(ii) …"
5 UCPR, r 42.15A is in Div 3 of Pt 42 of the UCPR. Rule 42.13 provides that Div 3 applies to:
"proceedings in respect of which an offer of compromise … is made under rule 20.26 with respect to a plaintiff's claim …"
6 Encyclopaedia Britannica also says that it is entitled to interest on costs and disbursements pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW) and that all previous orders and agreements as to costs (other than Order 2 made on 14 November 2008) should continue to apply.
7 In his written submissions, Mr Campbell makes no comment about the form of the offer of compromise made by Encyclopaedia Britannica. He does not appear to dispute that the offer of compromise complied with UCPR, r 20.26. He submits, however, that indemnity costs should not be ordered in respect of the appeal since "the appeal proceedings are completely fresh proceedings and no offers were made in respect of those proceedings". No authorities are cited for this proposition. Mr Campbell also submits that no order for indemnity costs should be made in respect of the trial, but the submission is not supported by any substantive argument, other than an assertion that it is a matter of discretion whether costs should be ordered on a party and party or an indemnity basis. Nor are authorities cited or reasons given for overcoming the effect of UCPR, r 42.15A.
8 As I have noted, Encyclopaedia Britannica has not adduced evidence as to the terms or form of the offer of compromise made on 9 November 2007. While its submissions assume that the offer was in a form that complied with UCPR r 20.26 and Mr Campbell does not specifically dispute the assumption, it lacks an evidentiary foundation. There may be a number of reasons why the form of a particular offer might take it outside UCPR, r 20.26: cf The Uniting Church in Australia Property Trust (NSW) v Takacs (No 2) [2008] NSWCA 172, at [6]-[7], [10]-[11], per Hodgson JA (with whom McColl JA agreed).
9 In any event, even if the offer of compromise complied with r 20.26, appeal proceedings are to be regarded as distinct proceedings for the purposes of r 42.13: Uniting Church v Takacs (No 2) at [16], per Hodgson JA; at [34] per Basten JA. Thus the offer of 9 November 2006, in the absence of a renewed offer on the appeal, does not attract r 42.15A in relation to the costs of the appeal.
10 The offer of compromise may nonetheless be relevant to the discretion that the Court has in relation to the costs of the appeal, although the failure to renew the offer on the appeal tends to militate against an award of indemnity costs in relation to the appeal: Brymount Pty Ltd v Cummins (No 2) [2005] NSWCA 69, at [29]-[30], per Beazley JA (with whom Ipp and McColl JJA agreed); Monie v The Commonwealth (No 2) [2008] NSWCA 15, at [71], per Campbell JA. In my view, having obtained a judgment in his favour at first instance, it was reasonable for Mr Campbell to attempt to support the judgment on the appeal, particularly in the absence of a renewed offer: see Uniting Church v Takacs (No 2), at [16] per Hodgson JA. Accordingly, the costs of the appeal should follow the event, but on the usual party and party basis.
11 So far as the costs of the proceedings at first instance are concerned, the making of the offer of compromise, even if not in a form that enlivens r 42.15A, is a matter to be taken into account. The offer of compromise involved the payment of $40,000 plus costs and was substantially more favourable to Mr Campbell than the outcome of the proceedings (having regard to the successful appeal). Mr Campbell does not dispute that the offer constituted a genuine offer of compromise of his claim and makes no suggestion that any unreasonable conditions were attached to the offer. Nor does he put forward any substantial reason why his rejection of the offer should not lead to an order that he pay costs on an indemnity basis as from 9 November 2007.
12 In these circumstances, it is appropriate that Mr Campbell should pay the costs of the proceedings at first instance on a party and party basis until 9 November 2007 and on an indemnity basis thereafter.
13 Mr Campbell does not dispute Encyclopaedia Britannica's entitlement to interest and agrees that costs orders made by the primary Judge prior to the orders of 14 November 2007 should not be disturbed. In the absence of evidence as to the terms of any agreements between the parties relating to costs, there is no occasion to make specific provision for such agreements not to be disturbed.
14 There is no basis for accepting Mr Campbell's invitation to reopen the question of superannuation contributions addressed in the Principal Judgment, at [79]-[81].
15 The following orders should be made, in addition to Orders 1-4 made on 10 September 2009:
5. Subject to Order 6, the respondent to pay the appellant's costs in respect of the proceedings at first instance on a party and party basis up to and including 9 November 2007 and on an indemnity basis thereafter.
6. Order 5 is without prejudice to any costs orders made by the primary Judge in the proceedings prior to 14 November 2008.
7. The respondent pay the appellant's costs in respect of the appeal on a party and party basis.
8. (a) The respondent pay interest on costs and disbursements pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW) at the rates specified from time to time in Schedule 5 to the UCPR , on the Allowed Percentage (as that term is defined in order (b) below) of each amount of costs and disbursements actually paid by the appellant, from the date of payment by the appellant of each such amount of costs and disbursements until the first to occur of:
(i) such time as the respondent has paid the costs due to the appellant; or