Cooper v Kinsella

Court of Appeal (NSW)|2011-06-03|Before: Allsop P, Hodgson JA

Judgment 1ALLSOP P: I agree with Hodgson JA. 2HODGSON JA: The principal decision of this appeal was given on 11 March 2011: [2011] NSWCA 45. On that occasion, the Court made the following orders: (1) Appeal allowed. (2) Orders below set aside. (3) Judgment for Mr Cooper against the respondents for $133,923. (4) Order that the respondents pay Mr Cooper interest on $133,923 from 1 September 2005 until to-day at prescribed rates. (5) Order that the respondents pay Mr Cooper's costs of the proceedings below. (6) Order that the respondents pay Mr Cooper's costs of the appeal, and that they have a certificate under Suitors' Fund Act 1951 if otherwise eligible. 3On 21 March 2011, a notice of motion was filed by Mr Cooper seeking a variation of the costs orders, identifying the source of power as Uniform Civil Procedure Rules (UCPR) 51.58. 4On 28 March 2011, the Registrar granted leave to file an amended notice of motion, which added a reference to UCPR 36.16 as the source of power. 5By the original and amended notice of motion, Mr Cooper sought in the alternative an order that the respondents pay all of Mr Cooper's legal costs in accordance with Cl 4 of the Deed of Guarantee dated 4 June 2004 being "any loss damage cost charge or expense whatsoever in connection with or in consequence of the default" of the Respondents from 19 August 2005, or orders in respect of both the proceedings at first instance and the proceedings on appeal that the costs be on an indemnity basis from 29 September 2009. 6The first alternative was based on the quoted words in the Deed of Guarantee referred to at par [13] of the principal judgment; and the second was based on number of offers of compromise, namely: (1) one dated 28 September 2009, offering to settle for $125,000 plus costs as agreed or assessed; (2) another dated 22 February 2010, offering to settle for $100,000 exclusive of costs; and (3) a third dated 21 January 2011 (after institution of the appeal) again for $100,000 exclusive of costs. 7The respondents oppose the making of any such orders on the following bases: (1) The effective notice of motion was brought after the fourteen days limited by UCPR 36.16(3A). (2) No claim was ever made in the proceedings based on Cl 4 of the Deed of Guarantee. (3) There are sound discretionary reasons for ordering otherwise in respect of the offers of compromise. 8I will deal with these contentions in turn.

Reference to the wrong rule 9The respondents referred to Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [47], where the question was raised but not decided whether there was power to extend time under UCPR 36.16 where an applicant had within time sought orders under an inappropriate rule. 10However, in my opinion what UCPR 36.16(3A) requires is that a notice of motion for the setting aside or variation of a judgment or order be filed within fourteen days after the judgment or order is entered. In this case, there was such a notice of motion filed, albeit one that referred to the wrong rule, seeking the variations that are now sought. 11It may be that if an amendment had been made to seek some order varying the costs orders, which was different from the orders sought in the notice of motion filed within time, that amendment would be ineffective to overcome the time limit. However, I note that the usual rule is that a document amended pursuant to a court order is treated as amended ab initio ; and the qualifications of that rule in ss 64 and 65 of the Civil Procedure Act 2005 do not affect an amendment after expiry of time limited by the rules. 12In any event, the variations in the orders now sought were sought in the notice of motion filed within time, and in my opinion that is sufficient.

Reliance on clause 4 of the Guarantee 13It was submitted for Mr Cooper that the Court's discretion as to costs should normally be exercised so as to reflect contractual rights (see Gomba Holdings (UK) Limited v Minories Finance Limited (No 2) [1993] Ch 171); and that an agreement such as that in Cl 4 would entitle the beneficiary of that agreement to costs as between solicitor and client ( Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45), which would equate to indemnity costs. 14It was submitted for the respondents that, if Cl 4 was to be relied on in this way, it should have been properly raised in the substantive proceedings. 15In my opinion, if Mr Cooper wished to do more than use Cl 4 in support of a discretionary decision to order indemnity costs, it should have been raised earlier. However, in my opinion, its existence is a factor to be taken into account in the exercise of the Court's costs discretion.

Offers of compromise 16It is not disputed that the offers of compromise were such as to support an order for indemnity costs, from the time they were made (that is, from 28 September 2009 in relation to the proceedings below, and from 21 January 2010 in relation to the appeal), unless the Court orders otherwise. 17It was submitted for the respondents that the Court should order otherwise because, at the time the offers were made, Mr Cooper's claim was not formulated in the way in which the Court of Appeal gave effect to it, and that in those circumstances the respondents had acted reasonably in rejecting the offer. 18The circumstances in which a change in the way in which a plaintiff puts its case can justify an order excluding indemnity costs were considered recently in Nominal Defendant v Hawkins [2011] NSWCA 93 at [47] - [58] and [73] - [88]. In that case, the Court of Appeal did not intervene when the primary judge had made such an order, in circumstances where the Nominal Defendant had rejected an offer of compromise when, on the information available to the Nominal Defendant, the plaintiff's case had very substantial difficulties; and where evidence led at the trial which overcame those difficulties was evidence that the Nominal Defendant could not have been aware of. Although finding that the primary judge's exercise of discretion was not vitiated by error of principle or outside the range of reasonable discretionary decision-making, the members of the Court of Appeal doubted if they would have exercised the discretion in the same way. 19An earlier case in which the Court of Appeal had ordered otherwise, in circumstances where the plaintiff's case had changed significantly between the date of the plaintiff's offer and the trial, was South Eastern Sydney Area Health Service v King [2006] NSWCA 2. 20In the present case, the facts relied on by Mr Cooper in the amended statement of claim and in Mr Cooper's affidavit were available to the respondents at the time of the first offer of compromise. Those facts did not change at any time. It is true that the legal consequences of those facts, on which Mr Cooper ultimately succeeded, were not clearly articulated at any time before the Court of Appeal hearing; but as set out in the principal judgment at pars [44] - [50], those legal consequences were within the pleaded claim. In my opinion, particularly when the case for indemnity costs has further support from Cl 4 of the Deed of Guarantee, this is not a case where the Court should order otherwise.

Orders 21For those reasons, I propose the following orders: (1) Order that Mr Cooper's legal costs of the proceedings below, to be paid by the respondents, be assessed on an ordinary basis up to and including 28 September 2009 and on an indemnity basis thereafter. (2) Order that Mr Cooper's costs of the appeal, to be paid by the respondents, be assessed on an ordinary basis up to and including 21 January 2011 and on an indemnity basis thereafter. (3) Order that the respondents pay Mr Cooper's costs of the notice of motion filed 21 March 2011. 22SACKVILLE AJA: I agree with Hodgson JA.

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: 06 June 2011

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