New South Wales Court of Appeal CITATION: Coastwide Fabrication & Erection Pty Ltd v Honeysett (No.2) [2009] NSWCA 291 HEARING DATE(S): On written submissions JUDGMENT DATE: 18 September 2009 JUDGMENT OF: Ipp JA at 1; Young JA at 2; McDougall J at 3 DECISION: The appellant's application to vary the costs orders made below be dismissed with costs. CATCHWORDS: PROCEDURE - costs - application to vary costs order - application made outside the time reserved for leave to make application - whether court has power to grant application - Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133 applied - application dismissed LEGISLATION CITED: Uniform Civil Procedure Rules 2005 CASES CITED: Deputy Commissioner of Taxation v Meredith (No.2) [2008] NSWCA 133 Kekatos v Stafford [2009] NSWCA 219 Coastwide Fabrication & Erection Pty Ltd (Appellant) PARTIES: Allan James Honeysett (First Respondent) Blue Circle Southern Cement Limited (Second Respondent) FILE NUMBER(S): CA 40260/08 SOLICITORS: McCabe Terrill Lawyers (Appellant) Russell McLelland Brown Lawyers (First Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 97/2006 LOWER COURT JUDICIAL OFFICER: Delaney DCJ LOWER COURT DATE OF DECISION: 17/06/08 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40260/08 IPP JA YOUNG JA McDOUGALL J 18 September 2009 Coastwide Fabrication & Erection Pty Ltd v Allan James Honeysett & Anor (No. 2) Costs Judgment 1 IPP JA: I agree with McDougall J. 2 YOUNG JA: I agree with McDougall J. 3 McDOUGALL J: On 12 June 2009, the Court made the following orders: (1) Appeal allowed in part. (2) Set aside judgment entered in favour of the first respondent against the appellant in the sum of $727,972.63. (3) In lieu thereof direct entry of judgment for the first respondent against the appellant in the sum of $666,714.63. (4) Direct that the judgment so entered take effect from 17 June 2008. (5) Appeal otherwise dismissed. (6) Subject to orders 7, 8 and 9, appellant to pay: (a) 90% of the first respondent's costs of the appeal; and (b) the second respondent's costs of the appeal. (7) Grant leave to any party wishing to vary or discharge order 6 liberty to apply to do so by filing and serving written submissions within 14 days of the date of delivery of judgment. Any such written submissions are to set out both the orders sought in lieu of order 6 and the reasons why those orders are sought. (8) Reserve to any party affected by an application under the previous order liberty to file and serve written submissions in reply within 14 days after service on it of the written submissions contemplated by the previous order. (9) Note that the Court will determine any such application on the papers. 4 The orders were recorded in the Court's computerised court record system on 12 June 2009. Accordingly (there having been no order to the contrary) they are taken to have been entered on that day (Uniform Civil Procedure Rules 2005 (UCPR) r 36.11(2)(a)). The costs application 5 The appellant (Coastwide) seeks a variation of the costs order made by the trial judge in favour of the first respondent (Mr Honeysett). The trial judge ordered Coastwide to pay Mr Honeysett's costs of the claim against Coastwide on the ordinary basis up to and including 1 November 2007, and thereafter on the indemnity basis. 6 The trial judge made that order because, on 1 November 2007, Mr Honeysett made an offer of compromise to Coastwide. By it, Mr Honeysett offered to settle his claim against Coastwide in the sum of $700,000.00 plus costs. The trial judge assessed damages at $727,972.63. Mr Honeysett's offer of compromise was not renewed for the purposes of the appeal. Neither he nor Coastwide submitted that this had any bearing on the question. 7 The effect of this Court's orders was to set aside the trial judge's assessment of damages and to direct entry of judgment in favour of Mr Honeysett in the sum of $666,714.63. The parties' submissions 8 Coastwide submitted that, in those circumstances, it would be unjust to permit Mr Honeysett to retain the benefit of the indemnity costs order made by the trial judge. 9 Coastwide accepted that its application is outside the extent of the leave reserved by order (7) made on 12 June 2009. Mr Honeysett did not submit that, in those circumstances, the Court could not (or should not) deal with Coastwide's application. 10 Mr Honeysett submitted that, on analysis, there is no basis for disturbing the costs orders made by the primary judge. That is so, he submitted, because: (1) the judgment that this Court directed to be entered was $666,714.63; (2) that judgment was to take effect from 17 June 2008 (the date that the trial judge gave judgment in favour of Mr Honeysett against Coastwide); (3) the amount of the judgment ordered by this Court together with interest thereon of $70,178.80 was paid to Mr Honeysett's solicitors on 21 July 2009; and (4) thus, Mr Honeysett received in total $736,893.43: "an increase from the amount which was payable to [Mr Honeysett] under the judgment awarded by the trial judge." 11 In those circumstances, Mr Honeysett submitted, he "obtained a judgment on the claim which is no less favourable, than the terms of the offer of compromise" (emphasis in written submissions). Is there power to make the orders sought? 12 The Court drew the parties' attention to its decision in Deputy Commissioner of Taxation v Meredith (No.2) [2008] NSWCA 133. In that case, an appeal had been allowed and the judgment and orders of the lower court had been set aside: including its orders as to costs. The respondent was ordered to pay certain costs in the lower court. There was no reservation of liberty to apply, nor was any such liberty sought when the orders were pronounced. The respondent sought leave to make further submissions on costs, in support of an application to vary the costs orders made by this Court. The Court held that there was no power to vary the orders that it had made, because the application had not been made within 14 days after entry of its orders (UCPR r 36.16(3A), (3B)). 13 In the present case: (1) at no stage during the hearing did Coastwide inform the Court that, depending on the outcome of the appeal insofar as Coastwide challenged the trial judge's assessment of damages, Coastwide might wish to make a submission as to the costs orders made by the trial judge (see for example Allsop ACJ, with whom Giles and Campbell JJA agreed, in Kekatos v Stafford [2009] NSWCA 219 at [107]); (2) the application that was in fact made was (as Coastwide accepted) outside the terms of the leave reserved by order (7) made on 12 June 2009; and (3) the application was not made on motion, or within 14 days of entry of the orders made on 12 June 2009. 14 In those circumstances, it seemed to the Court that it might not be able to entertain Coastwide's application. 15 As I have said, the parties were notified of the decision in Meredith. They were invited to put submissions. Coastwide did not submit that the decision in Meredith was incorrect or inapplicable; or that, for any other reason, the court had power to entertain its application. Decision 16 In Meredith, Basten JA (with whom Giles and Ipp JJA agreed) held at [15] and [16] that: (1) the purpose of r 36.16 was "to allow a window of 14 days after entry of judgment, in courts where entry takes place automatically and largely contemporaneously with the delivery of judgment" for a party to apply to set aside or vary the judgment or order in question; (2) there was no inherent power to set aside or vary a judgment or order once entered; and (3) thus, absent some express statutory power (such as those found in rr 36.16, 36.17) a court could not recall or vary judgments or orders once entered. 17 That reasoning is fatal to Coastwide's application. The application that was made was outside the times of the leave reserved, and hence could not be justified by reference to that reservation of leave. It was not made in accordance with any express statutory power. Accordingly, it must fail. Conclusion 18 The application should be dismissed. I see no reason why costs of the application should not follow the event of its dismissal. Proposed orders 19 I propose that the appellant's application to vary the costs orders made below be dismissed 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.