When determining whether to make an order for indemnity costs based upon the non-acceptance of a Calderbank offer, it is important to emphasise that "there is no presumption that an offeree who does not accept an offer and does not obtain a judgment more favourable than the offer will necessarily pay indemnity costs from the date of the offer": Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8] ('Miwa'). Further, whether it is appropriate to award indemnity costs turns upon a consideration of two questions - namely, whether "(a) there was a genuine offer of compromise, and (b) it was unreasonable for the offeree not to accept it": Miwa at [8]; Ziegler as trustee for the Doris Gayst Testamentary Trust v Cenric Group Pty Ltd [2020] NSWCA 85 at [69].
The defendant, whilst accepting the applicability of the above principles, nevertheless submitted that each of the "questions" was satisfied - that is, there was genuine compromise contained within the offer made and it was unreasonable for the plaintiff not to accept it. The plaintiff opposed the Court making such an order, raising two matters in this regard: first, the plaintiff submitted that the offer contained no element of compromise; and, secondly, the plaintiff relied upon what are alleged to be exchanges during the course of the hearing on 7 December 2023, in effect arguing that the plaintiff's claim had some prospects of success.
[2]
Discussion and consideration
It is well-settled that an offer with no real element of compromise in it, designed to trigger costs sanctions, will not, in and of itself, be treated as a genuine compromise: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [21]-[23] ('Green'). In terms of an offer that, in effect, invites a plaintiff to "walk away", an offer of that kind can amount to a genuine offer of compromise: Green at [30] and [39]. That characterisation of an offer - as one involving a genuine offer of compromise - can more readily be made where the costs are substantial and the offeror's prospects are considered to be strong: DSHE Holdings (Receivers & Managers Appointed)(In Liquidation) v Nicholas Abboud (No 4); National Australia Bank Limited v Nicholas Abboud (No 5) [2022] NSWSC 91 at [47], cited approvingly in Kramer v Stone (No 2) [2023] NSWCA 298 at [18].
In my view, the offer made by the defendant was objectively a genuine offer of compromise. That finding is informed by the fact that the costs incurred to that point were said to be "approximately $30,000.00" - an amount that I regard as, and find is in the present case, "substantial"; the offer was made in the context of what was objectively a case where the plaintiff's prospects were slight and the defendant's prospects were strong; and the offer itself set out, in effect, these matters.
To be clear, I do not accept the plaintiff's submission that, in some way, anything that arose during the course of the hearing on 7 December 2023 can be characterised as supportive of a finding that the plaintiff's claim (specifically, her appeal) had some prospects of success. At no time, during the course of the hearing, was that matter raised. To the extent that there was any discussion about specific grounds that stood apart from those that were, self-evidently without merit, the discussion was confined and related to those grounds identified by Campbell J as being no more than arguable (a finding that was made in the context of whether an order extending a stay should be granted given the summons that was filed by the plaintiff): see the primary judgment at [73]-[75]. That discussion, however, said nothing about the prospects of those grounds. Nor were there any discussions about the "merits", except to emphasise that they were not a matter for the Court on the plaintiff's amended summons.
The plaintiff argued that the defendant's offer was "an unreasonable and unrealistic offer of compromise at the very late stage of proceedings in 2023". I have taken this to be a submission directed to support a finding that it was not unreasonable for the plaintiff not to accept the offer. Some context needs to be given to this submission, including to note the following matters:
1. The proceedings were commenced by summons in this Court on 10 May 2023. That summons, and an application for a stay of the warrant for possession made by NCAT, ultimately came before Campbell J on 19 May 2023. His Honour made a range of orders, including an order granting the plaintiff leave to file an amended summons by 7 June 2023 (order 4) and an order that the plaintiff file written submissions by 14 June 2023 (order 5). (The original hearing was fixed by Campbell J to occur on 21 June 2023, but that hearing date was changed and the matter listed on 10 July 2023. Nothing turns on this).
2. The plaintiff, contrary to these orders, did not file her written submissions until 10 July 2023 - thereby necessitating the defendant to file its submissions, which were dated 6 July 2023, before the plaintiff had filed hers.
3. The hearing on 10 July 2023 was adjourned at the request of the plaintiff.
The submission of the plaintiff, referred to in [53], above - directed to the suggested lateness of the offer - appeared to invite an inference, and finding, that the offer made was merely one at the "heel of the hunt" and, in some unspecified way, that the timing of it reflects adversely upon the defendant. To the extent that an inference to that effect, or something similar, was sought by the plaintiff, I am not prepared to draw it. Nor am I prepared to find that the timing of the offer was unreasonable in any way. On the contrary, it is difficult to see how, given the above matters, the defendant could have made a genuine offer to compromise the proceedings before then. That is to say, a properly considered offer made by the defendant would need to factor in the grounds raised in the summons that were to be pressed by the plaintiff, as well as the submissions that were filed in support of those grounds. This is what occurred. The offer also inevitably took into account the fact that, by the time it was made, the hearing had been adjourned at the request of the plaintiff and there would need to be a further hearing at a time to be determined.
Thus, I reject the plaintiff's submissions that the time at which the offer was made (or the timing of that more generally) was in some way evidence of the offer being an unreasonable one or that it was not a genuine compromise. In my view, the opposite is so: I consider the offer to be a reasonable one, reflecting genuine compromise and I consider that it was unreasonable for the plaintiff not to accept it.
In Miwa at [12], the Court of Appeal accepted that the factors relevant to the second question - viz., whether it was unreasonable for the plaintiff not to accept the offer - are those identified in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25].
In my view, having regard to the matters there raised, I am satisfied that the plaintiff unreasonably refused to accept the offer. In particular:
1. For the reasons given in [53]-[55], above, I am satisfied that the stage of the proceedings at which the offer was received was appropriate, and reasonable.
2. In relation to the time allowed to the plaintiff to consider the offer, the plaintiff did not submit (or suggest) that the time available for acceptance was unreasonably short - thereby denying the plaintiff a reasonable opportunity of considering the offer and, possibly, accepting it. In any event, I am satisfied, in the circumstances, that the time available was sufficient and reasonable.
3. The extent of the compromise has been earlier addressed. Put simply, the compromise was, in context, substantial given the costs incurred and the prospects that the defendant reasonably had of resisting the plaintiff's appeal.
4. There is no suggestion that the terms of the offer were anything other than clearly expressed, and I find that they are.
5. It is clear that the defendant foreshadowed an application for indemnity costs in the event that the offer was not accepted. The letter dated 2 August 2023 was clear and reasonably set out the basis for why the defendant adopted the approach that it had. It must be remembered, as well, that by that time the defendant had served upon the plaintiff comprehensive written submissions (the submissions were served on or around 6 July 2023 - that is, around one month prior to the service of the offer contained in the letter dated 2 August 2023) that dealt with each and every ground (or possible ground) covered by the amended summons, and why those grounds enjoyed little prospect of success.
In my view, notwithstanding that the plaintiff appeared in person (with the assistance of her nephew), given that I have found that the offer made by the defendant was a genuine offer of compromise and that it was unreasonable for the plaintiff not to have accepted it, I consider that the plaintiff should pay the defendant's costs on an indemnity basis from 3 August 2023.
[3]
Orders
For the above reasons, I make the following orders:
1. Dismiss the plaintiff's application to vary the costs order of 10 July 2023.
2. Dismiss the plaintiff's application to vary the costs order of 22 December 2023.
3. Vary order 3 made on 22 December 2023 and in lieu thereof:
1. order the plaintiff to pay the defendant's costs of the proceedings in this Court up to and including 2 August 2023 on the ordinary basis and thereafter on an indemnity basis.
1. Direct that the Registrar of the Court send by post a copy of these reasons for judgment to the plaintiff.
[4]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 06 March 2024
On 22 December 2023, I delivered judgment in the matter: Halil v NSW Land and Housing Corporation (No 2) [2023] NSWSC 1646 ('the primary judgment'). By that decision, I refused the plaintiff leave to appeal from the decision of the NSW Civil and Administrative Tribunal Appeal Panel ('the Appeal Panel') dated 15 March 2023 and ordered the plaintiff to pay the defendant's costs of the proceedings in this Court.
During the hearing of the plaintiff's summons, the defendant specifically foreshadowed that, depending upon the outcome, it may wish to seek a different order (rather than the usual order) in respect of costs. In those circumstances, when delivering judgment, I made an order granting liberty to either party to apply to vary the costs order, with such liberty to be exercised by 20 January 2024.
The plaintiff and the defendant have each exercised that liberty to apply. Accordingly, I made orders in Chambers requiring the filing and service of evidence and submissions, and indicated that I proposed to deal with any application in Chambers.
The plaintiff essentially seeks two orders: first, an order that vacates an order for costs made on 10 July 2023 (requiring the plaintiff to pay the defendant's costs of an adjournment of the hearing); and, secondly, an order relieving the plaintiff from the order for costs made on 22 December 2023.
The defendant resists the orders sought by the plaintiff and seeks an order that the plaintiff pay its costs on an ordinary basis up to 2 August 2023, and on an indemnity basis from that time based upon the non-acceptance of a Calderbank offer.
In circumstances where a determination of the plaintiff's application would, in effect, be dispositive of the defendant's application, it is convenient to first deal with the plaintiff's application.
The costs order made on 10 July 2023
The hearing of the plaintiff's amended summons was listed for hearing on 10 July 2023. At the commencement of the hearing, the plaintiff, who was represented by her nephew, sought an adjournment of the hearing. The basis for that application was that there was an extant application for legal aid which was yet to be processed and determined: see my ex tempore reasons for judgment at [7] and the primary judgment at [54].
The defendant opposed the adjournment. Nevertheless, I granted the adjournment to enable that application to be determined. The defendant sought an order that the plaintiff pay the costs of, and incidental to, the adjournment of the hearing. I heard argument from the parties on that question and, having done so, made the order sought by the defendant. The order made was that the plaintiff was to pay the defendant's costs of and incidental to the adjournment of the hearing.
Despite liberty being confined only to the costs order made on 22 December 2023, the plaintiff now seeks to re-agitate and vary the costs order I made on 10 July 2023, essentially arguing: (a) that the need for the adjournment did not arise through any fault of her own; (b) although Campbell J made an order referring the plaintiff to the Registrar for the purpose of a pro bono referral on 19 May 2023, there was, so the plaintiff argued, insufficient time to obtain and properly instruct counsel; and (c) if the Court considered that the plaintiff required assistance to prosecute her appeal, and to that end made the referral for pro bono assistance, then the Court should not have ordered an expedited hearing which necessitated the adjournment.
The defendant opposed the Court entertaining the application to vary the order made on 10 July 2023, pointing out that the requirements under r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') had not been met and that, in any event, the application was without merit.
I do not propose to vary the order that I made. That is for the following reasons.
First, the power for me to do so was not identified by the plaintiff. If, as the defendant submitted, the power was contained within r 36.16 of the UCPR, then the plaintiff has not complied with the terms of r 36.16(1). If, however, the power is suggested to be sourced independently of that rule, then there needs to be a proper basis for the Court to exercise that power. This has been suggested to involve, at a minimum, the necessity to demonstrate "changed circumstances [that make] it just and proper to do so": Douglas v John Fairfax & Sons Ltd [1983] 3 NSWLR 126, 134. And, even then, it is proper to only do so sparingly, and with caution: see generally in this respect Majak v Rose (No 5) [2017] NSWCA 238 - a case that concerned r 36.16 of the UCPR but nevertheless dealt with the matter by reference to general principle - at [12]-[13]; Waterhouse v Independent Commission Against Corruption (No 2) [2015] NSWCA 362 at [15]-[17]; Johnson v Mackinnon (No 2) [2022] NSWCA 22 at [6].
There should be no order as to costs of the appeal
The plaintiff argued that the order for costs that I made in favour of the defendant should be varied and that the Court should not make an order for costs in favour of the defendant.
The general rule is that costs follow the event: thus, "…if the court makes any order as to costs, the court is to order that costs follow the event, unless it appears to the court that some other order should be made as to the whole or any part of the costs": r 42.1 of the UCPR. This rule founds a "reasonable expectation" on the part of a successful party of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67], [134] ('Oshlack'); Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [25] ('Sangare').
As is clear from the terms of the rule, the Court retains a discretion to refuse costs to a successful party. Nevertheless, it should be emphasised that the onus lies on the unsuccessful party to demonstrate a basis for departing from the usual rule: Waterman v Gerling Australia Insurance Co Pty Ltd (Costs) [2005] NSWSC 1111 at [10]. It is therefore for the plaintiff to establish a basis for departing from the rule.
The plaintiff's ultimate submission is that she should not be liable for the costs of the defendant. The plaintiff has raised a number of reasons why that should be so. I will deal with each of the plaintiff's submissions in what follows.
The defendant was only nominally successful
The plaintiff next argued that she should not have to bear the defendant's costs because the defendant was only "nominally successful". In aid of this argument, the plaintiff pointed out that although the defendant secured an order terminating the tenancy, it failed in other respects, including in connection with the "debt and condition of the property".
I do not accept this submission. The defendant was wholly successful on the appeal. That is the event in the present case: Jaycar Pty Limited v Lombardo [2011] NSWCA 284 at [62].
The plaintiff's circumstances and public interest
The plaintiff submitted that the Court should consider her circumstances - including her age, state of health and her financial means - with the result that the plaintiff should not be ordered to pay the defendant's costs. The plaintiff also raised other matters - such as that she has suffered damage to her belongings - which were also argued to support the order sought.
I am unpersuaded that the plaintiff's age or state of health provide a sound basis so as to displace the usual order. Separately, it is difficult to see how, in point of principle, these matters could inform the exercise of the Court's undoubted discretion to otherwise order (the considerations referred to in Sangare at [27], albeit in the context of impecuniosity, in my view apply with equal force to any suggestion that age or ill-health could, of themselves, justify a departure from the usual order). Even if they could, I do not accept that they should in this case.
The plaintiff claims to be of limited financial means and submits that that is a proper basis to make the order she seeks. In relation to that submission, as the defendant properly noted, the plaintiff adduced no evidence about this (as to which see BTM1 v Scout Association of Australia New South Wales Branch (No.2) [2023] NSWSC 806 at [17], where Garling J emphasised that where impecuniosity is sought to be raised as a substantive ground to displace the usual order as to costs, "then it needed to be established by evidence"). I am not prepared to infer anything about the plaintiff's financial means or otherwise.
In any event, neither impecuniosity, nor hardship, of themselves, provide a basis to deprive a successful party of its costs: Sangare at [26]; Walker v Harwood [2017] NSWCA 228 at [20]. Nor do I consider that any suggested impecuniosity, in conjunction with the other matters raised by the plaintiff, is sufficient to do so.
The plaintiff also argued that there was a "public interest" dimension to the plaintiff's claim. As I understand the submission, it was argued that because the plaintiff had made complaints about the defendant's conduct, including that it was, apparently, "unwilling to resolve any issues with its vulnerable tenants", these matters justified the Court departing from the usual order.
I do not accept the plaintiff's "public interest" submissions. There is not, in my view, any public interest dimension to the plaintiff's claim. Rather, this was a private dispute between the plaintiff (as a tenant) and the defendant (as a landlord) about the terms and conditions of that tenancy that resulted in proceedings in NCAT. The defendant was successful in the proceedings in NCAT, and the appeals by the plaintiff to the Appeal Panel were unsuccessful. The plaintiff then appealed, unsuccessfully, to this Court. That appeal did not involve any question or issue of public importance nor was there any "public interest" dimension to it, in my view. A consideration of the primary judgment demonstrates why that is plainly so.
Secondly, and following on from the above, the plaintiff here is doing no more than rearguing what was fully argued on 10 July 2023, but seeking to do so on a different and, as the defendant emphasised, inconsistent basis to what was argued on that day. In my view, it is contrary to the just, quick and cheap resolution of the real issues in the proceedings (s 56 of the Civil Procedure Act 2005 (NSW)) and the dictates of justice to allow that to occur. There are no changed circumstances or other matters that might warrant the issue being revisited, only a desire on the part of the plaintiff to reargue the matter so as to secure a different result.
Thirdly, I do not accept the basic premise of the plaintiff's submissions, being that the need for the adjournment arose without fault on the part of the plaintiff. Given the long and protracted history - and the fact that the applicant was pursuing legal aid whilst the tenancy dispute was before the NSW Civil and Administrative Tribunal (see the primary judgment at [54]) - the plaintiff had more than sufficient time to pursue any application for legal aid or retain the services of lawyers if she saw fit. Separately, she could have pursued an application for an adjournment well before the scheduled day of hearing of her appeal. In my view, given the circumstances surrounding the application, including the fact that it was made only on the morning of the hearing, there was an overwhelming basis upon which to make the order that the plaintiff pay the costs of the adjournment.
I therefore dismiss the plaintiff's application to vary the costs order made on 10 July 2023.
In my view, the proceedings both in this Court and in NCAT merely involved a public corporation. That litigation involves a public corporation does not inevitably mean that the proceedings contain a public interest dimension. The position is not otherwise merely because the plaintiff has made complaints against the way in which the defendant has, upon the plaintiff's arguments, dealt with their claim. Further, the fact that the defendant "is a public authority is likewise irrelevant" to the cost discretion: Sangare at [28], citing Oshlack at [92].