Supreme Court New South Wales Medium Neutral Citation: Campolongo v Club Marconi of Bossley Park Social Recreation & Sporting Centre Ltd [2012] NSWSC 815 Hearing dates: N/A Decision date: 18 July 2012 Jurisdiction: Equity Division Before: Ward J Decision: Orders made for the plaintiff to pay the defendant's costs of the proceedings Catchwords: COSTS - principles in Calderbank v Calderbank - whether letter of offer contained genuine offer of compromise - where letter of offer from defendant requested that the plaintiff discontinue proceedings and pay a sum as to costs of the defendant - whether rejection of offer unreasonable - whether conduct of the plaintiff otherwise warrants indemnity costs - HELD - rejection of offer by plaintiff not unreasonable - plaintiff's conduct in not pursuing allegations of bias at final hearing warranted order for costs thrown away on an indemnity basis Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (Formerly GIO Insurance Ltd) [2006] NSWSC 583 Bennette v Cohen (No 2) [2009] NSWCA 162 Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586 Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790 Commonwealth v Gretton [2008] NSWCA 117 DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555 Dunstan v Rickwood (No 2) [2007] NSWCA 266 Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 322 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 Leichhardt Municipal Council v Green [2004] NSWCA 341 Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; (1998) 152 ALR 83 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609 Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 Sydney City Council v Geftlick [2006] NSWCA 280 Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 Texts Cited: N/A Category: Costs Parties: Antonio Campolongo (Plaintiff/Respondent) Club Marconi of Bossley Park Social Recreation & Sporting Centre Ltd (Defendant/Applicant) Representation: Counsel: M W Sneddon (Plaintiff) M Fisher (Defendant) Solicitors: CMC Lawyers (Plaintiff) Middletons (Defendant) File Number(s): 12/093531 Judgment 1HER HONOUR: For the reasons I published on 4 July 2012 (Campolongo v Club Marconi of Bossley Park Social Recreation & Sporting Centre Ltd [2012] NSWSC 750) I dismissed an application by Mr Antonio Campolongo for final declaratory relief in relation to the validity of his suspension in late November 2010 as a member of Club Marconi. 2The principal relief that had been sought was a declaration that the purported suspension of Mr Campolongo on or about 29 November 2010 was "legally ineffectual". Further or in the alternative, a declaration was sought that Mr Campolongo had at all times to date been, and should from 29 November 2010 remain, a member of Club Marconi. (In its terms, such a declaration was too broad and could only have been made by reference to the effect of the suspension in the period up to February 2012.) 3At the time of commencement of the proceedings in March this year, urgent interlocutory relief was sought by way of an order that, pending the final determination of these proceedings, Club Marconi be restrained from taking any step in relation to proposed disciplinary proceedings then scheduled for 27 March 2012. (Those disciplinary proceedings related to a Notice of Charge that had been issued (after the November 2010 suspension) on 29 February 2012, by which the Board of Club Marconi expressly invoked the power under Rule 47(h) of the Club's constitution immediately to suspend Mr Campolongo's membership pending determination of the disciplinary proceedings.) 4The application by Mr Campolongo for interlocutory relief was resolved by the giving of an undertaking on behalf of Club Marconi to the effect that, pending the determination of the Court proceedings, Club Marconi would not take any steps in relation to the proposed disciplinary proceedings involving Mr Campolongo. Relevantly, however, that undertaking was given on the basis that Mr Campolongo would seek expedition of the proceedings and it was given in circumstances where Counsel appearing for Mr Campolongo had foreshadowed a challenge to the disciplinary proceedings themselves, including allegations that the Board was activated by bias against him (which, as it transpired, was not pursued at the final hearing). 5The practical effect of the undertaking given on behalf of the Club was that, since March 2012, the hearing of the proposed disciplinary proceedings has been delayed (in circumstances where there has ultimately been no challenge made to the constitution of those proceedings). 6As noted in my principal judgment, this means that the very basis on which Mr Campolongo had maintained that interlocutory relief was necessary (that being the context in which the undertaking was given) had wholly disappeared by the time of the hearing of his application for final declaratory relief. 7Notwithstanding the broad complaints that had been foreshadowed on the application for interlocutory relief (and the fact that some of the affidavit evidence served for Mr Campolongo related to the substance of the 2012 charges), the position of Mr Campolongo at the final hearing was firmly that the enquiry before the Court was limited in scope to the legal question as to whether (on a proper construction of clause 47 of Club Marconi's constitution) the suspension of Mr Campolongo on 29 November 2010 was legally ineffectual and invalid. The sole purpose for this was said, in effect, to be to 'clear Mr Campolongo's name' or to have a 'fresh slate'. 8Ultimately, I was of the view that there was no utility in the grant of declaratory relief that went no further than what Club Marconi itself had conceded (namely, that the Board did not comply with the disciplinary procedure under the Club's constitution when it resolved in November 2010 to suspend Mr Campolongo as a member of the Club and that Mr Campolongo's suspension only became valid as of 29 February 2012 when the 2012 Notice of Charge was issued). That concession was made in the submissions served by Club Marconi the day before the final hearing. 9I therefore dismissed Mr Campolongo's claim for declaratory relief. As to the costs of the proceedings, the parties sought leave to serve short written submissions and I was invited to determine the issue costs on the papers. What follow are my reasons for the costs orders I now propose to make. 10Mr Campolongo submits that there should be no order as to costs, with the intent that each party pay his or its own costs on the basis that the determinative factor against the grant of relief was the making of the concession by Club Marconi as to the invalidity of the 2010 suspension (and that this concession was made only in submissions served the day before the hearing, ie 3 July 2012). Club Marconi, on the other hand, seeks an order that Mr Campolongo pay its costs on an ordinary basis up to 20 April 2012 and on an indemnity basis thereafter, relying on a Calderbank offer made by letter of 20 April 2012 (and referring to the conduct of the proceedings by Mr Campolongo and, in particular, the abandonment of any claim in relation to the 2012 charges, which rendered otiose certain of the affidavit material that had been prepared in the defendant's case). Reasons 11Subject to the Rules of Court and to statute, the power to award costs pursuant to s 98(1) of the Civil Procedure Act 2005 (NSW) is discretionary and it is recognised that the discretion is a very wide one (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; (1998) 152 ALR 83; Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 322). It must be exercised judicially (having regard to its statutory context, established principle and the circumstances of the relevant case). The overriding statutory context in which this discretion falls to be exercised is that for which provision is made in s 56 of the Civil Procedure Act, namely, the just, quick and cheap resolution of the real issues in dispute. 12Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides that, subject to Part 42, if the court makes any order as to costs, it is to order that costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. The general rule is thus that a successful party will be the recipient of an order for costs in its favour (those costs to be on the ordinary or party/party basis). 13Application of that general rule in the present case would lead to a conclusion that Mr Campolongo should pay the costs of Club Marconi on the ordinary basis, since Mr Campolongo failed to obtain the declaratory relief that he had sought. However, Counsel for Mr Campolongo, Mr Sneddon, submits that the appropriate order is that each party should bear its own costs, pointing to the conclusion set out at [118] of my principal reasons that: Ultimately, however, my conclusion does not turn on the absence of any substantive relief now claimed by Mr Campolongo. It rests on the lack of any present dispute between the parties as to the subject matter of the declaratory relief claimed. There is simply no dispute between the parties as to the invalidity of the imposition of the 2010 suspension and hence no utility in the grant of a declaration that would go no further than what is expressly acknowledged by Club Marconi and noting that the concession made by Club Marconi was only made on the eve of the hearing. As I understand it, the basis of this submission is that there was conceded to be a breach by Club Marconi of its constitution and that, but for the concession of breach, Mr Campolongo would have been entitled to the declaratory relief that he was seeking. 14In this regard, I should note that at [13] I observed that even had that concession not been made, I considered that there would be little, if any, utility in the declaratory relief sought by Mr Campolongo since (whatever the position as to the suspension in 2010), there remained in place a suspension of Mr Campolongo's membership until such time as the disciplinary process provided for under the Rules was completed (or some other application was made in relation to the 2012 Notice of Charge). Hence, I would have been inclined to refuse declaratory relief even had the concession not been made. 15In any event, Mr Campolongo continued to press for the declaratory relief sought, even in light of the (admittedly late) concession by Club Marconi. Therefore, there is nothing to suggest that, had such a concession been made at an earlier stage of the proceedings, it would have led to any earlier resolution of the dispute. Mr Campolongo chose to pursue the claim for declaratory relief in the face of the fact that even if such relief were to be granted his membership would remain in suspension. 16There was no evidence as to reputational damage as such (simply the apprehension by Mr Campolongo that his reputation had been damaged) and that would surely remain the case in light of the current suspension in any event. The suggestion that declaratory relief would clear his name seemed to me to be misconceived since it would have gone no further than a conclusion that the suspension had been invalidly imposed, not that there was no underlying basis for the suspension. 17It seems to me that, Mr Campolongo having chosen, for his own purposes, to pursue the claim for declaratory relief at the final hearing, he must face the ordinary costs consequences which flow from a failure to obtain that relief (notwithstanding that Club Marconi did, in the course of the proceedings, concede that the 2010 suspension had been invalid and that it might be supposed that in the absence of the commencement of the proceedings no such concession might have been made). 18Therefore, subject to the import of the Calderbank offer, I consider that Mr Campolongo should pay Club Marconi's costs of the proceedings on the ordinary basis (other than Club Marconi's application to withdraw the undertaking, which I have already indicated should be dismissed with no order as to costs). 19I turn then to the effect of the offer made on 20 April 2012 by Club Marconi, expressly invoking the principles in Calderbank v Calderbank [1975] 3 All ER 333; 3 WLR 586. 20The rationale for those principles lies in the public policy (and private interest) recognised in the early settlement of litigation and the discouragement of wasteful litigation (as outlined in Commonwealth v Gretton [2008] NSWCA 117). In Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA said at [14]: ... the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants. 21In Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 the Court of Appeal recently reiterated the public policy objectives of special costs orders. Basten JA (with whom McColl and Campbell JJA agreed) referred at [6] to the objects underlying the formal offer of compromise procedures under the then court rules that were identified in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 as including: 1. To encourage the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation by promoting early offers of compromise by defendants which amount to a realistic assessment of the plaintiff's real claim which can be placed before its opponent without risk that its "bottom line" will be revealed to the court; 2. To save the public costs which are necessarily incurred in litigation which events demonstrate to have been unnecessary, having regard to an earlier (and, as found, reasonable) offer of compromise made by a plaintiff to a defendant; and 3. To indemnify the plaintiff who has made the offer of compromise, later found to have been reasonable, against the costs thereafter incurred. This is deemed appropriate because, from the time of the rejection or deemed rejection of the compromise offer, notionally the real cause and occasion of the litigation is the attitude adopted by the defendant which has rejected the compromise. In such circumstances, that party should ordinarily bear the costs of litigation. 22The onus is on the party making a Calderbank offer (here, Club Marconi) to satisfy the court that it should exercise the costs discretion in its favour (Evans Shire Council v Richardson (No 2) [2006] NSWCA 61). 23It does not automatically follow from the fact that a genuine offer of compromise was more favourable than the final judgment that an indemnity costs order will be made. What must be considered is the reasonableness of the offeree's rejection or non-acceptance of that offer, a matter to be determined having regard to the circumstances at the time that the offer fell to be considered. The question is whether, in all the circumstances, the failure to accept the offer "warrants departure from the ordinary rule as to costs" (SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 per Giles JA at [37]). 24Relevant factors in determining whether the rejection of an offer was unreasonable include those identified by the Court of Appeal in Victoria in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435, namely: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree's prospects of success, assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it (as noted in Miwa). 25In the present case, Counsel for Club Marconi, Ms Fisher, submits that the Court should exercise the costs discretion in the Club's favour on the basis that the Calderbank offer was a genuine offer of compromise and that it was unreasonable in the circumstances for Mr Campolongo not to accept the offer. 26The offer was made on 20 April 2012 (the proceedings having been commenced on 26 March 2012 with Mr Campolongo's application for interlocutory relief and the matter then having been referred to the Expedition List). The offer was as follows: 1. the Plaintiff discontinues proceedings against the Defendant; 2. the Plaintiff not oppose the withdrawal of the undertaking given to the Court so that Mr Campolongo's hearing in the disciplinary matter can proceed; and 3. the Plaintiff pays the Defendant's legal costs in the proceedings in the amount of $8,000. 27The offer was stated to remain open until 9am on 27 April 2012, therefore for roughly 7 days. It was made less than a month after proceedings commenced but at a time when the parties should have been well aware of the issues in dispute. It was made some two months before the hearing. 28The offer was summarily rejected by letter dated 24 April 2012. There was no suggestion in that letter that there was any uncertainty on the part of Mr Campolongo as to the operation of the proposed settlement or any difficulty for Mr Campolongo in assessing the reasonableness of the offer at that stage. (Nevertheless, I note that there was nothing in the letter itself to explain the basis for the sum sought in respect of legal costs - ie, whether the $8,000 represented a full indemnity for legal costs incurred to that point or some lesser sum.) 29Ms Fisher notes that the question of unreasonableness is a question of fact, to be determined in all the circumstances (Commonwealth v Gretton at [66]). It is submitted that it was unreasonable for Mr Campolongo not to accept the offer. That submission is put on the basis that, prior to commencement of the proceedings, Club Marconi's solicitors had, by letter dated 21 March 2012 (a copy of which is annexure C to an affidavit sworn by Mr Belling on 10 May 2012 in the principal proceedings), proposed a course of action in relation to the proposed disciplinary proceedings (instead of the proceedings Mr Campolongo had then indicated he was intending to commence). (This offer is said to have remained open up to the date of hearing.) 30In circumstances where the basis on which the interlocutory injunction was sought was abandoned by the date of the hearing, Ms Fisher submits that the lack of utility in the declaratory relief sought by Mr Campolongo ought to have been apparent to Mr Campolongo (or his legal representatives) prior to the commencement of the proceedings (in the face of the 21 March 2012 proposal) and certainly by the time of the Calderbank offer on 20 April 2012. 31In Miwa, the Court of Appeal confirmed (at [9]) that an informal offer of compromise must involve "a real and genuine element of compromise" (citing Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8] and referring to the discussion in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25]) and confirmed that "the response of the offeree must be assessed at the time it was made, and not with the benefit of hindsight resulting from a known outcome, recorded in a judgment" (citing Regency Media at [33], though the Court of Appeal went on to say that this should not entail a detailed investigation into the state of preparation or knowledge of the offeree as at the date of the offer). 32The issue thrown up by the offer in the present case to my mind is whether it involved "a real and genuine element of compromise" (Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375; Anderson Group; Leichhardt Municipal Council) in circumstances where what it required seems to have been, in effect, the capitulation by Mr Campolongo to Club Marconi's position (namely, the discontinuance of the proceedings coupled with payment of the Club's legal costs; and, though this was not the subject of the dispute at the final hearing, the prosecution of the disciplinary hearing). 33Where an offer in substance requires dismissal or discontinuance of the claim, the question is whether there is the necessary element of compromise for the application of the Calderbank principles. (In this regard, I refer to Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at [355]; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at [368]; Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609 at [6]; Bennette v Cohen (No 2) [2009] NSWCA 162 at [40]-[41]). 34At [31], in Regency Media the Court of Appeal said: An offer which is in substance an invitation to surrender can result in the successful triggering of the indemnity costs mechanisms under the rules. (See r 20.26(2); Leichhardt Municipal Council supra at [36]-[37], [40].) However, as Basten JA suggests in Robb Evans supra at [20], the claim or defence would have to approach something of the character of being frivolous or vexatious for that to be the case. (See also Hancock v Arnold supra at [17].) If it were otherwise, the public policy to encourage settlement would rarely be served, in an all or nothing case. (my emphasis) 35Furthermore, the fact that the offer included a term requiring payment by the offeree of an amount for the offeror's costs is of relevance (having regard to the fact that the formal Offer of Compromise procedure requires offers to be exclusive of costs). Although the formal requirements under the Rules are not directly applicable, there is authority to suggest that disconformity with those rules can be taken into account in assessing whether there is a genuine offer of compromise and whether it was unreasonable for the offeree to reject that offer (see the comments by McColl JA at [117] in Elite, albeit in the context of the time allowed for acceptance of the offer, not as to the inclusion of a costs component in the offer). 36In Elite, McColl JA noted the line of authority, commencing with Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97, to the effect that a Calderbank letter expressed to be inclusive of costs will not warrant departure from the usual basis upon which a successful party's costs are calculated. One rationale for that line of authority has been said to lie in the difficulty an offeree may have in assessing the offer (see Einstein J, in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (Formerly GIO Insurance Ltd) [2006] NSWSC 583 at [40]-[41]). (Here, the requirement to pay an amount for costs as a term of the offer requires no assessment as to the value of the offer, although it may have been difficult for Mr Campolongo to assess how much of a compromise it involved on the part of Club Marconi.) 37While her Honour concurred with the proposition espoused by Allsop J (as his Honour then was) in DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555 (at [12]-[13]), Allsop J to the effect that Smallacombe did not articulate "a definitive rule that in an application for costs, an offer that was an all inclusive sum could not, in any circumstances, be taken into account by a court in considering whether thereafter indemnity costs should be awarded", she considered that Smallacombe afforded guidance as to the exercise of the s 98(1) discretion (in informing the question as to the reasonableness of an offeree's refusal to accept an "all-in" offer). 38By analogy with the proposition by McColl JA in Elite (that prima facie litigants who choose not to avail themselves of the rules as to Offers of Compromise should be in no better position than those who do), the inclusion in the present Calderbank offer of a requirement for payment of costs may tend against a finding that it was unreasonable to reject that offer. 39Bryson JA in Leichhardt Municipal Council said at [59]: ... The only element of compromise in the offer was as to costs: otherwise it was a call on the respondent to capitulate and give up: the element of compromise was slight and the respondent's ultimate lack of success does not to my mind demonstrate that the reasonable course for the respondent was to capitulate, nor does anything show that the respondent was delinquent with going on with the trial or in resisting the appeal. 40In Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790, Bergin J (as her Honour then was), accepted that the offer there made by the defendant was a genuine offer of compromise (although describing it as a "borderline" case), where the offer represented a payment that would have covered only a portion of the plaintiff's costs incurred up to that time. Her Honour said (at [15]) that: An offer to pay only a portion of the plaintiff's costs at such a late stage of the proceedings may well present as equivalent to a requirement that the plaintiff capitulate. I am of the view that it is a borderline case but on balance, the fact that the defendant was willing at that time to give up - or compromise - what it saw as its strong position and pay $100,000 to the plaintiff persuades me that the offer was a genuine offer of compromise. 41Here, however, the offer was not to pay a portion of the plaintiff's costs (as was the case in Cat Media), it was to require the payment of costs to the defendant. It seems to me that what it called for was closer to capitulation than compromise. 42As to the time of the offer, while it was at an early stage in the proceedings, this was a case in which the matter was to be expedited and an offer at an early stage would be consistent with the policy underlying the Calderbank principles. In Elite, at [146], Basten JA said that: ... the fact that a defendant's offer is made early in the proceedings should not by itself be given significant weight in assessing the reasonableness of the plaintiff in rejecting it. Nor should significant weight usually be given to what the plaintiff did or did not know at that stage. Were it otherwise, the more complex the litigation the less likely that the rejection of an early offer which proves to have been fair and reasonable, will have costs consequences. That tendency would diminish rather than enhance the purpose to be discerned from Calderbank offers and court rules. 43Having regard to the above, it seems to me that while it may well be that there was an element of compromise in the offer (in that the amount demanded for Club Marconi's costs was perhaps unlikely to have provided a full indemnity for the costs incurred in attendance and preparation for an interlocutory hearing and steps taken in relation to the ongoing conduct of the proceedings, which might be assumed would be likely have been in an amount greater than $8,000) I am not persuaded that it was unreasonable for Mr Campolongo, as at 24 April 2012, to reject an offer that required a seemingly complete capitulation to Club Marconi's position (at least where Club Marconi had not by then made clear that it conceded that the 2010 suspension had been invalidly imposed). Given that the grant of declaratory relief is a discretionary matter on which different judges might have come to a different conclusion had the relevant concession not been made, I am not satisfied that the rejection of the offer was unreasonable. 44Club Marconi also submits that an indemnity costs order is warranted on the basis of the manner in which the litigation was conducted. In particular, reliance was placed on the fact that the undertaking given by Club Marconi was on the basis that Mr Campolongo would seek expedition (but filed no evidence in support of expedition) and that the relief ultimately sought (despite the assertions made at the interlocutory hearing) was solely in respect of the November 2010 suspension with no challenge to the suspension operating from on or shortly after 29 February 2012. 45Ms Fisher submits that the practical consequence is that even final relief favouring Mr Campolongo would not have been dispositive of the issues extant between the parties. I agree. 46Further, it is submitted that Club Marconi incurred unnecessary costs in adducing evidence in response to evidence served by Mr Campolongo (including paragraph 6 of the affidavit of Mr Campolongo sworn 23 March 2012), that was not ultimately read for Mr Campolongo at final hearing (namely the preparation of the affidavits of Nicholas Mamouzelos sworn 15 June 2012, Peta Dela Cruz sworn 19 June 2012 and Guiseppe Romeo sworn 15 June 2012, to each of which Mr Campolongo successfully objected on the basis of relevance and s 135 of the Evidence Act, with the result that only paragraphs [1] to [6] of Mr Romeo's affidavit were read in the proceedings). 47It is not clear when any decision not to pursue relief in relation to the 2012 Notice of Charge was made. However, the decision not to read those parts of Mr Campolongo's evidence that related to the 2012 charge was not, as I understand it, communicated to Club Marconi's representatives in advance and it cannot be said that it was unreasonable for Club Marconi to have assumed that it would be necessary to meet the allegations that had been made by Mr Campolongo in relation to that charge. 48It has been said that a court should depart from the general rule (and award indemnity costs) only where the conduct of the party against whom the order is sought is "plainly unreasonable" (Sydney City Council v Geftlick [2006] NSWCA 280; Dunstan v Rickwood (No 2) [2007] NSWCA 266). In Leichhardt Municipal Council, Santow JA (at [57]) said that indemnity costs orders should be reserved for the most unreasonable actions by unsuccessful plaintiffs. While I am not satisfied that the general conduct of the case by Mr Campolongo falls within that category, there may well be a basis for reconsideration of the exhortation in the above cases having regard to the regime now in place in relation to the conduct of litigation in this Court (as was suggested in a different context by Hammerschlag J in Simmons v Protective Commissioner of NSW also known as NSW Trustee and Guardian [2012] NSWSC 455). 49In any event, I am of the view that the lateness of the decision by Mr Campolongo not to pursue the serious allegations of bias or any challenge to the validity of the 2012 Notice of Charge (and the consequential need for Club Marconi to prepare evidence to meet those allegations) warrants an order that Mr Campolongo meet the costs thrown away in relation to the preparation of the evidence that was proposed to be adduced by Club Marconi in relation to the 2012 charges on an indemnity basis. 50Therefore, I have concluded that the appropriate costs order is to require that Mr Campolongo pay Club Marconi's costs of preparation of the affidavit evidence that was rendered unnecessary by reason of his decision not to challenge more than the 2010 suspension in the final hearing on an indemnity basis but otherwise that he bear its costs of the proceedings on the ordinary party/party basis. (Although some paragraphs of the affidavit of Mr Romeo were read (as to background matters) the substance of that affidavit was not read and it does not appear to me to be practicable to apportion the costs of preparation of the small portion that was read as against the bulk of the affidavit that was not read.) Orders 51I therefore order as follows: 1.Order that Mr Campolongo pay, on the indemnity basis, the costs of Club Marconi incurred in the preparation of the affidavits of Nicholas Mamouzelos sworn 15 June 2012, Peta Dela Cruz sworn 19 June 2012 and Guiseppe Romeo sworn 15 June 2012. 2.Otherwise than in respect of the costs the subject of order 1 above, order that Mr Campolongo pay the costs of Club Marconi of the proceedings on a party/party basis. 52For completeness, I note that on 4 July 2012 I dismissed Club Marconi's Notice of Motion with no order as to costs and hence the above costs orders do not include costs of and incidental to that Notice of 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. 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: 18 July 2012