Pel-Air Aviation Pty Ltd v Casey (No 2)

[2017] NSWCA 92

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Pel-Air Aviation Pty Ltd v Casey (No 2) [2017] NSWCA 92
Hearing dates:	On the papers
Decision date:	10 May 2017
Before:	Macfarlan JA; Ward JA; Gleeson JA
Decision:	(1)   Judgment for Ms Casey in the sum of $5,224,818, to take effect on the date of this judgment. (2)   Order Pel-Air to pay Ms Casey’s costs of the assessment at first instance of Ms Casey’s funds management damages. (3)   Subject to Order (2), order Pel-Air to pay Ms Casey’s costs of the proceedings at first instance: (a)   on the ordinary basis up to and including 30 January 2015 and (b)   after 30 January 2015 on an indemnity basis. (4)   Order Ms Casey to pay 50% of Pel-Air’s costs of its appeal. (5)   Order Pel-Air to pay Ms Casey’s costs of her cross-appeal.
Catchwords:	APPEAL – costs – no issue of principle
Legislation Cited:	Uniform Civil Procedure Rules 2005
Category:	Costs
Parties:	Pel-Air Aviation Pty Ltd (Appellant) Karen Casey by her manager the National Australia Trustee Ltd (Respondent)
Representation:	Counsel: J E Sexton SC / D Lloyd (Appellant) R S McIlwaine SC / G R Graham (Respondent)   Solicitors: GSG Legal (Appellant) Everett Evans (Respondent)
File Number(s):	CA 2015/171223
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2015] NSWSC 566 Date of Decision: 15 May 2016 Before: Schmidt J File Number(s): SC 2010/385262; 2011/46508

Judgment

1. THE COURT: On 9 March 2017 the Court gave judgment on this appeal ([2017] NSWCA 32). It allowed both Pel-Air’s appeal and Ms Casey’s cross-appeal, set aside the judgment and orders made below and directed the parties to lodge written submissions concerning quantification of the judgment to be entered in Ms Casey’s favour in conformity with the Court’s reasons for judgment and dealing with issues as to costs. Submissions were lodged in accordance with the timetable specified.

2. In these submissions and subsequent correspondence the parties agreed that judgment should be entered in Ms Casey’s favour in the sum of $5,224,818, to take effect from the date of this Court’s judgment. The agreed figure excluding interest accruing after the orders at first instance was $5,045,337. The Court was not informed of the precise makeup of this figure but Ms Casey’s submissions in chief identify the components of the almost identical figure of $5,045,936.50 which she then claimed as $4,173,936.50 prior to funds management expenses of $872,000.

3. The parties also agreed that an order should be made that Pel-Air pay Ms Casey’s costs of the assessment at first instance of Ms Casey’s funds management expenses. They did not suggest that the order made at first instance in relation to the remainder of the first instance costs was no longer appropriate. As that order (order (3) made on 21 March 2016) was set aside by this Court’s judgment on 9 March 2017, it should be re-made.

4. The parties were at issue as to the orders that should be made concerning the costs of the appeal proceedings.

5. In her submissions in chief, Ms Casey submitted that Pel-Air should be ordered to pay her costs of the appeal as her total judgment exceeded that which she obtained at first instance. This was however a result of her success on her cross-appeal, which resulted in a substantial increase in the award for her costs of funds management. On the remaining issues, her entitlement was found to be less than the amounts awarded at first instance.

6. Ms Casey relied in this context on an Offer of Compromise served on 4 December 2015. This was expressed to operate also as a Calderbank Offer in the event of any “technical invalidity” of the Offer of Compromise. By the Offer, Ms Casey indicated that she would accept a judgment of $4,212,431 “plus funds management”, with an order that Pel-Air pay one-half of her costs of the appeal. As Ms Casey concedes, her offer exceeded the amount of her judgment to be entered on appeal, albeit only by a small amount (in the order of the difference between $4,212,431 and $4,173,936.50 being $38,497.50).

7. In these circumstances, she cannot obtain the benefit of the Uniform Civil Procedure Rules 2005 concerning offers of compromise, as her judgment was less favourable than that which she indicated she was prepared to accept (r 42.14(1)). Nor do we consider that Ms Casey is assisted by the Calderbank principles as it cannot be said that Pel-Air’s non-acceptance of the offer was unreasonable, it being in excess of what Ms Casey has been ultimately awarded. Whilst the amount Ms Casey said she would accept in satisfaction of her claim was only slightly above the amount she ultimately recovered, there was nothing in Ms Casey’s communication, nor apparently in any subsequent communication, to suggest that she might reduce the amount she sought.

8. In response to Ms Casey’s submissions, Pel-Air submitted that there should be orders that Ms Casey pay its costs of the appeal (including the Notice of Contention) and Pel-Air pay Ms Casey’s costs of the cross-appeal. It pointed out that on its appeal it succeeded on the “bodily injury” issue and that, on her Notice of Contention, Ms Casey had unsuccessfully submitted that the primary judge’s contingent findings on damages were erroneous. Pel-Air recognised that it had obtained a reduction in the judgment sum considerably less than it had sought but submitted that this was not a reason to deprive it of its costs of the appeal.

9. In reply, Ms Casey pointed out that Pel-Air’s challenges to the primary judge’s contingent damages findings were unsuccessful. She submitted that if the Court took the view that some allowance should be made for Pel-Air’s success on the “bodily injury” issue, it should be reflected in a percentage reduction of the costs of the appeal that Pel-Air should be ordered to pay Ms Casey.

10. We turn then to resolve the issues between the parties.

11. The appeal, as distinct from the cross-appeal, had two severable facets: the “bodily injury” issue which involved detailed consideration of case authorities, and the contingent findings issue which involved detailed examination of the factual material. Pel-Air (the appellant) succeeded on the first. On the second, it failed to persuade the Court that the exclusion of consideration of Ms Casey’s PTSD substantially reduced Ms Casey’s entitlement under a number of heads of damages. On the other hand, Ms Casey failed to persuade the Court on her Notice of Contention that the primary judge’s contingent findings were in error and that exclusion of Ms Casey’s PTSD from consideration did not warrant any reduction at all in the damages that her Honour awarded.

12. In these circumstances, Pel-Air should receive its costs of the first facet of the appeal, to reflect its success on that topic. There should however be no order as to the costs of the second facet, neither party being successful on that topic. As in broad terms the two facets were of similar prominence in the argument on the appeal, these conclusions should be reflected in an order that Ms Casey pay 50% of Pel-Air’s costs of the appeal.

13. As Ms Casey succeeded on her cross-appeal, Pel-Air should be ordered to pay her costs of it.

Orders

14. The Court makes the following orders:

1. Judgment for Ms Casey in the sum of $5,224,818, to take effect on the date of this judgment.

2. Order Pel-Air to pay Ms Casey’s costs of the assessment at first instance of Ms Casey’s funds management damages.

3. Subject to Order (2), order Pel-Air to pay Ms Casey’s costs of the proceedings at first instance:

1. on the ordinary basis up to and including 30 January 2015 and

2. after 30 January 2015 on an indemnity basis.

4. Order Ms Casey to pay 50% of Pel-Air’s costs of its appeal.

5. Order Pel-Air to pay Ms Casey’s costs of her cross-appeal.

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Decision last updated: 10 May 2017