Supreme Court New South Wales Medium Neutral Citation: Walsh v State of New South Wales (No 2) [2020] NSWSC 1729 Hearing dates: On the papers Decision date: 03 December 2020 Jurisdiction: Common Law Before: Rothman J Decision: The Court makes the following orders: (1) The defendant shall pay the plaintiff's costs of the Motions, ordered to be paid by Harrison AsJ on 4 October 2018, and the costs of the appeal ordered to be paid by Rothman J on 26 June 2020, on the ordinary basis. (2) The costs referred to herein shall be paid forthwith; (3) The defendant shall pay the plaintiff's costs of and incidental to this application for costs forthwith and on an indemnity basis. Catchwords: COSTS – interlocutory proceedings – application may be made at any time before finalisation of proceedings – jurisdiction of the Court – indemnity costs refused – costs ordered to be paid forthwith Legislation Cited: Civil Procedure Act 2005 (NSW), ss 14, 98 Legal Profession Uniform Law Application Act 2014 (NSW) Uniform Civil Procedure Rules 2005 (NSW), rr 36.1, 42.1, 42.5, 42.7 Cases Cited: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1; [1991] NSWCA 19 CH Giles & Co v Morris [1972] 1 All ER 1960 Chen v Karandonis [2002] NSWCA 412 Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58 DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 Grierson v The King (1938) 60 CLR 431; [1938] HCA 45 Harrison v Schipp [2001] NSWCA 13 Hartmont v Foster (1881) 8 QBD 82 Hillman v Mayhew (1876) 1 Exch. D. 132 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 New South Wales Insurance Ministerial Corporation v Edkins (1998) 45 NSWLR 8 Ohn v Walton (1995) 36 NSWLR 77 Oppert v Beaumont (1887) 18 QBD 435 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Postiglione v the Queen (1997) 189 CLR 295; [1997] HCA 26 State of New South Wales v Walsh [2020] NSWSC 807 Category: Costs Parties: State of New South Wales (Defendant/Appellant) Wendy Walsh (Plaintiff/Respondent) Representation: Counsel: B K Nolan (Defendant/Appellant) J Morris SC/M N Hammond (Plaintiff/Respondent) Solicitors: Crown Solicitor's Office (Defendant/Appellant) Carroll & O'Dea Lawyers (Plaintiff/Respondent) File Number(s): 2015/376930 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Division Citation: Walsh v State of New South Wales [2018] NSWSC 1480 Date of Decision: 4 October 2018 Before: Harrison AsJ File Number(s): 2015/376930 Judgment 1. HIS HONOUR: On 26 June 2020, the Court, as presently constituted, issued Reasons for Judgment: State of New South Wales v Walsh [2020] NSWSC 807 (hereinafter "the Appeal Judgment"), the effect of which was to dismiss an appeal from the judgment of Harrison AsJ, dated 4 October 2018 (hereinafter from time-to-time referred to as "the Reasons" or "the Preliminary Judgment"). 2. By Motion, notice of which was filed electronically on 16 July 2020, the plaintiff, Wendy Walsh, seeks a special costs order pursuant to the terms of s 98 of the Civil Procedure Act 2005 (NSW). That special costs order seeks that the costs of the appeal, and the costs of the Motions below, be payable forthwith and be paid on an indemnity basis. 3. When the Motion was drawn to the attention of the Court, as presently constituted, the Court, by consent, made orders the effect of which was that the plaintiff was to file written submissions in reply by 8 October 2020 and the matter would be dealt with on the papers. Apparently, the plaintiff's submissions in reply were filed in the Registry or electronically and not drawn to my attention until the week commencing 15 November 2020, when I was out of Sydney. 4. The substantive proceedings involve a claim by the plaintiff, a former police officer, who, it is alleged, retired as a consequence of injuries sustained during the course of her employment in the New South Wales Police Force. The injury was psychiatric and is said to have been caused by circumstances in which the plaintiff was allocated the task of investigating a fellow officer who, at the time of the investigation or part of it, served alongside the plaintiff and/or in close proximity to her. 5. The substantive proceedings were commenced by Statement of Claim on 23 December 2015. To that Statement of Claim, the defendant filed a Defence on 27 May 2016, having filed a Notice of Appearance on 28 January 2016. 6. From the time of the filing of the Statement of Claim, the proceedings came before the Court on a number of occasions. On 10 July 2017 and, notwithstanding the 18-month delay and the number of times the matter came before the Court, the defendant, for the first time, sought to strike out the Statement of Claim. That was the strikeout Motion, also referred to in the Appeal Judgment (and hereinafter) as "the first Motion". 7. As a response to the first Motion, the plaintiff filed a Motion (referred to in the Appeal Judgment and herein as "the second Motion") on 15 December 2017, in which the plaintiff sought leave to file and serve an Amended Statement of Claim, dealing with the issues said to be raised by the defendant in the first Motion. 8. The last Motion (hereinafter "the third Motion") that was before the Court and dealt with by Harrison AsJ and by the Court, as presently constituted, was a Motion, entitled Amended Notice of Motion, filed on 3 May 2018, by which Motion the plaintiff sought leave to commence proceedings and an extension of time, but also sought that the application be dealt with at the same time as the substantive proceeding. There were consequential orders sought in the third Motion relating to the suspension of the limitation period, which it is unnecessary to recite. 9. The effect of the Preliminary Judgment of Harrison AsJ was to dismiss the Motion for summary dismissal; grant leave to file a Proposed Amended Statement of Claim; and to direct that the application under the Limitation Act 1969 (NSW) be heard at the same time as the substantive proceedings. The Preliminary Judgment was delivered by her Honour on 4 October 2018. Her Honour ordered that the defendant pay the plaintiff's costs of the Motions, on the ordinary basis. 10. On 27 November 2018, a time after the time for filing an appeal had expired, the defendant, the State of New South Wales, appealed and/or sought leave to appeal and/or sought an extension of time to allow it to appeal the judgment of Harrison AsJ. 11. The Court, in the Appeal Judgment, granted leave to file the appeal out of time, granted an extension of time in which to appeal, waived the rules to the extent necessary to achieve that outcome, and dismissed the appeal. The Court also ordered the State of New South Wales to pay the costs of and incidental to the appeal incurred by Ms Walsh. 12. Ms Walsh now seeks the special orders to which reference has been made and, in particular, that the costs be paid forthwith and be paid on an indemnity basis. That application is purportedly made pursuant to the provisions of the Uniform Civil Procedure Rules 2005 (NSW) (hereinafter "UCPR"), r 42.7(2). 13. The plaintiff points out that the Court has full discretion to make orders, purportedly pursuant to the provisions of s 98 of the Civil Procedure Act. In fact, the Court's jurisdiction to make orders is inherent as a superior court of record with general equitable jurisdiction and the provisions of s 98 of the Civil Procedure Act are, in that sense, supplementary. 14. Whatever be the source of the power and/or jurisdiction to order costs, the discretion to order costs must be exercised judicially and in accordance with the principles relating thereto. [1] Principles on Costs 1. Apart from the inherent jurisdiction of a superior court of record with general jurisdiction in equity, courts did not, at common law, have a right to order costs and no court other than a superior court of record with such general jurisdiction had the power to order costs. As a consequence, in all courts, other than those just described, the power and/or jurisdiction to award costs is statutory. It is primarily to the statute that one must go to determine the power and/or jurisdiction to make such orders. [2] 2. Whether the jurisdiction being exercised is inherent or statutory, the purpose of any order for the payment of costs is compensatory. The primary purpose of a costs order is to indemnify or compensate a successful party for the costs in asserting its rights or successfully defending against the assertion by another of rights that did not exist. [3] In Ohn v Walton, Gleeson CJ said: "When legislation confers a power to order costs it is, in the absence of any contrary indication, to be understood as conferring a power to be exercised for that purpose. Two things follow: 1. The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or the conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursement. 2. The test of whether an order for costs should be made against an unsuccessful plaintiff or complainant is not whether he or she has done anything to warrant punishment. It is whether, in the circumstances, the defendant or respondent should be compensated. The majority also held that these principles are equally applicable to a case where a complainant or informant is acting under a public duty to lay a complaint or information." [4] 1. As earlier stated, costs are awarded as an indemnity to a successful party in litigation. They are not ordered by way of punishment of an unsuccessful party. [5] 2. The usual order is that costs follow the event. [6] In this case, an order that the defendant pay the plaintiff's costs of the appeal was made at the time that the Appeal Judgment was issued. Further, Harrison AsJ issued an order that the defendant pay the plaintiff's costs of both Motions, which, on the basis explained in the Appeal Judgment, was a reference to the three Motions that were before her Honour. 3. In the case of the judgment issued by Harrison AsJ, her Honour expressly ordered that the plaintiff's cost be assessed "on an ordinary basis". No such express statement was made in the order for costs on the appeal. 4. Under the jurisdiction granted by s 98 of the Civil Procedure Act, and under its inherent jurisdiction, this Court has power to award costs on an indemnity basis. That is not the usual course. As already expressed, the usual course is "the ordinary basis", namely, that costs are taxed and/or assessed. 5. However, parties may be entitled to a special entitlement, for example, in relation to trusts and wills and be able to be indemnified, wholly, from the fund that may be in dispute. Further, many loan documents require indemnity costs as a matter of contract. 6. Absent an entitlement under contract or general law, the Court will award indemnity costs in circumstances where there is relevant misconduct by the unsuccessful party or, relevantly, the party against whom costs are being ordered. That may include the existence and content of prior notice that the applicant for costs has given in relation to the basis upon which costs will be assessed. 7. But prior notice is not an essential condition to the awarding of indemnity costs. The provisions of s 98(1)(c) of the Civil Procedure Act make express that the Court has the discretion to order costs on an indemnity basis. An order that costs be paid on an indemnity basis will not entitle a party to recover those costs that have been unreasonably incurred or appear to be of an unreasonable amount. [7] 8. As a consequence of the promulgation of the Legal Profession Uniform Law Application Act 2014 (NSW), costs assessors determine the level of costs and the amount of costs incurred. Assessed costs are, under those provisions, more generous than used to be the situation under the taxation provisions that previously applied. 9. As a consequence, the fundamental distinction or difference between costs on the ordinary basis and costs on an indemnity basis seems to relate, essentially, to questions of onus as to what was or is reasonable. In relation to indemnity costs, an assessor treats as reasonable all costs, unless it can be shown they were not. Whereas where costs are assessed on an ordinary basis, it is for the person seeking the costs to show that the costs incurred were reasonable and that a particular item of work was undertaken reasonably and charged reasonably. 10. As earlier stated, whether or not to order indemnity costs requires the Court to exercise its discretion, which must be exercised judicially and which must take into account the primary objective of the Civil Procedure Act including that proceedings should be conducted in a way that is just, quick and cheap and that there should not be undue delay or disproportionate costs. Nevertheless, there should be something special or unusual to justify the making of an award for indemnity costs. [8] That unusual situation or circumstance needs to relate to the conduct of the party against whom the order is to be made and should be described in terms that is a "relevant delinquency". [9] 11. In the sense used in the authorities, "relevant delinquency" does not mean some ethically inappropriate conduct or unfairness, but relates to the conduct of the case and delinquency in that conduct. It can include an unreasonable rejection of an Offer of Compromise, which, ordinarily, would be covered by the provisions of the rules dealing with Offers of Compromise or Calderbank letters. 12. Other circumstances may suffice. For example, arguments may be run and proceedings taken that are an abuse of process or otherwise unreasonably conducted or have no chance of success. Apart from the general statement of principle, it must be accepted that the Court will not lightly depart from costs being assessed on an ordinary basis and there must be something that satisfies the Court that indemnity costs should be awarded. 13. Lastly, it is necessary for the Court to deal with the proposal that costs be awarded and be paid forthwith or, more relevantly, for present purposes, the principles that apply to such an order. The timing at which costs arising from interlocutory applications and judgments will be paid is generally covered by the provisions of UCPR r 42.7, which prescribes that the costs of interlocutory proceedings will be dealt with in the same way as the general course of the proceedings and will be payable only at the conclusion of the proceedings. 14. In this way, in the usual course, costs in interlocutory proceedings are costs in the cause or not the subject of express order, but dealt with in accordance with the aforesaid rule. However, the terms of UCPR r 42.7 do not qualify the discretion on the Court to deal with interlocutory proceedings that are discrete in a manner which follows the general rule, namely, that the successful party should have its costs paid by the unsuccessful party. That was the basis upon which Harrison AsJ and the Court, as presently constituted, issued the orders as to costs in relation to these interlocutory proceedings. 15. One of the reasons that costs in interlocutory proceedings are not payable until the conclusion of the proceedings is that there may well be multiple orders for costs, some of which, or all of which, may be inconsistent with the ultimate order for costs in the substantive proceeding. It is therefore necessary for an assessment to be made of the costs. Ordering costs to be paid at a point in time prior to the conclusion of the substantive proceedings necessarily involves an assessment of costs on a number of occasions and does not allow for the crediting of costs as against different parties in the ultimate resolution of various costs orders. 16. Nevertheless, in appropriate circumstances there may be good reason to award costs of interlocutory proceedings on the basis that they be paid forthwith. Again, the exercise of discretion in this regard will be informed by the need for compensation; the nature of the proceeding; the primary objectives and purpose of the awarding of costs; and the primary purpose and objectives of the Civil Procedure Act. Jurisdiction 1. Somewhat ironically, the defendant submits that the Court has no jurisdiction to order that costs be assessed on other than the ordinary basis and that costs be paid forthwith. The purported basis for this proposition are those rules dealing with the entry of judgment and the capacity of the Court to amend judgment. 2. The defendant submits that the Court is without power to make the orders sought and relies upon UCPR r 36.11(2) and submits that, in order for the Court to make the orders sought, the Court would need to set aside or vary the judgment or order already made and an application for that purpose must be made within 14 days after the judgment or order is entered. Entry of the order or judgment is now effected by computer [10] and occurs 14 days after the entry of the judgment or order under the computer. [11] 3. There are two fundamental difficulties with the submission as to jurisdiction, with which I will now deal. The defendant's submission as to jurisdiction is, frankly, untenable and, in the circumstances of the defendant's status as a model litigant, ought not to have been put. 4. Is it seriously contended by the model litigant that, if the Court were, hypothetically, to come to the view that the whole of the claim by the plaintiff in these proceedings was fabricated and commenced in bad faith, that, because of already entered interlocutory orders as to costs, it could not make orders that all costs be paid by the plaintiff and to be paid on an indemnity basis? That is the consequence of the defendant's submission. 5. There are two fundamental bases for the proposition that the submission on jurisdiction is untenable. The first relates to the inherent jurisdiction of a superior court of record to alter judgments and orders after entry. 6. A judgment of a court is entered and forms part of the record of the proceedings and, at common law and absent statutory expansion, forms the basis, in relation to courts that are not superior courts of record, for certain prerogative writs. [12] 7. As a consequence, at least partly, of that formality, significant restrictions are imposed upon the jurisdiction of a superior court to alter judgments, once entered. [13] 8. In Postiglione, Dawson and Gaudron JJ, in their joint judgment, said: "If a final order was made perfecting the decision of the Court of Criminal Appeal on Postiglione's first application, the assumption of jurisdiction to entertain his second application and the ensuing appeal was contrary to the decision of this Court in Grierson v The King. It was held in that case that the Criminal Appeal Act 1912 (NSW) does not confer jurisdiction to re-open an appeal which has been heard on the merits and finally determined. A fortiori, in a case where what is involved is the hearing of a second appeal. Pantorno does not suggest otherwise. The view was expressed in Pantorno that an intermediate court of appeal can entertain an application to remedy a denial of procedural fairness whether or not its order has been perfected. Nothing was said as to the jurisdiction of an appellate court to entertain a second appeal when the first has been heard and determined on the merits and an order perfected." [14] (Footnotes omitted.) 1. The foregoing approach was also adopted or accepted by McHugh J (at CLR 315) and by Gummow J (at CLR 327) in Postiglione. 2. As a consequence of the restrictions on altering a judgment once entered, there are two distinct periods in relation to the right to alter judgments. The first is that period prior to the judgment being entered and the second is the period after entry. Each of those periods brings its own limitations on the right to alter judgment. But the restrictions are different. [15] 3. After entry of judgment, under the common law, there are only three bases upon which a judgment or order may be reopened and amended. Those bases are: 1. the "slip" rule; 2. the power to amend the judgment or order where the intention of the court has not manifested in the judgment; and 3. the capacity to allow the opening of orders made in chambers. [16] 1. In Bailey v Marinoff, supra, Barwick CJ said: "Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed." [17] 1. As is clear from the foregoing extract, Barwick CJ was referring to a proceeding for which a court had made orders finally disposing of the proceeding. The differentiation between the final disposal of proceedings and orders involving pending litigation was made express in Bailey v Marinoff, in the reasons for judgment of Menzies J, in which his Honour said: "This appeal is not concerned with the power of a court to alter orders in pending litigation. It is concerned with the power of a court to make an order in litigation which, without any error or lack of jurisdiction, has been regularly concluded and is no longer before the court. To recognize the problem is, I think, to solve it. However wide the inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend the making of orders in litigation that has been brought regularly to an end." [18] 1. Of course, the High Court in Bailey v Marinoff was dealing with an appeal from the Court of Appeal, which had made self-executing orders, the effect of which was that the proceedings were dismissed. The Court of Appeal then purported to reinstate the matter into the list and the High Court disapproved of such reinstatement. The ability to amend judgments that have already been entered was the subject of further discussion by the High Court, again, in DJL, in which the High Court said: "The common law courts, as superior courts of record, had "full power to rehear or review a case until judgment [was] drawn up, passed, and entered". That statement, with citation of supporting authority, was made by Starke J in Texas Co (Australasia) Ltd v Federal Commissioner of Taxation. Even after entry of judgment, an error arising from an accidental slip or omission might be corrected at any time by further order in the action and even without an enabling rule of court. An order also might be made in the action for the correction of the records of the court to make certain that they truly represented what the court had pronounced or had intended to pronounce. It also appears that a judgment might be set aside after entry if the parties to the judgment consented, although in deciding whether to make such an order the court would have regard to the interests of third parties. Finally, where the business of the court was so organised that some orders were made in chambers, those orders may have been open to review by motion in the action, even if they were final orders. The Court of Chancery had power to re‑open and rehear cases which had been tried before it, even after the decree had been entered. The right of rehearing in the Court of Chancery had involved the exercise of appellate rather than original jurisdiction. Sir George Jessel MR so concluded in In re St Nazaire Co. However, that peculiar state of affairs in Chancery did not continue with respect to the exercise of equitable jurisdiction by the Supreme Court of Judicature established by the Judicature Act 1873 (UK). The structure it provided included the Court of Appeal." [19] 1. The underlying purpose of the promulgation of the UCPR dealing with the 14 day limit on alteration after entry of judgments is to take account of the electronic record of the Court and the capacity, nowadays, to enter judgment almost instantaneously. Given the level of restrictions that applied to the capacity of the Court to vary judgments once entered and the circumstance that, given the entry of judgment by computer, there is an almost instantaneous entry of all judgments, the rules were promulgated for the purpose of giving a short period of time to allow for the correction of any order or judgment, without the necessity to rely upon the inherent jurisdiction to alter judgments otherwise. Further, the UCPR applies to all courts in this State and not only to this Court or superior courts of record, with or without inherent jurisdiction. 2. Thus, the provisions upon which the defendant relies to limit the capacity of the Court to alter an interlocutory judgment have been promulgated to overcome the mischief associated with the Court's inability to alter the judgment once entered. In other words, these rules are intended to expand, not confine, the jurisdiction that may otherwise exist in a court to alter or amend the terms of its judgment. 3. In that regard, the effect of the rules is to render the entry on the computer system not the formal entry of the order if, within 14 days, application is made to vary or set aside that order. In that way, the application to vary or set-aside operates nunc pro tunc so that it is as if the order had never been entered. 4. Even if all of the foregoing is incorrect, by operation of s 14 of the Civil Procedure Act, the Court may, by order, dispense with the requirements of the rules. In this case, that would involve waiving the requirement to make express application for the amendment of the original orders (assuming, for present purposes, that such variation was necessary). 5. While an order dispensing with the rules ought not, generally, permit parties to circumvent limitations or restrictions that otherwise apply, the function of the Court in such circumstances is to do justice between the parties. The notion that the orders relating to the time during which an order may be varied could be used to inflict an injustice, where the Court was otherwise of the view that indemnity costs or costs forthwith should, as a matter of justice, apply, would not be countenanced. 6. Over and above all of the foregoing, the interlocutory orders that were sought and obtained in the proceedings before Harrison AsJ, and were the subject of the Appeal Judgment, were orders that, historically, would be made after application in Chambers and a hearing in Chambers. They would be applications for an extension of time; applications in relation to pleadings; and the summary dismissal proceedings. 7. Almost all interlocutory applications are applications that, historically, were made in Chambers. Some interlocutory applications, although made in Chambers, were not heard in Chambers. An application for summary dismissal is in that class. The more serious Chambers' applications were made by Summons and heard by a judge in Chambers. Historically, proceedings in Chambers were in contradistinction to the proceedings of the Court en banc. [20] 8. It certainly included all injunctions and prerogative relief (at least at the point where orders nisi issued). 9. As such, the exception to the capacity of a court to vary or amend a judgment once entered, being the exception for orders made "in chambers", included most interlocutory orders. Exceptions included an order summarily dismissing proceedings; and certain other orders that finally determined the rights of the parties as a matter of practicality. 10. The second and simpler basis for the untenable nature of this submission as to absence of jurisdiction is the form of the orders that issued. With the exception of the orders issued by Harrison AsJ, which, expressly, require the costs to be assessed on an ordinary basis, neither of the orders deal with when the costs are to be payable and the order on appeal does not deal with the basis for the assessment of costs. 11. As a consequence, what is sought is not an amendment or variation, at least in those respects, it is a supplementary order of an interlocutory kind in accordance with the rules. It is necessary to deal with the merits of the application. 12. Apart from the general propositions already the subject of comment, reliance upon UCPR r 36.16 as a basis for limiting the power to alter costs is misconceived. Costs orders may be reconsidered and altered at any time prior to the entry of final judgment. As long as the proceedings are still on foot and the Court is not functus officio, a judge, even a judge of a court other than the superior court of record, may make orders relating to costs and may vary a costs order already made. [21] 13. In Edkins, Priestley JA, with whom Spigelman CJ and Sheppard AJA agreed, made it clear that a District Court judge who had entered verdict and made an order as to costs could, because there was, unknown to the judge, other work to be done in the proceedings, make supplementary or different orders as to costs than were made at the time that the verdict was entered or announced. The argument on jurisdiction and/or power put forward by the defendant is wholly without merit; without support on the authorities; and directly inconsistent with binding authority. [22] Indemnity Costs 1. It is necessary to reiterate, briefly, the Motions that were dealt with by Harrison AsJ and on appeal. There were three Motions: the first being the defendant's Motion to strike out or to dismiss summarily; the second being the plaintiff's Motion for leave to file and serve an Amended Statement of Claim; and the third being a Motion seeking an extension of time to commence proceedings and a declaration that the limitation period is, or be, suspended and that the extension application and the substantive matter be heard together. The plaintiff was successful on all three Motions. The Motion to dismiss summarily was unsuccessful and the two Motions of the plaintiff were each successful. 2. Nevertheless, the relief sought in each of the plaintiff's Motions was an indulgence to the plaintiff in that it allowed the plaintiff to remedy issues associated with the original Statement of Claim and issues associated with the lateness of the commencement of the proceedings. In those circumstances, it is difficult to envisage a situation where the Court would order indemnity costs against a party that is not, otherwise, in default or has not, otherwise, been responsible for any misconduct in relation to those aspects of the litigation. 3. Having made that comment, it is fair to say that, particularly given the defendant's role as the model litigant, the delay in raising the issues that were ultimately agitated in the Motion to dismiss summarily was not optimal and occasioned costs being thrown away, being costs of a number of appearances in the Court, prior to the realisation that the Statement of Claim required amendment. In and of itself, in the exercise of the discretion that the Court undoubtedly has to order indemnity costs, the circumstances giving rise to the matters that came before the Court are not such that indemnity costs should be ordered. 4. While the delay in raising issues occasioned by the failure of the defendant to raise the issues is problematic and is probably a "delinquency", it does not, in the circumstances now before the Court, warrant the description of a relevant delinquency. [23] 5. As earlier stated, the fundamental distinction between indemnity costs and costs on the ordinary basis is the onus of proof as to the provision of services being reasonable and the reasonable nature of the costs incurred. 6. Applying the principles associated with the basis upon which indemnity costs are ordered, it is considered, as a principle, that the awarding of indemnity costs must relate to relevant misconduct or delinquency of the party against whom such an order is made. In this case, the defendant has not misled the Court in the Motions that were heard or that were appealed; they have not maintained proceedings or applications that had no real prospect of success; have not maintained these applications for a purpose other than the purpose of achieving success in them; the applications themselves have not caused unreasonable delay and expense; and there is no relevant offer and acceptance. 7. The plaintiff relied upon notice by letter. However, that letter would not, of itself, constitute either an Offer of Compromise or a Calderbank letter, thereby allowing the application of principles associated with offers that, if accepted, would provide a better outcome than the result of the proceedings. Nor can it be said that it was unreasonable to reject said "offer". 8. Indemnity costs will not be ordered, except in relation to this application for costs forthwith, the major argument in response to which was, as stated, whole without merit. Time for payment of costs 1. The provisions of s 98 of the Civil Procedure Act allow the Court to order costs of interlocutory proceedings and make orders for their payment at a point in time prior to the conclusion of the substantive proceedings. The terms of UCPR r 42.7(2) expressly provide that the Court is entitled to "order otherwise", in the absence of which costs of interlocutory proceedings do not become payable until the conclusion of the proceedings. An order under r 42.7(2) that costs be payable forthwith may be made at any time. [24] 2. The principles applicable to making an order the effect of which is to render the costs orders payable forthwith are not confined. Such an order may be made in the exercise of the discretion of the Court on the basis of the general discretion available to the Court and bearing in mind the primary objective to facilitate the just, quick and cheap resolution of the real issues between the parties. 3. These proceedings involved interlocutory applications that were distinct from the substantive issues in the proceedings. That fact allowed the Court to issue orders in relation to the interlocutory proceedings and not otherwise allow the costs of the interlocutory proceedings to be dealt with in the same way as the general course of the proceedings. [25] 4. In the application that was dealt with by Harrison AsJ, and on appeal, the costs were and will be significant. The time for payment, if they be paid at the conclusion of the hearing, will be long postponed. It is likely that the substantive hearing of this application will not be until the latter half of 2021, at the earliest. The proceedings were commenced in 2015. Part of that delay is due to the failure of the defendant to raise the issues that gave rise to the Motions in a timely manner. [26] 5. Further, the appeal was largely concerned with an appeal against the exercise of discretion by the Associate Judge to require that the hearing of the extension of time be heard at the same time as the substantive proceedings. This is a matter of practice and procedure that should not be the subject of appeal except in the rarest of circumstances. 6. Further, the costs of these applications has not been insignificant and the plaintiff is otherwise relatively impecunious and a failure to make an order of this kind may affect the capacity of the plaintiff to proceed expeditiously with the remainder of the proceedings and to deal with the substantive hearing without delay. 7. I also bear in mind the fact that there is a huge disparity between the parties' ability to bear the ongoing costs of the litigation. [27] 8. For all of the foregoing reasons, it seems to me to be an appropriate course, consistent with the purposes of the Civil Procedure Act and the achievement of justice, for the costs ordered by Harrison AsJ and by the Court on appeal to be payable forthwith. 9. For the foregoing reasons, the Court makes the following orders: 1. The defendant shall pay the plaintiff's costs of the Motions, ordered to be paid by Harrison AsJ on 4 October 2018, and the costs of the appeal ordered to be paid by Rothman J on 26 June 2020, on the ordinary basis. 2. The costs referred to herein shall be paid forthwith; 3. The defendant shall pay the plaintiff's costs of and incidental to this application for costs forthwith and on an indemnity basis. ********** Endnotes 1. Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11. 2. Ibid. 3. Ohn v Walton (1995) 36 NSWLR 77. 4. Ibid, at 79. 5. Latoudis v Casey (1990) 170 CLR 534 at 542; [1990] HCA 59; Oshlack, supra, at CLR 75, [1], per Brennan CJ; Ohn, supra, at 79. 6. Oshlack, supra and UCPR r 42.1. 7. UCPR r 42.5. 8. Harrison v Schipp [2001] NSWCA 13 at [139]; Chen v Karandonis [2002] NSWCA 412 at [110]. 9. Oshlack, supra and Baltic Shipping Co v Dillon (1991) 22 NSWLR 1; [1991] NSWCA 19. 10. UCPR r 36.11(2). 11. Akkawi v R (No 2) [2013] NSWCCA 72 at [15] dealing with the identical provisions (Rule 50C) IN THE Criminal Appeal Rules. 12. Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58. 13. Grierson v The King (1938) 60 CLR 431 at 436; [1938] HCA 45; Postiglione v the Queen (1997) 189 CLR 295 at 300; [1997] HCA 26. 14. Postiglione, supra, at CLR 300. 15. Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6. 16. See Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49; DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17; CH Giles & Co v Morris [1972] 1 All ER 1960. 17. Bailey v Marinoff, supra, at CLR 530, per Barwick CJ. 18. Bailey v Marinoff, supra, at CLR 531-532, per Menzies J. 19. DJL v Central Authority, supra, at [34]-[35], per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. 20. Hillman v Mayhew (1876) 1 Exch. D. 132; Hartmont v Foster (1881) 8 QBD 82; Oppert v Beaumont (1887) 18 QBD 435. 21. New South Wales Insurance Ministerial Corporation v Edkins (1998) 45 NSWLR 8 ("Edkins"). 22. Edkins, ibid. 23. Oshlack, supra, at [44], per Gaudron and Gummow JJ. 24. Showtime Touring Group Pty Ltd v Mosley Touring Inc (2013) 296 ALR 597; [2013] NSWCA 53. 25. See UCPR r 42.7(1). 26. Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432. 27. Traderight (NSW) Pty Ltd & Ors v Bank of Queensland Ltd (No 2) [2008] NSWSC 589. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 December 2020