New South Wales Court of Appeal CITATION : MOORE v WOODFORTH (NO 2) [2003] NSWCA 46 HEARING DATE(S) : On the papers JUDGMENT DATE : 12 March 2003 JUDGMENT OF : Mason P at 1; Meagher JA at 1 DECISION : Vary Order 2 made on 6 February 2003 CATCHWORDS : Slip Rule - variation of award - Costs of appeal - rejection of pre-trial offer of compromise - Calderbank offer - less favourable result - Discretion as to costs - Supreme Court Rules Pt 52A r11 - District Court Rules Pt 39A r 25(6) not bound to apply - absence of renewal of offer - no variation of costs orders. (ND) PARTIES : Roderick MOORE v Reece WOODFORTH FILE NUMBER(S) : CA 40111/2002 COUNSEL : Appellant: F McAlary QC/S McCarthy Respondent: J Sharpe SOLICITORS : Appellant: Benjamin & Khoury Respondent: Ebsworth & Ebsworth LOWER COURT District Court JURISDICTION : LOWER COURT DC 3137/2000 FILE NUMBER(S) : LOWER COURT Sorby DCJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40111/2002 MASON P MEAGHER JA Wednesday 12 March 2003 Roderick MOORE v Reece WOODFORTH (No 2) JUDGMENT 1 THE COURT: Orders were made in this appeal on 6 February 2003 (Moore v Woodforth [2003] NSWCA 9). 2 On the day that the orders were pronounced and the Court's reasons published the parties notified the Court of an issue involving the slip rule and an issue as to costs. At that stage the resignation of Heydon JA, to take up office as a Justice of the High Court, was imminent. The parties informed the Court that they consented to the remaining matters being dealt with by the remaining judges (cf Supreme Court Act 1970, s45AA) and that they were content for them to be addressed on the papers. 3 The Court has now considered written submissions from the parties. 4 The matter engaging the slip rule is not in contest. The Court's variation of the sum for future economic loss was not adjusted to take account of the finding that damages were to be reduced by 40% for contributory negligence, which finding was undisturbed in the appeal. Accordingly, Order 2 pronounced on 6 February 2003 should be varied by insertion of the figure "$240,711" in lieu of "$256,804". 5 The costs issue arises out of an Offer of Compromise pursuant to Pt 19A of the District Court Rules dated 20 August 2001 and a Calderbank offer in a letter dated 30 August 2001. Each offer came from the defendant's solicitor and each was not accepted within the requisite time or at all. 6 The Offer of Compromise proposed a verdict for the plaintiff in the sum of $500,000 plus costs, with ancillary orders. The Calderbank offer was to similar effect, with the letter of offer containing a summary of the defendant's submissions for the "encouragement" of the plaintiff. 7 The District Court trial took place in late 2000 and it culminated in a verdict and judgment given on 25 January 2002. The plaintiff was awarded a verdict of $216,570 plus costs. 8 In light of the plaintiff's rejection of the more favourable settlement offers, the costs order at trial was (by consent) varied by the trial judge on 31 January 2002 by substituting an order that the defendant pay the plaintiff's costs up to and including 20 August 2001, with the plaintiff paying the defendant's costs from that date onwards. In each case costs were to be assessed on a party and party basis. 9 In the appeal to this Court the plaintiff/appellant sought substantially higher damages on various grounds. The defendant filed a cross-appeal seeking a verdict in its favour. 10 The cross-appeal was dismissed, and the plaintiff had partial success in his appeal. In light of the correction under the slip rule, it can be seen that his damages were increased from $216,570 to $240,711. This was in consequence of this Court increasing the loss of future earning capacity damages by a sum representing $50 per week, from $150 per week to $200 per week. 11 The costs orders made in the District Court were left undisturbed in the appeal. As indicated above, their final form reflects the fact that the plaintiff rejected favourable settlement offers made by the defendant prior to the trial. 12 The defendant/respondent seeks an order that the plaintiff/appellant pay his costs of the appeal. He relies on the mere fact that the plaintiff has obtained a less favourable result in the appeal proceedings than that embodied in the pre-trial offers. Reliance is placed on Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404. 13 Ettingshausen established that a pre-trial offer of compromise is not exhausted once the trial comes to an end. The offer is made in relation to the claim itself and the claim may not be determined until after an appeal. 14 But Ettingshausen does not establish that the Court of Appeal is bound to apply provisions such as Pt 39A r25(6) of the District Court Rules to the costs of the appeal itself. The leading case is Fotheringham v Fotheringham (No 2) (1999) 46 NSWLR 194. It establishes that the rejection of an offer of compromise made at first instance is a relevant factor to consider on the question of costs in an appeal; but the Court of Appeal retains a discretion as to costs. That discretion is guided by Pt 52A r11 of the Supreme Court Rules which provides: If the Court makes any order as to costs, the Court shall, subject to this Part, order that costs follow the event, except where it appears to the Court that some other order should be made as to the whole or any part of the costs. 15 In the present case the pre-trial offer of compromise is relevant, but so too is the absence of any renewal or variation of that offer during the pendency of the proceedings in this Court. 16 The parties chose the issues to litigate in this Court and the costs order previously indicated followed the event of the appeal and cross-appeal respectively. The defendant's generous pre-trial offer of settlement was never renewed and the appeal was fought on the basis that the verdict at trial was the starting point of the issues that were joined thereafter. The plaintiff/appellant established error in a not insubstantial matter and was therefore successful in the appeal. 17 Disclosure of the pre-trial offers of settlement, and their rejection, does not lead the Court to vary the costs orders. 18 The substantial matter in issue in this application was the contest as to the costs of the appeal. It is therefore appropriate that the costs of the application be the appellant's costs in the appeal. 19 The following orders should therefore be made: 1. Vary Order 2 made on 6 February 2003 by substituting "$240,711" in lieu of "$256,804" . 2. Costs of the present application to be the appellant's costs in the appeal. ********** Last Modified: 03/25/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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