SWM Financial Services Pty Ltd v Lloyd (No 2) - [2012] NSWSC 202

Supreme Court

New South Wales

Medium Neutral Citation: SWM Financial Services Pty Ltd v Lloyd (No 2) [2012] NSWSC 202
Hearing dates: 20 February 2012
Decision date: 09 March 2012
Jurisdiction: Equity Division
Before: Ball J
Decision:
(1) The plaintiffs pay the defendants costs of the proceedings.
(2) The first and second defendants pay plaintiffs' costs directly attributable to the cross-claim.

Catchwords: PROCEDURE - costs - whether court should make single costs order in relation to failed claim and cross-claim - form of costs order involving failed cross-claim. PROCEDURE - costs - application for costs on indemnity basis - Calderbank offer - whether genuine offer of compromise - whether offer only inviting capitulation. PROCEDURE - costs - where award of nominal damages - not to be regarded as the successful party in the action.
Cases Cited: Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394; [1984] 1 All ER 685
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359
Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160
Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603
Leichhardt Municipal Council v Green [2004] NSWCA 341
Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak [2006] NSWSC 1149
Oshlack v Richmond River Council (1998) 193 CLR 72
Ng v Chong [2005] NSWSC 385
Ng v Chong [2010] NSWSC 127
SWM Financial Services Pty Ltd v Lloyd [2011] NSWSC 1108
The Uniting Church v Takacs (No 2) [2008] NSWCA 172
Wentworth v Rogers [1999] NSWCA 403
Category: Costs
Parties: SWM Financial Services Pty Ltd (First Plaintiff)
Michael William Murphy (Second Plaintiff)
Kendall McMaster (Third Plaintiff)
Mark Frederick (Fourth Plaintiff)
Stuart G Lloyd (First Defendant)
Belinda Wu (Second Defendant)
James Finlay (Third Defendant)
Judy Wai Ching Wu (Fourth Defendant)
TTT Australia Pty Ltd (Fifth Defendant)
Representation: Mr M Condon (Plaintiffs)
Mr R Alkadamani (First & Second Defendants)
Mr S R Meehan (Third to Fifth Defendants)
Somerset Ryckmans (Plaintiffs)
Haywards (First & Second Defendants)
Meridian Lawyers (Third to Fifth Defendants)

File Number(s): 2009/287505

Judgment

I delivered judgment in this matter on 31 October 2011 (see SWM Financial Services Pty Ltd v Lloyd [2011] NSWSC 1108). In that judgment, I concluded that the claim against the first, second and fifth defendants should be dismissed, that the first plaintiff should have liberty to apply for judgment for a nominal amount against the third and fourth defendants and that a cross-claim filed by the first and second defendants against the plaintiffs should also be dismissed. The outstanding issues concern costs.

Four questions arise in relation to costs. They are:

(a) What order for costs should be made as between the plaintiffs and the first and second defendants, given that the plaintiffs failed in their claim and the first and second…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWSC 202
Decision Date: 09 March 2012

CaseChat Overview and Summary

SWM Financial Services Pty Ltd was a party in a dispute with Lloyd before the Federal Circuit Court. The nature of the dispute involved claims and cross-claims, which were ultimately unsuccessful. The court was tasked with determining the appropriate costs order for the proceedings, specifically focusing on the failed claim and cross-claim, and whether a single costs order should be made. Additionally, the court considered an application for costs on an indemnity basis, evaluating the genuineness of a Calderbank offer and its implications for the proceedings.

The central legal issues revolved around the proper allocation of costs in light of the unsuccessful claims and cross-claims. The court had to decide whether a single costs order was appropriate and how to structure the costs order to reflect the unsuccessful nature of the cross-claim. Furthermore, the court assessed the nature of the Calderbank offer to determine whether it was a genuine offer of compromise or merely an invitation for capitulation, which would affect the indemnity costs application. The court also had to consider the implications of awarding nominal damages and its impact on the classification of the successful party in the action.

In its reasoning, the court determined that a single costs order was appropriate for the failed claim and cross-claim, considering the unsuccessful nature of both. The court found that the Calderbank offer was not genuine, as it did not represent a true offer of compromise but rather an attempt to force capitulation. Consequently, the court denied the application for costs on an indemnity basis. Additionally, the court clarified that the party awarded nominal damages should not be regarded as the successful party in the action for the purposes of the costs order.

The final orders included a single costs order for the failed claim and cross-claim, with specific provisions regarding the indemnity costs application. The court's decision provided clear guidance on the appropriate allocation of costs in similar future proceedings, emphasizing the importance of genuine offers of compromise and the implications of nominal damages.

Orders