Langdon v Carnival PLC t/as P&O Cruises Australia

The law

1. The starting point is the Court's power to award costs in the circumstances governed by s 98 of the Civil Procedure Act 2005 (NSW), which confers the Court broad discretionary power, and rr 20.26 and 42.15A of the UCPR which relevantly reads: "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. … 42.15A Where 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 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.

Indemnity costs - the law

1. The general rule is that costs are payable on an ordinary basis. A court should only depart from the general rule and award indemnity costs where the conduct of the party against whom the order is sought is "plainly unreasonable": see Sydney City Council v Geftlick [2006] NSWCA 280 ('Geftlick') per Tobias JA at [91] (Mason P and Hodgson JA agreeing). Indemnity costs orders should be reserved for the most unreasonable actions by unsuccessful plaintiffs: see Leichhardt Municipal Council v Green [2004] NSWCA 341 ('Leichhardt Municipal Council') per Santow JA at [57] (Bryson and Stein JJA agreeing). This decision applies to Calberbank offers but not necessarily to offers of compromise.
2. In Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790, Bergin J (at [9]) confirmed the relevant principles in relation to Calderbank offers by reference to Leichhardt Municipal Council, stating that the costs consequences attendant under the general law upon an offer of compromise made in a Calderbank letter are in the court's discretion, to be exercised having regard to all of the relevant circumstances of the case. Firstly, there is not a prima facie presumption in favour of an award for indemnity costs if the Calderbank offer is not accepted and is not bettered; secondly, a Calderbank offer that has no real element of compromise in it, which is designed merely to trigger costs sanctions, will not be treated as a genuine offer of compromise; thirdly, there is no rule that an optimistic offer is not a genuine offer. Whether or not it was reasonable to reject an offer is a question that may figure in the discretionary balance, but it is not a question which affects the genuineness of the offer; and fourthly, an applicant for an order for indemnity costs consequent upon an unaccepted Calderbank offer must show that the rejection of the offer was unreasonable. Thus the questions for the court are (a) whether the offer was a genuine offer of compromise; and (b) whether it was unreasonable for the recipient of the offer not to accept the offer: see Miwa Pty Ltd v Siantan Properties Pty Ltd (No. 2) [2011] NSWCA 344 at [8].

The defendant's submissions

1. The defendant submitted that the 2 offers are either offers of compromise or Calderbank offers.

The first Calberbank offer

1. By letter dated 24 June 2021, the defendant served a Calderbank letter proposing resolution of the entirety of the plaintiff's claim on the following terms: 1. the plaintiff's claimed to be dismissed; 2. each party to bear their own costs. 3. On 24 June 2021, a Calderbank letter or offer of compromise was served on the plaintiff containing an offer on the same terms as the defendant's first offer.
2. The defendant's first offer was open for acceptance for 28 days from the date of service. The plaintiff allowed the defendant's first offer and Calderbank offer to lapse without response.
3. On 2 September 2021, before the second offer of compromise was made the defendant wrote to the plaintiff's solicitor and stated: "For the purpose of obviating any need for an expert opinion on liability, we are instructed to concede breach of duty on the basis that the timber step to the pool area suddenly gave way and collapsed when the plaintiff descended the steps as pleaded in paragraph 4(f) of the Statement of Claim. However, the cause and extent of the plaintiff's alleged injuries and ongoing complaints remain in dispute. … We expected to be in a position to serve medical evidence by 29 October 2021."

The second offer of compromise

1. By email dated 19 April 2022, the defendant served a further offer of compromise in which it offered to resolve the entirety of the plaintiff's claim against it on the basis of judgment for the plaintiff in the sum of $80,000 ('defendant's second offer'). This offer of compromise was silent as to costs.
2. The defendant's second offer was open for acceptance for 28 days from the date of service.
3. The defendant's second offer was allowed to lapse without response.

The plaintiff's offers of compromise

1. On 27 April 2022, the plaintiff served an offer of compromise in which the plaintiff offered to resolve the entirety of his claim against the defendant on the basis of a judgment for the plaintiff in the sum of $750,000 and that the defendant pay the plaintiff's costs.
2. For completeness, on 23 March 2023, the plaintiff made a Calderbank offer to the defendant that it pay the plaintiff the sum of $200,000 plus costs assessed on a "standard basis".
3. These offers of compromise were allowed to lapse.

The defendant's submissions

1. The defendant submitted that it has obtained judgment on the plaintiff's claim on terms that are no less favourable to it than the terms of the defendant's first offer and in the alternative, no less favourable to it than the terms of the defendant's second offer.

The first offer - 25 June 2021

1. Rule 20.26(3)(a)(i) of the UCPR specifically anticipates circumstances in which a party may propose judgment in favour of the defendant with no order as to costs.
2. In Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336, Campbell JA, with whom McColl JA and Sackville AJA agreed, stated at [17]: "The Respondent submits that there was little compromise involved in a "walk away" offer. I do not agree. By the time the offer was made the RTA had incurred the pre-trial costs involved in taking statements from numerous witnesses, collating numerous documents, and qualifying experts. It also had incurred the costs of four days hearing."
3. On 25 June 2021, at the time of the defendant's first offer, it stated that it had incurred substantial costs in the sum of $8,553.60 inclusive of GST. The defendant's willingness to forego what would have otherwise been its entitlement to legal costs up to the date of the proposed dismissal, pursuant to r. 42.19(2) of the UCPR, therefore represented a genuine and significant compromise.
4. The defendant submitted that its first offer was made at a time when the plaintiff knew or ought to have known that he had: 1. not fallen over or struck his left shoulder or neck in the subject incident; 2. sustained at least two separate falls shortly after the subject incident, including a fall in the bathroom of Trios Sports Club on 21 December 2017 and a mechanical fall one week prior to that, as identified in the Judgment at [111] - [112]; and 3. provided multiple inaccurate and inconsistent accounts of the subject incident to various medico-legal experts.
5. It was unreasonable for the plaintiff to reject the defendant's first offer because the plaintiff knew or ought to have known that his claim was founded on an evolving, inaccurate, and favourable version of the subject incident. Her Honour Harrison AsJ formed the view that "the plaintiff sought to portray himself in a favourable light so has tailored his evidence to do so": Judgment at [120].
6. The defendant's Calderbank letter set out the basis upon which the defendant's first offer and/or Calderbank offer were reasonable.
7. The first Calderbank letter specifically put the plaintiff on notice that: "The plaintiff has told a number of doctors (including Dr Dennerstein and Dr Jenkins) that he fell onto his back/left shoulder in the incident and was helped up by bystanders. This description of the incident is contradicted by CCTV footage which clearly shows that: the plaintiff did not fall onto his back or shoulder; the plaintiff landed on his feet and proceeded to lift the broken step by himself and without any apparent difficulty."
8. The Court of Appeal (per Meagher, Beazley and Santow JJA) in Jones v Bradley (No 2) [2004] NSWCA 258 ('Jones v Bradley (No 2)'), "'Calderbank offers' are well recognised means of making offers of settlement in circumstances where the party making the offer ultimately seeks a costs advantage if the offer is not accepted".

The second offer - 19 April 2022

1. In the alternative, the defendant seeks an order for costs to be awarded on the ordinary basis up to 19 April 2022, and on an indemnity basis thereafter.
2. On 19 April 2022, at the time of the defendant's second offer, it submitted that it had incurred substantial costs in the sum of $35,027.50 inclusive of GST. The defendant's willingness to forego what would have otherwise been its entitlement to legal costs up to the date of the proposed dismissal, pursuant to r. 42.19(2) of the UCPR, therefore represented a genuine and significant compromise.
3. The terms of the defendant's second offer would have meant that the plaintiff would have received a sum of money and his costs paid. The defendant has bettered that offer by some margin.
4. The defendant repeats paragraph [23] in relation to the second offer.
5. It was unreasonable for the plaintiff to reject the defendant's first offer because the plaintiff knew or ought to have known that his claim was founded on an evolving, inaccurate, and favourable version of the subject incident.
6. The defendant has been put to significant expense by the plaintiff's commencement and continuation of his claim.

The plaintiff's lengthy submissions

1. The defendant in its written submissions seeks the plaintiff pay its costs in accordance with the UCPR or Calderbank, on the basis that it sought to resolve these proceedings by serving offers on two (2) occasions.
2. The plaintiff allowing the defendant's offers to lapse does not automatically entitle the defendant to costs on an indemnity basis in accordance with Calderbank. By not letting the defendants' offers to lapse was not unreasonable so as to justify this type of costs order, and the greater circumstances of the litigation ought to be taken into consideration by the Court.
3. At the time of each offer, the plaintiff was not equipped with sufficient information to understand nor appreciate the difficulties in his case, in part due to the conduct of the defendant. He did not consider either offer compelling and did not act unreasonably in declining the offers when considering the context of the expert medical and liability evidence available at the time. The plaintiff is entitled to rely on expert opinion in assessing the merits of his case and considering any offers made by the defendant.
4. The defendant's conduct generally, but specifically in relation to the issue of liability, was obstructive and caused unnecessary delay to these proceedings. On this basis, the defendant by virtue of its conduct should not be entitled to costs of an indemnity basis, having regard to the guiding principles stipulated by sections 56 to 60 inclusive of the Civil Procedure Act 2005 (NSW).
5. The Court should not grant the orders sought and submitted that the defendant is only entitled to the usual order for costs which a successful litigant is entitled to receive, being costs on a "party and party" basis.
6. Unusually, the plaintiff also submitted that he ought to be entitled to costs from the defendant, on a "party and party" basis until the date the defendant admitted breach, being 1 September 2021.

Liability evidence

1. Prior to engaging solicitors, the plaintiff attempted to engage with the defendant as early as 22 November 2017.
2. The plaintiff through his solicitors continued to attempt to engage with the defendant without the need for litigation, to no avail. It became apparent that the plaintiff would be required to commence proceedings in order to obtain the CCTV footage of the incident and progress any claim for damages.
3. Once proceedings were commenced, on 17 December 2020 the plaintiff filed a subpoena for the production of records relating to the subject incident ("the subpoena"). The scope of the subpoena requested documents relating to subject incident including but not limited to the CCTV footage and maintenance records relating to the step.
4. The defendant filed its defence on 12 February 2021 in which it:- 1. denied that the step was not properly maintained [at 4(b)]; 2. did not admit that the plaintiff descended onto the step from the timber decking; and 3. that the step suddenly gave way and collapsed, causing the plaintiff to fall sixty centimetres onto the tiled floor below [at 4(c)].
5. The plaintiff notes the following timeline of events relating to the issue of the defendant's non-compliance with the subpoena, proposed interrogatories and liability evidence:- 1. On 17 December 2020, solicitors for the defendant confirmed its position that the issue of a subpoena was premature as a defence had not yet been filed. The subpoena was served on 20 December 2020 with a return date of 21 January 2021. 2. The defendant did not comply with the subpoena by 21 January 2021. 1. Orders dated 2 February 2021 required the defendant to comply with the plaintiff's subpoena by 26 February 2021; and 2. A further return date for the subpoena was listed on 1 March 2021. 1. The defendant partially complied with the subpoena on 1 March 2021 and 2 March 2021, where footage was provided. 2. As the defendant did not fully comply with the subpoena, further return dates were listed on 19 March 2021, 27 April 2021 and 20 May 2021 respectively. The plaintiff incurred costs as a result of the defendant's non-compliance and relisting of the subpoena's return date. 3. On 17 May 2021, the defendant produced a spreadsheet of maintenance records. The defendant confirmed it no longer held copies of the documents sought in the subpoena and that the spreadsheet produced was the only maintenance record in the defendant's custody and/or control, as the subject ship was no longer part of its fleet. The defendant also denied liability and reiterated its position regarding an amended defence, stating "that it is not a matter for the plaintiff to tell [the defendant] what it should and should not admit." 4. The overall delay was approximately four (4) months from the original return date of 21 January 2021 until 17 May 2021. 5. On 8 June 2021, the plaintiff requested an explanation regarding the defendant's non-compliance with the subpoena. The assertion that the defendant no longer held records was rejected in circumstances where the subject ship was part of the defendant's fleet from 2015 to 2020. The need for records in preparing the plaintiff's liability case was stressed, and the filing of an application to enforce compliance with the subpoena in the absence of the defendant's compliance or concession on the issue of breach of duty of care was foreshadowed. 6. On 24 June 2021, the defendant responded refusing to provide the material for the same reasons previously provided. 7. Also on 24 June 2021, a second letter was received by the plaintiff's solicitors (two (2) minutes later) with the defendant's first offer (as noted in its submissions). 8. The plaintiff required liability evidence for the matter to proceed, so during the period 24 June 2021 to 1 September 2023 the plaintiff's solicitors made enquiries with Dr Richardson of DVExperts International Pty Ltd in relation to the provision of an expert liability report. 9. On 2 July 2021, the plaintiff again requested a concession be made as to liability in the absence of the records sought. The plaintiff foreshadowed the necessity of making an application for an order that the plaintiff administer, and defendant answer, interrogatories. 10. On 6 July 2021 the parties exchanged correspondence relating to interrogatories, in which the defendant objected to orders relating to same. In the absence of an agreement, the parties agreed to an adjournment to properly review the issue of proposed interrogatories and a timetable. 11. On 6 July 2021 the plaintiff through his solicitors provided an explanation to the Court regarding the delay, namely the inability to obtain expert liability evidence without the documents required to brief an expert witness. 12. Orders dated 6 July 2021 (which were agreed between the parties) required the plaintiff to provide the defendant with proposed interrogatories by 13 July 2021 and a response from the defendant by 27 July 2021. 13. On 14 July 2021, the plaintiff provided the defendant with proposed interrogatories, and received no response. 14. On 26 July 2021, the plaintiff requested a response. The defendant's solicitors confirmed they were awaiting instructions from the defendant regarding the proposed interrogatories; and consent orders were agreed between the parties and proposed to the court. 15. Court orders dated 11 August 2021 (again agreed between the parties) required the defendant to advise the plaintiff whether it agrees to the proposed interrogatories by 20 August 2021. 16. On 31 August 2021, the plaintiff requested the defendant's compliance with the orders. 17. On 1 September 2021, the plaintiff confirmed to the defendant his intention to file a notice of motion. 18. On 1 September 2021, approximately twenty (20) minutes later, the defendant conceded on breach of duty of care and requested confirmation that the plaintiff no longer pressed the proposed interrogatories. The plaintiff subsequently consented to the defendant's concession and confirmed that he no longer pressed the proposed interrogatories. 19. Later, on 1 September 2021, the parties provided an explanation to the Court as to why the timetable was no longer required, confirming the agreement on breach.
6. Substantial cost was incurred by the plaintiff in relation to the issue of the defendant's non-compliance with the subpoena, and lack of response regarding the proposed interrogatories.
7. In addition to plaintiff's solicitors spending considerable time and resources making enquiries with a liability expert, during the month of August 2021 time was spent drafting a notice of motion and supporting affidavit, seeking orders to administer interrogatories on the defendant.
8. The directions listings on 7 July 2021, 13 August 2021 and 2 September 2021 mostly comprised the parties' conferral on these issues, which ultimately resulted in the defendant's concession on breach.
9. The plaintiff attempted to prepare his liability case and position from as early as 2018. From 8 June 2021, the plaintiff requested the defendant concede on breach and file an amended defence to admit paragraphs 4(e) and (f) of the statement of claim.
10. The plaintiff also notes the following:- 1. Orders dated 8 April 2022 (which were agreed between the parties) required the defendant to file and serve an amended defence by 25 April 2022. 2. The defendant did not file its amended defence until 23 June 2022. 3. Orders dated 8 July 2022 (which were agreed between the parties) required the defendant file a further amended defence admitting breach of duty of care by 15 July 2022. 4. Again, the defendant did not do so until 7 October 2022. 5. On 19 September 2022, the plaintiff received the defendant's first request for further and better particulars, almost two (2) years after the commencement of proceedings. Despite no orders requiring the provision of same, the plaintiff responded on 9 March 2023.

Medical evidence

1. The defendant was aware of the plaintiff's injuries and disabilities as early as 1 February 2021 when the plaintiff's statement of particulars was filed.
2. Orders were first made on 2 September 2021 for the provision of expert medical evidence and required the defendant to serve expert medical evidence by 11 March 2022.
3. The defendant first confirmed bookings were made with experts on 17 August 2021 and 25 August 2021 respectively. The defendant did not proceed with an appointment with an Orthopaedic Surgeon on 8 September 2021; later booking an assessment with a different expert on 7 June 2022.
4. The defendant served medical evidence for the first time on 17 March 2022 (being the opinion of Dr Doron Samuell, Psychiatrist, only) despite Orders requiring same by 11 March 2022. The defendant later served further expert medical evidence on 6 July 2022 and 23 December 2022, with leave of the Court.

The defendant's first offer

1. In relation to the defendant's first offer of compromise, the defendant in written submissions asserted that the first offer was made at a time when the plaintiff knew or ought to have known that he had: 1. not fallen over or struck his left shoulder or neck in the subject incident; 2. sustained at least two separate falls shortly after the subject incident, including a fall in the bathroom of Trios Sports Club on 21 December 2017 and a mechanical fall one week prior to that, as identified in the Judgment at [111] - [112]; and 3. provided multiple inaccurate and inconsistent accounts of the subject incident to various medico-legal experts.
2. The plaintiff rejects this these assertions. As at the date of the first offer the plaintiff had served one (1) medico-legal report, being the report of Professor Lorraine Dennerstein dated 22 June 2018. No expert medical evidence had been obtained by the defendant. There were no "multiple inaccurate and inconsistent accounts of the subject incident to various medico-legal experts."
3. The first offer was not a genuine offer and did not contain any real element of compromise. It demanded a complete capitulation when the defendant had previously withheld documents. The documents should have been provided to the plaintiff without delay and would have eliminated a significant portion of the defendant's costs incurred up until the date of the second offer.
4. The plaintiff and his solicitors did not have the benefit of reviewing the CCTV footage until produced by the defendant to the Court on 2 March 2021. This Court (as evidenced by the Practice Note) expects that when cases are commenced - significant steps have been taken to prepare the case, including the obtaining of medical opinions.
5. The assessment conducted by Professor Dennerstein was on 20 June 2018. The report was served on 28 January 2021. The plaintiff's version of events at that time was to the best of his recollection and belief, and the expert and the plaintiff's solicitors relied on these instructions in the absence of footage; which as detailed above had been withheld by the defendant.
6. Failing to provide those documents could lead to a conclusion that the offer did not involve "a real and genuine element of compromise" [emphasis added] (See Herning v GWS Machinery Pty Ltd (No. 2) [2005] NSWCA 375; Regency Media v AAV Australia Pty Ltd [2009] NSWCA 368; and other cases cited in Tonna v Mendonca (No. 2) (2011) 288 ALR 385; [2020] NSWSC 306).
7. In its written submissions the defendant states that the first offer was made at a time which one would expect any significant expenditure on costs legitimately or reasonably to have been incurred, and that it had incurred substantial costs in the sum of $8,553.60 inclusive of GST at this time of making the defendant's first offer. The plaintiff rejects that its willingness to forego payment of these costs on the terms proposed by the first offer represented a genuine and significant compromise at that time.
8. In this regard the plaintiff also takes the opportunity to note the defendant's concession of breach on 1 September 2021, some eight (8) months following service of the subpoena and ten (10) months following the commencement of proceedings. Despite this concession, there was further delay in the defendant filing its amended and further amended defence (which did not occur until 7 October 2022); a total delay of approximately twenty (20) months. Up until the filing of the amended defence, the plaintiff had no pleadings which confirmed the defendant's breach of duty.
9. In Jones v Bradley (No 2) in its written submissions: "'Calderbank offers' are well recognised means of making offers of settlement in circumstances where the party making the offer ultimately seeks a costs advantage if the offer is not accepted" [emphasis added]. Indemnity costs should not be used as a weapon to inhibit either party from litigating an issue reasonably in contention between them.
10. The defendant's legal costs from the commencement of proceedings to the date of the defendant's first offer was likely for time spent obstructing the plaintiff's liability case and investigations. Substantial cost was incurred by the plaintiff's solicitors during this period, majority of which could have been avoided with the defendant's cooperation.
11. It was not unreasonable for the plaintiff to not accept the defendant's first offer at the time in which it was made. It was not a true compromise of the case at that time.

The defendant's second offer

1. On or about 19 April 2022, the defendant served a further offer of compromise in which it offered to resolve the entirety of the plaintiff's claim against in the sum of $80,000.00 ("the second offer").
2. The second offer was open for acceptance for twenty (28) days, expiring on or about 17 May 2022. The plaintiff did not accept the second offer and allowed the offer to lapse. The second offer was not a genuine offer and did not contain a real element of compromise.
3. In the defendant's written submissions, it states that it was unreasonable for the plaintiff to reject the second offer because "the plaintiff knew or ought to have known that his claim was founded on an evolving, inaccurate, and favourable version of the subject incident." The plaintiff rejects these assertions.
4. As at the date of the second offer, the defendant had been served with the plaintiff's expert medical evidence. This issue of causation remained at large.
5. At the time the second offer was served (on 19 April 2022), the defendant had not served on the plaintiff any expert medical evidence relating to the plaintiff's physical injuries. There was no alternative opinion evidence on causation in which the plaintiff could make an evaluative opinion on the strength, or weakness, of the case.
6. On the issue of causation, the defendant relied on the opinions of Dr Brett Courtenay, (contained in his report dated 4 July 2022) and Dr Seamus Dalton (contained in his report dated 16 May 2022); both of which the defendant did not have in its possession at the time of making its second offer.
7. The defendant also submitted that at the time on the second offer, it had incurred substantial costs in the sum of $35,027.50 inclusive of GST. The plaintiff rejects the assertion that its willingness to forego payment of these costs on the terms proposed represented a genuine and significant compromise at that time.
8. The defendant served expert medical evidence for the first time on 17 March 2022. This was despite the report of Dr Doron Samuell, Psychiatrist, being dated 20 December 2021, following the assessment which was conducted on or about 27 October 2021.
9. Assuming the defendant received and reviewed the report at some point between 20 December 2021 and 17 March 2022, a large portion of the defendant's legal costs from the commencement of proceedings to the date of the defendant's second offer likely related to the defendant's obstruction of the plaintiff's liability case until 1 September 2021.
10. It is a matter for the defendant to explain work rendered by its solicitors for the period 1 September 2021 to the date of the second offer, as breach had been admitted with the main issue in dispute remaining being causation and quantum. The plaintiff did not receive details of an assessment with Dr Courtenay until 3 May 2022 with his opinion being provided to the plaintiff on or about 6 July 2022. Further, Dr Dalton's report was prepared on the paper and was received by the plaintiff on or about 23 June 2022.
11. It was not until the provision of the defendant's medical opinion evidence that the plaintiff had any alternative opinion as to causation. It was not unreasonable until the defendant had served all its evidence, for the plaintiff to reject the defendant's second offer.
12. Further the plaintiff makes reference to my findings of causation of the plaintiff's physical injuries [at 212]: "My findings as to the plaintiff's neck and shoulder injury After reviewing all the medical evidence of the neurologist, orthopaedic surgeons and the physicians, it is more likely that the preponderance of evidence is that the plaintiff suffered from muscular strain. At best, Dr Blombery says that the jarring of the fall possibility aggravated pre-existing degenerative changes to the cervical spine. The plaintiff has - to an extent - succeeded on establishing that he has suffered from a physical condition arising from the incident, albeit this paragraph of the judgment is at odds with paragraphs [at 231] and [at 341], and the assessment of damages."
13. The plaintiff accepts that the determination [at 225 and 230] is that the plaintiff has not established that he suffered a psychological and/or psychiatric condition caused by the subject incident.
14. The plaintiff's credibility is a matter to consider in the preparation of a damages case arising from negligence, and that this was an issue for her Honour to consider at hearing. In the absence of medical evidence relating to the plaintiff's physical injuries from the defendant, the plaintiff fails to see how this ought to have been considered at the time of the second offer was made.
15. For these reasons, the plaintiff acted reasonably in not accepting the defendant's second offer, at the time on which it expired on or about 17 May 2022.
16. While the plaintiff conceded that the defendant has obtained judgment on terms no less favourable to it than the terms of both the first and second offers, the plaintiff rejects that the defendant is entitled to either of the cost orders sought.
17. The plaintiff noted that the defendant has been put to the expense of defending these proceedings. The plaintiff submitted that the defendant's conduct contributed substantially to the delay and elevated cost of the continuation of same.
18. The case was decided on the issue of factual causation in the defendant's favour. The plaintiff noted his success on the issue of breach. The defendant would have failed at hearing in the absence of this concession on the issue if breach, however substantial costs were incurred by the plaintiff in dealing with this issue.
19. The course of the litigation demonstrates exceptional circumstances that warrant the Court's consideration on the issue of costs, and that the appropriate and just order should be the usual order for the payment of the defendant's costs on a "party and party" basis only.
20. The defendant ought not receive its costs even on a "party and party" basis with respect to the period up until admission of breach of duty, being 1 September 2021. Any cost order with respect to the payment of the defendant's costs ought to commence from 1 September 2021.

A flawed premise

1. The plaintiff's primary contention for why it is that the defendant should not have its costs as sought is that he was not fully appraised of the case he was to meet at the time of the various offers, which is said in part to be due to the defendant's conduct. The defendant's conduct is also advanced as the basis for what appears to be an "otherwise order" that the defendant pay the plaintiff's costs for a period.
2. The Court should take a dim view of any contention that seeks to assign responsibility for the plaintiff's plight upon the defendant. This is particularly so as the plaintiff was at all times represented by competent solicitors, was aware of what had occurred on the day of the accident, was aware of what he had informed his medical experts and ultimately that this was his case to bring, settle or discontinue.
3. The defendant's conduct, and in particular the conduct complained of, could not have borne upon the reasonableness of the plaintiff's refusal to accept any offer, particularly considering that ultimately the result turned upon the Court not being able to accept the plaintiff's evidence. Nor could it attract any criticism.

Principle

1. On an application to depart from the ordinary rule of costs, the onus lies upon the unsuccessful party: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]. If considering a departure from the ordinary rule, the Court should have regard to the purpose, rationale and principles of fairness which inform the general rule, referred to above, in particular that the award of costs should reflect the relative responsibilities of the parties for the incurring of costs: Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]; Turkmani v Visalingam (No 2) [2009] NSWCA 279 at [13].
2. The Court retains a broad discretion in respect of these matters: Oshlack v Richmond River Council [1998] HCA 11; (1999) 193 CLR 72 at [69]; Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 at [97]-[98].
3. Only in an exceptional case would a successful party not only be deprived of its costs but also ordered to pay an opponent's costs: Knight v Clifton [1971] Ch 700; Trade Practices Commission v Nicholas Enterprises Pty Ltd (No. 3) (1979) 42 FLR 213 at 220; Arian v Nguyen (2001) 33 MVR 37; [2001] NSWCA 5.

Defendant's conduct

1. There was simply nothing in relation to the defendant's conduct of the proceedings which in anyway would entitle the plaintiff to an otherwise order, or that would cause the Court concern in relation to either of the two offers the defendant made to settle the proceedings on terms that were better than the outcome of the proceedings for the plaintiff.
2. Take for example the complaint about various extensions to the timetable. True it is that the defendant needed to seek various extensions to the timetable. Minor delays are common in all litigation, particularly in circumstances where a party has little or no control over the availability of experts, or the time an expert requires to complete a report. That delay was not relevant to the plaintiff's case in any event.
3. Take for further example the defendant admitting breach after it had initially denied it. All that did was narrow the issues in dispute rather than waste the Court's time unnecessarily. That is entirely appropriate conduct.
4. Another example is the fact that the defendant served its medical evidence after the offers of compromise (being an entirely normal time to do so). There was nothing in the medical evidence that changed the core understanding of the case.
5. The plaintiff's submissions neglect to concede that the primary cause of the costs in the proceedings were entirely at the feet of the plaintiff, namely: 1. his decision to commence and continue them; and 2. his failure to accept either of the offers made by the defendant. 3. At all times the one person who knew exactly what had occurred on the day of the accident, and what had occurred after, was the plaintiff. Those matters had to be discovered by the defendant as the litigation continued.
6. Some complaint is made in the plaintiff's submissions that at the time of each of the defendant's offers, there was insufficient evidence exchanged between the parties for the defendant to appreciate the reasonableness of the offers. In fact, at the time of making its offers, it was the defendant that was at a forensic disadvantage as compared to the plaintiff, as the plaintiff had direct knowledge of: 1. the circumstances of the subject incident; 2. his own conduct post-incident, including snorkelling and day-trips during the subsequent days of the cruise; and 3. the two separate falls shortly after the subject incident.
7. The operation of r 20.26 is therefore uncontroversial in this instance. This is not a case where it was an assessment of the quantum of any offer that informed reasonability. In this instance the plaintiff has been wholly unsuccessful. Any offer was better than none.
8. Further, had there been a true problem with the plaintiff understanding the particularity of the defence being advanced by the defendant at the time of either offer, then notice could have been given pursuant to r 20.26(4) of the UCPR for such matters to be attended to. The plaintiff provided no such notice. It is too late to make such complaint now.

The otherwise order

1. Remarkably, the plaintiff seeks the extraordinary order that his legal costs be paid by the defendant on an ordinary basis up to 1 September 2021, being the date that the defendant admitted breach of its duty of care. He does so without reference to any offer he made, or any proper articulation of disentitling conduct that would ordinarily permit of such an order: see for example Oshlack v Richmond River Council [1998] HCA 11; (1999) 193 CLR 72. It is also a costs order sought without distinguishing what costs at that stage were referrable to questions of liability (i.e. likely none) and those referrable to causation and quantum (i.e. all).
2. Setting aside the fact that that the plaintiff clearly incurred costs in relation to elements of his case beyond the investigation of the breach issue prior to 1 September 2021, such an award does not accord with guiding principles of sections 56-60 of the Civil Procedure Act 2005 (NSW) as it would disincentivise any defendant from making appropriate concessions throughout the life of the litigation. By admitting that it breached its duty of care to the plaintiff, the defendant narrowed the scope of the issues in dispute and acted in accordance with its duty to assist the Court to further the overing purpose of section 56 of the Civil Procedure Act 2005 (NSW).
3. The plaintiff raises several complaints in respect of the defendant's conduct relating to the production of documents sought under subpoena. The plaintiff complains that he incurred the costs of enforcing compliance with that subpoena. However, the defendant, who has ultimately been successful in the proceedings, was put to significant expense by the plaintiff's tactical decisions to issue subpoenas in a matter in which he was ultimately unsuccessful.
4. The plaintiff submitted that he and his solicitors did not have the benefit of reviewing the CCTV footage until produced by the defendant to the court by the defendant on 2 March 2021. In doing so, the plaintiff acknowledged that he had reviewed the CCTV footage prior to the defendant's first offer of compromise dated 24 June 2021.
5. Even after receiving and reviewing the CCTV footage, the plaintiff continued to provide inaccurate and favourable versions of the subject accident to his solicitors and various medicolegal experts. The review of the CCTV some two years prior to hearing made no difference to the plaintiff's conduct of his case.
6. The plaintiff submitted that he was required to commence his case to obtain the CCTV. First, why it was needed by him when he was actually there is not explained. Second, there is no explanation for how it would have changed anything, given it clearly did not after it was reviewed. But third, there is a whole part of the UCPR dedicated to requiring such production, Part 5 (preliminary discovery). Elections the plaintiff made in the litigation are not matters for the defendant.
7. The defendant therefore continues to request the costs orders sought in the defendant's submissions dated 27 November 2023 and submitted there is no juristic ground for the otherwise order as sought.

Resolution

1. I do not accept the plaintiff's criticism of the defendant's conduct in its preparation for trial. It is an unusual course of action to issue a subpoena before the defendant has filed a defence. This is because the issues in dispute had not been defined.
2. On 1 and 2 March 2021, the defendant provided the CCTV of the cruise incident. This was prior to either of the defendant's offers of compromise. It demonstrated that the plaintiff's version of the incident was incorrect. The plaintiff has always been aware of the bathroom incident at the Trios Sports Club, but his memory of the actual circumstances as to how the bathroom incident occurred is hazy to say the least.
3. The plaintiff made a surprising submission that each party should pay their own costs up until 1 September 2021, being the date that the defendant admitted breach of duty of care. I disagree. It is my view that the normal rule should apply. As the defendant succeeded in the proceedings, the plaintiff should pay the defendant's costs on an ordinary basis.
4. The defendant's first offer of compromise dated 24 June 2021 that the plaintiff's claim is to be dismissed with each party paying their own costs can be considered a compromise. At the time the first offer was made, the plaintiff's solicitors had received and viewed the CCTV of the cruise incident. The plaintiff's solicitors should have become aware that the plaintiff's version of events was not borne out by what was shown in the CCTV footage. The plaintiff had largely given an inaccurate description of how he sustained his alleged injuries. The defendant only served the medical reports as to the plaintiff's physical injuries on 6 July 2022 and 23 December 2022 with the leave of the Court. However, the timetable directed that the defendant was to serve its medical evidence by 11 March 2022. It was only when the orthopaedic reports were served that the plaintiff and his solicitors would have become aware that causation was highly contested.
5. As to the second offer of compromise dated 19 April 2022, the defendant offered to resolve the entirety of the plaintiff's claim based on judgment for the plaintiff in the sum of $80,000, but it was silent as to costs. I accept that the plaintiff's solicitors were aware of the plaintiff's inaccurate evidence as to causation in the cruise incident and somewhat hazy evidence of the bathroom incident.
6. At the time of service of both offers of compromise, the defendant should have served its medical evidence by 11 March 2022, it had only served a psychiatric report of Dr Samuell, albeit a few days late. At the time that the offers of compromise were made, the plaintiff had no medico-legal evidence from the defendant as to causation. It was not unreasonable for the plaintiff not to accept the defendant's offers of compromise. In these circumstances, the plaintiff is not liable to pay the defendant's costs on an indemnity basis.

Costs

1. Costs normally follow the event. In my view, the plaintiff is to pay the defendant's costs on an ordinary basis.

THE COURT ORDERS THAT: 1. The plaintiff pays the defendant's costs of the proceedings on an ordinary basis. 2. Both parties pay their own costs of this costs application.

Amendments 02 February 2024 - Date change. 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: 02 February 2024