Fabre v Lui (No 2)

[2015] NSWCA 312

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Fabre v Lui (No 2) [2015] NSWCA 312
Hearing dates:	On the papers
Date of orders:	07 October 2015
Decision date:	07 October 2015
Before:	Basten JA, Macfarlan JA, Meagher JA
Decision:	Notice of Motion dismissed with costs
Catchwords:	PRACTICE AND PROCEDURE – costs – offer of compromise – offer to forego costs – offer made before significant costs incurred – whether any element of compromise
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.13, 42.15A, 51.37, 51.47, Part 42
Cases Cited:	Curtis v Harden Shire Council (No 2) [2015] NSWCA 45 Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No2) [2014] NSWCA 391 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706
Category:	Costs
Parties:	Christine Fabre (Appellant) Bonny Lai Chun Lui (Respondent)
Representation:	Counsel: G R Petty SC/S E McCarthy (Appellant) P J Deakin QC/P J Nolan (Respondent)   Solicitors: Barwick Boitano Lawyers (Appellant) Hunt & Hunt Lawyers (Respondent)
File Number(s):	CA 2014/189196
Publication restriction:	Nil

Judgment

1. THE COURT: On 10 June 2015 the Court dismissed the appeal in this matter, with costs ([2015] NSWCA 157). The appeal had been initiated by the filing of a Notice of Appeal on 28 August 2014 and had been heard on 30 April 2015.

2. By Notice of Motion filed on 22 June 2015 the respondent to the appeal, Ms Bonny Lui, sought an order, in lieu of the costs order made on 10 June 2015, that the appellant pay her costs of the appeal on the ordinary basis until 18 September 2014 and on an indemnity basis thereafter. The Registrar directed that the parties file written submissions and that Ms Lui’s motion be determined on the papers. Ms Lui filed written submissions but the appellant did not. By email dated 16 July 2015 the appellant’s solicitor advised the Registrar that she “does not oppose the applicant filing submissions and leaving the matter to the discretion of the court”.

3. In support of her motion, Ms Lui relies on the fact that she and her daughter (who was, but did not remain, a respondent to the appeal) offered to compromise the appeal on the basis that there be judgment in their favour with no order as to costs.

4. Ms Lui relies on r 42.15A(2), as modified by r 51.47(2), of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). The effect of these rules is that a party to an appeal who has served an offer of compromise on the other side prior to the hearing, which is not subsequently accepted, and has obtained a result on appeal that is no less favourable to it than the terms of that offer, is entitled to its costs on an indemnity basis from the day after the offer was made, unless the Court orders otherwise. Rule 42.15A falls within Division 3 of Part 42 of the UCPR. Rule 42.13 states that that Division applies to “offer[s] of compromise” made in accordance with r 20.26.

5. There is no reason to think that Ms Lui’s offer failed to comply with r 20.26; however there is a question as to whether it in fact offered a “compromise”.

6. As the Court noted in Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344, there are statements that an offer of compromise under the rules must involve “a real and genuine element of compromise” (The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8]). While this terminology is not entirely apposite, it has been described as “serviceable” (Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25]). To characterise an offer by reference to epithets such as “real” or “genuine” adds little to the requirement of compromise, and may imply (wrongly) that an inquiry is to be made about the subjective intentions of the offeror (Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 at [23]; Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [17]-[18]). As explained by Giles J in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368:

"Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so."

7. While the respondents’ offer to bear their own costs could constitute a compromise, that will not be so where no significant costs have been incurred (Curtis v Harden Shire Council (No 2) [2015] NSWCA 45 at [17]), as determined by assessing, at the date of the offer, whether the offeror is offering to forego something of substance (Leach v The Nominal Defendant (No 2) [2014] NSWCA 391 at [42]). In the present case, the offer was made about three weeks after the Notice of Appeal was filed. It is unlikely that Ms Lui (or her daughter) had incurred any significant costs in relation to the appeal at that time. Pursuant to UCPR r 51.37, the appellant’s written submissions were not due to be filed until six weeks after the Notice of Appeal was filed and the respondents’ submissions were not due for a further 10 weeks. Consistent with this, neither the affidavit in support of Ms Lui’s motion nor her written submissions suggest that she incurred any significant, if any, costs in relation to her appeal prior to the date of her offer of compromise.

8. In these circumstances, Ms Lui’s offer did not offer to forego anything other than costs that had not then been incurred in return for the appellant’s capitulation. Assessed at its date, there was therefore no element of compromise and her motion should be dismissed, with costs. Her offer was not an offer of compromise which attracted the operation of r 42.15A. Even if it were, the circumstances that we have identified would lead us to “order otherwise” in accordance with r 42.15A(2).

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Decision last updated: 07 October 2015