T & DC Pty Limited v Workforce Clothing Pty Limited

1. [1]

   HER HONOUR: This is an appeal from a decision of the Local Court. The plaintiff, T & DC Pty Limited, entered into an agreement with Workforce Clothing Pty Limited for the supply of services as a freight management consultant. The term of the agreement was 24 months from 1 September 2009 to 31 August 2011. The contract had an automatic renewal clause subject to an entitlement to terminate on 90 days written notice.

2. [2]

   In early 2011, the business of Workforce Clothing Pty Limited was sold. At that point the vendor (the entity with which T & DC had its contract) changed its name to Old Sca Pty Limited and the purchaser (a new entity) took on the name Workforce Clothing Pty Limited with a different ACN. In the balance of this judgment, references to “Workforce” are references to the purchaser.

3. [3]

   Workforce continued to use the services of T & DC for a period but, in July 2012, communicated its intention “to terminate the current relationship between our organisations” from the end of August 2012. By that date (assuming the contract remained on foot), the time within which notice could be given so as to prevent its automatic renewal had expired (the relevant date was 31 August 2011).

4. [4]

   On 1 September 2012, T & DC issued an invoice to Workforce in the sum of $16,045.68 for “management and consultancy fees for termination of agreement (contract) 12 months”. Workforce refused to pay the invoice.

5. [5]

   T & DC brought proceedings in the Local Court against both Old Sca Pty Limited and Workforce. The claim against Old Sca was settled on the first day of the hearing. As against Workforce, T & DC’s principal claim was that there had been an effective assignment to Workforce of Old Sca’s rights and obligations under its agreement with T & DC. In the alternative, T & DC claimed that Workforce had entered into a new agreement with it on the exact terms expressed in its agreement with Old Sca. The magistrate rejected both contractual claims and there is no appeal against that aspect of his Honour’s decision.

6. [6]

   The appeal concerns an alternative claim based on the common law doctrine of conventional estoppel. T & DC contended that both it and Workforce had adopted a mutual assumption as to the terms of their legal relationship; namely, that by or about 8 March 2011, T & DC’s contract with Old Sca had been assigned to Workforce. The magistrate held against T & DC in respect of that claim, finding that Workforce had not adopted the alleged mutual assumption.

7. [7]

   Separately, T & DC alleged that Workforce had engaged in misleading or deceptive conduct. The magistrate also held against T & DC in respect of that aspect of the claim. The summons commencing an appeal to this Court included two grounds of appeal in respect of that claim but those grounds were not pressed (T3.13).

8. [8]

   It followed from the magistrate’s findings that T & DC’s claim failed. However, in case of error in that conclusion, the magistrate assessed damages in the sum of $6,215.40. T & DC seeks leave to appeal against that part of the decision.

9. [9]

   In a separate judgment, the magistrate awarded Workforce its costs on an indemnity basis. T & DC also seeks leave to appeal against that decision.

Requirement for leave to bring appeal on some grounds

1. [10]

   An appeal lies as of right to this Court from a judgment of the Local Court sitting (as here) in its general division but only on a question of law: s 39(1) of the Local Court Act 2007 (NSW). Pursuant to s 40 of the Act, an appeal may be brought on a ground that involves a question of mixed law and fact but only by leave of this Court: s 40(1) of the Act. There is also a requirement for leave to appeal against an order as to costs: s 40(2)(c).

2. [11]

   Workforce accepted that three of the five grounds of appeal relied upon by T & DC in respect of the conventional estoppel claim raise questions of law (grounds 1(a), (b) and (d); T15-16). Grounds 1(c) and (e) involve questions of mixed law and fact, as does ground 5 in respect of the question of quantum. Workforce opposed the grant of leave to appeal on those grounds.

3. [12]

   As to the grounds requiring leave, I have concluded that leave should not be granted. My reasons for reaching those conclusions are included within my discussion of each ground below.

Conventional estoppel

1. [13]

   The elements of common law conventional estoppel are well established and were not in dispute in the court below. They are conveniently summarised in the judgment of Brereton J in Moratic Pty Limited v Laurence James Gordon [2007] NSWSC 5 at [30] to [37] in the context of a discussion of the differences (and similarities) between conventional estoppel and the equitable doctrine of promissory estoppel. Of conventional estoppel, his Honour said at [32]:

Circumstances in which an estoppel was alleged to have arisen

1. [14]

   The mutuality of the assumption is the critical foundation for an estoppel by convention. As already noted, the mutual assumption specified by T & DC in the present case was “that by or about 8 March 2011 [the contract between T & DC and Old Sca] had been assigned to [Workforce]”: further amended statement of claim at paragraph 20(a). The alleged mutual assumption thus went to the issue whether any contractual relationship existed at all rather than being an alleged assumption as to the terms of a contractual relationship as to the existence of which there was no dispute.

2. [15]

   T & DC provided the following particulars to sustain the alleged assumption:

3. [16]

   The same particulars were specified in support of the contention that the alleged assumption was adopted by Workforce (at paragraph 16 of the pleading).

4. [17]

   As to the element that both parties have conducted their relationship on the basis of the mutual assumption, T & DC relied upon the fact that, after those discussions, it provided services to Workforce of the same nature as those described in the contract; that it rendered invoices in respect of those services calculated in accordance with the contract and that Workforce paid those invoices.

5. [18]

   The pleading also relied upon an email from Workforce to T & DC dated 14 July 2012 which it was alleged represented that “Workforce Clothing will terminate our agreement with T & DC”. Since those words are evidently relied upon as an objective indication that Workforce conducted its relationship with T & DC on the basis of its adoption of the mutual assumption (that Old Sca’s contract with T & DC had been assigned to Workforce), it is necessary to have regard to the full exchange (at pages 12 to 16 of the affidavit of William Corless, sworn 19 June 2013). Mr Corless had evidently learned that Workforce was proposing to deal with a particular freight company directly rather than through T & DC as intermediary. He sent an email to Mr Winfield of Workforce confronting him with that information and asking for a meeting “to avoid any unpleasantness”. Mr Winfield responded by noting that T & DC’s agreement was with the former owners of Workforce and asserting that as Workforce had not requested an assignment of the agreement it was not bound by its terms. Mr Winfield said (emphasis added):

6. [19]

   Mr Corless responded that he had taken advice as to the agreement. He asserted that it had “a 100% validity” and that payment of T & DC’s invoices constituted acceptance. After a further exchange, Mr Winfield ended with the statement (emphasis added):

7. [20]

   As will be seen, Mr Windfield’s first email had employed different language, referring to an intention to terminate “the current relationship”, not “our agreement”. In my view, read in context, the later email relied upon by T & DC is plainly incapable of amounting to a representation or concession by Workforce that it had adopted the mutual assumption that the contract had been assigned to it. The whole thrust of the exchange was to record Workforce’s denial of that assumption.

8. [21]

   As to the element that Workforce knew or intended that T & DC would rely upon the conventional basis upon which the parties conducted themselves, T & DC again relied upon the fact that services were provided and invoices rendered and paid.

9. [22]

   Perhaps the most difficult aspect of T & DC’s claim based on conventional estoppel was the last element set out above; namely, that departure from the assumption will occasion detriment to the plaintiff. The particulars of that contention relied upon by T & DC were as follows:

10. [23]

    A critical aspect of the evidence was the conversation referred to in the particulars set out at [15] above, to which the magistrate referred as the “everything will remain the same” conversation.

11. [24]

    The evidence of Mr Corless on that issue (set out at para 8 of his affidavit) was that Steve Camarda introduced Mr Corless to “the man taking over the company, Steve Johnson”. Mr Corless said there was a conversation between him and Mr Johnson in the following terms:

The magistrate’s findings as to conventional estoppel

1. [25]

   The magistrate evidently accepted that evidence. There is an error in his Honour’s judgment where he stated “in cross examination Mr Camarda conceded that Johnson might have said what Mr Corless attributed to him, but that he could not remember the words used”. In fact, Mr Camarda did not give evidence in the proceedings, the claim against Old Sca having settled on the day of the hearing. Mr Johnson did give evidence and made a concession to the effect of that attributed to Mr Camarda in the judgment (T35.15). I do not think anything turns on that error since ultimately his Honour accepted the version of the conversation given by Mr Corless.

2. [26]

   The magistrate also referred to the email from Mr Johnson to Mr Corless dated 10 March 2011, in which Mr Johnson said:

3. [27]

   The magistrate considered those exchanges first in the context of his discussion of T & DC’s claims in contract. His Honour said (at page 6):

4. [28]

   The magistrate’s finding on that issue informed his assessment of the claim based on conventional estoppel, addressed at pages 14 to 16 of the judgment. In my respectful opinion, it is clear from the magistrate’s reasons that the central reason for rejecting the claim in conventional estoppel was that T & DC failed to prove that Workforce had adopted the assumption.

5. [29]

   The magistrate first turned to that question in the context of his consideration of a submission put on behalf of Workforce that even if it was established that there was a contract its terms did not confer on T & DC the exclusive right to provide the services in question. His Honour said (at page 16):

6. [30]

   The finding made expressly in that passage of the reasons that there was no mutual assumption was determinative and is not directly challenged in this appeal.

Grounds of appeal

1. [31]

   T & DC relies on five alleged errors all falling under the umbrella of the proposition that “the magistrate erred at law in applying the relevant elements of conventional estoppel” (ground 1). Ground 2 (which is entirely consequential on ground 1) contends that the magistrate ought to have found that a conventional estoppel was established, “at least by the date of the automatic renewal of the contract”.

2. [32]

   It is convenient to begin by considering ground 1(b), which is:

3. [33]

   It is appropriate to consider the relevant passage in full. The magistrate said (at page 14):

4. [34]

   It will be necessary to return to what his Honour said at the outset of the third of those paragraphs, which is the subject of ground 1(a).

5. [35]

   The reasons indicate that the magistrate had in mind two kinds of estoppel; one that had been pleaded by T & DC and one that had not (referred to by his Honour as “convention estoppel” and “estoppel by conduct” respectively).

6. [36]

   T & DC noted that the former category of estoppel is ordinarily termed “conventional estoppel” or “estoppel by convention” rather than “convention estoppel”. I do not think anything turns on the magistrate’s adoption of a less orthodox term; the kind of estoppel referred to was no less clear for having been described by a composite noun rather than an adjective.

7. [37]

   The critical question is whether the remarks reveal the application of a wrong principle. I am not persuaded that they do. T & DC submitted that the distinction drawn by the magistrate between what his Honour termed “convention estoppel” and “conduct estoppel” reveals error because “the modern doctrine of conventional estoppel involves the conduct of the parties”, citing the decision of the Court of Appeal in Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; 69 NSWLR 603 per Tobias JA at [193] to [201] (Mason P and Campbell JA agreeing).

8. [38]

   In my respectful opinion, that submission confuses doctrine and proof. Estoppel by convention is founded upon the common adoption by the parties of an assumption as the conventional basis of their relationship. As revealed by the passage from Ryledar relied upon by T & DC, the existence of such an assumption may be proved by reference to the parties’ conduct (such as a course of dealing). It does not follow that a reference to estoppel by conduct as a separate doctrine reveals misconception as to the doctrine of estoppel by convention.

9. [39]

   Contrary to the suggestion implicit in T & DC’s submission, the distinction drawn by the magistrate between conventional estoppel and estoppel by conduct has a long and respectable history. That it has caused confusion in the present case is no more than a reflection of the “historical and piecemeal fashion” in which the principles of judge-made law relating to estoppel have developed: see The Hon Sir Anthony Mason, “Contract, Good Faith and Equitable Standards in Fair Dealing” (2000) 116 Law Quarterly Review 66 at 90; quoted in Peter Young, Clyde Croft and Megan Smith, On Equity (2009, Thomson Reuters) at [12.30].

10. [40]

    It may be noted Sir Anthony, when Chief Justice, had used the expression “estoppel by conduct” as referring both to the principle of estoppel at common law and the principle of estoppel by conduct or representation in equity in Commonwealth v Verwayen (“Voyager case”) [1990] HCA 39; 170 CLR 394 at 409, [29]-[30].

11. [41]

    That is not to suggest that Verwayen is the origin of a distinction between estoppel by convention and estoppel by conduct. Young, Croft and Smith describe three broad classes of estoppel that have been identified:

12. [42]

    That classification is attributed to the work of Coke almost 400 years ago: Coke on Littleton (2nd ed, London, 1629).

13. [43]

    The same three categories are described, with the same citation, in the work of the Honourable Mr K R Handley AO, Estoppel by Conduct and Election (2006, Sweet & Maxwell). The author’s preface gives a delightful introduction to the topic which, incidentally, also hints at what Sir Anthony described as the piecemeal development of doctrine in judge-made law:

14. [44]

    Mr Handley states that the second category, estoppel by matter in writing, “covered estoppel by deed from which estoppel by convention developed”, as explained in chapters 7 and 8 of the text. There is accordingly a principled basis for distinguishing between conventional estoppel (developed from Coke’s second category) and estoppel by conduct (Coke’s third category). Understood in that historical context, the magistrate’s shorthand reference to estoppel by conduct as a category of estoppel distinct from estoppel by convention not only does not reveal error but indeed reflects what appears at some point at least to have been accepted doctrine (cf Moratic at [32] where Brereton J described conventional estoppel as being “included in the rubric of estoppel in pais”, citing Legione v Hateley (1983) 152 CLR 406 at 430).

15. [45]

    Although the language of the magistrate’s judgment is terse, on a careful reading of the judgment I think by the term “conduct estoppel” his Honour intended to refer to equitable promissory estoppel or estoppel by representation. As already noted, the differences and similarities between a claim in equitable promissory estoppel and a claim in common law conventional estoppel had been carefully exposed in the decisions of Brereton J in Waterman v Gerling Australia Insurance Company Ptd Limited [2005] NSWSC 1066; 65 NSWLR 300 and Moratic, both cited by the magistrate in his recitation of the elements required to be proved by the plaintiff (set out above).

16. [46]

    In my respectful opinion, the magistrate’s remarks set out above were intended to acknowledge (as Brereton J had, in reverse, in Moratic) that the plaintiff’s claim might alternatively have been framed by reference to the doctrine of equitable promissory estoppel. Understood in that way, the references to “conduct estoppel” and “estoppel by conduct” make sense. Having acknowledged the possibility of invoking the equitable doctrine, the magistrate went on to explain (in effect) that it would have been of no avail to T & DC to invoke it since Workforce had “made it plain” that it was using T & DC’s services “only on a temporary basis”. In other words, there was no representation by Workforce that it would adhere to the terms of its predecessor’s contract with T & DC. The intention appears to have been to indicate that a claim in equitable promissory estoppel would also have been rejected, had it been pleaded.

17. [47]

    For those reasons, I am not persuaded that his Honour was confused as to the elements of common law conventional estoppel as suggested in ground 1(b).

18. [48]

    Ground 1(a) is:

19. [49]

    T & DC submitted that those words revealed error. It was submitted that, contrary to what the magistrate said, “conventional estoppel can only be engaged where there is no strict legally enforceable contractual obligation of that nature between the parties but rather, where they have adopted by their conduct an assumed state of affairs”.

20. [50]

    In my view, the plaintiff’s submission is based on a misreading of the magistrate’s reasons. As I understand the submission, the plaintiff interprets the magistrate’s remarks to mean that, for the purpose of establishing a conventional estoppel, the alleged mutual assumption must coincide with a contractual obligation. That would have been wrong and, indeed, would have made no sense – if there is a contractual obligation to do the thing the plaintiff wants done, there is no occasion for reliance upon conventional estoppel. But I do not think it is what the magistrate meant.

21. [51]

    A more likely interpretation, in my view, is that the magistrate thought the doctrine of conventional estoppel could only be invoked as between parties to an existing contract (as opposed to parties between whom there is no contract at all) so as to stop a party from relying on the strict terms of the contract in circumstances where a mutual assumption inconsistent with those terms has been adopted. His Honour appears to have understood the judgment of Brereton J in Waterman at 322 to state a principle in those terms.

22. [52]

    I do not think Brereton J expressed such a principle in terms. The magistrate referred to page 322 of the judgment but must also have been referring to the preceding discussion, which begins at page 320, [75]. Certainly, the discussion assumes that a claim in conventional estoppel will ordinarily arise in the context of an existing legal relationship but I do not think it goes so far as to state that the absence of such a relationship is fatal.

23. [53]

    In any event, it is not necessary to determine that issue because it does not matter in the present context. As already noted, the critical finding was that Workforce did not adopt the alleged mutual assumption. That finding has not been challenged in the present appeal. It was plainly open and, in the circumstances, it was determinative. Accordingly, I would reject ground 1(a).

24. [54]

    Ground 1(c) is:

25. [55]

    As already noted, it is conceded that this ground raises a question of mixed law and fact and so requires leave. The fact in issue was whether Workforce adopted the alleged mutual assumption. In my view, having regard to the magistrate’s findings (accepting the plaintiff’s case) as to what was said in the “everything will remain the same” conversation, Workforce’s subsequent conduct in accepting services and paying invoices was equivocal. Further, as implicitly acknowledged in any ground which complains of a failure to give “sufficient weight” to a consideration, it is plain that the magistrate did take that conduct into account. It was expressly discussed at pages 6 to 7 of his Honour’s judgment. I do not think there is any force in this ground. Leave should be refused.

26. [56]

    Ground 1(d) is:

27. [57]

    This is a difficult ground. In support of it, T & DC submitted:

28. [58]

    At page 16.6 of the judgment, the magistrate said:

29. [59]

    To the extent that the reasons for decision are confusing in that respect, they reflect the complexity of the issue brought forward for determination by T & DC. As noted above, the “mutual assumption” alleged to have been adopted by Workforce went not to the terms of an existing agreement but to the question whether there was an agreement at all; the assumption alleged was that T & DC’s contract with Old Sca had been assigned to Workforce.

30. [60]

    Further, as already noted, one of the elements T & DC had to establish in order to make good that claim was that Workforce in fact adopted the mutual assumption; that is, it assumed or adopted the convention that the contract had been assigned to it. The magistrate expressly rejected that proposition. But even if it had been accepted, there was an additional complexity; the copy of the contract held by Workforce did not include page 7, which included the critical clause 4 (the automatic renewal clause).

31. [61]

    To add to the complexity, at the hearing before me, Workforce made a concession that “if the Court finds that [Workforce] is bound by some form of arrangement as between the parties then I think it follows that we’d be bound by the automatic renewal clause” (T31.36). In my respectful opinion, the correctness of that concession may be doubted. It is difficult to see how Workforce could be found to have adopted as the mutual basis of its dealings with T & DC a clause of which it had no knowledge. T & DC’s contentions in that respect appear to confuse notions of contract with those of conventional estoppel.

32. [62]

    Ultimately, however, the need to resolve this difficult question is obviated by the fact that the magistrate’s finding (that Workforce did not adopt the mutual assumption) cannot be impugned.

33. [63]

    Accordingly, I would reject ground 1(d).

34. [64]

    Ground 1(e) is:

35. [65]

    It may be observed that there is a degree of tension between this ground and ground 1(c), which complains of insufficient weight being given to the subsequent acceptance of services and payment of invoices. In my view, this ground does little more than to wrestle with aspects of the magistrate’s findings of fact which, in my respectful opinion, were well open. I am not persuaded that leave should be granted to argue ground 1(e).

Quantum

1. [66]

   The grounds of appeal sought to be relied upon by T & DC on the question of quantum (ground 5) are:

2. [67]

   Some explanation is required. In dealing with the issue of quantum, the magistrate noted that an affidavit of Ms Kym Corless established that invoices paid by Workforce up to September 2012 amounted to a total of $16,045.68. The magistrate noted, however, that the plaintiff’s claim was for future loss. On that premise, the magistrate expressly stated that he preferred the evidence of Matthew Winfield on behalf of Workforce which established that, due to a drop-off in work, particularly from one large client, “there would in any event have been less work available to the plaintiff for the period of future loss claimed”. The magistrate said:

3. [68]

   The magistrate then considered an alternative argument put on behalf of Workforce that the plaintiff’s damages should be nil, since Workforce had in fact made savings by engaging a different freight company from the one used by T & DC as intermediary. The basis on which T & DC’s remuneration was calculated in accordance with the contract was by reference to any savings achieved by T & DC. If there were no savings, the amount T & DC would have received would be nil.

4. [69]

   Having considered that issue, the magistrate concluded that the plaintiff’s loss should be assessed in the sum of $6,215.40 (the amount calculated by Mr Winfield on behalf of Workforce). There is an obvious mistake in his Honour’s articulation of that conclusion. Having correctly distinguished between the affidavit of Kym Corless (Mr Corless’s daughter) on behalf of T & DC and the affidavit of Matthew Winfield on behalf of Workforce in the first part of the discussion, when the magistrate returned to that issue at the conclusion of the discussion he wrongly referred to “Mr Kym Corless” as the author of the calculation in the sum of $6,215.40. It is plain from the logic of the reasoning that his Honour intended in those concluding paragraphs to refer to Matthew Winfield rather than to Kym Corless. The magistrate in fact confirmed exactly that when the apparent error was raised at the costs hearing.

5. [70]

   In my respectful opinion, the only error revealed in the magistrate’s decision on the question of quantum is the incorrect reference to “Mr Kym Corless” where it is clear the magistrate intended to refer to Mr Matthew Winfield. The finding and the reasons for it are tolerably clear. Leave to rely upon ground 5 should be refused.

Appeal in relation to the costs decision

1. [71]

   The magistrate dealt with costs in a separate judgment. The judgment was given ex tempore following argument and is incorporated within the transcript of the hearing rather than being separately transcribed. As noted at the hearing before me, there was a degree of informality in the process and the delineation between argument and the judgment is not exact.

2. [72]

   Having lost the proceedings, T & DC accepted that it was liable to pay costs. However, it submitted that the proceedings were governed by Practice Note Civ 1 in the Local Court pursuant to which, it was submitted, costs were capped at 25% of the amount claimed (around $4000).

3. [73]

   Workforce had made three offers of compromise by way of Calderbank letter offering to settle the claim for $500, then $1000 and finally $2000. On the strength of T & DC’s failure to accept any of those offers, it sought its whole costs on an indemnity basis. T & DC argued that the practice note should prevail and, separately, that it was not unreasonable to refuse the offers, which (it was submitted) effectively amounted to invitations to capitulate.

4. [74]

   The magistrate acceded to Workforce’s application, ordering the payment of Workforce’s costs from the date of the first letter (but carving out an order previously made, by which T & DC had been ordered to pay some costs to be assessed on the ordinary basis).

5. [75]

   The amount of costs claimed by Workforce pursuant to the magistrate’s order is almost $60,000 (affidavit of Mark Whowell sworn 6 August 2014, relied upon on the question of leave). The unfortunate disproportion between that amount and the amount claimed is a strong consideration in favour of granting leave to appeal against the decision. On balance, however, I have determined that leave should be refused.

6. [76]

   T & DC seeks to rely on three grounds of appeal in relation to the costs decision, as follows.

The trouble with the law

1. [77]

   Ground 6 suggests that the magistrate refused to apply the practice note because he considered it to be invalid. His Honour did express the view (perhaps incautiously) that the practice note is invalid but I do not think, on a fair reading of the reasons as a whole, it is fair to say that is the reason he refused to apply it. On the contrary, his Honour gave an explanation of his views as to costs which, although informally expressed, was compelling. The relevant passage is lengthy – perhaps it is adequately distilled in his Honour’s view (with which it is difficult to disagree) that “the trouble with the law is there is too much of it” but it is preferable to set out the relevant reasoning more fully.

2. [78]

   The plaintiff had noted the deeming effect of cl 36.2 of the practice note and the requirement of cl 36.3 to make any application for a variation of the orders taken to have been made under that rule by notice of motion with a supporting affidavit. Those clauses provide:

3. [79]

   The magistrate acknowledged that no motion had been filed. I accept that there was a measure of unfairness in allowing Workforce to make the claim in those circumstances, especially since the requirement to file a motion had previously been emphasised in the presence of Workforce’s legal representatives when Old Sca made a similar application at an earlier point in the proceedings.

4. [80]

   In any event, the magistrate acknowledged the potential unfairness of allowing an application to be made where no motion had been filed and continued:

5. [81]

   After an irrelevant excursion into a personal experience, the magistrate continued:

6. [82]

   In my view, it may be seen that the view his Honour expressed (that the practice note is “outside power”) was not central to, or even an aspect of, his reasons.

Power to depart from the practice note

1. [83]

   Ground 7 asserts a misconstruction of the practice note, effectively contending that the Local court is bound to apply its terms strictly and that failure to do so amounts to error. A similar argument was considered and rejected by Adamson J in Ada Evans Chambers Pty Ltd v Santisi [2014] NSWSC 538 at [19] to [22]. Importantly, her Honour held that the practice note does not have higher status than the Civil Procedure Act 2005 (NSW) or the Uniform Civil Procedure Rules 2005 (NSW). The fact that the issue sought to be raised has already been determined by this Court is a powerful consideration for refusing leave.

2. [84]

   Ground 8 asserts error in the evaluative judgment whether it was unreasonable of T & DC to reject the Calderbank offers. As observed by the magistrate in his reasons set out above, that is a judgment best made by the Court that heard the matter.

3. [85]

   For those reasons, I would refuse leave to appeal against the decision as to costs. I have reached that conclusion with some equivocation in light of the obvious disproportion between the costs claimed and the interest at stake. In an ideal world, the practice note would protect litigants against such outcomes. But the position of the defendant must be considered too. If there were no power to award costs as the magistrate did, the sensible commercial decision in the face of a weak but complex claim would be to capitulate to default judgment in the amount claimed rather than to defend the case. That would serve justice no better than disproportionate costs. No system is perfect; the magistrate took a robust approach but one which, in my view, was open to his Honour.

4. [86]

   For those reasons, the appeal is dismissed with costs.