On 20 November 2019, the court handed down its reasons for decision in relation to the plaintiff's claim, by her tutor mother, for damages for injuries suffered in a motor vehicle accident on 1 April 2016: AB v Keanes [2019] NSWDC 693 ("the Judgment"). The plaintiff is a minor. Liability was not disputed.
On 20 November 2019, the court made the following orders:
1. Judgment for the plaintiff in the sum of $77,768.31.
2. The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed.
3. Liberty to the parties to apply within 14 days to vary the order in (2) above or to correct any mathematical errors in my calculations.
4. Exhibits to be returned in 28 days.
5. Pursuant to section 77 of the Civil Procedure Act 2005 (NSW), the amount referred to in Order (1) is to be paid to the NSW Trustee and Guardian for investment on behalf of the plaintiff until she attains the age of 18 years.
Also on 20 November 2019, the legal representative for the defendant appearing to take judgment made an oral application for an indemnity costs order in favour of the defendant from 26 September 2019. Orders were made for the filing of written submissions. In the light of the decision of the Court of Appeal in Boateng v Dharamdas [2019] NSWCA 233 at [18]-[23], I made the following additional order:
"To the extent necessary dispense with the requirement under Part 36.16(3A) of the UCPR for a formal Notice of Motion to be filed seeking a variation of the costs order which was earlier announced today in the proceedings having regard to the oral application made by the defendant."
The defendant relied in support of its indemnity costs application on two letters and offers of compromise which became Exhibit A on the application.
The first offer of compromise has a covering letter dated 25 September 2019 from the solicitors for the defendant to the solicitors for the plaintiff indicating that the offer was open for 14 days. The offer itself is dated 25 September 2019 and states at the end "this offer shall be open for a period of 14 days only." In the event of the offer being invalid for a technical reason (no doubt because it is not consistent with the Uniform Civil Procedure Rules ("UCPR")), the offer covering letter says it is also conveyed as a Calderbank offer: see Calderbank v Calderbank [1975] 3 All ER 333.
The offer of compromise dated 25 September 2019 has a number of terms. These were associated with statutory deductions under various Commonwealth acts relating to the payment of medical costs to Medicare Australia and also the repayment or deduction of amounts paid by the defendant's insurer under s 83 of the Motor Accidents Compensation Act 1999 (NSW). I note that the Act is incorrectly named in paragraph 4 of the offer of compromise.
Despite paragraphs 32-34 of Boateng v Dharamdas, above, and the similarity of some of the terms referred to in that judgment with terms in the first offer of compromise in the present case, no argument was advanced by the plaintiff that the terms of the first offer of compromise would preclude a court from being satisfied that, for the purposes of Part 42.15, the judgment was "no more favourable" than the offer. That appears to be on the basis that the terms relate to statutory deductions in the main which the defendant was entitled to make or amounts which would clearly still have resulted in the offer being greater than the judgment amount.
Clearly the amount obtained by the plaintiff in the judgment was no more favourable than the amount offered of $100,000 in the offer of compromise dated 25 September 2019. The offer also expressly stated that it was an offer made in accordance with Part 20.26 of the UCPR.
The second offer of compromise in evidence was dated 22 October 2019. That offer of compromise also offered to pay the plaintiff the sum of $100,000 plus costs to be agreed or assessed. It was expressly stated that the offer was made in accordance with Part 20.26 of the UCPR. The second offer noted that the offer was open for acceptance only until 4pm on 28 October 2019, six days after the date of the offer. The covering letter did not refer to the offer also relying on the Calderbank principles.
Section 98(1)-(4) of the Civil Procedure Act 2005 (NSW) provides as follows:
"98 Courts powers as to costs
(1) Subject to rules of court and to this or any other Act:
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.
(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.
(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:
(a) costs up to, or from, a specified stage of the proceedings, or
(b) a specified proportion of the assessed costs, or
(c) a specified gross sum instead of assessed costs, or
(d) such proportion of the assessed costs as does not exceed a specified amount."
Part 20.26 of the Uniform Civil Procedure Rules provides as follows:
"20.26 Making of offer
(1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.
(2) An offer under this rule -
(a) must identify -
(i) the claim or part of the claim to which it relates, and
(ii) the proposed orders for disposal of the claim or part of the claim, including, if a monetary judgment is proposed, the amount of that monetary judgment, and
(b) if the offer relates only to part of a claim in the proceedings, must include a statement -
(i) in the case of an offer by the plaintiff, as to whether the balance of the proceedings is to be abandoned or pursued, or
(ii) in the case of an offer by a defendant, as to whether the balance of the proceedings will be defended or conceded, and
(c) must not include an amount for costs and must not be expressed to be inclusive of costs, and
(d) must bear a statement to the effect that the offer is made in accordance with these rules, and
(e) if the offeror has made or been ordered to make an interim payment to the offeree, must state whether or not the offer is in addition to that interim payment, and
(f) must specify the period of time within which the offer is open for acceptance.
(3) An offer under this rule may propose -
(a) a judgment in favour of the defendant -
(i) with no order as to costs, or
(ii) despite subrule (2)(c), with a term of the offer that the defendant will pay to the plaintiff a specified sum in respect of the plaintiff's costs, or
(b) that the costs as agreed or assessed up to the time the offer was made will be paid by the offeror, or
(c) that the costs as agreed or assessed on the ordinary basis or on the indemnity basis will be met out of a specified estate, notional estate or fund identified in the offer.
(4) If the offeror makes an offer before the offeree has been given such particulars of the offeror's claim, and copies or originals of such documents available to the offeror, as are necessary to enable the offeree to fully consider the offer, the offeree may, within 14 days of receiving the offer, give notice to the offeror that -
(a) the offeree is unable to assess the reasonableness of the offer because of the lack of particulars or documents, and
(b) in the event that rule 42.14 applies to the proceedings, the offeree will seek an order of the court under rule 42.14(2).
(5) The closing date for acceptance of an offer -
(a) in the case of an offer made two months or more before the date set down for commencement of the trial - is to be no less than 28 days after the date on which the offer is made, and
(b) in any other case - is to be such date as is reasonable in the circumstances.
(6), (7) (Repealed)
(8) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer.
(9) An offer is taken to have been made without prejudice, unless the notice of offer otherwise provides.
(10) A party may make more than one offer in relation to the same claim.
(11) Unless the court orders otherwise, an offer may not be withdrawn during the period of acceptance for the offer.
(12) A notice of offer that purports to exclude, modify or restrict the operation of rule 42.14 or 42.15 is of no effect for the purposes of this Division."
It can be seen that in accordance with Part 20.26(5)(b), the closing date for acceptance of an offer in the case of an offer made less than two months before the date set down for commencement of the trial (which applies to both offers of compromise here) is to be such date "as is reasonable in the circumstances".
Part 42.15 of the UCPR provides as follows:
"42.15 Where offer not accepted and judgment no more favourable to plaintiff
(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise -
(a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and
(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis -
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made."
I find:
1. Both offers were made by the defendant;
2. Neither offer was accepted by the plaintiff;
3. The plaintiff has obtained an order or judgment on the claim no more favourable to the plaintiff than the terms of the offers;
4. The difference between the offer amount and the judgment amount was considerable in all the circumstances.
In paragraph 34 of Boateng v Dharamdas, above, the court stated as follows:
"This Court would also not be in a position to decide whether an order "otherwise" should be made for the purposes of r 42.15(2). The argument before this Court identified, without fully addressing, contentions as to whether the respondent's rejection of the Offer of Compromise was reasonable. The mere fact that the rejection of an Offer of Compromise is reasonable is not enough to displace the rule but the reasonableness of the rejection remains a relevant consideration in the exercise of the court's broad discretion to "order otherwise" (The Uniting Church in Australia Property Trust (NSW) v Takacs (No 2) [2008] NSWCA 172 at [15] and [18], compare [32]-[33]; Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2)[2014] NSWCA 391 at [48], [60] and [61])."
The plaintiff accepts that the onus is on the plaintiff in the light of the offers of compromise to demonstrate that the court should make an order in relation to costs different to the order contemplated by Part 42.15(2). In Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391, McColl JA stated as follows at paragraph 45:
"45. Accordingly, the question is whether, as the appellant submits, the Court should "order otherwise": UCPR 42.15A(2). The onus is on the appellant to demonstrate why the Court should depart from the consequence of his rejection of the Offer: Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 (at [35]) per McColl JA (Mason P and McClellan CJ at CL agreeing); Miwa (at [16])."
McColl JA stated the following in paragraph 48 in relation to the reasonableness of the offer:
"It is impossible exhaustively to state the circumstances in which the court's discretion to "order otherwise" might be exercised: New South Wales Insurance Ministerial Corporation v Reeve (at 102). The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule: Morgan v Johnson (at 582). However that does not mean that reasonableness of the rejection is an irrelevant consideration: see Seven Network Ltd v News Ltd (at [64] - [67]); Uniting Church in Australia Property Trust (NSW) t/as Northaven Retirement Village v Takacs (No 2) [2008] NSWCA 172 (at [15]) per Hodgson JA (McColl JA agreeing); cf Basten JA (at [32] - [33])."
This view was confirmed by the majority in Boateng v Dharamdas at [34].
In Vale v Eggins (No 2) [2007] NSWCA 12 at [22] the Court of Appeal found, in circumstances where a party had not served all the medical reports on which it relied at the time the offer of compromise was made and which were relevant to an assessment of the offer, that the failure of service in the context of that case, disentitled the offering party from obtaining an award of indemnity costs.
Vale, above, was cited with approval by the Court of Appeal in Fairall v Hobbs (No 2) [2017] NSWCA 133.
In South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [85] Hunt AJA (with whom Mason P and McColl JA agreed) stated that indemnity costs should not be awarded in that case as "it would be unfair to a defendant to make an order for indemnity costs when the evidence at the trial is different from that known to the defendant at the time of the offer."
Counsel for the plaintiff, Mr Canceri, in his written submissions dated 27 November 2019, submits that the court should "otherwise order" in relation to the first offer of compromise on the basis that as at the date of the first offer of compromise, the defendant had only served the plaintiff with the reports of Professor Cumming dated 16 and 30 August 2019 and that significant reports of Professor Cumming dated 18 October 2019 and the defendant's occupational therapist dated 17 October 2019, were served after the date of the offer of compromise on 23 October 2019. This was also after the date for accepting the offer had expired. It is submitted that up to 23 October 2019, when the report of the defendant's occupational therapist was served, the plaintiff's claim for the cost of future commercial domestic assistance was strong and was supported by the opinions of Dr Davis and Ms Cogger. Also it is submitted that the later opinion of Professor Cumming dated 18 October 2019 that the plaintiff would not experience degenerative changes in her left wrist, had a significant impact on the assessment of the plaintiff's damages for loss of future earning capacity and was very important in bolstering the position of the defendant.
It is also noted that the report obtained by the plaintiff from Dr Korber, who Professor Cumming described as "an eminent radiologist" (Exhibit 1 page 26), as to the plaintiff's wrist and establishing a fracture of the articular surface of the distal radius, was obtained on 8 October 2019, very shortly before the defendant's offer of compromise dated 25 September 2019 expired. It is likely to have been relevant to the plaintiff's approach to the case and the offer. In oral submissions, Mr Canceri emphasised the importance to the plaintiff of this report which established the intra-articular fracture initially referred to as being significant in the report of Dr Davis (Exhibit 1 page 50).
Counsel for the defendant, Mr Hanna, submitted in his written submissions dated 2 December 2019:
1. The later reports served on 23 October 2019 actually weakened not strengthened the defendant's case (paragraph 5);
2. Professor Cumming's report dated 18 October 2019 conceded the plaintiff might have problems later in life due to the intra-articular fracture "but denied that economic loss would arise": paragraph 6;
3. There was a lack of oral evidence to support Ms Cogger's report and therefore Mr Miszczuk's report was not decisive (paragraph 7);
4. It is not fatal to an offer of compromise that medical evidence changes after service of an offer. It is not an excuse for failing to accept a reasonable offer of compromise at the point in time in the proceedings when it is made: paragraph 8;
5. As to the second offer, within the offer period, the period from 23-25 October 2019 was available to advise the tutor. No complaint was made about having insufficient time nor was a request for an extension made: paragraphs 9-11. The case of Gray v Hobson (No 2) [2018] NSWCA 131 supports the defendant: paragraph 11;
6. The offers made were generous and made despite the expert evidence for the defendant. A trial was unnecessary and the offers should have been accepted by the tutor: paragraphs 13-17;
7. The claim that an award of indemnity costs may erode the damages awarded (plaintiff's submission paragraph 26) is incorrect as the tutor and not the minor is liable for costs: paragraph 18.
In relation to this last submission, I agree with the defendant's submission. A tutor is responsible for costs including when the tutor rejects an offer of compromise: Part 7.15(6) of the UCPR; see Azar v Kathirgamalingan [2012] NSWCA 429 at [198]-[200] per Campbell JA (with whom McColl and Basten JJA agreed) and Smith v NRMA Insurance [2016] NSWCA 250 at [31]-[32] per Gleeson JA.
The case of Gray v Hobson (No 2) [2018] NSWCA 131, relied on by the defendant, is somewhat different to the present case. There, the plaintiff was in a good position to consider the offer as an unsuccessful mediation had occurred on the day the offer of compromise was sent and there was the service by the plaintiff himself of an offer of compromise the next day: see at [7]. The Court of Appeal emphasised that at the time the offer was made the parties had a "clear perception of the strengths and weaknesses of their positions" and "perhaps most importantly" the plaintiff was in a position to assess his prospects of success as he made his own settlement offer during the time the defendant's offer of compromise was open: also at [7]. There is no evidence that the plaintiff made an offer here.
At the costs hearing, when oral submissions were made, the plaintiff read on the application the affidavit of Mark Capolupo, the plaintiff's solicitor, sworn 3 December 2019. This affidavit:
1. Annexes as Annexure "MC1" a letter from the defendant's solicitors to the plaintiff's solicitors dated 26 September 2019 serving the report of Professor Cumming dated 20 September 2019;
2. Annexes as Annexure "MC2" a letter from the defendant's solicitors to the plaintiff's solicitors dated 16 October 2019 serving inter alia the reports of Professor Cumming dated 28 March 2019, 18 August 2019, 30 August 2019 and 20 September 2019;
3. Annexes as Annexure ""MC3" a letter from the defendant's solicitors to the plaintiff's solicitors dated 23 October 2019 serving the reports of Mr Miszczuk dated 17 October 2019 and Professor Cumming dated 18 October 2019;
4. States that "at about midday on 25 October 2019" Mr Capolupo learned from Mr Canceri of counsel that BB had "possibly suffered a heart attack and was in hospital". As a result, a planned conference between BB, the plaintiff's tutor, and Mr Canceri of counsel on 25 October 2019 was cancelled;
5. Mr Capolupo states that he did not have any communications with BB after learning of her heart attack and before the commencement of the trial as he and Mr Canceri "thought it best not to burden the tutor with the stress of the litigation whilst she was in hospital recovering from the heart attack".
Mr Canceri in his oral submissions emphasised:
1. The importance of the receipt of Dr Korber's report which established the intra-articular fracture and assisted the plaintiff's case as to the severity of the injury;
2. The importance of Mr Miszczuk's report as to equipment, treatment and future domestic assistance (which was said to be dependent on medical findings);
3. The importance of the 18 October 2019 Professor Cumming report which expressed an opinion negating the importance of the accepted fracture in the plaintiff's likely future recovery;
4. The heart attack to BB and the cancellation of the 25 October 2019 conference with her.
Mr Parker, for the defendant, submitted in his oral submissions:
1. The plaintiff's submissions rely on the benefit of hindsight;
2. The purpose of an offer of compromise is to require a party to review their position in the light of the offer with the risk of an indemnity costs order;
3. Professor Cumming's view as a matter of substance did not alter - any changes of opinion only went to aspects of his view relevant to quantum. The changes in the 18 October 2019 opinion were relevant but not of significance;
4. A highly relevant factor was that the plaintiff never requested any extension to consider the offer;
5. There was no evidence the conference on 25 October 2019 was to discuss the offer of compromise;
6. Mr Miszczuk's report was relevant to treatment but Ms Cogger's report as to domestic assistance was dependent on confirming oral evidence.
The chronology of important events is as follows:
1. Wednesday 25 September 2019: first offer of compromise made open for a 14 day period;
2. Tuesday 8 October 2019: Dr Korber's report received by the plaintiff;
3. Wednesday 9 October 2019: first offer of compromise expires;
4. Tuesday 22 October 2019: second offer of compromise made which was open for acceptance until 4.00pm on 28 October 2019;
5. Wednesday 23 October 2019: reports of Professor Cumming dated 18 October 2019 and Mr Miszczuk dated 17 October 2019 served on the plaintiff's solicitors;
6. Friday 25 October 2019: at about midday Mr Canceri informs plaintiff's solicitor that tutor may have had a heart attack and was in hospital. Conference between tutor and counsel cancelled. Tutor has an angiogram and a procedure for the insertion of a stent. No further contact between tutor and solicitors until first day of trial due to heart attack;
7. Sunday 27 October 2019: BB discharged from hospital;
8. Monday 28 October 2019: BB sees her general practitioner. Second offer of compromise expires at 4.00pm;
9. Tuesday 29 October 2019: trial commences at 10.00am.
The further supplementary report of Professor Cumming dated 18 October 2019 was in my view significant. This was the first time Professor Cumming had been provided with further x-ray films and two CT scans which he had been pressing for previously (Exhibit 1 pages 22, 25-26 and 28). He stated that a review of the films "was necessary to avoid error": Exhibit 1 page 26. Having obtained the films and reviewed them, Professor Cumming first confirmed that Dr Korber was correct and there was a fracture of the distal radius involving the articular surface which he stated was "a load-bearing area of significance for the future." However, importantly, he also, whilst accepting the fracture identified by Dr Korber, undertook a detailed description of the plaintiff's wrist injuries, their treatment and the result, and maintained his view "that the prognosis is good", there was a "slightly greater chance" the plaintiff may have symptoms in later life but was still of the opinion that was likely to be improbable. See in particular Exhibit 1 pages 28-29 which is relied on in the Judgment at [100] and [125]-[127] . Thus the report is important because Professor Cumming maintains his opinion even after accepting his initial opinion was erroneous which was based on incomplete x-ray films. Prior to this 18 October 2019 report, Professor Cumming's earlier reports could have been attacked as being based on an incorrect view as to there being no intra-articular surface fracture to the plaintiff's wrist in the accident.
The report of Mr Miszczuk, occupational therapist, dated 17 October 2019 served 23 October 2019 (Exhibit 1 page 57) was also important in doubting the plaintiff's domestic assistance claim, particularly in the future (see Judgment at [130]-[134]). The service of it on 23 October 2019 was likely to have resulted in a further review of this aspect of the plaintiff's claim. I accept the submission that up to the time the further reports were served, the plaintiff's claims were stronger on the basis of the opinions of Dr Davis and Ms Cogger. Mr Hanna submits that the assumptions of Ms Cogger had to be proved in oral evidence. I agree with that submission (submission paragraph 7). Mr Miszczuk's report did, however, dispute the Cogger recommendations for equipment and further treatment and was accepted on these issues (Judgment paragraphs 132-134). Mr Parker conceded in his oral submissions the relevance of the report on these issues.
Accordingly, in relation to the first offer of compromise, in my view the defendant had not served all relevant medical and allied health reports on which it was to rely by the time the offer of compromise had expired. The plaintiff also had the opinion of Dr Korber which assisted her position in relation to the claimed fracture of the articular "load-bearing" surface of the wrist. In my view, despite the defendant's submissions to the contrary, the 18 October 2019 report of Professor Cumming was of significance for the reasons which I have set out. It was not served until after the offer expired. When the offer expired, the plaintiff had the report of Dr Korber which established the intra-articular fracture. A different position emerged medically after the offer of compromise expired.
As a result, in the exercise of the discretion in the rule, the court should "otherwise order" within Part 42.15(2) and not disturb the costs order already made in favour of the plaintiff on the basis of the first offer of compromise.
In relation to the second offer of compromise dated 22 October 2019, the position is somewhat less clear.
Certainly the last report of Professor Cumming dated 18 October 2019 and the report of Mr Miszczuk, occupational therapist, dated 17 October 2019, were served the day following the date of the second offer of compromise being 23 October 2019. However, the offer was open for acceptance until 4pm on 28 October 2019, a period of about four to five days. As stated above, the position here was different to that in Gray, above, as there is no evidence of the plaintiff making an offer or there having been a mediation.
In relation to the second offer of compromise, the plaintiff relies on the same submissions and states that not including 23 October 2019 when the two reports were served, that left three business days only to consider the offer of compromise.
Also relied upon is the fact that the plaintiff's tutor, her mother BB, had a heart attack on Friday, 25 October 2019 which necessitated her having an angiogram and a stent inserted and being in hospital until she was discharged on Sunday, 27 October 2019: T22-23. A conference with counsel later on 25 October 2019 was cancelled as a result of BB being in hospital. It is submitted that from 25 October 2019, the mother tutor was in no position to be carefully assessing an offer of compromise made only days before her heart attack (no doubt following the receipt of legal advice).
In my view, both the service of the reports of Professor Cumming and Mr Miszczuk on 23 October 2019, the heart attack to the plaintiff's tutor mother on 25 October 2019 and the cancellation of a conference with counsel on that day are relevant matters to be taken into account by the court in assessing the period of the offer of compromise and whether the court should "otherwise order". The plaintiff's mother gave evidence that the heart attack was "out of the blue" (T22.49) and that she saw her general practitioner, seemingly in relation to her heart condition, on Monday, 28 October 2019 (T23.15). She is only 37 years of age: T22.24.
The plaintiff is a minor and has to be represented by a tutor. Her mother, BB, was a logical choice to act as the tutor having regard to the father's serious injuries sustained in the motor vehicle accident. In my view, it was appropriate for the solicitors representing the plaintiff to consider carefully the additional reports which had been served on 23 October 2019 in the light of the other medical evidence. They could not, practically, in my view have consulted with the plaintiff's mother, her tutor, in the period from 25‑27 October 2019. Whilst no extension was requested as pointed to by Mr Hanna (in writing) and Mr Parker (orally) and this is a relevant factor, on Monday, 28 October 2019, BB, the plaintiff's tutor, was seeing her general practitioner and no doubt would have continued to be anxious in relation to her heart condition. A conference on that day was also unlikely for that reason.
In my view, the first occasion on which the mother would have been in a position to be given proper considered advice on the offer was likely after the date and time when the offer had expired (see paragraph 4) which was 4pm on 28 October 2019. Clearly, the tutor mother would have been in a position to be given advice and to make a decision on the first day of the trial being 29 October 2019 but by that time the offer was no longer open. I accept that the defendant cannot be blamed for the mother's medical condition. However, in my view it is a relevant factor to be taken into account in practical terms in considering whether an order should be made. Having regard to the facts and evidence which I have set out above, in my opinion it was reasonable for the plaintiff not to have accepted the second offer of compromise before the time and date when it expired. The factual and medical issues raised in the last report of Professor Cumming and the report of Mr Miszczuk were also complex and required careful consideration by the tutor and careful explanation and clarification to her by the plaintiff's solicitors or her counsel in the planned conference. All of these matters, in my view, point to a proper basis for the court ordering otherwise within Part 42.15(2) of the UCPR. I also note that the report of Mr Miszczuk was relevant to the treatment and equipment issues which affected the quantum of damages.
The first offer of compromise was served with a covering letter relying on the Calderbank principles. These were not addressed in submissions but I will consider them briefly.
The rejection of a Calderbank offer by a party does not necessarily mean that indemnity costs are ordered as a matter of course. The applicant for indemnity costs must demonstrate to the court that the rejection of the offer was "unreasonable" in all the circumstances of the case: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19]; Jones v Bradley (No 2) [2003] NSWCA 258 at [12]; Russell v Edwards (No 2) [2006] NSWCA 52 at [8]; Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 at [7].
In NRMA Insurance for the Nominal Defendant v Al-Bayati (No 2) [2019] NSWCA 14, the Court of Appeal stated in paragraph 10 as follows:
"[10] The party making an offer of compromise or Calderbank offer bears the onus of satisfying the court that it should exercise the costs discretion in its favour: Evans Shire Council v Richardson (No 2) [2006] NSWCA 61; Commonwealth of Australia v Gretton [2008] NSWCA 117 at [46]; County Securities Pty Ltd v Challenger Group Holdings Pty Ltd (No 2) [2008] NSWCA 273 at [31] ..."
See also Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 per Basten JA (with whom McColl and Campbell JJA agreed) at paragraphs [8]-[16].
For the reasons set out above, the reports of Professor Cumming dated 18 October 2019 (in particular) and of Mr Misczuck dated 17 October 2019 which were served on 23 October 2019 were relevant and appeared to alter the balance of the evidence as to future loss of earning capacity and the claim for commercial assistance/equipment and future treatment. I do not consider that the plaintiff's failure to accept the offer was unreasonable in all the circumstances I have set out above as at the time of expiry of the offer.
Accordingly, the defendant's application for an indemnity costs order based on the two offers of compromise and the Calderbank letter served should be rejected.
Therefore, I do not disturb the costs order already made in favour of the plaintiff.
The defendant having failed on its application, I see no reason why the usual order for costs should not be made.
I therefore make the following orders:
1. The oral application for indemnity costs made by the defendant is dismissed.
2. The defendant is to pay the plaintiff's costs of the oral application for indemnity costs as agreed or assessed.
3. The costs order made in favour of the plaintiff on 20 November 2019 is confirmed.
[3]
Amendments
19 December 2019 - Spelling in the matter of AB v Keanes [2019] NSWDC 693 corrected.
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Decision last updated: 19 December 2019