Nilsen (NT) Pty Ltd v Delta Electrics NT Pty Ltd (No 2)

[2020] NTCA 6

CITATION: Nilsen (NT) Pty Ltd v Delta Electrics NT Pty Ltd (No 2) [2020] NTCA 6

PARTIES:  NILSEN (NT) PTY LTD
  (ACN 115 074 989)

v

DELTA ELECTRICS NT PTY LTD (ACN 094 187 050)

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY

JURISDICTION:  CIVIL APPEAL from the SUPREME COURT exercising Territory jurisdiction

FILE NO:AP 1 of 2020 (21932025)

DELIVERED:  16 April 2020

HEARING DATE:  On the papers

JUDGMENT OF:  Mildren AJ

REPRESENTATION:

Counsel:

Applicant:R Perkins

Respondent:  JW Roper

Solicitors:

Applicant:Powell & Co Legal

Respondent:  Maher Raumteen Solicitors

Judgment category classification:    C

Judgment ID Number:  Mil20562

Number of pages:  4

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Nilsen (NT) Pty Ltd v Delta Electrics NT Pty Ltd (No 2) [2020] NTCA 6

No. AP 1 of 2020 (21932025)

BETWEEN:

NILSEN (NT) PTY LTD
(ACN 115 074 989)

AND:

DELTA ELECTRICS NT PTY LTD
(ACN 094 187 050)

CORAM:    MILDREN AJ

REASONS FOR JUDGMENT

(Delivered 16 April 2020)

1. Following my order to refuse leave to the applicant to appeal from an interlocutory order by the Supreme Court striking out the applicant’s defence, the respondent now seeks an order that the applicant pay the respondent’s costs of the application on either an indemnity basis or the standard basis.

2. The applicant has re-pleaded its defence and has sought mediation of the action. It has submitted that it is too early to decide the question of the costs of the application, which should be reserved until the matter is finalised either by mediation or in the Supreme Court.

3. The respondent has submitted that as the proceedings in this Court have been finalised, I ought now make a costs order in relation to the application for leave to appeal. As the respondent points out, the application for leave is a separate proceeding in a separate Court and therefore stands separately from the proceedings in the Court below.

4. The fact that the applicant has sought to mediate the whole dispute does not alter the fact that the proceedings in this Court are at an end. If a costs order is now made, it will not alter the possibility of the action in the Supreme Court being mediated successfully.

5. Although costs are in the discretion of the Court, the general rule is that an unsuccessful party should pay the costs of the party who has been successful, unless there is some exceptional reason to deprive that party of its costs. In this case there is no basis for the displacement of the general rule.

6. The next question is whether or not the respondent is entitled to an order for indemnity costs. The general rule is that costs are ordinarily ordered to be paid on the standard basis unless there is some exceptional reason to award costs on an indemnity basis. Counsel for the respondent submitted that there were two reasons why indemnity costs should be awarded in this case. The first reason was that the application was one which was doomed to fail because there was no error of law made by the Judge at first instance, and furthermore, even if there was an arguable case, no prejudice had been demonstrated warranting the grant of leave. I was referred to the judgment of Sheppard J in Colegate-Palmolive Companyand Another v Cussons Pty Ltd[1] where His Honour summarised the principles and the sort of situations where an indemnity costs order might be made. In particular, the respondent relied upon the circumstance that a wilful disregard of known facts or clearly established law, or an imprudent refusal to accept an offer of compromise would ordinarily enliven the discretion. As to the “wilful disregard of clearly established law” it was put that because the judgment sought to be appealed was plainly right, and that there was no prejudice shown to the applicant if the judgment stood, the application was so hopeless as to fall into that category. No submission has been made to the contrary.

7. Furthermore, the respondent points to having made an offer of compromise, the terms of which are set out in the affidavit of the respondent’s solicitor. Essentially the offer made was to invite the applicant to withdraw it application for leave on the basis that the respondent would concede to directions that the applicant have leave to file an amended pleading. In my opinion, this was hardly an offer at all. Although the judge below did not mention whether or not leave to file an amended pleading would be granted, as far as I can see there would have been no basis for refusing such leave. The offer did not include any offer as to the costs of the application.

8. Nevertheless I am firmly of the view that the application was so hopeless that an order for indemnity costs should be made in favour of the respondent. The respondent also seeks an order that it be entitled to proceed to recover these costs forthwith. Because there is no rule deferring the payment of costs in an application for leave to appeal, no such order is necessary.

Order

1. Order that the applicant pay the respondent’s costs to be taxed on an indemnity basis. I certify fit for counsel.

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[1][1993] FCA 536 at [24]; (1993) 46 FCR 225 at 232-234.