Great Wall Resources Pty Ltd v O'Sullivan (No 2)
[2009] NSWCA 184
•9 July 2009
New South Wales
Court of Appeal
CITATION: Great Wall Resources Pty Ltd v O'Sullivan & Anor (No 2) [2009] NSWCA 184 HEARING DATE(S): On the Papers
JUDGMENT DATE:
9 July 2009JUDGMENT OF: Giles JA; Ipp JA; Macfarlan JA DECISION: (1) Order that the money paid into court by the appellant on 23 October 2008 be paid out to the respondents on account of the damages to which they are entitled by the decision of McLaughlin AsJ of 19 May 2008.
(2) Order that the costs ordered by this Court on 4 June 2009 to be paid by the appellant to the respondents to be paid on a party and party basis up to and including 8 September 2008 and thereafter on an indemnity basis.CATCHWORDS: COSTS - application for indemnity costs - Calderbank letter - no issue of principle CATEGORY: Consequential orders CASES CITED: Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12
Dodd v Arnold (No 2) [2009] NSWCA 19PARTIES: Great Wall Resources Pty Ltd (Appellant)
Stephen O'Sullivan (First Respondent)
Norella O'Sullivan (Second Respondent)FILE NUMBER(S): CA 40249/08 COUNSEL: R B Wilson (Appellant)
T H Barrett (Respondents)SOLICITORS: Daly Lawyers (Appellant)
Russell McLelland Brown Lawyers (Respondents)LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): SC 1313/06 LOWER COURT JUDICIAL OFFICER: McLaughlin AsJ LOWER COURT DATE OF DECISION: 19 May 2008 LOWER COURT MEDIUM NEUTRAL CITATION: O'Sullivan v Great Wall Resources Pty Limited [2008] NSWSC 1115
CA 40249/08
SC 1313/06THURSDAY 9 JULY 2009GILES JA
IPP JA
MACFARLAN JA
1 THE COURT: Judgment in this matter was delivered on 4 June 2009: [2009] NSWCA 119. The orders which were made included orders dismissing the appeal, the Notice of Motion filed by the appellant and the appellant’s application for leave to appeal. The appeal was dismissed as incompetent. An order was also made that the appellant pay the respondents’ costs of the purported appeal, the Notice of Motion and of the application for leave to appeal.
2 There now falls for determination a Notice of Motion filed on 18 June 2009 by the respondents seeking orders for indemnity costs and for payment out of Court of a sum of money paid into Court by the appellant.
3 The latter order is not opposed by the appellant and will be made.
4 An order for indemnity costs is opposed.
5 The principal basis upon which the order for indemnity costs is sought is the failure of the appellant to accept an offer of compromise made by the respondents by way of a “Calderbank” letter of 18 August 2008. This offer was made three days after the filing of the Notice of Appeal. The respondents submit that the offer was a genuine offer of compromise and that the appellant acted unreasonably in not accepting it.
6 The judgment which was the subject of the purported appeal and the leave application was one of McLaughlin AsJ assessing damages to which the respondents were entitled in the sum of $101, 914.74 inclusive of interest.
7 The offer made by the respondents on 25 August 2008 was that they would accept $60,000, together with their “legal costs on a party-party basis as agreed or as assessed” in full satisfaction of their claim. This offer involved a significant element of compromise as, if accepted, it would have involved the respondents receiving only about 60% of the damages they had been awarded by McLaughlin AsJ. The appellant in our view acted unreasonably in not accepting the offer, because, as is apparent from the Court’s Judgment of 4 June 2009, there were substantial obstacles which lay in the appellant’s path to success in the proceedings, not least of them being that the appellant needed to obtain leave to appeal in order to challenge the judgment below. The appellant knew, or should have known, of these obstacles and should have taken the view that the respondents’ offer to accept a substantially reduced judgment amount was a favourable one from the appellant’s point of view.
8 Consistently with the principles recently reiterated in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 and Dodd v Arnold (No 2) [2009] NSWCA 19, our view is that the appellant should be ordered to pay costs on an indemnity basis from the day after the date upon which the offer of 25 August 2008 was specified to lapse, that is, 8 September 2008.
9 We make the following orders;
(1) Order that the money paid into court by the appellant on 23 October 2008 be paid out to the respondents on account of the damages to which they are entitled by reason of the decision of McLaughlin AsJ of 19 May 2008.
(2) Order that the costs ordered by this Court on 4 June 2009 to be paid by the appellant to the respondents be paid on a party and party basis up to and including 8 September 2008 and thereafter on an indemnity basis.
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