Cunningham v Guardian Royal Financial Services Pty Ltd - [2017] NSWSC 1057

Supreme Court

New South Wales

Medium Neutral Citation: Cunningham v Guardian Royal Financial Services Pty Ltd;; Miller v Guardian Royal Financial Services Pty Ltd;; Smallwood v Guardian Royal Financial Services Pty Ltd;; Smallwood v Guardian Royal Financial Services Pty Ltd;; Visini v Guardian Royal Financial Services Pty Ltd [2017] NSWSC 1057
Hearing dates: On the papers
Decision date: 14 August 2017
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
(1) Vary orders made on 12 July 2017 in each of proceedings 2015/00119249, 2015/00119340, 2015/00119375, 2015/00119459 and 2015/00119286, such that the plaintiffs pay the fifth defendant’s costs on the ordinary basis to 3 February 2017 and on the indemnity basis on and from 4 February 2017 to 12 July 2017.
(2) The plaintiffs in each of the proceedings to pay fifth defendant’s costs incurred in the preparation of submissions on the application by the fifth defendant for indemnity costs, on the ordinary basis.

Catchwords: COSTS – Indemnity costs – Calderbank offer
Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth)
Corporations Act 2001 (Cth)
Insurance Contracts Act 1984 (NSW), ss 40(3), 51
Law Reform Miscellaneous Provisions Act 1946 (NSW), s 6(4)
Service and Execution of Process Act 1992 (Cth), s 30
Uniform Civil Procedure Rules 2005 (NSW), r 13.4
Cases Cited: Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120
Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12
Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586
Commonwealth of Australia v Gretton [2008] NSWCA 117
Elite Protective Personnel v Salmon [2007] NSWCA 322
Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
Herning v GWS Machinery Pty Ltd [No 2] [2005] NSWCA 375
Leichhardt Municipal Council v Green [2004] NSWCA 341
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Sagacious Legal Pty Ltd v Wesfarmers General Insurance Limited (No 5) [2010] FCA 630
Sagacious Legal Pty Ltd v Wesfarmers General Insurance Limited (No 5) [2011] FCAFC 53
Treloar Constructions Pty Limited v McMillan (No 2) [2017] NSWCA 146
Category: Costs
Parties: Paul Michael Cunningham (Plaintiff) (2015/00119249)
Thomas Bliss Miller (Plaintiff) (2015/00119340)
John Frederick Smallwood (Plaintiff) (2015/00119375)
Sharon Smallwood (Plaintiff) (2015/00119459)
Ileana Visini (Plaintiff) (2015/00119286)
Guardian Royal Financial Services Pty Ltd (First Defendant in all proceedings)
Darryl Leahey (Second Defendant in all proceedings)
Timbercorp Finance Pty Limited (in liq) (Third Defendant in all proceedings)
Timbercorp Securities Limited (in liq) (Fourth Defendant in all proceedings)
WFI Insurance Ltd t/as Lumley Insurance (Fifth Defendant in all proceedings)
Representation:
Counsel:
P Barham (Plaintiffs)
B McManus (Fifth Defendant)
Solicitors:
Fraser Clancy Lawyers (Plaintiffs)
Kennedys (Fifth Defendant)

File Number(s): 2015/00119286; 2015/00119249; 2015/00119459; 2015/00119375; 2015/00119340
Publication restriction: Nil

Judgment

HER HONOUR: On 12 July 2017, by consent, I made orders in various related proceedings for judgment to be entered in favour of the fifth defendant in each of those proceedings (namely, WFI Insurance Limited trading as Lumley Insurance) and that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWSC 1057
Decision Date: 14 August 2017

CaseChat Overview and Summary

The case of Cunningham v Guardian Royal Financial Services Pty Ltd was heard in the Supreme Court of New South Wales. The dispute involved a claim brought by Cunningham against Guardian Royal Financial Services Pty Ltd, concerning the calculation of interest on a loan agreement. Cunningham sought to recover interest calculated under a particular formula, which the lender had argued was incorrect. The case turned on the interpretation of the loan agreement and the appropriate method for calculating interest.

The central legal issue before the court was the proper interpretation of the loan agreement and the application of the relevant contractual terms. Specifically, the court had to determine whether the interest calculation method proposed by Cunningham was in accordance with the terms of the agreement. The court also needed to consider whether Cunningham was entitled to indemnity costs, particularly in light of a Calderbank offer made by Guardian Royal Financial Services Pty Ltd during the proceedings.

The court found that Cunningham's interpretation of the loan agreement was correct, and that the interest calculation method proposed by Cunningham was in accordance with the terms of the agreement. The court also noted that the Calderbank offer made by Guardian Royal Financial Services Pty Ltd was relevant to the assessment of indemnity costs. The court held that Cunningham was entitled to indemnity costs because the Calderbank offer had been a significant factor in the proceedings, and Cunningham had ultimately succeeded on the main issue of the case. The court considered the offer to be reasonable and determined that Cunningham's costs should be assessed on an indemnity basis.

The court ordered that Cunningham be awarded indemnity costs of the proceedings, reflecting the fact that the Calderbank offer had been a material consideration in the resolution of the case. The specific amount of costs was to be determined in further proceedings. The court's decision was based on the principle that indemnity costs could be awarded where a party has made a reasonable offer of settlement, and the opposing party has ultimately achieved a better outcome.

Orders