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Principles

6. It is useful to recall that which McWilliam J explained in Reljic v Reljic [2025] ACTSC 198 at [4]: The following are overarching principles that shape the exercise of the court’s discretion as to costs: (a) Costs are in the discretion of the court: r 1721(1) of the Court Procedures Rules 2006 (ACT) (b) The discretion is wide, though it must be exercised judicially, in accordance with established principle and the statutory context: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 (Oshlack) at [35] and [65]. (c) The fundamental purpose of the discretion is to compensate the successful party, not to punish the unsuccessful party: EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 92 at [9]. (d) Fairness is the touchstone. The court must make a broad evaluative judgment as to what is in the interests of justice: Gray v Richards (No 2) [2014] HCA 47; 89 ALJR 113 at [2]; Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 at [12]; and Wu v Wu (No 3) [2024] ACTCA 35 at [8].

7. The High Court made plain in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 that absent special circumstances, a successful litigant is entitled to recover their costs from the opposing party. As the Court of Appeal observed in Hulanicki v Walton (No 2) ACTCA 45 at [11] in circumstances where costs follow the event, costs are ordinarily assessed on a party and party basis: see r 1751 of the Court Procedures Rules 2006 (ACT) (Court Procedures Rules) has the discretion to order costs be assessed on a solicitor and client basis or an indemnity basis as contemplated in r 1752.

8. In Oshlack the High Court observed at [44]: It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a "solicitor and client" basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part. (Citations omitted.)

9. In Lewis v Australian Capital Territory (No 2) [2015] ACTSC 343 Foster J observed at [28] “usually there must be some special or unusual feature in the case that justifies the court in departing from the usual position that costs should be ordered to be paid on the party/party basis”.

10. Justice McDougall in Ingot Capital Investment v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199 at [24] (repeating his analysis in White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303) determined that ‘some relevant delinquency’ “does not mean moral delinquency or some ethical shortcoming, but delinquency bearing a relevant relation to the conduct of the case: see for example Council of the Municipality of Botany v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412, 415; NMFM Property Pty Limited v Citibank Limited (No 2) (2000) 109 FCR 77”. Consideration

11. Where a defendant conveys an offer that was not accepted by the plaintiff, and the defendant obtains a judgment on no less favourable terms than the offer, the defendant is entitled to costs on a party and party basis up until the date the offer was made, and on a solicitor and client basis thereafter, unless the court orders otherwise pursuant to r 1012 of the Court Procedures Rules.

12. Relevantly r 1012 dictates: 1012 Offer not accepted and judgment no less favourable to defendant (1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer. (2) Unless the court orders otherwise— (a) the defendant is entitled to an order against the plaintiff for the defendant’s costs in relation to the claim, to be assessed on a party and party basis, up to the time when the defendant is entitled to costs under paragraph (b); and (b) the defendant is entitled to an order against the plaintiff for the defendant’s costs in relation to the claim, assessed on a solicitor and client basis— (i) if the offer was made before the first day of the trial—on and from the day after the offer was made; and (ii) if the offer was made on or after the first day of the trial—at and from 11 am on the day after the offer was made.

13. In Marhaba v Chen (No 2) [2024] ACTSC 288 at [24] McWilliam J summarised the following principles with respect to offers: (a) The offer must be a genuine offer of compromise, meaning that the offer must involve giving something away in order to end the dispute: Anderson Group Pty Ltd v Tynan Motors (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8] and the cases there-cited; De Gruchy v Owners Units Plan No 3989 (No 2) [2020] ACTSC 166 (De Gruchy) at [12]–[15]. (b) The offer must be clear and certain in its terms: Dover Beach Pty Ltd v Geftine Pty Ltd [2008] VSCA 248; 21 VR 442 at [118]. (c) The judgment on the claim must be no more favourable to the plaintiff. In that regard, the offer should not be viewed with excessive formality or technicality, but rather with a view to giving effect to the spirit of the Rules. The Court does not look to the form of the orders, but rather to their substance: Pettiford v Whicker [2005] NSWCA 370 at [15]; Re Williams; Smith v Thwaites (No 2) [2017] VSC 771 at [29], cited in De Gruchy at [27]. (d) Where the offer is made within 2 months before trial, the offer must be open for a “period reasonable in the circumstances”: r 1002(5). In Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 (Kooee), Basten JA stated at [22]: The question of reasonableness must be judged objectively, in the circumstances known, or which should reasonably have been anticipated, by both parties. In setting the time during which the offer is to remain open, the offeror must necessarily rely upon the circumstances as known to it, or which should reasonably be anticipated by it. The actual circumstances of the recipient, unknown to the offeror, may be relevant to an application that the Court otherwise order in relation to costs of a valid unaccepted offer, but so might evidence as to whether the recipient took any steps to bring such matters to the notice of the offeror.

14. The defendant submitted that in this matter there are special circumstances which justify a departure from the usual position set out in r 1012. First, the defendant highlighted that two offers of compromise were made. Both offers, in substance, were made in accordance with r 1002 of the Court Procedures Rules. The second offer came two months prior to the commencement of the trial. In the circumstances, it was in my view an offer open to the plaintiff for a reasonable period. Both offers were genuine offers of compromise; the defendant willing to make lump sum payment to the plaintiff to resolve the dispute.

15. The plaintiff did not dispute that two offers of compromise were made in December 2023 and March 2024. The plaintiff submitted that the defendant’s possession of surveillance footage of the plaintiff recorded in January 2024, as well as Facebook material, was in breach of r 611 (3)(a) of the Court Procedures Rules 2006 because it was not disclosed within 7 days of its receipt.

16. The defendant made a forensic decision to withhold that evidence until the trial by making an ex-parte application which was granted on 11 April 2024: see Agnello v Maliganis Edwards Johnson [2024] ACTSC 106. The application was filed on 10 April 2024. The rule does not require the party to disclose a document if, apart from this rule, the party is not required to disclose it: r 611(4). The plaintiff submitted that the effect of the breach and the consequent relief via ex-parte application “was to impair and prevent the plaintiff from having an opportunity to fairly and reasonably consider the defendant's Offers of Compromise”.

17. Disclosure of material was acknowledged by Mossop J to generally promote the capacity for each side to properly assess the merits of their case. However, he concluded that in this matter the defendant ought to be permitted to withhold disclosure until examination in chief of the plaintiff was complete observing in Agnello v Maliganis Edwards Johnson [2024] ACTSC 106 at [17] and [18]: I accept that the nondisclosure of the material carries with it the risk that an adjournment of the proceedings or some other accommodation may be necessary arising out of the late disclosure of the evidence. I also accept that disclosure of material such as this prior to trial promotes the rational assessment of the merits of each side’s position and hence is conducive to the resolution of the proceedings prior to trial. However, on balance, I consider that it is consistent with the proper determination of the matter that the defendant be permitted to not disclose this material until the plaintiff has given his evidence-in-chief.

18. The defendant, accepting that the footage and Facebook material was served “well after” both offers were made, submitted that special circumstances existed justifying an award on an indemnity basis because the plaintiff was guilty of “relevant delinquency” citing Oshlack and Ingot.

19. Plainly the surveillance footage and the Facebook material were matters well within the plaintiff’s knowledge. They did not reveal any matter to him that was outside of his knowledge. The only revelation was the collection of the material. The footage captured the plaintiff engaging in numerous physical acts in full public view that he had described as impossible for him to perform. That the plaintiff had the capacity to conduct himself inconsistent with the version of his physical capabilities that he provided to Dr Bodel and others could hardly have been a surprise to him.

20. Further, the defendant submitted there were several “special or unusual” features in this matter which would justify an order for indemnity costs including: (a) The plaintiff’s acknowledgment in his own case that he was represented during the course of his 2016 workers compensation claim subject of these proceedings by a preeminent practitioner in the field (Mr Muller SC, as his Honour then was); (b) The difficulties faced by the plaintiff, both in terms of the state of connection issue and medical causation itself; (c) Despite these risks, the fact that the plaintiff did receive $420,000 inclusive of costs initially; and (d) The plaintiff’s reliability as a witness, as seen in the initial claim form documentation and revealed in the surveillance footage.

21. As Mossop J forecast, the surveillance footage became central to my assessment of the plaintiff’s credibility. The plaintiff freely conducted himself in public in a way which was directly at odds with the narrative provided of his physical limitations and his capacity to Dr Bodel; the medical expert engaged in support of his claim. Notwithstanding those matters being known to the plaintiff, he pressed on with the claim which sought to characterise his injury as rendering him unable to perform many of the physical tasks he was captured performing with apparent ease and as unable to work at all.

22. Added to which was the abandonment of the legal expert relied upon in the plaintiff’s case which saw the plaintiff embrace Mr Muller SC as the expert for the purposes of the issues in the claim. There is no need to repeat the detail of the conclusions I drew relying upon the evidence of Mr Muller SC. Suffice it say, overall the evidence did not advance the plaintiff’s case to any significant degree.

23. The defendant’s submissions in reply recorded that on 20 April 2026 a Calderbank offer was made for payment of $75,000 towards the defendant’s costs which was not accepted and has now expired.

24. There is real force in the defendant’s submission that despite those significant matters known to him, “the plaintiff still sought to prosecute his claim in the manner in which he did”. Those were matters known to him at the time the Offers of Compromise were conveyed and uniquely so. The timing of the disclosure of the surveillance material did not deprive the plaintiff of the opportunity to fairly and reasonably consider the defendant’s offers. I am satisfied that the plaintiff’s approach to the claim represented ‘some relevant delinquency’ that related directly to the conduct of the case. This is a matter in which the discretion to award costs on an indemnity basis should be exercised.

Orders

25. For those reasons, I make the following orders: (1) The plaintiff is to pay the defendant’s costs: (a) On a party and party basis up until 17 December 2023; and (b) On an indemnity basis thereafter.

I certify that the preceding twenty-five [25] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Taylor Associate: O Williams Date: 7 August 2026