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Nominal Defendant v Dighton (No 2)

Nominal Defendant v Dighton (No 2)

Case [2012] SASCFC 97 9 August 2012

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SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
NOMINAL DEFENDANT v DIGHTON (No 2)
[2012] SASCFC 97
Judgment of The Full Court
(The Honourable Justice Sulan, The Honourable Justice Anderson and The Honourable Justice David)
9 August 2012
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE - OFFER OF COMPROMISE MADE
CALDERBANK LETTERS - EFFECT OF IN RELATION TO INDEMNITY COSTS
The Court dismissed the appellant's appeal and allowed the respondent's cross-appeal - the respondent's award of damages was increased by $152,661.40 - Court entered judgment of $687,743.24 in favour of the respondent on 3 August 2012.
The respondent made two "Calderbank offers" - rejected by the appellant - appellant made counter-offer - counter-offer substantially lower than the amount awarded by the Court.
The respondent applied for an award of indemnity costs - whether the appellant's conduct amounted to an imprudent or unreasonable failure to accept offers - whether the respondent is entitled to an award of indemnity costs.
Held: Respondent's offers by way of Calderbank letters were reasonable - appellant's counter-offer fell far short of the mark - appellant to pay the respondent's costs of the appeal on an indemnity basis.
Hazeldene's Chicken Farm v VWA (No 2) (2005) 13 VR 435, discussed.
Calderbank v Calderbank (1975) 3 WLR 586, considered.

NOMINAL DEFENDANT v DIGHTON (No 2)
[2012] SASCFC 97
Full Court: Sulan, Anderson and David JJ

THE COURT: The Full Court disallowed an appeal by the appellant on both liability and quantum and allowed the cross-appeal by the respondent on quantum. As a result the Court entered a judgment of $669,193.24 in favour of Mr Dighton on 3 August 2012. This amount was later amended to $687,743.24 because an error had been made in calculations.
Mr Roberts for the respondent applied for an award of indemnity costs on the basis that it was imprudent of the appellant to not accept the respondent’s offers contained in letters dated 22 June 2012 and 2 July 2012. The appeal was heard on 3 July 2012. The respondent relies on Calderbank v Calderbank (1975) 3 WLR 586. Mr S. Doyle opposed this application.
Mr Roberts relied on both letters as Calderbank offers between the appellant and the respondent. The first of these letters dated 22 June 2012 stated that the respondent was of the view that the appellant had very limited prospects of success on the appeal, and given this matter had already accrued an excessive amount of costs, the respondent was prepared to attempt to resolve the matter and offered to accept an amount of $500,000 plus the costs awarded by the District Court plus costs of appeal on a party-party basis. The letter pointed to the prospects of the cross-appeal succeeding and a likely increase in damages of not less then $150,000.
The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Nominal Defendant v Dighton (No 2)

Details

AGLC: Nominal Defendant v Dighton (No 2) [2012] SASCFC 97
Case: [2012] SASCFC 97
Decision Date: 9 August 2012

CaseChat Overview and Summary

The appeal concerned an application for indemnity costs following a judgment in favour of the respondent, Dighton. The appellant, the Nominal Defendant, had appealed the primary judge's decision, and the respondent had cross-appealed seeking an increase in damages. The Court of Appeal dismissed the appellant's appeal and allowed the respondent's cross-appeal, increasing the award of damages by $152,661.40, resulting in a final judgment of $687,743.24 in favour of the respondent.

The central legal issues before the Court of Appeal were whether the respondent was entitled to an award of indemnity costs, and whether the appellant's conduct in rejecting the respondent's settlement offers and making a substantially lower counter-offer constituted an imprudent or unreasonable failure to accept those offers. The respondent had made two "Calderbank offers" which were rejected by the appellant.

The Court held that the respondent's Calderbank offers were reasonable. In contrast, the appellant's counter-offer was found to fall "far short of the mark," indicating an unreasonable stance in settlement negotiations. Applying the principles governing costs, particularly in circumstances where offers of compromise have been made and rejected unreasonably, the Court determined that the general rule that costs follow the event should be departed from. Consequently, the appellant was ordered to pay the respondent's costs of the appeal on an indemnity basis.

Orders