Kvaerner Oil and Gas Australia Pty Limited v Egis Consulting Australia Limited

[2003] NSWSC 75

CITATION:	Kvaerner Oil & Gas Australia Pty Limited v Egis Consulting Australia Limited [2003] NSWSC 75
HEARING DATE(S):	19/02/03
JUDGMENT DATE:	19 February 2003
JURISDICTION:	Equity Division
JUDGMENT OF:	Einstein J
DECISION:	The Court orders ; 1. Verdict of the plaintiff in the sum of $4,414,605.81.; 2. First and second cross claims dismissed.; 3. Defendant to pay plaintiff's costs on a party/party basis.; These orders are to be stayed for a period of 28 days.
CATCHWORDS:	Costs
CASES CITED:	Calderbank v Calderbank [1976] Fam 93 Nobrega v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [No 2], Court of Appeal, unreported, 21 May 1999
PARTIES :	Kvaerner Oil & Gas Australia Pty Limited (Plaintiff) Egis Consulting Australia Limited (Defendant) Storebrand Skadeforsikring AS (Second Cross Defendant)
FILE NUMBER(S):	SC 50136/00
COUNSEL:	Mr M Samios (Solicitor for the Plaintiff) Mr N J Kidd (Defendant)
SOLICITORS:	Michael Samios (Plaintiff and Second Cross Defendant) Colin Biggers & Paisley (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

EINSTEIN J

Wednesday 19 February 2003 ex tempore
Revised Thursday 20 February 2003

50136/00 KVAERNER OIL & GAS AUSTRALIA PTY LIMITED v EGIS CONSULTING AUSTRALIA LIMITED & ANOR

JUDGMENT

1 These proceedings were heard between 3 and 5 February 2003. A separate question order was made pursuant to Part 31 Rule 2. That matter became the subject of an ex tempore judgment delivered on 4 February 2003 (bearing date in revised form, 10 February 2003). The defendant failed on that separate question concerning the proper construction of the insurance policy identified in paragraph 1 of that judgment.

2 The proceedings were then litigated in full and the judgment of 12 February 2003 was a judgment in respect of which the plaintiff succeeded for the reasons given.

3 The parties were given leave to address further submissions with respect to interest but have reached an accommodation. The parties are now agreed on the amount of the verdict monies including interest. The question of interest can be regarded as effectively not requiring resolution by the court; indeed the court has not been informed of the precise amount of interest forming part of the verdict nor is it particularly relevant presently.

4 Before the court are cross submissions as to costs. The plaintiff submits that the defendant should be ordered to pay its costs on a party/party basis up to and incidental to 29 January 2003 and thereafter on an indemnity basis. The underpinning for that submission is a letter of 29 January 2003 from the plaintiff’s solicitor Mr Samios to the defendant’s solicitors Colin Biggers and Paisley which will be marked Exhibit C 1 on the application for costs. That was a Calderbank letter [Calderbank v Calderbank [1976] Fam 93] indicating a preparedness by the plaintiff to accept four million one hundred thousand dollars ($4,100,000) plus costs as agreed or taxed in full and final settlement of the matter. The offer was not accepted and the verdict sum which is agreed between the parties of four million four hundred and fourteen thousand six hundred and five dollars and eight-one cents ($4,414,605.81) plainly exceeds the amount which the plaintiff had, albeit only a few days before the final hearing, indicated a preparedness to accept.

5 There is certainly substance in Mr Kidd’s submissions that both the preliminary question as well as the issues which remained to be litigated after resolution of the preliminary question, were complex. Indeed in relation to the preliminary question, as Mr Kidd rightly points out, in paragraph 55 of the Judgment, the court made clear that the matter was ultimately one of impression.

6 It has occurred to me that primarily by reason of the case being brought by Egis in relation to the causation issue, if not being totally hopeless in terms of the matters in respect of which Egis bore the onus of proof, was clearly stated in the judgment at paragraph 77 as falling very far short of proving that case on the balance of probabilities, so that to the extent that the causation issue was an issue, the court’s discretion to order the indemnity costs in the fashion now pursued by the plaintiff, may have particular substance. On reflection the whole of the proceedings were, as I have said, complex in the extreme and it seems to me it would be an inappropriate exercise of the discretion to endeavour to work out how much of the time involved in preparation and in the hearing went to that causation issue.

7 As Mr Kidd has pointed out, the court retains a discretion to determine in relation even to Calderbank letters whether or not parties act reasonably or unreasonably in failing to accept a Calderbank offer [cf Nobrega v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [No. 2], Court of Appeal, unreported, 21 May 1999, per Powell JA at [17].

8 My own opinion in relation to the fairly complex set of issues determined by the two judgments, and bearing in mind the very late date when the Calderbank letter was issued, is that the proper exercise of the court’s discretion is to order costs on a party/party basis. This is not however to suggest that the touchstone for exercise of the discretion is complexity of issues. The type of issues, the stances of the parties and the timing of a Calderbank letter are all relevant requiring to be carefully weighed in terms of the reasonableness criterion.

9 For those reasons I make orders in terms of paragraphs 1, 2 and 3 of the short minutes of order which I initial and date 19 February 2003 and will leave with the papers.

10 I order that these orders be stayed for a period of 28 days.

I certify that paragraphs 1 - 10
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 19 February 2003
and revised on 20 February 2003

___________________
Susan Piggott
Associate

20 February 2003

Last Modified: 03/27/2003