Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QSC 220

SUPREME COURT OF QUEENSLAND CITATION: Cook’s Constructions P/L v Stork Food Systems Aust P/L [2008] QSC 220 PARTIES: COOK’S CONSTRUCTIONS PTY LTD ACN 004 782 558 (plaintiff) v STORK FOOD SYSTEMS AUSTRALIA PTY LTD ACN 007 298 633 (defendant) FILE NO/S: S10993 of 2001 DIVISION: Trial Division PROCEEDING: Trial ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 18 September 2008 DELIVERED AT: Brisbane HEARING DATE: 3 September 2008 JUDGE: Martin J ORDER: (a) Upon the defendant undertaking not to transfer any money paid to it pursuant to the judgment or as interest or as costs out of Australia until further order, agreement of the parties or the resolution of the plaintiff’s proposed appeal, the plaintiff’s application is dismissed. (b) The bank guarantees lodged by the defendant with the Principal Registrar in the amounts of $2,200,000 and $800,000 be released to the defendant. (c) That the orders made on 22 August 2008 with respect to the claim and counterclaim be varied by replacing them with the following order. (d) I give judgment for the defendant in the sum of $15,216,484.16. (e) That the plaintiff pay the defendant’s costs of and incidental to the counterclaim on an indemnity basis, (f) That the plaintiff pay 60% of the defendant’s costs of and incidental to the claim on the standard basis up to 24 February 2006, and (g) That the plaintiff pay the defendant’s costs of and incidental to the claim on the standard basis after 25 February 2006. -- 1 of 17 -- 2 CATCHWORDS: PROCEDURE - application to stay judgment pending appeal – whether a party will be sufficiently disadvantaged if a stay is not ordered. PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE – where defendant seeks a variation of the orders of 22 August 2008 to allow orders made against the defendant to be set off against money owed by the plaintiff. PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - where the plaintiff was successful on four of its six claims – how costs should be apportioned. PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON AN INDEMNITY BASIS – where the had been an offer of settlement by the defendant – where there had been a degree of irresponsibility in the plaintiff’s conduct of the case. PROCEDURE - JUDGMENTS AND ORDERS - INTEREST ON JUDGMENTS - RATE – where calculations were made by an accountant on the bases on the commercial rates of interest over the relevant period. PROCEDURE - JUDGMENTS AND ORDERS - INTEREST ON JUDGMENTS - IN GENERAL – whether defendant is entitled to interest on a claim which arose out of the Queensland Building Services Authority Act. Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1997) 71 ALJR 814 Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 Atkins v Great Western Railway Co [1886] 2 TLR 400 Berry v Green [1999] QCA 213 Challenge Charter Pty Ltd v Curtain Brothers (Qld) Pty Ltd [2004] VSCA 66 Colburt v Beard [1992] 2 Qd R 67 Cook’s Constructions P/L v Stork ICM Australia P/L [2004] QSC 066 Cook’s Constructions P/L v Stork ICM Australia P/L [2006] QSC 160 Cook’s Constructions P/L v Stork Food Systems Aust P/L [2008] QSC 186 Cretazzo v Lombardi (1975) 13 SASR 4 at 12 Croney v Nand [1999] 2 Qd R 342 Curtin v Meadlow Holdings Pty Ltd [2001] QCA 145 Edgar v Meade (1917) 23 CLR 29 Elphick v MMI General Insurance Limited & Anor [2002] QCA 347 Interchase Corporation Limited v Grosvenor Hill (Qld) Pty -- 2 of 17 -- 3 Ltd (No 3) [2003] 1 Qd R 26 JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 2) [1983] 2 Qd R 255 Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311 McBride v Sandland (No 2) (1918) 25 CLR 369 McFadzean v Construction Forestry Mining and Energy Union [2007] VSCA 289 Reid Hewitt & Co v Joseph [1918] AC 717 Seriser Investments Pty Ltd v English [1989] 1 Qd R 678 Spotless Group Limited v Premier Building and Consulting Pty Ltd [2008] VSCA 115 State of Queensland v Barram [2008] QCA 53 Todrell Pty Ltd v Finch and Ors [2007] QSC 386 Westpac Banking Corporation v Com’r of State Revenue [2005] QCA 327 Willemse Family Trust v Deputy Commissioner of Taxation [2003] 2 Qd R 334 WMJ Applications Pty Ltd v Ireland [2008] QSC 167 COUNSEL: D J Digby QC, with S R Grahame for the plaintiff K E Downes, with J S Payne, for the defendant SOLICITORS: Clarke & Kann, as town agents for McPherson & Kelly, for the plaintiff McCullough Robertson for the defendant [2] On 22 August 2008, I gave judgment in this matter for the plaintiff on its claim in the sum of $132,657.70, with interest to be determined, and for the defendant in the sum of $9,983,796.54, with interest to be determined. In addition to the determination of interest and costs, each party has applied for additional orders. [3] The plaintiff (“CCPL”) seeks an order staying the orders already made and any further orders made in relation to costs and interest until the hearing and determination of an appeal which has been foreshadowed by CCPL. [4] The defendant (“Stork”) seeks the following orders: (a) That the bank guarantees lodged by Stork with the Registrar be released. (b) That CCPL pay Stork’s costs of the proceeding calculated on the standard basis up to 24 February 2006 and calculated on the indemnity basis from 25 February 2006. (c) That pursuant to Rule 667 of UCPR, the orders dated 22 August 2008 be varied so that pursuant to Rule 184 of UCPR, judgment be entered for the defendant in the amount of $15,216,485. (d) In the alternative to (c): (i) The costs assessed to be payable by the plaintiff to the defendant pursuant to the order in (b) above and by way of costs assessed to be paid pursuant to the orders dated 6 April 2004, 12 July 2005, 7 December 2007 and 22 August 2008 be set off against the judgment sum of $132,657.70 and any interest and costs ordered to be paid by the defendant, -- 3 of 17 -- 4 (ii) Pursuant to Rule 800 UCPR, that enforcement by the plaintiff of the judgment dated 22 August 2008 and any interest and costs awarded be stayed pending the payment by the plaintiff to the defendant of the assessed costs in (i) above. Application for a stay [5] CCPL relies on an affidavit sworn by its chief executive officer to demonstrate that, upon the finalisation of these orders, CCPL will appeal the whole of the decision given. In order to consider the application for a stay it will assist to set out, briefly, the principles which apply to an application for a stay: (a) The applicant bears the onus of showing that a stay is appropriate.1 (b) A successful party is entitled to the fruits of its judgment and sound reasons must be demonstrated to justify a court in suspending that right.2 (c) It will not be enough to move a court to exercise its discretion merely by demonstrating that the proposed grounds of appeal raise a serious question of law and not merely a dispute as to the facts.3 (d) The prospect of success of an appeal is not a matter about which the court considering a stay application should generally speculate.4 Making an assessment of whether the appellant has an arguable case is undertaken to ensure the appeal has not been lodged simply to delay execution.5 (e) If an applicant will be disadvantaged if a stay is not ordered, that is a relevant consideration.6 (f) It is relevant to consider whether, if a stay is granted, the disadvantage suffered by the applicant is outweighed by the competing disadvantage to the respondent.7 (g) The relevance of a threat of liquidation should there not be a stay and the weight to be given to it will vary from case to case. 8 (h) Where it is possible that, if a stay is not granted, the party applying for the stay may be threatened with liquidation, it is not irrelevant that a liquidator may still pursue the appeal if he or she considers that to be worthwhile.9 [6] Another relevant consideration was enunciated by de Jersey CJ in the following way: “…we must strive to avoid crafting a position in the Court of Appeal whereby judgments in the trial division, whether this Court or the District Court, are seen to be provisional only pending the result of an appeal.”10 [7] CCPL identifies 14 errors upon which it would base its notice of appeal and a further, anticipated error should interest be allowed on the judgment given for Stork. These are identified in CCPL’s written submissions as the principal arguments in support of an appeal. The description of the assertions of error as “arguments” is generous, perhaps 1 Croney v Nand [1999] 2 Qd R 342 at [33] 2 McBride v Sandland (No 2) (1918) 25 CLR 369 at 374 3 Atkins v Great Western Railway Co [1886] 2 TLR 400, JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 2) [1983] 2 Qd R 255 at 259. 4 Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 695 5 Croney v Nand at [38] 6 Elphick v MMI General Insurance Limited & Anor [2002] QCA 347 at [8] 7 Elphick at [8] 8 Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1997) 71 ALJR 814 at 816 9 Challenge Charter Pty Ltd v Curtain Brothers (Qld) Pty Ltd [2004] VSCA 66 at [17] 10 Berry v Green [1999] QCA 213 -- 4 of 17 -- 5 excessive. They consist mainly of declarations of the existence of mistakes in law or fact. [8] In his oral submissions Mr Digby QC concentrated on the errors said to have been made in finding that Stork was relevantly mistaken in relation to its obligation to pay the plaintiff. It was contended that the evidence of Mr Jewell was not sufficient to establish a mistake. I need not recite all of the submissions put on this point. It was argued by Stork that CCPL had failed to demonstrate that it has good arguable grounds of appeal. This is not the place to enter into a lengthy excursus upon the merits of the case sought to be made on appeal by CCPL. While there has been reference in a number of cases to the requirement to demonstrate a “good arguable case”,11 it appears that the concern properly held by the court is that a stay should not be available where the appellant has a “plainly hopeless appeal”.12 The articulation of the argument with respect to the ground concerning whether or not Stork was relevantly mistaken in relation to its obligation to pay the plaintiff is sufficient, for the purposes of an application of this nature, to allow me to conclude that the applicant has satisfied this particular consideration. [9] The main parts of the balance of CCPL’s argument were as follows: (a) that if it was required to satisfy the judgment it would be irremediably prejudiced, (b) that there was a prospect of a successful appeal being rendered nugatory by Stork transferring the judgment amount to an associated company overseas, and (c) that the judgment in favour of Stork was a “windfall”. Financial Difficulties [10] The effect that being required to satisfy the judgment debt would have on CCPL was the subject of a considerable amount of assertion and some evidence relating to its financial position. It was submitted that CCPL does not have the financial capacity to pay the judgment debt and, if forced to do so, would be placed in default of its loan agreement with its major financier. The argument went on that, should it be required to satisfy the debt, it would inevitably be placed into receivership by its financier and that would have the consequences of exposing CCPL to: damages claims in relation to the various projects it is presently undertaking, termination of all employees and subcontractors associated with those projects, irreparable damage to the relationship between CCPL and its providers, and termination of all other non-primary funding arrangements. [11] It would not be unusual, except in the case of very large companies, for a judgment debt of some $10 million to have a serious impact upon the business of a judgment debtor. But, as was pointed out by Stork, CCPL had no entitlement to that money and has not been entitled to it for the eight years that it has held it. It has during the period since it could have been required to repay the amount, had the advantage of possession of that amount which it has been able to use in pursuit of its business. Obviously, a party in the position of CCPL can make claims of financial difficulties but, in order for them to have any value, evidence of an appropriate nature must be produced. 11 State of Queensland v Barram [2008] QCA 53 12 Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311 at [68] -- 5 of 17 -- 6 [12] It is said, on CCPL’s behalf, that it is unable to borrow against its assets to meet its liability and that it is not in a position to dispose of any assets in order to create a fund sufficient to pay the amount owing. Given the onus on an applicant in this situation one might have thought that there would be some detailed analysis of the borrowing capacity of CCPL. There was not. Mr Poutakidis gave some perfunctory evidence 13 about having approached four major banks about financing. No detail of the proposal put to these banks was given. It would appear that that was the extent of the research undertaken. [13] Mr Luckins provided two affidavits for the applicant. In his second affidavit he made the following, astute observation: “The capability of an entity to draw funds from its current financier or the ability and willingness of current and potential shareholders to fund the $10,000,000 immediately are the fundamental queries to be answered.” 14 The plaintiff produced no evidence of the “ability and willingness of current and potential shareholders to fund the $10,000,000”. As to the plaintiff’s current financier, there is, likewise, no evidence of any substance. There is no evidence of the terms upon which the plaintiff’s current facility is based apart from some excerpts which do not assist in this regard. [14] There was evidence called by Stork which attempted to analyse the financial circumstances of CCPL. There was evidence that CCPL is part of a web of companies which are interdependent in the sense that there are financial arrangements entered into involving one or more of the companies within the group which are for the benefit of CCPL and other companies within that group. There is nothing unusual in that. [15] Where a party wishes to demonstrate that it should not be required to satisfy a judgment debt pending an appeal then the onus is on it to provide sufficient information to allow a conclusion in its favour to be drawn. Information was sought from CCPL by Stork on this application in order that an assessment might be made of the capacity of CCPL to deal with the amount owing. That material was not provided. There are a number of unanswered questions about the financial circumstances of CCPL such that I cannot find, on the material presented, that CCPL could not answer the debt now without suffering serious damage. The plaintiff has failed to provide “sufficiently extensive” or “specific” evidence as to the impact payment of the judgment would have.15 In the absence of that information it is not possible to conclude that CCPL’s contention on this point is valid and that the effect of having to pay the amount owing will be so serious as to justify a stay. Transferring money overseas [16] CCPL argued that there was a risk that the money, if paid, might not be recoverable if Stork transferred it to an associated overseas company. I do not need to consider that in the light of Stork’s undertaking not to transfer any money paid to it pursuant to the judgment or interest or costs out of Australia subject to any further order, agreement or the resolution of the appeal. Windfall 13 Poutakidis affidavit, paras 19-22 14 Luckins 2 nd affidavit, para 5 15 Willemse Family Trust v Deputy Commissioner of Taxation [2003] 2 Qd R 334 at [28] -- 6 of 17 -- 7 [17] It was submitted that the circumstances of this case were exceptional in that Stork had not suffered any loss or damage because it had already been paid for the work the subject of the counterclaim by its principal, Shedden Uhde. This argument was advanced for the first time in oral submissions and caused some consternation for Stork. Stork said that there was no evidence that it had been paid by Shedden Uhde and, during an adjournment, produced an affidavit deposing to an action by Stork against Shedden Uhde in which Stork sought payment for work done on this and other projects. That action was settled for about 25% of the claim. There was no way in which one could tell whether the claim included the work the subject of the counterclaim. [18] This argument by CCPL is not supported by any evidence and is contrary to its own case as opened at the commencement of the trial. It was said then that “one of the reasons Stork wasn't paying our client was that Stork was not getting the money it wanted downstream, or from upstream from Shedden Uhde …”16 . Mr Trende, CCPL’s Chief Executive, gave the following evidence: “And can you tell his Honour now, if you can recall, the more specific conversations that you had with Mr Jewell about the payment of the claims in this proceeding in the meetings that occurred in 2000, and, as I mentioned before, if you're able to in your mind separate what was said at which meeting that would be satisfactory and if you can't just tell his Honour more generally what was said at these meetings by Mr Jewell and you?-- Unfortunately, your Honour, I don't have a specific recollection of the specific conversations at each meeting, however, at those discussions, as I said before, we discussed the various issues of rates, quantities and payments. Also throughout those conversations Mr Jewell made it clear that they still had had claims against Shedden at that time and they hadn't received a determination on those and they were the subject of ongoing protracted efforts to resolve them, and he indicated that the quantum of that claim was in excess of $40 million, and we were certainly left with no doubt that Stork was under significant financial pressure as a result of the additional moneys they've had to expend to complete this project which, in our opinion, had flowed on the repercussions to us.”17 [19] If I had to decide this point on the available evidence then I would lean to a finding that it was more likely than not that Stork had not been paid in full. I do not need to go that far. CCPL’s argument that the judgment is a windfall is unsupported by evidence and is contrary to its own case at trial. It does not support the application for a stay. [20] Upon the defendant undertaking not to transfer any money paid to it pursuant to the judgment or as interest or as costs out of Australia until further order, agreement of the parties or the resolution of the plaintiff’s proposed appeal, the plaintiff’s application is dismissed Costs [21] Stork served a formal offer to settle both the claim and counterclaim on CCPL on 24 February 2006. Stork did better than its offer. CCPL concedes that, as a result of the operation of the rules, orders could be made that: 16 T 17 17 T 84 -- 7 of 17 -- 8 (a) Stork pay CCPL’s costs of the claim on the standard basis until 24 February 2006, (b) CCPL pay Stork’s costs of the claim on the standard basis from 25 February 2006, and (c) CCPL pay Stork’s costs of the counterclaim on an indemnity basis. [22] The issue which arises is brought about by Stork’s application that there be one order as to costs of the claim and that it be: “The plaintiff pay the defendant’s costs of the proceeding calculated on the standard basis up to 24 February 2006 and calculated on the indemnity basis from 25 February 2006.” [23] This is an action which has been on foot in this State since 2001. There have been numerous interlocutory skirmishes and repeated amendments of the pleadings. Notwithstanding the many complaints about inadequate disclosure, reams of documents have been produced. The assessment of costs in this matter would be lengthy and could give rise to further disputation. [24] The general rule applicable in these circumstances is r 681 UCPR: “681 General rule about costs (1) Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise. (2) Subrule (1) applies unless these rules provide otherwise.” [25] The meaning of the word “event” in the context of a rule like this is not simply the result or outcome of the action. The words “follow the event” are to be read distributively, in other words, where there is more than one issue to be decided in an action, then each of them gives rise to an “event” for which costs may be determined separately.18 [26] That these principles apply under the UCPR was confirmed by McPherson JA in Interchase Corporation Limited v Grosvenor Hill (Qld) Pty Ltd (No 3).19 [27] What, then, should occur in these circumstances? CCPL succeeded in four of the 14 claims it made and failed on the counterclaim. The total value of CCPL’s initial claims was $1,313,623.20 and interest. Of that it succeeded completely on the road reconstruction, asphalt on site-roads and ammonia spill standby claims; and, partly, on the lime stabilisation of site-roads claim, for a total judgment of $132,657.70 with interest. Its failure on the bulk earthworks, quantities of footings, pedestal and suspended slabs claims is important as those claims took up a significant portion of the trial. I observe that the amount of time spent during a trial does not always mirror the amount of work necessarily done on that particular matter before trial. Further, I bear in mind that assessment of costs, especially in a matter such as this, is complicated by the number of issues and the fact that there cannot be a complete compartmentalisation of costs with respect to each issue as the work done by lawyers on, for example, a particular defence, may apply to more than one issue. [28] A court, in circumstances like these, may not only deprive a plaintiff of its costs on failed issues, but also may order the plaintiff to pay the other party’s costs of them. 20 18 Reid Hewitt & Co v Joseph [1918] AC 717 at 731, 744; Colburt v Beard 1992 2 Qd R 67 at 69-71 19 [2003] 1 Qld R 26 at [84] -- 8 of 17 -- 9 [29] Recent consideration has been given by the Court of Appeal in Victoria to the means by which costs may be apportioned according to the measure of success of a plaintiff. In Spotless Group Limited v Premier Building and Consulting Pty Ltd21 the court considered a trial which had lasted 75 days and in which it was argued by one party that the other should pay its costs notwithstanding that the other had succeeded because the basis upon which it succeeded was not pleaded and was not contended for until the very end of the trial and that that party had failed upon the remaining issues. Redlich JA22 said: “13. A plaintiff who is only successful on one of a number of pleaded causes of action would ordinarily be entitled to costs. But no party suggests that Premier or North Suburban should have all their costs of the trial. In McFadzean v Construction Forestry Mining and Energy Union the Court referred to a passage from the judgment of Eames J in Pricom Pty Ltd v Sgarioto dealing with the position as to costs where a plaintiff has only been partially successful: ‘As a general rule costs should follow the event, and a successful party should obtain all of the costs of the action even although it failed to establish some of the alternative heads of its claim: Ritter v Godfrey (1920) 2 KB 47. However, in the exercise of its discretion the court may decline to order costs in favour of a successful party, or may order the successful party to pay the costs of the unsuccessful party, where the plaintiff failed to establish discrete heads of claim, or failed to establish issues which it pursued in its claim, although ultimately succeeding on the basis of another discrete head of claim: Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748, per Toohey J at 48, 136.’ 14. In certain cases it is apposite for a trial judge to apportion costs having regard to the multiplicity of parties, actions, issues and the mixed success enjoyed by the plaintiffs. Under r 63.04, the judge may award costs in relation to particular questions or parts of the proceeding. The rules of court are wide enough to permit an apportionment of costs according to issues or causes of action, which enable a court to look at the realities of the case and attempt to do substantial justice. 15. Thus a pragmatic approach may be taken in cases where no party is wholly successful and there are clearly practical difficulties in awarding costs on an issue by issue basis. In exercising its discretion as to costs the court is entitled to take into account the failure of a party on certain ‘issues’. ‘Issue’ is not used in the technical pleading sense, but refers to any disputed question of fact of law. In Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd this Court observed: ‘In cases where neither party is wholly successful there are clearly practical difficulties in awarding costs on an issue by issue basis which would involve making separate costs orders. His Honour took a pragmatic approach, which has much to commend it, of apportioning the costs between the parties.’ ” 20 Edgar v Meade (1917) 23 CLR 29 at 45; Cretazzo v Lombardi (1975) 13 SASR 4 at 12 21 [2008] VSCA 115 22 With whom Dodds-Streeton JA agreed -- 9 of 17 -- 10 [30] The observations of Redlich JA were consistent with those of the Victorian Court of Appeal in McFadzean v Construction Forestry Mining and Energy Union 23 where the following was said: “158. In fixing costs a superior court may treat ‘heads of controversy as units of litigation’ and give directions to the taxing master in relation to them, such units not being circumscribed by pleadings, causes of action or issues capable in themselves of leading to the granting of relief. But to avoid the complications of taxation resulting from making orders recognising the entitlements to costs of a party on each action on which they were successful, the orders may be notionally set off against each other or other adjustments made so as to produce an order for a proportion of one party’s costs. This approach to costs orders where an action has had mixed success has been followed in a number of cases. In Hughes v Western Australian Cricket Association (Inc), Toohey J had regard to the fact that the plaintiff had succeeded on some issues but failed on others, but concluded that: ‘it would be unsatisfactory to attempt to apportion issues and leave the fixing of costs of those issues to the taxing officer. That would impose a very great burden on him and upon the parties’ legal representatives.’ In our view, the judge’s approach to the apportionment of costs was particularly apposite in this case, having regard to the multiplicity of parties, actions, and issues, and the mixed success enjoyed by the plaintiffs. 159. As his Honour recognised, a single order for costs of the plaintiff’s claim ‘would the more readily facilitate taxation of costs, which could otherwise become a task of extraordinary complexity.’ His Honour’s overall award to the defendants of 40% of their costs represented his: ‘best attempt at synthesis of a series of considerations pertinent to the plaintiffs’ claim: The success of some plaintiffs on some causes of action; the failure of some plaintiffs altogether; the success of some defendants altogether; the fact that even the successful plaintiffs failed upon many causes of action; the fact that the causes of action upon which some plaintiffs succeeded represented only a small fraction of the causes of action which were pleaded; the fact that there were very many issues joined upon which the plaintiffs failed, including issues pertinent to most of the causes of action upon which some plaintiffs ultimately succeeded; the fact that the plaintiffs succeeded upon some issues joined even though that did not always mean that a cause of action was established.’” [31] Another issue which the defendant submits ought to be taken into account is the conduct of the plaintiff at various times during this matter’s lengthy history. I observed, in a related matter that: “The plaintiff has known since, at least, 2005 that the defendant’s case was, on this part of the claim, that the material pleaded by the plaintiff did not allow for the necessary calculations to be done to 23 [2007] VSCA 289 -- 10 of 17 -- 11 determine the relevant quantities. The defendant has not made a secret of that and has consistently attacked the statement of claim in this respect on that basis.” 24 [32] The plaintiff’s case on the quantification of the roadworks claim remained essentially the same until, after the commencement of the trial it finally sought to amend its pleading on this point. I have dealt with that elsewhere.25 The important consideration for these purposes is that, in maintaining a pleaded case which could never have succeeded, it put the defendant to great expense in preparing to meet a case based on the for-construction drawings alone. It continued this attitude even though Mr Robinson, its main witness on this point, had conceded, months before the trial began, that the relevant measurements were taken from his survey data rather than just from the for-construction drawings. [33] In the reasons I gave for allowing the plaintiff’s application to amend the statement of claim in the first week of the trial, I dealt with a number of items in the following way26 : The history of the litigation, the lateness of the amendments, a change in case and the failure to explain [16] The matters referred to in the above subheading are all matters upon which the defendant is entitled to make strong complaint about the conduct of the plaintiff. [17] The plaintiff has known since, at least, 2005 that the defendant’s case was, on this part of the claim, that the material pleaded by the plaintiff did not allow for the necessary calculations to be done to determine the relevant quantities. The defendant has not made a secret of that and has consistently attacked the statement of claim in this respect on that basis. [18] Reference was made to an order of Byrne J made on 12 July 2005 concerning the statement of claim. So far as is relevant that order provided: “In relation to paragraph 6, 17, 30, 54, 79, 124 and 193 of the draft statement of claim, the Plaintiff file and serve, as soon as possible, but in any event within 45 days, particulars of the profiles and dimensions relied upon it as the basis for the calculation of each of the quantities alleged and each of those paragraphs by reference to each for-construction drawing from which each of the measured profiles and dimensions were taken.” [19] It was submitted by Mr Digby QC that the court “had in that respect prescribed the way in which it required those particulars to be put forward”, namely only the provision of particulars of the for-construction drawings to which the quantities have been measured, and that there was “something of a prohibition upon referring to or relying upon any other drawing than the for-construction drawing”. [20] Justice Byrne’s order, set out above, does not restrict the plaintiff in how it may plead its case. As with Moynihan SJA’s reasons, referred to above, the order of Byrne J provides the minimum which is required for the pleading. It does not, in any sense, purport to restrict the plaintiff in the proper provision of particulars beyond those set out in the order. 24 Cook’s Constructions P/L v Stork Food Systems Aust P/L [2008] QSC 186 at [17] 25 supra 26 Supra at [16] to [28] -- 11 of 17 -- 12 [21] I was referred to a number of cases by both parties. The most well known decision of them is State of Queensland v J L Holdings Pty Ltd (1996-1997) 189 CLR 146. The plaintiff relied on the often cited passages in the joint reasons of Dawson, Gaudron and McHugh JJ where they said: “Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.” [22] As this is a case in which both parties are corporations and the dispute is over a substantial building project what their Honours said at 154-155 is also relevant: “The majority in the Full Court considered that costs are not these days considered the "healing medicine" they once were. They referred to the speech of Lord Griffiths in Ketteman v Hansel Properties Ltd … and the decision of this Court in The Commonwealth v Verwayen … . In Ketteman Lord Griffiths said [at 220]: "justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes ... " In this case, which is of a commercial nature, the litigants are on the one side a developer and on the other side government, and there is nothing which would indicate any personal strain which would justify the conclusion that costs are not an adequate remedy for prejudice caused by the amendment sought to the pleadings.” [23] And further, at 155: “Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.” [24] This trial was on the Supervised Case List of this court. The Practice Direction governing the conduct of cases on that list (No. 6 of 2000) provides for the making of directions for the conduct of interlocutory steps. Clause 15 of the Practice Direction provides: 15. Non-compliance with a direction may, on the application of a party or on the court's own motion, result in: . an order pursuant to rule 371(2); . a non-complying party being deprived of the costs of late compliance; . a non-complying party may be ordered to pay the other party's costs thrown away by non-compliance which may be fixed and payable forthwith; -- 12 of 17 -- 13 . the non-complying party may be ordered to pay as a sanction an administration charge of $75.00; . the Supervised List Manager may be directed to write directly to the non-complying party informing that party of the non- compliance and any orders made in respect of it; .the matter may be listed for trial notwithstanding noncompliance. [25] It has become clear, during the conduct of this trial, that the plaintiff has ignored many of the directions given during the reviews conducted pursuant to the Practice Direction. [26] The failure to comply with directions, together with other matters (late disclosure, late supply of expert’s reports), has understandably frustrated the defendant in defence of the claim and in the pursuit of its defence and counterclaim. Nevertheless, the application is one which can be dealt with by the defendant (no prejudice was asserted), but it is made against a history which justifies an order for costs on an indemnity basis. [34] It is submitted that the conduct complained of by the defendant falls into that category identified by Chesterman J in Todrell Pty Ltd v Finch and Ors27 : “[4] The defendants in Action 1308 of 2007 (‘the Finchs) seek their costs of the trial which lasted four days on the indemnity basis. They do so on reliance upon the authorities which establish that, other things being equal, commencing proceedings in wilful disregard of clear law will result in an order for costs on the indemnity basis. The authorities include Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 and Di Carlo v Dubois (2002) QCA 225. Rosniak v Governor Insurance Office (1997) 41 NSWLR 608 at 616 decided that it was not necessary for a party seeking indemnity costs to establish ethical or moral delinquency by its opponent. It was enough that the opponent conducted itself unreasonably in some way. In Emanuel Management Pty Ltd (in liquidation) v Fosters Brewing Group Ltd & Ors [2003] QSC 299 I pointed out that that test is inexact. The test which I myself adopted in that case, and others, was whether there was something irresponsible about the conduct of the losing party which exposed its opponent to costs which should, in fairness, be ordered on the indemnity basis. It is, of course, irresponsible to commence proceedings which cannot succeed because of a known legal impediment.” [35] The plaintiff’s conduct with respect to the roadworks claim (at least) exhibited that degree of irresponsibility referred to by Chesterman J. [36] In deciding this issue I have given consideration to the following: (a) the non-acceptance by the plaintiff of the defendant’s offer, (b) the plaintiff’s conduct in the interlocutory stages of these proceedings28 , (c) the limited success of the plaintiff, (d) the proportion of the amount recovered by the plaintiff compared to its claim, (e) the time taken during trial on the unsuccessful claims, 27 [2007] QSC 386 28 See, inter alia, Cook’s Constructions P/L v Stork ICM Australia P/L [2004] QSC 066, Cook’s Constructions P/L v Stork ICM Australia P/L [2006] QSC 160 -- 13 of 17 -- 14 (f) the late amendment of the plaintiff’s case, (g) the complete success of the defendant on its counterclaim, (h) the practical difficulties which would be occasioned by awarding costs on an issue by issue basis, (i) that an order apportioning costs to one party can recognise the limited success of the other side, and (j) that a single order for costs would more readily facilitate assessment and be less likely to result in continuing disputation. [37] In the light of those considerations I order that the plaintiff: (a) pay the defendant’s costs of and incidental to the counterclaim on an indemnity basis, (b) pay 60% of the defendant’s costs of and incidental to the claim on the standard basis up to 24 February 2006, and (c) pay the defendant’s costs of and incidental to the claim on the standard basis after 25 February 2006. Interest [38] The parties are agreed that the appropriate amounts of interest on the plaintiff’s successful claims are: (a) Road reconstruction claim $21,413.90 (b) Lime stabilisation claim $35,475.38 (c) Asphalt on site roads claim $75,368.40 (d) Ammonia spill claim $28,545.21 $160,802.29 [39] In its pleading the defendant sought interest on the amount of its counterclaim at the rate of 10 per cent per annum pursuant to s 47 of the Supreme Court Act 1995 from July 2000 to the date of judgment. [40] Section 47 of the Supreme Court Act provides: “47 Interest up to judgment (1) In any proceedings in respect of a cause of action that arises after the commencement of the Common Law Practice Act Amendment Act 1972 in a court of record for the recovery of money (including proceedings for debt, damages or the value of goods) the court may order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment. (2) The powers conferred on a court of record by subsection (1) may be exercised by an arbitrator or umpire. (3) This section— (a) does not authorise the giving of interest upon interest; (b) does not apply in respect of any debt on which interest is payable as of right whether by virtue of an agreement or otherwise; (c) does not affect damages recoverable for the dishonour of a bill of exchange.” -- 14 of 17 -- 15 [41] Although the court has a discretion to award “such rate as it thinks fit” there has to be some criterion upon which a figure is selected.29 In this case, the defendant called evidence by way of affidavit from an accountant of the commercial rates of interest which applied over the relevant period. That evidence showed that rates of interest between 2000 and the date of judgment fluctuated but in all cases fell below the 10 per cent claimed by the defendant in its counterclaim. Consistent with that evidence, the defendant has abandoned its claim for 10 per cent interest and seeks interest in accordance with the evidence of the accountant. I am satisfied that the calculations made by the accountant provide a suitable criterion upon which I can select a figure and I adopt the amount set out in his affidavit of $5,526,148.20 as the appropriate amount of interest to be awarded on the counterclaim. [42] The plaintiff argued that the defendant was not entitled to any interest. It submitted that Stork had not suffered damage, loss or injury by reason of CCPL being unlicensed under the Queensland Building Service Act but that Stork had received a very substantial windfall gain. It was submitted that Stork had the benefit of the building works performed by CCPL but will not be required to pay for them. I do not accept that Stork “had the benefit of the building works”. It was a contractor, not the principal. As I have observed earlier in these reasons, it is possible that Stork has not been paid by the principal for the relevant work. It must also be observed that the amount of the counterclaim which might, on a preliminary reading, seem extraordinarily large compared to the claim of the plaintiff, must be viewed in the light of the finding that the plaintiff failed to prove any amount by which it could be afforded reasonable remuneration as contemplated under the Queensland Building Services Authority Act. Had such evidence been provided then it would have been likely that the counterclaim would have been substantially diminished. A single order? [43] Rule 184 of the UCPR provides: “184 Judgment for balance If a defendant establishes a counterclaim against the plaintiff and there is a balance in favour of 1 of the parties, the court may give judgment for the balance.” [44] The defendant submits that I should vary the orders made on 22 August 2008 to take into account the orders which I have made in these reasons with respect to interest and costs and, through the use of r 184, set off the claim and interest against the counterclaim interest and costs and give judgment for the balance. [45] Rule 667 of the UCPR provides: “667 Setting aside (1) The court may vary or set aside an order before the earlier of the following— (a) the filing of the order; or (b) the end of 7 days after the making of the order. (2) The court may set aside an order at any time if— (a) the order was made in the absence of a party; or (b) the order was obtained by fraud; or (c) the order is for an injunction or the appointment of a receiver; or 29 Seriser Investments Pty Ltd v English [1989] 1 Qd R 678 -- 15 of 17 -- 16 (d) the order does not reflect the court’s intention at the time the order was made; or (e) the party who has the benefit of the order consents; or (f) for a judgment for specific performance, the court considers it appropriate for reasons that have arisen since the order was made. (3) This rule does not apply to a default judgment.” [46] The making of an order is constituted by – (a) The order being pronounced in court by the person making the order; or (b) For a proceeding under chapter 13 part 6 – the order being set out in a document, with or without reasons, and signed by the person making the order.30 [47] The order sought to be varied was, for the purposes of r 667(1)(b), made on 22 August. Thus, the time limit which is established by r 667(1) expired prior to the making of this application by the defendant. [48] Rule 184 allows a single order to be made and, had it been sought on the day judgment was pronounced I would have been inclined to grant it. As neither party addressed me on extension of time when more than seven days had elapsed since the order was pronounced I sought further submissions on whether the time for making an application should be extended. [49] The defendant gave notice to the plaintiff of its intention to seek a single order on 29 August. The period of time of the proposed extension is only about 3 weeks. The matter was still the subject of consideration and, in particular, the question of assessment of interest was still open. The extension sought is within r 7 of the UCPR.31 [50] I agree with the analysis of Daubney J in WMJ Applications Pty Ltd v Ireland32on the application of r 7. It does permit an extension of time in these circumstances and the discretion must be exercised in a way which does justice to the parties in the light of the obvious good sense of having only one order in a case like this.33 [51] The plaintiff does not oppose the making of such an order. [52] I grant an extension of time under r 7 sufficient for an application to be made pursuant to r 184 today and I will make a single order. [53] I agree with the defendant’s submission that the fairest approach is to assess the interest on each of the judgment sums and then to set off the totals. The calculation is: Counterclaim $9,983,796.54 Interest $5,526,148.20 $15,509,944.74 Claim $132,657.70 30 R 660 UCPR 31 Westpac Banking Corporation v Com’r of State Revenue [2005] QCA 327 32 [2008] QSC 167 33 Curtin v Meadlow Holdings Pty Ltd [2001] QCA 145 -- 16 of 17 -- 17 Interest $160,802.88 $293,460.58 Therefore: $15,509,944.74 - $293,460.58 = $15,216,484.16 [54] I vary the orders made on 22 August by substituting the following for the two orders for judgment made then. I give judgment for the defendant in the sum of $15,216,484.16. The Bank Guarantees [55] In 2003 the plaintiff brought applications for freezing orders and, as a result, the defendant gave undertakings to lodge a bank guarantee in the amount $2.2 million with the registrar. [56] A second bank guarantee was lodged with the registrar in the sum of $800,000 in December 2006 pursuant to a consent order of 6 December 2006. Both guarantees remain lodged with the registrar pending further order or agreement of the parties. The plaintiff has not agreed to release the guarantees. [57] Given that I have declined to stay the judgments in this matter it would be inconsistent to require that the bank guarantees remain on foot. Further, the bank guarantees were lodged, initially at least, as the result of an injunction sought by the plaintiff. The terms upon which such injunctions may be granted require the court to consider whether or not there is an arguable case or prima facie case available to the plaintiff. The capacity to make such an assessment is, of necessity, confined to the material which is available at the relevant time. That is not the case at the conclusion of a trial and after judgment has been given. The result of this case is clearly in the defendant’s favour and the balance of convenience if otherwise relevant, would dictate that those bank guarantees be released. I make that order. Orders [58] I make the following orders: (a) Upon the defendant undertaking not to transfer any money paid to it pursuant to the judgment or as interest or as costs out of Australia until further order, agreement of the parties or the resolution of the plaintiff’s proposed appeal, the plaintiff’s application is dismissed. (b) The bank guarantees lodged by the defendant with the Principal Registrar in the amounts of $2,200,000 and $800,000 be released to the defendant. (c) That the orders made on 22 August 2008 with respect to the claim and counterclaim be varied by replacing them with the following order. (d) I give judgment for the defendant in the sum of $15,216,484.16. (e) That the plaintiff pay the defendant’s costs of and incidental to the counterclaim on an indemnity basis, (f) That the plaintiff pay 60% of the defendant’s costs of and incidental to the claim on the standard basis up to 24 February 2006, and (g) That the plaintiff pay the defendant’s costs of and incidental to the claim on the standard basis after 25 February 2006. -- 17 of 17 --