Fairall v Hobbs (No 2)

Case [2017] NSWCA 133

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Fairall v Hobbs (No 2) [2017] NSWCA 133
Hearing dates:On the papers
Decision date: 15 June 2017
Before: McColl JA; Leeming JA; Payne JA.
Decision:

Order 2(b) made by the Court on 18 April 2017 be varied as follows:

 2(b)    respondent to pay the appellants’ costs of the trial as agreed or assessed on an ordinary basis up until 18 March 2016, and on an indemnity basis thereafter.
Catchwords: COSTS – successful appeal - offers of compromise made before first instance proceedings ‑ no offer of compromise made in relation to the appeal proceedings
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) rr 36.16, 42.15, 51.47, 51.48, 51.49
Cases Cited: Barakat v Bazdarova [2012] NSWCA 140
Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No.2) [2009] NSWCA 12 Calderbank v Calderbank [1975] All ER 333
Equity 8 Pty Limited v Shaw Stockbroking Limited [2007] NSWSC 503
Fairall v Hobbs [2017] NSWCA 82
Gordian Runoff Limited (No.2) [2009] NSWCA 12
Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2016] NSWCA 3
Regency Media Pty Ltd v AAV Australia Pty Limited [2009] NSWCA 368
Robb Evans & Associates v European Bank Ltd (No. 2) [2009] NSWCA 170
South Eastern Sydney Area Health Service v King [2006] NSWCA 2
The Uniting Church v Takacs (No 2) [2008] NSWCA 172
Vale v Eggins (No.2) [2007] NSWCA 12
Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27
Category:Costs
Parties:

Carolyn Maree Fairall (First appellant)
Holly Lee Fairall (Second appellant)

Anthony Hobbs (Respondent)
Representation:

Counsel:
Ben Wilson and Timothy Abbott (Appellants)
Ian Roberts SC (Respondent)

  Solicitors:
Hall & Wilcox (Appellants)
Walsh & Blair Lawyers (Respondent)
File Number(s):2016/186993
 Decision under appeal 
Court or tribunal:
District Court of New South Wales
Jurisdiction:
Civil
Citation:
[2016] NSWDC 116
Date of Decision:
26 May 2016
Before:
Neilson DCJ
File Number(s):
2014/179721

Judgment

  1. THE COURT: On 18 April 2017, the Court delivered its primary judgment: Fairall v Hobbs [2017] NSWCA 82. The orders made were:

(1)    Appeal allowed.

(2)    Set aside the orders of the primary judge of 26 May 2016 and in lieu thereof make the following orders:

(a)    amended statement of claim dismissed;

(b)    respondent to pay the appellants’ costs as agreed or assessed.

(3)    Respondent to pay the appellants’ costs of the appeal as agreed or assessed.

(4)    Notice of cross-appeal dismissed with costs.

  1. On 2 May 2017 the successful appellants filed a notice of motion under Uniform Civil Procedure Rules 2005 (NSW) r 36.16 seeking the following orders:

1 That the orders made by the Court of Appeal on 18 April 2017 be varied in accordance with Rule 36.16 of the Uniform Civil Procedure Rules 2005.

2    That in accordance with Rules 42.15 and 51.49 of the Uniform Civil Procedure Rules 2005, Orders 2(b) and 3 made by the Court on 18 April 2017 be varied as follows:

2(b) Respondent to pay the…

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AGLC
Fairall v Hobbs (No 2) [2017] NSWCA 133
Case
[2017] NSWCA 133
Decision Date

CaseChat Overview and Summary

In *Fairall v Hobbs (No 2)*, the New South Wales Court of Appeal considered an application to vary costs orders made following a successful appeal. The dispute concerned the appropriate basis for awarding costs, specifically in light of offers of compromise made prior to the initial proceedings.

The primary legal issue before the Court of Appeal was whether the costs orders made on 18 April 2017 should be varied to reflect the fact that offers of compromise had been made before the first instance proceedings. The court was required to determine the impact of these pre-litigation offers on the apportionment of costs, particularly in relation to the period after a specific date.

The Court of Appeal reasoned that the original costs order had not adequately accounted for the offers of compromise made by the appellants before the trial commenced. The court applied the principle that where a party makes a reasonable offer of compromise which is not accepted, and the offering party ultimately obtains a more favourable outcome, the court may order that the unsuccessful party pay the costs of the successful party on an indemnity basis from the date the offer was made or from a later date that is just. In this instance, the court found it just to vary the order to reflect the costs on an indemnity basis from 18 March 2016, the date after which the appellants' success at trial was demonstrably better than their earlier offer.

Consequently, the Court of Appeal ordered that Order 2(b) made on 18 April 2017 be varied. The respondent was ordered to pay the appellants’ costs of the trial as agreed or assessed on an ordinary basis up until 18 March 2016, and on an indemnity basis thereafter.

Orders

Orders of the court

Order 2(b) made by the Court on 18 April 2017 be varied as follows:

2(b) respondent to pay the appellants’ costs of the trial as agreed or assessed on an ordinary basis up until 18 March 2016, and on an indemnity basis thereafter.

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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