Smith v Yusen Daly Smith International (In Liq) (No. 2)

[2001] NSWCA 482

CITATION:	SMITH v YUSEN DALY SMITH INTERNATIONAL (In Liq) (No. 2) [2001] NSWCA 482
FILE NUMBER(S):	CA 40783/00
HEARING DATE(S):	17 December 2001
JUDGMENT DATE:	17 December 2001
PARTIES :	First Claimant: Richard Graham Kent Binet Second Claimant: Yusen Daly Smith International Pty Limited (In Liq) Opponent: Thomas Edwin Curtis Smith
JUDGMENT OF:	Spigelman CJ

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	2400/97
LOWER COURT JUDICIAL OFFICER :	Hamilton J

COUNSEL:	Claimants: A Street SC Opponent (solicitor): R McLaughlin
SOLICITORS:	Claimants: Blake Dawson Waldron Opponent: McLaughlin & Riordan
CATCHWORDS:	COSTS - whether order as to costs in favour of respondent to appeal should be made - whether order for indemnity costs from date of offer of settlement should be made in relation to first instance proceedings - where offer had been made and rejected prior to judgment on costs in first instance proceedings.
LEGISLATION CITED:	Nil
CASES CITED:	Smith v Yusen Daly Smith International (In Liq) [2001] NSWCA 458
DECISION:	Notice of Motion dismissed with costs.

CA 40783/00
ED 2400/97
SPIGELMAN CJ
Monday 17 December 2001

THOMAS EDWIN CURTIS SMITH v YUSEN DALY SMITH INTERNATIONAL PTY LIMITED (In Liq) & ANOR (No. 2)

JUDGMENT

The Court has before it a Notice of Motion seeking orders subsequent to an earlier judgment of the Court. On 7 December 2001 the Court handed down judgment in Smith v Yusen Daly Smith International(In Liq) [2001] NSWCA 458. In that judgment the Court, for reasons outlined in pars [79] and [80], determined that there would be no order as to the costs of the appeal. Nor did the Court interfere in any way with the costs orders of the respective first instance decisions to which reference is made in this Court's judgment of 7 December 2001.

2 The orders sought in the Notice of Motion are:

1. An order that the appellant pay the costs of the respondents in both the appeal and cross-appeal.

2. Further and in the alternative, that the appellant pay the respondents' costs of the proceedings in the Court below on and from 8 June 1999 on an indemnity basis.

3 It is convenient to deal first with the proposed second order. The date 8 June 1999 is a reference to an offer made to settle the proceedings on terms which, in the event, were clearly reasonable. The proceedings at the time that the offer was made had been determined in large measure by a judgment of Hamilton J, delivered 13 May 1999. This is the first judgment to which reference is made in the earlier judgment of this Court at par [18].

4 The second judgment was delivered on 8 June 2000, and I infer it was delivered prior to the offer. That is the judgment referred to in par [19] of this Court's judgment.

5 In a third and final judgment referred to in par [20] of this Court's judgment his Honour dealt with the issue of the validity of the appointment of a receiver, a matter of considerable complexity which, by reason of this Court's judgment of 7 December, it was not necessary to investigate in any depth.

6 In that third judgment delivered on 30 August 2000, his Honour dealt with the costs of the matters that had been before him. His Honour determined, for reasons in pars [8] - [12] of the judgment of 30 August 2000, that, in substance, the costs would not be awarded, although there were some specific matters that required Short Minutes.

7 In submissions to this Court Mr Street SC, who appeared for the Claimant on the Notice of Motion, referred to the largest single claim in the proceedings, in the amount of some hundreds of thousands of dollars, being the topic described as Mr Smith's Legal Costs, considered in pars [40] - [49] of this Court's earlier judgment.

8 It does appear that this was, by a considerable margin, the largest single item of the matters in dispute. It was considered by Hamilton J in dealing with the issue of costs when he said, in par [9] of his judgment of 30 August 2000:

"The largest claim, that for costs, which involved hundreds of thousands of dollars was comparatively easily disposed of, and did not take a great deal of time at the hearing: see [17], [20], and [23] of my first judgment."

9 His Honour went on to indicate that, taking all the factors into consideration and notwithstanding the size of the item associated with Mr Smith’s Legal Costs, an order for costs was not appropriate.

10 The matters relied upon on the Notice of Motion were all matters known to the Claimant prior to his Honour's consideration of costs on the earlier occasion. The affidavit attached materials all of which precede the date of 30 August 2000, when Hamilton J delivered his judgment on costs.

11 The second order sought in the Notice of Motion seeks reconsideration of the order for costs below so that they are payable on an indemnity basis as and from the date of the offer of 8 June 1999. This was a subject that could easily have been brought before his Honour and dealt with by his Honour in the general costs discretion which his Honour did exercise.

12 In my view, it is not appropriate for this Court to entertain an application on a specific aspect of a broad discretionary judgment such as this, being a matter which was not raised before the trial judge.

13 I note that in the cross-appeal a normal order was sought as to the costs below, namely that, on the basis of success in the cross-appeal, the Claimant would receive its costs. Nothing was said in the cross-appeal indicating any ground on which a costs order would be made on a special basis, such as an indemnity basis, from a particular date.

14 In my opinion, it is not appropriate for this Court to entertain this application at this late stage. Hamilton J exercised the broad costs discretion appropriately and it would be quite invidious to take out one element going to the exercise of such a discretion and separately determine it upon appeal.

15 Nothing has happened subsequent to the judgment on costs of 30 August 2000 by Hamilton J which would justify this Court re-exercising the discretion as to costs which he had exercised in the earlier judgment.

16 As I have indicated, the other order that is sought is that the Court now order that the costs of the appeal and the cross-appeal be paid to the Claimant, notwithstanding the Court's decision, in the exercise of the discretion, not to make any order for costs as set out in pars [79] and [80] of the earlier judgment.

17 Unquestionably both parties would have been saved much in the way of costs if the original offer had been treated seriously rather than treated with almost contempt in the rejection that occurred. This Court is anxious to encourage parties to settle matters of this character in a reasonable manner and the response to the offer on behalf of the Opponent that occurred on 16 July was based on an assertion of almost complete victory, not indicating preparedness to compromise of any character.

18 In another situation it may have been the case that conduct of that kind would justify the Court exercising a costs discretion against the party that behaved in that intransigent manner. However, what has happened is that a reasonable offer was made over two years before the appeal was actually argued in the Court. It was rejected at that time. In the interim the trial judge exercised a costs discretion without having the matter drawn to his attention. An appeal was fought out in this Court, the result of which was, in practical substance, a draw. In the interim period of two years, including the entirety of the period in which the cross-appeal and the appeal were on foot, no further offer of any character was made on the part of the Claimant.

19 In these circumstances, in my opinion it is not appropriate for the Court to exercise the costs discretion in a manner favourable to that party. The Claimant had indicated a reasonable approach but has not maintained that stance over the period of two years when costs were incurred in this appeal and the cross-appeal.

20 In these circumstances, I am of the view that the Notice of Motion should be dismissed with costs.

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