Tambree v Travel Compensation Fund & [No 2]

[2004] NSWCA 147

NEW SOUTH WALES COURT OF APPEAL

CITATION:      TAMBREE v TRAVEL COMPENSATION FUND & ORS [NO 2] [2004]  NSWCA 147

FILE NUMBER(S):
41145/02

HEARING DATE(S):            29 October 2003

JUDGMENT DATE: 14/05/2004

PARTIES:
Robert Tambree t/as R Tambree & Associates - Appellant
Travel Compensation Fund - First Respondent/First Cross Appellant
Phillip Roseby t/as P J Roseby & Co - Fifth Respondent/Cross Appellant

JUDGMENT OF:      Mason P Sheller JA Ipp JA   

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):        ED 3295/99

LOWER COURT JUDICIAL OFFICER:     Austin J

COUNSEL:
P Walsh - Appellant
N Francey - First Respondent/First Cross Respondent
R Dubler - Fifth Respondent/Cross Appellant

SOLICITORS:
Burston Cole & Co - Appellant
McCabe Terrill - First Respondent/First Cross Respondent
Phillips Fox Lawyers - Fifth Respondent/Cross Appellant

CATCHWORDS:
Costs - Calderbank letter - Supreme Court Act 1970, Pt 52A r33

LEGISLATION CITED:
Supreme Court Act 1970
Fair Trading Act 1987

DECISION:
1  Set aside so much of order 4 as ordered the fifth defendant to pay TCF's costs of the proceedings and in lieu thereof order that the fifth defendant pay TCF's costs of the proceedings properly incurred by it up to and including 18 April 2001
2  Costs of this application costs in the appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA41145/02
ED 3295/99

MASON P
SHELLER JA
IPP JA

Friday, 14 May 2004

ROBERT TAMBREE t/as R TAMBREE & ASSOCIATES v TRAVEL COMPENSATION FUND & ASSOCIATES [NO 2]

Judgment

1. MASON P:  I agree with Sheller JA.

2. SHELLER JA:  Both the appellant and cross-appellant have applied, pursuant to leave granted when the Court handed down its judgment, for a variation of the costs order made at trial by Austin J who found in favour of the first respondent, Travel Compensation Fund (TCF), against both the appellant and the cross-appellant.  The effect of the orders of this Court was to reduce the amount of damages considerably, that is to say, from a total including interest of $188,330.23 to $13,320 together with interest of $4,216 being a total of $17,536.

3. The appellant, Tambree, submitted that the costs order below should be set aside and in place there should be no order as to costs as between TCF and Mr Tambree, the intention being that each party pay its or his own costs of the proceedings.  The matters relied on are:

   1.          The relatively small judgment.

   2.The general discretion of the Court under s76 of the Supreme Court Act 1970.

   3.Reliance by analogy on Part 52A r33 which applies to proceedings in the Common Law Division or entered in the Commercial List on a claim for debt, damages or other money. If this rule applied, TCF would not have been entitled to the payment of its costs of the proceedings unless it appeared to the Court that TCF had sufficient reason for commencing or continuing proceedings in the Court.

   4.The appellant submitted that he should not be deprived of the benefit of that rule because the proceedings as a result of a procedural irregularity were brought in the Equity Division.  The rule is intended to discourage people from commencing actions in the Supreme Court which are well within the limits of the jurisdiction of the District Court.

   5.TCF should have always known that by no test could it be said that the negligently prepared accounts were causally related to Ms Fry continuing to trade illegally as a travel agent after 23 February 1999.

4. The cross-appellant made similar submissions and relied on the affidavit of Belinda Beckley sworn on 4 March 2004 from which it appears that the cross-appellant “in no uncertain terms” submitted to TCF’s solicitors that no causal nexus could exist between the cross-appellant’s conduct and any losses that arose after the second respondent (Ms Fry) had applied to resign the membership of the fund.  This was rejected out of hand by TCF’s solicitors.

5. On 13 March 2001, the cross-appellant’s solicitors followed this up with a Calderbank letter offering to settle the proceedings for a total of $20,000 made up of a settlement sum of $11,068 together with a component for costs of $8,932.  The offer had conditions attached to it but it was submitted, that if TCF had agreed to accept the offer, those conditions involving the conduct of other parties would have been met.  The offer was rejected by letter of 25 October 2001.

6. The cross-appellant submitted that the appropriate order for costs ought to be that TCF pay the cross-appellant’s costs (ie the fifth defendant’s costs) on or from 18 April 2001, when the offer ceased to be open.

7. The cross-appellant supported the submission that by analogy with Pt 52A r33, there should be no costs order, by saying:

   (a)The proceedings could have, and should have, been brought in the District Court or the Local Court.

   (b)The claim was only for damages and the Mareva relief was able to be dealt with by the District Court.

   (c)There was no equity or equitable relief involved in the proceedings.

   (d)The amount claimed was always less than the amount of $225,000 provided for in Pt52A r33(2) and the fund could never have had reasonable grounds at any relevant time for expecting that it might recover an amount in excess of $225,000.

   (e)There was no particularly complex issue of fact or law beyond what could ordinarily be expected to be dealt with as a matter of course in either the District Court or Local Court.  The cross-appellant admitted negligence at trial.

8. The submission pointed out that the cross-appellant was not aware of any decided case in the Equity Division where Pt 52A r33 had been applied by analogy. Where the question had been raised the court had declined to deny the plaintiff costs because the equitable jurisdiction of the court was properly invoked and the inferior court would not have been available to give all the relief the plaintiff sought. Examples of these cases were given.

9. As was said by Brownie AJ in Eisenberg v Joseph (2001) NSWSC 1062 at [28]:

   “Looking at the matter overall, the whole purpose of Pt52A r33 is to deter small claims from being brought in this court, except in what might for brevity be described as circumstances justifying an unusual order.

10. In the present case there were no circumstances justifying an unusual order.

11. Some further reliance was placed upon the fact that the cross-appellant was insured and represented by Phillips Fox whereas TCF was a government backed statutory scheme.  Had the claim been for the sum of $13,320 the matter would probably have been settled without the need for any litigation.

12. TCF responded making the point that it at all material times, included a claim for orders under s72 of the Fair Trading Act 1987 being relief which could only be sought in the Supreme Court. That claim was never abandoned and in fact was the subject of specific submissions before Austin J. At no time, did any of the respondents seek to have the proceedings transferred to the Common Law Division of the Supreme Court, the District Court or the Local Court. During pre-trial directions, when it was apparent that the claim was in the order of $143,000 plus interest, Austin J said that there was no suggestion that the matter be transferred to the District Court simply on account of the amount claimed. In the proceedings, TCF was wholly successful against Ms Fry and Mr Fry.

13. I do not think there is any basis upon which it could be said that the proceedings against the appellant and cross-appellant should in some way have been separated from the other proceedings and commenced in some court other than the Supreme Court.  I think there is force in the argument of the cross-appellant that an offer to compromise the matter was made and rejected at a time when the cross-appellant’s solicitors made plain their opinion that no damages would be recoverable by TCF for payments made in respect of losses after Ms Fry began to operate illegally. 

14. In the circumstances, I think it is appropriate that an order be made that the cross-appellant should only be liable to TCF for costs incurred up to and including 18 April 2001.  I would not vary the costs order against the appellant at trial.

    Orders

    1.Set aside so much of order 4 as ordered the fifth defendant to pay TCF’s costs of the proceedings and in lieu thereof order that the fifth defendant pay TCF’s costs of the proceedings properly incurred by it up to and including 18 April 2001.

    2.Costs of this application costs in the appeal.

15. IPP JA:  I agree with Sheller JA.

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LAST UPDATED:            14/05/2004