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[2019] NSWSC 1438

Kerr v Australian Executor Trustees (SA) Ltd; Australian Executor Trustees (SA) Ltd v Fuller and others trading as Sparke Helmore Lawyers (No 2)

Judgment for the plaintiff to be entered but stayed for 14 days. First defendant to pay the plaintiff’s costs on an ordinary basis up until 19 December 2018 and on an indemnity basis thereafter. First defendant to pay the second to sixty-first defendants’ costs.

Catchwords

COSTS – party/party – exceptions to general rule that costs follow the event – Calderbank offer COSTS – party/party – orders when proceedings involve multiple parties – Sanderson order – whether reasonable in the circumstances for the plaintiff to have brought proceedings against the second to sixty-first defendants – where first defendant had pleaded a proportionate liability defence and joined the second to sixty-first defendants by its cross-claim

Cases cited

  • Kerr v Australian Executor Trustees (SA) Ltd; Australian Executor Trustees (SA) Ltd v Fuller and others trading as Sparke Helmore Lawyers[2019] NSWSC 1279
  • Sanderson v Blyth Theatre Co [1903] 2 KB 533
  • Zhang v ROC Services (NSW) Pty Ltd; National Transport Insurance by its manager NTI Ltd v Zhang (2016) 93 NSWLR 561;[2016] NSWCA 370

Legislation cited

  • Civil Procedure Act 2005 (NSW)

Judgment

  1. [1]

    I gave judgment in this matter on 26 September 2019: Kerr v Australian Executor Trustees (SA) Ltd; Australian Executor Trustees (SA) Ltd v Fuller and others trading as Sparke Helmore Lawyers [2019] NSWSC 1279. I shall use the same abbreviations here.

  2. [2]

    It is common ground that I should now enter judgment and make orders as follows:

    1. (1)

      Judgment be entered for Mr Kerr against AET in the sum of $76,619,978.42 inclusive of interest under s 100 of the Civil Procedure Act 2005 (NSW).

    2. (2)

      Mr Kerr’s claim against Sparke Helmore be dismissed.

    3. (3)

      AET’s cross-claim against Sparke Helmore be dismissed.

  3. [3]

    It also is common ground that AET should pay Mr Kerr’s costs. Mr Kerr seeks an order for indemnity costs from 20 December 2018 on the basis of a Calderbank offer made on 20 November 2018 that the proceedings be dismissed on the basis of a payment by AET to Mr Kerr of $65 million inclusive of costs.

  4. [4]

    AET neither consents to nor opposes the making of such an order.

  5. [5]

    I am satisfied that the order sought by Mr Kerr should be made.

  6. [6]

    The offer was a genuine compromise and was for an amount considerably less than the judgment I am about to enter. At the time the offer was made Mr Kerr’s case was made clear by his detailed pleadings. Evidence was complete and a mediation had taken place before Mr Jacobson QC at which, I assume, the issues ultimately ventilated before me were canvassed in detail.

  7. [7]

    Mr Kerr joined Sparke Helmore as a defendant. As Mr Kerr achieved success against AET, it was not necessary for Mr Kerr to prosecute his claim against Sparke Helmore.

  8. [8]

    In those circumstances, Mr Kerr seeks a Sanderson order (see Sanderson v Blyth Theatre Co [1903] 2 KB 533) that AET pay Sparke Helmore’s costs of Mr Kerr’s claim against Sparke Helmore.

  9. [9]

    AET neither consents to nor opposes the making of that order. Sparke Helmore adopts the same position.

  10. [10]

    I am satisfied that it is appropriate that a Sanderson order be made as it was, in my opinion, reasonable for Mr Kerr to join Sparke Helmore as second to sixty-first defendants and it would be fair, in all the circumstances, to impose on AET a liability to now meet those costs: Zhang v ROC Services (NSW) Pty Ltd; National Transport Insurance by its manager NTI Ltd v Zhang (2016) 93 NSWLR 561; [2016] NSWCA 370 at [299] (Leeming JA, with whom Macfarlan JA and Sackville AJA agreed).

  11. [11]

    As was submitted on behalf of Mr Kerr:

  12. [12]

    AET seeks a stay of the judgment I am about to enter for 28 days so that it may consider whether to appeal from my judgment.

  13. [13]

    On behalf of AET it was submitted:

  14. [14]

    On the hand, it was submitted on behalf of Mr Kerr:

  15. [15]

    As I noted at [32] of the judgment of 26 September 2019:

  16. [16]

    In those circumstances, any appeal made by AET is likely to be directed to the question of whether, contrary to my findings, it was entitled to succeed on its cross-claim against Sparke Helmore.

  17. [17]

    If that turns out to be the case, it is hard to see why AET should not, pending the hearing of the appeal, at least pay the judgment sum into Court.

  18. [18]

    Nonetheless, in order to give AET a further short time to consider its position, it being almost a month since I published my reasons, I will stay the judgment I am about to enter for 14 days.

  19. [19]

    Finally, the parties agree that if any one of them wishes to make an application for a gross sum costs order under s 98(4)(c) of the Civil Procedure Act, it should do so within 28 days.

  20. [20]

    In those circumstances I enter judgment and make orders as follows:

    1. (1)

      Judgment for the plaintiff against the first defendant in the sum of $76,619,978.42 inclusive of interest under s 100 of the Civil Procedure Act.

    2. (2)

      The plaintiff’s claim against the second to sixty-first defendants is dismissed.

    3. (3)

      The cross-claim is dismissed.

    4. (4)

      The first defendant pay the plaintiff’s costs of the proceedings on a party/party basis up until 19 December 2018 and thereafter on an indemnity basis.

    5. (5)

      The first defendant pay the second to sixty-first defendants’ costs of the plaintiff’s claim against the second to sixty-first defendants.

    6. (6)

      The cross-claimant pay the cross-defendants’ costs of the cross-claim.

    7. (7)

      Any party wishing to make an application pursuant to s 98(4)(c) of the Civil Procedure Act do so by filing a notice of motion, any evidence in support and brief outline submissions, within 28 days of the making of this order.

    8. (8)

      The judgment in order 1 be stayed for 14 days.

    9. (9)

      The parties have liberty to apply concerning the form of these orders, such liberty to be exercised by 5.00 pm on 24 October 2019.

    10. (10)

      Direct that the exhibit and subpoenaed material be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.