District Court New South Wales Medium Neutral Citation: RAB Finance Pty Limited v Parlby [2012] NSWDC 247 Hearing dates: 15/11/2012 Decision date: 15 November 2012 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: 1. No order as to the costs of the proceedings with the intent that each party bear their own costs. Catchwords: COSTS - proceedings settled - question of costs - each party bear their own costs Cases Cited: Burdel Investments Pty Ltd v Burchett [2001] NSWSC 600 Fire Containment Pty Ltd v Robins (No 2) [2011] NSWSC 547 Immigration and Ethnic Affairs, Re Minister for; Ex parte Lai Qin [1997] HCA 6 (1997); 186 CLR 622 at 624-5 In the matter of Wan Jia (Australia) International Development Pty Ltd [2012] NSWSC 1007 Category: Costs Parties: RAB Finance Pty Limited (ACN 010 741 509) (plaintiff) George Lassam Parlby (defendant) Representation: Mr J Darams (plaintiff) James Tuite & Associates Lawyers (plaintiff) Gillard Consulting Lawyers (defendant) File Number(s): 2011/195378 Publication restriction: No Judgment EX TEMPORE 1In this matter the parties have agreed on consent orders to dispose of the proceedings save for the matter of costs, in accordance with short minutes of order signed by the representatives of the parties, dated today and initialled by me and placed with the papers. I make orders 1, 2, 3 and 4 of those short minutes of order. The effect of those orders is, in two separate sets of consent orders, to give judgments for the plaintiff against the defendant in the sum of just over $250,000 inclusive of interest. 2That leaves the question of the costs. The plaintiff submits that the appropriate order for costs should be that there be no order as to costs, so that each party would bear their own costs, whereas the defendant submits that he should receive his costs of the proceedings. 3The basis of the claim by the defendant for costs consists of the circumstance that the plaintiff's claims, in total, amounted to something approaching one million dollars but the plaintiff was only successful to the extent of $250,000 and so a large part of the claim of the plaintiff, in terms of a monetary amount, has not been successful. Secondly, the defendant submits that the settlement occurred after the pleadings had closed and, with respect to the second part of the settlement, well after the pleadings had closed, some six months or so. 4The defendant accepts that in some parts of its defence it was not wholly successful, including in relation to the payment of interest on the bank guarantee, but submits that otherwise the settlement reflects the defences and cross-claims that the defendant filed in the proceedings. 5The defendant referred me to no authority in respect to the proposition that a plaintiff, which has made a claim for a substantial amount, should have to pay the costs of the defendant where the result reflected a significant reduction in the amount awarded either by the Court or by consent orders. 6I was referred by counsel for the plaintiff to a decision of In the matter of Wan Jia (Australia) International Development Pty Ltd, a decision of his Honour Black J, at [2012] NSWSC 1007 at [13] where there is a reference to the principle that where there has been no adjudication on the merits, the rule that costs generally follow the event does not apply. That judgment refers to the decision of McHugh J in Immigration and Ethnic Affairs, Re Minister for; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-5 where his Honour decided that where proceedings are settled and no order for costs has been agreed, it is generally appropriate that each party bear their own costs. 7I was also referred to a decision of Gzell J in Fire Containment Pty Ltd v Robins (No 2) [2011] NSWSC 547. There is also the decision of Hamilton J in Burdel Investments Pty Ltd v Burchett [2001] NSWSC 600, a decision some years ago which canvassed the same principles. 8The decision of Black J in Immigration and Ethnic Affairs, Re Minister for; Ex parte Lai Qin makes reference to two potential exceptions to the rule that each party bear their own costs: where there is conduct by one party which has been so unreasonable that it should bear the costs of the action, and where the consent orders might amount in effect to a capitulation by one of the parties. In those two circumstances it may be appropriate that one or other party obtain a favourable costs order. 9The only material on which I have to judge these matters is the terms of settlement and the pleadings. In the circumstances, I do not think that the mere fact that a plaintiff has agreed to compromise its claim to an amount of $250,000, when it was originally seeking payment of an amount towards $1,000,000, is properly to be regarded either as a capitulation necessarily, or unreasonable conduct. 10It seems to me that a defendant which desires to protect itself against costs arising from a claim by a plaintiff which is excessive, but which is likely to be successful to some extent, has options available in terms of offers of compromise and Calderbank letters. There are also other provisions of the rules which sometimes restrict a successful party from recovering costs if the amount of the judgment obtained is less than some statutorily specified amount. 11No reliance is placed by either party on those provisions in this case. Nevertheless, it seems to me that the existence of these options measurably weaken the defendant's argument that it should obtain an order for costs merely because the plaintiff has not been as successful as it would have been if it had received the entire amount of its claim. 12There may be cases where the pleadings so clearly demonstrate that the consent orders, ultimately made, reflect the position of the defendant, or that the plaintiff acted unreasonably in not accepting a lesser amount earlier. However, in this case the defendant denied that it had failed to pay either the principal or interest payments and denied owing the amount claimed by the plaintiff. In neither case do these denials support the argument that a reduced settlement amount should be a factor entitling the defendant to a favourable costs order. 13It is true, as the defendant has raised, that the cross-claim sought a reduction in the level of interest, but the evidence does not enable me to conclude that the reduction in interest proposed would precisely or closely represent the agreed amount of the judgment. 14In those circumstances, I do not think there is any basis to apply a rule other than the general rule applicable to proceedings which are settled, which is set out in the decision of Immigration and Ethnic Affairs, Re Minister for; Ex parte Lai Qin. Accordingly, I make no order as to the costs of the proceedings, with the intent that each party bear their own costs. 15After I had made the order in respect of costs - that there be no order - Mr Darams, for the plaintiff, sought an order for the costs of the argument in respect of costs. I allowed that argument although, again, I am not favoured with any evidence that enables me to make any decision about one party's unreasonableness, or capitulation. 16The plaintiff has been successful in the argument today. On the other hand, so far as the evidence reveals, the parties would have appeared in court today irrespective of that argument. There is no evidence that the costs were substantially increased by the argument today. 17My recollection is also that in the case to which I earlier referred of Burdel Investments Pty Ltd v Burchett, after the decision was made a similar argument was put by the defendant who had successfully resisted a costs order in that case. Although not recorded expressly in the written judgment that argument was likewise unsuccessful and the original costs orders confirmed. 18For these reasons, I am not persuaded that I should make any special costs order in respect of the argument today. I confirm that the costs of the proceedings as I have ordered them are to include the costs of the argument today. 19The orders of this Court shall be in accordance with the orders I have already made, namely in accordance with the consent orders in the short minutes of order dated today, together with an order that there be no order as to costs with the intent that each party bear their own costs. Orders 1. No order as to the costs of the proceedings with the intent that each party 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: 25 January 2013