Supreme Court New South Wales Medium Neutral Citation: GOWAY Travel Pty Limited v Critchley (No 2) [2024] NSWSC 810 Hearing dates: 23 May 2024 Date of orders: 1 July 2024 Decision date: 01 July 2024 Jurisdiction: Equity Before: Slattery J Decision: Plaintiff ordered to pay the defendants' costs up to 21 December 2022 and the defendants ordered to pay the plaintiff's costs thereafter. Defendants to pay two-thirds of the plaintiff's costs of the defendants' motion of 20 February 2024. Judgment entered for $264,572.07. Catchwords: COSTS – Party/Party – Exceptions to general rule that costs follow the event – Late amendment by the plaintiff on cause of action which succeeds and other causes of action would have failed – Whether the plaintiff should pay the defendants' costs up to the date of the amendment – Plaintiff failed in respect of some travel costs – Whether the claim for those travel costs is separable such that an order should be made for the plaintiff to pay the defendants' costs of that failed claim – Whether the proceedings should properly have been brought in the District Court and the plaintiff deprived of costs on that account – Whether the defendants should have the benefit of unaccepted Calderbank letters – Calculation of the quantum of the plaintiff's claim Legislation Cited: District Court Act 1973 s 134(1)(h) Uniform Civil Procedure Rule r 42.34(2) Cases Cited: GOWAY Travel Pty Ltd v Critchley & Anor [2024] NSWSC 2 Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 Category: Costs Parties: GOWAY Travel Pty Limited (Plaintiff) Robert Critchley (First Defendant) Lynette Tarbuck (Second Defendant) Representation: Counsel: Mr A.E. Maroya with Mr S. Scott (Plaintiff) Mr M.P. Cleary (Defendants) Solicitors: Richard Glover Law Practice (Plaintiff) Piper Alderman (Defendants) File Number(s): 2020/188401 Publication restriction: No Judgment 1. This is the Court's second judgment in these proceedings. In the Court's first judgment ("the first judgment") the plaintiff was successful on its claim, but the Court noted that the circumstances might call for an application for a special costs order: GOWAY Travel Pty Ltd v Critchley & Anor [2024] NSWSC 2. By a notice of motion dated 23 February 2024 the defendants have applied for a special costs order. In addition, the parties have raised an issue in relation to the calculation of the quantum of the plaintiff's claim which is also resolved in this judgment. This judgment assumes a reading of the first judgment. Events matters and things are referred to in both judgments in the same way. Each of the costs issues and the quantum issue are dealt with in these reasons. 2. The defendants' first argument is that there was a late amendment which substantially altered the case that the defendants had to meet and the matters upon which GOWAY succeeded took up less of the proceedings than the unsuccessful matters. 3. The usual rule that costs follow the event may be departed from where a late amendment substantially alters the case to be met and without which the party would have failed: Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 ("Leading Edge") at [13]. Another relevant circumstance is where the matters upon which the ultimately successful party was unsuccessful are separable and took up a significant part of the trial either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24]. 4. Here the plaintiff succeeded on a cause of action which was introduced into the pleading on after a directions hearing in December 2022. The Court raised questions about the plaintiff's claim at that directions hearing and an Amended Statement of Claim adding a new claim based on Barnes v Abby first limb recipient liability was added to the pleading on 21 December 2022. In the result in the first judgment the plaintiff succeeded on that amended Barnes v Abby claim but failed on all its other pleaded claims. It can be predicted that the plaintiff would have failed in these proceedings but for the amendment and this is an appropriate case to apply the principle in Leading Edge. 5. It is appropriate therefore in these circumstances for the Court to order GOWAY to pay the defendants' costs of these proceedings up to the date of the amendment, 21 December 2022. But subject to what is paid below, the defendants should pay GOWAY's costs after that. 6. The defendants also contend that the usual rule in relation to costs following the event should be departed from in respect of the plaintiff's costs after 21 December 2022 because the claim brought in respect of the travel of Ms Fryer and Ms Story in the sum of $282,226.96 failed in an amount which represented almost half of the quantum of the claim against the defendants. 7. This contention is not persuasive. It is true that the plaintiff's claim against Ms Story and Ms Fryer failed but that claim was never separable from the principal claim against the defendants, Mr Critchley and Ms Tarbuck. As the Court's lengthy reasons in the first judgment show there was a very close factual interweaving of the circumstances in which travel passes were issued to Mr Critchley, Ms Tarbuck, and the travel that was enjoyed by Ms Fryer and Ms Story. It is almost impossible to remove Ms Story and Ms Fryer from the closely related narrative of events and circumstances that led to the claim being successful against Mr Critchley and Ms Tarbuck. Indeed some of the events involving Ms Fryer and Ms Story are the sources of the knowledge upon which Mr Critchley and Ms Tarbuck are found to be liable to GOWAY. Put another way, even if a money claim had not been in respect of travel enjoyed by Ms Fryer and Ms Story, much of the same evidence about Ms Fryer and Ms Story would have been directly relied upon by GOWAY. 8. The defendants next argument is that this claim was within the equitable jurisdiction of the District Court of New South Wales: District Court Act 1973 s 134(1)(h). The defendants submit that the commencement and continuation of the proceedings in the Supreme Court rather than the District Court was not warranted so that Uniform Civil Procedure Rule r 42.34(2) is not satisfied and the plaintiff should be deprived of its costs. The Court is not persuaded by the defendants' argument that this matter was no more legally or factually complex than the type of matters that the District Court deals with on a daily basis. It can be accepted that the District Court did have jurisdiction to deal with this matter but as the Court's first judgment shows this case required very detailed factual analysis of a 6 volume Court Book heard over many days and in the Court's view was properly brought and continued in the Supreme Court. 9. The defendants seek to rely upon a number of Calderbank offers. On 6 November 2020 the defendants offered that the proceedings be discontinued and the plaintiff pay the defendants' costs as agreed or assessed. On 1 April 2021 the defendants offered that the proceedings be discontinued with no order as to costs and each party bear their costs to date. A similar Calderbank offer was made on 14 January 2022 and another on 8 December 2022. The defendants say that by the time this last offer was made their costs exceeded $400,000 inclusive of GST. It is true that at the time these offers were made the way that the plaintiff's case was pleaded it would have failed. The Court must, nevertheless, look at the overall circumstances. The Court has in fact made an order that the plaintiff pay the defendants' costs up to 21 December 2022 on the party-party basis. Moreover, the plaintiff's decision not to accept the Calderbank offer was not unreasonable as it had causes of action upon which it could succeed but they were not clearly pleaded as arising out of the pleaded facts at that time. 10. The last issue between the parties is one of the calculation of the quantum of the plaintiff's claim. The plaintiff calculates the quantum figure of its claims as $264,572.07. The defendants' total quantum figure is $232,054.87. The difference relates to travel taken by Ms Fryer and her family from Denver to Brisbane on 26 July 2016, travel which cost GOWAY $32,517.20. 11. GOWAY's claim is that this trip by Ms Fryer and her family was prior to the commencement of Ms Fryer's travel pass and before she had purchased the $2,000 business class airfares. But the defendants submit that Ms Fryer purchased her business class airfares in November 2015 and her platinum passes in May 2016 before this travel took place. In the first judgment (at [225]) the Court stated that Ms Fryer's pass did not commence until either 1 September 2016 or 1 March 2017 depending upon the interpretation of one of Ms Comito's emails. The Court also found in the first judgment at [222] that Mr Critchley had either given or sold some of his business airfares to Ms Fryer for that trip in July 2016. The plaintiff relies upon those findings in the first judgment at [222] and [225] and the Court's logic in [569] to include this item in the quantum of the claim the sum of $32,517.20. 12. The defendants take issue with this part of the calculation contending that Ms Fryer's travel and her family's travel was not pursuant to any pass or pre-purchased ticket allocation. The defendants contend that what actually happened was that this travel was offered on a complimentary basis directly to Ms Fryer. The defendants point to emails from Ms Comito on 13 July 2016 and 14 July 2016 (Court Book 1354 and 1356) to support the contention that the complimentary offer was made to Ms Fryer directly and not through Mr Critchley in accordance with the Court's logic in the first judgment at [569]. 13. The Court does not find the defendants submission persuasive on this issue. As GOWAY submits, the matter is already covered by the Court's findings at [222] and [225] in the first judgment which are only susceptible to change on appeal rather than by the Court reviewing its own reasons now. Secondly, the Court's lengthy narrative in the first judgment shows that much of what Ms Comito was saying in her emails was fantasy and her emails of 13 and 14 July 2016 are a very unsafe basis for any inference to be drawn. 14. For these reasons the Court will uphold the plaintiff's claimed total quantum figure of $264,572.07. This figure exceeds a Calderbank offer made by the plaintiff to the defendants on 14 April 2022. But that Calderbank offer was made at a time when the plaintiff's pleadings did not include the causes of action upon which it has since succeeded. It would not be appropriate therefore in those circumstances to take the plaintiff's April 2022 Calderbank offer into account in moulding any special costs order in favour of the plaintiff. 15. The defendants have been partially successful on their 20 February 2024 motion but they have also failed on much of it. Doing the best that it can the Court will order the defendants to pay two-thirds of the plaintiff's costs of the defendants' motion of 20 February 2024, as representing an appropriate balance of success and failure in the circumstances. 16. For these reasons the Court will make the following orders: 1. ORDERS that the plaintiff pay the defendants' costs of these proceedings up to and including 21 December 2022 and the defendants pay the plaintiff's costs thereafter excluding the costs of the defendants' motion of 20 February 2024. 2. ORDERS that the defendants pay two-thirds of the plaintiff's costs of the defendants' motion of 20 February 2024. 3. ORDERS that judgment be entered for the plaintiff in the sum of $264,572.07. ****** 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: 01 July 2024