Campolongo v Club Marconi of Bossley Park Social Recreation & Sporting Centre Ltd

Judgment 1HER HONOUR: For the reasons I published on 4 July 2012 (Campolongo v Club Marconi of Bossley Park Social Recreation & Sporting Centre Ltd [2012] NSWSC 750) I dismissed an application by Mr Antonio Campolongo for final declaratory relief in relation to the validity of his suspension in late November 2010 as a member of Club Marconi. 2The principal relief that had been sought was a declaration that the purported suspension of Mr Campolongo on or about 29 November 2010 was "legally ineffectual". Further or in the alternative, a declaration was sought that Mr Campolongo had at all times to date been, and should from 29 November 2010 remain, a member of Club Marconi. (In its terms, such a declaration was too broad and could only have been made by reference to the effect of the suspension in the period up to February 2012.) 3At the time of commencement of the proceedings in March this year, urgent interlocutory relief was sought by way of an order that, pending the final determination of these proceedings, Club Marconi be restrained from taking any step in relation to proposed disciplinary proceedings then scheduled for 27 March 2012. (Those disciplinary proceedings related to a Notice of Charge that had been issued (after the November 2010 suspension) on 29 February 2012, by which the Board of Club Marconi expressly invoked the power under Rule 47(h) of the Club's constitution immediately to suspend Mr Campolongo's membership pending determination of the disciplinary proceedings.) 4The application by Mr Campolongo for interlocutory relief was resolved by the giving of an undertaking on behalf of Club Marconi to the effect that, pending the determination of the Court proceedings, Club Marconi would not take any steps in relation to the proposed disciplinary proceedings involving Mr Campolongo. Relevantly, however, that undertaking was given on the basis that Mr Campolongo would seek expedition of the proceedings and it was given in circumstances where Counsel appearing for Mr Campolongo had foreshadowed a challenge to the disciplinary proceedings themselves, including allegations that the Board was activated by bias against him (which, as it transpired, was not pursued at the final hearing). 5The practical effect of the undertaking given on behalf of the Club was that, since March 2012, the hearing of the proposed disciplinary proceedings has been delayed (in circumstances where there has ultimately been no challenge made to the constitution of those proceedings). 6As noted in my principal judgment, this means that the very basis on which Mr Campolongo had maintained that interlocutory relief was necessary (that being the context in which the undertaking was given) had wholly disappeared by the time of the hearing of his application for final declaratory relief. 7Notwithstanding the broad complaints that had been foreshadowed on the application for interlocutory relief (and the fact that some of the affidavit evidence served for Mr Campolongo related to the substance of the 2012 charges), the position of Mr Campolongo at the final hearing was firmly that the enquiry before the Court was limited in scope to the legal question as to whether (on a proper construction of clause 47 of Club Marconi's constitution) the suspension of Mr Campolongo on 29 November 2010 was legally ineffectual and invalid. The sole purpose for this was said, in effect, to be to 'clear Mr Campolongo's name' or to have a 'fresh slate'. 8Ultimately, I was of the view that there was no utility in the grant of declaratory relief that went no further than what Club Marconi itself had conceded (namely, that the Board did not comply with the disciplinary procedure under the Club's constitution when it resolved in November 2010 to suspend Mr Campolongo as a member of the Club and that Mr Campolongo's suspension only became valid as of 29 February 2012 when the 2012 Notice of Charge was issued). That concession was made in the submissions served by Club Marconi the day before the final hearing. 9I therefore dismissed Mr Campolongo's claim for declaratory relief. As to the costs of the proceedings, the parties sought leave to serve short written submissions and I was invited to determine the issue costs on the papers. What follow are my reasons for the costs orders I now propose to make. 10Mr Campolongo submits that there should be no order as to costs, with the intent that each party pay his or its own costs on the basis that the determinative factor against the grant of relief was the making of the concession by Club Marconi as to the invalidity of the 2010 suspension (and that this concession was made only in submissions served the day before the hearing, ie 3 July 2012). Club Marconi, on the other hand, seeks an order that Mr Campolongo pay its costs on an ordinary basis up to 20 April 2012 and on an indemnity basis thereafter, relying on a Calderbank offer made by letter of 20 April 2012 (and referring to the conduct of the proceedings by Mr Campolongo and, in particular, the abandonment of any claim in relation to the 2012 charges, which rendered otiose certain of the affidavit material that had been prepared in the defendant's case). Reasons 11Subject to the Rules of Court and to statute, the power to award costs pursuant to s 98(1) of the Civil Procedure Act 2005 (NSW) is discretionary and it is recognised that the discretion is a very wide one (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; (1998) 152 ALR 83; Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 322). It must be exercised judicially (having regard to its statutory context, established principle and the circumstances of the relevant case). The overriding statutory context in which this discretion falls to be exercised is that for which provision is made in s 56 of the Civil Procedure Act, namely, the just, quick and cheap resolution of the real issues in dispute. 12Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides that, subject to Part 42, if the court makes any order as to costs, it is to order that costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. The general rule is thus that a successful party will be the recipient of an order for costs in its favour (those costs to be on the ordinary or party/party basis). 13Application of that general rule in the present case would lead to a conclusion that Mr Campolongo should pay the costs of Club Marconi on the ordinary basis, since Mr Campolongo failed to obtain the declaratory relief that he had sought. However, Counsel for Mr Campolongo, Mr Sneddon, submits that the appropriate order is that each party should bear its own costs, pointing to the conclusion set out at [118] of my principal reasons that: Ultimately, however, my conclusion does not turn on the absence of any substantive relief now claimed by Mr Campolongo. It rests on the lack of any present dispute between the parties as to the subject matter of the declaratory relief claimed. There is simply no dispute between the parties as to the invalidity of the imposition of the 2010 suspension and hence no utility in the grant of a declaration that would go no further than what is expressly acknowledged by Club Marconi and noting that the concession made by Club Marconi was only made on the eve of the hearing. As I understand it, the basis of this submission is that there was conceded to be a breach by Club Marconi of its constitution and that, but for the concession of breach, Mr Campolongo would have been entitled to the declaratory relief that he was seeking. 14In this regard, I should note that at [13] I observed that even had that concession not been made, I considered that there would be little, if any, utility in the declaratory relief sought by Mr Campolongo since (whatever the position as to the suspension in 2010), there remained in place a suspension of Mr Campolongo's membership until such time as the disciplinary process provided for under the Rules was completed (or some other application was made in relation to the 2012 Notice of Charge). Hence, I would have been inclined to refuse declaratory relief even had the concession not been made. 15In any event, Mr Campolongo continued to press for the declaratory relief sought, even in light of the (admittedly late) concession by Club Marconi. Therefore, there is nothing to suggest that, had such a concession been made at an earlier stage of the proceedings, it would have led to any earlier resolution of the dispute. Mr Campolongo chose to pursue the claim for declaratory relief in the face of the fact that even if such relief were to be granted his membership would remain in suspension. 16There was no evidence as to reputational damage as such (simply the apprehension by Mr Campolongo that his reputation had been damaged) and that would surely remain the case in light of the current suspension in any event. The suggestion that declaratory relief would clear his name seemed to me to be misconceived since it would have gone no further than a conclusion that the suspension had been invalidly imposed, not that there was no underlying basis for the suspension. 17It seems to me that, Mr Campolongo having chosen, for his own purposes, to pursue the claim for declaratory relief at the final hearing, he must face the ordinary costs consequences which flow from a failure to obtain that relief (notwithstanding that Club Marconi did, in the course of the proceedings, concede that the 2010 suspension had been invalid and that it might be supposed that in the absence of the commencement of the proceedings no such concession might have been made). 18Therefore, subject to the import of the Calderbank offer, I consider that Mr Campolongo should pay Club Marconi's costs of the proceedings on the ordinary basis (other than Club Marconi's application to withdraw the undertaking, which I have already indicated should be dismissed with no order as to costs). 19I turn then to the effect of the offer made on 20 April 2012 by Club Marconi, expressly invoking the principles in Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586. 20The rationale for those principles lies in the public policy (and private interest) recognised in the early settlement of litigation and the discouragement of wasteful litigation (as outlined in Commonwealth v Gretton [2008] NSWCA 117). In Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA said at [14]: ... the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants. 21In Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 the Court of Appeal recently reiterated the public policy objectives of special costs orders. Basten JA (with whom McColl and Campbell JJA agreed) referred at [6] to the objects underlying the formal offer of compromise procedures under the then court rules that were identified in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 as including: