Swire Pacific Ship Management (Australia) Pty Ltd v Bose

REASONS FOR JUDGMENT 1 On 15 April 2014, I dismissed the applicant's appeal on a question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). 2 At the time that I delivered my reasons, the respondent advised the Court that he wished to make submissions on the question of indemnity costs. I gave directions for the filing of affidavits and submissions in relation to that question. 3 The respondent relied on the affidavit of Mr David Thomas Trainor. The affidavit annexed a letter dated 27 August 2013 from the respondent's solicitors to the applicant's solicitors. The letter relevantly states as follows: I refer to the appeal herin. As you are aware your client's appeal is limited to questions of law. We do not believe that your Notice of Appeal identifies any error of law which would warrant correction by the Federal Court. We are instructed by our client to advise that he would be prepared to resolve the current appeal to the Federal Court on the following terms: 1. The appeal be dismissed. 2. Each party bear its own costs of the appeal. 4 The letter was expressed to be a Caldberbank offer and was said to remain open for acceptance until 4:00 pm on 13 September 2013. 5 The appeal was filed on 7 June 2013. By the time offer was made there had been a directions hearing on 25 July 2013, which the respondent attended by telephone. At that directions hearing, I drew the applicant's attention to the requirement that an appeal under s 44 of the AAT Act was to be confined to an appeal on a question of law. The applicant subsequently amended its notice of appeal. 6 Needless to say the applicant did not accept the offer and lost the appeal. The respondent contends that in those circumstances the Court should order that the costs of the appeal from 27 August 2013 be on an indemnity basis and that the costs prior to that date be on a party-and-party basis. 7 The first issue in considering whether to exercise the discretion to depart from the usual order for costs following the refusal of a Calderbank offer to compromise is whether the offer involved a real and genuine element of compromise. In The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120 it was said that an offer which did not involve a real and genuine element of compromise would not be taken into account in relation to costs. 8 The offer made by the respondent in this case is sometimes referred to as a "walk away" offer. Whether a "walk away" offer is to be construed as a genuine offer of compromise will depend upon the circumstances of the litigation in question. Thus, there have been cases where in complex litigation an offer to forego costs demonstrates a real and genuine offer to compromise by reason of the extent of the costs which have been incurred. However, in my view, this is not such a case. No evidence was given as to the costs that had been incurred by the time the offer was made. However, in my view, it is unlikely that the costs would have been significant because all the respondent had done was to attend a short directions hearing by telephone. The costs that the respondent was offering to give up in exchange for the applicant giving up its right of appeal were so small that it could not be said that the offer involved any real give and take. In my view, the position in this case is similar to that in Brookfield Multiplex Limited v International Litigation Funding Partners Pte Ltd (No 4) [2009] FCA 803, where the offer was made before much work had been done by the offeror, and where Finkelstein J declined to award indemnity costs. I find that the respondent's offer of 27 August 2013 did not involve a real and genuine element of compromise. 9 Accordingly, I will order that the applicant pay the respondent's costs of the appeal on a party-and-party basis. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.