_Taske v Occupational & Medical Innovations Ltd_

Supreme Court of Queensland|2007-07-03|Before: Moynihan J

[1] MOYNIHAN J: On 29 May 2007 for reasons which I then published I found that the defendant had unlawfully summarily dismissed the plaintiff from his position as its joint chief executive officer. I found that in the circumstances he was entitled to 9 months notice. The trial was heard on 12, 13, 14, 15, 16, 19, 21 and 22 March 2007.

[2] After the reasons were published the matter then adjourned with a view to the parties agreeing damages and for submissions as to costs.

[3] The parties have agreed that the plaintiff's damages are $158,583.30 which is the calculated 9 months salary less an amount for the plaintiff's use of a motor vehicle owned by the plaintiff valued at $10,604.20. There should therefore be judgment for the plaintiff for that amount.

[4] The plaintiff seeks an order for his costs assessed on a standard basis for an action in this court and interest on the judgment sum.

[5] The defendant submits the plaintiff should not receive interest and seeks orders that:

• the defendant pay the plaintiff's costs from 27 April 2005 to 9 February 2006;

• the plaintiff pay the defendant's costs from 10 February 2006;

• the costs be assessed on the District Court scale;

• the plaintiff be order to pay the defendant's costs of the counterclaim and of the first day of the trial.

[6] Uniform Civil Procedure Rule (UCPR) 689(1) provides that costs are at the discretion of the court but follow the event unless the court considers another order to be more appropriate. UCPR 698(3) provides to the effect that if the relief obtained by a plaintiff in a Supreme Court proceeding could have been given by the District Court when the action began the plaintiff's costs are to be assessed as if the proceedings had started in the District Court.

[7] As to UCPR 689(1) the plaintiff accepts the onus of demonstrating 'another order is appropriate in the circumstances' and both counsel were in agreement that it was unnecessary to apply a gloss such as 'unusual or exceptional circumstances' notwithstanding Collins v Carey.[1]

[8] It is pertinent to note that in the reasons published on 29 May 2007 I found that the matters pleaded by the defendant as justifying the plaintiff's summary dismissal did not constitute misconduct or justify summary dismissal. I commented that the justifications relied on 'had the flavour of setting out, in the circumstances where the decision had been based on other considerations, to justify the plaintiff's dismissal on the ground of misconduct'.[2] I rejected the defendant's submissions that the plaintiff was not a witness of credit and accepted his evidence.

[9] The matters relied on in justification bore adversely on the plaintiff's competence as a chief executive, his character and reputation.

[10] The defendant submits that the court should exercise its discretion to refuse to award interest on the damages from the period of the claim to judgment, in the light of significant differences between the quantum claimed and the amount ultimately awarded[3] and the defendant's arguments in respect of the issue of costs; this aspect relates to submissions as to offers of settlement and an order that costs be on the District Court scale.

[11] It is true that the damages claimed over the history of the litigation reflected different periods of notice, a claim for director's fee which was ultimately abandoned and the value of the use of a motor vehicle.

[12] The fact is however that it has been found that the plaintiff is entitled to have been paid the amount the subject of the judgment and I can see no reason why he should not have interest on that sum.

[13] On 10 January 2006 the defendant made an offer of settlement in the amount of $230,000 plus costs on a standard basis on the District Court scale on condition of the discontinuance of the Supreme Court proceedings, release of the defendant from all past and present claims including in respect of the employee's share ownership plan and defamation proceedings. The settlement was to be strictly confidential and there was to be a deed of settlement including terms as to no adverse comments by either party or comments to the media.

[14] That offer was rejected for reasons including that there would need to be appropriate provision for redress or remedy the damage to the plaintiff's reputation by the manner in which his employment was terminated. It cannot be said that was an unreasonable position.

[15] On 26 January 2006 the plaintiff made an offer under Chapter 9 Part 5 of the UCPR to settle on the basis of $230,000 with interest, including standard costs on the District Court scale. The offer was conditional on the execution of a deed of settlement and release in terms to be agreed by the parties and was open for 14 days from the date of service. The terms as to an agreement on terms to be agreed was an integral component of the offer.

[16] UCPR 361(1) refers to a judgment no more favourable to the plaintiff than the offer to settle. The acceptance of the offer as it stood would not have resolved the matter; the parties may not have agreed the terms of the deed and there was no agreed mechanism to settle them. The terms I have referred to were not terms which would be part of any judgment in the action and so the offers are not more favourable than the judgment.

[17] In my view neither the letter of 10 January 2006 nor the notice of offer of 10 February 2006, nor the two taken in conjunction, were relevantly for present purposes, offers to settle the action. The first offer extended beyond the claims in the proceeding and the second was conditional on the agreement of the deed in circumstances in which the plaintiff had rejected the defendant's earlier proposal as to the terms of the settlement to which I have earlier referred.

[18] In these circumstances there is no basis for departure from the usual rule that costs follow the event: c.f. Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd;[4] Hazeldene's Chester Jackson Pty Ltd v Victorian WorkCover Authority (No 2).[5]

If the only relief obtained by a plaintiff in a proceeding in the Supreme Court is relief that, when the proceeding began, could have been given by the District Court, but not a Magistrates Court, the costs the plaintiff may recover must be assessed as if the proceeding had been started in the District Court.

[20] The damages recovered, in the event, could have been given by the District Court but the test is to be applied 'when the proceeding began'.

[21] The damages were an unliquidated sum and their calculation is a function of the period of the notice. The period of notice is not a matter of fine calculation but a consequence of the size of a discretion weighing up various competing factors: Macauslane v Fisher & Paykel Finance Pty Ltd. [6]

[22] A range of periods was fairly open to consideration, in terms of the evidence and submissions by counsel. The range was from two years to less than nine months awarded.

[23] Given the inherent uncertainty in the damages recoverable when these proceedings began it was reasonable for the plaintiff to proceed on the basis that the amount of any judgment might be outside the jurisdiction of the District Court. Costs should be assessed on the Supreme Court scale.

[24] The counterclaim sought the return of the motor vehicle and damages for conversion. The vehicle was returned on 27 May 2005. On 16 August 2006 the statement of claim was amended to claim damages for the foregone use of the vehicle.

[25] The agreed damages include a credit for the plaintiff's use of the vehicle. In the circumstances there should be no order as to the costs of the counterclaim.

[26] As to the costs of the first day the matter was adjourned to allow the plaintiff to amend with respect to a claim for director's fees and to claim a total of $440,296 and, having withdrawn a claim for director's fees.

[27] In the circumstances there is no order as to costs of the first day.

1. The plaintiff's damages be assessed at $153,483.30. The plaintiff is entitled to interest on the damages.

2. The defendant pay the plaintiff's costs to be assessed on a standard basis on the Supreme Court scale, excluding the costs of the counterclaim and of the first day.

[2] Taske v Occupational & Medical Innovations Ltd [2007] QSC 118, 136-137.

[3] Defendant's outline of submissions at 16.

Civil Procedure Rules 1999

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