Hull v Brailey

[2012] NSWSC 1164

Supreme Court

New South Wales

Medium Neutral Citation:

Hull v Brailey [2012] NSWSC 1164

Decision date:

27 September 2012

Before:

Grove AJ

Decision:

Direction that judgment be entered for the defendants.

1) The plaintiffs are to pay the defendants costs of the action as agreed or assessed;

2) The plaintiffs are to pay to the defendants interest on costs as assessed or agreed but not exceeding costs of $207,589.09 from 11 April 2012 until payment of that interest, and, the plaintiffs are to pay to the defendants interest on costs as assessed or agreed but not exceeding costs of $389,567.46 from 4 September 2012 until payment of that interest.

Catchwords:

COSTS

Legislation Cited:

Civil Procedure Act 2005

Cases Cited:

Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586
Joseph Lahoud & Anor v Victor Lahoud & Ors [2006] NSWSC 126

Category:

Costs

Parties:

Richard Kenneth Hull (First plaintiff)
Richard Kenneth Hull and Lainie Hull ATF the R&L Superannuation Fund (Second plaintiff)
Lainie Hull (Third plaintiff)
Edmund Francis Brailey (First defendant)
TJC Financial Planning Pty Ltd (Second defendant)

Representation:

Counsel:
Mr MS White of counsel with Mr PM Afshar of counsel (Plaintiffs)
Mr TGR Parker SC with Mr CG Carroll of counsel (Defendants)
Solicitors:
McCabe Terrill Lawyers (Plaintiffs)
Holman Webb Lawyers (Defendants)

File Number(s):

2009/00297894

Judgment ON COSTS

1. In this action I have ordered judgment for the defendants and in the published reasons, I indicated that the plaintiffs should pay the defendants' costs and granted liberty to apply if any variation of that imposed costs order was sought. Application was made and it was agreed by the parties that I should deal with any dispute on the papers and written submissions.

1. Ultimately the defendants seek that the plaintiffs should pay the costs as agreed or assessed (on a "normal" basis) up to 11 April 2012 and on an indemnity basis from 12 April 2012.

1. A number of matters should be recorded. It is not contested that costs should follow the event, the contest is focused upon the requirement that they be paid on an indemnity basis after 12 April 2012. The defendants' submissions repeatedly refer to the proceedings being "commercial" in nature and advert to authority and judicial observations in cases of that style. This was a common law action for damages for negligence or breach of statutory duty. It is true that this case was conducted in the fashion of some commercial litigation by the production of enormous quantities of copied material said to be relevant to issues but the essential nature of this litigation was not that of a commercial case. This leads to the observation that I am unequipped to determine whether any incurred costs represent extravagances which should not be visited upon the unsuccessful party.

1. An affidavit of the defendant Edmund Brailey of 20 September 2012 was subject to objection, filed and read. I uphold the objection to paragraphs [6] and [7] these of which relate to proceedings not involving the plaintiffs and I hold to be irrelevant. I also uphold the objection to paragraph [5] as, on the face of the annexure, I am not satisfied that it relevantly demonstrated its applicability to whole to this action. I accept that Mr Brailey is qualified to testify to the amount of costs charged to the defendants and I overrule the objections to paragraphs [2], [3] and [4]. The consequence of these rulings is no more than to specify the amounts and times of accumulated payment.

1. The defendants claim to be paid costs by the plaintiffs to the extent that they may exceed what is determined to be payable on costs assessment is founded upon a letter of 11 April 2012 offering to settle on the basis that the defendants pay $50,000 to the plaintiffs, and the proceedings be dismissed (meaning presumably, judgment for the defendants) and no order as to costs. Express reference was made to Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586.

1. Whilst the written submissions recapitulate numerous statements in regard to this sort of issue, before a claim for indemnity costs can succeed when founded on the Calderbank basis, it must be shown that the offer was a "real and genuine compromise of the claims made by the plaintiff".

1. I am not so satisfied. Given the scope of the issues sought to be advanced and the proposal as to costs, the offer of payment would appropriately be described as "nuisance money", that is, an amount the defendants would be prepared to pay to avoid the increase in costs which continuation of the proceedings would cause. It did not, in my view, represent a genuine attempt at compromise of the dispute.

1. I decline to make the special order now sought.

1. The defendants also make a claim for interest on costs actually paid. The power of the court to make such an order is not in doubt. The problem arises that I do not know whether the amounts actually paid by the defendants up to the dates specified in Mr Brailey's affidavit are payable by the plaintiffs in their entirety as assessed or agreed costs, as opposed to indemnity costs.

1. The cases referred to (and the judgment itself) by Campbell J (as his Honour then was) in Joseph Lahoud & Anor v Victor Lahoud & Ors [2006] NSWSC 126 at [82] said that a case does not have to be out of the ordinary for such an order to be made. What is required is evidence of payment and this is now available. To accommodate the problem, I will "cap" the amounts as indicated in the orders.

1. No submission has been made that I should order any interest at a rate other than that referred to in s 101 of the Civil Procedure Act 2005 as "the prescribed rate".

1. I make the following orders in addition to the direction that judgment be entered for the defendants:

(1)   The plaintiffs are to pay the defendants costs of the action as agreed or assessed;

(2)   The plaintiffs are to pay to the defendants interest on costs as assessed or agreed but not exceeding costs of $207,589.09 from 11 April 2012 until payment of that interest, and, the plaintiffs are to pay to the defendants interest on costs as assessed or agreed but not exceeding costs of $389,567.46 from 4 September 2012 until payment of that interest.

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Decision last updated: 28 September 2012