New South Wales Court of Appeal CITATION: Richard Walkom Linehans Real Estate Pty Ltd trading as Walkom Linehans First National Real Estate v Dhasmana [2009] NSWCA 241 HEARING DATE(S): 31 July 2009 JUDGMENT DATE: 31 July 2009 JUDGMENT OF: McColl JA at 1,18; Basten JA at 11 EX TEMPORE JUDGMENT DATE: 31 July 2009 DECISION: Leave to appeal refused with costs. CATCHWORDS: COSTS – departing from the general rule – proceedings in negligence by lessee against owners of premises – owners cross-claimed against managing agent – Calderbank offer by owners for managing agent to take over defence –Plaintiff's claim failed and cross-claim dismissed – managing agent ordered to pay costs of cross-claim – primary judge held only basis for owner's liability could have been default by managing agent – whether real fight was between the plaintiff and managing agent (cross-defendant) – whether leave to appeal should be granted LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946 (NSW) Uniform Civil Procedure Rules 2005 (NSW) CATEGORY: Principal judgment CASES CITED: Gladstone Park Shopping Centre v Wills (1984) 6 FCR 496 PARTIES: Richard Walkom Linehans Real Estate Pty Ltd t/as Walkom Linehans First National Real Estate - Applicant Paramatma Dhasmana - Respondent FILE NUMBER(S): CA 40083/09 COUNSEL: D Priestley for the Applicant R Sheldon for the Respondent SOLICITORS: Gilchrist Connell - Applicant Henry Davis York - Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC141/07 LOWER COURT JUDICIAL OFFICER: Sidis DCJ LOWER COURT DATE OF DECISION: 11 February 2009 LOWER COURT MEDIUM NEUTRAL CITATION: [2009] NSWDC 27 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40083/09 DC 141/07 McCOLL JA BASTEN JA Friday 31 July 2009 Richard Walkom Linehans Real Estate Pty Ltd T/as Walkom Linehans First National Real Estate v Paramatma Dhasmana Judgment ex tempore 1 McCOLL JA: This is an application for leave to appeal against an order made by Sidis DCJ in proceedings between Ms Carol Hilditch and the respondent to this application, Ms Paramatma Dhasmana. 2 In the principal proceedings, the plaintiff claimed that she had been injured when she slipped on premises owned by the respondent. The applicant in this court, Messrs Walkom Linehans Real Estate Pty Limited, managed the property on the respondent's behalf. The respondent joined the applicant by means of a cross-claim in the principal proceedings stating in essence that if the plaintiff established the negligence upon which she based her claim, then the negligence in question were acts or omissions of the applicant in respect of which the respondent was entitled to indemnity or such contribution as the court might think just and equitable pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). 3 In the result, the plaintiff was unsuccessful and the proceedings were dismissed, as was the cross-claim. The question then arose as to how the costs of the proceedings were to be awarded. The plaintiff took no part in the arguments about the issue of costs. The substantial issue was between the cross-claimant, the respondent here and the cross-defendant, the applicant here, being in essence an application by the respondent that notwithstanding the dismissal of the cross-claim, the cross-defendant ought nevertheless be ordered to pay his costs of the cross-claim. 4 The primary judge acceded to that application and ordered the applicant to pay the respondent's costs of the cross-claim on an ordinary basis. She did so because, in substance, she concluded that the only basis upon which the respondent might have been held liable was that the applicant as its managing agent had not performed its obligations of managing the property. 5 Her Honour had had the benefit of presiding over the trial during the course of which it appears that the respondent, who gave evidence, was not challenged as to his denial of any knowledge of any complaints made on behalf of the plaintiff. The applicant in turn called a number of witnesses, whose evidence her Honour accepted, who equally said they were ignorant of any complaints. Based on that evidence, her Honour concluded that had the plaintiff succeeded, then liability for her accident would have been found to have arisen through the applicant's negligence and she would have ordered the applicant completely to indemnify the respondent as proposed in a letter, to which her Honour referred, from the respondent's solicitor of 2 July 2008 which was, in substance, a Calderbank letter. 6 Mr D Priestley, who appears for the applicant, submits that her Honour's order was contrary to the general rule that costs should follow the event (Uniform Civil Procedure Rules 2005 (NSW), r 42.1) and that, as the successful party in the cross-claim proceedings, her Honour ought to have ordered the respondent to pay the applicant's costs. He relies substantially on Gladstone Park Shopping Centre v Wills (1984) 6 FCR 496. 7 In that case Beaumont J (with whom Davies J agreed with some additional reasons), set out the reasons why the fundamental principle upon which Mr Priestley relies was sound. Nevertheless, his Honour also identified (at 510) an exception in cases where the "real fight" which could be identified was between the applicant for a costs order and the otherwise successful party. 8 In my view, the primary judge's decision on the question of costs was one in which she identified the "real fight" as having been between the plaintiff and the applicant here. Mr Priestley submits that her Honour's reference to the letter of 2 July 2008 was an irrelevant consideration. Nevertheless, that letter was, as Mr R Sheldon, for the respondent, points out, one in which the respondent effectively offered to let the applicant take over the conduct of the proceedings so that there was in substance only one defendant in the District Court proceedings which would be the managing agent as it was the person really identified in the pleadings as the subject of the attack. That in my view was a matter which in substance her Honour accepted. 9 In my view, her Honour's decision involved an exercise of her discretion on a matter of practice and procedure. I cannot discern from the reasons her Honour gave, nor from the (albeit helpful) submissions of counsel this afternoon, that there was an error on her part in the exercise of her discretion with which this court might interfere. 10 For those reasons, I would propose that leave to appeal be refused with costs. 11 BASTEN JA: I agree with the presiding judge that leave to appeal should be refused. I also agree that there does not appear to have been any misapprehension of principle on the part of the trial judge in making orders as to costs. In particular I note that in applying r 42.1 of the Uniform Civil Procedure Rules, different considerations may be relevant in relation to a failed cross-claim to those which might arise as between a successful defendant and a plaintiff. 12 Her Honour knew the circumstances of the trial and the likelihood that if the plaintiff had succeeded, the cross-claim itself would probably have succeeded to a significant extent if not as to the full amount of any award of damages available to the plaintiff. 13 The other matter which I would take into account is the dual nature of the application. It involves a complaint by the managing agent that it should not have to pay the owner's costs of the cross-claim. That the parties accepted is a relatively insignificant amount. If that had been the only order in question, it would not have been appropriate for this court to grant leave to challenge it. 14 The second part of the application was that in place thereof the defendant, namely the owner, be ordered to pay the managing agent's costs of the cross-claim by which it was joined. 15 In the final sentence of her Honour's reasons on costs, she noted the exchange of letters between the owner and the managing agent and said that it should have resulted in some form of commercial arrangement so that only one of the parties remained before the court. Had her Honour been minded to give effect to that consideration, she might well have been inclined to order that there be no order as to costs as between the defendant and the cross-defendant. 16 In my view, that might be the result of a successful appeal against her Honour's order. If that were the case, the only matter achieved by the applicant in these proceedings would be to remove an insignificant order for costs without getting a costs order in its favour. In those circumstances, I do not see that there is any likelihood or real prospect of an application for leave achieving the result which the applicant needs to achieve in order to justify its application. 17 Accordingly, for those additional reasons as well as those given by McColl JA, I would refuse leave. 18 McCOLL JA: The order of the court therefore is that leave to appeal is refused with costs. ********** 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. 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