The Owners of Strata Plan No 3397 v Tate

Civil Procedure Act 2005 LEGISLATION CITED: Strata Schemes Management Act 1996 Suitors' Fund Act 1951 Uniform Civil Procedure Rules 2005

CASES CITED: The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207

PARTIES: The Owners of Strata Plan No 3397 (Appellant / Cross-Respondent) Warwick Bannister Tate (Cross-Appellant / Respondent)

COUNSEL: G A Sirtes (Appellant / Cross-Respondent) M D Young (Cross-Appellant / Respondent)

SOLICITORS: Robinson & Davies Pty Ltd (Appellant / Cross-Respondent) Andreones (Cross-Appellant / Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40921 of 2005

MASON P McCOLL JA HARRISON J

9 April 2008 The Owners of Strata Plan No 3397 v Warwick Bannister Tate (No 2) Judgment THE COURT 1 Judgment in the original appeal to this Court was delivered on 16 August 2007: see [2007] NSWCA 207. The Court made the following orders: (1) Appeal allowed with costs.

(3) Judgment and orders of Rolfe DCJ of 17 November 2005, save order 3(c) be set aside.

(4) In lieu thereof, judgment for the respondent for $18,758.14 plus interest, such interest to run from the date of the overpayments.

(5) Appellant to pay one-quarter of the respondent's costs of the trial before Rolfe DCJ, and, pursuant to s 229 of the Strata Schemes Management Act 1996 , such costs to be payable by contributions levied in relation to lots other than lots owned by the respondent.

(6) Respondent to pay three quarters of the appellant's costs of the trial before Rolfe DCJ.

(7) The appellant and the respondent to have a certificate under the Suitors' Fund Act 1951 if otherwise entitled.

2 On the following day the respondent filed a Notice of Motion seeking orders in these terms: 1. Pursuant to rule 36.17 of the Uniform Civil Procedure Rules the orders of the Court of Appeal proclaimed on 16 August 2007 be corrected by amending order 3 to read:

"3. Judgment and orders of Rolfe DCJ of 17 November 2005, save so much of the judgment as relates to $26,659.47 and orders 2, 3(b) and 3(c), be set aside.

4. In lieu thereof, judgment for the respondent for $45,417.61 plus interest, such interest to run from the date of overpayment, and such judgment pursuant to section 229 of the Strata Schemes Management Act 1996 is to be paid by contributions levied only in relation to lots other than lots owned by the Respondent."

2. Any such other or further order as the court deems fit.

3. Costs of this application be each party's costs.

3 The respondent filed submissions in support of the Notice of Motion on 5 September 2007. Attached to those submissions was a proposed Amended Notice of Motion. The orders sought in that document are relevantly in the following terms: 1. Pursuant to s 98(3) Civil Procedure Act NSW (2005) and rule 36.16 (or alternatively 36.17) of the Uniform Civil Procedure Rules NSW (2005) the orders of the Court of Appeal proclaimed on 16 August 2007 be corrected by amending order 3 to read:

"3. Judgment and orders of Rolfe DCJ of 17 November 2005, save so much of the judgment as relates to $26,659.47 and orders 3(b) and 3(c), be set aside.

4. In lieu thereof, judgment for the respondent for $45,417.61 plus interest, such interest to run from the date of overpayment, and such judgment pursuant to section 229 of the Strata Schemes Management Act 1996 is to be paid by contributions levied only in relation to lots owned by the Respondent."

"5. The appellant to pay the respondent's costs below." 4 The appellant filed written submissions dated 3 October 2007. It did not oppose the amendment to the respondent's Notice of Motion or the making of proposed order 4, which amendment is intended to correct an arithmetical error appearing in order 4 made by this Court on 16 August 2007. Having regard to the agreement reached by the parties about that amendment, which does not raise any matter of principle, it is unnecessary to comment further upon it. In contrast, the proposed deletion of orders 5 and 6 as originally made by this Court, and the substitution of proposed order 5, is a matter of controversy between them and is opposed by the appellant. The discussion that follows is limited to that issue. Discussion 5 The respondent submitted that this Court's original order as to the costs below should be revisited because it was arguably based upon a view of the respondent's success below that was, or may have been, infected by an inappropriate or unjustified consideration of the arithmetical error already mentioned. In other words, if this Court's orders, that the appellant pay one quarter of the respondent's costs, and that the respondent pay three quarters of the appellant's costs, of the proceedings below were influenced by a consideration that the respondent recovered only $18,758.14, as opposed to $45,417.61, the orders were made upon a misapprehension about the degree of success of the respondent and were thereby vulnerable to review. 6 The submissions for the respondent put the issue in the following terms: "5. It follows that if the Court of Appeal (as it must have done) when considering the judgment figure overlooked the fact that part of the judgment below (the part of the judgment relating to the $26,659.47 and the interest on such sum) stood and had not been appealed from, it must also have overlooked the same fact when it came to consider the issue of costs below." 7 The respondent's submissions went on to suggest that this Court had "clearly made its determination on that issue [that is, the question of costs below] on a false premise". The respondent's submissions listed the following matters as relevant considerations to be taken in to account on this issue: 7.1 That, following adjustment (see above), the respondent as the plaintiff below was entitled to judgment in the sum of $45,417.61 plus interest from the respective dates of the overpayments;

7.2 That there was no concession by the appellant in its defence below or in its final submissions that the respondent had any entitlement at all;

7.3 That there was no relevant offer of compromise or Calderbank offer from the appellant;

7.4 That the respondent completely succeeded on its claim for $26,659.47;

7.5 That even on the issue the subject of its success in this Court, the appellant had not calculated the levies in the way that this Court found it should have but in a manner involving a double count, which led to the overcharging of the $18,758.14 (conceded by the appellant's counsel in this Court but not by its counsel in the court below);

7.6 That, as corrected by this Court in its judgment on the cross appeal, the respondent was entitled to interest on the overpayments from the date of receipt of the overpayments by the appellant; and

7.7 That the respondent had made an offer of compromise of $60,000 exclusive of costs which was slightly above the true entitlement of the respondent at the date of the offer ($57,703.75) but was below its entitlement by the date of judgment below ($61,469.41). 8 In short, the respondent submitted that he had to come to the court below to recover his $45,417.61 plus interest from the date of overpayment and that in the circumstances of the case he should be entitled to his costs below, at least on the party and party basis, with a s 229(2) Strata Schemes Management Act order. 9 The appellant relied upon the following contentions in response to the respondent's claim for costs: 9.1 Section 98(3) of the Civil Procedure Act 2005 did not apply to the respondent's motion because it is concerned with the timeframe in which costs orders can be made and not with the correction of orders once made. The respondent's motion seeks to change the existing costs order and s 98(3) gives him no entitlement to do so;

9.2 UCPR 36.16 has no application to the present circumstances. None of the matters dealt with in the respondent's written submissions has any connection with the circumstances set forth in rules 36.16 (2) (a), (b) or (c) or 36.16 (3);

9.3 The respondent wishes in effect to reopen his case on the issue of costs and ought not to be permitted to do so as this would be contrary to the substantial interest in maintaining the finality of litigation;

9.4 There is in any event no error that enlivens the slip rule under rule 36.17. Any failure by this Court to make allowance for the judgment of Rolfe DCJ in the court below (which was not contested on appeal) does not translate into the making of any different costs order. The allegation that this Court "must have overlooked the matter" when determining costs is unjustified;

9.5 Counsel for the respondent knew during the hearing that the appellant's position was that the respondent was entitled to $45,417.61 and yet made no submission as to costs other than those already in his submissions at Orange AB 13 L-Q. No submission was made about the proportional costs order proposed by the appellant and the power to vary a judgment ought not to be exercised in favour of a party that has failed to raise the matter at an earlier stage;

9.6 None of the matters set forth in par [7] above was raised in this Court either orally at the hearing of the appeal or in written submissions upon which the respondent relied. Those submissions were first made on 5 September 2007 without explanation as to why that was so;

9.7 The respondent's submissions say nothing at all about Harrison J's observations at [131] of the Court's judgment, as follows:

"[131] . . However, the appellant's Notice of Appeal asked for an order that the respondent pay three quarters of the appellant's costs of the trial, presumably based upon an estimation of the time occupied by the issue of interpretation of the by-law. Counsel for the respondent did not propose a smaller proportion. In my opinion, those proportions are appropriate."

9.8 The analysis on costs undertaken by the respondent, and summarised at par [7] above, proceeds upon a completely different basis to that which informed the appellant's original argument. The orders proposed by the appellant were based upon the time occupied at the hearing dealing with issues concerning the interpretation of the by-law. The respondent's proposition, that because the judgment of this Court contained an arithmetical error it necessarily equated to an entitlement to a different costs order, failed to have regard to the basis upon which the order was made - namely, that most of the time occupied in the court below concerned an issue upon which the respondent lost. The appellant's concession of a further $18,758.14 in this Court had no impact on the length of the hearing in the court below and has no role now to play in any costs argument concerning the proceedings in that court. Consideration 10 The appellant's proposition outlined at par [9.8] above accurately encapsulates the basis upon which the costs order in question was made by this Court. The respondent has not established that anything flowing from the arithmetical error in this Court's order should somehow operate to displace the significant fact that the principal issue upon which the proceedings in the court below were conducted was the interpretation of By-law 21. So much is apparent from the reasons for judgment of Rolfe DCJ and from the judgment of this Court. The correction of the arithmetical error does not give rise to an opportunity, let alone a requirement, for this Court to revisit any other orders made at the same time. 11 The respondent contended that the costs of the present application should be each party's costs in the appeal. The appellant sought an order that the respondent pay its costs of the application upon an indemnity basis. In all the circumstances the appropriate order is that the parties should pay their own costs of or incidental to the motion. Conclusion 12 In the circumstances, the Court makes the following orders:

(1) The parties are directed within 14 days to bring in Short Minutes of Order reflecting these reasons.

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