AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE [NO. 2] [2007] NSWCA 34 (28 February 2007)

Last Updated: 1 March 2007

NEW SOUTH WALES COURT OF APPEAL

CITATION: AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE [NO. 2] [2007] NSWCA 34


FILE NUMBER(S):
40225/06
40249/06
40765/05

HEARING DATE(S): 23 October 2006

JUDGMENT DATE: 28 February 2007

PARTIES:
AVS Australian Venue Security Services Pty Ltd - Appellant
Ricky John Criminale - Respondent

JUDGMENT OF: Giles JA Tobias JA Basten JA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 5166/02

LOWER COURT JUDICIAL OFFICER: Karpin DCJ

LOWER COURT DATE OF DECISION: 26 August 2005; 14 December 2005; 23 December 2005; 4 April 2006


COUNSEL:
K. Andrews/D. Aquilina - Respondent

SOLICITORS:
C P C Lawyers, Merrylands - Appellant
C M C Lawyers, Sydney - Respondent

CATCHWORDS:
COSTS – offers of compromise – offer lapsed with termination of earlier proceedings – due to continuity of subject matter, offer still a relevant consideration for exercise of discretion in awarding costs in subsequent proceedings – reasonableness of failure to accept offer

LEGISLATION CITED:


CASES CITED:
AVS Australian Venue Security Services Pty Ltd v Criminale [2006] NSWCA 368
Maricic v Dalma Formwork (Australia) Pty Ltd & Anor (No. 2) [2006] NSWCA 237
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Suresh v Jacon Industries Pty Ltd (No. 2) [2005] NSWCA 270

DECISION:
Vary order (3) made on 15 December 2006 to add the words “on an indemnity basis”. Order (3) now reads
(3) Order AVS Australian Venue Security Services Pty Ltd to pay the costs of Ricky John Criminale of and incidental to the proceedings 40765 of 2005, 40225 of 2006 and 40249 of 2006 in this Court on an indemnity basis.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40765/05

CA 40225/06

CA 40249/06

DC 5166/02

GILES JA

TOBIAS JA

BASTEN JA

28 February 2007

AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE [NO. 2]

Judgment

1 THE COURT: The Court handed down judgment in these matters on 15 December 2006. Relevantly for present purposes, the appeals were dismissed and the Appellant was ordered to pay the Respondent’s costs. On delivery of judgment the legal representative of the Respondent sought an opportunity to make submissions in relation to the costs order and, in the absence of agreement, the parties were directed to file submissions within 48 hours.

2 Relying on an offer of compromise, the Respondent seeks variation of the costs order so that it would now provide:

“(3) Order AVS Australian Venue Security Services Pty Limited to pay the costs of Ricky Criminale of and incidental to the proceedings 40765 of 2005, 40225 of 2006 and 40249 of 2006 in this Court on a party/party basis up to and including 30 June 2003 and thereafter on an indemnity basis.”

3 The order sought appears anomalous, in that it seeks costs from 30 June 2003 in relation to proceedings in this Court commenced in 2005 and 2006. The explanation is that the proceedings commenced in the District Court in 2002 resulted in a default judgment which the Appellant sought to set aside by an appeal to this Court which it later abandoned, in favour of taking further steps in the District Court. The offer of compromise relied upon was made whilst the appeal to this Court, filed on 11 December 2002, was still on foot: see primary judgment, [2006] NSWCA 368 at [11].

4 In his written submissions, counsel for the Respondent described those proceedings as having become “subsumed” within the proceedings the subject of the judgment delivered on 15 December 2006.

5 The earlier appeal (which was abandoned by the Appellant) and the present proceedings, were all concerned with a default judgment (and consequential orders) given in favour of the plaintiff (the Respondent in this Court) on 19 November 2002. The judgment awarded the plaintiff an amount of $145,004.21, plus costs. The offer of compromise, filed and served on 30 June 2003, offered to settle for an amount of $112,815.02 plus costs. It involved a compromise by way of a 22% reduction on the judgment debt.

6 The Appellant abandoned the proceedings in this Court, in favour of pursuing steps in the District Court to have the default judgment set aside. Its failure in that respect was the primary subject matter of the present appeal.

7 Despite the continuity of the subject matter, the consequences under the Supreme Court Rules of the service of an offer of compromise lapsed with the termination of the proceedings in which the offer was made. On the other hand, because there is continuity of the subject matter, the offer remains a relevant consideration for the purpose of the exercise of the Court’s discretion in relation to the award of costs in the subsequent proceedings in this Court, as are offers made in the trial court, not repeated on appeal: see, eg, Suresh v Jacon Industries Pty Ltd (No. 2) [2005] NSWCA 270 at [15] and Maricic v Dalma Formwork (Australia) Pty Ltd & Anor (No. 2) [2006] NSWCA 237 at [13]. The principles to be applied are, by analogy, those which would operate in considering a failure to accept an offer contained in a Calderbank letter: see SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [30] (Priestley JA), [45] (Giles JA) and [84] (Rolfe AJA). That requires a consideration of whether, in all the circumstances, it was reasonable for the Appellant to disregard the offer of compromise, without being at risk as to the Respondent’s costs, in the event that the appeal failed.

8 On one view, it could be said that the Appellant’s failure to accept the offer made in the earlier proceedings in this Court was reasonable, because it sought, no doubt appropriately, to pursue its interests first in the District Court by seeking to re-open the default judgment. If the offer to settle the earlier proceedings in this Court had been based on a procedural technicality, it could then be argued that the offer should not be seen as having consequences for the subsequent proceedings in this Court.

9 There are two difficulties in accepting this approach. The first is that the abandonment of the earlier appeal did not involve an abandonment of the substantive argument. Further, the Appellant not only sought to re-open the default judgment in the District Court, but repeated its attempt to invoke the jurisdiction of this Court to achieve that end. Secondly, the Appellant has not sought to explain its refusal of the June 2003 offer, or indeed made any response to the present application.

10 In these circumstances, the Respondent should have an order similar to that which it seeks, but relating only to the proceedings resolved on 15 December 2006.

11 Order (3) made on 15 December 2006 will be varied to add the words “on an indemnity basis”, so that it now reads:

(3) Order AVS Australian Venue Security Services Pty Ltd to pay the costs of Ricky John Criminale of and incidental to the proceedings 40765 of 2005, 40225 of 2006 and 40249 of 2006 in this Court on an indemnity basis.

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LAST UPDATED: 28 February 2007