Rosebanner Pty Ltd v EnergyAustralia (No 2)

[2011] NSWCA 150

Court of Appeal

New South Wales

Case Title:	Rosebanner Pty Ltd & Anor v EnergyAustralia (No 2)
Medium Neutral Citation:	[2011] NSWCA 150
Hearing Date(s):	On written submissions
Decision Date:	17 June 2011
Jurisdiction:
Before:	Allsop P, Giles JA, McColl JA
Decision:	1. Leave to amend to change the name of the respondent in the title of court documents to Ausgrid. 2. The appellants to pay the respondent's costs of the appeal on an indemnity basis . 3. The appellants to pay the respondent's costs of and incidental to the notice of motion. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	COSTS - substantial offer of compromise prior to trial - appellants did not accept offer - appellants unsuccessful at trial - appellants unsuccessful on appeal - respondent sought costs of appeal on an indemnity basis due to earlier offer of compromise - issues maintained on appeal in substance the same as those at trial - appellants to pay respondent's costs on an indemnity basis.
Legislation Cited:	Energy Services Corporation Amendment (Change of Name) Regulation 2011
Cases Cited:	Grace v Thomas Street Caf (No 2) [2008] NSWCA 72; Morgan v Johnson (1998) 44 NSWLR 578; Rebenta Pty Ltd v Wise (No 2) [2009] NSWCA 334; Regency Media v AAV Australia [2009] NSWCA 368; Rosebanner Pty Ltd & Anor v EnergyAustralia [2011] NSWCA 28.
Texts Cited:
Category:	Costs
Parties:	Rosebanner Pty Ltd - First Appellant Twenty-First Properties Pty Ltd - Second Appellant EnergyAustralia - Respondent
Representation
- Counsel:	Unrepresented - Appellants C H Withers - Respondent
- Solicitors:	Unrepresented - Appellants Clayton Utz - Respondent
File number(s):	CA 2009/00298238
Decision Under Appeal
- Court / Tribunal:
- Before:	Ward J
- Date of Decision:	20 February 2009
- Citation:	Rosebanner Pty Ltd v EnergyAustralia [2009] NSWSC 43
- Court File Number(s)	SC 1144/04
Publication Restriction:

JUDGMENT

1. THE COURT : We gave judgment in the appeal on 25 February 2011: Rosebanner Pty Ltd & Anor v EnergyAustralia [2011] NSWCA 28. We ordered that the appeal be dismissed and that the appellants pay the respondent's costs.

1. By notice of motion filed on 3 March 2011 the respondent sought an order that the appellants pay its "costs of the proceedings" on an indemnity basis. From its submissions, it meant the costs of the appeal.

History

1. The appellants brought proceedings against the respondent in 2004. They claimed damages for trespass and breach of contract and misleading or deceptive conduct all in relation to the presence of a pole for electricity transmission on their land.

1. On 20 September 2007 the respondent made an offer of compromise under r 20.26 of the Uniform Civil Procedure Rules 2005 (UCPR) . It offered to pay the appellants $200,000 plus costs. The offer was open for acceptance for 28 days. The appellants did not accept the offer.

1. The proceedings were heard in late 2008. On 20 February 2009 Ward J gave judgment dismissing the appellants' claim. On the same day her Honour ordered that the appellants pay the respondent's costs on a party/party basis up to the date of service of the offer of compromise and thereafter on an indemnity basis, presumably pursuant to UCPR r 42.15A.

1. The appellants appealed. As earlier noted, the appeal was dismissed on 25 February 2011. No further offer of compromise was made by the respondent, whether under the rules or as a Calderbank offer.

Submissions

1. Costs are to be assessed on the ordinary basis unless the Court orders otherwise: UCPR, r 42.2.

1. The respondent submitted that the Court should order costs on an indemnity basis first, by regard to the offer of compromise which it said was a generous offer "in the context of a claim of trespass over land which was found by the trial judge to have a value of $660,000-$720,000"; and secondly, by regard to the manner in which the appeal was conducted by the appellants, including the extensive grounds of appeal and what were referred to at [149] of our reasons as "thoroughly unsatisfactory" respects of the appellants' submissions. The respondent submitted that the case was analogous to Rebenta Pty Ltd v Wise (No 2) [2009] NSWCA 334.

1. The appellants submitted that there was no occasion to depart from assessment of costs on the ordinary basis. They submitted that the offer of compromise was of limited if any significance, because it could not be accepted after the 28 days and was not renewed, and the appeal was to be treated as separate proceedings for offer of compromise purposes. They said that Rebenta Pty Ltd v Wise (No 2) was not analogous, because in that case an offer of compromise had been made in relation to the appeal; and that, in the absence of a renewed offer, a special order for costs in respect of an appeal would not be made: Grace v Thomas Street Caf (No 2) [2008] NSWCA 72.

Consideration

1. The Court may have regard to an offer of compromise made at first instance pursuant to UCPR r 51.49. It informs the exercise of discretion pursuant r 51.48; however, the proceedings on appeal are distinct from the proceedings at first instance, and the offer of compromise is not an offer under the rules applicable in this Court: Grace v Thomas Street Caf (No 2) at [33]; Regency Media v AAV Australia [2009] NSWCA 368 at [38]-[39].

1. In Grace & Anor v Thomas Street Caf Pty Ltd & Ors (No 2) , the Court said -

"33 There is another factor which is relevant to the Court's consideration of this issue. There is authority in this Court that pre-trial settlement offers do not necessarily continue to operate for the purposes of an appeal. Generally, if an offer is not renewed (either in the same or different terms) prior to the appeal, the Court will not make a special costs order in respect of the appeal: see Brymount Pty Limited t/a Watson Toyota v Cummins ; Young Shire Council v Cummins (No 2) [2005] NSWCA 69; Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160; Stuart Pty Ltd v Condor Commercial Insulation Pty Ltd (No 2) [2006] NSWCA 379; and Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194. However, as costs are within the discretion of the Court: Uniform Civil Procedure Act 2005, s 98; a pre-trial offer may be relevantly persuasive in the exercise of that discretion, depending upon all of the circumstances."

1. The appellants' submissions overlooked the last sentence of this passage.

1. In Rebenta Pty Ltd v Wise the plaintiff's claim was rejected at first instance. It had failed to accept an offer of compromise, resulting in an order for costs on the ordinary basis up to the date of the offer and on an indemnity basis thereafter. On appeal, a second offer of compromise was made by the respondent and was not accepted by the appellant. The appeal was dismissed.

1. Costs of the appeal on an indemnity basis were ordered from the date of the second offer of compromise. The Court (Ipp and Basten JJA and Sackville AJA) considered whether the respondent should also have his costs on an indemnity basis prior to the date of the second offer of compromise. Their Honours said -

"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."

1. The third reason can not have played a large part in the exercise of the discretion. The second offer of compromise put the appellant on notice of its exposure to indemnity costs, but the exposure was by the operation of the rules, and the rules had been given effect through the order for costs on an indemnity basis from the date of the second offer of compromise. The first two reasons are pertinent to the present case.

1. In Regency Media v AAV Australia the Court explained -

"40. One of the reasons underlying the practice of the Court referred to in Grace v Thomas Street Caf is that on appeal, parties are in a different position from that which they were in prior to or at trial. Prior to trial, the facts are still to be determined. There may be questions as to the credibility of witnesses or as to the weight of evidence that are in issue. By the time of the appeal, facts have been found, credibility issues resolved and the weight of evidence determined. Although there may be a challenge to such findings, the parties are nonetheless in a different position from that prior to trial and should assess their cases accordingly, if they intend to seek indemnity costs based upon an offer of compromise . "

1. In the present case, the appellants were fully possessed at trial of the information going to their trespass claim. Their contract and misleading or deceptive conduct claims, and to an extent quantum, depended on factual determinations. The factual determinations were made adversely to the appellants, and in that respect the parties were in a different position in assessing their cases on appeal.

1. However, the appellants maintained their trespass claim on appeal, including on a partly different basis from that they had espoused at trial. That claim had the greater attention on appeal, and involved the greater costs. The misleading or deceptive conduct claim was not maintained, and so far as the appellants challenged the factual findings which brought rejection of their contract claim the challenge was of little substance: see [135] of our judgment, in which it was said that nothing in the appellants' submissions cast doubt on the primary judge's conclusion adverse to the appellants. The partly different position on appeal does not work to the appellants' advantage.

1. We are content to put aside what was said about the appellants' unsatisfactory conduct of the appeal. Without regard to it, in our view the offer of compromise is persuasive in the circumstances. The appellants lost at trial having failed to accept a substantial offer. The issues they maintained on appeal were in substance the same as those they had maintained at trial, and so far as they challenged factual findings the challenge was of little substance. The rationale of the rules in relation to offers of compromise, as described in Morgan v Johnson (1998) 44 NSWLR 578, has significant force. The order for indemnity costs the respondent seeks should be made.

1. The respondent's notice of motion also sought an order reflecting its change of name to Ausgrid, see Energy Services Corporation Amendment (Change of Name) Regulation 2011 published on 2 March 2011. That order should be made.

Orders

1. We make the following orders -

1. Leave to amend to change the name of the respondent in the title of court documents to Ausgrid.

2. The appellants to pay the respondent's costs of the appeal on an indemnity basis .

3. The appellants to pay the respondent's costs of and incidental to the notice of motion.

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