Gray (Constructions) Pty Ltd v Hogan (No 2)

CITATION:	GRAY (CONSTRUCTIONS) PTY LTD v HOGAN (No 2) [2000] NSWCA 68
FILE NUMBER(S):	CA 40365/98
HEARING DATE(S):	28 March 2000
JUDGMENT DATE:	30 March 2000
PARTIES :	W C GRAY (CONSTRUCTIONS) PTY LTD v NOELENE HOGAN
JUDGMENT OF:	Mason P at 1; Sheller JA at 13; Heydon JA at 14

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 5906/94
LOWER COURT JUDICIAL OFFICER :	Mahoney DCJ

COUNSEL:	Appellant: R W Seton Respondent: M S Jacobs QC
SOLICITORS:	Appellant: Symons & Co Respondent: Gillis Delany Brown
CATCHWORDS:	Costs [ND]
DECISION:	Decided on the papers. Costs order varied.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40365/98

MASON P
SHELLER JA
HEYDON JA

Thursday 30 March 2000

GRAY CONSTRUCTIONS PTY LTD v HOGAN (No 2)

JUDGMENT

1    MASON P: Following delivery of this Court’s judgment on 3 March 2000 (Gray Constructions Pty Ltd v Hogan [2000] NSWCA 26) the parties have exchanged written submissions relating to costs. The appellant seeks costs on a solicitor and client basis for certain stages of the proceedings below and for the whole of the proceedings in this Court. 2 On 19 November 1996 the plaintiff (appellant) made an offer pursuant to Pt 19A of the District Court Rules offering to accept the sum of $45,000 plus costs. At that stage the pleadings were complete, although there were to be later amendments. There was a defended claim and a defended cross-claim. 3 The substantive and formal effect of the offer was quite clear. The plaintiff was proposing that the claim and cross-claim be netted off, with a verdict being entered in its favour in the sum proposed. This was exactly the situation contemplated by Pt 20 r5(2). 4 The offer was made more than 28 days before the commencement of the hearing and remained unaccepted at the expiration of that period. According to Pt 39A r25(4), as it then stood, if the plaintiff obtained judgment no less favourable to it than the terms of the offer, then the plaintiff was to have its costs assessed on a solicitor and client basis “unless the Court otherwise orders”. 5    Allowing for pre-judgment interest to the date of the offer, the offer made by the plaintiff on 19 November 1996 was less favourable to the plaintiff than the judgment which it ultimately obtained in consequence of its successful appeal. 6    The principles governing the exercise of the judicial discretion to “otherwise order” are discussed in Morgan v Johnson (1998) 44 NSWLR 578. 7 I am not persuaded to displace the prima facie effect of the sub-rule. The parties had joined issue on the pleadings. There was nothing to take this case outside the ordinary (bitterly contested) building dispute. 8 The respondent submits that she was at a relevant disadvantage in assessing her prospects and in making an informed response to the settlement proposal because witness statements had not been exchanged at the time of the plaintiff’s offer. She…