State of NSW v Delly (No2)

THE COURT : The Court delivered its substantive judgment in this matter on 6 November 2007: State of New South Wales v Delly [2007] NSWCA 303. By majority it made the following orders: (a) Appeal allowed in part. (b) Set aside the award of damages in favour of the respondent made by her Honour Judge Balla on 5 December 2005 and in lieu thereof enter a verdict for the respondent in the sum of $35,000 to date from 5 December 2005. (c) The appellant to pay the respondent’s costs of the appeal and of the summons for leave to appeal. (d) Grant leave to the parties to make such written submissions as they may be advised with respect to the following: (i) the addition of pre-judgment interest to the damages of $35,000, and/or (ii) the effect of any relevant Calderbank offer on the costs of the trial or of the appeal.

In response to the leave granted in (d) above, the parties have filed written submissions on both of the issues in respect of which leave was granted. It is noted that both parties accept that the appropriate date of the primary judge’s judgment was 21 November 2005 and not 5 December 2005 as set out in para (b) of this Court’s orders. It is appropriate to amend that order accordingly.

As to the question of pre-judgment interest, the parties are agreed that interest at the rate of 4% per annum is payable on the full amount of the compensatory damages in the sum of $25,000 awarded by the primary judge and confirmed by this Court but that no pre-judgment interest is payable on the reduced award by this Court of exemplary damages. The amount of interest is agreed in the sum of $7,420.

Prior to the trial before her Honour, two offers of compromise were made. The first was that served by the respondent on 22 September 2004 in which the respondent offered to accept the sum of $40,000 together with $8,000 in costs in full satisfaction of his claims. As her Honour’s award of general and aggravated damages exceeded that amount, on 5 December 2005 she ordered that the appellant pay the respondent’s costs as agreed or assessed on a party/party basis up to and including 22 September 2004 and then costs as agreed or assessed on an indemnity basis from 23 September 2004 until 21 November 2005. Given that the total amount of damages awarded by this Court to the respondent has been reduced to $35,000, it follows notwithstanding the bare assertions by the respondent to the contrary, that the terms of her Honour’s costs order is no longer appropriate.

However, again prior to trial, the respondent served a further offer of compromise on 17 January 2005 in which she offered to accept the sum of $30,000 together with $12,000 costs in full satisfaction of her claims. The amount of that offer (excluding costs) is less than the sum of $35,000 which the respondent has now been awarded. Accordingly, it is appropriate to vary the order for costs made by the primary judge by providing that the cut-off date, as it were, between party/party costs on the one hand and indemnity costs on the other, is to be 17 January 2005.

So far as the costs of the appeal are concerned, on 14 March 2006 the respondent served a further offer of compromise upon the appellant in which she offered to accept the sum of $32,000 together with costs in answer to the causes of action on which she claimed. As the award of damages exceeds $32,000, it is not contested by the appellant that the respondent is entitled to indemnity costs as and from 15 March 2006.

Accordingly, the Court makes the following orders: (a) Vary Order (b) made by this Court on 6 November 2007 by substituting for the date “5 December 2005” wherever appearing the date “21 November 2005” and by deleting the reference therein to the sum of $35,000 and substituting therefor the sum of $42,420. (b) Set aside the order for costs made by her Honour Judge Balla on 5 December 2005. (c) The appellant to pay the respondent’s costs of the trial before her Honour Judge Balla on an ordinary or party and party basis up to and including 17 January 2005 and on an indemnity basis as and from 18 January 2005 until 21 November 2005. (d) Vary Order (c) made by this Court on 6 November 2007 by adding thereto the following: “on an ordinary basis up to and including 14 March 2006 and on an indemnity basis as and from 15 March 2006.”