Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd

DECISION: Notice of Motion filed 11 April 2008 dismissed with costs, provided that the costs recoverable by Rockcote shall not include costs attributable to its application for a more favourable costs order.

CATCHWORDS: PROCEDURE - Entry of judgment and orders - procedure for entry of judgment and orders under r 36.11 Uniform Civil Procedure Rules 2005 - Variation or setting aside of judgment or order following entry - variation or setting aside of judgment or order made but not entered - general law principles - statutory authority to reopen entered orders - r 36.16(3A) UCPR - time limits - COSTS - proper matters to be taken into account - late provision of defence - whether lateness made difference of substance to proceedings - whether proposing an issue to a court known by party to be wrong may be taken into account - whether Calderbank offer made on basis inclusive of costs capable of resulting in order for indemnity costs

Fair Trading Act 1987 LEGISLATION CITED: Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules

Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133 DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 CASES CITED: Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145 Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481 Re Suffield (1888) 20 QBD 693 Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v FS Architects Pty Ltd [2008] NSWCA 39

40847/06 Rockcote Enterprises Pty Ltd - Appellant FS Architects Pty Ltd - First Respondent Gary Finn - Second Respondent Donna Finn - Third Respondent 40015/07 PARTIES: Jill Carelli - Appellant J&J Group of Companies trading as Update Paint, Texture & Roof Restoration - First Respondent Jonel Srbin - Second Respondent FS Architects Pty Ltd - Third Respondent Gary Finn - Fourth Respondent Donna Finn - Fifth Respondent Rockcote Enterprises Pty Ltd - Sixth Respondent

KP Smark SC - (Rockcote Enterprises Pty Ltd) COUNSEL: J Carelli - (in person) G Finn - (in person, for FS Architects Pty Ltd & Finn Parties)

Turnbull Bowles - (Rockcote Enterprises Pty Ltd) SOLICITORS: J Carelli - (in person) G Finn - (in person, for FS Architects Pty Ltd & Finn Parties) No Appearance - (J&J Group of Companies; Jonel Srbin)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40847/06 CA 40015/07 DC 1657/04

McCOLL JA CAMPBELL JA HANDLEY AJA

28 AUGUST 2008 ROCKCOTE ENTERPRISES PTY LTD v FS ARCHITECTS PTY LTD & ORS (No.2) JILL CARELLI v FS ARCHITECTS PTY LTD & ORS (No.2) Judgment 1 McCOLL JA: I agree with Campbell JA. 2 CAMPBELL JA: The Court delivered judgment in these two appeals on 28 March 2008: Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v FS Architects Pty Ltd [2008] NSWCA 39. Orders were made on that day disposing of the appeals, save that orders relating to costs in the court below and of the appeal were made on the basis that those orders not be entered until 28 days after the date of delivery of the reasons for judgment. Liberty was granted to the parties to apply within 14 days of the date of delivery of the reasons for judgment to vary those costs orders on the basis of any material that there might be that was not contained in the appeal books. 3 On 11 April 2008, after terminating the retainer of his solicitors, Mr Finn filed a Notice of Motion, purportedly on behalf of all the Finn parties, that sought the following four orders: "1 Set aside, vary or supplement the Judgment of McColl JA, Campbell JA and Handley AJA dated 28 March 2008 by the authority vest in the Court. UCPR 2005 - Reg 36.16 (3B) having regard to the Affidavit of Gary Finn dated 11 April 2008. 2 In the alternative, set aside the Judgement and hear further argument. 3 An order that the Appellants pay the Respondent's costs at Trial and on Appeal, or alternatively; 4 Costs Orders appropriate to the circumstances." 4 Written submissions that Mr Finn made also relied upon Uniform Civil Procedure Rule 36.16(3A). 5 Uniform Civil Procedure Rule 36.16 provides: "(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if: (a) it is a default judgment, or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B). (4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order." 6 As recently explained in Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133, UCPR 36.16 recognises that, these days, court orders are entered by being recorded in the Court's computer system, without reference to the parties. That entry takes place very promptly after the judgment is delivered and the orders orally pronounced. It occurs pursuant to UCPR 36.11, which provides: "(1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered: (a) in the case of a court that uses a computerised court record system, when it is recorded in that system, or (b) in any other case, when it is recorded, in accordance with the practice of the court, as having been entered." 7 UCPR 36.16 provides a window of 14 days after entry of judgment in which setting aside or variation can occur, notwithstanding that entry of judgment. As Basten JA pointed out in Meredith (No 2) at [15]: "The removal of the power to extend the 14-day period makes it sufficiently clear that the intention is that the period is not variable, but reflects the need for judgments and orders to be final and certain as to their operation." 8 To the extent that that 14-day window exists, an exception has been created to the principle that ordinarily a court has no power to set aside a final judgment after it has been entered; DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 at [38]; Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481; Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529; Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145; Re Suffield (1888) 20 QBD 693; Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146. As UCPR 36.16(3A) and (3B) expressly state, any setting aside of a judgment or order under that power is to be carried out "as if the judgment or order had not been entered". 9 Courts have traditionally exercised great restraint concerning setting aside or varying a judgment or order that has been made, but not entered. In Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 at 302 Mason CJ accepted that "the jurisdiction is to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation", and that "generally speaking it will not be exercised unless the applicant can show that by accident and without fault on his part he has not been heard." He went on, at 303, to say: "However, it must be emphasised that the jurisdiction is not to be exercised for the purpose of reagitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases." 10 Ms Carelli submitted that Rule 36.16(3A) should be read as being subject to the limitations imposed by subrule 3. I do not agree. As I read it, the power conferred by UCPR 36.16(3A) is subject only to the limitations that the general law imposed on the power to set aside or vary a judgment or order prior to that judgment or order being entered. 11 Mr Finn submits that there are six manifest errors in the judgment, that ought lead to it being reconsidered. I shall deal with them seriatim.

"Does Not Plead To" 12 The Amended Cross-Claim was one that the Finn parties brought against four cross-defendants - Rockcote Enterprises Ltd ("Rockcote"), J&J Group of Companies ("J&J"), Mr Srbin, and Ms Carelli. The allegations it made against J&J, Mr Srbin and Ms Carelli were closely inter-related, while the allegations made against Rockcote arose from different facts. 13 The Amended Cross-Claim alleged, in para 20, that J&J, Srbin, and Ms Carelli made the five representations upon which the Finns sued those three parties. The terms of those representations are identified at para [47] of the previous judgment. The Amended Cross-Claim also alleged, in para 21, that those representations were terms of the Finns' contract with J&J. 14 In para 24 it pleaded that: "[J&J] breached the contractual terms described in paragraphs 20 and 21 above by: 24.1 [Rockcote] does not recognise [J&J] as an approved applicator; 24.2 [J&J] was not Licensed to do the rendering work; 24.3 the [Finns] did not receive the benefit of the certified 10 year product warranty; 24.4 render finish was defective; and 24.5 [J&J] did not complete the project within one week from commencement. Particulars (a) Conversation between Gary Finn and Rockcote's solicitor 10/11/03 (b) Update licence number is restricted to painting and does not include wet plaster. (c) Cross Claimants have not got the product warranty promised. (d) the render finish was defective (refer to Building Service Report File C2003/0332); and (e) Work not completed after 63 days of clear weather." 15 Neither Rockcote nor Ms Carelli pleaded to para 24. Mr Finn says that thereby each admitted the truth of para 24. That shows, he submits, that there was no issue on the pleadings about the inaccuracy of the matters thereby admitted. 16 That submission overlooks the fact that para 33 of the Amended Cross Claim alleged that the representations in para 20 were false, misleading and deceptive. Ms Carelli denied that paragraph. 17 The combined effect of the deemed admission of para 24, and the denial of para 33 created internal inconsistency in Ms Carelli's defence, which it might have been desirable to have clarified. However, it could not be said that the incorrectness of the representations was clearly not an issue at the trial, so far as Ms Carelli was concerned. 18 In the claim against Rockcote, representations made by Niven Building Services Pty Ltd ("Niven") on behalf of Rockcote were pleaded, that: "52.1 [J&J] was an approved applicator of the Rockcote Product. 52.2 The [Finns] would be able to obtain a 10 year product warranty if they contracted with [J&J] to apply to [sic] Rockcote Product; 52.3 [J&J] was licensed to undertake the Toscani Contract works and services." 19 Para 56 alleged that those representations were also contractual warranties. Para 58 alleged that Rockcote breached those warranties. By its defence, Rockcote denied the agency of Niven, did not admit the representations alleged in para 52, denied the contractual nature of the representations, and denied the breach of the contractual warranties. In this way it could not be said that any admissions arising from not pleading to para 24 made clear that there was no issue about the falseness of the representations alleged against Rockcote. 20 In delivering the reasons for judgment, the court was not under a misapprehension about there being no issue about the falsity of the various representations.

What was the Carelli Defence? 21 The red appeal book contained a Notice of Grounds of Defence to Cross-Claim of Ms Carelli, that appears on its face to be verified by an affidavit of Ms Carelli made on 9 May 2005, and bearing a stamp showing it as filed in the court on 10 May 2005. However that appearance is misleading. 22 Mr Finn annexes to the affidavit made 6 May 2008 that he has filed for the purposes of this motion, a Notice of Grounds of Defence to the Cross-Claim, bearing a stamp of the District Court and the stamped date 10 May 2005. That defence was filed on behalf of J&J, Mr Srbin, and Ms Carelli. It is preceded by an affidavit verifying the grounds of defence, sworn by Ms Carelli on 9 May 2005. It appears that, in the appeal book, the affidavit verifying that Ms Carelli swore on 9 May 2005 has been placed in front of a Notice of Grounds of Defence of Ms Carelli alone. That Notice of Grounds of Defence of Ms Carelli alone does not bear any stamp showing it as having been filed in the court, nor any date. 23 I have compared the terminology of the Notice of Grounds of Defence on behalf of the Second, Third and Fourth Defendants that was filed on 10 May 2005 with the terms of the apparent defence of Ms Carelli that appeared in the appeal book. Insofar as there are differences of substance between them, they include that the defence of Ms Carelli in the appeal book made no mention of some of the grounds of defence that had been raised in the defence dated 10 May 2005. Those are defences of failure to mitigate loss, voluntary assumption of risk, seeking contribution from Rockcote, alleging a set-off, and relying on some terms of the contract between J&J and the Finns. As well, some specific matters going to quantum of damages (that had been raised in para 42 of the 10 May 2005 defence) were not repeated in the defence of Ms Carelli alone. Para 71 of the 10 May 2005 document (which alleged contributory negligence by one particular set of words) is not repeated in the defence of Ms Carelli alone, though another portion of the 10 May 2005 document that alleged contributory negligence (para 66 and following) is repeated in Ms Carelli's defence. There are some other minor differences in the responses to paragraphs 9, 15, 22, 26, 44 and 50 of the Cross-Claim, but none of them has the effect of raising any new issue. All those minor differences relate to replacing what had been either an admission, a non-admission, or a denial in the defence dated 10 May 2005 by a "do not plead to" statement. 24 Thus, all the differences between the two documents have the effect of either making no difference in substance to, or narrowing, the issues on the pleadings. 25 It is apparent from the transcript of the hearing in the court below that counsel, Mr Cairns, appeared for Ms Carelli alone, and that J&J and Mr Srbin were not represented. The evidence was taken over three days, 11, 12 and 13 July 2006. At the start of the first day's proceedings the judge sought assistance from counsel in identifying the relevant pleadings. The judge identified the Notice of Grounds of Defence filed by the Second, Third and Fourth Cross-Defendants on 10 May 2005. Mr Cairns stated, in substance, that that document identified the defence of Ms Carelli. Mr Cairns stated (TP 6) "any representations made personally by my client are denied". The judge requested him to "formulate the defence so that everybody is well aware of what it is that you are saying is your defence". 26 Early on 12 July 2006 Senior Counsel for the Finns, Ms Olsson, enquired when she might be able to see the defence of Ms Carelli. The following exchange occurred: "CAIRNS: It will be a matter of a cut and paste exercise, just pulling out the matters of the filed defence -- HER HONOUR: But I think it's necessary to be done. CAIRNS: Yes. I'm instructed it can be done over lunch. OLSSON: Really it is a bit unsatisfactory. It looks to me as though the evidence will finish today and it's a bit unsatisfactory, really, for us to be running it without knowing what the defence is. However, if my friend can indicate formally that none of the matters in the paragraphs that he's agreed not to read will be incorporated into the defence, I can deal with it not being provided to us-- HER HONOUR: It shouldn't be too difficult for you to enumerate what you're actually saying is your defence anyway. CAIRNS: It's in that document. Unfortunately, it's also there with the second and third-- HER HONOUR: The trouble is that document is so rolled up. CAIRNS: Yes, it's there with the second and third defendant. There's going to be no surprise or no ambush in any document that's produced solely for the benefit of the fourth cross-defendant. … HER HONOUR: On that basis, I think it is important that you do formulate your defence." 27 Later on 12 July, Senior Counsel for the Finns returned to the topic of Ms Carelli's defence: "OLSSON: Your Honour, might I now enquire of the status of the defence? HER HONOUR: Yes. CAIRNS: Your Honour, what's happened is my client has gone through and deleted from the typed copy references to other cross-defendants or deleted complete portions, so it's now a document that reads only as to the fourth cross-defendant. I can, with the assistance perhaps of the court, provide photocopies of that-- HER HONOUR: Or perhaps you could just show it to the other parties and give them some idea of what's happening. CAIRNS: -- and then a properly cleaned copy tomorrow for the record, you Honour, rather than that amended or hand-amended document. OLSSON: Well, that might be suitable, as long as it's verified, and that can be done in the witness box. HER HONOUR: All right. CAIRNS: I'm sorry, your Honour, I missed that. OLSSON: I said it's all right as long as it's verified in the witness box. HER HONOUR: As it's verified in the witness box. CAIRNS: Yes, all right, well I'll deal with that when my client's in the witness box, your Honour." 28 It is not clear from the transcript precisely when the final version of Ms Carelli's defence document was produced. 29 Counsel who appeared on the appeal for the Finns was the same counsel who had appeared in the court below. No question was raised in the course of the appeal about the defence of Ms Carelli that appears in the appeal book not having been provided until late in the trial. So far as I can tell on the evidence, that defence did not raise any new issues beyond those that had already been raised by the joint defence of J&J, Mr Srbin, and Ms Carelli. There was no application for adjournment of the trial until a defence document was provided by Ms Carelli. There does not appear to have been any objection to the terms of Ms Carelli's defence document, when it was ultimately provided. When Senior Counsel for the Finns reached the end of her case on 12 July 2006 she prudently stated that she reserved her position with respect to "anything that arises in the defence". To that, the judge said "all right". No application was ever made to re-open the Finns' case. While Mr Finn also submits that Ms Carelli's defence was never verified, that does not show that there was any uncertainties at the trial about what she was saying was the substance of her defence. In any event, she had verified the defence of 10 May 2005. No argument was put on the appeal to the effect that the lateness in providing the final defence document of Ms Carelli had any effect at all on the conduct of the trial, or the orders made, or the orders that the Court of Appeal should make. 30 In all these circumstances, I am not persuaded that the lateness in Ms Carelli having provided her defence document had the effect that this Court's judgment was given under a material misapprehension, or that it has overlooked some relevant matter, such that the judgment should be reconsidered.

Negligence Claim Not Entirely Dropped? 31 I recorded at [6] of the judgment that the claim against (inter alia) Ms Carelli based on negligent statement had been withdrawn in the course of the hearing, and the Finns did not seek to support the judgment on that basis. Mr Finn now submits that, while that was the situation so far as Rockcote was concerned, it was not the situation so far as Ms Carelli was concerned. 32 I do not propose to review the transcript of the hearing to check on what basis that statement was made. That is because, when there is no case made out for the inaccuracy of the representation sued on, any claim against Ms Carelli based on the tort of negligent statement concerning such representations must fail. The argument on the appeal focused, correctly, on whether inaccuracy of the representations had been made out.

Agency Pleading 33 At [43] of the reasons I set out the representations that Niven was alleged to have made to the Finns on behalf of Rockcote. Those representations are also set out at para [18] of this judgment. 34 In para [44] of the earlier judgment, I said: "The Finns alleged that each of those representations was made on Rockcote's behalf by its agent Niven Building Services Pty Ltd. The Finns alleged that Niven Building Services Pty Ltd had actual authority on behalf of Rockcote to make those representations - no case of ostensible authority was pleaded, and at the trial it was confirmed that ostensible authority was not relied on. The Finns alleged that the representations were contractual, in the sense that the truth of the representations was warranted. While the pleading was a little less explicit than it might have been, it was treated by all parties as alleging that, in consideration that the Finns enter a contract for the application of the Rockcote products to their home, Rockcote warranted to the Finns that the representations were true." 35 The Finns' written submissions on the appeal gave as a précis of the collateral contract pleading: "The Finns allege that on or about 15th April 2003 they entered into a collateral contract with Rockcote via its agent, Niven …" 36 At [112] of the original judgment I said: "The case pleaded against Rockcote was a collateral contract entered into on Rockcote's behalf by its agent, Niven."

That closely follows the Finns' own submission. 37 At that part of the judgment, I was considering the claim made against Rockcote, insofar as it arose from the alleged collateral contract. In argument on the appeal Senior Counsel for the Finns explained the way she put the collateral contract allegation: "We say that … Niven is identifying somebody as an authorised applicator, the collateral contract is made good by the fact that the Finns rely on that representation that he is an authorised applicator when they enter into a contract." 38 Other parts of the judgment had dealt with the allegation that various representations had been made by Niven, on Rockcote's behalf. The statement in para [112] was not intended as an exhaustive statement of the allegations that the Finns made against Rockcote, nor (in light, particularly, of para [44] of the judgment) could someone reading the judgment as a whole fairly have taken it to have been so intended. 39 I am not satisfied that the judgment proceeded on any misapprehension of the case that had been pleaded against Rockcote, whether concerning collateral contract or in any other respect.

Loss 40 Mr Finn submits that the Court has taken a mistaken approach to its assessment of loss. He focuses upon para [99] of the reasons. That paragraph follows on from a finding that, even if the Finns had been given the Rockcote performance guarantee, that guarantee would not have responded to the particular damage that their house sustained. Para [99] went on to point out that proof of loss was essential to a cause of action for damages under Fair Trading Act or Trade Practices Act arising from the making of an inaccurate representation. The representation alleged was to the effect that the Finns would be able to obtain a 10-year product warranty. 41 The reason why Mr Finn submits that the findings on loss should be reviewed is "because the accuracy of the 'Approved Applicator' representation was a cause of losses other than the loss of a product warranty." I see no reason to alter the conclusion arrived at in the earlier judgment concerning whether incorrectness of the "approved applicator" representation (or indeed any other of the representations sued on) has been made out. Thus no occasion arises to reconsider the finding concerning loss.

Other Matters 42 Mr Finn's affidavit contains some other matters, not adverted to in his submissions, that seek to raise points that were not argued on the appeal. I do not propose to discuss them, beyond saying that none of them cause me to form the view that the judgment was given under a misapprehension such that it should be re-opened.

Conclusion Re Re-Opening 43 I am not satisfied that any of these alleged manifest errors relating to the judgment, that Mr Finn submits exist, are made out. So far as the orders other than concerning costs are concerned, there is no occasion to set aside, vary or supplement them.

The Finns' Application to Vary Costs Orders 44 I turn to consider separately whether the orders concerning costs should be varied. One matter on which Mr Finn relies to vary the proposed costs order, is that on 10 November 2003 he had a telephone call from the solicitor for Rockcote in which that solicitor said: "My client says that Greg Niven is not an agent of Rockcote and Rockcote have made no representations to you and Rockcote say that J&J Group of Companies are not Approved Applicators." 45 It is Mr Finn's file note of that conversation that is, it seems, referred to in the particulars to para 58.3 of the Amended Cross-Claim. The affidavits of Mr and Mrs Finn that were read at the trial do not refer to that conversation. Mr Finn says, for the purpose of the present application, that he served his file note of the conversation on both Rockcote and Ms Carelli in connection with some proceedings he had in the Consumer Trader and Tenancy Tribunal in the latter part of 2003. He submits that, "proposing an issue to a court which a party knows to be wrong in order to be successful in a court ought to have costs consequences." 46 That proposition as it is put is too unequivocal to be correct, given the way that costs orders are discretionary. I accept a similar proposition, that proposing an issue to a court which a party knows to be wrong is a proper matter to take into account concerning costs, and will often result in adverse costs consequences. 47 However application of the proposition that I accept in the present circumstances is problematical. In form, what Rockcote's solicitor told Mr Finn was his client's contention. Further, it is a statement that is made as at November 2003, not as at March 2003, when the representations were alleged to be made. No witness on behalf of Rockcote was called at the trial, but it was not put to Ms Carelli that she knew that J&J was not an approved applicator. There is some evidence consistent with J&J being an approved applicator, (whatever the criteria for having that status may be) referred to at para [88]-[94] of the earlier judgment. I am not prepared to conclude, for the purpose of this application, that either Rockcote or Ms Carelli knew, at the time of either the pleadings or trial, that J&J was not an approved applicator. 48 Another submission that Mr Finn raises concerning costs (which is the matter he asserted was the sixth manifest error in the judgment) is to return again to the point he had made, concerning the lateness of Ms Carelli providing a defence document at the trial. For reasons I have given earlier concerning late provision of that defence, it is not established that its lateness made a difference of substance to the way in which the trial proceeded. In that circumstance it does not make a difference to the appropriate costs order. 49 Thus, there is no reason to make any order for costs that is more favourable to the Finns than those proposed in paras [4], [5] or [6] of the earlier orders.

Rockcote's Application to Vary Costs Orders 50 Rockcote submits that there should be a variation of those proposed orders in its favour. On 21 October 2005 it made a purported Calderbank offer to the Finns, whereby it offered to pay "the Cross-Claimant" (ie Mr and Mrs Finn and the Finn company collectively) $15,000 inclusive of interest and costs, on the basis that it received a judgment on the cross-claim. The offer was open until 11 November 2005. 51 There is no rule that a Calderbank offer made on a basis inclusive of costs is incapable of resulting in the court making an order for indemnity costs if the party to who whom it is made fares is worse at the trial: Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322. However, the fact that the offer has not divided up the amount allocated to the claim itself, and the amount allocated to costs, is a matter which can bear upon the reasonableness of the conduct of the offeree in not accepting it, and thus on whether an indemnity costs order should be made. 52 In the present case, the consideration in favour of making an indemnity costs order, notwithstanding that the Calderbank offer made was one that rolled together the claim for damages and costs, is that for the Finns to be offered any money at all, whether on account of damages or costs, was to offer to put them into a better situation than they have ended in as a result of running the trial. 53 I do not propose to express a view about whether that consideration is enough to result in Rockcote being given an indemnity costs order for costs of the trial after 11 November 2005, because of a significant procedural matter. All the orders in this appeal were recorded in the court's computer system on the same day they were made, namely 28 March 2008. When the orders made and recorded included specific provision that the orders relating to costs not be entered until 28 days after the date of delivery of the reasons for judgment, the situation was one where the court "orders otherwise" within the meaning of UCPR 36.11(2) so far as those costs orders are concerned. The effect of the recording in the computer system of all the orders, including that direction that the costs orders were not be entered until 28 days after delivery of the reasons for judgment, was that, while the orders other than the costs orders were treated as entered as soon as they were recorded in the computer system, the costs orders that were recorded in the computer system came to be treated as entered 28 days after delivery of the reasons for judgment 54 Rockcote did not file any Notice of Motion seeking to take advantage of UCPR 36.16(3A) within the 14 day period allowed by that subrule. Its submissions, in which it both responded to Mr Finn's submissions, and make its own application for an indemnity costs order in the court below, are dated 30 April 2008. Insofar as it was seeking its own indemnity costs order concerning costs in the court below, that was the type of application that, in accordance with the liberty that had been reserved, needed to be made within 14 days of 28 March 2008. Thus, Rockcote's application for indemnity costs was not made in the exercise of that liberty. Rockcote's application was made at a time when the costs orders had come to be treated as entered, and otherwise than in exercise of the liberty that had been reserved. Under those circumstances, in accordance with Meredith (No 2), this court has no power to make the alteration that Rockcote seeks to the orders that have been entered. 55 Thus, I would not propose to make any alteration to any of the orders that were made.

Costs of This Application 56 Both Rockcote and Ms Carelli seek their costs of the present application. I see no reason why Rockcote should have any costs in relation to its application for a more favourable costs order. Subject to that, there is no reason why costs should not follow the event.

Order 57 The order I propose is: 58 Notice of Motion filed 11 April 2008 dismissed with costs, provided that the costs recoverable by Rockcote shall not include costs attributable to its application for a more favourable costs order. 59 HANDLEY AJA: I agree with Campbell JA. **********

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