On 26 August 2019, I delivered judgment in this matter. As I was not sitting in Sydney at the time of the delivery of judgment, the parties were informed that it was unnecessary for them to attend the delivery of judgment, which would be effected electronically.
As a consequence of the manner in which judgment was delivered, I made the following orders insofar as they relate to costs:
1. Judgment and Verdict for the plaintiff in the sum of $48,420.
2. Interest thereon at the rates prescribed from time to time pursuant to the provisions of section 100 of the Civil Procedure Act 2005 (NSW).
3. Should either party wish to be heard on costs, they should indicate that wish by contacting my associate, such contact to be made no later than 14 days from today.
4. In the absence of the parties wishing to be heard on costs, I order that the defendant pay the plaintiff's costs.
The parties subsequently indicated to me that they wished to be heard on the question of costs, and agreed on a timetable for the provision of evidence and written submissions, with a view to me deciding the costs issues on the papers.
On 20 November 2018, the defendant made an offer to settle the proceedings in the sum of $140,000 plus costs on the ordinary basis as agreed or assessed. The offer was made by a formal offer of compromise pursuant to Part 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) and in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333. Reliant upon this offer, which was not the subject of response by the plaintiff, and the fact that the offer significantly exceeded the judgment amount, the defendant sought the following orders:
1. the defendant is to pay the plaintiff's costs of and incidental to the proceedings on an ordinary basis until 20 November 2018;
2. the plaintiff is to pay the defendant's costs of and incidental to the proceedings on an indemnity basis from 21 November 2018.
In addition to this costs order, the defendant sought an order that the plaintiff pay interest on the defendant's costs pursuant to the provisions of s 101 of the Civil Procedure Act 2005 (NSW).
Baldrudgery Nominees Pty Limited v Landmark Operations Limited [2019] NSWDC 565 | Case summary | Zoe
The plaintiff's primary position was that costs orders ought to be made as follows:
1. the defendant is to pay the plaintiff's costs of and incidental to the proceedings on an ordinary basis as relates to issues of liability;
2. the defendant is to pay interest on those costs in accordance with section 101 of the Civil Procedure Act 2005 (NSW);
3. the plaintiff to pay the defendant's costs of and incidental to the proceedings on an indemnity basis from 21 November 2018 as relates to damages only.
The plaintiff's fall-back position was:
1. the defendant is to pay the plaintiff's costs of and incidental to the proceedings on an ordinary basis until 20 November 2018;
2. the plaintiff is to pay the defendant's costs of and incidental to the proceedings on an indemnity basis from 21 November 2018.
The reasoning behind the plaintiff's position on costs was that on the morning of the hearing, the defendant admitted liability, with the effect that the hearing proceeded solely on the question of damages.
As would be apparent from the orders which the plaintiff proposed, it tacitly accepted that the effect of its rejection of the defendant's offer of 20 November 2018, was such that a costs order on an indemnity basis from the day after such offer, was appropriate.
The issues requiring resolution therefore became reduced to the following:
1. whether it was appropriate for the Court to make a costs order separating the issues of liability and quantum; and
2. whether it was appropriate for interest to be payable in respect to any costs order.
The defendant invited me to infer that the issue of liability was never in dispute. It accepted however that there was no evidence of this fact. I am not prepared to draw such an inference. The admission of liability is like the old adage as to pregnancy, namely that it involves a binary choice of either the affirmative or the negative. Put another way, just as one cannot be a little bit pregnant, a litigant cannot say that it only half-heartedly put an issue as fundamental as liability in issue.
The plaintiff was obliged to come to Court on the first day of hearing with a view to running a case on liability, and should not have been expected to rely on any inference to the effect that liability would not seriously be put in issue.
The question arises however, as to whether it is appropriate to split the costs order to distinguish between issues of liability and quantum.
The defendant drew my attention to authorities which stand for the proposition that the Court should be wary of making costs orders on the basis of apportioning costs according to the success or failure of one party on various issues of fact or law (See for example: Cretazzo v Lombardi (1975) 13 SASR 4, at 16 per Jacobs J; Mond v Berger [2004] VSC 150, where Dodds-Streeton J stated at [54] that "issue apportionment should be sparingly exercised").
The defendant also submitted that greater latitude is usually provided to defendants in this regard (Australian Conservation Foundation Inc v Forestry Commission of Tasmania (1988) 81 ALR 166 at 169; Richmond River Council v Oshlack (1996) 39 NSWLR 622 at 637; Hendriks v McGeoch [2008] NSWCA 53 at [104]; Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19]-[20], [38]-[39]). The reason for this latitude, the defendant asserted, is that a defendant has little choice, short of settlement, but to defend the plaintiff's claim, and so a defendant who proves substantially successful defending the suit should not be penalised on costs on issues upon which he or she has failed to the same extent as the plaintiff, who elected to sue (see Law of Costs, 4th Ed, Dal Pont, G at 8.9).
I accept these submissions and more significantly, respectfully adopt that which fell from Kirby J in Sanders v Snell (No 2) (2000) 174 ALR 53 at 57, where His Honour stated:
It is not usual for the court to specify that costs will only be payable in respect of particular issues. Accordingly, it is not usual… to proceed in such a nice way, unless there are good and exceptional reasons in the particular case to do so. The marginal expense of calculating the costs of arguing particular issues, themes, ideas, facts, cases or arguments will ordinarily be outweighed by the inutility of doing so.
For these reasons, I am of the view that the interests of justice are not served by complicating the issue of the assessment of costs, by requiring a costs assessor, and the parties, to undertake the task of separating the costs as being referable to liability on the one hand, and damages on the other.
I am also of the view that to do otherwise is not conducive to the overriding purpose set forth in s 56 of the Civil Procedure Act 2005 (NSW).
For similar reasons, and especially in light of the fact that the costs orders which I propose to make will impose a burden of costs on both parties, it is not in my view in the interests of justice nor consistent with s 56 for interest to be calculated and payable in respect of any part of the parties' costs orders.
[2]
Conclusion
The Court makes the following orders:
1. The defendant is to pay the plaintiff's costs of and incidental to the proceedings on an ordinary basis up to and including 20 November 2018.
2. The plaintiff is to pay the defendant's costs of and incidental to the proceedings on an indemnity basis from 21 November 2018.
[3]
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Decision last updated: 15 October 2019