Bignell Pty Ltd v Edenden t/a Everdry Waterproofing and Coatings

[2004] NSWSC 288

CITATION:	Bignell Pty Ltd v Edenden t/a Everdry Waterproofing and Coatings [2004] NSWSC 288
HEARING DATE(S):	18/03/04
JUDGMENT DATE:	14 April 2004
JURISDICTION:	Administrative Law List
JUDGMENT OF:	Shaw J at 1
DECISION:	1) No order made for indemnity costs; 2) Costs to be paid on a part/party basis
CATCHWORDS:	Costs - Indemnity Costs - Offer of settlement
LEGISLATION CITED:	Supreme Court Act 1970 (NSW), s76(1)(b) Supreme Court Rules 1970 (NSW), Part 52 rules 17(4) & (5)
CASES CITED:	AJ Bignell Pty Ltd v SG Edenden t/a Everdry Waterproofing and Coatings and 4 ors [2004] NSWSC 27; Ballieu Kight Frank (NSW) Pty Limited v Ted Manny Real Estate Pty Limited (1992) 30 NSWLR 359; Colgate Palmolive Company & Anor v Cussons Pty Ltd (1993) 118 ALR 248; Ettinghausen v Australian Consolidated Press Limited (1995) 38 NSWLR 404; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721; Varga Group Investments No 8 Pty Ltd v Geebung Investments Pty Limited, Abadee J, 15 November 1994 (unreported)
PARTIES :	AJ Bignell Pty Limited (Plaintiff) SG Edenden t/a Everdry Waterproofing & Coatings (First Defendant) PA Edenden t/a Everdry Waterproofing & Coatings (Second Defendant)
FILE NUMBER(S):	SC 30042/2002
COUNSEL:	M. Tzannes (Plaintiff) T. Bland (First & Second Defendant)
SOLICITORS:	Atkins Jones Solicitors (Plaintiff) Lindsay Brien (First & Second Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Shaw J

14 April 2004

30042 of 2002

A J Bignell Pty Limited

v

S G Edenden t/a Everdry Waterproofing and Coatings

&

P A Edenden t/a Everdry Waterproofing and Coatings


JUDGMENT

1 Shaw J: This case, in the administrative law list of this court, involved a contention by the plaintiff (A J Bignell Pty Limited) that an order of the Fair Trading Tribunal of 30 March 2002 should be set aside on the basis that there was an error of law.

2 I held that any error was one of fact rather than law, and that it followed that the appeal by the plaintiff must be dismissed. I went on to say that the plaintiff is to pay the defendants’ costs of the appeal.

3 The respondents (defendants) to the appeal (or at least the first and second thereof) have submitted written submissions to the effect that such costs should be made on an indemnity basis rather than on a party/party basis. Those written submissions were supplied to my associate on 23 April 2004. A contrary set of submissions has been filed by the solicitor for the plaintiff opposing the grant of costs on an indemnity basis.

4 As I apprehended, it has been agreed that this matter should be determined on the basis of the written submissions without any need for an oral hearing. I accede to that proposal.

5 The defendants seeking indemnity costs first drew attention to s 76(1)(b) of the Supreme Court Act 1970 (NSW) stating that “the court shall have full power to determine by whom and to what extent costs are to be paid.” Those seeking indemnity costs rely upon the dissenting judgment of Kirby P (as he then was) in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 as identifying the policy underlying the rules of this court as being that there is “a prima facie entitlement indemnity costs.” It is said that this concept was supported by a majority in the Court of Appeal in Ettinghausen v Australian Consolidated Press Limited (1995) 38 NSWLR 404.

6 Part 52 rules 17(4) & (5) of the Supreme Court Rules make it clear that where there is an offer of compromise made by a party and not accepted by the other party, then, unless the court otherwise orders, the successful party is entitled to an order against the other party taxed on an indemnity basis from the day on which the offer was made.

7 Even in the absence of such a rejected compromise offer, which would improve the position of a plaintiff compared to the result achieved in the court, there remains a discretion in the court to order costs on an indemnity basis. In particular, where there is some element of misconduct, that is to say where the proceedings were maintained for some ulterior purpose or in wilful disregard of known facts or law, where the litigation involves the making of allegations which ought to never have been made, the undue prolongation of a case by groundless contentions or (the particular matter to which I have already referred and which is specified in the rules), the imprudent refusal of an offer of compromise: Colgate Palmolive Company & Anor v Cussons Pty Limited (1993) 118 ALR 248; Varga Group Investments No 8 Pty Limited v Geebung Investments Pty Limited per Abadee J, 15 November 1994 (unreported) citing Powell J in Ballieu Knight Frank (NSW) Pty Limited v Ted Manny Real Estate Pty Limited (1992) 30 NSWLR 359 at 362.

8 The first question, therefore, is whether there was some offer of compromise which had been unreasonably rejected. The defendants rely upon a letter dated 11 November 2002 between the solicitors which had been marked MFI 1 in the proceedings, but which I shall regard as evidentiary in relation to the debate about the nature of costs which should be awarded. That letter focuses wholly and solely upon the inability of the plaintiff to receive a transcript of the relevant tribunal which is described the “Consumer Tenancy and Trader Tribunal”, and the letter goes on to proffer the opinion that without that transcript the appeal must fail. The offer made on that basis was as follows:

i. Your client withdraw its appeal against our client.
ii. You agree to pay our reasonable costs of this matter up to 11 October 2002.
iii. You prepare terms and your representative attend at the Supreme Court and hand up the terms on 22 October.

The letter goes on to say that if that offer is not accepted, then “I am instructed to tender the letter and make an application for indemnity costs against your client.”

9 I would not regard that letter as constituting a proposal for compromise but rather a suggestion that the plaintiff entirely capitulates. Moreover it is misconceived in the sense that the case before me was conducted quite satisfactorily in the absence of a transcript by a co-operative procedure between the parties, and the court was satisfactorily able to determine whether or not there had been an error of law or an error of fact. I do not understand there to have been any serious controversy about the procedural course that was taken on the day of hearing.

10 Apart from that offer of settlement there was no element of the case involving any misconduct or any of the other criteria which have conventionally said to have founded costs awarded on an indemnity basis. The plaintiff is right to say that some important matters were raised in the case and nothing in my judgment indicates that the arguments mounted by the plaintiff were frivolous, vexatious or unarguable. In my view, both parties adopted an appropriate course, indeed a co-operative one, and I simply cannot see any proper basis for the costs awarded against the plaintiff being awarded on an indemnity basis. Even if it be correct to say that the courts are increasingly adopting the concept of indemnity costs, in my opinion this is not an appropriate case for doing so.

11 Accordingly, I dismiss the application for the costs already determined to be specified as being on an indemnity basis and I make an order for costs in favour of the plaintiff against the defendants in respect of this costs argument.

12 I propose to order therefore that the costs in the substantive proceedings should be paid on a party/party basis. The plaintiff should have its costs of these subsequent proceedings in relation to costs on a party/party basis.

**********

Last Modified: 04/14/2004