Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson (No 2) [2012] NSWCA 420 Hearing dates: On the papers Decision date: 14 December 2012 Before: Meagher JA at [1] Hoeben JA at [2] Tobias AJA at [18] Decision: (1) The costs order of 26 October 2012 is varied. The appellant is to pay the respondent's costs of the appeal on a party/party basis to 27 March 2012 and thereafter on an indemnity basis. (2) The respondent is to pay the costs of this application. [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 - offer of compromise before trial - whether that offer entitled offeror to indemnity costs of appeal - application dismissed. Legislation Cited: Defamation Act 1974 Cases Cited: Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson [2012] NSWCA 340 Channel 7 Sydney Pty Ltd v Mahommed (No 2) [2011] NSWCA 6; 80 NSWLR 210 Encyclopaedia Britannica Australia Ltd v Campbell (No 2) [2009] NSWCA 335 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [37] Uniting Church in Australia Property Trust (NSW) v Takacs (No 2) [2008] NSWCA 172 Category: Costs Parties: Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust - Appellant Gregory Thompson - Respondent Representation: Counsel: Mr R Sheldon SC - Appellant Mr M Neil QC/Mr M Thompson - Respondent Solicitors: DLA Piper Australia - Appellant Gerard Malouf & Partners - Respondent File Number(s): 2012/43333 Decision under appeal Date of Decision: 2011-11-07 00:00:00 Before: Nicholson SC DCJ File Number(s): 2012/212559 Judgment 1MEAGHER JA: I agree with Hoeben JA. 2HOEBEN JA: Nature of Dispute The principal judgment in this matter was delivered on 26 October 2012 (Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson [2012] NSWCA 340). The effect of that judgment was to allow the appeal in part in that the appellant's challenge to the liability finding was dismissed but the respondent's damages were reduced by $10,000. Accordingly, the judgment in favour of the respondent at trial in the sum of $223,381.58 was set aside and in lieu thereof, judgment was entered for $213,381.58. 3After judgment was delivered, the respondent sought a special costs order. This judgment relates to that application. Submissions and Consideration 4By letter dated 1 August 2011 the solicitors for the respondent served an offer of compromise on the solicitors for the appellant offering to settle the respondent's claim for $60,000 plus costs. That offer was not accepted by the appellant. 5The terms of the offer of compromise were as follows: "The respondent offers to compromise this claim on the following terms: 1. Verdict in favour of the plaintiff for the amount of $60,000 plus costs as agreed or assessed. 2. This offer of compromise is open for acceptance for a period of 14 days from the date of this offer. 3. This offer of compromise is made in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005." 6After Nicholson DCJ delivered judgment on 7 November 2011, the offer of compromise was brought to his attention. As a result, by agreement between the parties, Nicholson DCJ altered the order for costs as follows: "Costs order of 7.11.11 varied to order the defendant to pay the plaintiff's costs on a party/party basis to 1.8.11 and on an indemnity basis thereafter." No challenge is made to that order. 7The appeal was filed on 9 February 2012. On 27 March 2012 the solicitors for the respondent served an offer of compromise on the solicitors for the appellant in the following terms: "The respondent offers to compromise this claim on the following terms: 1. Appeal upheld. 2. Judgment of Judge Nicholson SC in the District Court, Matter No 2010/212559 varied by reducing same from $223,381.58 to an amount of $212,000. 3. This offer will remain open for acceptance by the appellant for a period of 28 days. 4. This offer of compromise is made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005." 8That offer of compromise was not accepted by the appellant. 9After the principal judgment was delivered the parties agreed that the respondent was entitled to the costs of the appeal on a party/party basis to 27 March 2012 and thereafter on an indemnity basis. 10The issue between the parties is that the respondent submits that he is entitled to indemnity costs from 1 August, 2011, being the date of the first offer of compromise. The effect of such an order would be that the respondent would be entitled to indemnity costs in respect of the whole of the appeal. 11The respondent submits that pursuant to UCPR 51.49 the Court may have regard to any offer of compromise in the court below when exercising its wide discretion as to costs. The respondent relies upon Channel 7 Sydney Pty Ltd v Mahommed (No 2) [2011] NSWCA 6; 80 NSWLR 210 as authority for the submission. 12The parties agree that if the respondent's submission is not successful, then he is entitled to indemnity costs of the appeal from 27 March 2012. 13The appellant opposes the respondent's application. The appellant submits that the appeal proceedings are to be regarded as distinct proceedings for the purposes of UCPR 42.13. It submits that the offer by the respondent of 27 March 2012 was not a renewal of the offer made by him on 1 August 2011. 14The appellant relies upon the Uniting Church in Australia Property Trust (NSW) v Takacs (No 2) [2008] NSWCA 172 at [16] per Hodgson JA and at [34] per Basten JA as support for the proposition that in the absence of a renewed offer on appeal, the offer made by the respondent on 27 March 2012 does not attract r 42.14 in relation to the costs of the appeal. The appellant also relies upon Encyclopaedia Britannica Australia Ltd v Campbell (No 2) [2009] NSWCA 335 at [10]. 15The decision in Channel 7 Sydney Pty Ltd v Mahommed (No 2) is readily distinguishable. The Court was there concerned with the interpretation of s48A(2) of the Defamation Act 1974 and in particular, whether an offer made before trial was a "settlement offer". That decision provides no assistance in relation to the application of r 42.14 and r 51.49 of UCPR. 16While it is true that r 51.49 permits the Court of Appeal to have regard to any offer of compromise made in the court below, the usual position is that appeal costs should primarily be determined by the issues in and the outcome of the appeal proceedings themselves: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [37] ff. As the appellant submitted, that was also the approach followed in Uniting Church in Australia Property Trust (NSW) v Takacs (No 2). 17The issues raised in the appeal were, in my opinion, quite distinct from those at trial. Moreover, the offer of 1 August 2011 was expressed to expire after 14 days and was not thereafter renewed. In my opinion, the appropriate orders to be made are: (1) The costs order of 26 October 2012 is varied. The appellant is to pay the respondent's costs of the appeal on a party/party basis to 27 March 2012 and thereafter on an indemnity basis. (2) The respondent is to pay the costs of this application. 18TOBIAS AJA: I agree with Hoeben JA. ********** 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: 14 December 2012