Court of Appeal Supreme Court New South Wales Medium Neutral Citation: United Airlines Inc v Sercel Australia Pty Ltd (No 2) [2012] NSWCA 118 Hearing dates: On the papers Decision date: 03 May 2012 Before: Allsop P at [1] Macfarlan JA at [10] Handley AJA at [11] Decision: (1) Vary the orders of the Court made on 5 March 2012 by varying the third order made: that "Appeal dismissed with costs" such that it reads and be so ordered that "Appeal dismissed with costs, such costs on the ordinary basis up to and including 12 April 2011, and on an indemnity basis thereafter." (2) Appellant to pay the costs of the notice of motion of 16 March 2012 on the ordinary basis. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: COSTS - indemnity costs - offer of compromise Cases Cited: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24 Category: Costs Parties: United Airlines Incorporated (Applicant) Sercel Australia Pty Limited (Respondent) Representation: Counsel: R S McIlwaine SC (Applicant) M J Jenkins (Respondent) Solicitors: Blackstone Waterhouse Lawyers (Applicant) Moray & Agnew Lawyers (Respondent) File Number(s): 2010/55277 Decision under appeal Date of Decision: 2010-03-01 00:00:00 Before: Robison DCJ File Number(s): 855 of 2009 Judgment 1ALLSOP P: Orders were made and reasons published in this matter on 5 March 2012: United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24. Leave to appeal was granted and the appeal was dismissed with costs. 2Application has been made by the respondent in the appeal, Sercel Australia Pty Ltd, ("Sercel") to vary the orders for costs in the District Court and this Court. 3On 4 June 2009 a letter was sent by Sercel's solicitor to the solicitor for the applicant in the appeal United Airlines Inc ("United"). The letter rejected an offer by United of $10,000. The claim made in the letter was for past payments of $26,843.51, interest of $2,300 and party/party costs. 4On 1 March 2010 the primary judge gave judgment in favour of Sercel for $36,088.97. On 12 March 2010 he ordered United to pay the costs of Sercel on the ordinary basis up to 4 June 2009 and on an indemnity basis thereafter. Since the appeal was dismissed this order stands and there is no need for this Court to make a fresh order in the same terms for the costs in the District Court. 5On 29 March 2011 (28 days after the first day of the appeal hearing) the solicitor for Sercel emailed his counterpart and made an offer that the application for leave and the appeal be dismissed, the District Court judgment be set aside, Sercel retain the money paid under the judgment and each side bear its own costs of the trial and the appeal to date. 6Given the size of the judgment sum (a little over $36,000) the offer concerning costs was a real compromise. The offer was rejected. The appeal ran with another day's argument and the costs of expert witnesses in relation to the French text of the relevant international Conventions. 7It can be taken that the matter, involving such a small sum, was one of principle for United in the conduct of its business. 8Whilst it may not have been unreasonable of United to have the point litigated (cf Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344), in all the circumstances, in particular the fact that it was a question of principle for United, the small sum involved and the real compromise involved in the March 2011 offer, Sercel should have its costs on an indemnity basis from a reasonable time to respond after 29 March 2011. The matter is one where if leave had been heard separately, a condition concerning costs of this character may well have been imposed on the applicant. Given the history of the matter 14 days is an appropriate time. 9The orders that I would make are as follows: (1)Vary the orders of the Court made on 5 March 2012 by varying the third order made: that "Appeal dismissed with costs" such that it reads and be so ordered that "Appeal dismissed with costs, such costs on the ordinary basis up to and including 12 April 2011, and on an indemnity basis thereafter." (2)Appellant to pay the costs of the notice of motion of 16 March 2012 on the ordinary basis. 10MACFARLAN JA: I agree with Allsop P. 11HANDLEY AJA: I agree with Allsop P. ********** 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. Decision last updated: 03 May 2012