Sahade v Bischoff (No 2)

Case [2016] NSWCA 45


Court of Appeal
Supreme Court

New South Wales

Case Name: 

Sahade v Bischoff (No 2)

Medium Neutral Citation: 

[2016] NSWCA 45

Hearing Date(s): 

On the papers(Last submissions 11 February 2016)

Decision Date: 

15 March 2016

Before: 

Basten JA at [1];
Gleeson JA at [2];
Beech-Jones J at [34].

Decision: 

(1)   The appellants to pay the respondents’ costs of the appeal.
(2)   The cross-applicants to pay the cross-respondents’ costs of the cross-summons.
(3)   Each party to bear their own costs of this application for costs.

Catchwords: 

COSTS – indemnity costs – joint offer of compromise – where offerees have separate causes of action – whether offer capable of acceptance by offerees separately

Legislation Cited: 

Civil Procedure Act 2005 (NSW), ss 3, 59, 60
Supreme Court Rules 1970 (NSW), Pt 52A r 22
Uniform Civil Procedure Rules 2005 (NSW), rr 9, 20, 42, 51

Cases Cited: 

Archer v Archer (No 2) [2000] NSWCA 315
Calderbank v Calderbank [1975] All ER 333
Rafferty v Time 2000 West Pty Ltd [2010] FCA 873; 87 IPR 593
Taheri v Vitek (No 2) [2014] NSWCA 343
Vieira v O’Shea (No 2) [2012] NSWCA 121

Category: 

Costs

Parties: 

Anthony Sahade (First appellant / First cross-respondent)
 
Adam Paul Smith (Second appellant / Second cross-respondent)
Eckart Bischoff (First respondent / First cross-applicant)
Celia Bischoff (Second respondent / Second cross-applicant)

Representation: 

Counsel:
B Coles QC / M Sahade (Appellants / Cross-respondents)
J Maconachie QC / J Sheller (Respondents / Cross-applicants)
 
Solicitors:
Oliveri Lawyers (Appellants / Cross-respondents)
Carroll & O’Dea Lawyers (Respondents / Cross-applicants)

File Number(s): 

2014/327602

Decision under appeal: 

 Court or Tribunal: 

District Court of New South Wales

  Jurisdiction: 

Civil

  Date of Decision: 

10 October 2014

  Before: 

McLoughlin DCJ

  File Number(s): 

2013/112435

[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.]

JUDGMENT

  1. BASTEN JA: I agree with Gleeson JA.

  2. GLEESON JA: The Court gave judgment in this matter on 23 December 2015: Sahade v Bischoff [2015] NSWCA 418. The appeals by Mr Sahade and Mr Smith were unsuccessful. The Bischoffs’ cross-summons seeking leave to cross-appeal was dismissed. At the request of the parties, the Court reserved all questions of costs in this Court. The Court directed that, in the absence of agreement between the parties, it would determine the issue of costs on the papers.

  3. The parties have provided written submissions. In addition, the respondents have provided an affidavit from their solicitor establishing service of an offer of compromise on 17 March 2015.

Orders sought

  1. The appellants’ primary contention is that all parties should bear their own costs in this Court. Alternatively, the appellants contend for orders that (a) the appellants pay the costs of the respondents in respect…

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Sahade v Bischoff (No 2) [2016] NSWCA 45
Case
[2016] NSWCA 45
Decision Date

CaseChat Overview and Summary

In Sahade v Bischoff (No 2), the New South Wales Court of Appeal considered an application for costs following an offer of compromise made by the respondents (Bischoffs) to the appellants (Sahades). The dispute concerned the application of Uniform Civil Procedure Rules (UCPR) r 42.15A, which provides for indemnity costs where a defendant's offer of compromise is not accepted and the defendant obtains a judgment no less favourable than the offer.

The primary legal issue before the court was whether the Bischoffs' joint offer of compromise, which encompassed both the appeal and a cross-summons, was capable of being accepted separately by the Sahades in relation to each of those proceedings, and consequently, whether r 42.15A could apply to the costs consequences of the offer. The appellants argued that the offer comprised two distinct parts, neither capable of independent acceptance, and that r 42.15A could not apply to the offer relating to the cross-summons because the Bischoffs were plaintiffs in that context.

The Court of Appeal found that while it was open in principle to treat the offer as having interdependent parts, the application of r 42.15A was complicated by the differing roles of the parties in the appeal and the cross-summons. Specifically, for the appeal, the appellants were plaintiffs and the Bischoffs were defendants, making r 42.15A potentially applicable. However, in relation to the cross-summons, the Bischoffs were plaintiffs and the appellants were defendants, meaning r 42.15A would not apply, and r 42.14 (which deals with unaccepted offers by plaintiffs) would be the relevant provision. The court noted that neither party had addressed the cost consequences under r 42.14 for the offer relating to the cross-summons, and identified a more fundamental problem with the Bischoffs' reliance on either rule.

The court ordered that the appellants pay the respondents' costs of the appeal, and the cross-applicants pay the cross-respondents' costs of the cross-summons. Each party was to bear their own costs of the application for costs.

Orders

Orders of the court

(1) The appellants to pay the respondents’ costs of the appeal.

(2) The cross-applicants to pay the cross-respondents’ costs of the cross-summons.

(3) Each party to bear their own costs of this application for costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

UCPR r 42.15A states:42.15A Where offer not accepted and judgment no less favourable to defendant(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.(2) Unless the court orders otherwise:(a) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and(b) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis:(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. The appellants say that the offer of compromise contained two offers, neither being capable of acceptance independently of the other. One related to the appeal and the other related to the cross-summons. They submit that UCPR r 42.15A can only apply to the offer made by the Bischoffs with respect to the appeal, but not to the offer in respect of the Bischoffs’ cross-summons because the Bischoffs are to be regarded as plaintiffs in respect of the proceedings to which that offer relates. There is force in that argument. Nevertheless, it is open, in principle, to treat the offer as having two interdependent parts, each providing the consideration for the other. Even if the offer is treated that way, for the purposes of the cost consequences stated in Division 3 of Pt 42 (as modified by r 51.48), the appellants are each to be regarded as a plaintiff and the Bischoffs are each to be regarded as a defendant in respect of the appeal. On the other hand, the Bischoffs (as cross-applicants) are each to be regarded as a plaintiff and appellants (as cross-respondents) are each to be regarded as a defendant in respect of the cross-summons: r 51.48(1)(d). It follows that the cost consequence stated in r 42.15A(2), read with the modifications in r 51.48(1), does not apply to the offer of compromise with respect to the Bischoffs’ claim the subject of the cross-summons in this Court. The relevant rule, if otherwise applicable, would be r 42.14 which applies where an offer is made by a plaintiff but not accepted by the defendant and the plaintiff obtains an order for judgment on the claim no less favourable to the plaintiff than the terms of the offer. Neither of the parties’ submissions addressed the stated cost consequence found in r 42.14 for the Bischoffs’ offer relating to the cross-summons. However, there is a more fundamental problem with the Bischoffs’ reliance on the stated cost consequence in r 42.15A(2), or indeed in r 42.14(2), had that rule been relied upon.

Ratio Decidendi

Legal Principle Established

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