Su v So; Verekers Lawyers v So (No 2)

[2010] NSWCA 303

New South Wales

Court of Appeal

CITATION:	Su v So; Verekers Lawyers v So (No 2) [2010] NSWCA 303
HEARING DATE(S):	On the papers
JUDGMENT DATE:	12 November 2010
JUDGMENT OF:	Allsop P at 1; Tobias JA at 16; Sackville AJA at 17
DECISION:	1. Decline to vary the orders made on 27 May 2010 as to the position between Mr Su and Mr So. 2. Decline to vary or add to the orders made on 27 May as to the position between Mr So and Verekers with the consequence that each is to pay his own costs of the proceedings below and the appeal.
CATCHWORDS:	COSTS - varying judgment or orders
CATEGORY:	Consequential orders
CASES CITED:	Donald v Campbell & Co Ltd v Pollak [1927] AC 732 MacDougall v Curlevski (1996) 40 NSWLR 430 Ritter v Godfrey [1920] 2 KB 47 Su v So; Verekers Lawyers v So [2010] NSWCA 119
PARTIES:	Jian Ji Su (Applicant) Verekers Lawyers (Second Applicant) Hip Tong So (Respondent)
FILE NUMBER(S):	CA 2009/298342; 2009/298356
COUNSEL:	Mr M L D Einfeld QC, Mr P T Newton (Applicant) Mr S Philips (Second Applicant) Mr J Garnsey SC, Mr C Moschoudis (Respondent)
SOLICITORS:	Heidtman & Co Lawyers (Applicant) Verekers Lawyers (Second Applicant) David Kam & Co Solicitors (Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	1033/2007
LOWER COURT JUDICIAL OFFICER:	Elkaim DCJ
LOWER COURT DATE OF DECISION:	25 May 2009

2009/298342
2009/298356

ALLSOP P
TOBIAS JA
SACKVILLE AJA

Friday 12 November 2010

SU v SO

VEREKERS LAWYERS v SO (No 2)

Judgment

1 ALLSOP P: On 27 May 2010, the Court made orders setting aside orders of the primary judge that had been favourable to Mr So. Submissions on costs were invited. See Su v So; Verekers Lawyers v So [2010] NSWCA 119.

2 The orders for costs not made were the costs between Mr So and the solicitors both at the trial and on appeal. My reasons for not doing so were set out in [63] and [64] of the reasons of myself and Justice Sackville:

“[63] … We have refrained from doing so because to a considerable extent, Mr Cuoco’s conduct was instrumental in this dispute breaking out and resulting in a prolonged trial.
[64] We propose to give the parties, including Mr Su, an opportunity to make submissions as to any further costs orders that should be made, having regard to Mr Cuoco’s central responsibility for what has occurred. …”

3 Mr So has sought orders that Verekers pay his costs of the trial and the appeal and the difference between the costs he has been ordered to pay Mr Su on the appeal and recovery from the Suitors Fund.

4 Verekers oppose this course and further seek an order that Mr So pay their costs. They asserted that Mr Cuoco’s conduct had no part in inducing the dispute. They do so on the basis of factual assertions that Mr So knew he had no cause of action.

5 Mr Su, whilst acknowledging the reason the Court made the order that Mr Su and Mr So pay their own costs of the trial (see [2010] NSWCA 119 at [53]), seeks to rely on offers of compromise made before and during the trial to have an order for costs in his favour.

6 Turning first to the position of Mr So and the solicitors, it can be accepted that an order that an otherwise successful party pay an unsuccessful party’s costs requires particular justification: Ottway v Jones [1955] 1 WLR 706; MacDougall v Curlevski (1996) 40 NSWLR 430; Donald Campbell & Co Ltd v Pollak [1927] AC 732; Ritter v Godfrey [1920] 2 KB 47.

7 Here, the conduct of Mr Cuoco is only capable of being described as misconduct which was central to this dispute breaking out – see [63] and [64] of my and Justice Sackville’s earlier reasons. That is sufficient particular justification, subject to any other relevant consideration.

8 That said, there is force in the solicitors’ submissions that Mr So did not have to bring the case and, on the facts as found by this Court, he should not have.

9 What can, however, be stated with confidence is that if Mr Cuoco had taken the most elementary professional precautions that proper professional practice required, the dispute would probably not have happened.

10 I am mindful of not succumbing to the temptation to use orders for costs in these proceedings as some punishment for professional misconduct. Weighing the central role of the misconduct of the solicitors against their success in the proceedings, the appropriate approach, in my view, is not to make any order for costs in favour of the solicitors either at the trial or on the appeal.

11 As to Mr Su’s argument that he should have some costs of the trial because of the offers of compromise before and during the trial, though the orders were not clear, leave can be taken to have been given to deal with costs generally. No submission was put that the Court could not entertain Mr Su’s application for costs.

12 The trial was heard in May 2009. By letter dated 14 January 2008 Mr Su offered to settle paying $20,000 to Mr So, implicitly inclusive of costs. On 29 October 2008 Mr So offered to settle for $291,724.13 inclusive of costs. On 19 November 2008, Mr Su offered to walk away and bear his own costs. During the trial, offers were made by Mr Su and the solicitors of $15,000 and $30,000, respectively, each inclusive of costs (11 May), and $30,000 and $30,000, respectively, each inclusive of costs (12 and 13 May). Mr So wanted his costs on an indemnity basis.

13 Whilst in the ordinary case I would be likely to give effect in some fashion to these offers, the matters shortly referred to in [53] of my and Justice Sackville’s earlier reasons persuade me that no order for costs should be made in the trial as between Mr Su and Mr So.

14 For the reasons earlier expressed, I would not make any order for costs as between Mr So and the solicitors, either at trial or on the appeal.

15 Thus the orders that I would make are:

(a) Decline to vary the orders made on 27 May 2010 as to the position between Mr Su and Mr So.

(b) Decline to vary or add to the orders made on 27 May as to the position between Mr So and Verekers with the consequence that each is to pay his own costs of the proceedings below and the appeal.

16 TOBIAS JA: I agree with Allsop P.

I agree with Allsop P.

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