Aslan v Stepanoski (No 2)

1. [1]

   MACFARLAN JA: On 25 February 2022 the Court delivered a judgment on this appeal ([2022] NSWCA 24). It allowed the appeal and set aside the substantial judgment entered against the appellant at first instance and awarded the appellant judgment against the respondents for an undisputed amount of $50,000. The Court ordered the respondents to pay the appellant’s costs of the proceedings at first instance and on appeal.

2. [2]

   By notice of motion filed and presumably served within 14 days of delivery of that judgment the respondents, notwithstanding their lack of success on the appeal, seek two special costs orders in their favour, neither of which were sought before judgment was delivered.

The first special costs order sought

1. [3]

   First, the respondents seek an order that the appellant pay their costs of 10 hearing days at first instance which culminated in a preliminary judgment of the primary judge of 30 July 2018 ([2018] NSWSC 1160). By that judgment his Honour determined, in a ruling favourable to the respondents, by what contract the parties’ relations were governed. Although this judgment was challenged in the appellant’s first notice of appeal (filed on 13 November 2020, at a time when he was unrepresented), the challenge was withdrawn when he filed an amended notice of appeal on 27 September 2021.

2. [4]

   On the appeal the respondents gave no indication that they sought, or would seek, an order that, in the event that they were unsuccessful on the appeal, the appellant nevertheless pay their costs of the issue determined by his Honour’s judgment of 30 July 2018 upon which they succeeded at first instance. Indeed, in light of an exchange at the appeal hearing between myself and counsel for the respondents, a clear implication arose that they did not and would not do so. The appellant’s submissions refer to the exchange as follows:

3. [5]

   The respondents nevertheless submit that they are entitled to seek the special costs order now because the Court has the power to make it under rr 36.16(1) and 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (the “UCPR”), the respondents having filed their motion within 14 days of the judgment being entered. This submission does not however address the authorities indicating that, in light of the public interest in the finality of litigation, the Court should exercise great caution in making an order in exercise of such a power. As was said by the High Court in Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672; [1982] HCA 41 at 684, “[g]enerally speaking [the power to reopen to enable a rehearing] will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard”. Another circumstance which might warrant use of the power occurs “when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law” (Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 at 302).

4. [6]

   The respondents have not identified any acceptable reason why an application for the special costs order was not made, or at least foreshadowed, at the hearing of the appeal. Ordinarily, questions of costs should be raised and addressed at the appeal hearing rather than parties making separate and subsequent applications (see Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47 at [5]–[7]). As this Court said in Fuller v Albert (No 2) [2021] NSWCA 183 at [31]:

5. [7]

   In some cases, there may be good reasons for deferring costs applications until after the principal judgment has been delivered. One example is a complex appeal in which there are numerous possible outcomes. The present is not such a case as the primary judge’s decision on the identification of contract point was not challenged on appeal and any need for a special costs order would necessarily arise for consideration if the respondents lost the appeal. If such an order was to be sought, it should have been referred to in answer to my questions excerpted at [4] above, or elsewhere in the argument. Indeed, strictly speaking, the respondents ought to have filed a notice of contention seeking to uphold that part of the primary judge’s costs orders that related to the identification of contract issue, as supported on the basis that is now advanced, namely that that issue was a clearly severable one warranting a separate costs order.

6. [8]

   Another circumstance that may justify a party making a post-judgment application for a special costs order is where there have been offers of compromise or Calderbank offers which are made without prejudice and are usually inappropriate to be disclosed to the Court before it makes its decision.

7. [9]

   These discretionary considerations weigh strongly against the respondents’ application. Also favouring rejection of this application is that it is by no means clear that, even if sought at the appropriate time, the special costs order would have been made. It is of significance in that respect that the respondents are unsuccessful plaintiffs rather than successful defendants. As Burchett J said in Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 at 169 a defendant is “entitled to raise his earthworks at every reasonable point along the path of assault” (cited with approval in Hendriks v McGeoch [2008] NSWCA 53 at [104] (Basten JA); see also Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19]–[20] and [38]–[39] and Real Estate Property Management Pty Ltd v WaterCorp Investments Pty Ltd [2018] NSWCA 194 at [6]). To similar effect, Hodgson JA (with Allsop P and my agreement) said in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 at [10]:

8. [10]

   For these reasons, I would reject the respondents’ first application.

The second special costs order sought

1. [11]

   The second special costs order sought by the respondents is one that their costs thrown away by reason of the appellant filing the amended notice of appeal be paid by the appellant.

2. [12]

   As noted above, the original notice of appeal was filed on 13 November 2020. The amended notice of appeal was filed on 27 September 2021 apparently without the required leave (compare UCPR rr 19.1 and 51.23) and the substantive appeal hearing took place on 13 December 2021.

3. [13]

   Neither prior to nor at the appeal hearing did the respondents seek, or foreshadow that they would seek, an order that the appellant pay their costs thrown away by reason of the amendment. The principle of finality to which reference is made in [5] above strongly favours refusal of the present belated application, particularly when the respondents have not identified any acceptable reason why the application was not made prior to the conclusion of the appeal. I would accordingly reject it.

Conclusion

1. [14]

   For the reasons given above, the respondents’ notice of motion should be dismissed with costs. I would not uphold the appellant’s application that this costs order should provide for the respondents to pay his costs on an indemnity basis. I do not consider that the respondents’ motion was so lacking in merit that such an order is justified or that there are any other circumstances warranting that form of order (see generally Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12 at [4]).

2. [15]

   GLEESON JA: I agree with Macfarlan JA.

3. [16]

   PAYNE JA: I agree with Macfarlan JA.