Ng v Chong

The application for this order is refused. 4 Cross Defendant's Costs against the Defendant. 7 The cross defendant says these should follow the event. The event was in the cross defendant's favour. This is not derogated from by the judgment for the defendant of nominal damages for $10; the substance of the claim for compensatory damages was lost. 8 Reference was made to what McHugh J said in Oshlack v Richmond River Council (1980) 193 CLR 72 at [70]. There was more extensive discussion of the principles in the Full Court of the Federal Court in Nexus Minerals NL v Brutus Constructions Pty Ltd FCAFC 10 September 1997 unreported. In general terms the event will be regarded as going against a party who recovers nominal damages only, unless some other right is vindicated by the judgment, eg, the establishment of a legal right irrespective of whether any substantial remedy is obtained. 9 This cross claim was a claim for damages only. The claim for damages substantially failed. The event was in favour of the cross defendant. In argument, counsel for the defendant put the proposition that the order for $10 damages should have included the causes of action for tortious claims based on negligence as well as those for breach of contract. This submission appeared to proceed from the misapprehension that the $10 was an estimate by the Court of the defendant's loss. In fact the Court specifically found there was no loss established as flowing from the breaches. The judgment for $10 was a modern extrapolation of the traditional common law verdict for 40 shillings where breach of contract was established, but no damage. 10 Furthermore, there was a submission that in my judgment I found that tortious causes of action in negligence were established. Wherever in my judgment I made a finding of negligence, it is quite clear from the context that it was a finding of negligence in the sense of a finding of a breach of a duty of care only; in every case, I clearly found there was no damage established as arising from the breach. The causes of action in negligence were clearly encompassed in my order giving judgment for the cross defendant otherwise than in respect of the breaches of the contract. 11 There is no reason why these costs should not follow the event and the event was in favour of the cross defendant. 5 Indemnity Costs 12 This leaves questions of indemnity costs. Both the plaintiffs and the cross defendant claim indemnity costs based on Calderbank letters. Both letters make offers better than the result obtained by the defendant. The cross defendant's letter of 30 April 2004 is technically flawless, whereas the plaintiffs letter of 27 May 2004 does not state that it is a Calderbank letter or warn of the consequences. 13 It is well established that the making of an offer better than the result ultimately obtained does not automatically translate into an indemnity costs order. At one stage there was a suggestion that such a letter raised a prima facie presumption: see Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 at 451. However, the rule now applied was stated by Giles JA in SMEC Testing Services Pty Ltd Limited v Campbelltown City Council [2000] NSWCA 323 at [37]. This formulation was confirmed by the Court of Appeal in Jones v Bradley (No 2) [2003] NSWCA 258 at [8]. Multicon was explicitly disapproved at [9]. And Santow JA in Leichhardt Municipal Council v Green [2004] NSWCA 341 has counselled caution in departing from making costs orders on the usual basis. 14 In all the circumstances, I decline to make an indemnity costs order in favour of the plaintiffs. After the first three days of the trial, the defendant was given only seven days to decide on the offer. Although the case was not huge, the issues were of some complexity: see MGICA Pty Ltd (1992) v Kenny & Goode Pty Ltd (No 2) (1996) 70 FCR 236. Acceptance of the plaintiffs' offer would have left the defendant in an undefined situation of some uncertainty vis a vis the continued conduct of its case against the cross defendant. I do not find it unreasonable for the defendant not to have accepted the offer. As to the form of the letter, I do not think that that alone would have precluded the making of an indemnity costs order were that course otherwise justified: see Nobrega v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (No 2) [1999] NSWCA 133; Jones supra. But I have not in any event taken the form of the letter into account in refusing indemnity costs. 15 As to the cross defendant's application for indemnity costs, it does not have the problem of creating difficulty with another party if accepted. And the time given for acceptance (19 days) was longer. However, bearing in mind all the circumstances, including the terms of the offer and the complexity of the case, I am not prepared to find in this case either the non acceptance of the offer conduct sufficiently unreasonable to justify an indemnity costs order. 16 The orders of the Court will be: 1 Order that the plaintiffs pay the defendant's costs of the notice of motion of 25 September 2002. 2 Otherwise order that the defendant pay the plaintiff's costs of the proceedings. 3 Order that the defendant pay the fourth cross defendant's costs of the proceedings. 4 Direct that the exhibits be returned unless an appeal is instituted within 28 days from today.