(2000) 35 ACSR 276
Beoco Ltd v Alfa Laval Co Ltd [1993] EWCA Civ 22
Source
Original judgment source is linked above.
Catchwords
(2000) 35 ACSR 276
Beoco Ltd v Alfa Laval Co Ltd [1993] EWCA Civ 22
Judgment (6 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: On 23 February 2024 the Court upheld the appeal of Ms Riechelmann from a decision of the District Court which had dismissed a cross-claim made by her against the respondent, Mr McCabe: Riechelmann v McCabe [2024] NSWCA 37 (First Judgment). The Court made the following orders:
1. Appeal allowed.
2. The respondent is to pay the appellant's costs of the appeal.
3. Order 3 made by the District Court on 21 February 2023 is set aside and the following orders are made in lieu thereof:
a. Judgment for the cross-claimant against the cross-defendant on the Cross-claim in the sum of $136,000;
b. The cross-defendant is to pay interest on the judgment sum from 21 February 2023 pursuant to s 101 of the Civil Procedure Act 2005 (NSW).
4. As regards costs of the proceedings in the District Court, orders 2 and 3 made by that Court on 20 July 2023 in relation to costs of the cross-claim are set aside, and in lieu thereof it is ordered that the cross-defendant pays the cross-claimant's costs of the cross-claim.
5. Liberty to the parties to apply for any variation or addition to these orders within 14 days.
6. Mr McCabe has 14 days to show cause why this Court's judgment and the papers in this Court should not be referred to the Legal Services Commissioner.
As regards order 6, Mr McCabe did not make any submissions as to why the Court's judgment and associated papers should not be referred to the Legal Services Commissioner. For the reasons set out in the First Judgment at [108]-[111] and [163]-[164], the Registrar of this Court will be directed to refer the papers in this proceeding to the Office of the Legal Services Commissioner, to include in particular the appeal books, the First Judgment and this judgment.
Pursuant to order 5, both sides exercised the liberty to apply to seek variations of the costs orders made as regards the proceedings in the District Court and in this Court. Mr McCabe indicated by email that he would seek to exercise the liberty. The Court made directions that he could file short submissions and any evidence on which he relied by 8 March 2024, with any responsive submissions and evidence to be filed by 13 March 2024. Both sides filed submissions. The order that Mr McCabe seeks is that Ms Riechelmann pays the costs of the District Court hearing up to 1 August 2022, accepting, it seems, that he would be liable for costs thereafter. He also appears to seek some variation of the order for costs in this Court.
Ms Riechelmann filed a notice of motion on 8 March 2024, in prayer 1 of which she sought that order 4 made by this Court be varied so that the respondent pay her costs in the District Court on an indemnity basis from 17 July 2019. The motion also sought, by prayers 2-4, other orders relating to asset preservation. That part of the motion is not currently before this Court for determination. Submissions were filed in support of prayer 1. The Court subsequently made a direction giving Mr McCabe leave to file and serve short submissions in response, and any evidence on which he sought to rely, by 13 March 2024. Mr McCabe promptly filed submissions on 12 March 2024. Ms Riechelmann then filed a two page reply submission on 13 March 2024. No direction had been sought nor made authorising any such reply. It should not have been filed. At the Court's request, on 14 March 2024 the Registrar informed the parties that the Court would not consider the reply submission, and we have not done so.
In sum, neither side has sought variation of the Court's orders with respect to the amount awarded and interest (order 3). Both sides have sought variation of order 4, relating to costs of the proceedings below. Mr McCabe sought variation of the order as to costs of the appeal (order 2). It is appropriate to address Mr McCabe's application first.
[3]
Mr McCabe's application
In relation to the costs of the proceedings in the District Court, Mr McCabe seeks an order as follows:
the Appellant should pay the costs of the Respondent (including Court Hearing Fees) of the District Court hearing up to 1 August 2022 regarding liability together with the costs order in his favour for his claim (which have not been the subject of contention).
For the avoidance of doubt, court hearing fees should be taken to be included in the general order as to costs. And no issue arises in this appeal as to the costs order made in Mr McCabe's favour on his claim, being order 1 made by the primary judge on 20 July 2023.
Mr McCabe invokes the following principle stated by the English Court of Appeal in Beoco Ltd v Alfa Laval Co Ltd [1993] EWCA Civ 22; [1995] QB 137 at 154:
As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment. There may, of course, be special reasons why this general rule should not be applied. An example of this is to be found in Kaines (UK) Ltd v Osterreichische Warrenhandelsgessellschaft (formerly C.G.L Handelsgesellschaft m.b.H.) [1993] 2 Lloyd's Rep. 1, 9, where the judge was satisfied that, even if the amendment had been made earlier, the action would have been vigorously resisted.
This approach has been referred to approvingly by this Court: Vero Insurance Ltd v Australian Prestressing Services Pty Ltd (No 2) [2014] NSWCA 8 at [7]; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [40]; note further Australian Prudential Regulation Authority v Holloway [2000] FCA 1245; (2000) 35 ACSR 276 at [49].
Pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), where a court makes an order as to costs it is to order that costs follow the event unless it appears that some other order should be made as to the whole or any part of the costs. Courts thus have a broad discretion in ordering costs. The "general rule" referred to in Beoco is perhaps more accurately described as a principle which may guide the exercise of the discretion under r 42.1. It is always necessary to consider each case on its merits, cognisant of the flexibility that r 42.1 allows.
Here, Mr McCabe's argument relies on the fact that Ms Riechelmann's cross-claim had not raised the version of events put by Ms Wells until an amendment application was foreshadowed on the fourteenth day of the trial, after Ms Wells had given evidence. That amendment was allowed by the primary judge on 1 August 2022, over Mr McCabe's opposition. The effect of the amendment was to add the words underlined in [1(v)] of the cross-claim:
(v) engaging in intentional and unlawful conduct against the cross-claimant such that when the cross-claimant bent down to retrieve her mobile phone, the cross defendant came over the top of her right shoulder with his right arm, grabbing her upper torso and chest and wrapping his arm around her throat and reaching across to her left shoulder as a consequence of which the cross-claimant was in a strangle hold and/or alternatively, at a later time in the corridor, choked by the use of two hands around her throat until she went red in the face; …
The words prior to the underlining outlined Ms Riechelmann's version of events. The added words are based upon Ms Wells' version of events. In the appeal Ms Riechelmann succeeded based only upon Ms Wells' version of events, this Court being unpersuaded to overturn the primary judge's rejection of Ms Riechelmann's version. The key differences between the two accounts were summarised in the First Judgment at [130]:
As discussed, there were two main inconsistencies between Ms Wells' and Ms Riechelmann's versions of the strangulation. First, as to timing, Ms Riechelmann's evidence was that it was shortly after her phone fell, whereas on Ms Wells' account as given in oral testimony it was some minutes after that, following Mr McCabe and Ms Wells having come back out of Mr McCabe's unit. Secondly, as to the method, Ms Riechelmann's evidence was that she was strangled by the respondent from behind, using one arm, whereas Ms Wells indicated that it was from the front using both hands. Ms Riechelmann gave evidence that she could not remember being strangled in the manner alleged by Ms Wells. And Ms Wells gave evidence that she did not see Ms Riechelmann being choked in the way that Ms Riechelmann had claimed. These differences are significant.
As noted in Mr McCabe's submissions, senior counsel for Ms Riechelmann frankly indicated to the primary judge that the way the evidence of Ms Wells came out took him by surprise (T964). The first main inconsistency - as to timing of the events - only emerged in the course of the cross-examination of Ms Wells. Yet the second inconsistency was evident in advance. In Ms Wells' second written statement, dated 15 April 2020 (well in advance of the trial), she indicated that at the prompting of a police officer she had said to Mr McCabe on the night in question that "[y]ou had your hand around her throat and strangled her" (see further the First Judgment at [74]). It should have been clear to all concerned that this involved a different type of allegation to the version given by Ms Riechelmann, which involved choking her from behind by use of his arm.
In her submissions to this Court Ms Riechelmann seeks to make a virtue of the fact that the allegation of strangling "was in Ms Wells' first statement". In that context, it is surprising that Ms Riechelmann's legal team chose to plead the alleged strangling in a way so closely tied to Ms Riechelmann's own account without allowing for the key difference as to manner of strangulation that should have been apparent prior to the trial. That is so even allowing for the fact that Ms Riechelmann's legal team had not had the chance to interview Ms Wells prior to the hearing: First Judgment at [37].
That being said, in all the circumstances of this case we consider it unlikely that Mr McCabe would have acted any differently in resisting Ms Riechelmann's cross-claim even if Ms Wells' version had been pleaded from the beginning. Mr McCabe has not claimed that he would have done so. That is unsurprising. The matter was hard fought on both sides, in a context of longstanding personal animosity between the parties. We therefore reject Mr McCabe's application that Ms Riechelmann pays his costs up to 1 August 2022.
Mr McCabe also refers to the principle that some costs allowance may be made if an ultimately unsuccessful party has succeeded on a separable issue. However, unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: note Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (No 2) [2014] NSWCA 425 at [27]. Ms Riechelmann's account and Ms Wells' account of the strangling were treated by both sides as involving distinct events. Yet even if Ms Riechelmann had only alleged Ms Wells' version in her cross-claim, it no doubt still would have been necessary to consider the significance of Ms Riechelmann's own diverging version. Mr McCabe also accepted in his submissions that Ms Riechelmann would be entitled to her costs in establishing quantum. Her success based upon Ms Wells' version meant that she obtained the bulk of the damages that had been contingently assessed by the primary judge: see First Judgment at [166]. Thus the accounts were distinct but the issues raised were not clearly separable.
However, it is apparent that the hearing below was lengthened by the late amendment to the cross-claim. It meant, for example, that Mr McCabe needed to be recalled in order to give evidence addressing the version of events given by Ms Wells. Some allowance should be made for this. In the end the task for the Court is to seek to make an order that is fair in all the circumstances. We will order that Mr McCabe pays 75% of Ms Riechelmann's costs in the proceedings below.
We note that in Ms Riechelmann's submissions responding to Mr McCabe's application it was submitted that "even if the Offers of Compromise and Calderbank offers are ineffective, the conduct by the Respondent is of a type that would warrant such an award". This submission appears to be making a claim for indemnity costs. Any such submission needed to be made in support of Ms Riechelmann's own application for indemnity costs. By making that submission in responsive submissions to Mr McCabe's application, where the Court's directions made no provision for a reply, Mr McCabe was denied a chance to respond. The submission should not have been put and is rejected.
In relation to the costs of the appeal, it is not entirely clear from Mr McCabe's submissions what variation he seeks. The appeal took one day, as it still would have done if only Ms Wells' version had been pursued. And, as for the proceedings below, in such an appeal it still would have been necessary to consider the significance of Ms Riechelmann's own diverging version. This is not a case, thus, where the issues are clearly separable. We are not persuaded to alter our order awarding costs of the appeal to Ms Riechelmann.
[4]
Ms Riechelmann's application for indemnity costs in the Court below
By order 4 made on 23 February 2024 this Court ordered that the cross-defendant (Mr McCabe) pay the cross-claimant's (Ms Riechelmann's) costs of the cross-claim. Ms Riechelmann seeks that this order be varied so that costs be payable on an indemnity basis from 17 July 2019. She relies on a purported offer of compromise and purported Calderbank letter sent on that date, or alternatively on a purported offer of compromise and purported Calderbank letter sent on 9 June 2020. Both offers were sent whilst the matter was still in the Local Court, prior to it being transferred to the District Court by consent in September 2020.
The first offer of compromise stated that Ms Riechelmann offered to compromise "the whole of the proceedings" on the basis of the following proposed orders:
1. Case dismissed.
2. Other orders in accordance with the Uniform Civil Procedure Rules 2005.
3. This offer is made pursuant to Rule 20.26 of the Uniform Civil Procedure Rules 2005.
4. This offer remains open for a period of 28 days from the date expressed on this offer.
The second offer of compromise was in identical terms.
Neither offer satisfies the requirements of r 20.26 of the UCPR. Mr McCabe's submissions pointed to many issues with the offer. It is sufficient to note the following. The provision for "other orders" meant that the content of the offer was not clear and it was not an offer capable of acceptance without further discussion between the parties. Moreover, the proposal of "case dismissed" is ambiguous as to whether it captured both the claim and cross-claim. The ambiguity is illustrated by Ms Riechelmann's submissions, which seek to have it both ways. On the one hand she submits that she "has obtained judgment on the cross-claim which is no less favourable to her than the terms of each of the offers" - thus focusing just on the cross-claim on which she succeeded rather than the primary claim on which she substantially failed - whilst on the other she claims that this offer "was truly a compromise of the proceedings as a whole". Relatedly, the offer did not address what orders, if any, were proposed as to costs in relation to the claim or cross-claim. If what was proposed was that each of the claim and cross-claim be dismissed, and in the absence of some proposal to the contrary, each side would have been entitled to costs up to the time of the order: r 42.13A(3). Yet that does not seem to have been the intent of the offer, as reflected in the Calderbank letter sent with it.
The Calderbank letter sent with the first offer of compromise said that it attached the offer of compromise, then said merely the following:
Please be aware that if the Offer does not for any reason comply with the Uniform Civil Procedure Rules 2005 then the offer is made pursuant to the principles of Calderbank v Calderbank [1975] 3 All ER 333 in that the offer is that the case against the defendant be dismissed and with no order as to costs.
The letter was somewhat unclear. The reference to the case against the defendant being dismissed with no order as to costs could have referred just to Mr McCabe's claim against Ms Riechelmann. In any event, no attempt was made to give reasons why the offer should be accepted. That absence stands in contrast to the submissions made to this Court by Ms Riechelmann, which set out many reasons why the offer should have been accepted by Mr McCabe. There is much force, for example, in the submission that the litigation "was going to be complicated, and expensive, and the personal and financial costs to either party to this litigation were going to be substantial". But such points were not made at the time. Moreover, the first offer was made at an early stage of the proceedings. The cross-claim itself had been filed some 4.5 months earlier. At that stage it also included allegations on which Ms Riechelmann did not ultimately succeed. In the circumstances it was not unreasonable for Mr McCabe to reject the offer made.
The second supposed Calderbank letter sent on 9 June 2020 contained one sentence, which itself contained an error as to the date: "I attach by way of service Offer of Compromise dated 18 December 2019". This cover letter did not communicate a Calderbank offer.
Ms Riechelmann's application for partial indemnity costs in the District Court proceedings is rejected.
[5]
Orders
Neither side has obtained the varied costs orders that they sought. Ms Riechelmann's application has had no success. Mr McCabe's argument has met with limited success, reducing the costs award in favour of Ms Riechelmann but not obtaining any costs order in his own favour. In the circumstances the parties should bear their own costs of the applications.
The orders of the Court will be as follows:
1. The Registrar of this Court is directed to refer the papers in this proceeding to the Office of the Legal Services Commissioner.
2. Order 4 made by this Court on 23 February 2024 is varied so that it reads as follows: "As regards costs of the proceedings in the District Court, orders 2 and 3 made by that Court on 20 July 2023 in relation to costs of the cross-claim are set aside, and in lieu thereof it is ordered that the cross-defendant pays 75% of the cross-claimant's costs of the cross-claim."
3. The appellant's application for indemnity costs in prayer 1 of her notice of motion filed on 8 March 2024 is dismissed.
4. There is no order as to costs in relation to the parties' applications to vary this Court's orders as made on 23 February 2024.
[6]
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Decision last updated: 20 March 2024