Supreme Court New South Wales Medium Neutral Citation: Milich v The Council of the City of Canterbury (No. 4) [2012] NSWSC 1546 Hearing dates: 12 December 2012 Decision date: 12 December 2012 Jurisdiction: Common Law Before: Davies J Decision: 1. The judgment in favour of the Plaintiff is stayed to the extent of $42,000; 2. Execution by the Plaintiff of Order 2 made 31 October 2012 is stayed. 3. Orders (1) and (2) are subject to the following conditions: a. The First Defendant is to file the Summons seeking leave to appeal and the White Book by close of business Monday 17 December 2012; b. The First Defendant is to pursue the application for leave and any appeal with due expedition. 4. No order as to costs to the intent that all parties, including the Second Defendant, should bear their own costs. Catchwords: PROCEDURE - judgments and orders - stay of judgment - application for leave to appeal - novel point decided - set-off of cost order and substantive judgment Legislation Cited: Workers Compensation Act 1987 Cases Cited: Lahoud v Lahoud [2012] NSWSC 284 Milich v The Council of the City of Canterbury (No 3) [2012] NSWSC 1280 Penrith Whitewater Stadium Ltd v Lesvos Pty Limited [2007] NSWCA 103 Category: Interlocutory applications Parties: Branislav (Bill) Milich (Plaintiff) The Council of the City of Canterbury (First Defendant) Ready Workforce Pty Ltd (Second Defendant) Representation: Counsel: M Boulton (Plaintiff) R Sheldon SC & P Knowles (First Defendant) E Brawn (Second Defendant) Solicitors: Watkins Tapsell (Plaintiff) DLA Phillips Fox (First Defendant) Holman Webb Lawyers (Second Defendant) File Number(s): 2008/315064 Judgment 1I gave judgment in relation to an Offer of Compromise served by the First Defendant in this matter on 31 October 2012. The judgment also made final orders in the substantive proceedings: Milich v The Council of the City of Canterbury (No 3) [2012] NSWSC 1280. 2In that judgment I rejected the First Defendant's application for indemnity costs from the date of the Notice of Offer of Compromise of 12 January 2011. I did that because I concluded, taking into account the workers compensation payback, that the result obtained by the Plaintiff was more favourable in the judgment than it would have been had the Notice of Offer of Compromise been accepted. 3The First Defendant has filed a Notice of Intention to Appeal against that judgment and, by Notice of Motion dated 5 December, seeks a stay on the judgment in the proceedings overall which required, subject to one matter I shall mention, the payment by the First Defendant to the Plaintiff of the sum of $232,315.80. The one matter is that by reason of the indemnity required to be paid by the First Defendant to the Second Defendant under section 151Z Workers Compensation Act 1987 the balance that will ultimately be paid to the Plaintiff will be $142,571.54. 4The stay is sought on the basis that if this amount is now paid and the First Defendant is successful on its application for leave to appeal against the costs judgment the amount paid is likely to be irrecoverable. Certainly the evidence put forward on the application and the evidence that I heard during the course of the substantive proceedings would suggest prima facie that there might be a difficulty in recovering some or all of any judgment paid. 5The matter is slightly complicated by the fact that the legal advisers for the Plaintiff are claiming a lien over any damages for their costs. 6The principles to be considered on an application for a stay where there is an appeal brought are conveniently summarised by McColl JA in Penrith Whitewater Stadium Ltd v Lesvos Pty Limited [2007] NSWCA 103 at [18]-[20]. 7The First Defendant, if successful on the appeal, would seek to set off the indemnity costs order which it would then obtain from the Plaintiff against the judgment of $142,000-odd that it is required to pay. There is support for the right to do so in the decision of Lahoud v Lahoud [2012] NSWSC 284 at [75] to [86]. 8The basis of the appeal arises from the rather unusual circumstances of this case. It is not what can be described as an ordinary appeal with regards to a costs order. The point I decided was said by Senior Counsel for both parties at the time to be a novel one. There are some reasonable prospects, therefore, that leave to appeal will be granted whatever the ultimate outcome of the appeal. The position contended for on the appeal is certainly not one which is obviously hopeless. 9The judgment that I gave on 31 October requires the First Defendant to pay the Plaintiff's costs on a party/party basis. That order, if it stands, relates to the whole of the proceedings. However, if the First Defendant is successful on its application for leave to appeal, the First Defendant will still be required, by that part of that order which is not affected by a successful appeal, to pay the Plaintiff's costs up to 12 January 2011. 10There is evidence on this application that the Plaintiff's legal costs and disbursements up to 12 January 2011 total $133,000. Those costs have not yet been assessed. If applying a rough rule of thumb of 75 per cent (for party/party costs) for the costs assessment, the amount that would be required to be paid by the First Defendant to the Plaintiff, even allowing for a successful appeal, would be approximately $100,000. 11There was also evidence on this application that the First Defendant's costs and disbursements from 13 January 2011 to date are in the sum of $111,291.69. Those costs have not been assessed, but that figure would have to be regarded as close to the amount that the First Defendant would be entitled to if successful on its application for leave to appeal because the costs payable would be indemnity costs. 12It seems to me that because of the obligation of the First Defendant to pay the Plaintiff's costs on a party/party basis up to 12 January 2011 in any event, if the requirement to pay those costs was stayed the First Defendant's position would be protected by only a partial stay being granted on the judgment sum of $142,571.54. The First Defendant would, in the circumstances of a successful appeal, be entitled to set off the costs it was obliged to pay to the Plaintiff in any event against its liability to pay the judgment sum that was ordered to be paid. 13I am satisfied that if the whole of the judgment sum is paid to the Plaintiff there are likely to be difficulties recovering some or all of that amount and that this is likely to produce a situation where the appeal that is now sought to be brought will be rendered nugatory. 14In those circumstances I consider the appropriate order is that there should be (1) a stay on the amount payable to the Plaintiff pursuant to the judgment in an amount of $42,000, and (2) a stay on the costs order, being order 2 I made on 31 October 2012. That second stay is a stay on execution of any costs assessed up to 12 January 2011. It does not prevent the Plaintiff from having costs to that date assessed. 15The First Defendant seeks the costs of this application on the basis that it has largely been successful. It points to the correspondence that passed between the solicitors for the Plaintiff and the First Defendant that is annexed to the affidavit of Nichola Leigh Scoble sworn 4 December 2012. It was submitted that there was no proposal by the Plaintiff that a stay of any sort be agreed to in response to the First Defendant's proposals. Rather the Plaintiff simply resisted any form of stay and threatened execution on the judgment. 16The Plaintiff draws attention to the fact that the first time any indication was given of the amount of the First Defendant's costs from 13 January 2011 to date was in a second affidavit of Ms Scoble dated 10 December 2012. The suggestion is that if this amount had been articulated earlier some arrangement might have been achievable. 17In my opinion the Plaintiff's approach to the question of a stay all along was simply to resist any stay being granted. It seems to me unlikely that if the costs amount had been provided at an earlier time it would have made any difference to the Plaintiff's position. Nevertheless, the late provision of the information concerning that amount at least deprived the Plaintiff of being able to consider the position which I have reached in the matter. 18I was first minded to make the costs in one way or another referable to the First Defendant's success on the appeal. That, however, does not seem to me to be appropriate and I think the better course is that each party should bear its own costs of this application. 19The orders that I make are these: 1. The judgment in favour of the Plaintiff is stayed to the extent of $42,000; 2. Execution by the Plaintiff of Order 2 made 31 October 2012 is stayed. 3. Orders (1) and (2) are subject to the following conditions: a. The First Defendant is to file the Summons seeking leave to appeal and the White Book by close of business Monday 17 December 2012; b. The First Defendant is to pursue the application for leave and any appeal with due expedition. 4. No order as to costs to the intent that all parties, including the Second Defendant, should bear their own 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. Decision last updated: 18 December 2012