State of NSW v Tyszyk (No. 2)

[2008] NSWCA 180

NEW SOUTH WALES COURT OF APPEAL

CITATION:
State of NSW v Tyszyk (No. 2) [2008] NSWCA 180

FILE NUMBER(S):
40747/06

HEARING DATE(S):
On written submissions

JUDGMENT DATE:
8 August 2008

PARTIES:
State of New South Wales (Appellant/First Cross-Respondent)
John Tyszyk (Respondent/Cross-Appellant)
Kanimbla Hall Limited (Second Cross-Respondent)

JUDGMENT OF:
Giles JA Campbell JA    

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable

COUNSEL:
JE Marshall SC; SE McCarthy (Appellant/First Cross-Respondent)
S Norton SC; PN Khandhar (Respondent/Cross-Appellant)
GA Laughton SC (Second Cross-Respondent)

SOLICITORS:
Crown Solicitor's Office (Appellant/First Cross-Respondent)
Bryden's Law Office, Liverpool (Respondent/Cross-Appellant)
McCullough & Buggy, Sydney (Second Cross-Respondent)

CATCHWORDS:
COSTS – costs of appeal and cross-appeal – where Appellant served on Respondent Offer of Compromise under the Uniform Civil Procedure Rules and a Calderbank offer – application of r 42.14 UCPR to proceedings in Court of Appeal – where Appellant obtained result no less favourable to it than the terms of the offer it made – where Appellant neither succeeded nor failed on new argument run on appeal – whether indemnity costs appropriate – costs of proceedings in court below – where Appellant made Calderbank offer to Respondent on day before trial – where Appellant served Offer of Compromise under the UCPR before second tranche of hearing – where result of appeal is that Appellant ought to have succeeded in court below on basis other than that run at trial or extensively on appeal

LEGISLATION CITED:
Supreme Court Rules 1970
Uniform Civil Procedure Rules

CATEGORY:
Consequential orders

CASES CITED:
Hill v Chief Constable of West Yorkshire [1989] AC 53
Jovic v Lamont [2007] NSWCA 47
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721
State of NSW v Tyszyk [2008] NSWCA 107

TEXTS CITED:

DECISION:
(1)  Respondent to pay costs of the Appellant of the appeal, and of the cross-appeal:
     (a)  on the ordinary basis to and including 27 June 2007, and
     (b)  on the indemnity basis from the start of 28 June 2007.
(2)  Respondent to pay the Appellant’s costs in the court below:
     (a)  on the ordinary basis to and including 21 September 2006, and
     (b)  on the indemnity basis from the start of 22 September 2006.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40747/06
DC 952/05

GILES JA
CAMPBELL JA

8 AUGUST 2008

STATE OF NEW SOUTH WALES v JOHN TYSZYK (NO. 2)

Judgment

1. THE COURT:  Reasons for judgment were delivered in this matter on 26 May 2008, and orders made on all topics except costs as between the Appellant and Respondent:  State of NSW v Tyszyk [2008] NSWCA 107. The costs in question were costs of the appeal, the cross-appeal, and the proceedings in the court below. The Appellant and the Respondent consented to those questions being determined by Giles JA and Campbell JA, after the retirement of Mason P. The matter proceeded by written submissions.

   Costs of the Court of Appeal Proceedings

2. The State served its written submissions for the appeal on 27 April 2007.  Part of those submissions articulated an argument to a conclusion for which the State had contended unsuccessfully at the trial, that the two police constables in question owed no duty of care to the Respondent.  However that argument was put in different and far more elaborate terms than had been put in the Court below.  The written submissions also put, at length, argument that the trial judge had been wrong in deciding there was a breach of duty.

3. On 27 June 2007 the State served on the Respondent both an Offer of Compromise in accordance with the Uniform Civil Procedure Rules, and a Calderbank offer.  The substance of each of those offers was identical, namely to settle the appeal on the basis of the following orders:

   1.          Appeal allowed.

   2.Orders of the District Court in relation to the State of New South Wales, including costs orders, to be set aside, and in lieu thereof, orders of verdict for the State of New South Wales and the plaintiff and the State of New South Wales to bear their own costs, to be entered.

   3.Each party to the State of New South Wales appeal to bear their own costs of the Court of Appeal proceedings.

4. The offer was expressed to be open for 28 days.  The Calderbank offer referred to the service of the written submissions in the appeal that the author said, “in my view clearly demonstrate that my client’s appeal will succeed”.

5. At the trial, the only argument that had been mounted as to why no duty of care was owed was that the police constables were engaged in an “investigation”, and thus the situation was one in which the Hill v Chief Constable of West Yorkshire [1989] AC 53 public policy exemption from a duty of care arose. The trial judge rejected that argument on the facts, on the basis that any “investigation” was finished within moments of the constables arriving on the scene and taking in the situation that existed there.  That argument was not repeated on the appeal.  At para [210] of the reasons for judgment of Campbell JA, he adverted to the fact that

   “In argument, Mr Marshall accepted that if the State were to win on the point concerning existence of duty of care, the fact that that point had not been run to its full extent in the court below could have an effect on costs.”

6. While Campbell JA was prepared to uphold a submission that no duty of care existed (though not for all the reasons that the State had advanced), Giles JA made no decision on whether a duty of care existed.  He assumed that a duty of care existed, and went on to find that it had not been breached.  Mason P agreed with Giles JA.  Campbell JA was also of the view that any duty of care had not been breached.  Thus, the decision in this Court did not turn on the extensive argument that had been presented as to why no duty of care was owed.

7. Uniform Civil Procedure Rule 42.14 provides:

   “(1)This rule applies if the offer concerned is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim concerned no less favourable to the plaintiff than the terms of the offer.

   (2)Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim:

   (a)assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and

   (b)        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.”

8. Notwithstanding the reference in it to “plaintiff”, “defendant”, and “trial”, it applies to proceedings in the Court of Appeal: cf Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 re the analogous provision in the Supreme Court Rules 1970.

9. It is clear that the State has obtained a result which is no less favourable to it than the terms of the offer it made.  Thus, the order for indemnity costs that UCPR 42.14 provides should be made, unless there is reason for the Court to “order otherwise”.

10. If on appeal an appellant, who was a defendant in the court below, succeeds in obtaining a decision that it has no liability at all, because it succeeds on a “no duty” point that had not been put below, that can have the effect that the appellant does not receive the costs of the appeal:  eg Jovic v Lamont [2007] NSWCA 47 at [98]. However, that is not the situation in the present case – here, the State has neither succeeded nor failed on the new argument it ran in this Court. A sufficient reason for the appeal succeeding was that all members of the Bench decided that the trial’s judge’s finding that there had been a breach of duty was erroneous.

11. The State has, in this Court, researched and put a complex argument for a “no duty” conclusion that a majority of the Bench did not adopt.  The interest of the State in seeking to have clarified, for its general responsibilities relating to administration of the police force, the extent of the duty of care that a police officer owes is manifest. 

12. However, the bulk of the work involved in preparing that argument would have been carried out at the time of preparing the written submissions.  The effect of allowing UCPR 42.14 to operate without interference is that indemnity costs will be ordered only concerning costs incurred on and from 28 April 2007 in the appeal. Thus, even if an indemnity costs order were to be made in accordance with the Rules, that would not have the effect of requiring the Respondent to bear all the costs of the State in putting an argument that it did not persuade the majority of the Bench to accept (though, also, an argument that has not been rejected by the majority of the Bench), and that the State had an interest beyond the present litigation in seeking to have clarified.

13. Once the written submissions were served, the Respondent was informed of the substance of the ground of appeal that all judges on the Bench upheld, and warned that if it persisted with the appeal the appeal would also include the more elaborate “no duty” argument that the State wished to run.  In all the circumstances, we see no reason to “order otherwise” concerning the costs of the appeal.

    Costs in the Court Below

14. The hearing in the court below took place in two tranches.  The first was from 20-23 June 2006 inclusive.  The second was from 16-18 October 2006 inclusive. 

15. On 19 June 2006 the State made a Calderbank offer to the Respondent, offering to settle on the basis of a verdict for the State, with each party to pay its own costs.  That offer was expressed to remain open for acceptance until 10:00am on Tuesday, 20 June 2006.  A fax header shows that it was transmitted at 2:07pm on Monday, 19 June 2006.

16. Even bearing in mind that on the day before the trial was due to start the minds of the lawyers involved were likely to have been focused on the issues, we are not satisfied that a reasonable time was allowed for consideration of this offer.  It was sent by facsimile to the office of the Respondent’s solicitors in Liverpool.  There is no evidence about when, if at all, it actually came to the attention of any of the Respondent’s lawyers, and in particular how soon before its expiry it came to their attention.  We would not regard the making of that offer as a reason to depart from what would otherwise be the appropriate costs order concerning the hearing below.

17. On 21 September 2006 the State served an Offer of Compromise under the rules, offering to settle on the basis of a verdict for the State, and the State and the plaintiff to bear its or his own costs of the proceedings.  That offer was expressed to be open until 12 October 2006.  When the result of the appeal is that the State ought to have succeeded in the court below, it is entitled to an order, of some sort, for costs in the court below.  Thus, the State has done better than the terms of the Offer of Compromise it made.  Even though the State ran a “no duty” argument below that it did not seek to support on appeal, the result of the appeal proceedings is that the State ought to have won in the court below on the issue of breach of duty.  Thus, there is no occasion, in our view, to depart from the costs order in the court below for which the Rules provide.

    Costs of the Cross-Appeal

18. While the parties were given liberty to make submissions on the costs of the cross-appeal, neither did so.  We see no reason why any costs that the State might have occurred in connection with the cross-appeal should not be treated in the same manner as its general costs of the appeal. 

19. We make the following orders:

    (1)Respondent to pay costs of the Appellant of the appeal, and of the cross-appeal:

    (a)        on the ordinary basis to and including 27 June 2007, and

    (b)        on the indemnity basis from the start of 28 June 2007.

    (2)Respondent to pay the Appellant’s costs in the court below:

    (a)on the ordinary basis to and including 21 September 2006, and

    (b)on the indemnity basis from the start of 22 September 2006.

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LAST UPDATED:
8 August 2008