Rose v Boxing NSW Inc (Costs)

[2007] NSWSC 256

CITATION:	Rose v Boxing NSW Inc & Anor (Costs) [2007] NSWSC 256
HEARING DATE(S):	31 January 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	31 January 2007
DECISION:	First defendant to pay plaintiff’s costs. Plaintiff to pay second defendant’s costs to extent they are additional to those incurred by first defendant.
CATCHWORDS:	COSTS – where plaintiff succeeds on all issues against first defendant but obtains no relief against second defendant whose joinder was unnecessary – where defendants make offer which plaintiff bettered only slightly.
LEGISLATION CITED:	(NSW) Uniform Civil Procedure Rules 2005 r 20.26
PARTIES:	Wayne John Rose (plaintiff) Boxing NSW Incorporated (first defendant) Arthur Tunstall (second defendant)
FILE NUMBER(S):	SC 1477/06
COUNSEL:	K Ryan w P Castley (plaintiff) M Robinson w S Blount (defendants)
SOLICITORS:	Christopher M Edwards, Solicitors (plaintiff) Carneys Lawyers (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Wednesday, 31 January 2007

1477/06 Wayne John Rose v Boxing NSW Incorporated & Anor (Costs)

JUDGMENT (ex tempore)

1 HIS HONOUR: As the plaintiff has succeeded in the proceedings on virtually every issue, the prima facie position as to costs is that, costs following the event, the first defendant, against whom the plaintiff succeeded, is to pay the plaintiff's costs, and it falls for the defendant to show good cause for departing from that prima facie position.

2 For that purpose, Mr Robinson relies primarily upon an offer of compromise served by the first defendant on the plaintiff on or about 15 November 2006 in which the defendants offered to compromise the proceedings, without admissions, on the basis that the plaintiff's expulsion would be declared null and void and of no effect, and the defendants would be restrained from taking any further steps to implement the purported expulsion, or otherwise obstructing the plaintiff in exercising his rights of membership. In addition, the defendants offered to pay damages of $1,000, and costs in the sum of $3,000.

3 The offer was expressed to be open for acceptance until 1 December 2006. The offer was not accepted, but the plaintiff made a counter-offer on 4 December 2006, in which the first two elements of the defendant's offer – namely the declaration of invalidity of the expulsion and an injunction restraining its further implementation – were repeated, and in addition, the plaintiff sought a public apology, damages in the sum of $50,000, and costs as taxed or agreed.

4 As Mr Ryan submits, the plaintiff's offer of compromise did not strictly comply with the rules. Nonetheless, I accept that it is a relevant matter to be taken into account on the question of costs, even though it is not strictly an offer of compromise under (NSW) Uniform Civil Procedure Rules 2005 r 20.26. Accordingly, the formal defects in the offer do not require that it be entirely disregarded, and the question is whether, as a matter of substance, it was unreasonable for the plaintiff not to accept it.

5 The orders which I made on 11 December effectively mirror the first and second elements of the offer, namely the declaration of invalidity, and the injunction restraining further implementation. However, the plaintiff has bettered the offer in respect of the third element, namely damages: whereas the defendants offered $1,000, the plaintiff has recovered damages in the sum of $4,000 which, although far short of the plaintiff's offer, is still as, Mr Ryan put it, 400 per cent of what the defendant offered. Moreover, the plaintiff may have an order for the costs of the proceedings not capped to a sum of $3,000, but as assessed or taxed. Furthermore, the offer was “without admissions”, whereas the judgment provides an element of vindication for the plaintiff, in a context in which vindication was impotent.

6 Even as at 15 November 2006 it is likely that the plaintiff's costs exceeded the sum of $3,000 offered on that account. The plaintiff also bettered the offer in terms of damages. In those circumstances, I cannot see why it was unreasonable for the plaintiff to refuse an offer which ultimately it has bettered, all the moreso where an element of vindication was involved.

7 It has also been submitted that the first defendant is a voluntary association, with limited funds. However, I do not think that I can give significant weight to that circumstance. The status of voluntary associations, and the extent of their funds, do not confer on them an immunity from costs orders if they engage unsuccessfully in litigation.

8 I have also given consideration to whether the position that, as I am now aware of the negotiating positions of the parties, it would seem that the true difference between them at the final hearing was on damages, and that the amount of damages recovered was within the jurisdiction of the small claims division of the Local Court, should bear on the exercise of the costs discretion. However, the fundamental position is that to obtain the relief that the plaintiff sought, by way of declaration and injunction, he had to come to this court, and the defendant's offer of that relief was upon terms as to damages and costs which the plaintiff was not bound to accept. In those circumstances, I do not think the quantum of damages awarded affects the proper exercise of the costs discretion.

9 It follows that, in my opinion, there is insufficient reason to depart from the prima facie position that the first defendant should pay the plaintiff's costs.

10 The position so far as the second defendant is concerned is different. Mr Tunstall was a completely unnecessary party to the proceedings. The proceedings were properly brought against the Association, and although it has been put that Mr Tunstall was its mouthpiece or alter ego, the fact is that the claim for relief properly lay against the Association alone. Mr Tunstall was the Association's officer and agent, but as is trite law, the proper defendant in such circumstances is the principal, not the agent.

11 As the defendants were commonly represented, it is unlikely that the costs of Mr Tunstall, over and above those of the first defendant, will be significant, but to the extent that there is an excess, the plaintiff has obtained no relief at all against Mr Tunstall, and ought never have joined him, and to the extent that the costs have been increased by that circumstance they should be borne by the plaintiff.

12 I order that, except in so far as any other order made in these proceedings in respect of costs specifically provides:

(a) the first defendant pay the plaintiff's costs of the proceedings, and

(b) the plaintiff pay the second defendant’s costs of the proceedings to the extent that those costs are additional to those which would have been incurred by the first defendant in any event.

13 I order that the exhibits be returned upon the undertaking of the solicitors for the parties, to whom they are respectively returned, to return them to the Court in the event of an application for leave to appeal being filed.

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