District Court New South Wales Medium Neutral Citation: Newport v Li & Anor (No 2) [2022] NSWDC 132 Hearing dates: 29 April 2022 Date of orders: 29 April 2022 Decision date: 29 April 2022 Jurisdiction: Civil Before: Judge Levy SC Decision: See paragraph [15] Catchwords: COSTS – consequential orders for costs following final judgment Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Uniform Civil Procedure Rules 2005 (NSW), r 36.16 Cases Cited: Gray v Richards (No 2) [2014] HCA 37 House v The King [1936] HCA 40; (1936) 55 CLR 499 Newport v Li & Anor [2022] NSWDC 8 Northern Territory v Sangare [2019] HCA 25 Category: Costs Parties: Sunantha Newport (Plaintiff) Zhuo Hua Li (First defendant) Guoxi Li (Second defendant) Representation: Counsel: Mr K Andrews (Plaintiff) Mr T Smartt (First defendant) No appearance of second defendant on costs application Solicitors: Slater & Gordon (Plaintiff) Clyde & Co (First defendant) LLL Lawyers (Second defendant) File Number(s): 2019/201663 Publication restriction: None Judgment Notice of motion on costs 1. On 11 February 2022 the principal judgment was delivered in these proceedings in which the plaintiff claimed damages for personal injury. The hearing took place over 6 days commencing 9 August 2021. The plaintiff obtained a verdict against the second defendant in the sum of $252,376.71 but did not succeed against the first defendant: Newport v Li & Anor [2022] NSWDC 8. These reasons concern competing applications for costs following that outcome. 2. On 23 February 2022 the first defendant filed a notice of motion pursuant to r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW), seeking the following orders: 1. The plaintiff is to pay the first defendant's costs of defending the proceedings the plaintiff has brought against him: 1. On an ordinary basis up to 1 April 2021; 2. On an indemnity basis from (and including) 2 April 2021. 1. In the alternative, the plaintiff is to pay the first defendant's costs of defending the proceedings: 1. On an ordinary basis up to 6 August 2021; 2. On an indemnity basis from (and including) 7 August 2021. 1. The hearing of the motion was fixed for 11 March 2022. On that day the hearing of the motion was stood over to Friday 29 April 2022, with affidavit evidence to be completed within 14 days and written submissions to be provided within 7 days of that date. Counsel for the plaintiff was not available on that day and the motion was stood over for hearing today. 2. The applicant first defendant relied on evidence in the form of affidavits by Breannon Bailey, solicitor, affirmed on 23 February 2022 and 7 March 2022. The first affidavit set out the history and the second affidavit corrected a series of typographical errors in the first affidavit. The relevant factual matters of significance that emerge from those affidavits are as follows: 1. On 4 March 2021, the first defendant's solicitors served a rules-compliant offer of compromise on the plaintiff's solicitor offering to resolve the plaintiff's claim by the entry of a judgment in favour of the first defendant with each party to bear their own costs; 2. That offer was expressed in terms which stated that the first defendant was of the view the plaintiff's claim would fail against him. That offer was not accepted by the plaintiff; 3. On 5 August 2021 the solicitor for the first defendant served a rules-compliant offer of compromise on the solicitor for the plaintiff offering to resolve the plaintiff's claim by a judgment in favour of the plaintiff in the sum of $40,000 plus costs to be assessed or taxed. That offer was not accepted by the plaintiff; 4. By the terms of the judgment delivered on 11 February 2022, the first defendant obtained a more favourable outcome in the proceedings when compared to the abovementioned offers of compromise. 1. The first defendant seeks an order that the plaintiff pay the first defendant's costs from 2 April 2021 (being the date of expiry of the first offer of compromise) or alternatively, 7 August 2021 (being the date of expiry of the second offer of compromise). 2. The respondent plaintiff relied upon an affidavit by her solicitor, Laura Sampson, affirmed on 25 March 2022. The essential matters of relevance to emerge from that affidavit were that the matter had a long and complex case management and listing history, where, ultimately, different solicitors were retained by the respective defendants instead of joint representation. Two hearing dates were previously vacated on the application of the first defendant with that defendant being ordered to pay the plaintiff's costs associated with those vacated dates. 3. The Court file reveals the following historical costs orders were made: 1. On 22 November 2019, the first defendant was ordered to pay the plaintiff's costs of the first defendant's unsuccessful application to set aside a paragraph of a subpoena; 2. On 13 May 2020, the first defendant was ordered to pay the plaintiff's costs of the first defendant's unsuccessful notice of motion to adjourn the court-ordered mediation and vacate the hearing date on 16 June 2020; 3. On 15 June 2020, the first defendant was ordered to pay the plaintiff's costs of the first defendant's successful notice of motion to vacate the hearing date, as well as the costs thrown away from vacation of the hearing date; 4. On 24 August 2020, the first defendant was ordered to pay the plaintiff's costs of the first defendant's successful notice of motion to vacate the hearing date, as well as the costs thrown away from vacation of the second hearing date. 1. I have been informed that the plaintiff's costs in respect of those orders total $145,580. 2. In light of that history of costs orders made against the first defendant, the plaintiff has submitted that the appropriate order in this case should be for all previous costs orders to be vacated, and that each party pay their own costs of the proceedings as between the plaintiff and the first defendant. 3. In contrast the first defendant seeks an order that his costs be paid on the ordinary basis up to 1 April 2021, or alternatively, to 7 August 2021 on the ordinary basis, and on the indemnity basis thereafter. 4. At today's costs hearing, without prior notice to the first defendant, and in the absence of the second defendant, in the alternative, the plaintiff sought a Sanderson order for costs against the second defendant. That argument cannot be fairly entertained in the absence of that defendant and absent prior notice to that defendant. 5. Section 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion as to costs. That discretion must be exercised rationally: House v The King [1936] HCA 40; (1936) 55 CLR 499. Orders for costs must be made according to the justice of the case: Gray v Richards (No 2) [2014] HCA 37; Northern Territory v Sangare [2019] HCA 25. 6. It is convenient to examine the defendant's costs application first. I do not consider it to be appropriate or just that the plaintiff should pay the first defendant's costs on an indemnity basis as a consequence of either of that defendant's two offers of compromise as those offers did not on their face take into account the sizeable costs orders that the plaintiff has secured against the first defendant. Accordingly, on assessment any costs liability of the plaintiff to the first defendant should be limited to the ordinary basis. 7. I do not accept the plaintiff's submission that the plaintiff and the first defendant should bear their own costs. To make such an order would be arbitrary as the first defendant's costs have not been quantified for comparison purposes. This prevents a reasoned comparative analysis to determine whether the expedient costs order the plaintiff seeks is just in the circumstances. No costs equivalence has been demonstrated. 8. Therefore, I order that the plaintiff is to pay the first defendant's costs of the proceedings on the ordinary basis after offset of the benefit of costs orders she has already obtained against the first defendant. Each party should bear their own costs of the costs application. ********** 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: 29 April 2022