State of New South Wales v Abed (No 2)

[2015] NSWCA 47

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

State of New South Wales v Abed (No 2) [2015] NSWCA 47

Hearing dates:

On the papers

Date of orders:

13 March 2015

Decision date:

13 March 2015

Before:

Bathurst CJ at [1];
Macfarlan JA at [2];
Gleeson JA at [3]

Decision:

1. Ms Abed to pay 75% of the State’s costs of the appeal and Ms Abed’s cross-appeal.
2. Ms Younis and Mr Younis to pay 90% of Ms Abed’s costs of their respective cross-appeals.
3. Ms Younis to pay the whole of the State’s costs of the proceedings in this Court.
4. No order as to costs as between the State and Mr Younis in respect of the proceedings in this Court.
5. In lieu of the order made by Sorby DCJ on 27 September 2013:
(a)the State to pay 25% of Ms Abed’s costs of the proceedings below from 13 May 2013;
(b)Ms Younis to pay the State’s costs of the proceedings below;
(c)Ms Younis to pay to the State the amount of the State’s costs liability to Ms Abed referred to in (a) above.

Catchwords:

COSTS – Indemnity costs – Offer of compromise – UCPR r 20.26 – Reasonableness of rejection – Where respondent achieved better outcome than offer of compromise

COSTS – Party to party – Ordinary basis – Where respondent unsuccessful on main issue on appeal but partially successful on other issues

COSTS – Appeal costs – Suitor’s fund – Suitor’s Fund Act 1951 (NSW) s 6(1) – Where respondent unsuccessful on cross-appeal on the issue also the subject of the appellant’s successful appeal – Where erroneous decision of primary judge is made in context where the respondent persuaded the primary judge to act on a basis for decision overturned on appeal – Where respondent’s fabricated complaint formed the basis for civil proceedings – Where respondent defended the claim at trial on evidence found to be inherently untrue – Certificate refused

PROCEDURE – Where funds paid into District Court by respondents until further order – Where proceedings determined in District Court and on appeal – Where potential dispute as to ownership of funds paid into court – Whether proceedings to be remitted to District Court – No such order necessary

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 98
Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5
Suitors’ Fund Act 1951 (NSW) s 6(1)
Uniform Civil Procedure Rules 2005 (NSW) rr 25.14, 42.1

Cases Cited:

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Director of Public Prosecutions (NSW) v Moradian, Saliba and Sparos [2010] NSWCCA 27
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (No 2) [2014] NSWCA 425
R v Hookham (No 2) (1993) 32 NSWLR 345
State of New South Wales v Abed [2014] NSWCA 419

Texts Cited:

-

Category:

Costs

Parties:

State of New South Wales (Appellant)
Hayam Abed (First respondent)
Wafaa Younis (Second respondent)
Khalil Younis (Third respondent)

Representation:

Counsel:
J E Maconachie QC / D F Villa (Appellant)
D Higgs SC / D Del Monte (First respondent)
R M Sweet / F Salama (Second and third respondent)

Solicitors:
I V Knight - Crown Solicitor (Appellant)
Kheir Lawyers (First respondent)
Stojanovic Solicitors (Second and third respondents)

File Number(s):

2013/319409

Publication restriction:

No

 Decision under appeal 

Court or tribunal:

District Court

Citation:

Abed v State of New South Wales (District Court (NSW), Sorby DCJ, 21 June 2013, unrep)

Date of Decision:

27 September 2013

Before:

Sorby DCJ

File Number(s):

2009/338335

Judgment

1. BATHURST CJ: I agree with the orders proposed by Gleeson JA and with his Honour’s reasons.

2. MACFARLAN JA: I agree with Gleeson JA.

3. GLEESON JA: The Court delivered judgment in this appeal on 5 December 2014: State of New South Wales v Abed [2014] NSWCA 419 (the principal reasons). The appeal by the State of New South Wales (the State) was allowed in part. The cross-appeals by the first respondent (Ms Abed) and by the third respondent (Mr Younis) were also allowed in part. The orders of the primary judge were set aside and in lieu thereof judgment was entered for Ms Abed against the State in the sum of $25,448.76; judgment was entered for Ms Abed against Ms Younis and Mr Younis in the sum of $283,541.92; and judgment was given on the State’s cross-claim against Ms Younis in the sum of $25,448.76. The State’s cross-claim against Mr Younis was dismissed with costs. Ms Younis and Mr Younis were ordered to pay Ms Abed’s costs of the proceedings in the District Court.

4. The Court otherwise reserved all questions of costs. In default of agreement between themselves, the parties were invited to make submissions as to costs of the proceedings, including the proceedings in this Court. The Court has now received submissions as to costs.

The costs orders which are sought

5. The appellant (the State) contended for the following orders:

1. Ms Abed pay the State’s costs of the appeal and the cross-appeals;

2. Ms Younis pay the State’s costs of the appeal and the cross-appeals. (There is an apparent typographical error in the State’s proposed orders which are inconsistent with its written submissions (para 20), in that the reference in proposed order 2 is to Ms Younis paying Ms Abed’s costs instead of Ms Younis paying the State’s costs);

3. [as between the State and Mr Younis] no order as to the costs of the appeal or the cross-appeal of the Mr Younis;

4. in lieu of the order made by Sorby DCJ on 27 September 2013:

1. Ms Abed to pay the State’s costs of the proceedings below on an indemnity basis from 23 February 2010 (being the date of the offer of compromise made by the State). Alternatively, Ms Abed to pay the State’s costs of the proceedings below on the ordinary basis;

2. Ms Younis to pay the State’s costs of the proceedings;

3. Ms Younis to pay Ms Abed’s costs of the proceedings;

4. [as between the State and Mr Younis] no order as to the costs of Mr Younis.

6. The first respondent (Ms Abed) contended for the following orders:

1. Ms Abed to pay 65% of the State’s costs of its appeal and Ms Abed’s cross-appeal;

2. the State to pay Ms Abed’s costs of the proceedings below.

7. The second and third respondents (Ms Younis and Mr Younis) contended for the following orders:

1. Ms Abed to pay the State’s costs of the appeal and the cross-appeals;

2. Ms Younis to pay 90% of Ms Abed’s costs of the appeal and cross-appeals;

3. [as between the State and Mr Younis] no order as to the costs of the State’s appeal or the cross-appeal of Mr Younis;

4. grant the second and third respondents a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of the costs of the appeal;

5. in lieu of the costs orders made by Sorby DCJ on 27 September 2013:

1. the State to pay Ms Abed’s costs of the proceedings;

2. Ms Younis to pay the State’s costs of the proceedings;

3. Ms Younis to pay Ms Abed’s costs of the proceedings;

4. the State to pay the costs of Mr Younis.

8. It is to be noted that the proposed orders of Ms Younis and Mr Younis omit any reference to costs on appeal as between the State and Ms Younis.

The subject matter and outcome of the appeals

9. The subject matter of the State’s appeal and the cross-appeals by Ms Younis and Mr Younis and by Ms Abed respectively are outlined at [67]-[81] of the principal reasons. The outcome of the appeal and cross-appeals is stated in the conclusions at [319]-[322] of the principal reasons. In summary:

1. the State succeeded on appeal against Ms Abed in setting aside the finding of malicious prosecution, but not the findings of trespass and false imprisonment. As a consequence the award of damages against the State was reduced from $215,089 to $25,448.76 (which includes prejudgment interest). Ms Abed otherwise failed in her appeal claiming a higher award of damages for trespass and false imprisonment;

2. Ms Younis and Mr Younis each failed in their cross-appeal challenging their liability to Ms Abed for malicious prosecution;

3. Ms Younis and Mr Younis enjoyed limited success in reducing the amount of the judgment in favour of Ms Abed in respect of two components totalling $20,000 with respect to trespass and false imprisonment;

4. Notwithstanding (3) above, Ms Abed succeeded on her cross-appeal in increasing the award of damages against Ms Younis and Mr Younis for malicious prosecution from $195,089 to $283,541.92. This increase was largely a consequence of the reassessment of Ms Abed’s claim for past economic loss and the allowance of her claim for loss of superannuation benefits, both past and future;

5. the State succeeded on its appeal against Ms Younis claiming indemnity in respect of its liability to Ms Abed for trespass and false imprisonment, but failed on its appeal against Mr Younis claiming indemnity in respect of the same matter.

(a) Costs of the appeal

10. The State submitted that Ms Abed should pay the whole of the State’s costs of the appeal because the malicious prosecution issue, on which the State succeeded, occupied the vast bulk of the preparation time and hearing time of the appeal, and Ms Abed’s limited success on the damages issues was the subject of a concession by the Crown that prejudgment interest should be included on the award of general damages totalling $20,000.

11. Ms Abed submitted that the Court’s proposed apportionment of costs of the appeal – that Ms Abed pay 65% of the State’s costs of its appeal and Ms Abed’s cross-appeal (as foreshadowed at [312] of the principal reasons) – was an appropriate reflection of the overall justice demanded by the matter and its outcome, including Ms Abed’s success in maintaining and (slightly) increasing her award of damages for trespass and false imprisonment by the inclusion of prejudgment interest on damages.

12. As between Ms Abed and Ms and Mr Younis, the latter submitted that there should be no order for costs against Mr Younis, and that Ms Younis should pay 90% of Ms Abed’s costs (as foreshadowed at [313] of the principal reasons). This submission was advanced on the basis that Ms Younis gave inherently untrue evidence and adhered to false allegations and maintained the prosecution of Ms Abed.

13. As between the State and Ms Younis and Mr Younis, the latter submitted that the appropriate costs order was as foreshadowed at [314] of the principal reasons. This was that Ms Younis should pay the State’s costs of the appeal as between them, and that there should be no order as to costs as between the State and Mr Younis in view of their respective lack of success against each other on appeal. (As mentioned above, the costs orders proposed by Mr and Ms Younis in their draft short minutes of order do not reflect this position, ie there was no reference to any costs order on appeal as between Ms Younis and the State.)

14. The State’s proposed costs order 4 acknowledged that the order foreshadowed by the Court was appropriate as between the State and Mr Younis.

15. However, with respect to Ms Younis, the State submitted that, consistently with the judgment of this Court on the cross-claim in favour of the State against Ms Younis, Ms Younis should pay the whole of the State’s costs of the appeal, not simply the costs of the appeal as between the State and Ms Younis. The State contended (with respect to costs both on appeal and below) that ordinarily contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), which in this case amounted to full indemnity, extends not only to the liability to pay damages but also to any liability to pay costs to Ms Abed, as well as any costs incurred by the State in consequence of the conduct of Ms Younis in fabricating her complaint against Ms Abed.

Decision

16. The starting position is s 98 of the Civil Procedure Act 2005 (NSW) which provides that, subject to the rules of court, costs are in the discretion of the Court including by whom, to whom and to what extent costs are to be paid. Next, reference should be made to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1, that is, if the Court makes any order as to costs, it should be in terms that costs follow the event unless the circumstances justify some other order.

17. Here, if one looks at the State’s appeal and Ms Abed’s cross-appeal, there were multiple issues and a number of “events”. The State was successful on the malicious prosecution issue. The sole issue on which Ms Abed succeeded were the related claims of trespass and false imprisonment. In monetary terms Ms Abed obtained only a very small increase in the damages award to include prejudgment interest. However, I reject the State’s submission that the issues on which the State failed (the trespass and false imprisonment issues) occupied only a minor part of the written and oral submissions on appeal, so as to make it appropriate for Ms Abed to pay the whole of the State’s costs of the appeal. Although of lesser monetary significance, those issues were not minor issues occupying little time on the appeal.

18. The question is how the State’s substantial success and Ms Abed’s limited success should be properly reflected in the costs order on appeal. In the circumstances of this appeal it is preferable to make a costs order which is the result of an overall assessment, reflecting the respective successes of the parties on appeal, rather than separate orders directed to specific issues on which one or other of the parties was successful. A global view of the outcome of the proceedings should be taken, rather than a more particular approach in the sense of attempting to quantify the amount of preparation time and hearing time spent on the issues on which the respective parties succeeded.

19. Taking into account that Ms Abed’s limited success on her cross-appeal was the subject of a concession by the State (assuming the State was unsuccessful on its appeal), I am persuaded that I should depart from the preliminary view expressed at [312] of the principal reasons. The appropriate order in the present case is that Ms Abed pay 75% of the State’s costs of the appeal and Ms Abed’s cross-appeal.

20. As between Ms Abed and Mr and Mrs Younis, a global view of the outcome of the proceedings should also be taken. Ms Younis accepted that an order that she pay 90% of Ms Abed’s costs of the proceedings in this Court as between them was appropriate. Ms Abed did not contend for a higher percentage.

21. As to Mr Younis, I reject the submission advanced on his behalf that no order for costs should be made in favour of Ms Abed against him. He failed on his cross-appeal in challenging the findings against him on the malicious prosecution issue. It is not to the point that the conduct of Ms Younis may have been more egregious than that of Mr Younis. That is not a circumstance which Mr Younis can call in aid to avoid the usual cost consequences of Ms Abed’s success on her cross-appeal and Mr Younis’ failure on his cross-appeal.

22. As between the State and Ms Younis, I accept the State’s submission that Ms Younis should pay the whole of the State’s costs of the appeal. This order is appropriate and consistent with the reasons for judgment on the State’s cross-claim against Ms Younis, that Ms Younis should indemnify the State for its liability to Ms Abed: see [314] of the principal reasons.

23. As between the State and Mr Younis, it is common ground that there should be no order as to costs in this Court in view of their respective lack of success against each other on appeal and cross-appeal.

(b) Costs of proceedings below

24. The costs position below must now be assessed as if the result before the primary judge had been as this Court has found. The focus of the competing submissions was on three matters.

25. First, whether an indemnity costs order should be made in favour of the State against Ms Abed having regard to the terms of the State’s offer of compromise dated 23 February 2010. The terms of that offer were: verdict for the State with each party to bear their own costs.

26. The second (and alternative) issue is whether Ms Abed should pay the State’s costs of the proceedings on an ordinary basis because the only issue on which Ms Abed ultimately succeeded (trespass and false imprisonment) was said to be a relatively minor issue in the proceedings below.

27. The third issue is whether there should be no order for costs in favour of Ms Abed against Mr Younis.

Decision

28. As between the State and Ms Abed, I reject the State’s submission that there should be an order against Ms Abed for indemnity costs from 23 February 2010 having regard to the State’s offer of compromise of that date.

29. First, it is not in dispute that Ms Abed has ultimately succeeded in obtaining judgment against the State in the amount of $25,448.76, which is a better outcome than the offer of compromise. In these circumstances the usual default consequences under the UCPR r 20.26 do not apply.

30. Secondly, although the basis upon which Ms Abed succeeded against the State was only advanced, for the first time, in the course of opening at the hearing below, this does not of itself render the pursuit of other (ultimately unsuccessful) claims “unreasonable”, so as to attract the consequences of an indemnity costs order.

31. The State’s alternative submission (that Ms Abed pay the State’s costs below on an ordinary basis) ignores that, consistent with UCPR r 42.1, a plaintiff who obtains judgment at trial for a monetary sum will ordinarily be entitled to an order that the defendant pay his or her costs, notwithstanding that the plaintiff might not have recovered the whole of the amount he or she claimed: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (No 2) [2014] NSWCA 425 at [27] (Macfarlan JA; Meagher and Barrett JJA agreeing). One of the recognised circumstances where it may be appropriate to deprive a successful party of costs or a portion of the costs is where the defendant succeeds on a clearly dominant or separable issue. The principles on which the Court approaches the question of apportionment where there is a mixed outcome in proceedings are well-known and were summarised by this Court in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].

32. Here it may be accepted that the malicious prosecution issue was the main issue below, and Ms Abed has ultimately failed on this issue. Nonetheless, the issues on which Ms Abed succeeded (trespass and false imprisonment) were not insignificant or minor matters, albeit Ms Abed’s success on those issues has resulted in only a modest award of damages in her favour. However these claims were only introduced by Ms Abed at the beginning of the hearing. These factors support the view that Ms Abed should be deprived of any costs prior to the commencement of the hearing.

33. The question of apportionment of the costs of the hearing is very much a matter of discretion and mathematical precision is illusory: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272. Taking account of Ms Abed’s ultimate failure on the main issue of malicious prosecution, her limited success on the distinct claim of trespass and false imprisonment, the late inclusion of that claim at the beginning of the hearing and the modest award of damages in her favour, which was only a relatively small proportion of the entirety of her claims for damages, the appropriate order is that the State pay 25% of Ms Abed’s costs below from the date of the hearing.

34. As between Ms Abed and Mr and Mrs Younis, no further order is required as this Court has already made an order that Ms Younis and Mr Younis pay Ms Abed’s costs of the proceedings in the District Court: at [323(5)(v)] of the principal reasons.

35. As between the State and Ms Younis it is common ground that there should be an order that Ms Younis pay the State’s costs of the proceedings below.

36. As between the State and Mr Younis, again no further order is required as this Court has already made an order that the State pay Mr Younis’ costs of the amended first cross-claim: at [323(5)(vi)] of the principal reasons.

28. There should be an order that Ms Younis indemnify the State with respect to the State’s cost liability to Ms Abed, for the reasons advanced by the State: see [15] above.

Application for a Suitors’ Fund Certificate

38. The Court’s power to grant a certificate under s 6(1) of the Suitors’ Fund Act is discretionary. The discretion is enlivened if, relevantly, an appeal against the decision of the Court to the Supreme Court on a question of law or fact succeeds. In such event this Court may grant to the respondent to the appeal or to anyone or more of several respondents to the appeal an indemnity certificate in respect of the appeal.

39. The purpose of the statute is to relieve the unsuccessful respondent of at least part of the costs for which he or she will be liable in circumstances where the Court system, run by the State, has erred: Director of Public Prosecutions (NSW) v Moradian, Saliba and Sparos [2010] NSWCCA 27 at [11] (Basten JA; Howie J and Johnson J); R v Hookham (No 2) (Hookham) (1993) 32 NSWLR 345 at 346 (Priestley JA; Wood J and Sully J agreeing).

40. In the present case Ms Younis and Mr Younis contend that as the State’s appeal succeeded, the discretion to grant an indemnity certificate under s 6(1) is activated. No elaboration was provided in their written submissions as to why the discretion should be exercised in their favour. There are compelling reasons why it should not.

41. First, in relation to both Ms Younis and Mr Younis, insofar as the State succeeded on its appeal on the malicious prosecution issue, it cannot be said that Ms Younis and Mr Younis are in the position of an unsuccessful respondent to an appeal. The primary judge found both Ms Younis and Mr Younis liable for damages for malicious prosecution. The cross-appeal by Ms Younis and Mr Younis challenging that finding was unsuccessful. The success of the State’s appeal on the malicious prosecution issue did not give rise to any cost consequences for Ms Younis and Mr Younis on the State’s appeal.

42. Secondly, in relation to Mr Younis, the State’s appeal challenging the failure of the primary judge to determine the State’s cross-claim against Mr Younis was unsuccessful. Accordingly the discretion to grant an indemnity certificate is not enlivened in favour of Mr Younis, insofar as the State’s appeal against Mr Younis in respect of the State’s undetermined cross-claim was unsuccessful.

43. Thirdly, in relation to Ms Younis, although the State’s appeal against Ms Younis on its cross-claim for indemnity was successful on appeal, there are good reasons for not exercising the discretion in favour of granting a certificate to Ms Younis.

44. The first reason is that Ms Younis also brought her own cross-appeal which was unsuccessful in seeking to set aside the primary judge’s findings against Ms Younis on the malicious prosecution issue. Ms Younis should not receive a certificate which would effectively compensate her as an unsuccessful cross-appellant.

45. The second reason is that the erroneous decision of the primary judge in failing to determine the State’s cross-claim against Ms Younis can be seen to have occurred in a context where Ms Younis persuaded the primary judge to act upon the basis of a decision on the apportionment issue which has been overruled: Hookham at 346.

46. The third reason is that this Court has found Ms Younis liable to indemnify the State on its cross-claim in respect of the tort of maliciously inducing arrest. In the Court below, Ms Younis maintained her complaint against Ms Abed upon which the police acted when arresting Ms Abed, which complaint was found by the primary judge to be inherently untrue. In this Court, Ms Younis contended that the State’s cross-claim should be dismissed because Ms Younis should not have been found liable for the malicious prosecution of Ms Abed. However, no submissions were advanced by Ms Younis as to why the State had not made out its claim for indemnity based on the tort of maliciously inducing arrest. In these circumstances, Ms Younis should not be compensated for her costs as an unsuccessful respondent to the State’s appeal.

Other matters

47. The Court was informed by the parties in their written submissions that there are moneys presently paid into the District Court pending “the outcome of this appeal”. It seems that this is a reference to a freezing order made in the proceedings below against Ms Younis and Mr Younis on 12 November 2010: UCPR r 25.14. Although the form of that order was not included in the appeal books, JusticeLink records that the terms of the order required Ms Younis and Mr Younis to pay into court the sum of $437,154.54 to be invested in an interest bearing account by the Registrar “until further order of the Court” and that “any application to vary these orders is to proceed by way of notice of motion”. This order was made prior to the hearing below. There was no appeal against this order.

48. The Court was further informed that there is an unresolved dispute as to whether these moneys are jointly owned by Ms Younis and Mr Younis or whether they are severally owned and, if so, in what proportion. It is common ground that in the absence of agreement between the parties as to how the moneys in court should be disbursed, that matter should be resolved by the District Court.

49. The State submitted, and the other parties agreed, that to accommodate that contingency, the proceedings should be remitted to the District Court. That step is unnecessary. The terms upon which the moneys were paid into court were “until further order of the Court” (that is, the District Court). The parties may apply directly to the District Court by way of notice of motion for variation of that order, including payment out of moneys in court, if they are otherwise unable to reach agreement as to the disposition of those funds.

Orders

50. I propose the following orders:

1. Ms Abed to pay 75% of the State’s costs of the appeal and Ms Abed’s cross-appeal.

2. Ms Younis and Mr Younis to pay 90% of Ms Abed’s costs of their respective cross-appeals.

3. Ms Younis to pay the whole of the State’s costs of the proceedings in this Court.

4. No order as to costs as between the State and Mr Younis in respect of the proceedings in this Court.

5. In lieu of the order made by Sorby DCJ on 27 September 2013:

1. the State to pay 25% of Ms Abed’s costs of the proceedings below from 13 May 2013;

2. Ms Younis to pay the State’s costs of the proceedings below;

3. Ms Younis to pay to the State the amount of the State’s costs liability to Ms Abed referred to in (a) above.

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Decision last updated: 13 March 2015