B & W Windows (Residential) Pty Ltd v Sibilia;

The appellant's submissions

1. In support of its submissions concerning the costs at first instance, the appellant relied upon its offer of $17,500 inclusive of costs made on 10 February 2020.
2. The appellant submitted that the respondents had unreasonably rejected the appellant's offer. The appellant submitted that the offer was "marginally less than the amount ordered by the Appeal Panel" and that "this is a relevant factor in the exercise by the Tribunal of its general discretion as to costs, but does not necessarily mean that the Calderbank offer was ineffective".
3. The appellant submitted that the offer of $17,500 involved a genuine compromise because the owners would have been "better off if they had accepted the offer because they would not have needed to engage [their expert] to prepare his report in reply or incur the costs of running the hearing".
4. The appellant further submitted that the question whether the failure to accept an offer was reasonable or not was assessed at the time of the offer, not with the benefit of hindsight (citing Rolls Royce Industrial Power (Pacific) Ltd v James Hardy & Co Pty Ltd (2001) 53 NSWLR 626 at [95]-[99]).
5. The appellant submitted that, at the time of the offer, the respondents' claim for scaffolding was $9,240 which was later reduced to $3,960 on the eve of the hearing at first instance. The appellant submitted that, at the time of the offer, there was no evidence that would support a claim for the cost of the scaffolding hire.
6. In respect of the costs of the appeal, the appellant relied upon its offer made on 17 November 2020 to pay the respondents $35,000 plus their costs at first instance. The appellant submitted that the respondents should pay half the appellant's costs of the appeal up to 17 November 2020 on the bases that "the amount of $17,980 awarded to the respondents was more than nominal, and that, roughly half of the hearing time on the appeal was spent on 'the Bannister invoices'". The appellant submitted that the Bannister invoices, which were the issue on which the appellant succeeded, were a clearly separable issue to the issues relating to whether the re-manufactured windows installed by the appellant were defective.
7. The appellant submitted that the respondent should pay the costs of the appeal on the indemnity basis after 17 November 2020 on the basis of the rejection by the respondent of the appellant's offer of 17 November 2020. The appellant submitted that an offer to pay $35,000 plus the costs of the proceedings at first instance was substantially more favourable to the respondents than the amount of $17,980 they were awarded as the ultimate outcome of the appeal.

The respondents' submissions in chief and in response to the appellant's submissions

1. In relation to the costs of the hearing at first instance, the respondents submitted that, "notwithstanding the variation in the orders made by the Appeal Panel, the respondents were successful in their case as the Appeal Panel upheld a substantial part of the decision at first instance" and the ultimate outcome of the proceedings was an award in the respondents' favour.
2. The respondents submitted that the outcome of the decision of the Appeal Panel was not an award of nominal damages.
3. The respondents submitted that (paragraph 16 of their submissions in chief): "In the hearing at first instance, there were a number of issues that needed to be considered by the Tribunal including the terms of the contract between the parties, a settlement deed, the conduct of the parties, the nature of the manufacture of the windows and their construction by the appellant, the determination of the relevant expert evidence to determine the defects in the windows, and/or their installation by the appellant, the replacement of the windows by the respondent via a third party contractor, … consideration of statutory provisions of the Home Building Act, the cost of work performed by the appellant's builder in recovery of these costs, the cost of erection, installation and removal of scaffolding and recovery of these costs."
4. The respondents submitted that at the first instance hearing those issues were substantially inter-connected and could not be seen to be separable.
5. In the alternative, the respondents submitted that, if the Appeal Panel determined it was not appropriate to grant the respondents the whole of their costs of the first instance hearing, those costs should be discounted by 15% "being the percentage of time spent in the hearing at first instance on the issue of the cost of work performed by the appellant's builder, its invoices and recovery of these costs."
6. The respondents also submitted "this would also be consistent with this issue being one of seven grounds raised by the Appeal Panel in its decision".
7. In respect of the appeal, the respondents submitted that: "Notwithstanding the variation in orders made by the Appeal Panel, the respondents were successful in their case as the Appeal Panel upheld a substantial part of the decision at first instance, notably that the windows manufactured and installed by the appellant were defective and awarding an amount to the respondent for two of the three monetary components of the claim being the costs incurred for window replacement and a reduced amount for scaffolding."
8. In the alternative, the respondents sought the costs of and incidental to the first day of the hearing on the basis that those costs were thrown away because "the appeal hearing on 25 January 2021 was adjourned and then had to be re-heard because the appellant failed to articulate their appeal issues, state the claimed errors of law and facts in both written and oral submissions, and incorrectly exhibited evidence on the day of the hearing."
9. The respondents referred to paragraphs 35 and 36 of the Principal Decision which were as follows: 35 The appellant set out in an annexure to the Notice of Appeal, under the heading "Grounds of Appeal", forty paragraphs. In relation to the application for leave to appeal the appellant set out eleven paragraphs directed to the proposition that the decision was not fair and equitable, and twenty one paragraphs directed to the proposition that the decision was against the weight of evidence. 36 The Notice of Appeal did little to narrow the issues or identify for the Appeal Panel the questions of law which the appellant sought to raise. The written submissions filed by the appellant did not provide any clarification.
10. The respondents submitted the appellant should pay the respondents' costs of the second day of the hearing on the basis that the respondents had been successful in the appeal. The respondents submitted, in the alternative, that the appellant should pay 85% of the respondents' costs of the appeal on the basis that the appellant succeeded on only one of the seven grounds considered by the Appeal Panel.
11. In the alternative, the respondents submitted that each party should pay its own costs of and incidental to the second day of the appeal.
12. The respondents sought an order that the appellant pay the respondents' disbursements necessarily incurred of and incidental to the proceedings in the Tribunal. That submission was made on the basis that the respondents had been successful in the proceedings before the Tribunal.
13. In reply to the appellant's submissions the respondents submitted that, at the time the appellant's offer of 10 February 2020 was made, it was not unreasonable to reject the offer. The respondents further submitted that an apportionment of costs was not appropriate in respect of the hearing at first instance.
14. The respondents disputed that "roughly half the time of the appeal was spent on the Bannister invoices". The respondents submitted that the first day of the appeal was "spent with the appellant's legal representative trying to explain to the Appeal Panel the appellant's case, issues of law, and determining exhibits and their references which necessitated an adjournment to enable the appellant to file an explanatory supplement to their bundled appeal books".
15. The respondents submitted that the second day of the appeal dealt with a variety of issues which the respondents submitted could be summarised as the seven grounds raised by the Appeal Panel in the Principal Decision.
16. The respondents submitted that the offer in the appellant's letter of 16 November 2020 of $35,000 plus costs at first instance should be understood in the context of further offers made by the respondents on 17 November 2020, 26 November 2020 and 12 March 2021 as set out above.
17. The respondents submitted that their offers of $48,000 on 17 November 2020 and $42,000 inclusive of costs on 26 November 2020 equated to less than the appellant's offer of $35,000 plus costs. The respondents asserted (although they did not file evidence to support the assertion) that the respondents' costs in November 2020 were approximately $17,000.

The appellant's submissions in response to the respondents' submissions

1. In reply to the respondents' submissions in chief, the appellant submitted that the respondents had succeeded at first instance in such a small proportion of the amount originally claimed that it should not be concluded that the respondents had succeeded. The appellant further submitted (without any supporting evidence) that there was a "large gap" between the amount recovered and the costs of the proceedings and that that was a factor to be taken into account in allocating the costs of the proceedings. The appellant submitted that there was no clear winner at first instance and that each party should pay their own costs up to the date of the appellant's letter of offer of 10 February 2020.
2. In relation to the costs of the appeal the appellant disputed that the appellant had succeeded on only one of the seven grounds set out by the Appeal Panel at paragraph [39] of the Principal Decision.
3. The appellant submitted that the appellant was unsuccessful on Ground 1 "but only after the owners made it clear in their written submissions for the first time that the Bannister invoices did not relate to water damage but only to make good".
4. The appellant acknowledged that the appellant did not succeed on Grounds 4 and 6. The appellant pointed out that it was not necessary to decide Grounds 2 and 3 in light of the Appeal Panel's decision in the appellant's favour on Ground 5. The appellant submitted that in respect of Ground 7 which related to scaffolding, the appellant had succeeded in reducing the amount awarded to the respondent although the Appeal Panel allowed a reduced claim.
5. The appellant submitted that, effectively, the appellant had succeeded on approximately half the issues.
6. In response to the respondent's submission that the respondent should have the costs of the first day of the appeal as costs thrown away by reason of the appellant's conduct of the appeal, the appellant submitted that "only 2 hours had been allowed for the hearing of the appeal. Given the extent of exchanges with the Appeal Panel, the Appeal Panel expressed the view that the appeal would not be concluded in the time available, affording the opportunity for [the appellant] to prepare the cross-referencing document". The "cross-referencing document" was the document referred to in paragraphs [38] and [39] of the Principal Decision.
7. The appellant submitted that "no additional costs were incurred by the owners. The second hearing date was required in any event, as the original two hours were not sufficient."
8. In response to the respondents' submissions seeking an order for payment of disbursements the appellant submitted (as is clearly correct) that legal costs include disbursements and that no separate order is necessary in respect of the amounts expended by the respondents as disbursements in the course of the first instance proceedings.

General principles

1. In Thompson v Chapman [2016] NSWCATAP 6, an Appeal Panel of this Tribunal held, in relation to the exercise of the discretion to award costs where rule 38 applied: 69. The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council (1998) 193 CLR 72 per McHugh J at 97. 70. The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75. 71. Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 88 and Kirby J at 121 - 123. 72. The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include: 1. Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made: see for example Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWSCA 304; and 2. Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 41 - 44.
2. As noted above, both parties, but the appellant in particular, relied upon Calderbank letters, that is, offers of settlement made "without prejudice save as to costs". It is not necessary to canvass in detail the authorities regarding the significance of Calderbank offers of settlement. However, in circumstances where the offers relied upon by the parties were all, at least in part, inclusive of costs, it is appropriate to note the comments of the Court of Appeal in Elite Protective Personnel Pty Ltd & Anor v Salmon [2007] NSWCA 322 concerning such offers.
3. In that case, at [98] and [100] McColl JA stated: 98 The general principles concerning Calderbank offers were set out in Jones v Bradley (No 2) where the Court approved Giles JA's statement in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 (at [37]) that: "The making of an offer of compromise in the form of a Calderbank letter … where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the Court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure …" … 100 There is a line of authority, commencing with Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97, to the effect that a Calderbank letter expressed to be inclusive of costs will not warrant departure from the usual basis upon which a successful party's costs are calculated.
4. After discussing the authorities, McColl JA stated, at [115]: 115 I agree … that Smallacombe does not lay down a "definitive rule" that an "all-in" Calderbank offer can never be considered on the question of indemnity costs. The Court cannot fetter the s 98 discretion by legal rules: Oshlack (at [35]). Smallacombe does, however, afford guidance as to the exercise of the s 98(1) discretion. It informs the question of the reasonableness of an offeree's refusal to accept an "all-in" offer. In my view it has a sound practical basis. While I accept each case should be considered on its facts, Smallacombe provides sound reasons to discourage offerors from drafting Calderbank letters on an "all-in" basis.
5. Basten JA stated, at [142] - [145]: 142 In the Federal Court Goldberg J followed the reasoning of Spender J in Smallacombe and Moore J (to similar effect without further analysis) in Hanave Pty Ltd v LFOT Pty Ltd [1998] FCA 1429. Goldberg J stated in Dr Martens at [24]: "If the purpose of a Calderbank letter is to offer to bring litigation to an end it should be couched in such terms as enable the offeree to make a carefully considered comparison between the offer made and the ultimate relief it is seeking in all its aspects. An offer inclusive of costs confuses this issue as it puts the offeree in a position of not being able to determine the appropriate amount to attribute to the money sum it is seeking. Although an estimate can be made of what the offeree's taxed party and party costs might be at the time of the offer, the offeree is not being offered the opportunity to have those costs assessed by taxation in default of agreement, in addition to being made an offer to settle its claim." 143 With respect, I would not accept that reasoning. If a party in receipt of an offer wishes to know how far the sum offered will go in meeting its costs up to that time, all it has to do is ask its lawyers. In an age where lawyers are required to provide advance estimates of their fees and in circumstances where commercial services are billed on a monthly basis, it is unrealistic to suggest that the recipient of an inclusive offer will be confused or otherwise unable to assess the financial risk of proceeding with litigation. In any event, the offeree is likely to be liable for legal fees exceeding the costs recoverable from the other party. Most litigants, in considering offers, will want to know from their own lawyers, how much they will receive in the hand. Of course, if the offer is not left open for a reasonable time, that might itself make non-acceptance a reasonable course. However, an offeree which is genuinely seeking to assess its position, might be advised to seek more time, if it thinks that is reasonably required. 144 The suggestion that a Calderbank letter which is expressed to be inclusive of costs is "insufficiently precise to qualify as a Calderbank offer" requires to be addressed in particular circumstances. A defendant who fears that even if successful it will be unable to recover costs awarded against the plaintiff, may wish to make an offer in full and final settlement, without further disputation over costs. It may wish to place pressure on the plaintiff to consider the offer favourably by reserving an entitlement to use the offer in relation to costs if the matter proceeds to trial. There is no reason based on policy or principle which would preclude a defendant relying on such an offer only when it is said to be exclusive of costs. Such an inclusive offer will not cause the plaintiff embarrassment: its value will be that amount remaining to him or her after deducting costs already incurred, which the plaintiff's lawyer should be readily able to quantify. The disadvantage of an inclusive offer lies with the defendant if the matter proceeds to judgment. Where the judgment is equal to or above the inclusive figure, the defendant will have failed to better its own offer. However, if the judgment is below the offer there may be uncertainty because the offer included an unquantified element for costs incurred up to the time when it lapsed or was rejected. No doubt the figure for costs incurred to that time by the plaintiff could be resolved by some form of assessment, but if the calculation of the damages component is not clearly seen to provide a figure above the judgment, then the interests of justice will usually not be served by incurring further expense in assessing the costs element of an offer and the plaintiff would be entitled to his or her costs: see Smallacombe above at [140]. 145 Different considerations will arise if the plaintiff makes an inclusive offer, the matter proceeds to trial and the plaintiff obtains a judgment which is below the offer but arguably above the damages component. Again, applying the approach adopted in Smallacombe, the plaintiff will be unable to obtain a special order as to costs because he or she will be unable to establish (without an assessment of costs) that the offer has been bettered. On the other hand, if the plaintiff obtains a sum in excess of the offer, it is clear that the offer has been bettered and a special order for costs may be appropriate. … [Emphasis added].
6. Beazley JA stated, at [6] - [7]: 6 There is, however, as discussed in the judgments of McColl JA and Basten JA, some disputation in the authorities as to whether an offer that is inclusive of costs may be the basis upon which an indemnity costs order can be made. Notwithstanding a number of first instance decisions that state that an offer inclusive of costs does not operate as a Calderbank offer, there are authorities of this Court that an offer of compromise which is inclusive of costs may form the basis upon which the court awards indemnity costs. 7 As is apparent from the short remarks I have made, I consider that the proper approach to any such offer of compromise is to consider it according to its terms and determine whether, in all the circumstances, the court should exercise its discretion to award indemnity costs. Having said that, there may be difficulties in the path of a party who seeks indemnity costs when the application is based upon an offer inclusive of costs, as is examined and explained by Basten JA.
7. Thus, although the fact that a Calderbank offer of settlement is made inclusive of costs does not prevent it being taken into account in determining appropriate costs orders, the assessment of whether the party making an offer has achieved a better outcome in the final result must acknowledge that there is an inherent uncertainty in that calculation when the offer was made inclusive of costs. In some circumstances a court, or the Tribunal, may be confident that the offeror has achieved a better result despite the uncertainty involved in determining the relevant measure of costs. Where the court or Tribunal cannot be confident that the offeror has achieved a better result, it is unlikely to be able to find that the offeree acted unreasonably in rejecting the offer or that the offer warrants departure from the usual rules which would otherwise apply.

First instance proceedings

1. The respondents were successful in the ultimate outcome of the proceedings, albeit only in an amount of $17,980.
2. We are not persuaded that the appellant achieved a better result than the offer the appellant made to the respondents on 10 February 2020. That offer was less than the ultimate amount awarded by the Tribunal. Moreover, the offer was inclusive of costs which, if the respondents succeeded, they were presumptively entitled to.
3. We reject the appellant's submission that the scaffolding cost should be excluded from the assessment of whether the respondents obtained a better outcome than the offer of 10 February 2020. Some scaffolding cost was clearly necessary and the fact that the respondents had not at that point identified the precise amount of that cost does not mean it was not unreasonable of the respondents not to accept the offer.
4. On the other hand, it is not possible to say whether or not the respondents' offers of 2 June 2020 and 12 June 2020 were better than the ultimate result. The respondents' offer of 12 June 2020 was made after the hearing at first instance but before the preparation of written submissions. At that stage it is likely that the respondents' assessable costs would have exceeded $10,000. If necessary, we would draw the conclusion that the respondents did ultimately obtain an outcome better than the offer made by the respondents on 12 June 2020.
5. However, that offer would only be relevant to the allocation of the costs of written submissions and, in any event, the respondents are not seeking indemnity costs.
6. We consider it is appropriate to award the respondents the costs of the first instance proceedings as agreed or assessed. Although it is correct that the respondents did not succeed on all issues arising at first instance, the issues which were ultimately determined against them on the appeal were issues relating to the quantification of damages.
7. It is not apparent to us that those issues occupied a great deal of time at the hearing, and we are not persuaded that it is appropriate to discount the costs to be awarded to the respondents by reference to those issues.
8. As the respondents submitted in paragraph 16 of their submissions in chief (set out at [29] above), a number of issues requiring consideration were raised at the first instance hearing, and nothing in the material made available to the Appeal Panel suggests that any of those issues was clearly severable or that the parties' relative success on particular issues warranted an allocation of costs based on the outcome of particular issues.
9. The fundamental issue at the first instance hearing, as we understand it, was whether or not the re-manufactured windows installed by the appellant were defective and required replacement. The respondents succeeded on that issue and a costs order in their favour is appropriate.
10. Although, as the appellant pointed out, the respondents did not ultimately recover more than $30,000, the amount in dispute in the proceedings did exceed $30,000 with the result that rule 38 is applicable.
11. It cannot be said that the respondents' claim to amounts in excess of $30,000 was not made in good faith or was maintained for the purpose of attracting the operation of rule 38.

Appeal

1. We accept the respondents' submission that the appellant should pay the costs of the first day of the appeal hearing on the basis that those costs were thrown away by reason of the manner in which the appellant conducted the hearing.
2. We do not accept the appellant's submission that the original two hours allocated for the appeal hearing were not sufficient.
3. The exchanges with the Appeal Panel referred to by the appellant in its submissions were related entirely to the lack of clarity in the appellant's paperwork, including its Grounds of Appeal, its written submissions, and the cross-referencing from the submissions to the transcript.
4. As is apparent from the Principal Decision, the appellant's 32 Grounds of Appeal were effectively encompassed within seven grounds which could be succinctly stated (cf paragraph 39 of the Principal Decision). We are satisfied that, if the appeal had been appropriately prepared, the appeal hearing would have concluded on the first day. Accordingly, we consider it appropriate that the appellant pay the respondents' costs of the first day of hearing as costs thrown away by reason of the appellant's conduct of the appeal.
5. The appellant was successful on the appeal, although not on all grounds. In particular the appellant failed in its challenge to the finding that the re-manufactured windows were defective and required replacement. Nevertheless, the appellant was successful in reducing the judgment against it by two thirds. In the absence of an effective Calderbank offer we would have been minded to award the appellant only a proportion of its costs of the appeal (apart from the first day of hearing). However, we consider that the appellant did obtain a better outcome on the appeal than the terms of the appellant's offer of 16 November 2020.
6. The first instance decision was delivered on 13 September 2020. The appellant's offer of 16 November 2020 was sent about two weeks after the first call over of the appeal and the offer included payment of the respondents' costs of the first instance proceedings as agreed or assessed.
7. Although the offer was inclusive of the costs of the appeal, we consider that we are able to draw the inference that the offer exceeded the amount the respondents would have recovered if they had obtained an order for the payment of their costs of the appeal at that point. For that not to be the case it would be necessary that the respondent's assessed costs of the appeal as at the date of the offer have exceeded $17,000.
8. As we have noted above, the offer was made shortly after the first call over of the appeal proceedings. We recognise that the appellant had sought a stay of judgment which may have increased the costs which the respondents had incurred to that date. However it does not seem to us to be within the realm of possibility that the respondents had incurred costs in relation to the appeal by 16 November 2020 which, on assessment, would have exceeded $17,000. In fact the respondents themselves suggested that their entire costs, including the costs of the first instance hearing were $17,000 at that point. We also note, as the appellant submitted, that it would not have been an automatic conclusion as at 16 November 2020 that the respondents should be entitled to an order for the costs of the appeal.
9. The respondents did not seek to establish (or even submit) that the offer of 16 November was not a better outcome for the respondents than the ultimate result of the appeal. Although, as Basten JA noted in Elite Personnel (at [144], "the interests of justice will usually not be served by incurring further expense in assessing the costs element of an offer", it would not have been difficult or expensive for the respondents to provide evidence of the costs they had incurred in relation to the appeal up to 16 November 2020, if they had considered it relevant to do so.
10. The respondents' answer to the appellant's submissions concerning the offer of 16 November 2020 was that the respondents had, shortly after rejecting that offer, made offers to the appellant which were more advantageous to the appellant than the appellant's offer of 16 November 2020. The respondents relied in particular on the offer made on 26 November 2020 to accept $42,000 inclusive of costs. The respondents sought to support the submission that that offer was better for the appellant than the appellant's offer of 16 November on the basis that the respondents had incurred costs to that date of $17,000 (presumably in both the first instance proceedings and the appeal). As we have noted above, the respondents did not support that submission with any evidence.
11. We accept that it is likely that the respondents' offer, made on 26 November 2020, to accept $42,000 inclusive of costs both at first instance and on the appeal would have been a better outcome for the appellant than $35,000 plus the first instance costs as assessed. However, a counter-offer, subsequent to the rejection of a Calderbank offer, does not become a relevant offer just because it offers a better outcome than the rejected offer. The counter-offer could only be relevant to the allocation of costs if it was one which the counter-offeree should have accepted, generally because it provided a better result for the counter-offeree than the ultimate outcome of the proceedings.
12. We are not satisfied that the offers by the respondents to accept $48,000 inclusive of costs made on 17 November 2020 and to accept $42,000 inclusive of costs made on 26 November 2020 were more favourable to the appellant than the final outcome of the proceedings. Both offers were inclusive of costs and there is no basis upon which we could conclude that the outcome of the proceedings under which the respondents have been awarded $17,980 plus their costs at first instance is a better result for the respondents than a payment to them of $42,000. The respondents' offers of 17 and 26 November 2020 fall squarely within paragraph [145] of the judgment of Basten JA in Elite Protective Personnel
13. Although, as we have indicated above, it would otherwise have been appropriate to allocate liability for the costs of the appeal according to the parties' relative success on different issues, we consider that in light of the offer made by the appellant on 16 November 2020 and the fact that the appellant did succeed in the appeal, it is appropriate to order the respondents to pay the appellant's costs of the appeal, other than the costs of the first day of the hearing of the appeal, as agreed or assessed.
14. Although the appellant sought indemnity costs from 17 November 2020, we consider that awarding the appellant the whole of the costs of the appeal, apart from the first day of the hearing, would be an appropriate recognition of the value of the offer of 16 November 2020.
15. Were it necessary to undertake an allocation of costs by reference to the parties' relative success on respective issues, we would accept the appellant's submission that it was substantially the successful party. We would not accept the respondents' submission that their measure of success should be assessed at 85%. We would have accepted the appellant's submission that the appropriate allocation was 50%.
16. Although both parties had no doubt incurred costs in relation to the appeal before 16 November 2020, the appeal was at an early stage at that time. Because the offer was made at an early stage we do not consider it appropriate to make any different orders in respect of costs incurred before the making of the offer. We are satisfied that, taking into account all of the factors which we have canvassed above, the just result in relation to the costs of the appeal is that the respondents should pay the appellant's costs of the appeal, other than the costs of the first day of the hearing.
17. As noted above, the appellant correctly submitted that the disbursements incurred by the respondents, in respect of which the respondents sought a separate order, are properly covered by the orders relating to the costs of the first instance proceedings and we see no reason to make a separate order in that regard.

Orders

1. Our orders are: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), a hearing in respect of the costs of the proceedings at first instance and on appeal is dispensed with. 2. The appellant is to pay the respondents' costs of the proceedings at first instance as agreed or assessed. 3. The appellant is to pay the respondents' costs of the first day of hearing of the appeal as agreed or assessed. 4. The respondents are to pay the appellant's costs of the appeal, other than the costs of the first day of the hearing, as agreed or assessed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 January 2022