New South Wales Supreme Court CITATION : Stainless Pty Limited v Artsigns & Graphics .com Pty Limited [2006] NSWSC 1384 HEARING DATE(S) : 12/12/2006 JUDGMENT DATE : 14 December 2006 JUDGMENT OF : Associate Justice Malpass DECISION : The summons is dismissed. I make no order as to the costs of the proceedings. CATCHWORDS : Appeal on question of costs - lack of material - leave - material error on point of law. PARTIES : Stainless Pty Limited Artsigns & Graphics .com Pty Limited FILE NUMBER(S) : SC 15474/05 COUNSEL : Dr Fawzy Soliman (Director of Pl) No Appearance (Def) SOLICITORS : Hartmann & Associates (Pl) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 3457/03 LOWER COURT JUDICIAL OFFICER : Johnson LCM LOWER COURT DATE OF DECISION : 24/10/2005 LOWER COURT MEDIUM NEUTRAL CITATION : Artsigns & Graphics .com Pty Ltd v Stainless Pty Ltd - 6 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE MALPASS 14 December 2006 15474/05 Stainless Pty Limited v Artsigns & Graphics .com Pty Limited JUDGMENT 1 HIS HONOUR: The defendant provided work and materials for the plaintiff. The parties came to dispute. The dispute proceeded to the Local Court. The defendant was the plaintiff in the Local Court. The plaintiff defended the claim and brought a cross-claim. There were a number of hearing days (the first being 2 June 2005). 2 The defendant recovered the sum of $18,820.00. The plaintiff recovered the sum of $20,482.00. There is an overall judgment for the plaintiff in the sum of $1,662.00. 3 The Magistrate made the following orders as to costs [Decision pp10-11]:- "Overall verdict for Defendant/Cross Claimant for $1662. The Plaintiff is to pay one third of the Defendant's costs on an ordinary basis until 1st June 2005. From 1st June 2005 Plaintiff to pay one third of the Defendant's costs on indemnity basis until 2nd August 2005. No costs to the Defendant for hearing on 19th September 2005. No costs for either party for 24th October 2005. Defendant to pay Plaintiff's costs on an ordinary basis including prior cost order of 2nd August 2005. Costs to be in such sum as agreed or as assessed. Judgment accordingly." 4 In his judgment, the Magistrate described the proceedings before him as essentially a building dispute, which threw up a number of factual matters. 5 The plaintiff has now brought proceedings in this Court. It seeks leave to appeal. Neither party has challenged what the Magistrate did in respect of their claims. The plaintiff brings a challenge to the costs orders that were made. 6 The proceedings came before Associate Justice Harrison on 20 September 2006. There was no appearance on behalf of the defendant. She extended the time for the filing of the summons. She then adjourned the hearing of the proceedings to 12 December 2006. The proceedings were heard on that day. 7 There is an appeal as of right to this Court where there has been error in point of law. However, where the challenge concerns a question of costs, leave is first required. If leave is granted, the plaintiff then bears the onus of satisfying the Court that there was material error which justifies the disturbing of the decision of the Court below. 8 The Magistrate did not expressly disclose the reasoning process which led to the costs orders made by him and his judgment on the matters in dispute sheds little light on what led him to those orders. 9 The Court has a discretionary power to grant leave. The discretion is exercised having regard to the relevant circumstances of the particular case before the Court and so that the dictates of justice are best served. The authorities indicate that relevant matters may be manifest error and the presence of questions of public interest and/or of legal significance. 10 The awarding of costs itself is also a discretionary matter. In the exercise of that discretion, the Court has regard to the relevant legislation and rules, together with the dictates of justice. 11 The summons contains, inter alia, the following:- "The grounds for leave to appeal are as follows: 3. The costs the Plaintiff alleges it has been deprived of outweigh the amount at stake in the proceedings. 4. The Plaintiff wrongly had a judgment against it at arbitration and obtained judgment in its favour upon rehearing. 5. The Plaintiff also relies on the grounds of appeal. The grounds of appeal are as follows: 6. The Magistrate erred by making an order for costs in favour of the Defendant, who commenced proceedings but in the result had judgment entered against it, requiring it to pay money to the Plaintiff. 7. The Magistrate erred by making separate costs orders with respect to the claim and cross-claim, contrary to the principles set out in, for example, MacKinnon v Peterson , unreported, SCNSW, Cole J, 19 April 1989. 8. The Magistrate erred, in absence of special circumstances or other sufficient grounds not to apply the usual order as to costs, by (a) awarding the Plaintiff only a portion of its costs; (b) ordering that neither party pay costs for the date on which the judgment was delivered, being 24 October 2005; and (c) not awarding the Plaintiff costs from 2 August 2005 to 18 September 2005 and 20 September 2005 to 24 October 2005. 9. The Magistrate erred by departing without reason or principle from the usual form of indemnity costs order arising from a Calderbank offer, by formulating the special costs order to apply from the date of expiry of the Calderbank offer, rather than the date the offer was made. 10. The Magistrate's order as to costs was on the facts "unreasonable and plainly unjust" in the sense referred to by Dixon, Evatt and McTiernan JJ in House v R (1936) 55 CLR 499 at 504-5." 12 I now return to the hearing that took place on 12 December 2006. The Court was placed in the unhappy position of having to do its best with very limited assistance. 13 Whilst it appears that the plaintiff has had legal representation from time to time, it did not have legal representation at the hearing of the appeal. A director of the plaintiff (Dr Soliman) did his best to present the case on behalf of his company. He made available to the Court his copy of an affidavit sworn on 8 December 2006 (the original was not with the file). 14 The defendant did not appear. It seems that there may have been an appearance in Court at an earlier stage in the proceedings. 15 The lack of information before the Court presents the plaintiff with a near impossible task. The costs orders made by the Magistrate are expressed to have operation in relation to certain specified dates. In an endeavour to ascertain the significance of these dates, I questioned Dr Soliman concerning them. 16 The first date is 1 June 2005. Dr Soliman has told me that this date has relevance to a compromise offer made by the plaintiff on 9 May 2005. It was not accepted by the defendant. 17 In substance, it offered to settle the defendant's claim in the sum of $500 plus costs. It offered to resolve the cross-claim by discontinuance of the proceedings with each party paying their own costs. The offer remained open until 5.00pm on 1 June 2005. 18 It is not possible to evaluate this offer against the result in the proceedings in the absence of precise information as to costs. 19 I was also informed by Dr Soliman that the dates 2 August 2005 and 19 September 2005 were hearing dates and that the date 24 October 2005 was the date on which judgment was delivered. 20 In the absence of the offer, the result reached in the case by the Magistrate was one that could have led to the making of an order to the effect of each party paying their own costs. It seems clear from what the Magistrate has ordered that he has taken the offer into account. In my view, no error has been demonstrated. 21 The plaintiff has stressed that its costs outweigh the amount at stake in the proceedings. This general submission is not supported by any detail or evidentiary material. In any event, I do not regard it as a matter which would justify the granting of leave. 22 On the material that has been placed before this Court, I am not satisfied that a case has been made out for the granting of leave. I am not satisfied that there has been manifest error, The proceedings give rise to no matter of public interest. The proceedings give rise to no significant question of law. 23 Putting aside the question of leave, the onus borne by the plaintiff has not otherwise been discharged. There has been a failure to demonstrate material error in point of law that justifies the disturbing of the Magistrate's decision. 24 The summons is dismissed. I make no order as to the costs of the proceedings. ********** 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.