Casey by her manager the National Australia Trustees Limited v Pel-Air Aviation Pty Ltd (No 2)

[2016] NSWSC 446

Supreme Court

New South Wales

Medium Neutral Citation:	Casey by her manager the National Australia Trustees Limited v Pel-Air Aviation Pty Ltd (No 2) [2016] NSWSC 446
Hearing dates:	Written submissions
Date of orders:	19 April 2016
Decision date:	19 April 2016
Jurisdiction:	Common Law
Before:	Schmidt J
Decision:	Ms Casey to pay Pel-Air’s costs of the quantification of the damages for funds management, as agreed or assessed.  All exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.
Catchwords:	PROCEDURE – costs – departure from the usual costs order sought – costs on the funds management assessment – no proper basis for any departure from the usual costs order established   PROCEDURE – stay – variation sought to consent orders made – no explanation for proposal – order sought declined
Legislation Cited:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Casey v Pel-Air Aviation Pty Ltd; Helm v Pel-Air Aviation Pty Ltd [2015] NSWSC 566 Casey by her manager the National Australia Trustee Limited v Pel-Air Aviation Pty Ltd [2016] NSWSC 212
Category:	Costs
Parties:	Casey by her manager the National Australia Trustees Limited (Plaintiff) Pel-Air Aviation Pty Ltd (Defendant)
Representation:	Counsel: Mr ER Graham (Plaintiffs) Mr D Lloyd (Defendant)   Solicitors: Everett Evans Solicitors (Penrith) (Plaintiffs) GSG Legal (Defendant)
File Number(s):	2010/385262
Publication restriction:	None

Judgment

1. On 11 March 2016, I gave judgment on an outstanding issue as to the calculation of damages for funds management. Orders were made on the basis for which Pel-Air had contended (see Casey by her manager the National Australia Trustee Limited v Pel-Air Aviation Pty Ltd [2016] NSWSC 212).

2. There was then a disagreement as to costs, with Ms Casey contending that the appropriate order would be that she pay one half of Pel-Air's costs on the funds management issue, as well as the costs incurred from 2 February up to and including 19 February, ordered on 19 February to reflect what had transpired after the hearing.

3. Pel-Air contended that it was entitled to a costs order in its favour on this issue or at least, an order as to 90% of its costs.

4. The parties were heard on the outstanding issue on 16 December 2015, when I reserved subject to receiving a note on certain outstanding matters as to the calculation of damages. As I said in the March judgment, discussions between the parties continued, with the result that those issues were in large measure resolved. What still had to be determined was whether Ms Casey should be paid $872,000, the charge assessed for the funds management National Australia Trustees Limited had been engaged to provide Ms Casey, or $515,173, what the parties agreed NSW Trustee would charge, if it had been engaged.

5. The damages were ordered on the basis of the NSW Trustees’ charge. The usual order under the Uniform Civil Procedure Rules 2005 is that costs should follow the event. On this issue that is an order in favour of Pel-Air.

6. Ms Casey, however, contends that the Court should exercise its undoubted discretion to depart from the usual rule, for two reasons. Firstly, because of an issue between the parties’ experts as to the accounting basis on which the calculations in question should be made, about which the parties reached a compromise, after the hearing. In the result, Ms Casey contended, each party should bear their own costs as to that matter. She conceded that Pel-Air having succeeded otherwise, it should have a costs order in its favour, on the issue of which trustees’ fees should form the basis of the damages award. In the result the “best balance” was submitted to be an order that she pay half of Pel-Air’s costs on the funds management assessment.

7. Pel-Air’s case was that it had served its expert’s report on 16 November, quantifying the fees at $498,585 on a present day value approach and $531,811 on an actual values approach. Ms Casey served her experts’ reports only on 11 and 14 December, shortly before the 16 December hearing. One expert favoured the actual value approach, but did not calculate the damages which would flow on that basis, in either her original or supplementary reports. Ms Casey’s second expert considered that the actual value approach was flawed and not mathematically logical and that the present day value approach did not suffer from this flaw and that the calculation of Pel-Airs’ expert was mathematically correct. This presented obvious difficulties.

8. At the hearing the figure submitted for Ms Casey was $531,811, if the actual values approach was adopted to the calculation of the NSW Trustee’s fees. After the hearing the parties agreed, however, on a figure of $515,173, the result of a splitting of the difference of some $33,226 identified as being in dispute, Pel-Air having contended for the figure of $498,585.

9. There was no suggestion that Pel-Air’s approach to the calculation of the NSW Trustee’s charge, or the case it had advanced at the hearing had been unreasonable or improper. The agreement later reached accorded with the continuing obligations imposed on the parties by s 56 of the Civil Procedure Act 2005 (NSW) to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

10. That agreement was to Ms Casey’s obvious advantage, but did not amount to a substantial capitulation by Pel-Air, nor did it reflect that to that point, it had acted unreasonably. Further, Pel-Air succeeded entirely on the issue the Court was left to decide, whether or not damages should be calculated by reference to the NSW Trustee’s charges, rather than by reference to the fees charged by the trustee which Ms Casey’s tutor had engaged, for undisclosed reasons.

11. Nothing in its conduct, or approach to the determination of this issue, in my view, provides a just basis for any departure from the usual costs order in Pel-Air’s favour.

Stay

12. Pel-Air has appealed the judgment given in favour of Ms Casey in May 2015 (see Casey v Pel-Air Aviation Pty Ltd; Helm v Pel-Air Aviation Pty Ltd [2015] NSWSC 566).

13. By consent on 10 June 2015, I ordered:

1   Judgment for the plaintiff against the defendant in the amount of $4,362,431 plus funds management fees in an amount to be determined.

2   Note that of the judgment sum in order 1 the defendant has already paid the sum of $694,330.75 by way of repayment of workers compensation benefits paid to the plaintiff, in partial satisfaction of the judgment.

3   Payment of $1,168,100 of the judgment and any amount awarded for funds management is stayed pending the resolution of any appeal filed by the defendant.

4   The balance of the judgment sum namely $2,500,000 be paid on or before 24 June 2015.

14. The funds were invested, with the result, no doubt that funds management expenses are now being incurred.

15. By the written submissions advanced on the costs question, Ms Casey also sought a further $295,200 be paid to her, some 57.3% of the order made in her favour for funds management. No explanation for the basis on which such an order would be made has been advanced, by affidavit, or even submission. It was not suggested, for example, that such an amount has already been incurred.

16. Pel-Air objected to such an order being entertained or made, Ms Casey not having put on a motion or supporting affidavit, in circumstances where the funds management order is itself subject to appeal and that if successful, Ms Casey has no entitlement to such an order.

17. In the circumstances I can see no just basis on which the consent orders which the parties earlier agreed can be varied in the terms now sought, absent any explanation at all for what is proposed. Accordingly, I decline to make the order sought.

Orders

18. Accordingly, I order that Ms Casey pay Pel-Air’s costs of the quantification of the damages for funds management, as agreed or assessed.

19. All exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

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Decision last updated: 19 April 2016