Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd

[2016] NSWCA 3

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2016] NSWCA 3
Hearing dates:	16 December 2015
Decision date:	03 February 2016
Before:	Gleeson JA; Leeming JA; Emmett AJA
Decision:	Application to vary costs orders refused.
Catchwords:	COSTS – offer of compromise – “walk-away” offer – no significant compromise – no basis for special costs order
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A, 51.47, 51.48
Cases Cited:	Calderbank v Calderbank [1976] Fam 93 Taheri v Vitek (No 2) [2014] NSWCA 344
Category:	Costs
Parties:	Mega-top Cargo Pty Ltd (Appellant) Moneytech Services Pty Ltd (Respondent)
Representation:	Counsel: T Hall, solicitor (Appellant) C D Wood (Respondent)   Solicitors: Hall Partners (Appellant) Berry Buddle Wilkins Lawyers (Respondent)
File Number(s):	2015/151853
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 30 April 2015 Before: Olsson DCJ File Number(s): 2014/245779

Judgment

1. THE COURT: On 16 December 2015, this Court dismissed the appeal with costs. When judgment was delivered, Moneytech made an oral application for that order to be varied, by reason of an offer of compromise made by it on 26 October 2015. The compromise offered was that the appeal be dismissed with no order as to costs. The letter enclosing that offer of compromise advised that if the offer was not found to be a valid offer of compromise, then it was to be considered as an offer made in accordance with the principles in Calderbank v Calderbank [1976] Fam 93. The letter concluded:

“In the event that your client does not accept our client’s offer for settlement, we propose to tender this letter in support of an application that our client be entitled to its costs to date on the indemnity basis.”

2. Moneytech submitted that the offer was a valid offer of compromise, such that it was entitled to a more favourable costs order. Mega-top submitted that the offer amounted to “capitulation” and did not warrant disturbing the existing costs order. Neither sought to be heard in writing or to tender any evidence beyond the offer and the letter which enclosed it.

3. The offer of compromise made by Moneytech was open for a period of 28 days, and complied with the rules: see Uniform Civil Procedure Rules 2005 (NSW), r 20.26(3)(a). There was no evidence to suggest that Moneytech had, by 26 October 2015, incurred any significant costs in defending the appeal. Its written submissions, which ultimately were nine paragraphs occupying just over two pages, signed by counsel who had appeared at trial, had not even been filed. They were filed two days later, on 28 October 2015.

4. Part 42, r 42.15A applies where an offer is made by a defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer. Part 51, r 51.47 makes that rule applicable to appeals. The result is as stated in r 42.15A(2) (which is made applicable by r 51.48), namely, that Moneytech is entitled to a special costs order from the time the offer was made, unless the court orders otherwise. (The covering letter wrongly stated that an application would be made for indemnity costs to date, something which goes further than is provided by the rules. Nothing turns on that error.)

5. However, the making of an offer of compromise no less favourable than the result achieved does not give rise to an unconditional entitlement to a favourable costs order. Rule 42.15A(2) makes it plain that the court retains a discretion. It is well settled that in circumstances such as these, where no significant compromise at all is made by a party to an appeal, the default position provided for in the rules will not be applied. It suffices to reproduce the judgment of this Court in Taheri v Vitek (No 2) [2014] NSWCA 344 at [9]-[11]:

“However, as the appellant's submissions point out, the offers made on 17 July and 10 December 2013 in large measure invited capitulation by the appellants in each appeal. There is no evidence before the Court as to the costs incurred by the respondents at those times (some three weeks after the commencement of the first appeal, and seven days after the commencement of the second appeal). It would be expected that virtually no costs would have been incurred by those times.

In our view, it would not be appropriate for the non-acceptance of either of those offers to lead to the consequences for which Pt 42, r 42.15 provides. The only measure of compromise involved on the part of the respondents was not to seek their costs which could not, by that stage, have been significant: cf Botany Bay City Council v Latham (No 2) [2013] NSWCA 450 at [12] (Adamson J, Ward and Leeming JJA agreeing). If that were not so, then the rule could be engaged by a defendant (or a respondent to an appeal) early in the litigation making a "walk-away" offer of compromise; that would not serve the public policy of encouraging settlement.

For the same reasons, if the correspondence of 17 July and 10 December 2013 be treated in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333, the same result obtains.”

6. Moneytech has not demonstrated that the present appeal is materially different. It follows that the order made on 16 December 2015 should not be varied.

7. The parties addressed the application to vary the order for costs efficiently, in a manner which was not apt to give rise to any material additional costs. It is unnecessary, in those circumstances, separately to address the question of the costs of the application to vary the costs order.

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