Collegians' Rugby League Football Club Limited v McDonald (No. 2)

[2003] NSWCA 191

CITATION:	Collegians' Rugby League Football Club Limited v McDonald (No. 2) [2003] NSWCA 191
HEARING DATE(S):	09/07/03
JUDGMENT DATE:	8 September 2003
JUDGMENT OF:	Beazley JA; Ipp JA; Tobias JA
DECISION:	The Court proposes that each party pay his and its own costs of the appeal, including the application for costs.
CATCHWORDS:	Costs - Offer of Compromise - Calderbank offer Consent orders - error in lower court judgment
LEGISLATION CITED:	Diamond v. Simpson (No. 2) [2003] NSWCA 78 Moore v Woodforth (No. 2) [2003] NSWCA 46
PARTIES :	Collegians' Rugby League Football Club Limited (Appellant) Mark McDonald (Respondent)
FILE NUMBER(S):	CA 41247/02
COUNSEL:	C Hoeben SC (Appellant) M Williams SC (Respondent)
SOLICITORS:	Moray & Agnew (Appellant) Maguire & McInerney (Respondent)

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 108/01
LOWER COURT JUDICIAL OFFICER :	Goldring DCJ

CA41247/02
DC108/01

BEAZLEY JA
IPP JA
TOBIAS JA

8 September 2003

COLLEGIANS’ RUGBY LEAGUE FOOTBALL CLUB LIMITED v MCDONALD (No. 2)

Judgment

1 THE COURT: The appellant filed a notice of appeal without appointment on 24 December 2002, appealing from the decision of Goldring DCJ in which His Honour awarded damages to the respondent in the sum of $376,475.62. On 24 March, the appellant filed its notice of appeal with appointment. Pursuant to consent orders subsequently filed with this Court the judgment of Goldring DCJ was set aside and in lieu thereof there was a judgment for the respondent in the amount of $256,222.81.

2 This Court then heard oral argument as to costs, a matter left unresolved by the consent orders. Both parties claimed to be entitled to an order for costs. It is necessary to review the history of the litigation and the settlement negotiations in the matter to determine the appropriate costs order to be made.

On 28 October 2002, a month before the hearing of the action, the respondent served an offer of compromise on the appellant for $170,000 plus costs.

The hearing before Goldring DCJ commenced on 29 November 2002. On 6 December Goldring DJC gave judgment in favour of the respondent in the sum of $376,475.62. The appellant was ordered to pay the respondent’s costs on a solicitor/client basis.

On 24 December 2002 the appellant filed its notice of appeal without appointment.

On 13 March 2003, the appellant made an offer of compromise of $220,000 including costs. This offer was expressed as a “bottom line figure”; the respondent’s counsel described this offer as a “non-negotiable ultimatum” .

On 24 March 2003, the notice of appeal with appointment was filed.

On 15 May 2003, the appellant’s submissions were filed. The appellant’s supplementary submissions were filed on 6 June 2003. The respondent’s submissions were filed on 13 June 2003.

On 17 June 2003, a Calderbank offer was sent to the appellant, offering a settlement of $256,000, plus interest on the unpaid portion of the verdict, plus costs.

On 4 July 2003, a Calderbank letter was sent to the respondent, offering $256,222.81. This offer was accepted and formed the basis of the consent orders.

3 It was conceded by the parties that Goldring DCJ had erred in calculating future economic loss on the basis that the respondent would have worked until age 65. The respondent’s claim was only ever advanced on the basis that he would work until age 60. It was the rectification of this error that led to the consent orders being filed with the Court and it was the only matter that caused the damages to be reduced.

4 In oral argument, senior counsel for each of the parties accepted that it was not until 24 March 2003, when the notice of appeal with appointment was filed, that the error in Goldring DCJ’s judgment was identified. Senior counsel for the appellant also accepted that the error was not fully articulated until 15 May 2003, when its submissions were filed. The respondent conceded the error in its submissions filed on 13 June 2003.

5 As at 13 June, however, the appellant’s notice of appeal included grounds that were far more extensive than this one error. The appellant challenged the entire award as being excessive and made a specific challenge to the Trial Judge’s assessment of future economic loss alleging that his Honour failed to consider the respondent’s residual earning capacity. As late as 11 June 2003, the appellant amended its Notice of Grounds of Appeal to include a ground that his Honour erred in failing to assess the respondent’s future earning capacity on the basis of the loss of a chance.

6 The respondent submitted that in the circumstances, notwithstanding that the appellant had succeeded in having the award of damages reduced, the appellant should be ordered to pay the costs of the appeal on a party/party basis. He submitted that such an order was justified because on 28 October 2002, prior to the commencement of the proceedings he had made an offer of compromise of $170,000 plus costs. After judgment was delivered, the appellant, with a substantial verdict against it, sought to settle the proceedings in a preemptory fashion, in a sum which was about equivalent to the respondent’s pre-trial offer. There was no recognition in this offer of the success the respondent had had at trial, nor any indication as to why the verdict should be so drastically reduced.

7 The respondent also submitted that once he received the specific grounds of appeal and the submissions, he was entitled to consider the specific matters raised therein before formulating his own position, and argued that he made the “frankest of concessions” in relation to the error in the judgment in a timely manner. As senior counsel for the respondent said: “the global picture here is one where the respondent has been immaculate in all regards”, whereas the appellant had persisted in pursuing all its grounds of appeal both in its submissions and supplementary submissions, including by filing the amended notice of appeal to which we have referred.

8 The appellant conceded that the respondent’s concession in his submissions was made in a timely manner after receipt of the appellant’s submissions. The appellant however submitted that from the time the notice of appeal with appointment was filed, or at least from the time its written submissions were filed on 15 May, and the error in Goldring DCJ’s judgment was apparent, there was some onus on the respondent to make a concession that there needed to be an adjustment in the judgment. It had not done so until 13 June 2003. This submission was somewhat at odds with the appellant’s acceptance that the respondent’s concession as to the error was made in a timely manner after receipt of the submissions. In the final analysis, the appellant’s submission was essentially that it had been successful on the appeal and accordingly it was entitled to its costs: see Diamond v Simpson (No 2) [2003] NSWCA 78; Moore v Woodforth (No 2) [2003] NSWCA 46.

9 Counsel for the appellant advanced an alternative position that if it was unsuccessful in having an order for costs made in its favour, a “midway position” that would appropriately address the competing claims of each party was that each party pay his and its own costs. The respondent, did not however, embrace this alternative.

10 The appellant was successful on the appeal. The verdict against it was reduced by $120,000. However, its ultimate success needs to be understood in a context where the appellant was actively pursuing other grounds of appeal, and it was the respondent’s concession and his offer of compromise of 17 June which were instrumental in achieving the settlement of the matter. The respondent had acted reasonably throughout the litigation but was awarded damages in an amount that involved error. The amount involved in that error was not insubstantial and the appellant was entitled to have the error rectified. However, it continued to pursue an even greater reduction of the verdict against it, a challenge that was ultimately abandoned. In all the circumstances it seems that the appellant’s ‘fall back’ position is appropriate and one that the Court, in its discretion, should adopt. Accordingly, we would propose that each party pay his and its own costs of the appeal, including the application for costs.

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Last Modified: 09/15/2003