Lee v Kennedy & Ors [2001] NSWCA 8

New South Wales Court of Appeal

CITATION : Lee v Kennedy & Ors [2001] NSWCA 8 FILE NUMBER(S) : CA 41033/98 HEARING DATE(S) : 7 February 2000 JUDGMENT DATE : 8 February 2001

PARTIES : Susan Lee v Gary Kennedy, Anthony Bordin, Robert Krause and The State of New South Wales JUDGMENT OF : Priestley JA at 1; Sheller JA at 1; Beazley JA at 1

LOWER COURT JURISDICTION : District Court LOWER COURT DC 78/97 FILE NUMBER(S) : LOWER COURT His Honour Judge Delaney JUDICIAL OFFICER :

COUNSEL : Appellant - A.B. Shand QC / B. Kinsella Respondents - B. Donovan QC / C. Lonergan SOLICITORS : Appellant - James Fuggle Solicitors, Lismore Respondents - I.V. Knight, State Crown Solicitor CATCHWORDS : Judgment on costs following delivery of judgment on 26 June 2000 LEGISLATION CITED : District Court Rules Part 39A rule 25(4) CASES CITED: Commonwealth of Australia v Murray (1988) Aust Torts Reports [80-207] Fotheringham v Fotheringham (1999) 46 NSWLR 194 DECISION : Judgment on costs following delivery of judgment on 26 June 2000

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 41033/98 DD 78/97

PRIESTLEY JA SHELLER JA BEAZLEY JA

Friday, 22 December 2000

LEE v KENNEDY & ORS

1 THE COURT: When the court reserved judgment in this appeal we were asked not to make costs orders until the parties had a chance to make submissions about them after considering the reasons for judgment. Accordingly, when judgment was delivered, no costs orders were made and the parties were directed to file written submissions on costs. 2 In the written submissions for the plaintiff/appellant it was stated that in the District Court proceedings the appellant had served upon the respondents an offer of compromise dated 30 April 1998 pursuant to Pt 19A of the District Court Rules, in the sum of $50,000 plus costs. 3 It appears from the notice of appeal that the dates of hearing of the trial were 23, 24 and 25 September 1998 and 16 and 17 November 1998, judgment being delivered on 4 December 1998. The trial judge awarded the appellant $40,000. 4 In the appeal, the court held that the trial judge should have found that the appellant had established more causes of action than he found. The court also increased the damages to $170,000. 5 For the appellant it was submitted that she should have an order for indemnity costs of the appeal, and also indemnity costs of the District Court action from 30 April 1998. (The correct term so far as concerns the District Court is not indemnity costs but solicitor and client costs: District Court Rules Part 39A r 25(4).) 6 In the respondent's submissions on costs, no issue was taken with any of the facts we have noted above, but the orders sought were opposed on the single ground that the judgment entered by this court in the appellant's favour " only exceeded the offer because of the quite unusual award of punitive damages. The punitive damages amount awarded was very much higher than had previously been awarded in any punitive damages claim in this country apart from the XL Petroleum case, which was a quite different factual case. " 7 This argument (apart from being factually inaccurate, see eg Commonwealth of Australia v Murray (1988) Aust Torts Reports [80-207]) does not seem to us to merit much weight, in the circumstances of this case, in taking into account the various considerations relevant to the exercise of the discretion one way or the other. The case alleged by the appellant prior to the trial should have been well known to the respondents' legal advisers. That case, if accepted, would clearly justify the court in awarding very substantial exemplary damages. The appellant's case was, in substance, accepted by the trial judge. 8 The appellant's offer was more than reasonable, as matters turned out, and in our opinion, the respondents by not accepting it, left themselves very much at risk in the matter of the eventual costs orders. 9 As already indicated, it was not contended for the respondents that this court did not have power to make the orders sought by the appellant. No doubt this was because of the line of cases leading to this court's decision in Fotheringham v Fotheringham (1999) 46 NSWLR 194. This decision in our opinion applies to the District Court Rules in their operation upon offers made after 1 January 1998. 10 In our opinion the sequence of events in this case requires the court to uphold the appellant's submissions and to make the following costs orders: (1) the second, third and fourth respondents are to pay the appellant's costs of the District Court action, such costs, from 30 April 1998 to be solicitor and client costs; (2) the second, third and fourth respondents are to pay the appellant's costs of the appeal on an indemnity basis. **********