Rebenta Pty Ltd v Wise (No 2)

[2009] NSWCA 334

New South Wales

Court of Appeal

CITATION:

REBENTA PTY LTD v WISE (NO 2) [2009] NSWCA 334

HEARING DATE(S):

On the papers

 
JUDGMENT DATE: 

14 October 2009

JUDGMENT OF:

Ipp JA at 1; Basten JA at 1; Sackville AJA at 1

DECISION:

Vary the orders made on 24 July 2009 so that they provide:

(1) Dismiss the appeal.

(2) Order the appellant to pay the respondent’s costs in this Court, to be assessed on the indemnity basis.

CATCHWORDS:	COSTS – indemnity costs – offer of compromise – valid offer made by respondent prior to trial – indemnity costs awarded by trial judge – offer extended again by respondent prior to appeal – respondent successful on appeal – whether costs incurred following pre-trial offer payable on indemnity basis – Uniform Civil Procedure Rules 2005 (NSW), r 51.49
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 (NSW), ss 92, 93 Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A, 51.47, 51.48
CATEGORY:	Consequential orders
CASES CITED:	Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404 Rebenta Pty Ltd v Wise [2009] NSWCA 212
PARTIES:	Rebenta Pty Ltd - Appellant Peter Wise - Respondent
FILE NUMBER(S):	CA 40864/07
COUNSEL:	I M Jackman SC/J K Taylor - Respondent
SOLICITORS:	Mallesons Stephen Jaques - Respondent

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 20349/1998
LOWER COURT JUDICIAL OFFICER:	James J
LOWER COURT DATE OF DECISION:	30 November 2007
LOWER COURT MEDIUM NEUTRAL CITATION:	Rebenta Pty Ltd v Wise [2007] NSWSC 1332

CA 40864/07
SC 20349/98

IPP JA
BASTEN JA
SACKVILLE AJA

14 October 2009

REBENTA PTY LTD v Peter WISE (NO 2)

Judgment

1 THE COURT: On 24 July 2009 the Court handed down the principal judgment in this matter, dismissing the appeal with costs: Rebenta Pty Ltd v Wise [2009] NSWCA 212. The Court, when handing down judgment, granted leave to the respondent to file submissions in respect of any variation of the costs order within seven days. The appellant was given leave to file a response within seven days of receipt of the respondent’s submissions. Submissions were received from the respondent in accordance with the grant of leave, together with a supporting affidavit. No submissions have been received from the appellant.

2 The respondent now seeks an order that the appellant pay his costs of the appeal on an indemnity basis. In the alternative, he seeks an order for payment on an indemnity basis from 12 April 2008.

3 The underlying dispute, the subject of the appeal, involved the appellant, being a company involved in the development of a property at Bronte, and its former solicitor. Rebenta claimed that the solicitor was negligent in failing to give it correct advice as to a means available to terminate the development agreement. Rebenta contended that in not availing itself of the opportunity to terminate the agreement, it lost the chance to make a greater profit on the development than that ultimately received. The loss was said to flow from the negligence of the solicitor.

4 Rebenta commenced proceedings against the solicitor in the Supreme Court for damages in September 1998.

5 The solicitor made a number of offers to settle the proceedings in the course of the hearing in the Common Law Division. In particular, an offer of settlement made pursuant to Pt 22 of the Supreme Court Rules 1970 (NSW) (as then in force) was made on 9 July 2004.

6 On 30 November 2007 James J rejected Rebenta’s claim and gave judgment for the solicitor. On 10 September 2008 costs orders were made requiring the appellant to pay the defendant’s costs on a party and party basis up to the date of the offer, 9 July 2004, and thereafter on an indemnity basis. The appeal having been dismissed, the costs orders in relation to the trial are unaffected. However, it may be noted that order (4) made on 10 September 2008 involved a stay in respect of payment and enforcement of the costs orders pending the appeal to this Court. Interest was payable on the amount outstanding until payment. The stay automatically ended with the delivery of judgment on the appeal.

7 A formal notice of appeal without appointment was filed by the appellant on 12 December 2007, a full notice of appeal with grounds being filed on 7 March 2008.

8 On 11 April 2008 the respondent made an offer of compromise in respect of the appellant’s claim in the appeal, pursuant to r 51.47 of the Uniform Civil Procedure Rules 2005 (NSW) (“the UCPR”). The offer was in similar terms to that made on 9 July 2004, namely an offer to pay $50,000 plus costs. The offer was further conditioned on agreement that the appeal be dismissed, without prejudice to the respondent’s rights to costs in the proceedings below.

9 The quantum of the respondent’s costs of the trial are not known, but the orders made in the Common Law Division on 10 September 2008 placed a cap on the costs payable by Rebenta in an amount of approximately $1.5 million. The recent offer of compromise by payment of $50,000 involved a relatively insignificant sum, given the costs of the trial and the amount of Rebenta’s claim, which was said, in the notice of appeal, to be in the order of $4 million. If successful on the appeal, Rebenta would have anticipated a reversal of the costs orders made at the trial. If it had accepted the offer, it would have obtained a relatively small amount for its costs incurred in this Court up until 11 April 2008.

10 There is no reason to characterise the offer as other than one which complied with UCPR, r 20.26. Nor is there reason to doubt that, the respondent having obtained a judgment on the appeal in respect of the appellant’s claim, the consequences provided by r 42.15A (as modified by r 51.48 in relation to proceedings in this Court) will follow. That would require the appellant to pay the costs of the respondent up until the date of the offer, assessed on the ordinary basis and, from the following day, as assessed on an indemnity basis.

11 There is no apparent reason to order otherwise. The appellant has presented no material which would support some other order. No other order was made in the Court below in relation to a similar offer. There is nothing before this Court which would justify an alternative order.

12 There remains a question as to whether the respondent should also have his costs on an indemnity basis prior to the date of the offer made in this Court. As he noted in his written submissions, such a result may flow from the continued effect of a pre-trial offer: see Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404 at 409-410 (Gleeson CJ and Priestley JA). That principle is now encapsulated in r 51.49, permitting the Court to “have regard to any offer of compromise made (whether under these rules or otherwise) in the Court below”.

13 In having regard to the offer of 9 July 2004, it is not necessary to identify any particular consequence flowing from the rules under which the offer was made. It is of course true that that offer was not capable of acceptance after judgment had been given at trial. Indeed, in accordance with its terms, it was not capable of acceptance from 28 days after the date of service. However, as noted in Ettingshausen in the passage referred to above, the consequences of the offer are not “exhausted” once the trial comes to an end. That is in part because “the offer is made, not in respect of a trial, but in respect of a claim”: at 409G. The appeal to this Court is “by way of rehearing” and the claim is not finally determined for these purposes until judgment has been given by this Court. (It is not necessary for present purposes to consider the effect of an order for a retrial or the possibility of an application for special leave to appeal to the High Court.)

14 There are three reasons why the pre-trial offer should result in an order for costs to be assessed on an indemnity basis in this Court, even if incurred prior to the offer of 11 April 2008. First, the issues which arose from the claim were the same as those which arose at trial and as to which the appellant was in possession of full information as to the strength of its claim. If its position was seen to be adversely affected by the judgment below, it had the choice of not appealing or making its own offer of compromise. Secondly, by the time it filed its appeal it was aware that, in the Common Law Division, its failure to accept the offer had resulted in an order for costs assessed on the indemnity basis. There was no separate challenge to that order on the appeal. Thirdly, the offer was renewed at the first reasonable opportunity in this Court, namely within about a month of receiving the appellant’s notice of appeal with grounds.

15 In these circumstances, it is appropriate to order that the appellant pay the respondent’s costs in this Court assessed on the indemnity basis, from the commencement of the proceedings in this Court.

16 The appropriate order is, accordingly:

Vary the orders made on 24 July 2009 so that they provide:
(1) Dismiss the appeal.
(2) Order the appellant to pay the respondent’s costs in this Court, to be assessed on the indemnity basis.
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