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[2012] NSWCA 58
Court of Appeal (NSW)
2012-03-29
Beazley JA, Whealy JA
Original judgment source is linked above.
Judgment 1THE COURT: On 19 September 2010 Mr Harmer ("the plaintiff"), the successful respondent to an appeal in this Court, sought by Notice of Motion the following orders: (1)that the defendant pay to the plaintiff costs of the subject appeal on an indemnity basis; (2)that the defendant pay to the plaintiff interest in the sum of $549,717.62 in respect of the judgment amount from 14 August 2008 [sic] to 11 August 2011 pursuant to r 36.16 or in the alternative r 36.17 of the Uniform Civil Procedure Rules; (3)that the defendant pay the plaintiff's costs of this motion. 2On 17 October 2011, the plaintiff filed an Amended Notice of Motion (by order of the Court) seeking indemnity costs as before but, on the interest issue, seeking the following orders in lieu of previous order (2) sought: "(2) that the Court order, pursuant to r 36.4(3) and r 36.17 of the Uniform Civil Procedure Rules that the judgment take effect as of 14 March 2008; (3) that the defendant pay to the plaintiff interest in respect of the judgment amount from 14 March 2008."
Chronology 3The following is a brief chronology of the relevant dates and occurrences:
4It is necessary to flesh out some aspects of the chronology above. At the time the primary judge delivered reasons for judgment on 14 April 2010, her Honour said at paragraph 107: "Before making final orders, it will be necessary for the parties to provide up to date figures to deal with any income received by the plaintiff to date, claims for paid or voluntary care and claims for medical and other out of pocket expenses." 5On 11 June 2010, the primary judge entered judgment in favour of the plaintiff. In the judgment delivered that day, her Honour said: "The proceedings were also listed to allow the parties to update figures so that final orders could be entered. I was informed that neither party wished to vary the amounts awarded in the initial reasons handed down on 14 March 2008. Senior Counsel for the plaintiff indicated that a claim for interest might be forthcoming and provision to allow for interest has been in the orders." 6It was in these circumstances that an order was made suspending the orders for seven days to allow the parties to apply to re-list the proceedings to deal with issues of interest and a stay pending appeal. As it happened, there was no application made in relation to interest. However, the defendant applied for a stay pending an appeal to the Court of Appeal. The stay was consented to on terms including the prompt lodgement of a Notice of Appeal. At no time thereafter did the plaintiff seek to have the matter re-listed before the primary judge to deal with the issue of interest. 7As can be seen from the facts we have outlined, the plaintiff did not make an application to set aside or vary the judgment or orders made by this Court on 11 August 2011 within the fourteen day period required by r 36.16 Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The first application made was, as we have observed, on 19 September 2011. Correspondence was exchanged between the parties during the period August to November 2011. In short, the plaintiff maintained that he was entitled to indemnity costs in respect of the Court of Appeal proceedings, based on the offers of compromise which had been made and the order of the primary judge for costs on an indemnity basis. The defendant claimed that there could be no basis for any claim for interest prior to 11 June 2010, the date when a verdict and judgment had first been entered for the plaintiff in the District Court. Regrettably, the parties were not able to resolve their differences and this much litigated action has now required once again the intervention of this Court.
Submissions 8The plaintiff's foundational contention is that at no stage during the course of the proceedings, following the first judgment by the primary judge, had there been any real issue about the appropriate judgment sum. Her Honour had determined a contingent figure. The only issues remaining throughout the litigation were those of primary liability and contributory negligence. 9On the costs issue, the plaintiff argued that the two offers of compromise were properly to be regarded as genuine attempts to compromise a settlement. The plaintiff next pointed to r 42.14(2) UCPR which states: "Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim: ... (b) assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made ..." 10In this regard, the plaintiff acknowledged that costs remain always a matter of discretion. It asserted in the present matter that the offers of compromise made prior to appeal ought not to be the subject of an unfavourable exercise of discretion. To the contrary, it submitted that the discretion ought to be exercised in his favour. The plaintiff argued that there are no circumstances that would warrant exercising the discretion adversely to the plaintiff. 11The plaintiff accepted that no fresh offer of compromise had been made prior to the second appeal. While there was an acceptance that this fact is relevant to the Court's exercise of its discretion in the award of costs (Moore v Woodforth (No 2) [2003] NSWCA 46; Brymount Pty Ltd v Cummins & Anor (No 2) [2005] NSWCA 69), the plaintiff argued that the offers that were made represent a substantial discount on the undisputed quantum available to the defendant and that this too must be relevant to the Court's discretion to award indemnity costs: South Sydney Council v Morris (No 3) [2001] NSWCA 200 at [10] per Heydon JA. 12Finally, on the issue of costs, the plaintiff submitted that the conduct of the defendant in refusing to consider any attempt to settle the matter, in refusing to embark on mediation against the background of two offers of compromise - each representing a substantial discount on the undisputed quantum of the case - should be viewed as "unreasonable or delinquent conduct": Baresic v Slingshot Holdings Pty Ltd & Anor (No 2) [2005] NSWCA 160; Oshlak v Richmond River Council [1998] HCA 11; 193 CLR 72 at 89. 13In relation to the interest claim, the plaintiff argued that s 100 of the Civil Procedure Act 2005 (NSW) allows a discretion that a party be properly compensated by way of interest for the practical loss suffered. However, the plaintiff accepted that ordinarily a judgment takes effect, pursuant to r 36.4 UCPR, as at the date on which it was given or made, or if the Court orders that it not take effect, until the date on which it is entered. 14The plaintiff suggested that r 36.4(3) has a potential operation in the present case. It states: "Despite the sub-rules (1) and (2) the Court may order that a judgment or order take effect as of a date earlier or later than the date fixed by those sub-rules." 15The plaintiff's essential argument is that, from the time of the first judgment given on 14 March 2008, there has never been any dispute on the quantum of the claim. The only issues in the trial that have persisted during the following years, it repeated, have been primary negligence and contributory negligence. It was submitted, no doubt correctly, that the provision of interest is intended to compensate an applicant for the loss it suffers being kept out of its money or damages: Batchelor v Burke [1981] HCA 30; (1981) 148 CLR 448. 16The plaintiff argued that the ordinary rule is this: interest will invariably be allowed when claimed if it can be demonstrated that the plaintiff has been kept out of money that would have accrued to him at an earlier point of time: Donellan v Watson (1990) 21 NSWLR 335, at 345. The plaintiff argued that is no reason not to award interest on the money of which the defendant has had the benefit, and of which the plaintiff has been deprived, since the date of the original judgment but for the error of the trial judge at first instance. This is so especially in circumstances where there has never been challenge to quantum. 17Finally, the plaintiff pointed to the fact that no claim has been made in respect of interest pursuant to the Civil Liability Act 2002 (NSW) for sums which might have been awarded separately under that legislation. The only claim made was in respect of the judgment entitlement without the adjustments that would otherwise have occurred in respect of the indexed amounts under the Act. 18In relation to both interest and costs, the plaintiff has sought to counter the fact that its motion was filed outside the time permitted by r 36.16 by arguing that the relief sought by the plaintiff in the Amended Notice of Motion is relief consequential on the judgment rather than the seeking of orders to disturb the judgment. In relation to the interest claim, the plaintiff suggested that r 36.17 UCPR - the slip rule - is enlivened (given that quantum was not in issue) and that this may be an additional basis for the exercise of the Court's power to order that the judgment take effect as from 14 March 2008. 19The defendant in response emphasised that the second judgment of this Court was handed down 11 August 2011 and entered on 12 August 2011. The consequence of this was that the plaintiff is out of time in seeking the relief he does. The motion was filed more than fourteen days after the time allowed to vary the orders made by the Court pursuant to UCPR r 36.16(3A) or (3B), a time that the Court may not extend: r 36.16(3C). 20The defendant acknowledged that the applicant's written submissions attach an Amended Notice of Motion that asked the Court to make orders pursuant to r 36.4(3) and r 36.17 that the judgment take effect from 14 March 2008. The defendant suggests that it is wrong to categorise the relief as "orders consequential on the judgment". The defendant submits that the application is in reality an application to vary the order made with respect to costs, and with respect to when the judgment should take effect. Such an application could only have been made within fourteen days of 12 August 2011, which it was not: Deputy Commissioner of Taxation v Meredith (No 2) (2008) 75 NSWLR 462 and AT v Commissioner of Police, NSW (No 2) [2010] NSWCA 337. 21In so far as the plaintiff seeks to argue that the slip rule is enlivened, the defendant argued that the situation here could not possibly be categorised as a clerical error or an accidental slip or omission. No argument was ever directed to the Court of Appeal on the second hearing that costs should, in the event that the appeal was unsuccessful or the cross-appeal successful, that costs should be paid on any basis other than the ordinary basis. 22Similarly, with respect to interest, the defendant pointed out that the plaintiff did not take up the invitation of the primary judge on 11 June 2010 to make an application for interest within the seven days she allowed. It should, as a consequence, be presumed that the applicant was simply content with the order taking effect from that date, and with interest running on the judgment debt from that date, as is the usual situation. The defendant indicated that no contention was made in the cross-appeal, or otherwise on the hearing of the second appeal, that interest should run from any date earlier than 11 June 2010. 23In relation to costs, the defendant's position remained that the Court has made an order disposing of the costs of the appeal and cross-appeal. An application to vary that order was not made in time. The time cannot be extended. 24In relation to interest, the defendant submitted that the effect of the orders made, by virtue of the operation of the rules of Court, was that interest would run from the date of judgment of the primary judge as varied by the second Court of Appeal decision. Once again, it was said, the present application seeks to vary the orders made in circumstances where that application was made out of time. 25The defendant asks that the motion and amended motion be dismissed with costs.
Resolution 26The Court concludes that, in the circumstances, the costs orders made by the Court on 11 August 2011 should stand. Consequently, the application for indemnity costs (relating to the appeal) should be refused. Further, the Court concludes that the application to ante-date the District Court judgment of 14 March 2008 should be refused. 27As to costs: it is true that the application to seek indemnity costs following the appeal was made out of time. Rule 36.16(3C) states: "Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)." 28Relevantly, the time permitted under subrule (3A) is fourteen days after the judgment or order is entered. The plaintiff's argument that the relief sought in the amended motion is consequential on the judgment rather than the seeking of orders to disturb it cannot be accepted. It is clear that the Court is being asked, so far as the costs order is concerned, to vary the judgment made on 11 August 2011 and entered on 12 August 2011. 29However, since the parties to the motion, in their written submissions, have not addressed the issue as to whether there is any other dispensation power that might be relied upon by a defendant who has failed to make a timely application, we prefer not to dispose of the application on that basis. We consider that the costs aspect of the application may more properly be dealt with on its merits. 30The plaintiff's first offer of compromise was made at the commencement of the first Wagga hearing in November 2007. Consequent upon that hearing, however, a verdict was entered for the defendant on 14 March 2008. Very shortly after the entry of the orders made as a consequence of this Court's first decision, the plaintiff made a second offer of compromise on 22 April 2009. This offer was not accepted by the defendant. 31Sidis DCJ gave her reasons for judgment following the second hearing on 14 April 2010. Verdict and judgment were entered on 11 June 2010. The defendant lodged its appeal shortly thereafter and, as the chronology shows, the second appeal in this Court was heard in March 2011. No renewal of the second offer of compromise or any variation of it was made by the plaintiff prior to the hearing of the second appeal to this Court. That fact, of course, did not disentitle the plaintiff from seeking indemnity costs in relation to the second appeal. Indeed, this Court may have regard to any offer of compromise (made under the Rules or otherwise) in the Court below: r 51.49. However, the absence of any renewal or variation of the second offer prior to the appeal is clearly a relevant matter to be weighed in the discretionary balance. 32The reality of the situation was this: the plaintiff's second offer in April 2009 to the defendant was intended to, and perhaps did, offer a substantial inducement to settle the case before the proceedings were re-heard by Sidis DCJ in 2009. It was clearly at that time a genuine offer of compromise. However, the plaintiff in June 2010 secured a highly favourable judgment, only to see it challenged in substantial terms by the appeal to this Court lodged in July 2010. We consider it significant, given the passage of time and the circumstances we have outlined, that no renewal of the offer or a variation of it was proffered by the plaintiff prior to the hearing of the second appeal in this Court in March 2011. Nearly two years elapsed between the second offer and the commencement of the second appeal in this Court. This is a significant discretionary factor: Brymount Pty Ltd v Cummins & Anor (No 2) [2005] NSWCA 69 at [29]-[30], per Beazley JA, with whom Ipp and McColl JJA agreed; Baresic v Slingshot Holdings Pty Ltd & Anor (No 2) [2005] NSWCA 160 at [21] per Beazley JA; Encyclopaedia Brittanica Australia Ltd v Campbell (No 2) [2009] NSWCA 335 per Giles and Macfarlan JJA and Sackville AJA at [9][11]. 33Moreover, we do not consider that there was any unreasonable or delinquent conduct on the part of the defendant in mounting the challenges raised in the appeal to this Court. As our decision shows, this was a difficult case with many complex issues of both fact and law. The defendant maintained that he was entitled to succeed on the liability issue. If he failed, he maintained that the plaintiff's contributory negligence was of such a high order that the verdict should be reduced by 100%. Although he failed on both these issues, there is nothing to suggest that he was not entitled to ventilate the issues on appeal as he did. We do not accept that the defendant's failure to continue with mediation proceedings demonstrated any relevant delinquency. Nor did the defendant's failure to accept the two offers of compromise demonstrate unreasonable or delinquent conduct on his part. 34For these reasons, we are satisfied that the costs order should stand. 35As to interest: the basic rule is that a judgment or order takes effect as of the date on which it is given or made or, if the Court orders that it not take effect until it is entered, as at the date on which it is entered: r 36.4. The plaintiff here seeks to place reliance on r 36.4(3) (text set out at para 14 above). 36It has been held that the discretion conferred by the rule is primarily, though not exclusively, concerned with instances where there has been delay between the adjudication of the claims in the proceedings and the formal pronouncement or order: Hartley Poynton Ltd v Ali [2005] VSCA 53 at [73] and [76]-[80]. Although the power is not confined to this situation, circumstances warranting its exercise in other situations may be said to be relatively circumscribed: Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589; Government Insurance Office (NSW) v Healy (No 2) (1991) 22 NSWLR 380 at 387. 37In the present situation, the primary judge, having delivered her reasons for judgment on the second occasion, adjourned the proceedings to enable the parties to make submissions on damages and to deal with the formal final orders. As it happened, there was no major dispute raised regarding the amount to be awarded (on the basis that contributory negligence had been assessed at 25%) and her Honour entered judgment on 11 June 2010 against that specific background. However, it is important to note that her Honour allowed the plaintiff seven days to make any application with respect to interest, and no application was made. 38It is impossible to see this as a matter warranting the exercise of the slip rule. Far from this being an instance of a "clerical mistake or an error arising from an accidental slip or omission", the judgment of the District Court reflected the accepted position by both parties on the method of calculation of damages, the assessment of interest and the entry of judgment. The plaintiff should be held to that position. 39In our opinion, it has not been demonstrated by the plaintiff that he has any entitlement to the making of an order that the District Court's judgment should have commenced on any date earlier than 11 June 2010. 40The Court makes the following orders: (1) The plaintiff's amended motion of 17 October 2011 is dismissed. (2) The plaintiff is to pay the defendant's costs of the motion.
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: 30 March 2012
Harmer
Hare
[2005] VSCA 53
(1981) 148 CLR 448
(2008) 75 NSWLR 462
(1990) 21 NSWLR 335
(1991) 22 NSWLR 380
(1984) 154 CLR 589
[1998] HCA 11