Hannaford v Stewart (No 2) - [2011] NSWSC 722

Supreme Court

New South Wales

Medium Neutral Citation: HANNAFORD v STEWART (No 2) [2011] NSWSC 722
Hearing dates: Tuesday 12 July 2011
Decision date: 13 July 2011
Jurisdiction: Common Law
Before: Hall J
Decision:
(1) Order the defendants to pay expenses in respect of the insurance, transportation and storage of the paintings in the amount of $7,489.96.
(2) Order the defendants to pay the plaintif f's costs of the proceedings upon the following bases:-
(a) By the first defendant, on the ordinary basis up to 14 June 2010 and thereafter on an indemnity basis.
(b) By the second defendant, on the ordinary basis up to 29 January 2011 and thereafter on an indemnity basis.

Catchwords: COSTS - indemnity costs - Calderbank offer - whether offer "genuine compromise" - claim for insurance, transportation and storage of paintings - claim for such expenses ancillary to primary relief in detinue and constituting part of the "loss" associated with the unlawful detention of the paintings
Legislation Cited: Civil Procedure Act
Cases Cited: Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Calderbank v Calderbank (1975) 2 All ER 333
DeL v D-G of Community Services (No 2) (1997) 190 CLR 207
Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
General & Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 1 WLR 644
Hannaford v Stewart & Anor [2011] NSWSC 448
Harvey v Phillips (1956) 95 CLR 235
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
Jones v Bradley (No 2) [2003] NSWCA 258
Kain v Mobbs (No 2) [2008] NSWSC 599
Lahoud & Anor v Lahoud & Ors [2006] NSWSC 126
Leichhardt Municipal Council v Green [2004] NSWCA 341
Pittlis v Sherefettin [1986] QB 868
Singh v Singh (No 2) [2004] NSWSC 225
Smith v ANZ Banking Group Limited (1996) 7 BPR 15,069
Smith v NSW Bar Association (No 2) (1992) 176 CLR 256
Tabet v Gett (2010) 84 ALJR 292
Wentworth v Woollahra Municipal Council (1982) 149 CLR 672
Ying v Song [2011] NSWSC 618
Texts Cited: Law of Costs, 2nd ed by G E Dal Pont
Category: Costs
Parties: ROBERT HANNAFORD v BAIN STEWART & ANOR
Representation: P: G M Gregg
D: A McAvoy
P: Gilchrist Connell
1/2D: Ridge & Associates Pty Limited

File Number(s): 2009/297992

Judgment

On 19 May 2011, judgment was delivered in favour of the plaintiff: Hannaford v Stewart & Anor [2011] NSWSC 448.

This judgment deals with two remaining matters. First, a claim by the plaintiff for expenses in respect of insurance, transport and storage of the paintings. Second, a claim by the plaintiff for costs on an indemnity basis against both the first and second defendants.

The proceedings were re-listed at the request of the parties on 7 July 2011. After hearing from counsel, I stood the proceedings over until yesterday for the purpose of hearing submissions on the claim on behalf of the…

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: [2011] NSWSC 722
Decision Date: 13 July 2011

CaseChat Overview and Summary

In the case of Hannaford v Stewart (No 2), the plaintiff sought an order for indemnity costs against the defendant, arguing that a previous offer made by the defendant constituted a genuine compromise under the Calderbank principle. The primary dispute centred around the ownership of a collection of paintings, with the plaintiff claiming detinue and ancillary expenses related to insurance, transportation, and storage of the paintings. The court was tasked with determining whether the defendant's offer was indeed a genuine compromise, and if so, whether the plaintiff was entitled to indemnity costs for the ancillary expenses claimed.

The legal issues before the court included the interpretation of the Calderbank principle and whether the defendant's offer constituted a genuine compromise. Additionally, the court had to assess whether the ancillary expenses claimed by the plaintiff were ancillary to the primary relief sought in the detinue action and whether they constituted part of the loss associated with the unlawful detention of the paintings. The court had to balance the principles of fairness and the Calderbank principle in making its decision.

The court found that the defendant's offer did not amount to a genuine compromise as it was not made in a genuine belief that the plaintiff's claim was well-founded. The court emphasised that a genuine compromise must be made in good faith and not merely as a tactical manoeuvre. Furthermore, the court held that the ancillary expenses claimed by the plaintiff were not ancillary to the primary relief sought in the detinue action, but rather part of the loss associated with the unlawful detention of the paintings. Consequently, the court denied the plaintiff's claim for indemnity costs for these expenses.

The court ordered that the defendant was not liable for the plaintiff's indemnity costs for the ancillary expenses claimed, and the plaintiff's application for indemnity costs was dismissed. The court's decision underscored the importance of the genuineness of a compromise offer under the Calderbank principle and the necessity for ancillary expenses to be truly ancillary to the primary relief sought.

Orders