COMMERCIAL UNION ASSURANCE COMPANY OF AUSTRALIA v PELOSI [NO 2] [1996] NSWCA 115

COMMERCIAL UNION ASSURANCE COMPANY OF AUSTRALIA v PELOSI [NO 2]

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

HANDLEY, SHELLER and POWELL JJA 8 February, 27 February 1996

[1996] NSWCA 115

On 2 February 1996 the Court of Appeal gave judgment allowing this appeal and cross appeal, ordering the appellant to pay the respondent's costs of the trial and making no order as to the costs of the appeal. At trial, Barr AJ ordered that the appellant pay the respondent's costs of the trial on and from 25 May 1993, the date of the arbitrator's award, on an indemnity basis.

On 13 August 1993 the plaintiff made an offer of compromise to the respondent in accordance with Part 22 Supreme Court Rules for an amount of $1.7m. On appeal the Court substituted a verdict higher than this amount. In accordance with Part 52A r22(4) the plaintiff/respondent applied for her costs of the appeal on an indemnity basis in reliance on Ettingshausen v Australian Consolidated Press Limited (unreported) 17 November 1995. She submitted that, since the substituted verdict exceeded her offer, she should be entitled to the costs of the appeal on an indemnity basis, whatever the result of the appeal or cross appeal.

Held:

1. Accepting that it was open to the plaintiff to rely on her offer of compromise on the appeal, the submission that she was entitled to indemnity costs regardless of the result of the appeal or cross appeal should be rejected.

2. Part 52A 122 is directed, not to which party should pay the costs, but to whether the party ordered to pay the costs should pay them on an indemnity basis.

3. The order for costs made on 2 February 1996 was confirmed and the application to review the order dismissed with costs.

Handley JA. I agree with Sheller JA.

Sheller JA. On 2 February 1996 the Court, differently constituted (Kirby P, Handley and Sheller JJA), delivered judgment allowing this appeal and cross appeal, substituting a verdict of $1,985,881.90 for the verdict at trial of $2,082,865.90 and ordering the appellant, Commercial Union Assurance Company of Australia Limited (Commercial Union) to pay the costs of the respondent, Michelina Pelosi (the plaintiff) of the trial. The Court made no order as to the costs of the appeal or cross appeal. The orders of this Court have not been entered and Miss Pelosi now applies for an order that she have her costs of the appeal on an indemnity basis. On 7 April 1995 the trial judge, Barr AJ, noted that the parties were agreed that on his assessment the plaintiff was entitled to indemnity costs, commencing from 25 May 1993, the date of the arbitrator's award. He made an order accordingly and the order of this Court that the appellant pay the respondent's costs of the trial should beplaintiff relied upon that case and the judgment of the majority of the Court (Gleeson CJ and Priestley JA, Kirby P dissenting) in Ettingshausen v Australian Consolidated Press Limited (unreported) 17 November 1995. The parties put no submissions about the costs of the appeal at the hearing of the appeal but it is not suggested that we should not now address the submission.