Marcello Capone and Nicole Masson v Richard Lambert

[2014] NSWCATCD 222

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Marcello Capone and Nicole Masson v Richard Lambert [2014] NSWCATCD 222
Hearing dates:	Heard on the papers
Decision date:	02 December 2014
Jurisdiction:	Consumer and Commercial Division
Before:	D. Goldstein, Senior Member
Decision:	Richard Lambert must pay Marcello Capone and Nicole Masson their costs of and incidental to these proceedings, on a party and party basis, up to and including 1 November 2014 such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the ; and Richard Lambert must pay Marcello Capone and Nicole Masson their costs of and incidental to the proceedings; on an indemnity basis from 2 November 2014 onwards such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the .
Catchwords:	Costs, Bankruptcy of a party, Calderbank Offers
Legislation Cited:	Consumer, Trader and Tenancy Act, 2001 Consumer, Trader and Tenancy Tribunal Regulation 2009 Bankruptcy Act 1966 (Commonwealth)
Cases Cited:	Bruckner v JVZ Steel Roof (24 August 2011), Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 , Jones v Bradley (No. 2) [2003] NSWCA 258, Leslie Gaskin v Matthew Ollerenshaw , Oshlack v Richmond River Council (1998) 193 CLR 72.
Texts Cited:	None cited
Category:	Costs
Parties:	Marcello Capone and Nicole Masson (applicants) Richard Lambert (respondent)
Representation:	Counsel: Solicitors: Harris Wheeler for the Applicants
File Number(s):	HB 12/48071
Publication restriction:	Unrestricted

reasons for decision

1. On 16 July 2014 I published reasons for decision and final orders in these proceedings. The applicants were successful. An order for $65,716.57 was made in their favour.

2. Orders 2 – 6 of the orders made on 16 July 2014 dealt with costs applications.

3. The applicants made an application for costs on 5 August 2014.

4. On 12 August 2014 Messrs Terry Grant Van Der Velde and Jason Shane Cronan, wrote to the Tribunal stating that they were the joint and several Trustees of the bankrupt estate of Mr Lambert, the respondent. They stated that he was bankrupt as and from 5 August 2014.

5. Section 58(3)(b) of the Bankruptcy Act 1966 states:

‘(3)  Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

(a)  to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

(b)  except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding’

6. On 1 October 2014 the Tribunal wrote to the applicants’ solicitors requesting them to provide submissions as to whether the Tribunal could proceed with their clients’ costs application in light of section 58(3)(b) of the Bankruptcy Act.

7. The Tribunal has not received the courtesy of a reply from the applicants’ solicitors.

8. I have decided that section 58(3)(b) of the Bankruptcy Act does not prevent me from proceeding with the costs application. I refer to the decision of the High Court in Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 as authority for that.

9. I accept the applicants’ solicitor’s submissions that the provisions of the following Legislation and Rules apply to the costs application.

10. Section 53 of the Consumer, Trader and Tenancy Act, 2001 Act provides, so far as is relevant, that:

‘1)  Subject to this section and the regulations, the parties in any proceedings are to pay their own costs.

(2)  The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings.

(3)  If costs are to be awarded by the Tribunal in accordance with the regulations, the Tribunal may:

(a)  determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.’

(4)  In this section, costs includes the costs of, or incidental to, proceedings.’.

11. Regulation 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation 2009 provides that :

‘In any proceedings in respect of which the amount claimed or in dispute is more than $30,000, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit.’

12. The amount claimed in this application was $95,968.00. An order was made in the applicants’ favour in the sum of $65,716.57. It is clear in these circumstances that I have jurisdiction to award costs as I think fit.

13. The general law position is that a successful party has a “reasonable expectation” of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and at [134]. At paragraph 67 of the judgement Gaudron and Gummow J.J. stated:

‘The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party[96]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.’

14. I find that being the successful party, the applicants are entitled to their costs of and incidental to the proceedings, on the usual basis.

15. The applicants’ solicitor’s submission state that a ‘Calderbank’ offer was made by the applicants to the respondent on 4 October 2013, more than one calendar month before the hearing commenced. In this offer the applicants offered to accept the sum of $40,000.00 in satisfaction of their claim and in addition their reasonable legal costs, such costs to be assessed if not agreed. A reasonable time was allowed for the respondent to consider the offer.

16. I accept the applicants’ solicitor’s submissions at paragraphs 36 and 37.

17. I also accept that the proposed form of orders set out by the applicants’ solicitors are reasonable, having regard to the offer made by the applicants and the fact that they have obtained an outcome which is substantially more favourable than their offer.

18. In Bruckner v JVZ Steel Roof (2011) NSW CTTT 382 (24 August 2011) Senior Member Meadows made an order for part indemnity costs after the respondent largely succeeded against the applicant. He considered that in accordance with principles enunciated by the P Garling J in Leslie Gaskin v MatthewOllerenshaw (2010) NSW SC 874 there was a basis for ordering indemnity costs in accordance with the Act and regulations governing the Consumer, Trader and Tenancy Tribunal.

19. The making of a ‘Calderbank Offer’ that is bettered by the offeror does not in itself entitle the offeror to an order for indemnity costs. That was decided in Jones v Bradley (No. 2) [2003] NSWCA 258.

20. I refer to the recent Court of Appeal decision in Miwa Pty Ltd v Siantan Properties Pte Ltd (No. 2) [2011] NSWCA 344. In that case Basten JA identified two questions which are relevant to a ‘Calderbank’ offer and a claim for indemnity costs. They are whether:

1. there was a genuine offer of compromise, and

2. it was unreasonable for the offeree not to accept it.

21. In my view and I so find, there was a genuine offer of compromise made by the applicants and the respondent acted unreasonably in not accepting it. I accept that the matters referred to by the applicants’ solicitors at 19 – 24 of their submissions point to the refusal of the offer being unreasonable. The amount offered was substantially less than the applicant’s claim of $95.968.00. I find that it was unreasonable for the respondent to have refused the offer for the reasons pointed out in the applicants’ submissions.

22. Having regard to the reasons set out above, I will make the following orders:

1. The respondent must pay the applicants’ costs of and incidental to the proceedings, on a party and party basis, up to and including 1 November 2014 such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004; and

2. The respondent must pay the applicants’ costs of and incidental to the proceedings; on an indemnity basis from 2 November 2014 such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004.

D Goldstein

Senior Member

Civil and Administrative Tribunal of New South Wales

2 December 2014

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 10 February 2015