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[2015] ACTCA 41
Court of Appeal (ACT)
2015-08-04
Murrell CJ, Penfold and Burns JJ
Original judgment source is linked above.
Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY COURT OF APPEAL
Case Title: Moon v Whitehead (No 2) Citation: [2015] ACTCA 41 Hearing Date: 4 August 2015 Decision Date: 4 August 2015 Before: Murrell CJ, Penfold and Burns JJ Decision: Application for indemnity costs refused. See [14]-[18]. Category: Costs Catchwords: COSTS – Calderbank Offer – rejection – reasonableness – discretion to refuse indemnity costs Legislation Cited: Court Procedures Rules 2006 (ACT) r 1906(2) Cases Cited: Moon v Whitehead [2015] ACTCA 17 Vizovitis v Ryan (No 2) [2014] ACTSC 301 Parties: Michael Moon (Appellant) Sharon Whitehead (Respondent) Representation: Counsel No Appearance (Appellant) Mr C Painter (Respondent) Solicitors No Appearance (Appellant) Snedden Hall & Gallop (Respondent) File Number: ACTCA 1 of 2014 Decision under appeal: Court: ACT Supreme Court Before: Master Harper Date of Decision: 5 December 2013 Case Title: Sharon Whitehead v Michael Moon Citation: [2013] ACTSC 243
THE COURT:
On 22 May 2015 the Court of Appeal ordered that the appellant pay the respondent's costs of the appeal on a party/party basis unless an application for a different costs order was made within 14 days.
The respondent applied for a different costs order; that the appellant pay the respondent’s costs of the appeal on a party/party basis up to 12 August 2014 and thereafter on an indemnity basis.
The respondent also seeks orders that: (a) The security paid by the appellant into the Court, including any accrued interest, be released to the respondent, through her solicitor, and be offset against the costs of the appeal owed to the respondent by the appellant. (b) The appellant pay the respondent’s costs of the application. Background
On 5 December 2013 Master Harper found in favour of the respondent on a claim for assault brought against the appellant. The Master entered judgment in the sum of $668,856.00, including $10,000.00 for aggravated damages. The appellant was ordered to pay party/party costs.
On 2 January 2014, the appellant lodged an appeal.
On 2 April 2014, Penfold J ordered that the appellant pay $10,000.00 into Court for security for costs.
On 12 August 2014, the respondent made a Calderbank offer. In brief, the terms of the offer were as follows: (a) The appellant would withdraw his appeal. (b) The respondent would accept nil dollars in respect of the judgment sum ordered by the Master Harper. (c) The appellant would pay $110,000.00 to the respondent in satisfaction of the costs order in her favour. (d) The appellant would agree to the respondent informing Medicare that the respondent was unsuccessful in recovering any amount for compensatory damages. (e) The appellant would agree to the respondent informing her private insurer that she was unsuccessful in recovering any amount for compensatory damages.
The offer remained open for a period of 14 days. It was not accepted.
On 22 May 2015 the Court of Appeal allowed the appeal in part, reducing the damages awarded by the Master Harper by $10,000.00 because no award should have been made for aggravated damages. This left the respondent with judgment in the sum of $658,856.00: Moon v Whitehead [2015] ACTCA 17. Was it reasonable to reject the offer?
The question is whether, from the perspective of the recipient of the offer (the appellant), it was unreasonable to refuse the offer at the time that the offer was made. Some of the matters that may be taken into account when making this assessment are set out in Vizovitis v Ryan (No 2) [2014] ACTSC 301 at [23]. They include: (a) The stage of the proceeding at which the offer was received. (b) The time allowed to the offeree to consider the offer. (c) The extent of the compromise offered. (d) The offeree’s prospects of success, as at the date of the offer. (e) The clarity with which the terms of the offer were expressed. (f) Whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.
Having regard to these considerations, particularly the stage of the proceedings at which the offer was made, the time allowed to the appellant to consider the offer and the extent to which the offer represented a compromise, at first blush the offer made on 12 August 2014 was a reasonable offer and it was unreasonable for the appellant to have refused the offer.
However, the appellant may have formed a view that he did not want to engage in an attempt to redirect funds that might have otherwise gone to Medicare, to the respondent’s lawyers. It would not be unreasonable to refuse an offer on that basis. Decision
Even in cases where an offer has been unreasonably refused, the Court retains a general discretion in relation to the awarding of indemnity costs.
The Court is concerned that the manner in which the offer was framed was designed to ensure that the payment of the respondent’s lawyers took precedence over recompensing the public revenue for payments made by Medicare. The Court declines to approve such an arrangement. For this reason, the respondent’s application for indemnity costs is refused.
The order for party/party costs that was made on 22 May 2015 is confirmed.
We now turn to the other orders sought by the respondent in the application. The sum of $10,000.00 was lodged by the appellant for the purpose of providing security for costs. Rule 1906(2) of the Court Procedures Rules 2006 (ACT) provides: If judgment is given requiring the party to pay all or part of the costs of the proceeding or any application in the proceeding, the security may be applied in satisfaction of the costs.
There is evidence that the costs are well in excess of $10,000.00. The Court therefore orders that the security paid by the appellant into the Court, including any accrued interest, is released to the respondent, through her solicitor, with the amount offset against costs of the appeal owed to the respondent by the appellant.
Each party is to pay its own costs of this application. We note that the appellant has not appeared. I certify that the preceding eighteen [18] paragraphs are a true copy of the Reasons for Judgment of the Court of Appeal. Associate: Date: 24 August 2015
Moon
Whitehead