RHEE v MASON

In support of this order, Mr Leslie QC relied upon what was said by Kirby P in New South Wales Medical Defence Union v Crawford 31 NSWLR 469 at 494. Essentially indemnity costs have been reserved to clearly exceptional cases such as those in which the conduct of the losing party has involved some unmeritorious, deliberate or high-handed conduct thought by the Court to warrant an order for costs over and above the ordinary. Mr Leslie submitted that the present was such a case. In particular, he referred to the fact that the appellant had two appeals, one appeal from an arbitrary award made on 3 October 1995 to the District Court and then the appeal which was discontinued yesterday.

It appears that the verdict of the District Court was less than the amount awarded by the arbitrator so that in that sense the appellant's appeal from the award was justified. However, the nub of Mr Leslie's complaint is the late time at which this appeal was discontinued.

The philosophy of this Court has been described by the majority of the Court in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 in Kirby P's judgment at 247. His Honour pointed out that it is extremely unusual for indemnity costs to be ordered in this Court even on the late abandonment of an appeal. In that case, considerable store was placed upon the late abandonment of the appeal and the acknowledgment, that this was said to provide, that the appeals were always hopeless. His Honour said even though that argument had force, it would be undesirable for the Court by its costs orders to discourage the proper but late abandonment of unwinnable appeals or points. Mahoney JA came to the same conclusion. Rolfe AJA dissented.

In my opinion the philosophy outlined by Kirby P in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd applies in the present case. I am not satisfied that any ground has been shown for awarding the respondent costs on an indemnity basis and, accordingly, I would refuse the second order sought in the notice of motion.

Cole JA I agree with the orders proposed by Sheller JA. I would add only this. In Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd at 247 Kirby P referred to the conflicting factors where an application for indemnity costs is sought in circumstances of late withdrawal of an appeal. The conflict arises between the rights of persons subjected to litigation to be reimbursed their costs if that litigation is abandoned, on the one hand, and the philosophy that it would be undesirable for the Court, by its costs orders, to discourage the proper but late abandonment of unwinnable appeals or points. The learned President, with whom Mahoney JA in substance agreed, preferred to allow the latter concept to dominate the former. Were I free to do so, my own view would be that the former should dominate the latter. However, it seems to me that there is a decision of this Court which has been followed since it was given. Application was not made to re-argue Huntsman and unless and until the principle enunciated by the majority in Huntsman is reversed. I take my position to be that I am bound to apply it. In those circumstances I agree with the orders proposed.

Sheller JA In so far as it is necessary we give leave to the appellant to discontinue. Mr Tonner has pointed out, that carries with it an order for costs in favour of the respondent.

Leave given to the appellant to discontinue and an order for costs given in favour of the respondent.

Counsel for the appellant: R C Tonner Solicitors for the appellant: Moray & Agnew Counsel for the respondent: A J Leslie QC/J A Gracie