that the parties intended that no interest would accrue if payment under the contract was made within a reasonable time. I take that into account in considering how to exercise the discretion. [6] I propose to allow interest from about two months after the contract was terminated and to apply the interest rates submitted for by the plaintiff and to allow interest until 9 February 2010 as submitted for by the plaintiff for that is the date when the plaintiff would ideally have been ready to argue the point. Interest is payable for 573 days to 30 June 2007 in the sum of $3,688. Interest is payable for the period from 1 July 2007 to 9 February 2010, in the sum of $6,829.62. Interest ordered under the Act is included in the judgment sum. Interest which should be included in the judgment sum for the plaintiff is $10,517.62. Accordingly there should be judgment for the plaintiff in the sum of $36,620.35 inclusive of that interest. Costs [7] The plaintiff’s solicitors wrote on 23 January 2008: “We confirm our client is prepared to resolve the issues on the basis that each discontinues proceedings and meets his own costs.” The plaintiff’s solicitors wrote on 7 February 2008: “Our client has instructed us that he is prepared to resolve the issues on the basis that each party abandons its claim and each party meets its own costs. The offer made is open for acceptance for a period of five (5) working days from the date of this letter.” [8] The defendant’s counsel does not dispute the submission that each of those letters was a genuine offer of compromise which allowed sufficient opportunity to the defendant to consider the offers and to respond. [9] On 1 September 2008 the plaintiff’s solicitors made an offer pursuant to Chapter 9 Part 5 of the Uniform Civil Procedure Rules that each party release the other from all claims arising out of and incidental to the proceedings; that each party discontinue the claim against the other and that each meet its own costs. That offer was left open for 14 days. [10] No offer was accepted. The plaintiff’s offer to settle pursuant to the Uniform Civil Procedure Rules was an offer which was no less favourable to the defendant than the judgment. The ordinary rule would see the plaintiff awarded indemnity costs from September 2008, in accordance with the Rules unless the defendant shows another order for costs is appropriate. It did not make submissions as to why another order was appropriate. Instead, it made submissions to the effect that the ordinary rule of costs on a standard basis should apply though without explaining why that should be or why UCPR 360(1) should not apply. The plaintiff also submitted that the genuine offers of compromise contained in the earlier letters justify an award of indemnity costs implying that this would be of advantage to the plaintiff by permitting an order for costs to be made from as early as 23 January 2008. The effect of UCPR 360(1), where its conditions are met, is to provide for indemnity costs to be ordered from the commencement of the proceeding and not simply from the date of the offer. The conditions are met in this case. The defendant should not -- 3 of 4 -- 4 be liable for the costs since 9 February 2010 as the plaintiff should have been in a position to argue costs and interest on that day. [11] I order that the defendant pay the plaintiff’s costs of the proceeding to and including 9 February 2010 on an indemnity basis to be assessed. -- 4 of 4 --