On 29 September 2017, I gave judgment in Bamber v Hartman Pacific Pty Ltd; Bamber v Hartman Pacific Pty Ltd [2017] NSWSC 1318, dismissing Mr and Mrs Bamber's claims. There was an issue between the parties as to the appropriate costs order, Hartman Pacific Pty Ltd seeking an indemnity costs order in its favour, from 27 April 2017, relying on two offers of compromise it made by email on that day at 8:06am, the trial being due to commence on 1 May 2017.
Hartman's offers were annexed to an affidavit sworn by its solicitor Mr Partridge. What was offered in each case was an offer of compromise that judgment be entered in favour of Hartman, with "no order as to costs". Each offer was open only until 10am on 1 May 2017 and was said to be made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW). In the event that it failed to comply with those requirements, it was to be relied on as a Calderbank v Calderbank [1975] 3 All ER 333 offer.
Given the conclusions reached in the September judgment, there is no question that Mr and Mrs Bamber would have been better off if they had accepted these offers, even though they were put on a "walk away" basis. Nor can it doubted that by 27 April, the Thursday before the commencement of the trial, significant costs had been incurred, which Hartman was offering to forego. Such a "walk away" offer can involve real compromise: Dean v Stockland Property Management Pty Ltd & Anor (No 2) [2010] NSWCA 141. I am satisfied that they did in this case.
For Hartman it was contended that the offers were served in accordance with rr 20.26 and 51.47. It having obtained judgment no less favourable than its offers, under r 42.15A, Mr and Mrs Bamber should be ordered to pay its costs on an indemnity basis, there being in the circumstances no reason why the Court should otherwise order.
Rule 20.26(5) provides that:
"(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."
Even offers made close to trial, which provide only a short time for acceptance, may be reasonable. In Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 it was observed at [20] - [21]:
"20 In considering whether the time allowed for acceptance is "reasonable in all the circumstances" once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.
21 In relation to the first factor, it should be accepted that by the day before the hearing, in commercial litigation involving experienced counsel and solicitors, the legal representatives would have been able to give the client an immediate assessment of:
(a) the approximate costs incurred to date;
(b) the likely length of the trial;
(c) the approximate amount of costs assessed on an indemnity basis if the matter proceeded to trial, and
(d) the most likely outcome, which may involve a range as to quantum.
It should also be accepted that someone with authority to bind the client would have been available to give instructions based on legal advice as to the preferable response."
On 27 April 2017, Hartman also served a statement of final issues in dispute, which provided:
"1 Whether the incident the subject of these proceedings ('the incident') occurred as alleged by the plaintiff and if not, how it occurred.
2 Whether the incident occurred as the result of any negligence on the part of the defendant in the design, manufacture, inspection or labelling of the Gorilla EL 12/21-1 ladder.
3 Whether the incident occurred as the result of any safety defect in the Gorilla EL 12/21-1 ladder having regard to Section 138 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)).
4 Whether the plaintiff caused or contributed to the incident through his own negligence.
5 Whether the plaintiff read and paid adequate heed to the instructions affixed to the Gorilla EL 12/21-1 ladder prior to the incident.
6 Whether the plaintiff failed to ensure the locking mechanism of the Gorilla EL 12/21-I ladder was secure before climbing the ladder.
7 Whether the plaintiff inspected the Gorilla EL 12/21-1 ladder before use.
8 What injury, loss and damage (if any) was suffered by the plaintiff as a consequence of the incident."
That undoubtedly drew to the attention of Mr and Mrs Bamber and those who advised them, the difficulties confronting them in the litigation.
In resisting the order sought, Mr and Mrs Bamber relied on r 20.26(4), which provides:
"(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)."
It was argued for Mr and Mrs Bamber, that the time that the offer was made precluded it being put to Mr and Mrs Bamber, who live in England and arrived in Australia only on Saturday 29 April, until Sunday 30 April. While there was no evidence led about this, it was not put in issue by Hartman.
It was also argued that Hartman's evidence about its manufacturing process, on which much of the judgment hinged, had not to that point been disclosed to Mr and Mrs Bamber. That was also not challenged and accorded with what had been revealed on the first day of the trial, namely, that while experts' reports had been served, witness statements had not, nor had notice been given of who was to be called.
In those circumstances, it was argued that it could not be concluded that Hartman had, at the time its offers were made, given Mr and Mrs Bamber particulars necessary to permit them to assess the reasonableness of those offers. In the result, neither offer complied with r 20.26, nor could orders be made on a Calderbank basis, that also requiring that it be established that it was unreasonable for Mr and Mrs Bamber not to have accepted them: Miwa Pty Ltd v Siantan Properties (No 2) [2011] NSWCA 344 at [8].
In all of these circumstances I am satisfied that Mr and Mrs Bamber's submissions must be accepted.
It was most unusual that Hartman had not disclosed the evidence that it proposed to call prior to the hearing. It seems that neither party sought directions about the service of lay evidence, but Hartman having decided not to reveal what evidence it would lead prior to trial, it cannot now justly be concluded that in those circumstances, the offers it made only on 27 April complied with r 20.26. Nor can it be concluded that they provide a just basis for an order for indemnity costs to be made in Hartman's favour, on a Calderbank basis.
The offers were open only for a short time, during much of which Mr and Mrs Bamber were travelling to Australia. They were made without Hartman having disclosed the evidence which led to it successfully defending the claims. In those circumstances, it cannot be concluded that Mr and Mrs Bamber were in a position to assess the reasonableness of the offers; that it was open for a reasonable period; or that it was unreasonable for them to have been rejected.
In the result there can be no departure from the usual costs order.
[2]
Order
For those reasons, I order that:
1. Mr and Mrs Bamber pay Hartman's costs, as agreed or assessed.
2. All exhibits and subpoenaed material may 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.
[3]
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Decision last updated: 16 November 2017