Treloar Constructions Pty Ltd v McMillan (No 2) - [2017] NSWCA 146

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Treloar Constructions Pty Limited v McMillan (No 2) [2017] NSWCA 146
Hearing dates: On the papers
Decision date: 22 June 2017
Before: Beazley P;
Gleeson JA;
Emmett AJA
Decision:
(1) The security for costs paid into Court on 14 November 2016 by the appellant for the costs of the respondent in the sum of $75,000 be released to the appellant pursuant to r 41.3 of the Uniform Civil Procedure Rules 2005 (NSW).

(2)   Order 2 made by the Court on 6 April 2017 be varied as follows:

(a)   Set aside the orders made in the District Court and, in lieu thereof, direct the entry of judgment for the plaintiff in the sum of $418,991.77 together with interest up to the date of judgment for $321,974.45 and order the defendant to pay the plaintiff’s costs in the District Court on an ordinary basis.

(3)   Order 3 made by the Court on 6 April 2017 be varied as follows:

(a) The respondent pay the appellant’s costs of the appeal on the ordinary basis up to 18 August 2016 and thereafter on an indemnity basis and the respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW) if so entitled.
(4)   The respondent pay the appellant’s costs of this motion.
Catchwords:
COSTS – indemnity costs – application for order that costs at first instance be assessed on the indemnity basis – reliance on settlement offer made prior to trial as constituting “Calderbank offer” – no indication in settlement offer that non-acceptance would be relied on as a basis for seeking indemnity costs – settlement offer insufficient basis to make indemnity costs order
COSTS – indemnity costs – offer of compromise in accordance with Uniform Civil Procedure Rules 2005 (NSW), r 20.26 made prior to appeal proceedings – no discretionary reason to order costs otherwise than as provided by r 42.14
Legislation Cited: Civil Procedure Act 2005 (NSW)
Legal Profession Uniform Law (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127
Calderbank v Calderbank [1975] 3 All ER 333
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Mohareb v Palmer [2016] NSWCA 378
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Whitney v Dream Developments Pty Ltd (2013) 84 NSWLR 311; [2013] NSWCA 188
Category: Principal judgment
Parties: Treloar Constructions Pty Limited (Appellant)
Brian McMillan (Respondent)
Representation:
Counsel:
T Alexis SC; D J A Mackay (Appellant)
A McGrath SC; J Shepard (Respondent)
Solicitors:
Diamond Conway (Appellant)
Somerset Ryckmans (Respondent)

File Number(s): 2016/81735
Decision under appeal

Court or tribunal:

District Court

Date of Decision:

19 February 2016

Before:

Gibb DCJ

File Number(s):

2013/223785

Judgment

THE COURT: On 6 April 2017, the Court gave judgment in these proceedings, allowing the appeal: Treloar Constructions Pty…

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: [2017] NSWCA 146
Decision Date: 22 June 2017

CaseChat Overview and Summary

In *Treloar Constructions Pty Ltd v McMillan (No 2)*, the New South Wales Court of Appeal considered applications for indemnity costs following an appeal and a prior settlement offer made in the District Court. The dispute concerned the assessment of costs at first instance and on appeal, with the appellant seeking indemnity costs in certain circumstances.

The primary legal issues before the Court of Appeal were whether a settlement offer made prior to the District Court trial constituted a valid "Calderbank offer" sufficient to warrant an order for indemnity costs, and whether an offer of compromise made in accordance with the Uniform Civil Procedure Rules 2005 (NSW) prior to the appeal proceedings should lead to costs being awarded on an indemnity basis. The Court also had to determine the appropriate basis for assessing the costs of the appeal itself.

The Court held that the settlement offer made before the District Court trial was insufficient to justify an order for indemnity costs because it did not clearly indicate that its non-acceptance would be relied upon as a basis for seeking such costs. Regarding the offer of compromise made before the appeal, the Court found no discretionary reason to depart from the usual rule that costs follow the event, meaning the respondent was to pay the appellant's costs of the appeal on the ordinary basis up to a specified date, and thereafter on an indemnity basis.

The Court ordered the release of security for costs paid by the appellant, varied the District Court's costs orders to direct judgment for the plaintiff on an ordinary basis, and ordered the respondent to pay the appellant's costs of the appeal on the ordinary basis up to 18 August 2016 and thereafter on an indemnity basis. The respondent was also ordered to pay the appellant's costs of the motion.

Orders

Orders of the court

(1) The security for costs paid into Court on 14 November 2016 by the appellant for the costs of the respondent in the sum of $75,000 be released to the appellant pursuant to r 41.3 of the Uniform Civil Procedure Rules 2005 (NSW).

(2) Order 2 made by the Court on 6 April 2017 be varied as follows:

(a) Set aside the orders made in the District Court and, in lieu thereof, direct the entry of judgment for the plaintiff in the sum of $418,991.77 together with interest up to the date of judgment for $321,974.45 and order the defendant to pay the plaintiff’s costs in the District Court on an ordinary basis.

(3) Order 3 made by the Court on 6 April 2017 be varied as follows:

(a) The respondent pay the appellant’s costs of the appeal on the ordinary basis up to 18 August 2016 and thereafter on an indemnity basis and the respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW) if so entitled.

(4) The respondent pay the appellant’s costs of this motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Treloar Constructions Pty Limited v McMillan (No 2) [2017] NSWCA 146
Hearing dates:	On the papers
Decision date:	22 June 2017
Before:	Beazley P; Gleeson JA; Emmett AJA
Decision:	(1) The security for costs paid into Court on 14 November 2016 by the appellant for the costs of the respondent in the sum of $75,000 be released to the appellant pursuant to r 41.3 of the Uniform Civil Procedure Rules 2005 (NSW). (2) Order 2 made by the Court on 6 April 2017 be varied as follows: (a) Set aside the orders made in the District Court and, in lieu thereof, direct the entry of judgment for the plaintiff in the sum of $418,991.77 together with interest up to the date of judgment for $321,974.45 and order the defendant to pay the plaintiff’s costs in the District Court on an ordinary basis. (3) Order 3 made by the Court on 6 April 2017 be varied as follows: (a) The respondent pay the appellant’s costs of the appeal on the ordinary basis up to 18 August 2016 and thereafter on an indemnity basis and the respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW) if so entitled. (4) The respondent pay the appellant’s costs of this motion.
Catchwords:	COSTS – indemnity costs – application for order that costs at first instance be assessed on the indemnity basis – reliance on settlement offer made prior to trial as constituting “Calderbank offer” – no indication in settlement offer that non-acceptance would be relied on as a basis for seeking indemnity costs – settlement offer insufficient basis to make indemnity costs order COSTS – indemnity costs – offer of compromise in accordance with Uniform Civil Procedure Rules 2005 (NSW), r 20.26 made prior to appeal proceedings – no discretionary reason to order costs otherwise than as provided by r 42.14
Legislation Cited:	Civil Procedure Act 2005 (NSW) Legal Profession Uniform Law (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 Calderbank v Calderbank [1975] 3 All ER 333 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Mohareb v Palmer [2016] NSWCA 378 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Whitney v Dream Developments Pty Ltd (2013) 84 NSWLR 311; [2013] NSWCA 188
Category:	Principal judgment
Parties:	Treloar Constructions Pty Limited (Appellant) Brian McMillan (Respondent)
Representation:	Counsel: T Alexis SC; D J A Mackay (Appellant) A McGrath SC; J Shepard (Respondent) Solicitors: Diamond Conway (Appellant) Somerset Ryckmans (Respondent)
File Number(s):	2016/81735
Decision under appeal	Court or tribunal: District Court Date of Decision: 19 February 2016 Before: Gibb DCJ File Number(s): 2013/223785