Orix Australia Corporation Limited v Moody Kiddell and Partners Pty Limited (No 2)

[2006] NSWCA 301

New South Wales

Court of Appeal

CITATION:	Orix Australia Corporation Limited v Moody Kiddell & Partners Pty Limited & Anor (No 2) [2006] NSWCA 301 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	On written submissions
JUDGMENT DATE:	7 November 2006
JUDGMENT OF:	Spigelman CJ; Ipp JA; Basten JA
DECISION:	(1) Respondents' application dismissed with costs. (2) There will be no variation to the costs order made when judgment delivered on 26 September 2006.
CASES CITED:	Calderbank v Calderbank (1975) 3 WLR 586 Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 Leichhardt Municipal Council v Green [2004] NSWCA 341 Manly Council v Byrne (No 2) [2004] NSWCA 227 The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120
PARTIES:	Orix Australia Corporation Limited (Appellant) Moody Kiddell & Partners Pty Limited (First Respondent) Christine Mathers (Second Respondent)
FILE NUMBER(S):	CA 41003/05
COUNSEL:	T Hale SC/A Mitchelmore (Appellant) M McCulloch SC/J White (First and Second Respondents)
SOLICITORS:	M D Nikolaidis & Co (Appellant) Ebsworth & Ebsworth (First and Second Respondents)
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	ED 6113/04
LOWER COURT JUDICIAL OFFICER:	White J
LOWER COURT DATE OF DECISION:	30/11/05
LOWER COURT MEDIUM NEUTRAL CITATION:	[2005] NSWSC 1209

CA 41003/05
ED 6113/04

SPIGELMAN CJ
IPP JA
BASTEN JA

Tuesday 7 November 2006

ORIX AUSTRALIA CORPORATION LIMITED v MOODY KIDDELL & PARTNERS PTY LIMITED & ANOR (NO 2)

Judgment – On Costs

1 The Court: On 26 September 2006 this Court delivered judgment dismissing the appellant’s appeal with costs. The respondents thereupon applied for an order that costs be paid on an indemnity basis and that the costs orders be varied accordingly. Directions were made that written submissions be exchanged on this issue and that has now occurred.

2 The basis of the application for an order for indemnity costs was an offer made on 3 February 2006 (prior to the hearing of the appeal) by the respondents to the appellant in the following terms:

“If the appeal were to be discontinued at this point, our client is willing to pay its own costs of the appeal to date. In the event that this offer is not accepted within 28 days, and our client ultimately succeeds on the appeal, this letter will be used as a basis for seeking an order for indemnity costs on the appeal.”

3 The appellant filed its notice of appeal on 23 December 2005. The first call-over before the registrar of this Court took place on 16 March 2006. The appellant’s written submissions were filed on 24 April 2006 and on 9 June 2006 the respondents filed their written submissions. The appeal was heard on 13 September 2006.

4 This brief chronology shows that by 3 February 2006 (when the respondents’ offer was sent to the appellant) and by 3 March 2006 (when the offer expired) the costs incurred by the respondents would have been minimal.

5 In these circumstances, the appellant submits that the offer of 3 February 2006 did not involve a real or genuine element of compromise. The appellant argues:

“There was nothing the respondents were giving away. The offer required capitulation before the first call-over and before any costs were incurred.”

6 In The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120 Basten JA (with whom Santow JA and Young CJ in Eq agreed) said at [8]:

“It is well established that an offer which does not involve a real and genuine element of compromise, will not be taken into account in relation to costs, either under the general law principles established by Calderbank v Calderbank (1975) 3 WLR 586, or under Rules of Court: see, eg, Leichhardt Municipal Council vGreen [2004] NSWCA 341; Manly Council v Byrne (No 2) [2004] NSWCA 227 and Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375.”

7 The point was succinctly put by the Court in Herning at [5]:

“The general approach adopted in this Court is that where an offer involves ‘no real element of compromise’ but merely ‘invites capitulation by the appellant’ it will not result in a variation of the usual costs order.”

8 The offer made by the respondents in this case fell squarely within the category of offers that contain no real element of compromise and invite capitulation. It was not unreasonable for the appellant to reject it.

9 Accordingly, the respondents’ application cannot be upheld and is dismissed with costs. There will be no variation to the costs order made when judgment was delivered on 26 September 2006.

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07/11/2006 - Short Case Title on Cover Sheet: typo word "Partners" - Paragraph(s) N/A