Morris v Leaney

Judgment

1. These proceedings were heard in late August 2020 and in February 2021. Written submissions were filed after the hearing and I delivered judgment on 10 June 2021.
2. In brief, I concluded that the plaintiffs had not succeeded in proving any loss that flowed from the conduct of the defendant, but gave judgment in their favour for $1,000 as nominal damages for the defendant's breach of contract.
3. In my reasons I expressed the provisional view, at [160], that the appropriate order in respect of costs was that the plaintiffs pay the defendant's costs. However, as the parties had not been heard on that question, I refrained from making any costs order and gave directions to allow the parties to be heard on the matter.
4. Both parties filed submissions and were content for orders to be made without any further oral hearing. The defendant submitted that the plaintiffs should pay his costs on an ordinary basis, up to and including 18 August 2020 and on an indemnity basis from 19 August 2020. The plaintiffs submitted that the defendant should be ordered to pay their costs. The plaintiffs' submissions are inconsistent with the authorities concerning costs in judgments for nominal sums and do not grapple with that inconsistency.
5. In my view, the authorities referred to in my principal judgment support an order for costs in favour of the defendant. Further, for the reasons I set out below, those costs should be on an indemnity basis from 19 August 2020.
6. On 18 August 2020 the defendant served a notice of compromise in accordance with UCPR r 20.26 in terms that there be judgment for the plaintiffs for $50,000. The offer was open for acceptance until 4:00pm on 21 August 2020.
7. Rule 20.26 provides as follows: 20.26 Making of offer (1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms. (2) An offer under this rule: (a) must identify: (i) the claim or part of the claim to which it relates, and (ii) the proposed orders for disposal of the claim or part of the claim, including, if a monetary judgment is proposed, the amount of that monetary judgment, and (b) if the offer relates only to part of a claim in the proceedings, must include a statement: (i) in the case of an offer by the plaintiff, as to whether the balance of the proceedings is to be abandoned or pursued, or (ii) in the case of an offer by a defendant, as to whether the balance of the proceedings will be defended or conceded, and (c) must not include an amount for costs and must not be expressed to be inclusive of costs, and (d) must bear a statement to the effect that the offer is made in accordance with these rules, and (e) if the offeror has made or been ordered to make an interim payment to the offeree, must state whether or not the offer is in addition to that interim payment, and (f) must specify the period of time within which the offer is open for acceptance. (3) An offer under this rule may propose: (a) a judgment in favour of the defendant: (i) with no order as to costs, or (ii) despite subrule (2) (c), with a term of the offer that the defendant will pay to the plaintiff a specified sum in respect of the plaintiff's costs, or (b) that the costs as agreed or assessed up to the time the offer was made will be paid by the offeror, or (c) that the costs as agreed or assessed on the ordinary basis or on the indemnity basis will be met out of a specified estate, notional estate or fund identified in the offer. (4) If the offeror makes an offer before the offeree has been given such particulars of the offeror's claim, and copies or originals of such documents available to the offeror, as are necessary to enable the offeree to fully consider the offer, the offeree may, within 14 days of receiving the offer, give notice to the offeror that: (a) the offeree is unable to assess the reasonableness of the offer because of the lack of particulars or documents, and (b) in the event that rule 42.14 applies to the proceedings, the offeree will seek an order of the court under rule 42.14 (2). (5) The closing date for acceptance of an offer: (a) in the case of an offer made two months or more before the date set down for commencement of the trial - is to be no less than 28 days after the date on which the offer is made, and (b) in any other case - is to be such date as is reasonable in the circumstances. (6), (7) (Repealed) (8) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer. (9) An offer is taken to have been made without prejudice, unless the notice of offer otherwise provides. (10) A party may make more than one offer in relation to the same claim. (11) Unless the court orders otherwise, an offer may not be withdrawn during the period of acceptance for the offer. (12) A notice of offer that purports to exclude, modify or restrict the operation of rule 42.14 or 42.15 is of no effect for the purposes of this Division. (Emphasis in original)