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[2026] NSWCA 53
mixed. In the appeal, leave was refused with costs, with a process set for any further application about costs. In the cross-appeal, leave was granted and the appeal allowed in part. The primary costs order...
The Court of Appeal refused Mr Lau permission to challenge the refusal of an apology. It considered that the statutory power he relied on required an order capable of compensating an injured person or preventing or reducing loss, and the findings did not establish that Betty or her estate had suffered loss or damage. On costs, the Court accepted that Mr Lau’s $200 nominal damages award could count as success because the case at trial was directed to establishing a breach of contract. It did not disturb the primary judge’s assessment that Anglicare should pay 35% of Mr Lau’s costs, taking account of the many claims he abandoned or failed to prove. But it held that the primary judge had used a wrong principle when discounting the effect of Anglicare’s 25 March 2025 offer because Mr Lau was unlikely to be induced by money. Mr Lau ultimately received less money than the offer proposed, and the Court held that the offer should affect costs from its date. The Court therefore allowed Anglicare’s cross-appeal in part.
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2,498 words · generated 08/10/2026
3 cited instruments linked from this judgment.
Man Hay Lau was the husband of Betty Wai Yee Chan and the executor of her estate. Betty lived at the Donald Coburn Centre, a high-care facility owned and operated by Anglican Community Services (Anglicare), from 25 September 2020 to 27 June 2021. Mr Lau brought proceedings both personally and as executor, alleging that Anglicare had mistreated Betty during her residence there ([4]).
The scope of the case narrowed substantially. Mr Lau’s amended claim originally sought $37,150.28 in contract damages, included a negligence claim, and sought compensation under Australian Consumer Law (ACL) s 267 for alleged failures to comply with consumer guarantees ([17]). Anglicare made an offer on 11 June 2024 inviting Mr Lau to discontinue with no order as to costs ([18]). On 25 March 2025, it made a further offer: $5,000 characterised as general damages, and a statement of regret in specified terms ([19]–[21]).
On the first day of trial, Mr Lau abandoned his substantial damages and negligence claims. He later abandoned the consumer-guarantee allegations. The case proceeded on a claim for nominal damages for breach of contract and an application for a court-ordered apology under ACL s 243 ([22]). The primary judge awarded $200 in nominal damages for two contract breaches but declined to order an apology ([23]).
The primary judge then ordered Anglicare to pay 35% of Mr Lau’s costs. Mr Lau sought leave to appeal the refusal to order an apology. Anglicare sought leave to cross-appeal the costs decision ([6], [15]). The Court of Appeal refused Mr Lau’s application. It granted leave to cross-appeal and allowed it in part, proposing that Anglicare pay 35% of Mr Lau’s ordinary costs until 25 March 2025, and that Mr Lau pay Anglicare’s indemnity costs from that date ([65]). The final orders also allowed for further evidence and written submissions about whether different costs orders should be made ([66]).
The apology issue turned on the statutory purpose of ACL s 237. As set out in the judgment, s 237 permits orders on application by an injured person who has suffered or is likely to suffer loss or damage because of contravening conduct. Section 237(2) requires an order the court considers will compensate the injured person or prevent or reduce loss or damage ([7]).
The Court rejected the suggestion that the primary judge’s decision rested on Mr Lau lacking standing as executor under s 236. Rather, the relevant findings were that Betty had not been found to suffer loss or damage, no loss or damage to her estate had been found, and the trial evidence did not establish harm to Betty caused by an ACL contravention ([8]–[9]). The substantial damages claim had been abandoned, and no other loss was identified to support a s 237 order ([9]). The Court considered that an apology directed to an executor could not, on these findings, be said to compensate an injured person or prevent or reduce loss. It also noted that Betty could not benefit from an apology because she had died ([10]).
The leave application also failed under the threshold described in the judgment. The Court cited the principle that leave is ordinarily appropriate where there is an issue of principle, a question of general importance, or reasonably clear injustice, not merely an arguable error ([12]). It found no such basis here ([13]).
On the costs question, the Court distinguished this case from the usual situation where a plaintiff seeks substantial damages but obtains only nominal damages. It accepted that nominal damages do not automatically entitle a plaintiff to costs, but they do not automatically prevent an award either. The individual facts and practical objective matter ([34]–[35]). Mr Lau’s case, by the time the trial proceeded, was for nominal damages and an apology. Anglicare denied the contract breaches and denied any entitlement to even nominal damages ([33]). The Court considered that the award established a legal right and met the limited damages case Mr Lau chose to run ([36]). It therefore upheld the primary judge’s identification of the relevant event as vindication of the asserted mistreatment, and rejected the argument that this treated an irrelevant subjective motive as success ([37]–[38]).
The Court also rejected Anglicare’s challenge to the 35% allocation on the basis that the primary judge had failed to consider Mr Lau’s conduct. The primary judge had addressed the abandoned and unsuccessful allegations, their effect on costs, and the strain they placed on the proceedings. Those matters appeared in the reasons reproduced at [41], including discussion of the breadth of the allegations, the additional expense, and Anglicare’s success on most claims. The Court of Appeal held that dissatisfaction with the percentage was not enough to establish that the discretion miscarried ([45]–[46]).
The offer issue produced the partial success on the cross-appeal. The Court described the 11 June 2024 proposal as an offer to capitulate rather than a genuine offer to compromise, and in any event Mr Lau achieved a better result than discontinuing and bearing his own costs ([57]). The later offer was different. It offered $5,000 and a statement of regret. Mr Lau ultimately obtained $200 in nominal damages and no other substantive relief ([19], [23], [58], [64]).
The Court accepted that the primary judge had considered the 25 March offer, but held that his reasoning about its likely effect on Mr Lau used a wrong principle. A rejected offer has, by definition, not induced the recipient to settle. Its reasonableness cannot therefore be assessed only by asking whether this particular recipient might have accepted it ([60]–[61]). Offers can also protect the offeror’s costs position. The Court reasoned that, once the apology was not ordered, a monetary offer was the available means by which Anglicare could offer settlement, and the $5,000 offer exceeded the damages ultimately obtained ([62]). It held that the offer was genuine and that it was unreasonable for Mr Lau not to have accepted it ([64]).
The judgment does not purport to create a new general rule about nominal damages or costs. It applies the established starting point that costs are discretionary and ordinarily follow the event, referring to Civil Procedure Act 2005 (NSW) s 98 and UCPR 42.1 ([26]). It also relies on the principle that the event may be assessed by reference to the practical result, while recognising that the outcome depends on the individual facts ([29], [34]–[35]).
Before this decision, as described in the judgment, an award of nominal damages in a contract action would usually not make the plaintiff the successful party where the plaintiff had sought substantial damages and failed to obtain them. The Court cited Chandrasekaran and Mid-City Skin Cancer & Laser Centre for that usual approach ([28], [34]–[35]). It also referred to the proposition that nominal damages are no longer simply a “peg” on which a party can hang a costs order ([34]).
The decision illustrates the qualification to that approach. The Court considered that Mr Lau’s case at trial was not merely a failed substantial damages claim followed by a token award. By the time the case was tried, nominal damages were the damages relief he pursued, and the award recognised the legal right he sought to establish ([33], [36]). The costs result therefore depended on the case as it was actually tried, not only on the broader claims originally pleaded.
For settlement offers, the judgment applies UCPR 42.15, which provides a usual costs consequence if a defendant’s offer is not accepted and the plaintiff obtains no more favourable judgment, subject to the court ordering otherwise ([48]). The Court’s reasoning clarifies that a recipient’s personal unwillingness to settle cannot, by itself, determine whether the offer was reasonable. The offer may still be significant to the costs discretion because it could have protected the offeror against the costs of a contested hearing ([60]–[63]). The judgment does not say that every rejected monetary offer attracts indemnity costs. Its conclusion concerned the particular offer, the terms proposed, and the result obtained ([58]–[64]).
At [10], Harrison AJA said: “A court is not empowered to make orders under this provision unless these objects of the section would be satisfied.” In plain English, the Court treated the purposes stated in s 237(2) as a necessary limit on the kind of order the court could make. The question was not simply whether an apology might express regret or provide vindication. It was whether the order could compensate an injured person or prevent or reduce loss or damage.
At [36], the Court said the nominal damages award “represented the establishment of a legal right” even though no substantial remedy was obtained. In plain English, the Court treated the $200 award as legally meaningful in this case because it confirmed the breach Mr Lau had chosen to pursue at trial. That does not mean nominal damages will always make a plaintiff successful for costs purposes. The judgment’s approach remains fact-specific ([34]–[37]).
At [61], the Court said: “The reasonableness of an offer cannot only be judged by reference to whether the recipient of the offer could ever have been induced to accept it.” In plain English, an offer can matter to costs even if the recipient’s priorities make settlement unlikely. The offer’s possible effect on the costs of litigation remains relevant.
At [62], the Court reasoned that, given Anglicare’s position on an apology, a money offer was the available means of seeking settlement. It also noted that Mr Lau recovered less money at trial than Anglicare had offered. The point was that the offer had to be assessed against the relief available and the result, not dismissed solely because Mr Lau wanted public affirmation or an apology.
At [46], the Court said that Anglicare’s dissatisfaction with the 35% award did not determine whether the discretion had miscarried. In plain English, an appellate court does not reallocate costs simply because it might prefer a different percentage. The challenge must identify an error in the exercise of discretion, not merely a disagreement about the outcome.
The costs reasoning is most directly relevant to cases where a plaintiff’s claim changes before trial, and the practical case ultimately pursued differs from the broader relief first claimed. In Lau, Mr Lau abandoned substantial damages and negligence at the start of the hearing and later abandoned consumer-guarantee allegations. He then pursued nominal damages and an apology ([22]). The Court assessed the costs issue against the limited case that actually proceeded ([33], [36]).
The reasoning may also be relevant where nominal damages are awarded after the plaintiff has deliberately pursued recognition of a legal right, rather than where the plaintiff sought substantial compensation throughout and obtained only a nominal award. The judgment emphasises that the latter is the usual situation in which nominal damages do not establish success for costs purposes, while treating the case before it as an individual exception based on the relief pursued at trial ([34]–[37]).
The offer reasoning concerns a defendant’s settlement proposal followed by a judgment that is financially less favourable to the plaintiff, especially where the offer includes both money and non-monetary terms. Here the offer proposed $5,000 and a statement of regret, while the eventual damages award was $200 ([19]–[21], [23]). The Court’s focus was on the terms and outcome, and it rejected treating the recipient’s particular motivation as a sufficient reason to disregard the offer’s costs significance ([60]–[64]).
The ACL s 237 reasoning is tied to a proposed order where the statutory requirement is compensation for, or prevention or reduction of, loss or damage. The Court considered the lack of findings of loss to Betty or her estate, the absence of evidence of harm caused by contraventions, and the fact that Betty had died ([8]–[10]). The judgment does not resolve every possible application of s 237 involving a deceased person, an estate, or a different kind of order. Its reasoning is anchored to those findings and the apology sought in this case.
The judgment text supplied here records no later judicial decisions considering or applying Lau. The decision is dated 17 April 2026, and the supplied reasons contain no subsequent treatment. It would therefore be unsupported to describe Lau as having been followed, distinguished, or criticised by later courts on the basis of this source alone.
The judgment itself relies on earlier authorities for the principles it applies. It cites Botany Bay City Council for the threshold for leave to appeal ([12]); discusses Chandrasekaran and Mid-City Skin Cancer in relation to nominal damages and costs ([34]–[35]); refers to Nexus Minerals when explaining why the damages award was not merely a retrospective peg for costs ([37]); and cites Miwa and Lawrence in relation to informal settlement offers and costs discretion ([63]). Those are the relationships stated in this judgment, not later treatment of Lau.
The decision does not set a general formula for deciding when nominal damages represent success for costs purposes. It explains why the award did so on these facts: Mr Lau proceeded at trial on a limited damages case, Anglicare denied liability, and the award established a legal right he sought to vindicate ([33]–[37]). It does not determine how a court should weigh a nominal award where a plaintiff continues to pursue substantial damages until judgment, or where the nominal award has little connection to the practical objective of the proceedings.
The decision also does not define when a monetary offer will be “genuine” or reasonable in every case. The Court found the 25 March offer genuine in its context and concluded that it exceeded the financial result Mr Lau obtained ([58], [64]). It did not hold that a monetary offer will always be sufficient where a plaintiff seeks non-monetary relief, nor that every rejection of an offer produces indemnity costs.
The relationship between UCPR 42.15 and the wider costs discretion remains fact-sensitive in the judgment. Rule 42.15 itself provides for costs consequences “unless the court orders otherwise” ([48]). The Court found that the primary judge’s reasoning about inducement involved error, then set out the costs orders it proposed. The orders also allowed for submissions about whether different costs orders should be made ([65]–[66]). The supplied text therefore records both the Court’s conclusion about the rejected offer and a further process concerning the final costs orders.
Finally, the s 237 reasoning does not decide the range of remedies that could meet that section’s purposes in different circumstances. It holds that the apology sought here could not be shown to compensate Betty or prevent or reduce loss, given the findings and her death ([8]–[10]). The judgment does not address hypothetical claims supported by different findings of loss, different applicants, or a different proposed order.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have a qualified Australian lawyer check it.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Lau v Anglican Community Services [2026] NSWCA 53
Hearing dates: 20 March 2026
Date of orders: 17 April 2026
Decision date: 17 April 2026
Before: Payne JA at [1]
Price AJA at [2]
Harrison AJA at [3]
Decision: In the appeal:
(1) Refuse leave to appeal with costs.
(2) Order that by 4pm on 24 April 2026 Anglicare file any evidence, together with a written submission not exceeding 5 pages, in support of any different costs order to that made in the appeal and proposed at [65] in relation to the cross-appeal.
(3) Order that by 4pm on 8 May 2026, Mr Lau file any evidence, together with a written submission not exceeding 5 pages, in response to any orders sought by Anglicare.
(4) Note that the Court will consider any application for a different costs order to that made in the appeal and proposed at [65] in relation to the cross-appeal on the papers.
(5) Note that if Anglicare does not seek a different costs order to that proposed at [65] in relation to the cross-appeal, the Court will make and enter those orders and notify the parties.
In the cross-appeal:
(1) Grant leave to appeal.
(2) Allow the appeal in part.
(3) Set aside the costs order of the primary judge made on 12 June 2025 and in lieu thereof order:
(a) that Anglicare pay 35% of Mr Lau’s costs on the ordinary basis until 25 March 2025; and
(b) that Mr Lau pay Anglicare’s costs on an indemnity basis from 25 March 2025.
(4) Order that Mr Lau pay Anglicare’s costs of the cross-appeal.
Catchwords: APPEALS – whether primary judge erred in refusing to order an apology under s 237 of the ACL – whether question of public importance raised
APPEALS – cross-appeals – whether primary judge acted on a wrong principle in identifying the event for the purposes of the costs analysis – whether primary judge took into account extraneous or irrelevant matters when making a costs order – whether primary judge erred in failing to find that costs should have been calculated in accordance with UCPR 42.15 – whether primary judge acted on a wrong principle in identifying that offer of money was unlikely to provide a basis upon which to settle – whether primary judge’s exercise of costs discretion unreasonable or plainly unjust
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 3, 60, 61, 236, 237, 243, 267
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 36.15, 36.16, 42.1, 42.15
Cases Cited: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Botany Bay City Council v Minister for Planning and Infrastructure [2014] NSWCA 141
Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21
Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219
Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 1229
Leichhardt Municipal Council v Green [2004] NSWCA 341
Mid-City Skin Cancer & Laser Centre v Zahedi-Anarak [2006] NSWSC 1149
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Nexus Minerals NL v Brutus Constructions Pty Ltd [1997] FCA 926
PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48
Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39
Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40
Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206
The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26
Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166
Category: Principal judgment
Parties: Man Hay Lau (Applicant/Cross-Respondent)
Anglican Community Services ABN 39 922 848 563 (Respondent/Cross-Appellant)
Representation: Counsel:
J Glissan KC (Applicant/Cross-Respondent)
A Elizabeth (Respondent/Cross-Appellant)
Solicitors:
William Chan & Co Lawyers and Notaries (Applicant/Cross-Respondent)
Barry Nilsson (Respondent/Cross-Appellant)
File Number(s): 2025/242573
Publication restriction: Nil
Man Hay Lau was the husband of the late Betty Wai Yee Chan and executor of her estate. For a period of about nine months between 2020 and 2021, Betty was a resident of the Donald Coburn Centre which was owned and operated by Anglican Community Services (“Anglicare”).
Mr Lau, in both his personal capacity and as Betty’s executor, brought claims against Anglicare alleging that it mistreated Betty when she resided at the centre. He sought nominal damages for breach of contract and an apology. In the substantive proceedings below, Abadee DCJ awarded nominal damages in favour of Mr Lau the amount of $200 but declined to order an apology. On 12 June 2025, Abadee DCJ ordered Anglicare to pay 35% of Mr Lau’s costs.
Mr Lau sought leave to appeal on the single ground that his Honour’s refusal to order an apology was an error. At the conclusion of the hearing, the Court dismissed the summons seeking leave to appeal and made orders dealing with costs.
Anglicare sought leave to cross-appeal against the primary judge’s decision as to costs.
The issues arising on the cross-appeal were:
(i) Whether the primary judge acted on a wrong principle in identifying the ‘event’ for the purposes of the costs analysis as Mr Lau vindicating his sense of righteous belief that Betty was mistreated.
(ii) Whether the primary judge took into account extraneous or irrelevant matters when determining that a costs order should be made, namely that Mr Lau’s main objective was vindication and he achieved that by the award of nominal damages.
(iii) Whether the primary judge erred in failing to find that the offers of compromise made by Anglicare were valid under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) 20.26 and that costs should be calculated in accordance with UCPR 42.15, because Mr Lau achieved no better financial outcome in the proceedings.
(iv) Whether the primary judge acted on a wrong principle in identifying as a relevant consideration that an offer of financial settlement by Anglicare was unlikely to provide a basis upon which to settle.
(v) Whether the primary judge’s exercise of the discretion as to costs was unreasonable or plainly unjust.
The Court held, refusing leave to appeal:
(1) The primary judge did not decide this issue on the basis that Mr Lau had no standing as executor under s 236 of Sch 2 to the Competition and Consumer Act 2010 (Cth) – Australian Consumer Law (“ACL”), but rather, as Betty did not suffer any loss or damage, her estate could not have suffered any loss or damage. In circumstances where a court-ordered apology to an executor could not “compensate the injured person” or “prevent or reduce the loss or damage suffered”, and even if Betty had suffered loss or damage, she could not benefit from an apology because she is dead, a court could not make an order under s 237 because the objects of the provision would not be achieved: at [8], [10].
The Court held, granting leave to cross-appeal and allowing the cross-appeal in part:
(1) In the Court below, Mr Lau abandoned several aspects of his claim and proceeded on a limited basis seeking nominal damages for breach of contract and a court-ordered apology under s 243 of the ACL. In this case, the award of nominal damages represented the establishment of a legal right, sounding in the recognition of Mr Lau’s righteous belief, even though no substantial remedy was obtained. The failure to obtain an apology is irrelevant for present purposes. The primary judge correctly identified that the event Mr Lau was aiming at was to vindicate his fervent conviction that Anglicare mistreated Betty: at [36]-[37].
Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21 and Mid-City Skin Cancer & Laser Centre v Zahedi-Anarak [2006] NSWSC 1149.
(2) As the primary judge clearly directed his attention to the limited issue on which Mr Lau ultimately decided to pursue a limited litigated outcome in the proceedings, his Honour did not take into account extraneous or irrelevant matters in ordering costs in favour of Mr Lau: at [38].
(3) The primary judge acted on a wrong principle by considering that an offer of financial settlement by Anglicare was unlikely to induce Mr Lau to settle. By definition, any offer rejected by a plaintiff must be taken to have provided insufficient inducement for that plaintiff to settle the proceedings. The reasonableness of an offer cannot only be judged by reference to whether the recipient could ever have been induced to accept it. Once it is accepted that Anglicare’s disinclination to apologise to Mr Lau in the terms that he required was vindicated by his Honour’s decision, the only means by which Anglicare could induce Mr Lau to settle was by monetary payment: at [60]-[62].
(4) Informal offers operate against the court’s discretion with respect to costs, exercised presumptively in favour of an order that costs follow the event. The court’s discretion to make a special order is enlivened where a Calderbank offer is made but not accepted: at [63].
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344; Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 1229.
(5) It is difficult to accept Anglicare’s contention that the primary judge failed properly to consider relevant matters when they are described and discussed in his judgment. Anglicare’s dissatisfaction with his Honour’s decision is not the determinant of whether the relevant discretion miscarried and Anglicare has not demonstrated that this Court should interfere with his Honour’s decision: at [45]-[46].
PAYNE JA: I agree with Harrison AJA.
PRICE AJA: I agree with Harrison AJA.
HARRISON AJA:
Man Hay Lau is the husband of the late Betty Wai Yee Chan and executor of her estate. Between 25 September 2020 and 27 June 2021, Betty was a resident in the high care facility at the Donald Coburn Centre, owned and operated by Anglican Community Services (“Anglicare”). In his capacity both as Betty’s executor and in his personal capacity, Mr Lau brought claims against the respondent alleging that it mistreated Betty when she resided at the centre. Despite originally seeking much broader relief, at the trial he sought only nominal damages for breach of contract for the benefit of the estate and an apology for his benefit and for that of the estate.
The proceedings below were heard by Abadee DCJ: see Man Hay Lau v Anglican Community Services [2025] NSWDC 193. His Honour made an award of nominal damages in favour of Mr Lau in the amount of $200, but declined to order an apology in the form that was sought or at all. Mr Lau sought leave to appeal from this decision upon the single basis that his Honour’s refusal to order an apology was an error. Mr Lau’s challenge to the decision in the Court below is said to involve the following questions:
Whether his Honour erred in holding that neither Mr Lau as executor nor in his personal capacity had standing to seek a remedy under ss 237 and 243 of the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (“ACL”).
Whether his Honour erred in finding that Mr Lau was not a consumer within the meaning of s 3 of the ACL.
Whether his Honour erred in holding that the power to order a public apology was not available to an individual litigant.
Whether his Honour erred in holding that Mr Lau had suffered no loss or damage within the meaning of s 237 of the ACL either as executor or in his personal capacity.
After hearing Mr Lau’s leave application, it became apparent, particularly having regard to what has become the limited scope of the relief sought by Mr Lau in this Court, that Mr Lau’s contentions at best rose no higher than the merely arguable. They did not support a reason why this Court should grant leave. Accordingly, the Court refused leave to appeal and ordered Mr Lau to pay the respondent’s costs. This was for the following reasons.
Sections 236 and 237 of the ACL provide relevantly as follows:
236 Actions for damages
(1) If:
(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
…
237 Compensation orders etc. on application by an injured person or the regulator
(1) A court may:
(a) on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because another person has engaged in conduct in contravention of a provision of Chapter 2, 3 or 4; or
(b) on the application of the regulator made on behalf of, and with the consent in writing of, one or more such injured persons;
make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct.
Note: The orders that the court may make include all or any of the orders set out in section 243.
(2) The order must be an order that the court considers will:
(a) compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or
(b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the injured person or any such injured persons.
…
First, Betty was not found by the primary judge to have suffered any loss or damage. No finding was made that Betty’s estate suffered loss or damage. The primary judge did not decide this issue on the basis that Mr Lau had no standing as an executor to bring the proceedings under s 236.
Secondly, but in a related sense, no evidence was presented at trial showing that any contraventions of the ACL caused harm to Betty. The substantial damages claim originally brought by Mr Lau as executor was abandoned, and no additional loss was identified to support an order under s 237. So much is clear from [6] of the primary judge’s reasons as follows:
“[6] On the morning of the first day of the hearing, Mr Lau’s Counsel acknowledged … that Mr Lau could not point to any ‘substantial impact’ on Betty’s life expectancy or circumstances arising from the asserted breaches of contract or non-compliances with the consumer guarantees. Accordingly, Mr Lau’s action for damages in negligence was abandoned. Moreover, Mr Lau abandoned any claim for substantial damages (under the general law of contract) or for compensation (under the ACL). He conceded that he could not prove that any ‘loss’ or ‘damage’, sounding in an entitlement to substantial damages, was caused by the breach or breaches of contract; and/or because of non-compliance with the consumer guarantees.”
Thirdly, it was not shown in this case how an order under s 237 addressed to an executor in the form of an apology could “compensate the injured person” or “prevent or reduce the loss or damage suffered”: s 237(2). A court is not empowered to make orders under this provision unless these objects of the section would be satisfied. Even assuming, contrary to the primary judge’s unchallenged finding, that Betty suffered loss or damage, Betty could not benefit from an apology because she is dead. As I have said, no finding was made that Betty’s estate suffered loss or damage.
Fourthly, there are simply no findings below that Mr Lau himself suffered any loss or damage. Mr Lau does not challenge the primary judge’s findings of fact. Any attempt by Mr Lau to recast his case below in order to contend that he has suffered emotional harm should not be permitted. Without proof of loss or damage, there is no occasion to grant Mr Lau a remedy under s 236.
Moreover, even accepting Mr Lau’s contentions at their highest, there is no basis upon which to intervene having regard to the well-known principles in Botany Bay City Council v Minister for Planning and Infrastructure [2014] NSWCA 141 at [15]:
“[15] … ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. It is not sufficient merely to show that the trial judge was arguably wrong: see Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32].”
See also The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [6].
Here there is clearly no issue of principle or question of general importance raised by Abadee DCJ’s decision. Mr Lau has not demonstrated that there is any basis that conforms with established principles on which this Court could, or should, intervene.
For these reasons the Court refused leave to appeal and ordered Mr Lau to pay the respondent’s costs. The respondent gave timely notice that it wishes to seek a different costs order in accordance with Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) 36.15 or UCPR 36.16. I propose orders at the conclusion of these reasons to permit an application to be made.
On 12 June 2025, the primary judge ordered Anglicare to pay 35% of Mr Lau’s costs: see Lau v Anglican Community Services (No. 2) [2025] NSWDC 211. By its cross-summons seeking leave to cross-appeal, Anglicare seeks leave to appeal from the whole of this decision upon the following grounds:
The primary judge acted on a wrong principle in identifying the ‘event’ for the purposes of the costs analysis as Mr Lau successfully vindicating his sense of righteous belief that his late wife was mistreated in circumstances where:
(a) the vast preponderance of claims brought by Mr Lau were abandoned or were unsuccessful; (b) Mr Lau’s only remaining claim by the end of the hearing was for breach of contract; and (c) Mr Lau was awarded only nominal damages and a finding that his objective of vindication had been achieved.
(a) it was Mr Lau’s main objective or motive to obtain vindication in the proceedings; and (b) that Mr Lau had achieved that objective by the findings of breach made in the proceedings and the award of nominal damages.
In order fully to understand the competing contentions of the parties, it is necessary to appreciate the changing ways in which Mr Lau prosecuted his case in the Court below and the manner in which these changes influenced the primary judge’s approach to the question of costs.
Mr Lau started with a large number of complaints about the services provided to Betty as part of her respite care and over the approximately nine months that she was a resident of the centre in Castle Hill before her discharge into a different facility. By his amended statement of claim, Mr Lau claimed $37,150.28 in damages for breaches of contract and also brought a claim in negligence. He also claimed unliquidated damages as compensation under s 267 of the ACL, in particular for alleged contraventions of the consumer guarantees in ss 60, 61(1) and 61(2). Mr Lau asked for an order that Anglicare apologise to him for Betty’s treatment.
On 22 December 2023, Anglicare’s solicitors wrote to Mr Lau’s solicitors inviting him to discontinue the proceedings. They expressly reserved the right to rely upon their letter on the question of costs. Later, on 11 June 2024, and before Mr Lau amended his statement of claim, Anglicare’s solicitors wrote again offering to dismiss the proceedings with no order as to costs. The terms of the letter were such that it purported to be an offer in accordance with UCPR 20.26 or alternatively complying with Calderbank principles. The offer remained open for acceptance until 9 July 2024. The letter also contained a commentary about the lack of merit in Mr Lau’s claim.
Then on 25 March 2025, after Mr Lau had amended his statement of claim, Anglicare’s lawyers wrote a letter in purported compliance with the rules as well as Calderbank principles offering to settle Mr Lau’s claims as follows:
“(a) Our client will pay to your client an amount in the sum of $5,000 to be characterised as general damages; and
(b) Our client will provide a statement of regret to your client in the manner proposed in Schedule ‘A’ of the Deed.”
That offer was open for Mr Lau’s acceptance until 5pm on 4 April 2025. The hearing was scheduled to commence on 28 April 2025.
The proposed statement of regret was in the following terms:
“We acknowledge that, despite the best efforts of our staff, you were dissatisfied with the service that Ms Chan, and by extension you as her power of attorney, received while she was a resident of the Centre. We have reviewed your concerns and, while our staff acted with due care and diligence, it is regrettable that this did not meet your expectations.
Bearing this in mind, we wish to express our disappointment that you have been left with a negative view of our services.
…”
On the first day of the hearing, Mr Lau abandoned his claim for substantial damages, for breach of contract and negligence, as well as his claim for compensation under s 267 of the ACL. After the close of the parties’ cases he also abandoned his allegations regarding a non-compliance with the consumer guarantees. Instead, Mr Lau claimed only nominal damages for breach of contract and sought a court-ordered apology under s 243 of the ACL. Anglicare denied all asserted breaches of contract, and therefore any entitlement to even nominal damages, as well as any entitlement to a court-ordered apology.
In the result, Mr Lau succeeded in obtaining an order for nominal damages of $200, based on two findings of breach of contract, but he failed in his action for relief in the form of an apology.
The primary judge recorded the parties’ respective submissions as to costs as follows:
“Anglicare’s submissions
[37] Anglicare submits that costs should follow the event. That rule of court reflected the concept that costs be paid in a way that is fair, having regard to the Court’s assessment of the responsibility of the parties in incurring costs.
[38] The ‘event’ was not whether or not Mr Lau would recover nominal damages. The event was more properly characterised as to whether he would recover substantial damages, under general law, or through a claim for compensation under s 267 of the ACL. At least that was the case until the first day of the hearing.
[39] Even if, contrary to Anglicare’s submission, Mr Lau’s receipt of nominal damages could, in principle, be a ‘peg on which to hang costs’, he could not be regarded as being a ‘successful’ party. This was so in the context that until the first day of the hearing, Mr Lau sought an order for substantial damages.
[40] Anglicare submitted further that even if Mr Lau could be considered to have been the successful party, for multiple reasons, his conduct was such that he should be disentitled from receiving a costs order in his favour. Anglicare principally cited his abandonment of his claim for damages; and certain causes of action (the negligence action and, I interpolate, the actions for non-compliance with the purpose and result consumer guarantees as well). If those actions or claims had not been brought, Anglicare might have run its case differently.
[41] Separate to its assertion of disentitling conduct by Mr Lau, Anglicare also argued that, as a matter of fairness, it should not be exposed to any liability in costs. It had shown that it had tried hard to settle the proceedings on multiple occasions, whereas Mr Lau appeared bent upon vindication for ‘some perceived but unquantifiable wrong’ and had made an ‘unreasonable request’ (such as the apology he sought). Anglicare also argued that, whilst not seeking to trivialise the breaches of contract that were found by the Court, Mr Lau’s pursuit of vindication in relation to them came at a cost that was disproportionate to the value of the proceeding in the absence (ultimately) of any loss or damage being established. Mr Lau’s quest, in short, served no ‘social utility’ and this was especially so where issues had already been considered by the Commission.
Mr Lau’s submissions
[42] Mr Lau contends that the practical result of the litigation, and hence the event, is that he vindicated Betty’s legal rights. Anglicare acknowledged as much in its submissions on costs. Mr Lau had made many complaints to the Commission, which led the Commission to institute an investigation. Those complaints were determined by the Commission and Anglicare had pointed out at the hearing that it had not identified any non-compliance with the relevant legislation, but even if it had, the Commission did not regard the non-compliances to amount to ‘major failures’. In contrast to the outcome of the Commission’s investigation, the Court has found that three of the complaints Mr Lau had raised gave rise to a breach of the Charter of Aged Care Quality Standards. I understood Mr Lau to submit that it followed from the result that the Court found in Mr Lau’s favour on three of the complaints that the Commission had not carefully considered them. He has now been vindicated by the Court’s Reasons. That constitutes the relevant ‘event’ even if he did only obtain nominal damages. It is up to Anglicare to persuade the Court why the usual order reflected in r 42.1 should not apply.
[43] Mr Lau submits that this is not a case where any disentitling conduct by him should militate against the application of the usual order. It is not a case where he brought a proceeding which he knew had no real prospects of success. Whilst he abandoned certain claims, it is important, when considering whether he engaged in ‘disentitling conduct’ to carefully distinguish claims that were hopeless from those which were arguable. Parties and their lawyers (all of whom are subject to procedural obligations under s 56 of the Civil Procedure Act 2005 (NSW)) should not be penalised by a prospective costs liability if unwinnable points are abandoned late in the piece.
[44] Mr Lau also submits that his rejection of settlement offers was not a reason for altering the operation of the usual order under r 42.1.
[45] Mr Lau separately made other criticisms of the settlement offers. This was on the premise that the offers should be considered in the context of his entitlement to a costs order; assuming that the Court accepted the predicate argument that the ‘event’ was whether or not he might be vindicated.
Anglicare’s submissions in reply
[46] Anglicare said it was inaccurate to say that Mr Lau vindicated Betty’s rights. More accurately, he vindicated his belief that the contract had been breached.
[47] Anglicare joined issue with Mr Lau’s criticisms as to the validity of the 11 June 2024 rules offer. So too, the 25 March 2025 rules offer was valid. As to the last in particular, although Mr Lau complained about late notification of documents that Anglicare might rely upon, he should have expected, or anticipated the possibility that some of the ones helpful to Anglicare’s case might be put to him in cross-examination. He was not in a position to complain about a lack of time.
[48] As to the Calderbank offer of 25 March 2025, Mr Lau did not obtain a more favourable result than the payment Anglicare offered him. To the extent that he obtained findings on breach, they benefited no one but himself, and they only amounted to technical breaches not giving rise to damage.
[49] If, contrary to Anglicare primary submission, any apportionment is to occur, by its calculations, Mr Lau’s ‘success’ on issues was much more minor than what his submissions had suggested.” (Footnotes omitted.)
“[57] Nevertheless, in my opinion, on balance, this is not the ‘usual’ case where Mr Lau has obtained something (nominal damages) of no real use to him and which, had he known that this was all that he would obtain, he would not have commenced the suit in the first place.
[58] I recognise that Mr Lau did not claim nominal damages, but rather an order for substantial damages, in his originating process. That claim, moreover was supplemented by a claim for pre-judgment interest which is premised as a claim for relief for being kept out of a sum of money.
[59] But those formal claims are not antithetical to the notion that that the obtaining of an award of substantial damages constituted Mr Lau’s primary, or even predominant, purpose.
[60] The context in the lead-up to the institution of the proceeding is critical. Mr Lau had been at war with Anglicare and, indirectly, with the Commission, for a considerable period of time before he commenced this lawsuit. For the purpose of addressing the issues in this cost dispute, as they had done at the substantive hearing, neither party referred me in detail to the precise complaints that Mr Lau had raised about Anglicare before the Commission or the Commission’s outcomes in respect to individual complaints, but it was sufficiently clear that Anglicare believed that: (a) Mr Lau was substantially seeking to litigate complaints that he had previously raised to the Commission … and (b) Mr Lau was bound to fail again in this proceeding: Anglicare described Mr Lau’s proceeding as ‘manifestly hopeless’ …
[61] That Mr Lau commenced this suit at all was an indication of his determination, in the face of the Commission’s findings to the contrary, to establish that TDCC did mistreat his late wife in many different ways.
[62] I would interpose briefly to indicate that if part of what drove Mr Lau’s desire for vindication was the processes or results in the Commission, and a desire to prove the Commission was wrong, then that would not be entirely fair to the Commission. The Court was not conducting a review into the merits or the legality of the Commission’s reasoning. There were different (stricter) standards of admissibility of evidence in this court proceeding than there were likely to have been in an investigation conducted by the Commission. Nevertheless, to the extent that Mr Lau may have partly been driven to prove the Commission was wrong and belief that he could so in this Court, that misconception does not derogate from the intensity of Mr Lau’s quest for vindication.
[63] It was patently obvious that Mr Lau, who was legally represented at all times, was establishing an extremely broad canvas of factual assertions of episodic mistreatment of Betty. This is a circumstance relevant to later arguments about the reasonableness of his prosecution of the proceeding. But for present purposes, that broad canvas of factual assertions is emphasised in the light of the modest quantum of monetary claim that he brought, being in the order of approximately $37,000. Money claims of that quantum fall within the civil jurisdiction of the Local Court of New South Wales. For all of this, I think Mr Lau, who struck me as an intelligent man, can be taken to have known that if he did not establish that TDCC was at fault in any respect, then he was exposed to the risk of a substantial personal costs order against him.
[64] In my view it would be highly doubtful that a reasonable defendant in Anglicare’s position could have misapprehended that Mr Lau’s primary objective was to vindicate his fervent conviction that in many different ways, TDCC had mistreated his late wife, whatever it took and whatever was the risk of financial cost for him to do so. In this regard, it strikes me as being a semantic exercise whether he was seeking to vindicate Betty’s rights or his own belief in those rights. Whether he acted in the capacity as Betty’s representative or as principal in his own right is immaterial. Anglicare accepted he had standing to bring the actions in general law.
[65] I also consider that his quest for vindication was likely stimulated further by Anglicare’s conduct in the proceeding. Although in some respects it made admissions in its Defence, it is fair to say that Anglicare did not really admit any fault, generally, or in relation to those complaints by Mr Lau which this Court upheld. By its written submissions in chief, Anglicare suggested that apologies of certain kinds were made to Mr Lau … but in my view these were meagre offerings. As I noted in the Reasons, it was also open to Anglicare to express a (private) apology for some breaches of contract without being taken to have admitted them at any hearing this proceeding. In retrospect, and with reference to some of the extrinsic material relating to Part 10 of the Civil Liability Act, this case struck me as the sort of case that Parliament had in mind for the purpose of reducing the incidence of litigation being commenced or continued. There is of course no guarantee that had a (private) apology been made it would have deterred Mr Lau from commencing or continuing the litigation.
[66] I do not wish to be taken as being critical of Anglicare’s conduct in these particular respects. It was up to Anglicare as to how it approached its defence. My point, to reiterate, is to indicate that by its conduct, Mr Lau was essentially met with stonewall resistance; which I infer further galvanised him in his pursuit for vindication.
[67] It is unnecessary, in my view, to hold that vindication was Mr Lau’s sole objective. He did seek to recoup the sum of money he expended. He also sought a public apology from Anglicare. He failed in those two objectives.
[68] They were, however, subordinated or ancillary objectives to his main objective in vindicating his sense of righteous belief that his late wife was mistreated in serial respects. In the circumstances, this is not a case where, to adapt what Stevenson LJ in Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685; 1 WLR 395 at 401 said, “the event of an award of nominal damages was not the event at which the plaintiff was aiming”. The event that he was aiming at was to prove that TDCC, for which Anglicare was responsible, mistreated Betty. The award of nominal damages, even if ‘tokenistic’ in financial terms, satisfied his pursuit of vindication.” [Emphasis added; footnotes omitted.]
Costs are in the broad discretion of the court with the general rule being that they should follow the “event”: s 98 of the Civil Procedure Act 2005 (NSW); UCPR 42.1; Chandrasekaran v Western Sydney Local Health District (t/as Westmead Hospital) (No 2) [2024] NSWCA 21 at [11].
In ordering Anglicare to pay 35% of Mr Lau’s costs, the primary judge acted on a wrong principle by identifying the relevant event for the purposes of the costs analysis as Mr Lau “successfully” vindicating [sic] his sense of righteous belief that his late wife was mistreated and then exercising his discretion based on that wrong principle. This is because the vast preponderance of Mr Lau’s claims were either abandoned or failed, where his only remaining claims were breaches of contract and contraventions of s 60 of the ACL, for which he sought and received only nominal damages and where the relevant event was Mr Lau’s sense of righteous belief that his wife had been mistreated had been vindicated by the award of nominal damages.
Section 98 of the Civil Procedure Act confers on the court a wide discretion with respect to costs. Under UCPR 42.1, the general rule is that the court is to order that costs follow the event. Ordinarily, if a plaintiff establishes liability and obtains an order for payment of nominal damages, that plaintiff is usually not regarded as the successful party in the action: Mid*-*City Skin Cancer & *Laser Centre v Zahedi-*Anarak [2006] NSWSC 1149 at [47]-[52]; Chandrasekaran at [13]; Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 at [100].
Accepting that the “event” may be characterised in more than one way, it generally refers to the practical result of a particular claim: Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 at [6]; Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15].
Anglicare contended that a practical result is usually the achievement of the relief sought, not some subjective feeling or sense of satisfaction about how the litigation has ended. The relevant event could not therefore be characterised in this case as the vindication of Mr Lau’s “sense of righteous belief” that his late wife was mistreated. Anglicare submitted that any such belief could not substantiate an award of nominal damages. The relevant event was whether the causes of action brought by Mr Lau were established and resulted in an award of substantial damages and/or an apology. Neither outcome was obtained.
While each case must depend upon its own facts, where it is not a primary purpose of proceedings simply to establish a breach or contravention alone, but to recover substantial damages or other relief, ordinarily an award of nominal damages would not entitle a party to the costs of the proceedings: see [2001] WASCA 166 at [9]. In such a case, the party has obtained something of no real use to them and something which, if they had known it was all that was available, would not have brought proceedings to recover. It would be contrary to modern notions of the efficient and cost-effective use of judicial resources to enable a party to recover its costs of a pyrrhic victory, having substantially failed in the action.
With great respect to these submissions, Anglicare has overlooked one important fact. As I have earlier explained, Mr Lau abandoned his claim for substantial damages, on the first day of the hearing. After the close of the parties’ cases he also abandoned his allegations regarding a non-compliance with the consumer guarantees. In that context it is therefore clear that Mr Lau’s claims upon which the trial before the primary judge proceeded were his claim for nominal damages for breach of contract and for a court-ordered apology under s 243 of the ACL. It must be remembered that Anglicare denied all asserted breaches of contract, and therefore any entitlement to even nominal damages, as well as any entitlement to a court-ordered apology.
It is important to understand the boundaries of the cases that deal with an entitlement to costs when an award of only nominal damages is achieved and that the recovery of only nominal damages does not automatically or always foreclose an award of costs. In this respect, the following passages from Chandrasekaran should be noted:
“[12] Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of costs: Commonwealth Bank of Australia v Gretton [2008] NSWCA 117 at [121] …
[13] In an action for breach of contract, if the plaintiff establishes liability and obtains an order for payment of nominal damages, the plaintiff is usually not regarded as the successful party to the action: Mid-City Skin Cancer & Laser Centre v Zahedi-Anarak [2006] NSWSC 1149 at [47]-[52] … ; Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 at [100] …
[14] That is, an award of nominal damages is no longer regarded as a ‘peg on which to hang costs’: State of New South Wales v Stevens (2012) 82 NSWLR 106; [2012] NSWCA 415 at [22] … referring to Nexus Minerals NL v Brutus Constructions Pty Ltd [1997] FCA 926 … Adapting the words of Stevenson LJ in Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685; 1 WLR 395 at 401, in a like context, ‘the event of an award of nominal damages was not the event at which the plaintiff was aiming’.
[15] Here, the appellant was seeking substantial damages for the balance of the term of the locum agreement, past economic loss, and future economic loss. Those claims for damages serve to highlight why the practical result of the appeal, being an order for nominal damages, was not the event at which the appellant was aiming. Nor did the appellant’s submissions identify any facts that would support the conclusion that the appellant really has been successful, although only obtaining an award of nominal damages.
[16] Contrary to the appellant’s characterisation of her ‘success’ in establishing breach of contract as the most significant or overwhelming outcome of the proceedings, the Court (a) found that the appellant was only entitled to nominal damages of $100, not compensatory damages, (b) rejected the claim for damages for past and future economic loss, and (c) rejected all other appeal grounds, including the other pleaded and unpleaded breaches of contract.”
“[52] As with all questions of costs, the ultimate decision must be made by reference to the facts of the individual case. One circumstance that Hamilton J in Ng v Chong [2005] NSWSC 385 at [8] regarded as possibly justifying an award of costs in favour of someone who recovered nominal damages was when ‘some other right is vindicated by the judgment, eg, the establishment of a legal right irrespective of whether any substantial remedy is obtained.’ However no such question arises in the present case. Even though the plaintiff would, strictly, have been entitled to an award of nominal damages against both Dr Zahedi and the Kernot Company, for the purpose of exercising any costs discretion it is to be regarded as having failed against each of those defendants.”
In the present case, Mr Lau did not recover nominal damages merely as a consolation prize when something more substantial had been sought but not recovered. Whatever might be said about the timing of his late decision, at the commencement of the hearing, to limit his claim to nominal damages, that was his claim. Mr Lau was, in the words of Hamilton J, someone who recovered nominal damages when some other right was vindicated by the judgment. The award of nominal damages in this case represented the establishment of a legal right, sounding in the recognition of his righteous belief, even though no substantial remedy was obtained. That was the limited damages case that he ran and it succeeded.
Nor is Mr Lau’s recovery of only nominal damages a peg, in the sense discussed in Nexus Minerals, on which he is metaphorically scrambling retrospectively to hang an award of costs. His failed pursuit of an apology is irrelevant for present purposes. Mr Lau is not attempting to elevate an unsatisfactory outcome to the status of a victory justifying a costs order. The undisputed fact is that he ultimately went to trial claiming only nominal damages. As his Honour said, the event that Mr Lau was aiming at was to prove that Anglicare mistreated his wife. His Honour correctly characterised the event as Mr Lau’s objective to vindicate his fervent conviction that in many different ways the centre had mistreated his late wife, by whatever it took and whatever was the risk of financial cost to him for doing so.
It follows in my opinion, contrary to Anglicare’s submissions in support of ground 2, that the primary judge did not take into account extraneous or irrelevant matters in determining that a costs order should be made in favour of Mr Lau. On the contrary, his Honour clearly directed his attention when awarding costs to the limited issue that fundamentally inspired Mr Lau’s decision ultimately to persist with his desire to secure an admittedly limited litigated outcome in the proceedings.
Anglicare submitted that the primary judge’s exercise of his costs discretion was unreasonable or plainly unjust and that his Honour failed properly to consider the matters at [73]-[82] of his judgment when exercising the discretion to award costs.
Those paragraphs were as follows:
“[73] The other aspect of disentitling conduct, which was directly addressed in Mr Lau’s submissions, concerns the way in which Mr Lau conducted the litigation. Here Anglicare is on firmer ground, since a litigant’s conduct has real consequences for its opponent, the court system and other litigants. There is force in its submission that several of Mr Lau’s ‘claims’ were largely hopeless or not pleaded at all if, the expression ‘claims’ is intended to denote his asserted complaints of mistreatment.
[74] In my view, the hearing itself, along with the proceeding generally, was made more protracted by Mr Lau advancing barely tenuous complaints. Mr Lau did not establish or abandoned a significant preponderance of the complaints that he raised. Indeed, Mr Lau later purported to add complaints that had not earlier been pleaded. All of that needlessly built up legal expenses. He was entirely responsible for himself and Anglicare incurring unnecessary expense when that occurred.
[75] I am mindful of a gradation or spectrum or scale between asserted breaches that are faintly arguable, to reasonably arguable and those which are virtually certain to succeed. I am also alive to the circumstance that it is not the role of a court to act in a way so as to filter only certain arguments or complaints for its adjudication.
[76] With all of that, however, and with all respect to him, it was difficult to avoid the impression that by his conduct Mr Lau was using the Court process as a means to ventilate every grievance, large or small, that he had against Anglicare, no matter how serious or trivial in nature. He did so at the hearing in a context where he did not contend that the breaches caused the deceased harm, loss or damage (although his Counsel somewhat tentatively sought to suggest that some loss or damage did arise to support the statutory claim). Some breaches were, with respect responsibly, abandoned by Counsel for Mr Lau, but that was a reflection of the circumstance that they should not have been brought in the first place. Allegations about causing Betty to choke and administering incorrect medication were at the serious end; so serious that it appears that they might have given rise to potential criminal sanctions; and even jeopardising Anglicare’s accreditation. The positioning of Betty’s eyeglasses was at the trivial end of the scale. None of those particular alleged breaches had any merit to found a breach of contract or a non-compliance with a consumer guarantee. That they (especially the serious breaches) were persistently argued and maintained made it inevitable that Anglicare would strenuously defend them.
[77] Further, I do not find persuasive that the outcome of these individual complaints only became predictable when Anglicare gave late notice at the hearing of its intention to rely upon evidence. By then, the parties had already been in substantial disputation through the course of the Commission’s investigation. Each party was, or is taken to be, well aware of their opponent’s position and evidence on each of the key complaints.
[78] It appeared that Mr Lau was asking the Court to function as a roving investigative commission, albeit under stricter rules of evidence, after he was dissatisfied with the results of the investigation conducted by the aged care regulator. There was an absence of restraint or discrimination in the breaches of contract or non-compliances with consumer guarantees that he agitated. It was a course that endured until his Counsel, acting responsibly, abandoned many of them in his final submissions.
[79] I am mindful of the observations of the Court of Appeal in the Supreme Court of Western Australia in Motium, in the last sentence of paragraph 10, cited earlier in this judgment. There is a concern that once a claimant gets into their head the notion that all they are seeking is vindication, and that they might achieve it by proving only one or few breaches among an assortment of asserted breaches, irrespective of whether or not they were causative of loss or damage or entailed any other tangible consequence, there can develop a tension between the litigant’s rights to commence and to continue litigation and the obligation upon the Court in s 56(1) of the Civil Procedure Act to ‘facilitate the just, quick and cheap resolution of the real issues in the proceeding’. Specifically, part of that involves the management of civil proceedings in a way that has regard to the efficient disposal of the business of the court, and the efficient use of available judicial and administrative resources (ss 57(1)(b) and (c)) and the need to resolve disputes which is proportionate to the importance and complexity of the subject matter (s 60).
[80] I do not raise these matters to suggest that Mr Lau, or his lawyers, were in breach of their obligation under s 56(3). I do so only from the narrower viewpoint of considering whether having regard to what occurred at the hearing, and the outcome in the Reasons, there should be some modification, or dispensation of the general position, acknowledged by the parties in their submissions on the costs dispute, that the Court will not lightly reduce the successful party’s costs by reference to an apportionment exercise or for other reasons.
[81] As was also acknowledged in the Reasons, the Court does not doubt Mr Lau’s sincerity nor underestimates or wishes to understate the extent of his grief at the loss of his life partner. But a litigant, especially one that was represented, as Mr Lau was, who embarks on a strategy of raising and trying to prove a large and indiscriminate list of breaches may face a challenging task in persuading a Court why they should not be accountable in some way for that forensic course if their success is, objectively, relatively minor. That is because one consequence of that approach to litigation is necessarily to force the opposing party to incur substantially more costs than if his approach had been more streamlined. Another consequence is that by causing overly protracted proceedings, the Court’s administrative and judicial resources are taken away from the resolution of other litigants’ disputes.
[82] Whilst it did not successfully defend all allegations of breaches, Anglicare did successfully defend the vast preponderance of them and it also succeeded in its opposition to the application for a court-ordered apology. Indeed it received its own measure of vindication when it had all of the money claim, the cause of action in negligence and the relief Mr Lau claimed under the statutory action, dismissed.”
Anglicare complains, however, that despite this, the 35% costs order in Mr Lau’s favour appears to commence from the position that he was wholly successful below but with a reduction or discount of 65% in the total amount payable based on his conduct in bringing and conducting the proceedings. This is despite Mr Lau abandoning his substantial damages case at the commencement of the proceedings resulting in the generation of costs ultimately wasted by Anglicare in preparing to meet it.
Anglicare emphasised that it is appropriate to deprive a successful party of costs in whole or in part if the matters upon which that party did not succeed took up a significant part of the trial, either by way of evidence or argument: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. Anglicare contended that the reduction in the present case should be greater than 65%.
Anglicare submitted that if the primary judge had exercised his discretion on the matter of costs taking into account the matters that his Honour dealt with at [73]-[82], it would have obtained its costs in full, including the provision for the costs it unnecessarily incurred because of Mr Lau's conduct.
The problem with these submissions, in my opinion, is that it is clear that his Honour adverted to the very matters that Anglicare contends he should have taken into account when coming to his conclusion that Mr Lau should have only 35% of his costs. It is in these circumstances difficult to accept the contention that his Honour failed properly to consider relevant matters when they are described in his judgment in terms and discussed in some detail.
The real import of Anglicare’s submissions concerning the 35% proportion of costs awarded by the primary judge is that it should have been lower. However, Anglicare’s dissatisfaction with his Honour’s decision is not the determinant of whether the relevant discretion miscarried. Alike with assessments of contributory negligence or contribution between tortfeasors, discretionary decisions concerning allocation of costs should not lightly be disturbed. Accepting that minds may well differ, I am not satisfied that Anglicare has demonstrated that this Court should interfere with his Honour’s conclusions.
“[69] I do not consider that Mr Lau’s refusal to accept the invitation to discontinue or the offer of settlements to be disentitling conduct. The rules, and principles associated with Calderbank offers commonly contain a requirement that the offeror prove that it obtained a result no less favourable than that which it offered to the offeree.
[70] It is doubtful that this requirement is satisfied in the circumstances. Subject to consideration of the Calderbank offer of 25 March 2025, Anglicare’s offers of settlement were predicated on a view that Mr Lau would not likely obtain any benefit from his suit, other than removal from an exposure to a costs liability. However the latter prospective benefit was something which, for reasons explained, was not likely to persuade Mr Lau to abandon the litigation he commenced, as I have found, with the knowledge of that prospect. Anglicare’s projection that Mr Lau would not obtain a benefit has now been falsified.
[71] The Calderbank offer of 25 March 2025 is in a different category; since it proposed a cash payment to Mr Lau as the price for the proceeding going away. But for someone like Mr Lau who was bent on vindication and, moreover, had an associated wish for public affirmation in the form of a court-ordered apology, that was no more likely to be effective as an inducement to resolve the proceeding than an offer to walk away with Mr Lau no longer bearing the risk of exposure to a costs order.
[72] Anglicare raises an interesting point as to the lack of social utility served by Mr Lau’s quest for vindication, especially in circumstances where, it says, the Commission had considered the issues. Another way of interpreting its submission is that Anglicare is asking what more it could to do to make litigation which, of its nature was replete with reputational risk to it, go away when Mr Lau did not appear to be (primarily) commercially motivated. But short of a somewhat self-serving statement of regret in which no wrongdoing was acknowledged, Anglicare appeared to consider, by its 25 March 2025 offer, that it might purchase Mr Lau’s termination of the proceeding. In retrospect, this appeared to underestimate Mr Lau’s objectives. Courts exist, of course, for the resolution of disputes. Subject to an especially important qualification I am about to turn to, the effects of litigation upon other litigants or the community more generally, parties are entitled and regularly do litigate in what they perceive as their private interests. The application of principles or court rules as to costs should not turn on whether the motives of litigants in commencing or continuing litigation are socially desirable or otherwise. That would be a slippery slide in a democracy which adheres to the rule of law.”
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.
…
(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.
42.15 Where offer not accepted and judgment no more favourable to plaintiff
(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise—
(a) the plaintiff is entitled to an order against the defendant for the plaintiff’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.
The question is whether the primary judge failed to consider the offers of settlement in determining the matter of costs. Mr Lau contends that he did so and relies upon his Honour’s remarks at [69]-[72] reproduced above. Mr Lau contended that, in the light of these remarks, it cannot be said that his Honour failed to consider Anglicare’s offers when deciding whether any different orders for costs should be made.
UCPR 42.15(2) clearly preserves the court’s discretion (“unless the court otherwise orders”) to award costs other than in a manner provided for when an offer of compromise is rejected. Mr Lau submitted that his Honour did so in this case based on the context surrounding the litigation most particularly described by his Honour at [60]-[68]) of his judgment. Those circumstances informed his Honour’s conclusion about whether Mr Lau’s refusal of the offers was disentitling conduct.
The mere fact that the primary judge did not alter the award of costs in the manner prescribed in UCPR 42.15(2) is insufficient to demonstrate that the discretion had been improperly exercised or that the primary judge failed to consider the offers.
Mr Lau perceives that Anglicare’s submissions appear to equate financial gain and what may be considered to be a “better result”. Mr Lau maintained that such a submission should be rejected.
For example, in Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA at [23] considered that an offer of compromise with no real element of compromise could not be genuine. Whether this requirement is met is to be assessed with respect to the totality of the circumstances. A similar analysis should be applied to consider whether a “better result” was achieved. The mere fact that Mr Lau did not obtain a better financial result does not necessarily mean that he should be taken to have obtained a result that is less favourable than that in the 25 March 2025 offer. Mr Lau submitted that the 25 March 2025 offer did not provide for a more favourable result than that which he received.
Furthermore, Anglicare’s submissions seem to suggest that his Honour considered an irrelevant matter being whether the offer had the effect of inducing Mr Lau to resolve the proceedings. Mr Lau submitted that those submissions should not be accepted. As Santow JA pointed out in Leichhardt Municipal Council at [14]-[15], both the laws relating to Calderbank letters and statutory procedures for offers of compromise are grounded in the public policy objective of providing an incentive for disputants to end litigation as soon as possible. A related public policy objective is the discouraging of wasteful and unreasonable behaviour by litigants.
Mr Lau also perceives that Anglicare’s submissions suggest that the primary judge was required to find an appropriate form of apology before coming to his conclusions at [71]. Mr Lau contended that those submissions should also not be accepted. There is no requirement for a court to speculate on what may hypothetically be acceptable to a litigant before finding that an offer provides for something that is less favourable than the result.
It is unnecessary in my view to consider in detail the effect of the 11 June 2024 offer of compromise. It was an offer to capitulate and did not amount to a genuine offer to compromise the proceedings. In any event, Mr Lau achieved a result more favourable than the suggestion that he should abandon the proceedings and pay his own costs.
It should be recalled that when the 25 March 2025 offer was made and rejected, Mr Lau was still seeking substantial damages and an apology. He did not abandon his claim for substantial damages until the first day of trial. Plainly, the offered amount of $5,000 was more than the $200 in nominal damages that he obtained in the proceedings. The rejection of the offer was unreasonable in the circumstances where Mr Lau himself ultimately ensured, by restricting his claim to nominal damages, that he was unlikely to obtain a more favourable result at trial.
The only apparent basis for the primary judge otherwise ordering in terms of UCPR 42.15(2) can be found at [71]:
“… But for someone like Mr Lau who was bent on vindication and, moreover, had an associated wish for public affirmation in the form of a court-ordered apology, [a cash payment of $5,000] was no more likely to be effective as an inducement to resolve the proceeding than an offer to walk away with Mr Lau no longer bearing the risk of exposure to a costs order.”
In my opinion, the primary judge acted on a wrong principle in identifying as a relevant consideration the notion that an offer of a financial settlement by Anglicare was alone unlikely to provide a sufficient reason to induce Mr Lau to settle. By definition, any offer rejected by a plaintiff must be taken to have provided an insufficient inducement for that plaintiff to settle the proceedings. Properly understood, Anglicare’s offer was based upon their anticipation or best estimate that the Court would not order an apology and that any award of damages, nominal or otherwise, that Mr Lau might have been expected to receive, would not exceed $5,000.
It is the very essence of what inspires offers of compromise and Calderbank offers that opposing parties’ views about the likely or even possible outcome of contested proceedings may differ. The primary purpose of any such offer is not only to induce an opposing party to settle but to protect one’s position as to costs, including costs that could have been avoided by obviating the need for a contested hearing, in the event that the offer is rejected. In such circumstances, the reasonableness of an offer cannot only be judged by reference to whether the recipient of the offer could ever have been induced to accept it.
In the events that occurred, Anglicare’s offer was rendered even more reasonable by the time the hearing commenced as the result of Mr Lau’s decision to claim only nominal damages. It may be understood to be uncontroversial that Anglicare recognised and accepted that Mr Lau was driven by more than a desire for money, and that a public affirmation by judgment or court-ordered apology acknowledging the substance of his complaints about the treatment of his wife were of paramount importance. However, once it is accepted that Anglicare’s disinclination to apologise to Mr Lau in the terms he required was vindicated by his Honour’s decision, there was no means, apart from an offer to pay money, by which Anglicare, or any defendant in a similar position, could induce Mr Lau to settle the proceedings. Mr Lau recovered a monetary payment and it was significantly less than Anglicare’s offer.
It may be accepted that an informal offer must operate against the background of the court’s discretion with respect to the award of costs which is to be exercised, presumptively, in favour of an order that costs follow the event: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [7]. However, if a Calderbank offer is made, but not accepted, the court’s discretion to make a special order is enlivened: Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 1229.
In the present case, the 25 March 2025 offer was a genuine offer of compromise. Mr Lau obtained no better financial result at trial and no other substantive relief apart from costs. It was unreasonable for Mr Lau not to have accepted the offer.
(1) Grant leave to cross-appeal.
(2) Allow cross-appeal in part.
(3) Set aside the costs order of the primary judge made on 12 June 2025 and in lieu thereof order:
(a) that Anglicare pay 35% of Mr Lau’s costs on the ordinary basis until 25 March 2025; and
(b) that Mr Lau pay Anglicare’s costs on an indemnity basis from 25 March 2025.
(4) Order that Mr Lau pay Anglicare’s costs of the cross-appeal.
(2) That by 4pm on 24 April 2026 Anglicare file any evidence, together with a written submission not exceeding 5 pages, in support of any different costs order to that made in the appeal and proposed at [65] in relation to the cross-appeal.
(3) That by 4pm on 8 May 2026, Mr Lau file any evidence, together with a written submission not exceeding 5 pages, in response to any orders sought by Anglicare.
(4) The Court will consider any application for a different costs order to that made in the appeal and proposed at [65] in relation to the cross-appeal on the papers.
(5) If Anglicare does not seek a different costs order to that proposed at [65] in relation to the cross-appeal, the Court will make and enter those orders and notify the parties.
**********
Lau
Anglican Community Services [2026] NSWCA 53
(2017) 95 NSWLR 597
(2013) 82 NSWLR 268
(2012) 82 NSWLR 106
In the appeal, leave was refused with costs, with a process set for any further application about costs. In the cross-appeal, leave was granted and the appeal allowed in part. The primary costs order was to be set aside and replaced with an order that Anglicare pay 35% of Mr Lau’s costs on the ordinary basis until 25 March 2025, and Mr Lau pay Anglicare’s costs on an indemnity basis from that date. Mr Lau was also ordered to pay Anglicare’s costs of the cross-appeal. The Court provided for submissions and evidence on whether different costs orders should be made ([65]–[66] and the decision orders).
Qualifying the general rule that costs follow the event is the idea that costs should be paid in a way that is fair, having regard to what the court considers was the responsibility of each party for the incurring of costs. Where Mr Lau was unsuccessful in the vast number of claims brought or otherwise abandoned at the latest stage possible, including his claim for substantial damages, and did not obtain the apology he sought, Mr Lau caused both parties to incur significant and unnecessary costs. This should have resulted in a further discount to costs.