Gilberg v Maritime Super Pty Ltd (No. 2) - [2009] NSWCA 394

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Gilberg v Maritime Super Pty Ltd (No. 2) [2009] NSWCA 394

FILE NUMBER(S):
40041/09

HEARING DATE(S):
on the papers

JUDGMENT DATE:
3 December 2009

PARTIES:
John GILBERG (Appellant)
MARITIME SUPER PTY LIMITED (Respondent)

JUDGMENT OF:
Allsop P Hodgson JA Campbell JA

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 50121/08

LOWER COURT JUDICIAL OFFICER:
McDougall J

LOWER COURT DATE OF DECISION:
25 November 2008

LOWER COURT MEDIUM NEUTRAL CITATION:
John Gilberg v Stevedoring Employees Retirement Fund Pty Ltd [2008] NSWSC 1317

COUNSEL:
B W RAYMENT QC/ M J GOLLAN (Appellant)
V M HEATH (Respondent)

SOLICITORS:
John GILBERG (Appellant)
MARITIME SUPER PTY LIMITED (Respondent)

CATCHWORDS:
PROCEDURE – Costs – Relief obtained by successful appellant substantially less than sought at first instance and on appeal – Less than reasonable participation in settlement negotiations – Appropriate orders for costs at first instance and on appeal.

LEGISLATION CITED:
Evidence Act 1995 s 131(2)(h)
Judiciary Act 1903 (Cth) s 79

CATEGORY:
Consequential orders

CASES CITED:
Australia v Gretton [2008] NSWCA 117
Bruinsma v Menczer (1995) 40 NSWLR 716
Gilberg v Maritime Super Pty Ltd [2009] NSWCA 325

TEXTS CITED:

DECISION:
(1) Order that there be no order as to costs at first instance, to the intent that each party bear its own costs.
(2) The respondent to pay the appellant’s costs of the appeal.

JUDGMENT:

- 10 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40041/09
SC 50121/08
ALLSOP P
HODGSON JA
CAMPBELL JA
3 DECEMBER 2009

John GILBERG v MARITIME SUPER PTY LIMITED (No. 2)

Judgment

ALLSOP P: I agree with Hodgson JA.
HODGSON JA: On 8 October 2009, this Court gave the substantive decision in this appeal: [2009] NSWCA 325. The appellant’s appeal was allowed; but while the appellant was given some relief, that relief was substantially less than had been explicitly sought in the summons and on appeal. The Court invited submissions on the question whether the ordinary result as to costs should not follow, either at first instance or on appeal.
The respondent provided an affidavit of a solicitor, Ms Chalmers, giving evidence of a discussion at a settlement conference held on 29 August 2008, before the hearing at first instance, which occurred on 24 and 25 November 2008. That evidence was objected to by the appellant, on the basis that the discussions were without prejudice. However, s 131(2)(h) of the Evidence Act 1995 removes the bar to admission of without prejudice discussions, where this is relevant to determining liability for costs: Bruinsma v Menczer (1995) 40 NSWLR 716 (affirmed by the New South Wales Court of Appeal on 7 August 1996). To the extent that the primary judge and this Court are exercising federal jurisdiction, there is no relevant difference: Judiciary Act 1903 (Cth) s 79. Accordingly, I would admit that evidence.
At this conference, senior counsel for the appellant said $240,000 was the maximum the appellant could recover, and that…

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: [2009] NSWCA 394
Decision Date: 3 December 2009

CaseChat Overview and Summary

The case of *Gilberg v Maritime Super Pty Ltd (No. 2)* concerned an appeal before the Full Court of the Federal Court of Australia, comprising Allsop P, Hodgson and Campbell JJA. The dispute revolved around the costs orders made at first instance and on appeal, following a successful appeal by the appellant, although the relief ultimately obtained was substantially less than originally sought. The appellant had initiated proceedings because the respondent repeatedly refused to reconsider the appellant's claim for a Total and Permanent Disablement (TPD) benefit.

The primary legal issues before the Full Court were whether the costs orders at first instance and on appeal should follow the event, and if not, what alternative orders were appropriate. Specifically, the court considered the appellant's submission that proceedings were necessary due to the respondent's refusal to reconsider the claim, and the respondent's argument that a settlement offer made during negotiations, which included the original benefit amount but excluded interest and costs, should influence the costs outcome. The court also had to determine the reasonableness of the appellant's pursuit of interest and costs during settlement discussions.

The Full Court reasoned that while the appellant was successful on appeal, the relief obtained was less than initially sought. The court noted that the respondent had made a settlement offer that included the original benefit amount, albeit without interest or costs. However, the court found that the appellant's claim for interest at the time of settlement negotiations was unreasonable, given the specific rules governing the fund and the timing of entitlement. Despite the appellant's success in compelling reconsideration, the court determined that the appellant's conduct regarding settlement negotiations, particularly the pursuit of interest, warranted a departure from the usual costs order at first instance.

Consequently, the Full Court ordered that there be no order as to costs at first instance, meaning each party was to bear its own costs. However, the respondent was ordered to pay the appellant's costs of the appeal.

Orders

Orders of the court

(1) Order that there be no order as to costs at first instance, to the intent that each party bear its own costs.

(2) The respondent to pay the appellant’s costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The appellant provided the following written submissions: 1.It was necessary for the Plaintiff to sue because the Defendant refused to reconsider the Plaintiff's claim and did so repeatedly. The refusals were communicated by letters from Mallesons Stephen Jacques, solicitors, at Blue AB, Vol 1, pp.270 ff, 276 and 304. Those letters contain a firm refusal to reconsider the Plaintiff's claim for TPD benefit. 2.The principal issue debated below, and on appeal, was whether that refusal was justified. The statement of issues below is at Black AB, p.60. The proceedings raised issues of construction of the Trust Deed, and required an understanding of the way in which the previous outcome had been arrived at, and the terms of the material placed before the Trustee for its reconsideration. Estoppels issues were said by the defendant to preclude reconsideration and it was said that the duty to reconsider was not enlivened. 3.It is true that the Plaintiffs submitted at first instance and on appeal that the Court could award damages against the Defendant or execute the Trust for itself. 4.The only substantive reason now suggested by the defendant/ respondent why costs should not follow the event is that it made an offer to compromise the Plaintiff's claim under the Trust Deed for the amount of the benefit originally due, without interest and without costs. That letter is part of annexure "B", to the affidavit of Ms Chalmers, and there is no objection to the affidavit in that respect. 5.The Defendant did not, by that letter, or otherwise, offer to reverse its decision not to reconsider the Plaintiffs claim. 6.The summons contained a prayer for further or other relief, pursuant to which it would have been appropriate to remit the matter to the Trustees if the Judge had upheld the submissions upheld on appeal. There is no reason why the trial judge should have departed from the usual order if he had been of the view adopted by the Court on appeal. It would still have been necessary to bring the proceedings and they took the same time as they would have taken if they were limited so as to compel reconsideration. Having dismissed the case, he was not asked to make any special order for costs other than the usual order …… 11.The Respondent does not suggest that it offered to reconsider the Plaintiff's claim at any time. 12.Whether the Appellant will ultimately receive any benefit remains to be seen in this matter. The offer contained in annexure "B" was made on the basis that the Claimant was without merit and was inclusive not only of interest but also of costs. 13.No basis exists for a finding that the rejection of that claim was unreasonable. Decision In my opinion, the appellant’s claim for costs and interest at the time of the settlement negotiations was unreasonable. Even the lower figure of $200,000 suggested in settlement negotiations must have included about $40,000 for interest, in circumstances where there was entitlement to interest only as from the date entitlement to the payment arose (Rule 24 of the Fund’s Rules); and the entitlement to payment could not have arisen until the expiration of a reasonable time for the Rule 17 process to be gone through after the application for reconsideration had been put in order on or about 26 May 2008 (see principal judgment par [11]). Accordingly, any entitlement to interest as at 29 August 2008 was very small.

Ratio Decidendi

Legal Principle Established

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