Aslan v Stepanoski

Aslan v Stepanoski - [2022] NSWCA 89 - NSWCA 2022 case summary — Zoe

The first special costs order sought

First, the respondents seek an order that the appellant pay their costs of 10 hearing days at first instance which culminated in a preliminary judgment of the primary judge of 30 July 2018 ([2018] NSWSC 1160). By that judgment his Honour determined, in a ruling favourable to the respondents, by what contract the parties' relations were governed. Although this judgment was challenged in the appellant's first notice of appeal (filed on 13 November 2020, at a time when he was unrepresented), the challenge was withdrawn when he filed an amended notice of appeal on 27 September 2021.
On the appeal the respondents gave no indication that they sought, or would seek, an order that, in the event that they were unsuccessful on the appeal, the appellant nevertheless pay their costs of the issue determined by his Honour's judgment of 30 July 2018 upon which they succeeded at first instance. Indeed, in light of an exchange at the appeal hearing between myself and counsel for the respondents, a clear implication arose that they did not and would not do so. The appellant's submissions refer to the exchange as follows: "a. At T33.44-46, the presiding judge asked the Respondents' counsel, Mr Folino-Gallo, 'If we were against you on repudiation, do you accept that the orders Ms Chan [the appellant's leading counsel] seeks in her amended notice of appeal would be appropriate?' b. Mr Folino-Gallo stated that he would turn his mind to this issue (T 33.48). c. The Court then adjourned for lunch. Following the lunch adjournment, the question was repeated by the presiding judge ('The question of the orders that would be appropriate if we were against you on repudiation') at T36.50-37.1. d. In response, Mr Folino-Gallo accepted that in those circumstances a judgment of $50,000 in favour of [the appellant] would follow (T37.3-30), making no reference to the position on costs."
The respondents nevertheless submit that they are entitled to seek the special costs order now because the Court has the power to make it under rr 36.16(1) and 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (the "UCPR"), the respondents having filed their motion within 14 days of the judgment being entered. This submission does not however address the authorities indicating that, in light of the public interest in the finality of litigation, the Court should exercise great caution in making an order in exercise of such a power. As was said by the High Court in Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672; [1982] HCA 41 at 684, "[g]enerally speaking [the power to reopen to enable a rehearing] will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard". Another circumstance which might warrant use of the power occurs "when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law" (Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 at 302).
The respondents have not identified any acceptable reason why an application for the special costs order was not made, or at least foreshadowed, at the hearing of the appeal. Ordinarily, questions of costs should be raised and addressed at the appeal hearing rather than parties making separate and subsequent applications (see Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47 at [5]-[7]). As this Court said in Fuller v Albert (No 2) [2021] NSWCA 183 at [31]: "If [parties] wish to make submissions on costs, they should either do so at the hearing of the appeal, addressing the foreseeable possible outcomes, or in special circumstances seek leave to make costs submissions after the outcome is known." (See also Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 at [34] (White JA)).
In some cases, there may be good reasons for deferring costs applications until after the principal judgment has been delivered. One example is a complex appeal in which there are numerous possible outcomes. The present is not such a case as the primary judge's decision on the identification of contract point was not challenged on appeal and any need for a special costs order would necessarily arise for consideration if the respondents lost the appeal. If such an order was to be sought, it should have been referred to in answer to my questions excerpted at [4] above, or elsewhere in the argument. Indeed, strictly speaking, the respondents ought to have filed a notice of contention seeking to uphold that part of the primary judge's costs orders that related to the identification of contract issue, as supported on the basis that is now advanced, namely that that issue was a clearly severable one warranting a separate costs order.
Another circumstance that may justify a party making a post-judgment application for a special costs order is where there have been offers of compromise or Calderbank offers which are made without prejudice and are usually inappropriate to be disclosed to the Court before it makes its decision.
These discretionary considerations weigh strongly against the respondents' application. Also favouring rejection of this application is that it is by no means clear that, even if sought at the appropriate time, the special costs order would have been made. It is of significance in that respect that the respondents are unsuccessful plaintiffs rather than successful defendants. As Burchett J said in Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 at 169 a defendant is "entitled to raise his earthworks at every reasonable point along the path of assault" (cited with approval in Hendriks v McGeoch [2008] NSWCA 53 at [104] (Basten JA); see also Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19]-[20] and [38]-[39] and Real Estate Property Management Pty Ltd v WaterCorp Investments Pty Ltd [2018] NSWCA 194 at [6]). To similar effect, Hodgson JA (with Allsop P and my agreement) said in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 at [10]: "Where a plaintiff's case fails, it may sometimes be appropriate to order the plaintiff to pay the costs of issues unsuccessfully raised by the defendant, even if those issues are severable, so long as the defendant acted reasonably in raising those issues. It is I think less often the case that a defendant would be ordered to pay the costs of severable issues unsuccessfully raised by an otherwise successful plaintiff."
For these reasons, I would reject the respondents' first application.

At a glance

Court

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Before

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Judgment (6 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (20)

Cited By (2)