John Stanley Beagle(Appellant) v Australian Capital Territory and Southern New South Wales Rugby Union Ltd

• Jurisdiction: Australian Capital Territory
• Court: Court of Appeal of ACT
• Judge: Murrell CJ,Burns,Collier JJ
• Judgment Date: 13 September 2017
• Docket Number: File Number: ACTCA 53 of 2016
• Date: 13 September 2017

John Stanley Beagle

(Appellant)

and

Australian Capital Territory and Southern New South Wales Rugby Union Limited

(Respondent)

[2017] ACTCA 40

Before:

Murrell CJ, Burns and Collier JJ

File Number: ACTCA 53 of 2016

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY COURT OF APPEAL

COSTS — costs on appeal — appeal dismissed — Calderbank offers pre-trial — Calderbank offers rejected by plaintiff — solicitor/client costs ordered at first instance from date offer was rejected — Calderbank offers not renewed on appeal — whether solicitor/client order appropriate on appeal — whether pre-trial Calderbank offer continues to have cost consequences on appeal — no application to strike out grounds of appeal — no objection to competency — award of costs at discretion of Court — costs ordered on party/party basis

Cases Cited:

AIG Australia Ltd v Jaques (No 2) [2015] VSCA 3

Beagle v Australian Capital Territory and Southern New South Wales Rugby Union Limited [2017] ACTCA 29

Calderbank v Calderbank [1976] Fam 93

Cooper v Singh [2017] ACTCA 21

CSR Limited v Thompson [2004] NSWCA 11

Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192

Diamond v Simpson (No 2) [2003] NSWCA 78

Ettingshausen v Australian Consolidated Press (1995) 38 NSWLR 404

Fotheringham v Fotheringham (No 2) [1999] NSWCA 21 ; 46 NSWLR 194

Fox v Percy [2003] HCA 22 ; 214 CLR 118

GJ v AS (No 4) [2017] ACTCA 7

Grierson v The King (1938) 60 CLR 431

Lower Murray Urban and Rural Water Corporation v Di Masi (No 2) [2014] VSCA 133

McDonald v Dods [2017] VSCA 197

Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344

Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15

Oshlack v Richmond River Council [1998] HCA 11 ; 193 CLR 72

South Sydney Council v Morris (No 3) [2001] NSWCA 200

Stuart Pty Limited v Condor Commercial Insulation Pty Limited (No 2) [2006] NSWCA 379

Legislation Cited:

Supreme Court Act 1933 (ACT) pt 2A

Court Procedures Rules 2006 (ACT) pts 2.17, 5.4, rr 1721, 5001(2), 5001(3)

Supreme Court Rules 1970 (NSW) pt 52A, r 22(4)

Representation:

Counsel

Dr D Hassall (Appellant)

Mr I Meagher (Respondent)

Decision:

• 1. The appellant pay the costs of the respondent of and incidental to the appeal on a party/party basis, such costs to be taxed if not otherwise agreed.

• 2. The amount of $10,000 held in the trust account of Nelson & Co pursuant to the order of Refshauge J in 2 November 2016 be released to the respondent, or its solicitors, within seven days of the costs of the respondent being taxed or otherwise agreed by the appellant.

THE COURT:

1 On 21 July 2017, this Court delivered judgment ( Beagle v Australian Capital Territory and Southern New South Wales Rugby Union Limited [2017] ACTCA 29) dismissing an appeal from a decision of a Judge of the Supreme Court. The appellant relied on 36 grounds of appeal, each of which the Court found was unsubstantiated. The Court sought further written submissions in respect of costs.

2 At first instance, the primary Judge ordered Mr Beagle to pay the respondent's costs on a party/party basis until 3 February 2016 and thereafter on a solicitor/client basis. This order was made in light of a Calderbank offer made by the respondent to Mr Beagle dated 18 December 2015, which was ultimately rejected by Mr Beagle on 3 February 2016.

3 We also note that, pursuant to orders of Refshauge J on 2 November 2016, Mr Beagle paid the sum of $10,000 as security for costs in this appeal into the trust account of his solicitors, Nelson & Co.

4 In relation to the appeal, Mr Beagle submitted that the usual order as to costs was appropriate, namely that costs follow the event. To that extent Mr Beagle conceded that he should pay the respondent's costs of the appeal on a party/party basis, to be taxed if not agreed.

5 In the alternative, Mr Beagle submitted that the Court could exercise its discretion and make no order as to costs, or order he pay only a proportion of the respondent's costs, because the appeal had clarified the law in the Australian Capital Territory ( ACT) with respect to the application of the principles of unjust enrichment and quantum meruit claims.

6 The respondent sought orders that Mr Beagle pay its costs of the appeal on a solicitor/client basis, and that the $10,000 held on trust pursuant to the order of Refshauge J be released to the respondent or its solicitors within seven days.

7 In summary, the respondent submitted that it was entitled to these orders because:

• • The first instance costs order was made on the basis of the Calderbank offer of 18 December 2015;

• • The Calderbank offer of 18 December 2015 was extended, and then later improved by an offer made by the respondent on 16 August 2016. On that date, the respondent offered Mr Beagle the amount of $30,000 plus $15,000 for costs (or as otherwise agreed or assessed). The subsequent offer was also rejected by Mr Beagle;

• • Noting that the 18 December 2015 offer was made, extended and later improved, the respondent provided three opportunities for Mr Beagle to discontinue his claim. All three offers were rejected. The respondent submitted that this was unreasonable conduct on the part of Mr Beagle;

• • At all times material to the consideration of the respondent's offers, Mr Beagle was on detailed notice of the defence the respondent would run;

• • Given the success enjoyed by the respondent at first instance, which was upheld on appeal, it would not be reasonable to expect the respondent to have restated any of their earlier Calderbank offers after Mr Beagle had commenced his appeal;

• • The large number of appeal grounds unreasonably put the respondent to higher expense in preparation for the appeal; and

• • The fact that security for costs was ordered against Mr Beagle, an individual, was indicative of the poor prospects of success of his appeal.

Consideration

8 It has been noted by previous Courts of Appeal that:

• • Part 2.17 of the Court Procedures Rules 2006 (ACT) applies to costs in proceedings in the Supreme Court of the ACT, and includes r 1721 which states that costs are at the discretion of the Court, and

• • Rule 1721 applies, with necessary changes, to appellate proceedings which are civil proceedings (r 5001( 2) and (3)).

9 The facts of this case invoke two legal principles to which Courts commonly have regard in the exercise of their discretion. First, in the absence of special features warranting a different order, costs ordinarily follow the event: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67]; GJ v AS (No 4) [2017] ACTCA 7 at [25]–[27]. Second, it is settled principle — derived from the case of Calderbank v Calderbank [1976] Fam 93 — that where a valid offer of settlement is made but rejected, and the offeree obtains an order or judgment on the claim that is less favourable than that offered, the offeror will be entitled (unless the Court orders otherwise) to its costs assessed on an indemnity basis from the date of offer (see, for example, Cooper v Singh [2017] ACTCA 21 at [19]).

10 It is not in dispute that Mr Beagle was unsuccessful in his appeal. In dismissing the appeal, we can identify no reason to disturb his Honour's orders as to costs at first instance, including the award of solicitor/client costs against Mr Beagle from 3 February 2016.

11 We consider that, in the appeal, costs should follow the event. We do not consider that this appeal has clarified the law in the ACT in respect of principles of unjust enrichment and restitution such as to warrant an order that the parties bear their own costs. Applicable principles in these proceedings were apparent from the High Court decisions we identified in our judgment. The application of those principles to the facts of the case inevitably resulted in Mr Beagle's appeal being dismissed. The length of the judgment was primarily attributable to the unfortunate necessity of the Court examining extensive and repetitive appeal grounds, wherein Mr Beagle not only ‘nitpicked’ the primary Judge's decision but in a number of grounds sought to minutely cavil with factual and credit findings. As we indicated in our judgment, those grounds of appeal were not substantiated.

12 The key question for this Court's consideration is the basis on which costs in the appeal should be awarded against Mr Beagle.

13 Examining the position in respect of costs orders in appeals, where a Calderbank offer has been made pre-trial, there is an apparent divergence of authority in relation to the extent to which such an offer is relevant to the exercise of an appellate court's discretionary powers to order costs.

14 One school of thought is that, in considering an appropriate order for costs, a pre-trial offer of compromise continues to have cost consequences in the event of an...