Loose Fit Pty Limited v Marshbaum (No 2)

[2012] NSWCA 23

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Loose Fit Pty Limited v Marshbaum & Ors (No 2) [2012] NSWCA 23

Hearing dates:

On the papers

Decision date:

06 March 2012

Before:

Campbell JA, Handley AJA, Sackville AJA

Decision:

Motion of 6 December 2011

(1) Order that the costs payable by the appellant pursuant to order (1) of 30 November 2011 be paid on the ordinary basis up to and including 13 May 2011, and on the indemnity basis thereafter until 30 November 2011.

(2) The appellant to pay the costs of the motion.

Motion of 13 December 2011

(1) Order (4) of 30 November 2011 varied by adding "and 50% of the costs of the trial payable by Loose Fit Pty Ltd to the plaintiff".

(2) No order as to the costs of the motion.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Legislation Cited:

Law Reform (Miscellaneous Provisions) Act 1946

Cases Cited:

Callisher v Bischoffsheim (1870) LR 5 QB 449
James Hardie & Co Pty Ltd v Wyong Shire Council [2000] NSWCA 107, 48 NSWLR 679
L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59, 151 CLR 590
Gould v Vagellas [1985] HCA 85, 157 CLR 271
Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691

Category:

Costs

Parties:

Loose Fit Pty Limited - Appellant
Ellen Marshbaum - First Respondent
John Francis Kocx - Second Respondent
Marea Anne Hickie - Third Respondent

Representation:

Solicitors -
Walker Hedges & Co - Appellant
Terrance Stern - First Respondent

File Number(s):

2008/289559

 Decision under appeal 

Citation:

Marshbaum v Loose Fit Pty Ltd and Anor [2010] NSWSC 1130

Date of Decision:

2010-10-11 00:00:00

Before:

Hoeben J

File Number(s):

2008/289559

Judgment

1. THE COURT : The Court gave judgment in this case on 30 November 2011 [2011] NSWCA 372. It dismissed with costs the appeal by the occupier Loose Fit Pty Limited, against the judgment in favour of the plaintiff entered by Hoeben J. However its appeal against the dismissal of its cross claim against the owners for contribution under s 5(1)(c) of the Law Reform (Miscellaneous Provision) Act 1946 was allowed.

1. By notice of motion of 6 December 2011 the plaintiff respondent, relying on an offer of compromise of 13 May 2011, sought an order against the appellant for the costs of the appeal payable by it to be assessed on the indemnity basis from 14 May 2011.

1. In the appeal against dismissal of the occupier's cross claim for contribution this Court ordered the owners to pay the occupier's costs of the appeal against them, the costs of the cross claim in the Division, and contribution of 50% in respect of the plaintiff's judgment for damages.

1. By notice of motion of 13 December 2011 the occupier sought an order extending its judgment against the owners for contribution to include the costs of the trial payable by it to the plaintiff.

Claim for indemnity costs.

1. On 13 May 2011 the solicitors for the plaintiff respondent sent an offer of compromise to the solicitors for the appellant. The offer did not limit the time for acceptance but it was not accepted and presumably lapsed after a reasonable time. The offer was for the appeal to be dismissed as against the plaintiff, with each party to bear its or her own costs.

1. The element of compromise was in the respondent plaintiff's offer to bear her own costs of the appeal to date. The judgment in the Division was entered on 11 October 2010. The appeal had then been pending for some 6 months but the hearing was still 5 months away.

1. The affidavit of Terrence Stern of 21 December 2011 in support of the notice of motion stated that by 13 May 2011 the plaintiff respondent had incurred solicitor's costs of $6,300 plus GST, and counsel's fees of $20,240. The solicitors had served a statutory demand on the appellant, which led to an application for a stay of execution which was dismissed. Counsel had advised in respect of the appeal, and had appeared before the Registrar on the return date, settled the statutory demand, settled the plaintiff respondent's written submissions in the appeal, settled a notice of motion and supporting affidavit of 5 April 2011, appeared on the motion on 2 May and appeared before the Registrar on directions hearings on 6 April and 10 May.

1. The Court cannot determine what proportion of these costs and fees would be allowed by a costs assessor on a party/party assessment. However there is a fair inference that a substantial proportion would be recovered, particularly the costs and fees incurred in respect of the motions and the written submissions. In any event the compromise involved the abandonment of a claim to $26,540 plus GST for costs. The release of a bona fide claim is valuable consideration for a compromise without any need to determine its prospects of success: Callisher v Bischoffsheim (1870) LR 5 QB 449, 452; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, 698.

1. The offer of compromise did not provide the solicitors for the appellant with details of the costs the plaintiff respondent was offering to forego. However they were aware of the interlocutory proceedings and had been served with the respondent's written submissions in the appeal. The solicitors for the plaintiff respondent were not asked to provide details of the costs.

1. In our judgment the offer can properly be characterised as an offer of compromise.

1. The principal submission of counsel in opposition to the orders sought was that the appellant was not in a position to accept the offer because it was pursuing an appeal against the owners. In order to succeed in that appeal it was necessary for the appellant to establish its liability to the plaintiff.

1. These submissions cannot be accepted. The owners, as cross defendants below, were bound by the issue estoppels from the judgment in the proceedings between the plaintiff and the appellant: Sandtara Pty Ltd v Abigroup Limited (1997) 42 NSWLR 5 CA. The owners as cross defendants also had standing to appeal from the judgment against the appellant: Insurance Exchange of Australasia v Dooley (2000) 50 NSWLR 222 CA, 228-233. Of course, having succeeded on the cross claim, they had no incentive to pursue such an appeal.

1. The appellant could have accepted the offer of compromise and still proceeded with its appeal against the owners. In that appeal it could have relied on issue estoppels to establish that it was a tortfeasor liable for the plaintiff's damages within s 5(1)(c) of the 1946 Act.

1. If the owners, on learning of the settlement, then wished to attack the judgment in favour of the plaintiff, they would almost certainly have obtained leave to cross appeal out of time. In our judgment therefore the withdrawal of the appeal against the plaintiff would not have prejudiced the appellant's appeal against the owners. This appeal did not prevent the occupier accepting the offer of compromise.

1. The appellant should be ordered to pay the plaintiff respondent's costs of the appeal on an indemnity basis from 13 May 2011 until 30 November 2011.

Occupier's claim for contribution for plaintiff's costs.

1. This Court held in James Hardie & Co Pty Ltd v Wyong Shire Council [2000] NSWCA 107, 48 NSWLR 679 that a tortfeasor could also seek contribution under s 5(1)(c) of the 1946 Act for the costs payable to the plaintiff.

1. This aspect of the occupier's contribution claim against the owners was overlooked by its advisers. The notice of appeal did not seek this relief and it was not sought orally at the hearing. However the new claim is within the slip rule and similar claims were allowed after final judgment in L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59, 151 CLR 590; Gould v Vagellas [1985] HCA 85, 157 CLR 271, and Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659, 661.

1. There is therefore no reason why the Court should not entertain the claim for additional contribution on its merits. The appropriate order should be made, but there should be no order for costs on this motion.

1. The following orders are made:

Motion of 6 December 2011

(1) Order that the costs payable by the appellant pursuant to order (1) of 30 November 2011 be paid on the ordinary basis up to and including 13 May 2011, and on the indemnity basis thereafter until 30 November 2011.

(2) The appellant to pay the costs of the motion.

Motion of 13 December 2011

(1) Order (4) of 30 November 2011 varied by adding "and 50% of the costs of the trial payable by Loose Fit Pty Ltd to the plaintiff".

(2) No order as to the costs of the motion.

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Decision last updated: 06 March 2012