Director of Public Prosecutions (Cth) v Della-Vedova (No 2)

[2010] NSWSC 192

CITATION:	Director of Public Prosecutions (Cth) v Della-Vedova (No 2) [2010] NSWSC 192
HEARING DATE(S):	5 March 2010
JUDGMENT DATE :	18 March 2010
JUDGMENT OF:	Harrison J
DECISION:	No order as to costs. Parties to bear their own costs of and incidental to the proceedings.
CATCHWORDS:	COSTS – plaintiff successfully sought superannuation order pursuant to Crimes (Superannuation Benefits) Act 1989 (Cth) s 19 – where plaintiff seeks no order for costs against the defendant – where defendant seeks an order for costs against the plaintiff from date of offer of settlement – defendant's offer of settlement contained ambiguity causing misunderstanding between the parties which the defendant should have corrected – no order as to costs.
LEGISLATION CITED:	Crimes (Superannuation Benefits) Act 1989
CATEGORY:	Consequential orders
CASES CITED:	Director of Public Prosecutions (Cth) v Della-Vedova [2010] NSWSC 8
PARTIES:	Director of Public Prosecutions (Cth) (Plaintiff) Shane Malcolm Della-Vedova (Defendant)
FILE NUMBER(S):	SC 12440/2009
COUNSEL:	C P O'Donnell (Plaintiff) J P Lo Schiavo (Defendant)
SOLICITORS:	Commonwealth Director of Public Prosecutions (Plaintiff) Thomas Henry Bray Lawyer (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HARRISON J

18 March 2010

12440/2009 Director of Public Prosecutions (Cth) v Shane Malcolm Della-Vedova

JUDGMENT

1 HIS HONOUR: On 27 January 2010 I published my reasons for judgment in the principal proceedings: see [2010] NSWSC 8. I directed the parties to bring in short minutes of order to reflect my decision. That occurred on 5 March 2010 when the question of costs was also argued. These reasons are limited to a consideration of that issue.

2 The plaintiff successfully sought a superannuation order against the defendant pursuant to s 19 of the Crimes (Superannuation Benefits) Act 1989 (Cth). The orders that I made were as follows:

"The Court:

1. Declares pursuant to section 19(1)(a) of the Crimes (Superannuation Benefits) Act 1989 ('the Act'), that Shane Malcolm DELLA-VEDOVA ('the Defendant') was convicted in the District Court of New South Wales of one offence against subsection 7(1) of the Weapons Prohibition Act 1998 (NSW), and one offence against subsection 131.1(1) of the Criminal Code Act 1995 (Cth) being corruption offences within the meaning of the Act.

2. Declares pursuant to section 19(1)(b) of the Act, that Part 2 of the Act applies in relation to the rights of, and benefits paid or payable to or in respect of, the Defendant under the superannuation scheme established by the Commonwealth of Australia pursuant to the Superannuation Act 1990 and known as the Defence Force Retirement and Death Benefits Scheme ('DFRDBS') for the period of membership between 21 June 1999 and 10 August 2008.

3. Declares pursuant to section 19(1)(b) of the Act, that Part 2 of the Act applies in relation to the rights of, and benefits paid or payable to or in respect of, the Defendant under the superannuation scheme established by the Commonwealth of Australia pursuant to the Defence Force (Superannuation) (Productivity Benefit) Determination issued under section 52 of the Defence Act 1903 (Cth) and known as the Productivity Benefits Scheme ('PBS'), for the period of membership between 21 June 1999 and 10 August 2008.

4. Specifies pursuant to section 19(4)(a) of the Act, the amount which reflects the value of the sum of the employer contributions or benefits made by the Commonwealth in respect of the Defendant under the DFRDBS, for the period of membership between 21 June 1999 and 10 August 2008, that have been paid to the Defendant by the DFRDBS as at the day on which this order is made (plus interest on those contributions or benefits accrued under the DFRDBS) is $55,825.54 ('the DFRDBS amount').

5. Specifies pursuant to section 19(4)(a) of the Act, the amount which reflects the value of the sum of the employer contributions or benefits made by the Commonwealth in respect of the Defendant under the PBS, for the period of membership between 21 June 1999 and 10 August 2008, that have been paid to the Defendant by the PBS as at the day on which this order is made (plus interest on those contributions or benefits accrued under the PBS) is $16,779.99 ('the PBS amount').

6. Orders, pursuant to section 19(4)(b) of the Act, that the Defendant pay the DFRBS amount to the Commonwealth.

7. Orders, pursuant to section 19(4)(b) of the Act, that the Defendant pay the PBS amount to the Commonwealth.

8. Declares pursuant to sections 19 and 21 of the Act, that Part 2 of the Act does not apply in relation to the rights of, and benefits paid or payable to or in respect of, the Defendant under the superannuation scheme established by the Commonwealth of Australia pursuant to the Superannuation Act 1990 and known as the Defence Force Retirement and Death Benefits Scheme ('DFRDBS') for the periods of membership between 6 June 1978 to 5 June 1984 (first period of service) and 18 February 1985 to 20 February 1999 [second period of service]."

Consideration

3 The plaintiff did not seek any order for costs against the defendant either in its summons filed on 7 May 2009 or in its amended summons dated 29 September 2009. Despite the fact that the plaintiff has been successful in the proceedings, it does not even now ask for an order for costs against the defendant.

4 However, by way of significant contrast, the defendant seeks an order that the plaintiff pay his costs on and from 18 September 2009 on which date the defendant's counsel, who then apparently appeared for the defendant on a direct access basis, sent a letter to the solicitor for the plaintiff offering to resolve the matter without the need for a hearing. The letter attached a proposed consent judgment/order, which was in effect draft terms of settlement. For reasons that will shortly emerge, it is necessary to compare the terms of the letter with the terms of the draft. The letter was relevantly as follows:

" 18 September 2009

Without Prejudice save as to Costs

I act for Mr Della-Vedova in this matter.

Please find attached a draft set of consent orders for the settlement of the matter. I note that the amounts are yet to be finalised by the DFRDB and will need to be inserted. You will note the relevant period of application for the draft orders attached is the full period of the defendants' [sic] last period of service.

It is the defendant's position that the first two periods of service are separate periods of service and as such are not relevant to your application. I also note that those periods are treated as separate periods under the relevant piece of legislation (being the Defence Force Retirement and Death Benefits Act 1973 (Cth)). An application to include the first two periods will be opposed and costs sought.
If there are any issues or further information that you require I can be contacted on the numbers above." (emphasis added)

5 The proposed terms of settlement were as follows:

"1. The defendant admits that the offence as charge [sic] is a 'corruption offence' as defined in section 2 of the Crimes (Superannuation Benefits) Act 1989 (Cth) and that the relevant offence occurred on 31 August 2001 .

2. The defendant consents pursuant to section 19(1)(a) of the [Act] to the making of the order for Board of Directors of the Defence Force Retirement and Death Benefits Scheme to pay to the Commonwealth $x, being the Commonwealth contributions to the plaintiffs superannuation scheme between 31 August 2001 and 11 August 2008 in accordance with section 19(4)(a) of the [Act].

3. The relevant period of membership of the Superannuation Scheme, the subject of these orders, for the purposes of sections 19 and 21 of the [Act] is described as the period of time [the] defendant was an 'eligible member of the Defence Force' as described in section 3 of the Defence Force Retirement and Death Benefits Act 1973 (Cth), that period being from 21 June 1999 to 11 August 2008.

4. Pursuant to section 21(5)(b) of the [Act] the Board of Directors of the Defence Force Retirement and Death Benefits Scheme pay to the defendant the sum of $y being the defendants contributions during the period from 21 June 1999 to 11 August 2008. The defendant is not required to repay any of this amount to the Commonwealth.

5. The periods of service in the Defence Force by the defendant between 6 June 1978 to [sic] 5 June 1984 and 18 February 1985 to [sic] 20 February 1999 are not periods of service to which these orders apply.

6. No orders as to costs of this application." (emphasis added)

6 It will be apparent that there is a disconformity between the letter and the draft terms of settlement. I take it to be the burden of the defendant's submissions that both documents conveyed an offer to settle the proceedings upon the basis that the plaintiff would be entitled to a superannuation order in respect of Commonwealth contributions during the defendant's third period of employment but not in respect of the first two periods. The defendant emphasises the words in the letter that say "the relevant period of application for the draft orders attached is the full period of the defendant's last period of service". Unfortunately, the draft orders relevantly refer to the period in question as from 31 August 2001 to 11 August 2008 instead of the period from 21 June 1999 to 11 August 2008. The agreed statement of facts in the proceedings nominated 31 August 2001 as the date of the commission of the relevant corruption offence.

7 The plaintiff replied by letter from Mr Muir dated 29 September 2009. That letter was relevantly in the following terms:

"I note our telephone conversation on Wednesday 23 September 2009. I note that you indicated that the factual matters raised in the affidavit of Amelia Sapre dated 20 May 2009 are not in dispute.

I further understand that the essence of the argument is whether the CSB Act applies to all periods of service by Mr Della-Vedova with the ADF (the contention of the Director) or whether the CSB Act only applies to the final period of service and from the date of the offence by Mr Della-Vedova ." (emphasis added)

8 If there was a reply to that letter, I have not been provided with it. This is significant because the fact that this letter from Mr Muir was not answered appears to make it clear that the defendant appreciated and presumably must have accepted that the plaintiff's understanding was correct. Mr Muir had in terms taken the defendant's offer to be that any superannuation order should be limited to so much of the defendant's third period of employment as commenced on 31 August 2001, the date of the offence, and which ended when his employment ceased on 11 August 2008. The defendant contends that the difference between his counsel's letter and the draft terms was "a clerical error" but the opportunity to correct that error, if it was an error, was never taken. When the parties went to trial the last word on any settlement proposal, figuratively and literally, was that contained in Mr Muir's letter. My decision was effectively in accordance with the offer contained in the defendant's letter taken alone.

9 In the result the plaintiff succeeded in respect of the Commonwealth contributions made during the whole of the defendant's third period of employment but failed in respect of the contributions made during the first two periods. The plaintiff was therefore more successful than the offer apparently understood by Mr Muir in his letter dated 29 September 2009, but less successful than its original claim to recover contributions made during all three periods of the defendant's employment. Conversely, the defendant was more successful than the plaintiff's original claim but less successful than the offer apparently understood and referred to by Mr Muir in his letter dated 29 September 2009.

10 The defendant submitted that it was unreasonable for the plaintiff not to accept the offer contained in the 18 September 2009 letter. He submitted that the difference between the entire third period of employment in the letter and the erroneous "draft" would not make the offer any less genuine. I do not understand that submission. The "genuineness" or otherwise of an offer is not of any particular significance if it is in a form that is capable of being accepted and is not withdrawn before that occurs. Mr Muir's letter effectively sought clarification of what the offer meant and that clarification was not provided. The matter went no further.

11 At the hearing before me the defendant made submissions on a wide range of issues, some only of which I have referred to in my earlier decision. They were largely confused and confusing and undoubtedly added to the length of the hearing, which was conducted on agreed facts. The case raised at least one significant and interesting issue concerning the extent to which the plaintiff could recover superannuation contributions that were made by the Commonwealth during a period or periods that did not involve the commission of a corruption offence. The defendant's letter of 18 September 2009 was an attempt to focus on that issue as a lever for settlement. But for the confusion created by the accompanying proposed draft terms of settlement it may well have provided a sound basis for the application that the defendant now makes.

12 In my view the plaintiff was entitled to proceed to a hearing in the circumstances because no unambiguous offer to settle had been made by the defendant. Alternatively, Mr Muir's letter in reply clearly stated the plaintiff's understanding of the offer that had been made. That was the "offer" that the plaintiff did not accept. The defendant now says that was not the offer that had been communicated but the defendant never corrected the misunderstanding. It could have been and, relevantly for present purposes, it should have been. In the events that occurred, the plaintiff achieved a result in the proceedings that was more favourable than Mr Muir's expressed understanding of the terms of the defendant's offer.

13 As I have already observed, but for reasons that are not expressed by the plaintiff, it does not seek an order for costs against the defendant. Even though the plaintiff argued that it was entitled to recover contributions for all three periods of the defendant's employment, but succeeded on only one of them, the time taken to hear the case was not significantly extended. Apart from the plaintiff's generous concession, it would have had a respectable claim for a costs order in its favour. It now proposes that the appropriate result should be that each party pay its own costs. I consider that such a result is a proper one in the circumstances.

Order

14 Accordingly, I make no order as to costs to the intent that each of the plaintiff and the defendant respectively should pay and bear its and his own costs of and incidental to the proceedings.

**********