Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Motorcycling Events Group Australia Pty Ltd v Kelly (No 2) [2013] NSWCA 399 Hearing dates: On the papers Decision date: 29 November 2013 Before: Basten JA at [1]; Meagher JA at [11]; Gleeson JA at [12] Decision: 1. Substitute for order (2) made on 29 October 2013 the following order: The appellant to pay the respondent's costs of the proceedings in this Court (including the motion to vary order (2)) to be assessed on the ordinary basis up to 17 October 2012 and thereafter on the indemnity 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: PROCEDURE - costs - departing from the general rule - order for costs on indemnity basis - where offer of compromise made - where offer failed to make provision for the disposal of the appeal - r 42.14 Uniform Civil Procedure Rules 2005 - whether respondent defended the appeal on a substantially different basis to that which the Court ultimately decided on appeal Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 36.16(3C), 42.14, 51.47, 51.48 Cases Cited: Hancock v Arnold (No 2) [2009] NSWCA 19 Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361 Category: Costs Parties: Motor Cycling Events Group Australia Pty Ltd (Appellant) David Kelly (Respondent) Representation: Counsel: P Dury (Appellant) J H Reimer (Respondent) Solicitors: A R Conolly & Company (Appellant) Brydens Law Office LP (Respondent) File Number(s): 2012/240492 Decision under appeal Jurisdiction: 9101 Citation: David Kelly v Motorcycling Events Group Australia Pty Limited Date of Decision: 2012-07-06 00:00:00 Before: Curtis DCJ File Number(s): 2010/405573 Judgment 1BASTEN JA: The principal judgment in this matter dismissed the appellant's appeal and ordered the appellant to pay the respondent's costs: Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361. At the time judgment was delivered, counsel for the respondent applied to vary the costs order. He was granted leave to make the application in writing, it being anticipated that he would tender an offer (or offers) of compromise and submissions in support of an order for indemnity costs. 2The written notice of motion seeking to vary the costs order was filed 16 days after judgment was entered. It is not necessary to determine whether that application was too late, because not within the 14 day period provided by the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 36.16(3C). A timely oral application having been made, it is sufficient to waive any requirement that a notice of motion be filed and served: Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 at [11]. 3On 16 October 2012, shortly after the appeal was filed, the respondent served a written offer of compromise, said to be made pursuant to r 20.26 of the UCPR, on the basis of a judgment in his favour in the sum of $340,000. As he had obtained a judgment at trial in an amount of $368,445, the offer was properly characterised as an offer of compromise because it involved a not insignificant reduction of the judgment to which the respondent was then entitled. 4The appellant submitted that the offer did not comply with r 20.26(2), because it failed to make provision for the disposal of the appeal. The submission relied upon the current terminology of r 20.26. That approach is erroneous: it is not sensible to complain that an offer does not comply with a rule not in existence at the time it is made. In October 2012, r 20.26 provided that "any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms": r 20.26(1). In this Court, a relevantly identical provision was found in r 51.47(1). There was no requirement to specify "proposed orders for disposal of the claim". 5The objection is, in any event, insubstantial. The respondent had the benefit of a judgment in a precise amount; he was offering to accept a judgment in a lower amount. The appellant can have been in no doubt as to the substance of the offer. 6The appellant did not accept the offer. The appeal was dismissed, the respondent retaining the full entitlement of his judgment at trial. Accordingly, the respondent is entitled to an order for costs to be assessed, from the date of the offer, on an indemnity basis: r 42.14, as applied in this Court by r 51.48. 7The appellant seeks to avoid that result by contending that this Court should order otherwise, as the rules permit. The basis for that application was that the Court ultimately decided the appeal on a basis which was "substantially different" from that upon which the respondent relied in his submissions. 8There may be extreme cases in which such a submission should prevail, because, for example, the appellant was led into a false sense of security in its assertion of error on the part of the trial judge by some conduct on the part of the respondent. That was not this case. 9The appellant's submissions did not seek to identify the points of departure between the respondent's submissions and the reasoning of the Court in its principal judgment. Nor should such an exercise be encouraged. Shortly stated, the respondent was successful in his claims at trial and obtained an award of damages. The appellant (not the respondent) bore the burden of demonstrating error on the part of the trial judge sufficient to have that judgment overturned: that it failed to do. The respondent is entitled to the order sought. 10The Court should make the following order: (1) Substitute for order (2) made on 29 October 2013 the following order: The appellant to pay the respondent's costs of the proceedings in this Court (including the motion to vary order (2)) to be assessed on the ordinary basis up to 17 October 2012 and thereafter on the indemnity basis. 11MEAGHER JA: I agree with Basten JA. 12GLEESON JA: I agree with Basten 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: 29 November 2013