New South Wales Court of Appeal CITATION: CSL Australia Pty Limited v Formosa (No 2) [2009] NSWCA 425 HEARING DATE(S): On the papers JUDGMENT DATE: 23 December 2009 JUDGMENT OF: Allsop P at 1; Basten JA at 1; Handley AJA at 1 1. The order for costs made on 11 November 2009 should be varied by rescinding the order that the appellants pay 75 per cent of the costs of the respondent of the appeal and cross-appeal and in lieu thereof: DECISION: (a) order that the appellants pay the respondent's costs of the appeal on an ordinary basis up to 5 November 2008 and on indemnity basis thereafter; and (b) order that the cross-appellant/respondent pay the cross-respondents'/appellants' costs of the cross-appeal. 2. The appellants pay half of the respondent's costs of the motion. CATCHWORDS: COSTS - no question of principle LEGISLATION CITED: Uniform Civil Procedure Rules 2005 (NSW) CATEGORY: Consequential orders CASES CITED: Ettingshausen v Australian Consolidated Press Limited (1995) 38 NSWLR 404 CSL Australia Pty Ltd (First Appellant, First Cross Respondent on Cross Claim) PARTIES: Inco Ships Pty Ltd (Second Appellant, Second Cross Respondent on Cross Claim) John Paul Formosa (Respondent, Cross Appellant on Cross Claim) FILE NUMBER(S): CA 40440/08 COUNSEL: R Sheldon (Appellants) H Kelly SC, T McKenzie (Respondent) SOLICITORS: HWL Ebsworth (Appellant/Cross Respondent) Barry F Cosier & Associates (Respondent/Cross Appellant) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 73/2007 LOWER COURT JUDICIAL OFFICER: Delaney DCJ LOWER COURT DATE OF DECISION: 3 October 2008 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40440/08 ALLSOP P BASTEN JA HANDLEY AJA 23 December 2009 CSL AUSTRALIA PTY LIMITED v FORMOSA (No 2) Costs Judgment 1 THE COURT: On 11 November 2009 the Court delivered judgment in this matter: [2009] NSWCA 363. In dismissing the appeal and cross-appeal the Court ordered the appellants to pay 75 per cent of the costs of the respondent of the appeal and cross-appeal. The intention of this was to avoid unnecessary costs in the untangling of the appeal and cross-appeal costs. It was also to reflect the fact that the respondent won the appeal and lost the cross-appeal. 2 A notice of motion was filed by the respondent, Mr Formosa, within time to vary the costs order. The notice of motion seeks an order that the first and second appellants pay the respondent's ordinary costs up to and including the date of an offer on compromise of 5 November 2008 and on an indemnity basis thereafter. 3 The motion makes no distinction between the appeal and the cross-appeal. 4 The offer of compromise was made in relation to the appeal. Any effect on the level of the costs awarded after the offer compromise lapsed can only be in relation to the appeal. The cross-appeal had not been filed at the time of the offer of compromise. 5 In the offer of compromise the respondent offered to settle the matter in the sum of $108,000, being approximately $10,000 less than he was awarded in the District Court. This was a real compromise and, subject to other considerations, there was a basis for seeking indemnity costs. 6 Against this, the appellants submitted that when the offer of compromise was made a Notice of Appeal had not been filed, rather only a Notice of Intention to Appeal. The argument lacks a certain attraction. It is correct that the Notice of Intention Appeal does not operate to commence proceedings in the Court. Whether or not this proposition alone is sufficient to deny the offer the character of being under the Uniform Civil Procedure Rules may be an open question: cf Ettingshausen v Australian Consolidated Press Limited (1995) 38 NSWLR 404. Nevertheless, the offer can be characterised as a "Calderbank" offer. 7 The offer was a real one. The respondent should have his costs of the appeal on an indemnity basis after 5 November 2008. 8 That, however, does mean that he should obtain his costs of the cross-appeal. It was the respondent's choice to cross-appeal. He failed. This was not encompassed by the offer of compromise and a proper exercise of discretion should not mean that an offer to settle the appeal carries an effect on the costs of the cross-appeal. 9 The order for costs made on 11 November 2009 should be varied by rescinding the order that the appellants pay 75 per cent of the costs of the respondent of the appeal and cross-appeal and in lieu thereof order that: (a) the appellants pay the respondent's costs of the appeal on an ordinary basis up to 5 November 2008 and on indemnity basis thereafter; and (b) the cross-appellant pay the cross-respondents' costs of the cross-appeal. 10 Given that the respondent has not been fully successful on the motion he should receive only half his costs of the motion. ********** 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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