Crossman v Sheahan (No 2)

Case [2016] NSWCA 351

Court of Appeal


Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Crossman v Sheahan (No 2) [2016] NSWCA 351
Hearing dates:On the papers
Decision date: 13 December 2016
Before: Basten JA; Ward JA; Payne JA
Decision:

1. Vary order 1 of the orders made on 23 August 2016 and add a new order 1A as follows:
1.   Appeal allowed.
1A.   Order the first and second respondents to pay the appellants’ costs of the appeal:
a. on an ordinary basis until 11 April 2016; and
b. on an indemnity basis from 12 April 2016.
2. There be no order as to the costs of the notice of motion filed on 7 September 2016 by the appellants.

Catchwords: COSTS – indemnity costs – Calderbank offers – application with respect to trial – whether compromise or capitulation offered – application with respect to appeal – reliance on offers made before trial – further offer before hearing of appeal – whether reasonable time allowed – relevance of ongoing negotiations – whether unreasonable for respondents not to accept offers
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A, 42.19(2), Pt 42
Cases Cited: Calderbank v Calderbank [1976] Fam 93
Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404
Grace v Thomas Street Café Pty Ltd (No 2) [2008] NSWCA 72
Grbavac v Hart [1997] 1 VR 154
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Old v McInnes [2011] NSWCA 410
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA
Category:Costs
Parties: Phillip Crossman (First Appellant)
Seniors Provident Pty Ltd (Second Appellant)
Metro Finance Pty Ltd (Third Appellant)
Metro Finance (NZ) Pty Ltd (Fourth Appellant)
John Sheahan (First Respondent)
Ian Lock (Second Respondent)
Valofo Pty Ltd (in liq) (Third Respondent)
Ross Seller (Fifth Respondent)
Peter Londish (Sixth Respondent)
Representation:

Counsel:
Dr AS Bell SC with DFC Thomas (Appellants)
JE Marshall SC with DR Sulan (First and Second Respondents)

  Solicitors:
Corrs Chambers Westgarth (Appellants)
Clayton Utz (First, Second and Third Respondents)
File Number(s):2015/221882
Publication restriction:Nil
 Decision under appeal 
Court or tribunal:
Supreme Court of New South Wales
Jurisdiction:
Equity – Commercial List
Citation:
[2015] NSWSC 535; [2015] NSWSC 871
Date of Decision:
06 May 2015
Before:
Rein J
File Number(s):
2013/127413

Judgment

  1. THE COURT: In this matter, on 23 August 2016 the Court allowed with costs the appellants’ appeal from a decision in the Equity Division of the Supreme Court. The Court set aside the orders made by the primary judge and in lieu thereof dismissed the further amended commercial list summons filed by the respondents, as plaintiffs, in those proceedings and ordered that the first and second plaintiffs pay the costs of the third, fourth, fifth and ninth defendants in those proceedings.

  2. On 7 September 2016, the appellants filed a notice of motion in this Court seeking costs orders on an indemnity basis in respect of the…

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AGLC
Crossman v Sheahan (No 2) [2016] NSWCA 351
Case
[2016] NSWCA 351
Decision Date

CaseChat Overview and Summary

The case of *Crossman v Sheahan (No 2)* concerned an application for indemnity costs following an appeal. The appellants sought to recover their costs of the appeal on an indemnity basis from a certain date, relying on offers made during the course of the litigation. The respondents argued against this, contending that the offers were not sufficiently clear or that insufficient time was given to consider them. The appeal was heard by Basten, Ward and Payne JJA in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the offers made by the appellants constituted a compromise or capitulation that the respondents unreasonably refused, and whether the timing and nature of these offers justified an award of indemnity costs for the appeal. Specifically, the court had to consider the reasonableness of the respondents' refusal to accept offers made before the trial and a further offer made shortly before the hearing of the appeal, taking into account the ongoing negotiations and the time allowed for acceptance.

The Court of Appeal found that the appellants' offers, particularly the one made on 11 April 2016, were of a nature that the respondents ought to have accepted. The court reasoned that the offer represented a genuine attempt to compromise the litigation and that the respondents' refusal to accept it was unreasonable, especially in light of the subsequent outcome of the appeal. The court applied the principles governing *Calderbank* offers, considering whether the offer was a reasonable one to accept and whether the party refusing it had acted reasonably in doing so.

Consequently, the Court of Appeal varied the earlier costs orders. The appeal was allowed, and the first and second respondents were ordered to pay the appellants’ costs of the appeal on an ordinary basis until 11 April 2016, and thereafter on an indemnity basis from 12 April 2016. There was no order as to the costs of a subsequent notice of motion filed by the appellants.

Orders

Orders of the court

1. Vary order 1 of the orders made on 23 August 2016 and add a new order 1A as follows:

1. Appeal allowed.

1A. Order the first and second respondents to pay the appellants’ costs of the appeal:

a. on an ordinary basis until 11 April 2016; and

b. on an indemnity basis from 12 April 2016.

2. There be no order as to the costs of the notice of motion filed on 7 September 2016 by the appellants.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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