New South Wales Court of Appeal CITATION : SOUTHERN AREA HEALTH SERVICE v BROWN [NO 2] [2004] NSWCA 19 HEARING DATE(S) : 2 October 2003, 3 October 2003 JUDGMENT DATE : 19 February 2004 JUDGMENT OF : Sheller JA; Hodgson JA; McColl JA DECISION : Respondent's application for indemnity costs dismissed with costs. CATCHWORDS : COSTS - application for indemnity costs - special order LEGISLATION CITED : District Court Rules Supreme Court Act 1970 CASES CITED : Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 South Sydney Council v Morris [No 3] (2001) NSWCA 200 PARTIES : Southern Area Health Service - Appellant Jodi Lorraine Brown - Respondent FILE NUMBER(S) : CA 41166/02 COUNSEL : J E Maconachie QC/Ms J M Sandford - Appellant Ms C E Adamson SC/S B Loughnan - Respondent SOLICITORS : Francess Allpress - Appellant Button Hawdon & McMahon - Respondent LOWER COURT District Court JURISDICTION : LOWER COURT 4519/00 FILE NUMBER(S) : LOWER COURT Graham DCJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41166/02 DC 4519/00 SHELLER JA HODGSON JA McCOLL JA Thursday, 19 February 2004 SOUTHERN AREA HEALTH SERVICE v BROWN [NO 2] JUDGMENT 1 THE COURT: On 18 December 2003 the Court gave judgment dismissing the appeal of the appellant, Southern Area Health Service with costs. When the decision of the Court was handed down, counsel for the respondent, Jodie Brown, sought a special order for costs. Sheller JA reserved this question and gave directions for the filing of written submissions. 2 The appeal was from a judgment of his Honour Judge Graham entered on 15 November 2002 in proceedings brought by the respondent against the appellant to recover damages for the appellant's breach of its duty of care to her. Judge Graham awarded the respondent damages in the sum of $371,395 with interest and costs. 3 The appellant appealed from this on various grounds going both to liability and the quantum of damages. On all these grounds it failed. The decision of this Court was unanimous. 4 By a Calderbank letter dated 20 November 2001 the respondent's solicitor offered to the appellant's solicitor to settle the proceedings for $395,000 plus costs. On 31 May 2002 the respondent made an offer of compromise pursuant to Pt 19A of the District Court Rules, in the same amount and served that offer under cover of a letter bearing the same date. On 15 November 2003 Judge Graham ordered that the appellant pay the respondent's costs on a solicitor client basis, pursuant to the offer of compromise and Pt 39A r25(4) of the District Court Rules. 5 The respondent now seeks an order that the costs of the appeal be assessed on an indemnity basis; s76(1)(c) of the Supreme Court Act 1970. The respondent relies on the appellant's failure to achieve a result more favourable than the pre-trial offers either at the trial or on appeal. The respondent acknowledges that Pt 39A r25(4) of the District Court Rules does not in terms apply to the costs of the appeal; South Sydney Council v Morris [No 3] (2001) NSWCA 200 per Heydon JA at paras 10-12. The respondent invokes the Court's inherent jurisdiction in relation to the costs of an unsuccessful appeal. It is submitted, in this context that the pre-trial offers can be taken into account. 6 The appellant accepts that the offers are a factor relevant to the question of costs on the appeal but points out that the respondent did not renew or vary the offers during the pendency of proceedings in this Court. In Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 at 249-250 Kirby P (as his Honour then was) suggests that it is preferable that a party intending to seek indemnity costs should give due warning of this before hearing. 7 While the appeal failed on all grounds we do not regard the appeal as without substance. Indeed, as the appellant points out, one part of the appellant's argument on liability resulted in the respondent, at the invitation of the Court during the hearing of the appeal, filing and relying upon a notice of contention which was argued. 8 In our opinion, this is not a case in which the Court, as a matter of discretion, should make any special order in relation to costs. The respondent's application for indemnity costs should be dismissed with costs. ********* Last Modified: 02/19/2004 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.