Commonwealth of Australia v Ryan (No 2)

[2002] NSWCA 386

CITATION:	Commonwealth of Australia v Ryan (No 2) [2002] NSWCA 386 revised - 18/12/2002
FILE NUMBER(S):	CA 40195/02
HEARING DATE(S):	(On written submissions)
JUDGMENT DATE:	6 December 2002
PARTIES :	Commonwealth of Australia - Appellant David William Ryan - Respondent
JUDGMENT OF:	Beazley JA; Giles JA; Hodgson JA

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	CLD 20844/96
LOWER COURT JUDICIAL OFFICER :	Newman AJ

COUNSEL:	R S McIlwaine SC & D J Brogan - Appellant F M Douglas QC & W D H Walsh - Respondent
SOLICITORS:	Australian Government Solicitor, Sydney - Appellant James Taylor & Co, Myrtleford, Victoria - Respondent
CATCHWORDS:	Costs - Calderbank offer made by respondent - appeal dismissed - application for indemnity costs - no real element of compromise - application refused. ND
CASES CITED:	Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.
DECISION:	Application dismissed with costs.

CA 40195/02
SC 20844/96

BEAZLEY JA
GILES JA
HODGSON JA

Friday, 6 December 2002

THE COMMONWEALTH OF AUSTRALIA v RYAN (No 2)

Judgment

1 THE COURT: We gave judgment in this appeal on 21 November 2002 ([2002] NSWCA 372). We ordered that the appeal be dismissed with costs. The respondent orally applied for an order that the costs be on an indemnity basis. Written submissions were directed, and were received.

2 The jury returned its verdict on 21 February 2002, assessing damages at $780,000 exclusive of interest. There was argument over interest on the 26 February 2000. On that date judgment was given for the respondent for $1,222,904.97, together with an order for party and party costs up to and including 7 November 2000 and on an indemnity basis thereafter except for 26 February 2002; as to 26 February 2002, costs were payable on a party and party basis. The appeal papers did not disclose the reason for the costs on an indemnity basis after 7 November 2000, but presumably it was to do with an offer to accept a lesser sum exclusive of interest than the jury awarded.

3 The respondent obtained his judgment on 26 February 2002. The appellant filed its notice of appeal without appointment on 20 March 2002. By a Calderbank letter dated 27 March 2002 the respondent made an offer of settlement open for 14 days thereafter. The offer was not accepted. The appellant filed its notice of appeal setting out the grounds of appeal on 26 April 2002, and the appeal was in due course heard.

4 The offer was to accept in full and final settlement -

“ … the payment of $1,170,000.00 plus indemnity costs to the date of judgment being 21 February 2002 and payment of the Plaintiff’s party/party costs from 26 February 2002 being the date His Honour entered judgment”.

5 The respondent submitted that the appellant acted unreasonably in not accepting the offer because -

(a) the appeal had little or no prospects of success;

(b) there was no uncertain principle of law in the appeal as to which the appellant wanted clarification; and

(c) the 14 days allowed was sufficient for the appellant to consider whether the offer should be accepted.

6 These submissions had overtones of indemnity costs because the appellant should have known that the appeal had no chance of success (see for example Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401), rather than reliance on the Calderbank letter. We do not think that the appeal was without arguable merit.

7 The Calderbank letter involved a reduction of $52,904.97 in the judgment sum, but an addition of the difference between party/party costs and indemnity costs up to and including 7 November 2000. The appellant submitted that it must have been obvious to the respondent that the indemnity costs in the offer were only from 7 November 2000: that is not what the offer says. The proceedings had been on foot since August 1996. The appellant was not told, and was not in a position to know within the 14 days, what the additional costs might be. Perhaps it is unlikely that they would have been as much as $52,904.97, but the uncertainty was there. Further, the additional costs meant that the already marginal reduction in the amount payable by the appellant, in comparison to the nil or much reduced amount which would be payable if the appeal succeeded, was even less significant. There was really not an element of compromise in the respondent’s offer: it was little more than an invitation to the appellant to abandon its appeal.

8 In these circumstances, we do not think that a case has been made out for costs on an indemnity basis. The application is dismissed with costs.

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