Kassas v State of New South Wales [2017] NSWCA 332
Fred Saad & Ors v State of New South Wales
Ashley Saad v State of New South Wales (No 2) [2016] NSWSC 1482
Showtime Touring Group Pty Ltd v Mosley Touring Inc [2013] NSWCA 53
296 ALR 597
Bull Nominees Pty Ltd Trading As Grassy Car Hire v Dr G R McElwee (1997) 7 Tas R 339
Source
Original judgment source is linked above.
Catchwords
Kassas v State of New South Wales [2017] NSWCA 332
Fred Saad & Ors v State of New South WalesAshley Saad v State of New South Wales (No 2) [2016] NSWSC 1482
Showtime Touring Group Pty Ltd v Mosley Touring Inc [2013] NSWCA 53296 ALR 597
Bull Nominees Pty Ltd Trading As Grassy Car Hire v Dr G R McElwee (1997) 7 Tas R 339
Judgment (3 paragraphs)
[1]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
Judgment
THE COURT: Late last year, this Court dismissed the appeals brought by Messrs El-Wasfi, Kassas, Pound and Ashley Saad and allowed the State's cross-appeal: El-Wasfi v State of New South Wales; Kassas v State of New South Wales [2017] NSWCA 332. The result was that both proceedings brought against the State at first instance were dismissed. At the parties' request, the parties were granted leave to be heard separately as to costs.
The Court directed the filing of agreed orders as to costs, or in default of agreement, written submissions as to costs not exceeding five pages, by 8 February 2018. The State supplied submissions in support of the orders for which it contended on 8 February 2018. No submissions were received from the other parties, and all counsel and solicitors were notified by the Court on 13 February 2018 that if those parties wished to provide written submissions as to costs, they were at liberty to do so by 20 February 2018. No such submissions have been supplied.
The State submits that costs of the two appeals in this Court (which were heard concurrently) should follow the event, and does not seek any special costs order. There being no basis for displacing the general rule in UCPR r 42.1, such an order is plainly appropriate.
In relation to the costs of the proceedings at first instance, the primary judge made a series of partial costs orders, to the effect that the State pay 75% of Mr El-Wasfi's costs, and Messrs Kassas, Pound and Ashley Saad pay 70% of the State's costs, reflecting Mr El-Wasfi's success on one cause of action, and the view that costs should be determined by reference to issues, rather than merely the result: Fred Saad & Ors v State of New South Wales; Ashley Saad v State of New South Wales (No 2) [2016] NSWSC 1482. Those orders have already been set aside following this Court's principal decision, and it is necessary for the discretion as to costs of the proceedings at first instance to be re-exercised.
The State propounds, as its primary position, that it is entitled to costs on an indemnity basis after 8 December 2010, by reason of offers of compromise served on that date on each of the plaintiffs. As a fallback position, the State seeks to rely upon offers of compromise made some three years later (on 15 January 2014, in the same terms, repeated in February 2014).
Each offer was a "walk-away" offer, proposing that the proceeding be compromised by a verdict for the defendant with each plaintiff and the defendant to pay their own costs of the proceedings. It is as well to be precise as to the costs consequences in that offer. An order that the parties "each pay their own costs of the proceedings" does not bear its literal meaning. It is not to be read as an injunction enforceable at the suit of the lawyers against their clients. Rather, it is identical to an order that "there be no order as to costs, with the intent that the parties bear their own costs."
The State submits that its offers of compromise dated 8 December 2010 amounted to an offer "to relinquish its entitlement to costs pursuant to prior costs orders made on 6 March 2008, 19 June 2008, 11 July 2008, 21 October 2008, 5 February 2009, 28 September 2009 and 20 April 2010". It is possible that the offers of compromise were made with that intention, although there is no evidence of that. But the legal effect of the offers made in December 2010 is quite different from that identified in the State's submissions.
An order made at the conclusion of the proceedings will, subject to any order to the contrary, include costs in respect of interlocutory applications which have been reserved or not otherwise dealt with: UCPR r 42.7(1). However, where an order is made at an interlocutory stage without qualification, it is unaffected by a general order of the costs of the proceedings made at the end of the litigation.
True it is that, ordinarily, steps may not be taken to enforce the interlocutory costs order until the proceedings have concluded: UCPR r 42.7(2), although the discretion to order otherwise may be exercised at the time the interlocutory order is made, or at any later stage: Showtime Touring Group Pty Ltd v Mosley Touring Inc [2013] NSWCA 53; 296 ALR 597 at [29]-[30]. Formerly, it appears to have been the practice for such an interlocutory order to be framed as an order that the costs be paid by a party "in any event": see Bull Nominees Pty Ltd Trading As Grassy Car Hire v Dr G R McElwee (1997) 7 Tas R 339; [1997] TASSC 148, where it was said, "If the action is compromised before trial but the order overlooked, the appellant will still be entitled to tax and recover those costs." The change in the form of the order does not affect the substance of the matter, namely, that interlocutory costs orders are unaffected by a general order as to the costs of the proceedings made at the conclusion of the litigation.
This point arose in the Court of Appeal in Walter v Bewicke (1904) 90 LT 409, where Collins MR, with the agreement of Romer and Mathew LJJ, said at 410:
"During the progress of the action orders were made that the plaintiff should pay costs to the defendants, in some cases 'in any event'. Those orders cannot be got rid of unless the parties have clearly agreed that those costs shall not be paid. In this case it was agreed that the record should be withdrawn, and it is said that that foregoes all rights to any costs under orders previously made. In my opinion no implication arises in point of law from that agreement that it was agreed to forego such costs. In those circumstances the orders made for payment of the defendants' costs were left as they were, and the defendants have a right to have those costs taxed and paid."
Thus, if the offer had been accepted and each of the parties ordered to pay their own costs of the proceedings, that would not, without more, have the effect of setting aside earlier interlocutory orders as to costs. There is nothing in the offer of compromise or covering letter which could cause a departure from that ordinary position. An order that the parties "pay their own costs of the proceedings" at the conclusion of the litigation does not without more have the implied effect of vacating the earlier orders between the parties as to discrete aspects of the litigation.
It is to be recalled that there were two proceedings at first instance, one commenced in 2007, the other in 2008. Both proceedings had a lengthy procedural history prior to the trial in 2015 (some aspects of which are described in Saad v State of New South Wales (No 3) [2014] NSWSC 214). The details of that history do not matter for present purposes. What does matter is that once it is appreciated that what was being offered on December 2010 on its proper construction excluded any compromise in relation to the seven costs orders made in 2008, 2009 and 2010, it is difficult to see that there was any substantial compromise being put forward by the State in December 2010. If indeed by 8 December 2010 the State had incurred any substantial amount of costs which fell outside all of the interlocutory costs orders already made in its favour, no evidence of that has been provided to this Court. Nor is that how the State puts forward its entitlement to a special costs order. Rather, the State contends that "[t]he offer made by the defendant, in giving up its existing entitlements to costs orders, was an offer to settle on terms more favourable to the plaintiffs than the ultimate result". For the reasons already given, that is not the true effect of the offer of compromise.
The position in 2014 is different. Although there was no evidence as to the costs which had been incurred by the State which were not the subject of interlocutory costs orders, it may be inferred that substantial costs had been incurred by that date. For example, the lengthy statement of Sergeant McLennan was made in September 2013. It follows that the 15 January 2014 offer of compromise involved a significant element of compromise, and was made at a time when the plaintiffs were well able to appreciate the nature of the case which would be advanced by the State. It was unreasonable for each of the plaintiffs not to accept those offers. Accordingly, the State is entitled to have its costs of the proceedings at first instance on an indemnity basis from 15 January 2014 onwards.
The following orders should be made:
1. In Mr El-Wasfi's appeal (2016/295735), appellant to pay the respondent's costs.
2. In the appeal brought by Messrs Kassas, Pound and Ashley Saad (2017/293409), the appellants to pay the State's costs.
3. In proceedings 2007/265173 and 2008/20521, the plaintiffs to pay the defendant's costs on an ordinary basis until 15 January 2014, and on an indemnity basis thereafter.
[3]
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Decision last updated: 27 February 2018