New South Wales Court of Appeal CITATION: Perpetual Trustees Australia Ltd v Heperu Pty Ltd & Ors [No 3] [2010] NSWCA 3 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): On the papers. JUDGMENT DATE: 9 February 2010 JUDGMENT OF: Allsop P; Campbell JA; Handley AJA (1) The respondents to pay the appellant's general costs of the motion of 20 May 2009 incurred after 7 September, other than the costs incurred in respect of the affidavit of Mr Bray of 10 November; DECISION: (2) The appellant to pay the respondents' costs of preparing, settling, filing and serving the affidavit of Mr Bray of 10 November; (3) Costs to be set off; (4) No order as to the costs of the motion incurred after 30 November 2009; CATCHWORDS: COSTS - No question of principle. CATEGORY: Separate question PARTIES: Perpetual Trustees Australia Ltd (Appellant)Heperu Pty Ltd (1st Respondent)Kirisi Holdings Pty Limited (2nd Respondent)Barry Samuel Landa (3rd Respondent)Drymmoyne Administrative Services Pty Ltd (4th Respondent) FILE NUMBER(S): CA 40018/2008 COUNSEL: R E Dubler SC with J Emmett (Appellant)J Digby QC with A Hourigan (Respondents) SOLICITORS: TressCox Lawyers, Sydney (Appellant)Wilson Solicitors, Penrith (Respondents) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 6165/2003 LOWER COURT JUDICIAL OFFICER: Palmer J LOWER COURT DATE OF DECISION: 12/12/2007 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40018/08 ALLSOP P CAMPBELL JA HANDLEY AJA Tuesday 9 February 2010 Perpetual Trustees Australia Limited –v- Heperu P/L & Ors [NO 3] CATCHWORDS COSTS – No question of principle. ORDERS (1) The respondents to pay the appellant's general costs of the motion of 20 May 2009 incurred after 7 September, other than the costs incurred in respect of the affidavit of Mr Bray of 10 November; (2) The appellant to pay the respondents' costs of preparing, settling, filing and serving the affidavit of Mr Bray of 10 November; (3) Costs to be set off; (4) No order as to the costs of the motion incurred after 30 November 2009; IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40018/08 ALLSOP P CAMPBELL JA HANDLEY AJA Tuesday 9 February 2010 Perpetual Trustees Australia Limited –v- Heperu P/L & Ors [NO 3] Judgment 1 THE COURT: On 23 April 2009 the Court published its reasons for allowing the appeal, and entered judgment for the defendant in the action. 2 On 20 May the respondents to the appeal filed a notice of motion seeking to have the orders made on 23 April set aside. 3 On 24 September Handley AJA ordered that certain questions in the motion be decided separately from any other questions. 4 The Court heard argument on the separate questions on 12 November and on 30 November we published joint reasons, answered the questions and ordered that the motion be dismissed. The question of costs was reserved for further argument on written submissions. 5 The parties filed written submissions and these are our reasons for making the orders for costs later referred to. 6 The respondents submitted that the appellant should pay their costs of the motion because it had failed before and at the trial to identify the proper defendant and this had given rise to the proceedings on the motion. In the alternative they submitted that there should be no order as to costs. 7 The appellant submitted that it should have its costs on an indemnity basis because the respondents had unreasonably refused their Calderbank offer of 29 June. 8 We reject the extreme positions of both parties. The Court has not made, and on the separate questions it was not entitled to make, any findings about the conduct of the appellant and its legal advisers prior to and at the trial. 9 The Court also rejects the appellant's submission that the respondents should pay its costs of the motion on an indemnity basis. The Calderbank offer was not made until 29 June after substantial costs had already been incurred by both sides. 10 The respondents' motion, as originally framed, was based on the assumption that the orders made on 23 April had not been entered, and the Court had a general discretion to set them aside on proper grounds. 11 This assumption was incorrect because the orders were entered on 23 April in the Court's computerised records system, and it only had a general discretion to review them if an appropriate application was made within 14 days: UCPR Pt 36.16(1) and (3A). 12 The respondents' advisers were not aware of the true position, and the appellant's advisers failed to take the point. The question was raised by the Court in a letter from the Registrar of 3 September. 13 The respondents, confronted with this unexpected difficulty, not unnaturally attempted to find alternative bases which could support their motion. If they had appreciated the difficulties created by the entry of the orders on 23 April they may not have launched a motion on the alternative bases later propounded. 14 The appellant's advisers failed to take the point in their Calderbank letter, incurring unnecessary costs prior to receipt of the Registrar's letter, and allowing the respondents to incur further substantial costs . 15 The appellant's claim for indemnity costs is rejected. 16 In the circumstances the Court will make no order as to the costs incurred by either side prior to receipt of the Registrar's letter. 17 Following receipt of that letter the respondents reformulated their case and pressed on. They necessarily did this at their own risk as to costs and having failed they should bear the general costs of the proceedings after 7 September. 18 The separate questions did not raise any question of fact for decision, and Question 1 in particular did not raise any question as to the sufficiency of the respondents' evidence that had already been filed. The appellant was not entitled to make a "no case" submission on the separate hearing. 19 The Registrar's letter stated that the parties should not incur further costs in the motion until its competency had been established. 20 Despite the form of the separate questions the appellant's written submissions of 6 October took the point in para 9 (Orange 3) that there was no evidence that during the trial or on the appeal the respondents or their legal advisers actually failed to appreciate the true role of PIML. 21 The respondents answered this in an argumentative way in their written submissions of 21 October in para 26 (Orange 14). 22 In its submissions in reply of 27 October the appellant relied on the absence of evidence to support some of the respondents' contentions in their position statement: see paras 1, 2(b), 4, 5, 6 and 7 (Orange 19-20). 23 These submissions stirred the respondents' advisers into producing a lengthy affidavit of Mr Bray sworn 10 November which was served the same day. 24 The no evidence submissions were irrelevant to the separate questions and should not have been made. 25 The respondents' advisers might have relied on an objection to those submissions on the ground of relevance but understandably they were in no mood to take any risks. Not unreasonably they armed themselves with the affidavit of Mr Bray, incurring substantial additional costs in doing so. This was something that the Court had been attempting to prevent. 26 In the Court's judgment the appellant should pay the respondents' costs of preparing, settling, filing and serving the affidavit of Mr Bray of 10 November, such costs to be set off against the costs payable to the appellant. 27 The following orders are made: (1) The respondents to pay the appellant's general costs of the motion of 20 May 2009 incurred after 7 September, other than the costs incurred in respect of the affidavit of Mr Bray of 10 November; (2) The appellant to pay the respondents' costs of preparing, settling, filing and serving the affidavit of Mr Bray of 10 November; (3) Costs to be set off; (4) No order as to the costs of the motion incurred after 30 November 2009; ********** 09/02/2010 - No amendments made. - Paragraph(s) no amendments made 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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