Secure Parking Pty Limited v Ralan Property Services Pty Limited (No 2)
[2018] NSWSC 661
•10 May 2018
Supreme Court
New South Wales
Medium Neutral Citation: Secure Parking Pty Limited v Ralan Property Services Pty Limited (No 2) [2018] NSWSC 661 Hearing dates: 10 May 2018 Decision date: 10 May 2018 Jurisdiction: Common Law Before: McCallum J Decision: Secure Parking to pay Ralan's costs of the summons assessed on the ordinary basis; Secure Parking to pay Mr Macphillamy's costs of the summons assessed on the indemnity basis; Ralan to pay Mr Macphillamy's costs of the cross-summons assessed on the indemnity basis
Catchwords: COSTS – applications for leave to appeal costs order made in the Local Court – applications for relief not sought in the Local Court – claimants ought to have known their applications against another party enjoyed no real prospect of success – application for indemnity costs Legislation Cited: Local Court Act 2007 (NSW), s 41 Category: Costs Parties: Secure Parking Pty Ltd (plaintiff/second cross defendant)
Ralan Property Services Pty Ltd (first defendant/cross-claimant))
Richard Macphillamy (second defendant/first cross defendant))Representation: Counsel:
Solicitors:
N Ghabar (plaintiff/second cross defendant)
M Bennett (first defendant/cross claimant)
A Power (second defendant/first cross defendant)
HBA Legal (plaintiff/second cross defendant)
Lachlan McBride (first defendant/cross claimant)
CJ Boyd Solicitors (second defendant/first cross defendant)
File Number(s): 2017/00222361 Publication restriction: None Decision under appeal
- Court or tribunal:
- Local Court of New South Wales
- Jurisdiction:
- General division
- Date of Decision:
- 23 June 2017
- Before:
- Magistrate J.S. Andrews
- File Number(s):
- 2015/359155
Judgment
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HER HONOUR: This morning I gave judgment in these proceedings refusing leave to Secure Parking Pty Ltd to appeal against an order as to costs made in the Local Court. I have this afternoon heard the parties as to the costs of the proceedings.
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In the proceedings below, Ralan Property Services Pty Ltd sued Mr Richard Macphillamy and Secure Parking seeking the costs of repair to a motor vehicle. Ralan succeeded against Mr Macphillamy and obtained an order that he pay Ralan's costs (the "primary order"). Ralan also obtained an order that Mr Macphillamy pay the successful second defendant’s costs (Secure Parking). I will refer to that as the "Sanderson order".
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In each case, the order was quantified by reference to the cap imposed under cl 36.2 of the Local Court Practice Note Civ 1, which provides for maximum costs orders in the sum of 25% of the relief claimed in the proceedings plus any amount that might be allowed in relation to costs incurred up to the filing of the first defence in the proceedings.
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The Magistrate refused an application by Secure Parking for an order that Ralan pay its costs on an indemnity basis on the strength of an offer of compromise made under the rules.
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In this Court, Secure Parking sought leave to appeal the Magistrate's orders as to costs on the basis that it should have succeeded in obtaining an indemnity costs order against Ralan. The relief sought in Secure Parking's summons was to set aside the Sanderson order made against Mr Macphillamy and, in its place, for the Court to order Ralan to pay Secure Parking's costs on an indemnity basis from the date of the offer of compromise. Alternatively, the summons sought an order that Mr Macphillamy pay Secure Parking's costs on that same basis.
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By cross-summons, Ralan sought an order that Mr Macphillamy pay Ralan's costs on an indemnity basis from a certain date, together with Secure Parking's costs, and, alternatively, an order that Mr Macphillamy pay Ralan's costs on an indemnity basis from a certain date and that there be otherwise no order as to the costs of either cross-defendant to the cross-summons.
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Both the summons and the cross-summons entailed what might be termed a measure of overreach, in each case seeking costs orders against Mr Macphillamy of a kind not sought in the Local Court. In the case of Ralan's cross-summons, the relief sought against Mr Macphillamy was sought on the basis of an offer, evidence of which was not even before the Local Court. To that extent, each summons was misconceived.
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Separately, a question might arise as to whether this Court would even have power to grant the relief sought. On that issue, Mr Bennett, who appears for Ralan, made a careful submission based on the terms of s 41 of the Local Court Act, submitting that, had I acceded to Secure Parking's application and removed the cap on the costs ordered to be paid by Mr Macphillamy, it might have become appropriate for Mr Macphillamy to be present to answer an application that the costs order made at first instance should be "varied" (as allowed under s 41(a)) so as to award indemnity costs rather than the capped costs awarded by the Magistrate. Mr Bennett submitted on that basis that Mr Macphillamy was a necessary party to both the summons and the cross-summons. For the reasons I have explained, however, the relief sought against Mr Macphillamy went significantly further than anything that had been put in the Local Court.
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Secure Parking accepts that, having been unsuccessful in obtaining leave to appeal, it should pay the costs of both defendants to its summons on the ordinary basis.
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As between Secure Parking and Ralan, it is agreed that there should be no order as to the costs of Ralan's cross-summons.
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The contest as to costs this afternoon is that Mr Macphillamy seeks his costs of both the summons and the cross-summons on an indemnity basis. That order is sought on two grounds. First, Mr Macphillamy relies on Calderbank letters sent on 25 January 2018 in which he offered to settle the proceedings on the basis that, in each case, the plaintiff would withdraw its summons and that each party would bear their own costs. The letter did not expand upon any reasons why the claim was said to be hopeless or doomed to fail. Had the application been based on that ground alone, I would not have been inclined to accede to it.
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However, it was alternatively submitted by Ms Power on behalf of Mr Macphillamy that costs should be ordered on the indemnity basis in any event on the grounds that the applications against him were always misconceived and neither plaintiff enjoyed any prospect of success.
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The general rule is that costs are to be assessed on the ordinary basis "unless the Court orders otherwise". One accepted basis for ordering otherwise is where the party in question has maintained proceedings that they should have known had no real prospect of success. As I understood the submission, that was the basis upon which it was put that indemnity costs should now be paid to Mr Macphillamy.
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The written submissions filed by Mr Macphillamy in the proceedings set out cogently the reason each plaintiff ought to have known that no real prospect of success could be enjoyed. In particular, it was pointed out in careful detail, at par 11 in respect of the summons and par 44 in respect of the cross-summons, that each plaintiff (Secure Parking and Ralan) was bound by its conduct of the case in the Local Court and could not seek to change the case on appeal.
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In my view, there is force in Ms Power's submission that the relief sought in each case was relief that could never have been obtained having regard to the constitution of each appeal and the authorities referred to by Ms Power in the paragraphs of her written submissions to which I have referred.
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I have considered whether, on that basis, an order should be made for costs to be assessed on the indemnity basis only from the date of those submissions. Upon reflection, however, it seems to me that the matters pointed out by Ms Power in her submissions ought to have been ascertained prior to the commencement of either appeal. Accordingly, I am persuaded that Mr Macphillamy should have his costs assessed on the indemnity basis from the outset of the proceedings.
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For those reasons, I make the following orders:
that Secure Parking pay Ralan's costs of the summons assessed on the ordinary basis;
that Secure Parking pay Mr Macphillamy's costs of the summons assessed on the indemnity basis;
that Ralan pay Mr Macphillamy's costs of the cross-summons assessed on the indemnity basis.
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I make no order as to Secure Parking's costs of the cross-summons.
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Decision last updated: 14 May 2018
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