Claimant Ordered to Pay Respondent's Appeal Costs, Excluding Senior Counsel

The Court of Appeal ordered the claimant to pay the respondent's costs of the appeal, excluding the cost of briefing senior counsel, due to the substantially coinciding interests of the parties.

[ADDRESS] of Appeal

CITATION: [NAME] v. [NAME] & Ors; [COMPANY]. v. [NAME] & Ors [2005] NSWCA 11

HEARING DATE(S): Matter dealt with on written submissions in Chambers

JUDGMENT DATE: 9 February 2005

JUDGMENT OF: Beazley JA at 1; Hodgson JA at 2; Tobias JA at 10

DECISION: In addition to the orders made in par.[45] of the judgment dated 13 December 2004, the following order made: 4. [NAME] to pay [NAME]'s costs of the appeal not extending to briefing senior counsel, and to have a certificate under the Suitors' Fund Act if otherwise eligible.

CATCHWORDS: COSTS - Appeal - Two parties with substantially similar interests - Separate appeals brought - One appellant, an insurer with an interest in establishing a general point, briefed senior counsel - Respondent ordered to pay the appellant's costs, not extending to briefing senior counsel.

[NAME] - appellant [NAME] - 1st respondents PARTIES: [COMPANY] - 2nd respondent Consumer, Trader & Tenancy Tribunal - 3rd respondent

FILE NUMBER(S): CA 40120/04; 41106/03

COUNSEL: [redacted]

[NAME], Eastwood for 1st respondent SOLICITORS: [redacted]

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC12971/02

LOWER COURT JUDICIAL OFFICER: Master Harrison

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40120/04 CA 41106/03 SC 12971/02 [NAME] No.HB 00/83497

BEAZLEY JA HODGSON JA TOBIAS JA

Wednesday 9 February 2004 [NAME] V. [NAME] & [COMPANY] (formerly ROYAL & SUN ALLIANCE INSURANCE AUSTRALIA LIMITED) V. [NAME] & ORS. Judgment No. 2 (On Costs) 1 BEAZLEY JA: I agree with Hodgson JA. 2 HODGSON JA: On 13 December 2004, this Court delivered a judgment in which it left open questions concerning [NAME]'s costs. [NAME] has provided submissions and affidavits in relation to those questions. [NAME] provided answering submissions, and [NAME] provided submissions in reply. No objection was taken to the affidavits, and they have been read. The affidavits established inter alia:

1. Prior to the hearing before the Master, [NAME] made an offer of compromise on terms that the summons be dismissed with no order as to costs.

2. The [NAME]' claim before the [NAME] was for $137,756.00 plus interest and costs, and after taking into account settlement of the part of the claim that related to defects, the amount in issue on the part of the claim that related to non-completion was about $100,000.00 plus interest and costs. 3. [NAME]'s costs before the Tribunal were a little over $70,000.00, some being applicable to the defects portion of the claim and some to the non-completion portion. 4. [NAME]'s costs in relation to the Supreme Court proceedings were about $40,000.00. However, it is not clear if this relates to the proceedings before the Master or proceedings before the Court of Appeal or both. 5. [NAME] regarded the frustration point as important in determining the risk it undertook in issuing insurance under the Home Building Act. 3 The question of costs before the Tribunal is still to be determined by the Tribunal, and is not being dealt with by this Court. 4 [NAME] has sought indemnity costs. However, as a defendant it would not be entitled to indemnity costs by force of the Supreme Court Rules. Such entitlement would require a determination by this Court that the [NAME]' rejection of the offer was unreasonable. In my opinion, particularly having regard to the difficulty of the case, the rejection was not unreasonable. [NAME] is not entitled to indemnity costs. 5 [NAME] was the insurer of the [NAME] and not of [NAME], and as submitted by [NAME], it had interests which were different from and could potentially conflict with [NAME]'s interests. However, the interests of [NAME] and [NAME] in the proceedings before the Master and in this Court, relating entirely to the frustration point, substantially coincided. However, I cannot say that it was unreasonable for [NAME] to be separately represented before the Master and to bring its own appeal against the Master' decision; and in circumstances where the [NAME] briefed Senior Counsel, I cannot say it was unreasonable for [NAME] to brief Senior Counsel. Furthermore, there is force in [NAME]'s submission that, if there is any penalty to be imposed by reason of the bringing of separate appeals, there is no reason that it should be visited upon [NAME] and not at all on [NAME]. 6 However, there is still the consideration that [NAME] has vigorously contested the frustration point partly because of the wider importance of the case to [NAME], beyond the result in the particular case. It cannot be said that this was a test case, as was A. Goninan & Co. Limited v. Gill [2001] NSWCA 77, 51 NSWLR 441, at [60]. However, the wider importance of the point to [NAME] is a matter that, in my opinion, can be taken into account. 7 I am concerned that, by reason of [NAME]'s contesting the difference between a claim for $137,000.00 plus interest and a conceded entitlement to $37,000.00 plus interest, the [NAME] face the possibility of liability for costs of [NAME] perhaps in the order of about $100,000.00, incurred by one of two defendants with substantially the same interests, where the extent of these costs may be partly because it was in [NAME]'s commercial interests to establish a general point. 8 If an order for costs is made in [NAME]'s favour in the appeal, it would seem that a Suitors' Fund certificate could be granted; and since [NAME]'s appeal is a distinct appeal from [NAME]'s appeal, there would be a further amount of $10,000.00 available towards payment of [NAME]'s costs. In my opinion, the provisions of the Suitors' Fund Act and the limits provided by that Act are matters that can be taken into account in determining costs orders. One possibility, then, is to order that the [NAME] pay [NAME]'s costs of its appeal and have a certificate under the Suitors' Fund Act, and to limit the quantum of [NAME]'s costs to $10,000.00. As against this, as I have said, there is the consideration that there may not be sufficient reason to discriminate between the positions of [NAME] and [NAME] in relation to costs; and also the consideration that it could not be said to be unreasonable for [NAME] to have brought its separate appeal and to brief Senior Counsel. 9 However, I think the separate appeal and briefing of Senior Counsel may fairly be regarded, at least in part, as additional precaution taken by [NAME] by reason of its wider interests, and the exclusion of Senior Counsel's costs would not involve discrimination in favour of [NAME].

Accordingly, in addition to the orders made in par.[45] of the previous judgment, I would propose the following further order: 4. [NAME] to pay [NAME]'s costs of the appeal not extending to briefing Senior Counsel, and to have a certificate under the Suitors' Fund Act if otherwise eligible. 10 TOBIAS JA: I agree with Hodgson JA. **********

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