Jianwei Liu v State of New South Wales

Judgment 1On 23 July 2014 I heard argument on the question of the order for costs to be made in these proceedings. The plaintiff claims an order for costs against the defendant on the ordinary basis. The defendant claims that each party should bear his/its own costs of the proceedings up to and including 7 April 2014, and thereafter the plaintiff to pay the defendant's costs on an indemnity basis. 2In accordance with reasons delivered on 16 July 2014, I proposed to award damages to the plaintiff in the total amount of $27,615 of which there was the amount of $10,000 for the monetary value of the jade pendant. On 23 July 2014 the parties agreed on interest in the amount of $6,500. I thereupon ordered judgment for the plaintiff for damages and interest in the total amount of $34,115. 3The relevant procedural background is as follows. 4The proceedings were commenced by a Statement of Claim filed on 11 May 2012, in which the particulars of damages included an allegation that the estimated value of the pendant was $1.5 million. The Defence filed 12 September 2012, inter alia, put damages in issue. 5On 10 May 2013 the plaintiff was ordered to file expert reports on valuation by 21 June 2013, extended by order made on 28 June 2013 to 22 August 2013, to enable a valuation to be obtained. 6On 20 November 2013, before Davies J, the plaintiff corrected the amount claimed in the particulars for the pendant by substituting the Australian dollar equivalent of RMB1.5 million (then said to be about $270,000), for the amount of $1.5 million. Leave was granted to the defendant to rely upon the expert reports of Mr Joel of 18 and 19 November 2013. The plaintiff was ordered to serve any expert reports in reply by 18 December 2013. 7On 10 February 2014 the proceedings were again before Davies J on an issue concerning mediation, during which the following exchange took place between his Honour and the plaintiff's solicitor: "HIS HONOUR: I want you to understand this very clearly, Ms Chen, because the way this case has been conducted by the plaintiff is a disgrace. For the amount that is involved in it is ridiculous that it is even in this Court. I order a mediation, you consent and then you don't go to it because you have changed your mind about the costs of it. If you don't attend this settlement conference you will need to justify why it shouldn't be struck out on the next occasion. CHEN: Your Honour, just to clarify for mediation, I apologise for I didn't think of the costs but if your Honour say that this matter is just about $1,000, I don't agree because-- HIS HONOUR: You don't have any evidence that it is anything at all. CHEN: Your Honour, we have evidence saying that valuers can't value the jade pendant without seeing the physical jade pendant. It is unlike what my friend said, we just can't value. We gave expert evidence saying without the physical jade pendant, so they can't just value, otherwise it is just an assumption, and I talked to many valuers and they have the same opinion. What evidence we can give if the valuer can't give a figure? His HONUR: It may be very unfortunate, and I said this to you on the last occasion, it may be unfortunate that it has been destroyed and therefore you have this difficulty, but you can only succeed in this Court if you show what its value was and you don't have any evidence. If Mr Bradley hadn't gone off and got evidence there'd be nothing. " 8On 3 March 2014 the parties were given leave to obtain a hearing date. 9By letter of 8 April 2014 the defendant's solicitors made a Calderbank offer to the plaintiff's solicitors which included: "We have reviewed the evidence you have served so far and maintain that the plaintiff lacks sufficient, or any, evidence justifying the approximately $250,000 he now claims for the jade pendant. We have also obtained a supplementary report from our expert, Mr Warren Joel. He maintains that the pendant is worth, at most, no more than $5,000 to $10,000. We have served a copy of Mr Joel's supplementary report on you today by way of a separate letter. A two day hearing is likely to be expensive, involving interpreters and several expert and lay witnesses. Pursuant to rule 42.34 of the UCPR, we will submit that we should not be required to pay the plaintiff's costs as the proceedings have been commenced in the District Court. In the interests of a commercial and timely resolution of the proceedings, and given that this matter is listed for hearing on 1-2 July 2014, our client offers to settle the proceedings on the following terms: We agree to pay $40,000, inclusive of costs, in full and final settlement of his claim. If your client does not accept this offer and obtains an outcome at trial no more favourable than the terms of this offer, our client will produce this letter to the court on the question of costs. Our client will seek that your client pays the costs of the proceedings on an indemnity basis from the date of this letter. " 10The offer was open for acceptance until 29 April 2014 but was not accepted. 11By letter of 29 May 2014 the defendant's solicitors made another Calderbank offer in terms substantially similar to those in the letter of 8 April 2014. It was open for acceptance until 12 June 2014, but was not accepted. 12By letter of 26 June 2014 the defendant's solicitors made another Calderbank offer in terms substantially similar to those in the earlier letters, but increased the amount offered to $50,000, inclusive of costs. It was open for acceptance until 30 June 2014, but was not accepted. 13Under s 98 Civil Procedure Act 2005, subject to the rules, costs are in the discretion of the Court. UCPR, Part 42, rule 42.1 is the general rule that costs follow the event unless it appears to the court that some other order should be made. 14Rule 42.34 provides: "42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court (1) This rule applies if: (a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted."