Grant v Brewarrina Shire Council

26 March 2003 WALTER ALFRED GRANT Applicant v BREWARRINA SHIRE COUNCIL Respondent EXTEMPORE JUDGMENT [No. 3] HIS HONOUR: 1 On 6 March 2003 I made an order that the respondent pay the applicant damages in the sum of one dollar and reserved the question of costs: see Grant v Brewarrina Shire Council [No. 2] (2003) NSWLEC 54. The applicant now applies for an order that the respondent pay his costs. I need not repeat the facts and conclusions which led to the award of damages and which are fully set out in my previous judgment. It is sufficient to note that the damages are truly nominal damages. 2 The Court has an unfettered discretion under s 69(2) of the Land and Environment Court Act 1979. Such discretion is, of course, not unqualified and must be exercised judicially in accordance with established principle: Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [22], 96 [65] and 121 [134]. 3 As a general rule a wholly successful defendant should receive his costs unless good reason is shown to the contrary: Oshlack at 86 [35] and 96 [66]. This is "the usual order" as to costs. The guiding principle is one of fairness. Fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation: Oshlack at 97 [67]. 4 There are, however, exceptions to the usual order as to costs. One exception is whether or not any Calderbank letters have passed between the parties. Another exception focuses on the conduct of the successful party which may disentitle it to the beneficial exercise of the discretion: Oshlack at 97 [69]. Thus where the plaintiff has obtained only nominal damages a court may order costs in favour of a defendant: Oshlack at 97 [70]. Two authorities are cited in Oshlack for this proposition. In Anglo Cyprian Trade Agencies Limited v Paphos Wine Industries Limited [1951] 1 All ER 873 Devlin J said, at 874: No doubt, the ordinary rule is that where a plaintiff has been successful he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct. 5 In applying that rule, however, it is necessary to decide whether the plaintiff really has been successful and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a successful plaintiff. 6 In Anglo-Cyprian Trade Agencies Devlin J ordered that the plaintiff having been awarded a modest but not nominal sum by way of damages for breach of contract for the sale of goods to pay the costs of the action to the defendants. 7 The other case cited as authority for that proposition is Alltrans Express Limited v CVA Holdings Ltd [1984] 1 WLR 394; [1984] 1 All ER 685. In that case the plaintiff having claimed damages of £82,500 was awarded damages in the sum of £2. Lord Justice Stephenson said, at 401: But the event of an award of £2 was not the event at which the plaintiffs were aiming. They were aiming at £82,500, and the mere fact that they ultimately got something- token or nominal damages - does not enable me to regard them as remaining successful plaintiffs. I find support for that view of the matter in what Devlin J. said in Anglo-Cyprian Trade Agencies Ltd. v. Paphos Wine Industries Ltd. [1951] 1 All E.R. 873. 8 Lord Justice Stephenson then quoted the passage from Devlin J's judgment, which I have just quoted, and then made the following observation (inter alia), at 403: …[the plaintiffs] took up the time of the Court and more important [ly] from the point of view of this appeal, put themselves and the defendants to considerable expense over, as I have said, 15 working days; and at the end they came away empty-handed because I cannot think that £2 in the hand disqualifies them from that description. 9 In the same case, Lord Justice Griffiths said, at 403: As a general rule a successful party is entitled to his costs, expressed by the lawyer's phrase "costs follow the event." Who was the successful party in the issue, or lis, tried by the judge in this case. Undoubtebly it was the defendants. 10 The Court of Appeal (England and Wales) in that case ordered the plaintiff in whose favour an order for nominal damages had been made to pay the costs of the defendant. 11 In Australia the question of costs where a plaintiff has recovered only nominal damages was considered by the High Court in Connelly v Sunday Times Publishing Company Limited (1908) 7 CLR 263. The plaintiff had been awarded one shilling damages. The Chief Justice, Sir Samuel Griffith said, at 270: …it is sufficient to say that in the circumstances of the case the learned Judge was justified in drawing the inference that the jury were of opinion that the plaintiff, by reason of his conduct and character as disclosed in the course of the evidence, was not entitled to anything more than nominal damages; and in my opinion that is a good cause for thinking it more fair that an exception should be made to the ordinary rule that costs follow upon success. 12 The Chief Justice went on to uphold the decision of the trial judge to not order costs. 13 In the same case, O'Connor J, agreeing, said, at 275: If ever there was a case in which a judge ought to exercise his discretion under the Rule to prevent injustice being done, it was in a case such as this. 14 The rule to which O'Connor J referred was one that provided that where any action is tried by a jury, the costs shall follow the event unless the judge by whom such action is tried or the court shall for a "good cause" otherwise order. 15 O'Connor J further said, at 276: All we have to say is whether the view taken by the Judge was open to him. I think it was, and under those circumstances I have no doubt he came to the right conclusion in holding that it would be unjust to leave the ordinary rule of costs to operate, and thus to allow the plaintiff, to whom a jury had given a verdict for contemptuous damages for a most serious libel on his character, to obtain the whole of the costs from the defendants. 16 There are two cases in Victoria which also bear on this question. In Gannon v White (1986) 12 VLR 589 there was a verdict for one farthing. On the question of costs the Full Court of the Supreme Court said, at 596: We think also that a verdict of a farthing only in an action for libel constitutes a good cause for which the judge may in his discretion deprive the plaintiff of his costs. 17 Again, in that case the Full Court upheld the decision of the trial judge that there should be no order for costs. 18 The other case to which I refer from Victoria is Earnshaw v Loy (No. 2) [1959] VR 252. In that case the plaintiff was awarded £1 ten shillings for damages for assault consisting of £1 six shillings and ten pence special damages and three shillings and two pence general damages and was awarded £40 and one shilling for malicious prosecution being £40 special damages and one shilling general damages. Sholl J said, at 253: It is common ground that as to the costs I have a complete discretion under O. LXV, r. 1 [Rules of Supreme Court of Victoria] , though of course it is to be exercised judicially. I was referred to many cases upon the question of the proper exercise of that discretion but I can think of no better test than the test of what is fair and just between the parties;… ... …courts have often pointed out that a general discretion to do what is fair and right should not be restricted by a series of decisions laying dawn [sic] supposedly binding principles as to the method of exercising the discretion. 19 Sholl J then went on to hold that in his opinion the case could not be satisfactorily dealt with by letting the plaintiff obtain his costs from the defendant. On the contrary, the Court ordered that the successful plaintiff, pay the defendant one half of the defendant's costs. 20 These authorities and the principles to which they refer suggest to me that not only should the applicant in the present case not receive any costs but the applicant should pay the respondent's costs. 21 The position in the present case is changed by the passing of some correspondence between the parties in the nature of Calderbank letters. I have been referred to an affidavit sworn by the solicitor for the respondent which annexes that correspondence. It is sufficient to go, firstly, to a letter of 13 March 2002 from the respondent's solicitors to the applicant's solicitors offering in total the sum of $18,000 comprising legal costs $7,000, damages for economic loss $6,000, and general damages $5,000. 22 Then, on 10 April 2002, the solicitors for the respondent wrote to the applicant's solicitors offering to settle the proceedings for the sum of $7,000 inclusive of costs and to write off the debt of $3,700 charged to the applicant. 23 On 29 October 2002 the applicant's solicitors rejected the offer and made a counter offer to compromise the claim for the sum of $100,000 plus costs to be agreed or assessed. Thereafter the proceedings continued for two days before me on 11 December 2002 and 12 December 2002 and were part heard to 17 February 2003. 24 During the intervening period, on 18 December 2002, the respondent's solicitors wrote to the applicant's solicitors offering to settle the claim for the sum of $7,000 plus costs assessed at $18,000. Express reference is made in that letter to an intention to rely upon the principles in Calderbank v Calderbank [1975] 3 All ER 333. On 13 March 2003, after the final judgment had been delivered, the respondent's solicitors wrote to the applicant's solicitors offering to settle the issue of costs on the basis that each party pay their own. On 25 March 2003 the applicant's solicitors rejected that offer. 25 The result of all this is affected by the fact that on 7 November 2002 the applicant for the first time particularised his claim for damages in points of claim. It is clear from both the principles explained in the cases to which I have referred above and by reference to the correspondence that the applicant should not be entitled to any order for costs in his favour. The applicant, it is true, was successful in achieving a declaration relating to the invalidity of the council's acts. That declaration was conceded on the first morning of the hearing on 11 December 2002. It is fair to say that the bulk of the three days of hearing were occupied in the claim for damages. In my opinion, there should be an order that the applicant pay the respondent's costs on and from 18 December 2002 thereby giving effect to the so called Calderbank offer of that date. 26 It follows that the order for costs is that the applicant pay the respondent's costs on and from 18 December 2002, otherwise no order as to costs. The applicant must pay the costs of the application for costs. I hereby certify that the preceding 26 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

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