New South Wales Court of Appeal CITATION: STATE OF NEW SOUTH WALES v BURTON [NO. 2] [2006] NSWCA 43 HEARING DATE(S): 27 September 2005 JUDGMENT DATE: 10 March 2006 JUDGMENT OF: Spigelman CJ; Basten JA; Hunt AJA DECISION: (1) Application to vary orders made on 10 February 2006 dismissed.; (2) Costs of the application be part of the costs of the appeal. CATCHWORDS: COSTS - offer of compromise served in District Court proceedings - whether costs of the successful appeal should await the outcome of retrial. Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404 CASES CITED: State of New South Wales v Burton [2006] NSWCA 12 Suresh v Jacon Industries Pty Ltd [No. 2] [2005] NSWCA 270 PARTIES: State of New South Wales (Appellant) Christopher Burton (Respondent) FILE NUMBER(S): CA 41016/04 COUNSEL: P. Menzies QC/S. Woods - Appellant M. Joseph SC/I. Butcher - Respondent SOLICITORS: Crown Solicitor - Appellant Oates & Smith - Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 9889 of 2001 LOWER COURT JUDICIAL OFFICER: Puckeridge DCJ LOWER COURT DATE OF DECISION: 09/27/2005 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41016/04 DC 9889 of 2001 SPIGELMAN CJ BASTEN JA HUNT AJA 10 March 2006 STATE OF NEW SOUTH WALES v CHRISTOPHER BURTON [NO. 2] Judgment on Costs 1 THE COURT: In the principal judgment in this matter, State of New South Wales v Burton [2006] NSWCA 12, handed down on 10 February 2006, the Court indicated that the Respondent should pay the Appellant 25% of its costs of the appeal. The order for costs in the District Court was set aside and those costs were to abide the outcome of the further trial in that Court: at [86]. Further, because there was some suggestion that an offer of settlement had been made in the District Court which might affect the outcome in this Court, the parties sought an opportunity to make further submissions as to costs after the principal judgment was delivered. That request was accepted and submissions in writing in relation to the question of costs were to be filed within 14 days: [85]. 2 The intention of the grant of leave to make further submissions was to allow for submissions as to the basis on which such costs should be assessed, with reference, if necessary, to the date from which any offer of settlement may have taken effect. Further, if the judgment of the Court had confirmed the award of damages made below, or had substituted another figure, the effect of the offer made in the District Court might have been relevant. 3 In his written submissions, the Respondent stated that he had served an offer of compromise "before the first trial", but did not disclose the contents. He suggested that the costs of the appeal should await the outcome of the retrial. To that effect, he cited Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404. The Appellant submitted, in substance, that the orders should be made as proposed, together with an additional order that the Respondent pay the Appellant's costs of this application. 4 In the Ettinghausen litigation, the appellant received, at the first trial, a sum in excess of an offer of compromise filed by him in accordance with the Supreme Court Rules. The respondent appealed and this Court set aside the judgment at trial and granted a new trial in relation to damages. At the retrial, the appellant obtained a second judgment in excess of his original offer of compromise, but did not receive costs on an indemnity basis, in accordance with the rule. He again sought leave to appeal to this Court with respect to the costs order. The second decision of the Court, referred to above at [3], concerned the appeal against that costs order. The Court substituted an order assessable on an indemnity basis for that made by the trial judge. However, the case does not assist the present Respondent. In the second Ettingshausen appeal the appellant received his costs, but not on an indemnity basis: see 38 NSWLR at 411G. 5 The principles which govern the effect of offers of compromise in the District Court, when a matter comes before this Court, were considered in Suresh v Jacon Industries Pty Ltd [No. 2] [2005] NSWCA 270 at [13]-[17]. At [17], in a judgment with which Mason P and Santow JA agreed, Basten JA stated: "The possibility that the Respondent would ultimately be successful, once the offer of compromise is taken into account, is a possibility which may arise in any case where a retrial is ordered. There is no authority for the proposition that, in such circumstances, the proper course is for this Court to make its order conditional on such an outcome not eventuating. It is usual for this Court, and indeed the High Court, to award costs of an appeal to follow the outcome of the appeal. There is no reason not to do so in the present case." 6 Although not referred to in Suresh, Ettingshausen reflects an application of this approach. Accordingly, the orders made in this matter on 10 February 2006 should stand. 7 In relation to the application made by the Appellant for the costs of the present application, it is sufficient that they should be treated as costs of the appeal. They will therefore be included within the costs to be assessed in accordance with Order (3) made on 10 February 2006. No further order is required to achieve that result. ********** 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.