Toyota Finance Australia Limited v Gardiner (No 2)

1. [1]

   THE COURT: On 12 July 2016, this Court dismissed the appeal in this matter with costs. Upon publication of the reasons of the Court, the respondent applied within the time permitted to it for the order for costs to be varied, by reason of an offer of compromise made by him to the appellant on 11 December 2015.

2. [2]

   The Court ordered that both parties file short written submissions and any supporting affidavit evidence about the issue of costs.

The offer of compromise

1. [3]

   On 9 December 2015 the appellant filed the Notice of Appeal in the present matter.

2. [4]

   On 11 December 2015, the respondent made an offer of compromise pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 20.26(2) and (3)(a). The respondent offered to compromise the entirety of the proceedings on the basis that orders be made that:

   1. (1)

      The Notice of Appeal filed on 9 December 2015 be dismissed; and

   2. (2)

      There be no order as to costs.

3. [5]

   The offer of compromise made by the respondent was open for acceptance for a period of 29 days, and complied with the UCPR. The offer of compromise was rejected by the appellant on 14 December 2015.

Submissions by the parties

1. [6]

   The respondent filed submissions on 14 July 2016 and relied upon an affidavit of Richard Arthur Murphy sworn on 19 May 2016.

2. [7]

   The respondent submitted that he was entitled to indemnity costs from 15 December 2015, as a valid offer of compromise had been rejected on 14 December 2015.

3. [8]

   The respondent also submitted that the offer represented a genuine compromise, as:

4. [9]

   No evidence was filed by the respondent which identified any amount of solicitor’s costs or counsel’s fees which would have been forgone by the respondent had the offer of compromise been accepted.

5. [10]

   Submissions were filed by the appellant on 26 July 2016. The appellant submitted that, at the time the offer was made, the Notice of Appeal had been filed and served only two days earlier and that it would not be appropriate in those circumstances that the non-acceptance of that offer would lead to the consequence that the appellant pay costs on an indemnity basis from that date.

6. [11]

   The appellant submitted that acceptance of the offer required “almost complete capitulation” by it. It was submitted that whatever the amount of the respondent’s costs, “the costs could not have been substantial at that stage, namely two days after the Notice of Appeal had been filed and served”.

7. [12]

   The appellant submitted that it should be paid its costs of the present application to vary the costs order made by the Court

Consideration

1. [13]

   Rule 42.15A of the UCPR applies when a defendant has made an offer which is not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of that offer. In those circumstances, the defendant is entitled to a special costs order from the time the offer was made, unless the Court orders otherwise. This rule is applicable to appeals: UCPR rr 51.47 and 51.48.

2. [14]

   The making of a valid offer of compromise does not, however, guarantee a special costs order. This is a matter for the Court’s discretion.

3. [15]

   It is clear that “where no significant compromise at all is made by a party to an appeal, the default position provided for in the rules will not be applied”: Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2016] NSWCA 3 at [5]; Taheri v Vitek (No 2) [2014] NSWCA 344 at [9] ‑ [11].

4. [16]

   In the present case, the offer of compromise was made by the respondent almost immediately after the Notice of Appeal had been filed. No evidence was filed by the respondent which identified any amount of solicitor’s costs or counsel’s fees which would have been forgone by the respondent had the offer of compromise been accepted.

5. [17]

   Acceptance of the offer required “almost complete capitulation” by the appellant and, in our view, it would not be appropriate in those circumstances for the appellant’s non-acceptance of this offer to result in a special costs order.

6. [18]

   The respondent has not demonstrated that its offer of 11 December 2015 represented a genuine compromise. It follows that the order of the Court as to costs made on 12 July 2016 should not be varied.

7. [19]

   We do not think it appropriate to make a separate award of costs in relation to this application, given that the matter was dealt with efficiently and on the papers.

Order

1. [20]

   Application to vary costs order of 12 July 2016 refused.