Pike v Coles Supermarkets Australia Pty Ltd; Pike v Solomon

THE LEGISLATION AND RULES

1. The powers of the Court as to costs are set out in s 98 of the Civil Procedure Act 2005 (NSW) ("Civil Procedure Act") in the following terms: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount.
2. Part 42 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") sets out the rules with respect to costs. Rule 42.1 is extracted below: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
3. Rules 20.25, 20.26, 20.27, 42.15 and 42.14A of the UCPR relevantly provide: 20.25 Definitions In this Division - judgment in favour of the defendant includes a dismissal of a summons or a statement of claim. offer means an offer of compromise referred to in rule 20.26. period of acceptance for an offer means the period of time during which the offer is open for acceptance. 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. 20.27 Acceptance of offer (1) A party may accept an offer by serving written notice of acceptance on the offeror at any time during the period of acceptance for the offer. (2) An offer may be accepted even if a further offer is made during the period of acceptance for the first offer. (3) If an offer is accepted in accordance with this rule, any party to the compromise may apply for judgment to be entered accordingly. 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.
4. Reliance was placed by the Owners on r 42.15A which was introduced on 8 December 2006 and is in the following terms: 42.15A Where offer not accepted and judgment no less favourable to defendant (1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer. (2) Unless the court orders otherwise - (a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis - (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
5. Coles relied upon r 42.34. Rule 42.34 is in the following terms: 42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court (1) This rule applies if - (a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied that - (a) for proceedings that could have been commenced in the District Court - the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted, or (b) for proceedings under Part 2 of Chapter 7 of the Industrial Relations Act 1996 -the commencement and continuation of the proceedings in the Supreme Court, rather than the Local Court, was warranted.
6. Before turning to the question of costs in the context of the issues raised on the present application, I will address the general principles associated with costs orders.

General Principles

1. The general principles, with respect to costs orders, were set out in Moseley v AB (No 2) [2017] NSWSC 1812 at [65]-[79], extracted below: [65] The court's primary task is to determine whether the facts of the case or specific costs provisions impact upon the court's jurisdiction to make costs orders. Unless there are statutory provisions to the contrary, the court's discretion to determine such issues is unfettered: Civil Procedure Act 2005 s 98(1) (extracted above at [59]). [66] The central and overriding principle in this regard is that of doing justice to the parties in each particular case. This involves a heavily contextual assessment that focuses upon the conduct of the litigation itself. A discretion exercised on grounds unconnected with the litigation, or on no grounds at all, is arbitrary or capricious rather than fair or just (see Peters v Peters (1907) 7 SR (NSW) 398 at 399 (per Street J); Cretazzo v Lombardi (1975) 13 SASR 4 at 11 (per Bray CJ); Scharer v Counting Instruments Ltd [1986] 1 WLR 615 at 621 (per Buckley LJ). [67] The discretion must be exercised judicially and "according to rules of reason and justice, not according to private opinion … or even benevolence … or sympathy": Williams v Lewer [1974] 2 NSWLR 91 at 95. [68] This discretion may be exercised whenever the circumstances warrant, having regard to the scope and purpose of the s 98 of the Civil Procedure Act: Oshlack v Richmond River Council (1998) 193 CLR 72; Hamod v State of NSW [2011] NSWCA 375 at [813]. However, the discretion must be exercised on a principled basis (see Smith v Sydney West Area Health Service (No 2) [2009] NSWCA 62 at [11]), and in accordance with the principles of proportionality: Civil Procedure Act s 60. [69] In Oshlack v Richmond River Council, McHugh J observed the discretion, whilst unfettered, is not to be applied without guidance or qualification (at [65]-[67]): The discretion must be exercised judicially [65] Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous considerations which, if taken into account, will cause the exercise of the discretion to miscarry. Consistent with the aim of justice, the law could not have developed otherwise. As Mason CJ said in Latoudis it does not follow that any attempt to formulate a principle or a guideline according to which the discretion should be exercised would constitute a fetter upon the discretion not intended by the legislature. Indeed, a refusal to formulate a principle or guideline can only lead to exercises of discretion which are seen to be inconsistent, a result which would not have been contemplated by the legislature with any degree of equanimity. [66] By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2), when setting aside an arbitrator's costs award: the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure. The combined force of the sentiments recognised above by Mason CJ, regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the "usual order as to costs". The usual order as to costs [67] The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. [70] Equally, the "general rule" (or "usual order as to costs") does not amount to a fetter on the court's discretion. The terms of r 42.1, "unless it appears to the court that some other order should be made", clearly envisage that the court may, in its discretion, make a costs order other than one following the event. [71] The most common circumstance in which the general rule may be displaced is evidence of disentitling conduct on the part of the successful party: Oshlack v Richmond River Council at [40] and [69]; G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263. The disentitling conduct does not necessarily need to amount to misconduct; it may simply be any conduct "calculated to occasion unnecessary expense": Lollis v Loulatzis (No 2) [2008] VSC 35 at [29]; Keddie v Foxall [1955] VLR 320 at 323-4. [72] In Commonwealth of Australia v Gretton [2008] NSWCA 117, Hodgson JA addressed the principles of fairness underlying the making of a costs order, which may at times warrant departure from the general rule (at [121]): [121] In my opinion, 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 the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach. [73] Further factors identified as relevant to informing judicial discretion were identified in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 at [97]-[98] (per Campbell JA) (see also, Oshlack v Richmond River Council at [69] (McHugh J); and Ritter v Godfrey [1920] 2 KB 47). They include, but are not limited to, the following: (1) whether the successful party effectively invited the litigation; (2) whether the successful party unnecessarily protracted the proceedings (3) whether the successful party succeeded on a point not argued before a lower court; (4) whether the successful party prosecuted the matter solely for the purpose of increasing the costs recoverable; and (5) whether the successful party had obtained relief which the unsuccessful party had already offered in settlement of the dispute. [74] The onus lies on the losing party to establish a basis for any departure from the general rule: Waterman v Gerling (Costs) [2005] NSWSC 1111 at [10]. Only in an exceptional case would a successful party both be deprived of costs and also ordered to pay the opponent's costs: Arian v Nguyen (2001) 33 MVR 37. [75] The fact that the proceedings involve some public interest aspect does not, of itself, necessarily warrant departure from the general rule that costs follow the event: Oshlack v Richmond River Council at [90] (McHugh J); Re Kerry (No 2) [2012] NSWCA 194 at [13], [15]; CSR Ltd v Eddy (2005) 226 CLR 1. [76] Where there is a divergence of authority on a particular issue, this may be a factor, but in Rinehart v Welker (No 3) [2012] NSWCA 228 the importance of the subject matter did not provide a basis for refusing costs to the successful party in private litigation (at [15]). [77] The Court should, however, have careful regard to the facts of the case: EKO Investments Pty Limited v Austruc Constructions Ltd [2009] NSWSC 371 at [18]-[23]; Knight v Clifton [1971] Ch 700 at 725. [78] Additionally, in a case where there are multiple issues litigated, the Court may, in the exercise of its discretion, order that a successful party have only part of its costs. It may be appropriate to order that a successful party be deprived of costs or a portion of the costs if the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument: see Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. [79] The appropriate starting point, nonetheless, remains the presumption under r 42.1, and the enquiry then becomes whether in the exercise of the court's discretion, the presumption should be displaced, or whether some other order is to be preferred.

Offer of Compromise

1. In Ackerman v Morgan [2019] NSWSC 1250, this Court considered provisions of the r 42.15A relating to Offers of Compromise at [64] and [65], as follows: [64] The rules in relation to offers of compromise operate differently to the principles which apply to Calderbank offers. Schmidt J sets out this distinction, in the context of UCPR r 42.15A, in Vagg v McPhee (No 2) [2012] NSWSC 187 at [16]-[23]. Her Honour observed: [16] When the plaintiffs' did not succeed, having rejected the offer of compromise made under the Rules, under r 42.15A an onus fell upon them to establish that the Court should depart from the consequences of the Rule, the defendants having obtained a judgment at least as favourable to them as the terms of their offer. That onus has not been met. [17] The defendants relied on Leichhardt Municipal Council v Green where Bryson JA observed at [59]: "I agree with the conclusions reached by Santow JA. The application for an order for costs to be assessed on the indemnity basis raises a discretionary question the answer to which is not in my view susceptible of much detailed exposition. The settlement offer was made before trial and was no longer available while the appeal was pending. The respondent's case did not succeed, but it was not a case which could not reasonably be argued and it succeeded at first instance. The only element of compromise in the offer was as to costs: otherwise it was a call on the respondent to capitulate and give up: the element of compromise was slight, and the respondent's ultimate lack of success does not to my mind demonstrate that the reasonable course for the respondent was to capitulate, nor does anything show that the respondent was delinquent in going on with the trial or in resisting the appeal." [18] That was a case concerned with a Calderbank offer, as was Miwa Pty Ltd v Siantam Properties Pty Ltd (No 2), on which reliance was also placed. The Rules in relation to offers of compromise operate differently to the principles which apply to Calderbank offers. In the case of a Calderbank offer an onus falls on the offeror to convince the Court that it should exercise its discretion in the offeror's favour, the offeree having acted unreasonably in rejecting the offer (see Jones v Bradley (No 2) [2003] NSWCA 258; Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 per Giles, Ipp and Tobias JJA at [26]. ) The offeror must also show that the offer was a genuine compromise (see Leichhardt Municipal Council v Green, at [21] - [24], [36] per Santow JA (Stein JA agreeing) and Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4] - [5] per Handley, Beazley and Basten JJA). In considering a Calderbank offer, the Court strives to achieve fairness in the result (see the discussion in Commonwealth v Gretton [2000] NSWCA 118). [19] The provisions of Rule 42.15A operate quite differently, even though it should be noted, that even in the case of a Calderbank offer a "walk-away" offer can be a "genuine offer of compromise" (see Leichhardt Municipal Council v Green [2004] NSWCA 341 at [36]; and GIO General Ltd v ABB Installation and Service Pty Ltd [2000] NSWCA 118 at [36];) [20] Having refused the defendants' offer the plaintiffs had to establish circumstances which, as a matter of justice, warrant a departure from what the Rule contemplates will be the usual result of refusal of the offer. The defendants are entitled to an order in accordance with the Rule, unless the plaintiffs establish that the Court should order otherwise. [21] The exercise of that discretion in favour of the plaintiffs requires that they establish that 'exceptional circumstances' exist, as discussed in South Eastern Sydney Area Health Service v King [2006] NSWCA 2 per Hunt AJA (Mason P and McColl JA agreeing): "83 Part 52 rule 22 provides that, where a plaintiff who has made an offer of compromise in accordance with Part 22 (Division I) which is not accepted by the defendant, and where the plaintiff obtains a judgment no less favourable than the terms of the offer, then, unless the Court otherwise orders, the plaintiff will be entitled to an order against the defendant for costs on an indemnity basis in relation to his costs incurred from the day after the offer was made. The onus is on the defendant to persuade the Court that indemnity costs should not be ordered. He must demonstrate the basis on which an order should be made denying the plaintiff's entitlement to indemnity costs. He must establish that he had given serious thought to the risk involved in non-acceptance of the offer, and that he had assessed the plaintiff's case properly and in the context of the rule and the achievement of its purpose - to encourage the proper compromise of litigation, in the private interests of the litigants and in the public interest of the prompt and economical disposal of litigation. Generally, exceptional circumstances are required to justify such an order denying the plaintiff's entitlement. See, generally, Fowdl v Fowdl , Court of Appeal, 4 November 1993, unreported, per Kirby P at 12, 16; Hillier v Sheather (1995) 36 NSWLR 414 at 422-423; Morgan v Johnson (1998) 44 NSWLR 578 at 581-582. 84 Although the Court may take into account the particular features of a case and the difficulty of putting an accurate estimate on its value in advance of the litigation, those considerations do not provide a basis by themselves for denying the party making the offer an order for indemnity costs: Hillier v Sheather (at 423). In Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721 at 725, it was said that a miscalculation in a case with large imponderables, where the course taken by the party to whom the offer was made may have been perfectly reasonable, would provide a basis for denying an order, but the subsequent decision in Hillier v Sheather suggests that, whilst "large" imponderables may be a relevant factor in the particular case in denying an order for indemnity costs, in the general case a party's reasonable belief as to his own chances of success does not alone provide a basis for denying an order for indemnity costs." [22] In Hillier v Sheather (1995) 36 NSWLR 414 it was also observed (at 423) that: "Secondly, it might be thought that the rule operates rather unfairly upon plaintiffs. They may be subjected to risk by early offers which are judged to be unrealistic. Plaintiffs may not be able to afford the risks of litigation with the added risk as to costs. The transference of the risk of costs to them (even if they succeed generally) imposes upon ordinary plaintiffs a burden which few can afford to bear. It is important that the courts should not approach the exercise of the discretion to "otherwise order" in a mechanical way: cf, Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721 at 725. Even skilled legal representatives do not have the gift of prophecy. Calculating damages verdicts is inescapably inexact because of the many imponderables which must be taken into account. The present is a case in point. So much depended upon the view which would be taken concerning the significance (if any) of pre-injury spinal and neck pain. In exercising the discretion, courts will not overlook the particular features of a case and the difficulty of putting an accurate estimate on its value in advance of the litigation. Yet the general considerations of chance and risk would have been known to the rule-maker when Pt 19A, r 9 of the District Court Rules was introduced into the District Court Rules . Without more, they could not provide a basis for ordering otherwise than as the rule will ordinarily provide. If this puts plaintiffs' legal representatives in an impossible position and, in practice, forces the settlement of cases for sums less than they are worth because the costs of litigation cannot be wagered against their risks, the complaint must be against the terms of the rules and the apparently narrow provision for exempting orders. The complaint cannot be against a court which merely gives effect to the purpose of the rule as expressed in its plain language." [23] In this case, there was no evidence led or explanation given for the plaintiffs, as to why the offer wasn't accepted. Exceptional circumstances warranting a departure from the effects of r 42.15A have not been established. [65] With respect, I accept and adopt her Honour's reasoning.
2. The same approach is generally applicable with respect to the operation of r 42.15 (noting that r 42.15 and 42.15A ("the costs rules") apply to differing outcomes in the proceedings).
3. Any requirement to establish exceptional circumstances should not be understood as placing a gloss on the language of the costs rules where they respectively use the expression "unless the Court orders otherwise", but rather as emphasising the weight to be accorded to the presumption otherwise contained within the costs rules.
4. In Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 ("Perisher Blue") Gleeson JA and Tobias AJA stated at [28], [33] - [38]: [28] In relation to rr 42.14, 42.15 and 42.15A, the onus lies on the party seeking to displace the presumptive rule: Curtis v Harden Shire Council (No 2) [2015] NSWCA 45 at [27] (rr 42.14, 42.15) ; Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [45] (r 42.15A). The same view should be taken in relation to the question of onus in r 42.13A. … [33] The former approach finds support in Porter-Coote v DHSH (Aust) Travel Pty Ltd [2009] NSWSC 1094 at [5] (Gzell J), specifically dealing with r 42.13A. Gzell J applied by analogy, the approach to an "order otherwise" under r 42.14 in Macquarie Radio Network Pty Ltd v Arthur Dent (No 2) [2007] NSWCA 339, where Beazley JA (as her Honour then was) at [15] held that the Court would only deviate from the general rule provided for in r 42.14 and make a different order if the Court found exceptional circumstances for doing so. See also South Eastern Sydney Area Health Service Ltd v King [2006] NSWCA 2 at [83] (Hunt AJA; Mason P and McColl JA agreeing). [34] The latter approach is reflected in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 (Regency Media) at [15], where this Court (Spigelman CJ, Beazley and McColl JJA), said in relation to rr 42.14, 42.15 and 42.15A, each of which was expressed to be "unless the court orders otherwise" (emphasis added): The relevant provisions of these rules do not specify that exceptional circumstances or the avoidance of substantial injustice must be established before the court will make a different order to the prima facie order for which the rules provide and, in our opinion, the rule should not be so construed. Rather, the discretion is one that has to be exercised having regard to all the circumstances of the case. [35] In Barakat v Bazdarova [2012] NSWCA 140 at [42]-[50], Tobias AJA (Bathurst CJ and Whealy JA agreeing) reviewed the authorities in the context of an "order otherwise" for the purposes of r 42.14(2), but found it unnecessary to determine which line of authority to follow. McColl JA referred to the conflict in decisions in this Court in Commissioner of Taxation v Moodie [2014] NSWCA 59; 308 ALR 571 McColl JA at [64]. In Jojeni Investments Pty Ltd v Mosman Municipal Council (No 2) [2015] NSWCA 208 at [18], the issue was noted but did not need to be resolved. [36] It may be observed that, in practice, the difference in view may be more a matter of semantics, particularly if the reference to "exceptional circumstances" is understood as explaining the operation of the relevant rule rather than impermissibly attempting to place a fetter on the exercise of the Court's discretion: see the observations of McColl JA (Gleeson JA and Sackville AJA agreeing) in Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) at [46]-[47], where reference is made to the view of Hely J in relation to the like power to "order otherwise" in O 23, r 11(4) of the Federal Court Rules 1979 (Cth) (as then in force). [37] Hely J considered that the use of language such as "compelling and exceptional circumstances" with respect to the discretion to make an "otherwise" order, merely "convey[s] that the prima facie position should only be departed from for proper reasons which, in general, only arise in an exceptional case": Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) [2004] FCA 1437; 212 ALR 281 at [17]. [38] As will appear below, it is unnecessary here to determine which line of authority to follow here.
5. In broad terms, the costs rules are intended to indicate that there must be a good reason to oust the effect of the rules rather than equating exceptional circumstances to that which is extraordinary or rare.
6. Without fettering the discretion residing within the costs rules, I consider that the question of reasonableness of not accepting an offer is a relevant consideration (see Mendonca v Tonna (No 3) [2020] NSWCA 332, (per Bell P (as the Chief Justice then was), Meagher and Payne JJA agreeing).
7. The stage of the proceedings at which the offer is made and the information available to the party to whom the offer is directed will also be relevant in this respect, so too, will the duration given for the consideration of the offer (see Perisher Blue at [16], [17], 18]. The latter consideration calls for attention to be given to r 20.26(5).

UCPR Rule 42.34

1. I discussed the operation of r 42.34 in Jabber v Gade [2022] NSWSC 998 at [62] as follows: [62] The defendant submitted that the plaintiff obtained a judgment against the defendant in the Supreme Court for only $7,000 which was considerably short of the $500,000 threshold contained within r 42.34(1)(a) of the UCPR. The proceedings could have been commenced in the District Court and there was no warrant to commence proceedings in this Court: UCPR r 42.34(2)(a). [63] The defendant accepted that the Court retained a discretion to award the plaintiff her costs pursuant to r 42.34 of the UCPR but that a costs order "will not ordinarily be made" in the circumstances. It was contended that there was no reason to depart from the usual course and the plaintiff should not be awarded the costs save for the costs concerning the defendants filed motion for which the plaintiff obtained a costs order: Jabbar 2018. [64] I do not accept the defendant's submission in this respect. It is true that a costs order will not ordinarily be made where the judgment obtained was less than $500,000 but the Court retains a discretion if it made be said the proceedings are warranted in the Supreme Court. I am prepared to allow some latitude here in this case for an unrepresented litigant who proceeded upon the basis that she was prosecuting for five separate assaults which if established may well have resulted in damages exceeding the threshold. Whether the case is not legally complex, there were factual complexities. Further, it is not suggested that the case ran for longer than it should have in circumstances of an unrepresented litigant. [65] In my view, the case is broadly analogous to State of New South Wales v Quirk [2012] NSWCA 216. In that case, the Court of Appeal set aside a judgment in the sum of $175,000 and, in lieu thereof, awarded the plaintiff $95,000. The defendant invoked r 42.34 of the UCPR. Tobias AJA (with whom Beazley and Hoeben JJA agreed, as Her Excellency then was) stated at [169]-[171]: [169] There does not appear to be any authority as to the application of this rule. The appellant submitted that the present case could easily have been litigated in the District Court and did not require the determination of issues in the Supreme Court either as to the monetary basis of the respondent's claim or as to the complexity of the law. In this respect, actions for malicious prosecution, assault and false imprisonment are, so it was said, frequently heard in the District Court to no prejudice to the parties. Accordingly it was submitted that it was appropriate that the respondent not recover any of his costs of the proceedings. [170] In the present case the provisions of rule 42.34(1)(a) are obviously satisfied. The respondent will receive a judgment for less than $500,000. It is a matter of contention as to whether the provisions of subpar (b) are satisfied given that the respondent has failed to succeed on his malicious prosecution claim. However, for present purposes, I will assume that he would be entitled to at least some order for costs against the appellant at first instance. [171] I will therefore concentrate on the provisions of rule 42.34(2). True it is that the present case did not involve any complex legal issues and that the monetary amount to which the respondent would have been entitled had he succeeded on all his claims may not have exceeded the amount of $500,000. However had he so succeeded he may have been entitled to an amount approaching that figure. Importantly, the facts were complex involving as they did two separate incidents involving not insignificant conflicts of evidence. It was not suggested that the case ran for a period longer than it should have which was from 4 April to 21 April 2011 before a highly experienced judge of the Common Law Division of this Court. It was also conducted by experienced senior counsel on both sides. Although it is true that the case could have been litigated in the District Court, in my view the factual issues were sufficiently complex as to warrant the proceedings being commenced and continued in the Supreme Court. It therefore follows that in my view rule 42.34 has no application to the present case." [66] In my view, [171] of the Court of Appeal's reasons emphasise the discretionary nature of the considerations that the Court can take into account in determining whether r 42.34 of the UCPR is engaged.

RELEVANT FINDINGS PIKE NO 1

1. I shall provide extracts of the judgment relevant to the determination of the costs issues: 4 Both Coles and the owners filed cross-claims against each other in their respective proceedings ("the cross-claims"). A central issue in the cross-claims was control of the relevant area, in particular, having regard to the terms of the lease under which Coles occupied, at least, the supermarket premises and had some responsibilities with respect to the car park. I will return to the terms of the lease below. 5 Prior to the hearing, both Coles and the owners resolved the claims brought between them, respectively. As such the cross-claims do not need to be determined. As at the time of the hearing, both Coles and the owners were jointly represented. Hereinafter, Coles and the owners shall be, collectively, referred to as "the defendants". … CREDIT The Evidence of the Plaintiff … Conclusion 163 The defendant correctly submitted that the plaintiff's evidence before and after the surveillance footage reveals a shifting of evidence to adjust to the inconsistencies in her account. So much is evident from both the terms of her answers as I have discussed them and from the manner in which she gave her evidence. As mentioned, her evidence was somewhat [calibrated] to avoid risk before the surveillance footage and further adjusted afterwards. 164 Further, the surveillance footage is often inconsistent with the plaintiff exhibiting pain or physical limitation and demonstrates some resumption of functionality at pre-incident level. 165 Despite the evidence as to the underlying existence of pain there was the absence of facial expressions or the movements of the body demonstrative of pain being felt during the discharge of work. 166 The nature of the work and the activities shown in the footage, all of which are arduous, must raise doubts about the level of pain experienced at the time the footage was taken and the reports of medical professionals as to the same. The contention that the discharge of that work was necessary for financial reasons has a superficial attraction (in the sense of working through the pain) but some doubt must be cast upon that explanation because of her prior evidence of her experience in relatively light work as a bookkeeper (although some medical reasons were advanced for not taking up that work). 167 The credibility of the plaintiff's evidence as to her afflictions is also strained by the volume of work undertaken by her in the absence of her son and the passage of her evidence in which she insinuated her condition had deteriorated since 2017 (see transcript at 107). 168 Her evidence as to her availability for a disability pension must, in the light of the evidence, be doubted. 169 My overall impression is that the plaintiff's evidence as to the extent of her incapacity and as to the extent of the pain she expressed are exaggerated and that her concessions were tailored for the avoidance of exposure as to the true state of her capacity for work (including arduous work). I do not find that the plaintiff's evidence was untruthful as such but that the content and manner of it reflected very poorly upon her as a witness. I consider her to be an unreliable witness. In particular, her evidence is unsatisfactory as to the existence of incapacity and pain. This necessarily impacts her reports to medical professionals as to those states of being from time to time, and overall, suggests that the plaintiff has a capacity for even arduous work from the start of her lawnmowing business, even though she may have suffered some ongoing pain managed by medication.. … 206 The plaintiff's case was that the defendants owed the plaintiff a duty to take reasonable care to ensure that she was not exposed to unnecessary risk of injury. In summary, it is submitted: (1) The drainage pipe into which the plaintiff stepped clearly had its cover/cap removed. There was no evidence before the Court of a damaged cover, noting there were no screws in the hole, nor evidence from the defendants as to why or when it was removed. Further, the detritus surrounding the pipe, again, suggest a period of time has past with the cap missing. (2) The plaintiff did not see the uncapped drainage pipe because, whilst she put her groceries into the passenger front seat, the drainage pipe was initially concealed by the vehicle parked in the western bay. 207 By the close of submissions, the parties were in agreement as to the duty owed by the respective defendants and, in light of the Joint Expert Report, any dispute as to the seriousness of the plaintiff's injuries fell away. As to duty, counsel for the defendant conceded that both sets of defendants owed a duty of care to the plaintiff and the duty arose from "the circumstances in which they were each, in their own way, to some extent, occupiers, in the sense conventionally recognised under the common law". As such, "it could not be said on behalf of either sets of defendants that they had no duty to entrants to that property". 208 The plaintiff drew a distinction between Coles as occupier and the owners as the relevant owners of the premises. However, for the purposes of determining liability, senior counsel for the plaintiff recognised that the submissions advanced for the defendants had, in substance, accepted that Coles was the relevant occupier. 209 Turning to the scope and content of each of the duties, whilst both sets of defendants conceded that Coles had assumed responsibilities for maintenance, subject only to matters of structural or capital repair, it was submitted that the Court should approach questions of liability with respect to Coles and the owners, respectively, "independently". In that respect, it was also submitted "issues about respective responsibilities do not need to be determined on the factual and legal issues in proceedings". 210 It being conceded that the defendants, respectively, owed a duty of care to the plaintiff, the primary area dispute remaining in the plaintiff's liability case was causation. Whilst a joint document was not filed, by closing submissions, counsel for the defendants confirmed the crux of the dispute with respect to liability was one of causation. As to the issue of causation, senior counsel for the defendants submitted: (1) in relation to Coles, "[liability] arises from whether or not had Coles had a proper system, this risk would have been identified and addressed"; and (2) in relation to the owners, "there was a sufficient discharge of the duty, in other words there was a duty as owners and to some extent occupiers, although having regard to the terms of the lease and the - that are taken through their commercial agents, such reasonable precautions as were required under s 5B of the Civil Liability Act were taken". 211 Section 5B of the Civil Liability Act 2002 (NSW) requires that the risk of injury, if appropriate precautions were not taken, be foreseeable and not insignificant. In the plaintiff's submission there can be little issue but that that risk was clearly foreseeable. The relevant risk of harm in this matter was identified as the risk that a person such as and including the plaintiff could step into a hole such as that that was uncovered and sustain injury. The defendants conceded that risk was foreseeable and not insignificant. 212 The position of the defendants is that the defendants, in their respective capacities, had taken reasonable precautions, which constituted an adequate response to the risk and there is no breach of duty by either Coles or the owners. However, the defendants concede that risk was foreseeable and not insignificant. … DUTY OF CARE 215 As mentioned, it was uncontroversial that the defendants as the occupiers of the car park at the time of the incident, the defendants each owed a duty of care to the plaintiff. The duty owed by an occupier is to exercise reasonable care so that the premises are safe for pedestrians and other users: Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7 at [488]; Thompson v Woolworths (Q'land) Pty Limited (2005) 221 CLR 234 at [24]. 216 I find that the defendants owed a duty to the plaintiff at the time of the incident as occupiers of the car park. … BREACH OF DUTY … Defendants' Submissions … 243 The defendants have properly conceded the question of breach with respect to Coles. The provisions of cl 29.7(a) of the lease plainly provide that Coles was required, at its expense, to repair and maintain the car park. 244 The risk of harm in this matter is the risk that a person would step into a hole that was uncovered and thereby sustain injury. The hole was located in the car park and, self evidently from the photos of the hole after the incident, was in need of maintenance or repair. 245 The reasonable precautions to be taken by Coles in that respect, having regard to its obligations under the lease involved, in order to properly maintain and repair the car park, regular inspection of it. 246 Thus, a system of inspection by means of cleaners or other persons to inspect the car park would have been required as reasonable precautions. There would seem to be no dispute that a daily inspection would have been reasonable, workable and appropriate in that respect. 247 There was no evidence of a system of inspection by Coles, but there was evidence of Coles being aware and reminded of its obligations in that respect before the incident as to the state of disrepair of the car park and Coles' responses taking steps under the lease. The hole into which the plaintiff stepped was indicative of a state of disrepair. Coles was required to take reasonable steps to effect maintenance and repair of the car park. 248 In those circumstances, it may be concluded that Coles failed to take reasonable precautions, either by failing to have and applying any system of inspection, maintenance and repair, or adopting a system which was wholly inadequate in its terms or application in that respect for the purposes of s 5B of the Civil Liability Act. 249 I consider the submissions of the owners to be correct in this respect, namely, the owners had adequately discharged their duty to take reasonable precautions for the purposes of s 5B. The owners were owners of commercial property which was leased to a large commercial operator with specific obligations to maintain the car park. They reminded and pressed Coles to fulfil those obligations and with reasonable frequency, inspected the condition of the property to ensure the obligations were met and took steps to remediate the property including the car park either directly or through the contractor. … CAUSATION… Defendant Submissions: Causation 258 The only aspect that arises for determination in relation to the liability assessment of Coles' position is under s 5D of the Civil Liability Act and that is causation. The question, in that respects is as follows: (1) what reasonable precautions should have been taken because, without assessing that, the Court cannot proceed to properly consider the question of causation; and (2) if those precautions had been taken, is it reasonably likely that the risk of harm would have been avoided. 259 As to the issue of causation, with respect to Coles, counsel for the defendants submitted: (1) The finding should be that a reasonable precaution that should have been taken by Coles, having regard to its obligations under cl 29 in the lease, would have been to perform some sort of inspection of the car park. In my submission, it being a car park, a reasonable system of inspection would have been either through cleaners or through inspectors per se to have patrolled the car park at least once per day. (2) The causation submission is simply that had that been done, the risk would have necessarily been obviated. In the absence of any evidence as to how long the risk had been present, the Court could not confidently conclude that it would have been. Reliance was placed upon Strong. (3) It was contended that caution should be taken when assessing the time based upon the photograph of the hole, namely, "approximately an hour after the event, that there was a detritus visible in and around the hole to suggest that it had been uncapped for a period of time". It was submitted: "one cannot say with any confidence from that photograph, or from any other evidence, whether the hole had been uncovered for days, or hours or minutes before the accident, and so in those circumstances the Court would not be satisfied in relation to the matter of causation". 261 As to the issue of causation, with respect to the owners, counsel for the defendants submitted: (1) First, regard must be had to the relevant obligations of the owners. In that respect, it was contended, in light of the obligations imposed by the lease upon Coles, the obligation upon the owners "would have been lesser". This is because, the issue of maintenance was "largely delegated". It was contended the owners' duty "would have been no more than to, if you like, oversee that process by conducting less regular inspections itself". (2) Secondly, as to the duty to conduct such inspections, it was contended that was done through the owners' commercial agents. Reference in that respect was made to the evidence of Ms Skinner; she conducted such inspections on a "monthly" basis. (3) Therefore, it was submitted, one must doubt whether whatever system should have been adopted by the owners, directly or through their agents, would have detected the risk. Conclusion: Causation 262 Attention was directed by the parties to the judgment of the High Court in Strong. In that matter, the appellant suffered serious spinal injury when she slipped and fell while at a shopping centre. At the time she was in the sidewalk sales area outside the entrance to a Big W store. That area was under the care and control of the first respondent, Woolworths Limited.… 269 There is no evidence as to when the hole into which the plaintiff stepped became uncovered or broken. The evidence reveals that in the late afternoon of 20 January 2015 the plaintiff stepped into the hole which, at that time, had no cover. A photograph of the hole in that state was taken a short time later. 270 I accept, as submitted by the defendants, that caution should be exercised in drawing inferences from the bare fact of a photograph of the hole. Particular caution of should be taken in drawing an inference that, because no screws were apparent in the screw holes or broken pieces of the cover visible, that Coles had, in fact, removed the broken cover and had failed to replace it, thereby ending any real issue as to causation. 271 However, in my view, the fact that the photograph illustrated that the hole was open, there were no apparent screws or broken pieces of the cover remaining and the considerable debris between the two concentric rings of the hole leads to the reasonable inference that the hole had been exposed at least for a period greater than the day of the incident. There is no contradictory evidence. It follows that I am satisfied, on the balance of probabilities, that the hole had been open at least since the previous day or although most likely for a longer period sufficient to enable the cover or broken cover and screws to be removed and for the debris to accumulate in the hole. 272 In those circumstances, and as properly conceded by senior counsel for the defendant, the judgment in Strong does not defeat the plaintiff's case against Coles on the issue of causation. The hole into which the plaintiff inadvertently stepped was a danger of which the defendants ought to have been aware and ought to have covered or guarded so that persons could not accidentally step into it. The precautions which I found to be reasonably required by Coles would then have obviated or mitigated the risk of harm. 273 Thus, factual causation for the purposes of s 5D of the Civil Liability Act has been established. In failing to cover the hole or in failing to barricade of the hole whilst it was uncovered, Coles is guilty of negligence. 274 The scope of liability issue did not arise in this case. In any event, it is appropriate for the scope of the occupier Coles' liability to extend to the harm caused to the plaintiff given that the car park was, in essence, provided by the occupier to members of the public for the purposes of accessing the Coles' store (which the plaintiff did). 275 It is strictly unnecessary to consider the question of causation with respect to the owners given my earlier finding. However, it may be observed that the obligation upon the owners would have been less than that falling upon Coles because, as senior counsel for the defendants contended, the issue of maintenance was largely delegated to Coles. The obligation to oversee the process fell upon the owners by way of an overview of the process to ensure compliance with the lease. A duty to conduct inspections in that context was done through the owner's commercial agents. This was done on a monthly basis. Significant doubt must be held as to whether the conduct of inspections on that basis would have detected the risk of harm and whether the plaintiff's established factual causation with respect to the owners. Conclusion: Liability 276 It follows that Coles is liable in negligence for any injuries, loss or damage occasioned to the plaintiff arising out of the incident. The issue of contributory negligence was ultimately not pursued by the defendants in final submissions though they pleaded the same in their defences. I make no finding of contributory negligence. 277 Given the conclusions earlier reached with respect to the owners, I do not find the owners liable in negligence with respect to the incident. 278 I note that the position adopted by the defendants results in the cross-claims falling away. 279 I will now turn to the question of damages. ... Consideration re Medical Evidence and Capacity of the Plaintiff in the Light of the Surveillance Footage 431 The plaintiff underwent back surgery by Dr Davidson on 6 November 2013 at Nepean Hospital. That surgery was undertaken after a long history of the plaintiff suffering back pain (particularly since 2005) and imaging showing a central and right sided disc protrusion causing nerve root compression. The plaintiff underwent a bilateral LS/51 microdiscectomy and nerve root decompression. 432 The operation was substantially successful. Dr Davidson reported that the plaintiff had a complete resolution of her sciatica, but had some ongoing pain including hip pain. I have some doubt about the plaintiff's evidence of complete recovery of her back problems after this operation given that she complained about back and hip pain six weeks after the surgery (even though the sciatica had been resolved), there was an ongoing record of back and buttock pain in 2014 and her GP's notes of January 2015 refer to "exacerbate lower back" (after walking into an open plastic drain). 433 As a result of the incident, the plaintiff suffered serious injury which Dr Davidson felt was not contributed to by her previous surgery. The injury suffered was evidenced by a right-sided L5 pars deficit with a grade 1 spondylolisthesis. 434 In June 2016, some 18 months after the incident, Dr Tait performed an LS/51 posterior lumbar interbody fusion for isthmic spondylolisthesis with radiculopathy. 438 In April 2017, Dr Tait stated that he was disappointed with the results 10 months after the plaintiff's operation. The plaintiff described pain at various locations of her body including the lumbosacral junction and left lower limb pain. 439 On 11 July 2017, Dr Ho identified the continuance of failed back surgery syndrome and a L4/5 disc protrusion. The plaintiff was 'coping' with resilience and ongoing opioids and an antineuropathic pain agent. 440 On 17 July 2017, Dr Tait reported that the plaintiff was still very much debilitated by her symptoms. He stated that the plaintiff reported back pain at the lumbosacral junction which was worse on the right side. Dr Tait referred to Dr Ho as managing the pain. 441 In July 2017, the plaintiff commenced her lawn mowing business which involved voluminous and arduous work involving significant lifting and bending as demonstrated by the surveillance footage before the Court. 442 The plaintiff was cross-examined about being "debilitated" by her symptoms at this time as referred to in Dr Tait's report and, in particular, as to her reporting that bending set off the pain. I have earlier referred to the plaintiff's unsatisfactory evidence in this respect in the light of the surveillance footage which, inter alia, depicts at about this time (and in subsequent years) the plaintiff bending whilst undertaking mowing work without any bending avoidance behaviour. That aspect of the work together with other aspects of the work such as lifting mowers raises significant doubts about the extent of any incapacity suffered by the plaintiff and the assertion of pain or at least the extent of the pain referred to by the plaintiff as referred to earlier in this judgment in discussing the Markus ruling, the credit of the plaintiff and the review of the medical evidence. It may be noted that at this time, Dr Tait stated that there was no explanation for the plaintiff's ongoing symptoms. 447 In December 2017, Dr Giblin issued a report with respect to the plaintiff which contained, inter alia, a heading "Present Disability". In this section of the report, he indicated that the plaintiff had reported that she was mowing lawns three times a week for an hour under heavy medication. She apparently reported that what used to take half an hour, now took an hour. That reporting did not reflect, on the surveillance material, the manner in which the plaintiff undertook her continuing mowing business at that time. 448 That said, Dr Giblin took the view that, even at the reported level of mowing activity, the repetitive bending and heavy lifting involved in mowing should have the plaintiff looking for "an alternative career". It may also be noted in this respect that Dr Giblin's report and his subsequent report in 2020 are the first reports to recognise, to some degree, the work actually being undertaken by the plaintiff. 449 It may also be noted that Dr Giblin's report in 2020 again refers to the plaintiff undertaking mowing tasks by doing three to five jobs a week for approximately one hour each. Dr Giblin maintained the view that the plaintiff had persistent pain and discomfort which possibly related to the L4/L5 level of her spine and that she remained unfit for work that involved repetitive bending and heavy lifting. Again, the surveillance evidence revealed a fitness for the heavy mowing work at a very strenuous level requiring strength and agility proximate in time to this report. 450 Dr Stephen concluded an examination of the plaintiff on 23 January 2018. He reported that the plaintiff walked without a limp, there were no inconsistencies, her lumbar posture was normal, there was no muscle wasting in the lower limbs and that the plaintiff had a fair range of lumbar movement. He also reported that hip movements were in the normal range and that numbness in the foot was reported. 451 Dr Stephen opined that the plaintiff had sustained a large haematoma of the right outer leg which left a minor soft issue deformity. He found that the plaintiff had sustained a persistent and severe recurrence of her lower back and right leg pain which she claimed was much improved after the operation performed in 2013 (in fact, she claimed that it was entirely absent). 452 Dr Stephen opined that the incident was a significant contributing factor to the plaintiff's current impairment and disability. He considered that the prognosis was not good but that her condition was unlikely to be improved by further surgery. 453 In the Joint Conclave Report, Dr Giblin and Dr Stephen opined that the plaintiff had undergone a difficult operation after the incident which was not successful and that she continued to have back and right leg pain. She also complained of numbness in the right foot and left leg pain. 454 In the joint report, the doctors indicated that the plaintiff had complained about ongoing back pain and that her lawn mowing business was limited by her symptoms. The doctors indicated that there appeared to be developing a solid fusion and some narrowing of the L4/5 disc with possible impingement on the L4/5 root. It was also reported that the plaintiff had sustained a persistent and severe occurrence of her lower back pain and right leg pain and that the surgery in 2017 had not improved her symptoms. Both experts opined that the incident was a major contributing factor to the plaintiff's current impairment and disability and that her prognosis was not good. There was a disagreement as to whether surgery would be of some assistance. 459 It is perhaps understandable that the treating and examining doctors may have taken, at face value, the statements by the plaintiff as to the extent of her pain and suffering. She experienced a serious injury and underwent surgery, although there were aspects of the opinions of the doctors querying why the operation had not better resolved the plaintiffs back and leg condition. 460 However, the medical opinions were given either without knowledge of the nature and volume of the work performed by the plaintiff in the mowing business at the time of the medical evaluations or based on an inadequate understanding of those considerations and volume of work performed or its actual nature. (For example, Dr Stephen referred to pushing a mower and Dr Giblin, "mowing" although he refers to the avoidance of a career involving bending or heavy lifting). 461 I have found the plaintiff's evidence to be unreliable. The surveillance footage reveals a person capable of arduous work involving bending and heavy lifting. It is demonstrative of strength and a fluidity of movement. The unreliability of the plaintiff's evidence also undermines her account as to the suffering of pain or suffering to the degree she reported to the doctors providing reports. The work shown in the surveillance footage is hard work, inconsistent with the suffering of acute back and leg pain. Furthermore, the surveillance footage does not show a restriction in movement or objective signs of pain. I do not consider the period of the surveillance to be unrepresentative of the plaintiff's work given the amount of the footage, period of time over which it was conducted and the consistency of the observations of the plaintiff. 462 I consider that, even in the absence of cross-examination of the doctors providing medical reports in the proceedings, the weight that may be given to medical reports in these circumstances must be significantly reduced insofar as they are based, as they substantially were, upon the self-reporting of the plaintiff as to her work activities, her capacity for the same (or assumed capacity) and the level of pain she suffered whilst undertaking the physical activity which is her business and work. This is particularly so given the volume of work undertaken by the plaintiff over an extended period. Overall, I agree with the submission of the defendant that a significant part of the plaintiff's case depended upon her credibility as a witness. 463 I do not find that the plaintiff does not suffer any ongoing back and leg pain deriving from the incident., There is in prospect some ongoing pain in the plaintiff's back and leg which may modestly impact the plaintiff's future career earning prospects, for which I have made provision in the head of damages. However, as I have stated, her assertions are significantly exaggerated when viewed in the light of the evidence before the Court such that the weight of the medical opinions predicated upon her accounts of the severity of her condition is significantly reduced. The plaintiff has a capacity to work, even to undertake arduous work, with pain managed adequately by medication. Heads of Damages Schedule of Damages 464 The plaintiff relied upon an amended Schedule of Damages (see p 703 and following of the Court Book). By an email dated 6 November 2020, the defendant provided an amended Schedule of Damages. … Conclusion: Non-Economic Loss 473 My views in this respect broadly accord with the defendants having in mind my earlier conclusion as to her capacity since the incident on the impact of any pain or suffering in its aftermath. 474 In my view, the plaintiff's non-economic loss should be assessed at 29% of the most extreme case. … Economic Loss Plaintiff's Submissions … 481 At the time the plaintiff returned to her lawn mowing and gardening business in about May 2015, she performed 3 to 6 jobs per week at $50 per job. This amounted to gross weekly earnings of between $150 to $300 per week. 482 Reducing the weekly income of $2,100 by $334 leaves a taxable income of $1,766 per week. On current tax rates that would amount to $1,310 net per week. 483 However, the particulars relied upon by the plaintiff provide a significant margin for the fact that the business was being built up and other such vicissitudes. Accordingly, for the period up to the present the claim proceeds on a basis that she would have earned $800 net per week. The plaintiff does not seek to resile from that claim. 484 In relation to the future, the claim, more realistically, is based upon a net loss of earnings of $1,250 per week. This is amply justified by the evidence. … Domestic Assistance Plaintiff's Submissions … Conclusion 531 I accept that, as contended for the plaintiff, there are aspects of Ms Zeman's report which should be viewed with considerable caution and afforded little weight particularly as opinions of a medical character. 532 Nonetheless, in my view, the evidence does not ultimately support any claims for domestic assistance for the past. There may have been some periods where she required gratuitous assistance in this regard, but having regard to her work history, it has not been established that there have been any periods of 6 hours per week for 6 months in accordance with the statutory threshold. 533 I have already found that the evidence of the plaintiff's son as to domestic assistance may be doubted. His statements of what chores he did, and more importantly why, cannot be reconciled with the plaintiff's demonstrated strong physical capacity in 2015, and since 2016: His estimates of time spent years earlier, as a teenager, were unconvincing. 534 There is no basis to conclude that the plaintiff will require any domestic assistance in the future, paid or otherwise. She continues to regularly perform tasks in her work as or more onerous that any household chores. 535 I agree that, even the occupational therapist's modest allowances for assistance, were too much. Ms Zeman was however correct in using the fact that the plaintiff could do paid gardening work as an objective indicator, rather than simply accepting the plaintiff's statements. Ms Zeman's assessments as to the plaintiff's lawn mowing work are compatible with the findings in this judgment as to the plaintiff's capacity. 537 Any claim for past domestic assistance by the plaintiff would, in my view, be at best for closed periods and would no surpass the threshold under s 15(3) of the Civil Liability Act. I do not consider the plaintiff will require further domestic assistance. …Out of Pocket Expenses .... Conclusion 541 Past out of pocket expenses have been covered by Coles in the sum of $137,941. The payment of those expenses should be allowed. I do not consider there is a basis for further expenses. The position as to Medicare amounts will need further consideration. …Treatment expenses/Future Out of Pocket Expenses Plaintiff's Submissions … Conclusion 544 The evidence does not establish that future surgery is necessary because of the accident, or likely to be offered to the plaintiff, or likely to be chosen by the plaintiff. The joint report of the medical experts was divided on the need for this treatment] and the plaintiff has expressed reluctance. 545 Otherwise, the plaintiff continues to take medication, as she did for many years prior to the accident. 546 As noted, Coles has already paid an amount of $137,941.80 to or on behalf of the plaintiff in relation to past out of pocket expenses with respect to the accident. Coles has also paid a $20,000 ex gratia lump sum, without admission of liability. These sums need to be accounted for in any damages award. 547 The defendant accepted that an allowance should be made for future medical expenses against the chance that the accident related condition may flare up and require medical or GP visits. It has allowed for $2,000. Conclusion 548 In my view, an allowance of $8,000 should be made for future out of pocket expenses. CONCLUSION 549 Coles is liable in negligence for any injuries, loss or damages occasioned to the plaintiff arising from her fall at the car park outside a Coles supermarket on 20 January 2015. 550 I do not find the owners liable in negligence. 551 No issue of contributory negligence arises in the proceedings. By virtue of arrangements between the defendants, the cross-claims have fallen away. 552 The Court has made determinations as to each head of damage contested in the proceedings which are specified in the section of my judgment bearing that heading. 553 At the conclusion of the hearing, the amount of Medicare charges remained uncertain. The Court indicated that, in that light, some further steps may be required before judgment in order to determine the quantum of damages. The Court has not received any update in that respect. 554 The defendants should bring in short minutes of order reflecting this judgment, after discussion with the plaintiff, as to Medicare charges. There is liberty to have the matter listed in the event of any dispute as to those charges or the form of the short minutes of order. Costs shall be reserved.

EVIDENCE ON COSTS

1. The plaintiff relied upon the affidavit of Rachel Cracknell of 28 January 2022.
2. The defendants relied upon the affidavit of Mark Andrew Siebold of 11 February 2022.

The Plaintiff's Submissions

1. In summary, the plaintiff's written and oral submissions as to costs are as follows: 1. The defendant's case on costs is predicated upon four Offers of Compromise variously made by the defendants. It was the plaintiff's initial contention that the first two offers made on behalf of the Owners cannot be relied upon since they suggested that Coles was liable for the damaged pipe that was the cause of the plaintiff's injuries. However, Coles never conceded liability. 2. The offer conveyed on 28 August 2020 ("the third offer") does not comply with the UCPR to trigger a right to indemnity costs because the plaintiff beat that offer. The Court can put this offer to one side. 3. The offer conveyed on 19 October 2020 ("the fourth offer") was made in accordance with the UCPR and should not be the basis of any variation of the usual cost's orders. 4. The Owner's offered to resolve the case against them by way of a verdict in their favour in an offer made on 28 September 2018 ("the first offer"") which was re-opened on 2 April 2019 ("the second offer"). 5. However, in the letter from the solicitors of the Owners dated 28 September 2018, on page 2, the Owners admitted that they were the registered owners of the premises and asserted that Coles was the occupier of the premises. It was further asserted that Coles had the care, control, and management of the premises. It was said, therefore, that Coles was liable, and the plaintiff should discontinue against the Owners. 6. The difficulty with that assertion is that Coles did not admit liability. The offending drain was, on one view of it, a capital works expenditure item that would normally be expected to be covered by the owner of the premises. If that was found by the Court to have been the case and the plaintiff had discontinued against the Owners, then there would have been no verdict in favour of the plaintiff. 7. Had Coles conceded that they were responsible for the safety of persons using the carpark and therefore the plaintiff's injuries, then the plaintiff could have been satisfied that she was not going to, as it were, "fall between two stools." 8. Coles should pay the Owners costs because they never conceded that they were the correct defendant, leaving the plaintiff the task of having to work out who was liable. The defendants were in the best position to know who was liable. The plaintiff submitted that it is hardly just that the defendants, who knew who was liable, should "hide behind a screen and say, well, you decide, we are not going to tell you". It could be done by way of a "Bullock" or a "Sanderson" order, but ultimately, the costs should be paid directly by Coles to the Owners. 9. The reference to "Bullock" and "Sanderson" orders is a reference to the respective cases in which the English Court of Appeal made such orders: Bullock v London General Omnibus Company [1907] 1KB 264 and Sanderson v Blyth Theatre Co [2003] 2KB 533 and subsequent authorities in which Courts have exercised a discretion to make orders of that type. 10. UCPR r 20.26(5)(a) provides that the closing date for acceptance of an offer is, where the offer is made more than 2 months before the date for commencement of the hearing, to be no less than 28 days after the date on which the offer was made. 11. The fourth offer allowed only 2 and a half days for acceptance. The hearing commenced on 27 October 2020. This was 8 days after the fourth offer was made. 12. UCPR r 20.26(5)(b) provides that in those circumstances the closing date for the acceptance of the offer is such a date as is reasonable in the circumstances. 13. To allow only two days for acceptance of the offer in a case involving senior and junior counsel who, along with their instructing solicitor, is naturally required to give some advice about the offer, is unreasonably short. Senior counsel for the plaintiff submitted they were not able to turn their mind to it until the third day, Wednesday, due to personal considerations. The plaintiff submitted that the need to prioritise more urgent work by lawyers generally is no doubt a reason why the general rule is that the offer should be open for 28 days if made more than 28 days prior to the hearing. To leave the offer open for less than 3 days "smacks of an attempt merely to trigger a costs sanction rather than a genuine attempt to reach a negotiated settlement". 14. In those two days, all parties would have been required to be available for the offer to be considered by the plaintiff's lawyers and then advice considered by her. There is no reason why at least a week could not have been given for the acceptance. By the time the offer was made, preparation for the hearing would be well advanced and little could be lost to the defendant in allowing 7 days to consider, and advise on, the offer. 15. The allowance of two days for the fourth offer, similarly to the 11 days allowed for the third offer, was unreasonable and against the spirit and terms of the relevant rule. 16. UCPR r 43.34 provides that, if damages are awarded below $500,000 then the plaintiff should show why a costs order should be made. The plaintiff submitted that the defendant served the fourth offer for $500,000 plus costs eight days before the hearing, which suggested that they considered there was a possibility the plaintiff could achieve damages more than $500,000. It is disingenuous for the defendants to, in hindsight, argue that the plaintiff would never have been awarded $500,000, considering their own actions suggested it was a possibility. In these circumstances, no order should be made in accordance with the rule in relation to costs because both parties believed there was a possibility that the damages could exceed $500,000. 17. The fourth offer for $500,000 was open for two and a half days which is not a reasonable time in the circumstances. While the plaintiff did not request more time to consider the offer, it is not up to the plaintiff to contact the defendants and make their offer comply with the UCPR. 18. The plaintiff seeks orders that Coles pays the plaintiff's costs on an ordinary basis and that insofar as the the Owners are concerned, Coles pay those defendant's costs as well.

The Solomon Proceedings

1. In summary, the defendant's submissions are as follows: Ordinary Costs 1. A judgment has been entered in favour of the Owners and as such they are entitled to an order for costs, those costs following the event: see UCPR r 42.1. The plaintiff makes no submission to the contrary and there is no reason why costs should not follow the event. Indemnity Costs 1. With respect to indemnity costs, two Offers of Compromise were served by the Owners on 28 September 2018 and 21 April 2019. Both offered judgments in favour of the Owners, with the Owners to pay their own costs. Neither offer was accepted. 2. The facts are squarely in accordance with UCPR r 42.15A(1) and the Owners are entitled to a costs order in accordance with r 42.15A(2). There is no substance to the plaintiff's submission that, in effect, it was reasonable to reject these offers because another defendant, Coles, did not admit liability. It was for the plaintiff to assess the case on liability against the Owners on its own merits, in light of the terms of the offers and any accompanying information. 3. The Owners submit that in the Solomon proceedings the orders of the Court should be: 1. Plaintiff to pay the costs of the Defendants on an ordinary basis up to 28 September 2018 2. Plaintiff to pay the costs of the Defendants on an indemnity basis from 29 September 2018 and thereafter. The Coles Proceedings 1. The question is whether the Court should be satisfied that bringing proceedings in this Court was warranted. In light of the terms of UCPR 42.34(2), "will not ordinarily be made", the onus is on the plaintiff to establish that the Court proceedings were warranted. 2. The facts suggest otherwise. Despite the plaintiff's Schedule of Damages, the plaintiff's damages were less than half the jurisdictional limit of the District Court of $750,000, and even well below the $500,000 threshold provided in UCPR r 42.34(1). Importantly, less the amounts already paid by Coles, the plaintiff obtained a sum of about $201,000. 3. It is clear that the plaintiff recovered significantly less than $500,000 in proceedings in this Court and so the operation of r 42.34(1) is triggered and the onus under the rule falls squarely on the plaintiff to justify why a costs order in her favour is nevertheless warranted. 4. Coles submitted that the evident reason the proceedings were in this Court was because the plaintiff misled her expert medical practitioners and her legal representatives as to the extent of her disabilities and incapacity. Had she been truthful the proceedings should and would have remained in the District Court. The plaintiff, presumably upon advice given to her based upon her own misleading instructions, elected to proceed to this Court. 5. Whether or not the plaintiff misled her medical practitioners or her lawyers, she clearly put forward her case on the basis of severe physical disability and that case was not accepted. This went to her credit in the proceedings and is why the case was assessed at so much less than what was claimed. 6. The purpose if the rule is based upon the efficiency of the court system of NSW, to ensure proceedings are prosecuted in the correct jurisdiction, and to discourage proceedings in the wrong jurisdiction. 7. If the rule does not apply in this matter, it is difficult to envisage any circumstances when it will apply. 8. Coles therefore submitted the appropriate order is that each party pay their own costs. 9. Regarding the plaintiff's submission that the fourth offer was made for the amount of $500,000 shortly before the trial, the defendant's submitted that this was a last-ditch attempt to settle the matter, despite the plaintiff's high claims, before the trial. The defendants submitted that this should not be against the defendants in an assessment of whether or not the plaintiff has satisfied her onus under the rule. 10. The defendants submitted that the third offer for $350,000 plus costs was made eight weeks before the trial and that they were putting to one side that Offer of Compromise for the purposes of r 42.34(1).

The Third Offer

1. The defendants contested that the third offer was in breach of r 20.26(5)(a) of the UCPR, contending that, as the offer was served on 28 August 2020, it could be open for less than 28 days because the date of the offer was less than two months before the hearing.

The Fourth Offer 1. The plaintiff complained that the fourth offer, made close to trial, was not left open for a reasonable period. 2. The offer was served by email at 9.51am on Monday 19 October. It was open until 5pm on Wednesday 21 October 2020. This is the better part of three days for acceptance. At the time it was served there were six business days until the hearing. 3. The plaintiff complained that there was not enough time to get instructions within the acceptance period. There is no evidence that the plaintiff had difficulty getting advice or giving instruction. For example, there is no evidence that Senior and Junior counsel were unavailable to give advice during that period. In view of her evidence as to her limited work as set out in her evidentiary statement the plaintiff could reasonably expect that she had plenty of time on her hands to confer with her legal representatives. One could also reasonably expect that the plaintiff and her legal representations were conferring during that period, a week out from hearing in accordance with the usual practice. 4. The defendants submitted that the Court would be more inclined to infer that the offer was rejected, not because it was not around or open for long enough time, but because it was for far less than the plaintiff herself was claiming. 5. Importantly, the plaintiff did not request more time to consider the offer. 6. Again, the plaintiff was awarded damages less than the offer sum, and there is no other reason to order otherwise than indemnity costs in favour of the defendant offeror. If indemnity costs are not awarded to the defendant on the basis of an early offer, indemnity costs should be ordered from the date of this offer. 7. Further to its evidence and submissions that the fourth offer was open for a period "reasonable in the circumstances" under UCPR r 20.26(5)(b), Coles submitted that the relevant principles are helpfully addressed in Gray v Hobson (No 2) [2018] NSWCA 131 ("Gray"), at [3]-[8]. 8. Applying those principles, and consistent with the outcome in Gray, a matter of closely similar facts, the parties should have had a "clear perception of the strengths and weaknesses of their positions", they would have been "armed with sufficient information to make a reasoned judgment of the offer", significant costs would have been accruing on a daily basis, the plaintiff had not sought any extension of time to consider the offer, the period was reasonable in the circumstances, and Coles is entitled to indemnity costs from the day after the offer was made.

Submissions On Application for Bullock/Sanderson order in the Owners' proceedings

The Defendant's

1. It is not disputed that the Owners are prima facie entitled to an order that the plaintiff pay their costs of the proceedings. There is a possibility that some of these costs be paid on an indemnity basis as a result of Offers of Compromise served on the plaintiff.
2. The plaintiff however, sought a further order that those costs be borne by Coles, either by way of indemnifying the plaintiff, a Bullock order, or by direct payment, a Sanderson order. These orders are opposed.
3. Such orders may be appropriate where the claiming party has acted reasonably in suing the party against which it was unsuccessful, and there has been some conduct of the unsuccessful party that makes it just that that unsuccessful party pay the costs of the successful party, thereby encouraging the unsuccessful party to sue or maintain the action against the successful defendant: Gould v Vaggelas (1985) 157 CLR 215 at 229, 230; Johnsons Tyne Foundry Pty Limited v Maffra Corporation (1948) 77 CLR 544 at 572; Great Lakes Shire Council v Dederer [2006] NSWCA 336.
4. Here, there was no conduct of Coles which caused or encouraged the plaintiff to sue the Owners. The plaintiff sued the Owners from the start, and moreover, in entirely separate proceedings.
5. Simply denying liability could only constitute conduct encouraging a plaintiff to sue another defendant where the cases were truly dependant on each other, and in the alternative: Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179 at 128; Lackersteen v Jones (No 2) (1988) 93 FLR 442 at 449; Nominal Defendant v Swift [2007] NSWCA 56 at [99]; ACQ Pty Limited v Cook (No 2) [2008] NSWCA 306 at [36] - [43]. That could not be said here - the plaintiff was made aware of the terms of the lease and contractual allocation of responsibilities as between Coles and the Owners in clear terms by the letter from the Owners' solicitors of 28 September 2018. The general denial of liability by Coles, which included challenging matters such as the time the risk existed for causation arguments, did not in any way suggest or support a conclusion that the Owners had breached some duty as occupier.
6. Ultimately, the plaintiff's case against the Owners was without merit. It was unreasonable for the plaintiff to have caused the Owners to incur costs, particularly after their letter of 28 September 2018. Coles should not be ordered to pay any part of the plaintiff's liability in costs to the Owners.
7. If such an order were to be made, the appropriate order would be a Bullock order. A Sanderson order is for the protection and benefit of the Owners, as it removes their onus to pursue the plaintiff for fulfilment of the costs order, but they have not sought such an order.

The Plaintiff's Supplementary Submissions on Costs

1. The plaintiff responded to the defendant's supplementary submissions on costs on 3 March 2022. In summary, the reply submitted as to Bullock/Sanderson orders was as follows: 1. It was said in the defendant's supplementary submissions that there was no conduct of Coles which caused or encouraged the plaintiff to sue the Owners. However, those submissions misunderstand the positions taken by the various defendants. 2. The plaintiff had been made aware of the terms of the lease and contractual allocation of responsibility between Coles and the Owners in clear terms. However, the pleadings relied upon by the defendants did not reflect that. Neither set of defendants (Coles or the Owners) accepted that they had responsibility for the area. If the documents provided to the plaintiff were said to be so clear on their face as to who would be the responsible party, then that was not reflected in the pleadings by Coles, or anywhere else. 3. It was for this reason that the plaintiff had no choice but to continue on with proceedings against Coles and the Owners. 4. Further, the documents that were provided, as noted during the course of the hearing and in the previous submissions given on this issue by the plaintiff, did not identify with any particularly whether the hole into which the plaintiff fell had been created by the negligence of Coles or the Owners. Indeed, Coles' case seemed to proceed on the basis that it could not even be said that there was previously a cover on the hole. 5. If Coles was aware of these things, namely that there was a cover on the hole previously, as the Court found, and that it was Coles' responsibility to replace it, then the approach taken by Coles to this litigation is "somewhat bewildering". That approach simply did not concede that there was ever a cover on the hole for which Coles was responsible and did not concede that Coles would, in the circumstances, have had the obligation to repair the hole and make it safe by putting in a new cover. 6. The plaintiff further observed that all of the defendants were represented at the hearing by one set of lawyers. Presumably, the various defendants came to an agreement as to who in fact was responsible for creating, maintaining and/or failing to repair the hole. 7. Such an agreement between the defendants was never communicated to the plaintiff. 8. It was for this reason that it cannot be said that the plaintiff's case against the Owners was 'without merit'. Nor can it be said that it was unreasonable for the plaintiff to have proceeded against the Owners. Coles was apparently at all times aware that it had responsibility for the hole. In those circumstances, a simple letter identifying that they had responsibility for the hole, without necessarily conceding that there was any negligence on the part of Coles, would have meant that the plaintiff then understood what Coles and the Owners clearly understood which was that Coles had the responsibility. Proceedings against the Owners could then have been discontinued. 9. In the defendant's submissions it is said the appropriate order would be a Bullock order. The plaintiff does not agree. A Sanderson order means that the unsuccessful defendant pays the costs directly to the successful defendant instead of seeking to recover them from the plaintiff who in turn must recover them from Coles. Since all defendants are now represented by the same solicitor it is inefficient and unnecessary for the process to be prolongated by involving the plaintiff in it. Additionally, it means that the party paying and the party seeking costs can directly negotiate over them.

An additional procedural matter

1. Coles and the Owners both consider that the cross claim in each proceeding should be dealt with by final orders. Coles and the Owners, the only parties to the cross claims, propose that each cross claim be the subject of the following order: The cross claim is dismissed with each party to pay its own costs.

CONSIDERATION

1. The judgment of the Court in Pike No 1 concerned two sets of proceedings by which the plaintiff brought an action against Coles and the Owners respectively in negligence, essentially arising out of the same substratum of facts with respect to the incident giving rise to the claim.
2. The Court determined that, in the Coles proceedings, there would be judgment for the plaintiff in the sum of about $360,000 and that Coles would have credit for monies paid resulting in a net sum paid to the plaintiff by Coles of about $201,364.
3. The Court gave judgment to the Owner's in the Solomon proceedings.
4. Before the commencement of hearing of the proceedings, various Offers of Compromise were made by the defendants as follows: 1. On 28 September 2018, by a letter from Lucinda Lyons and Nicole Oglesby of Clyde & Co solicitors for the Owner's to the solicitors for the plaintiff, the Owners conveyed, in the Solomon proceedings, the first offer in the form of Form 1 (Version 4) of r 20.26 of the UCPR to the plaintiff. The terms of the offer were of judgment in favour of the Owners, with each party to bear their own costs. The offer was open for acceptance for 28 days from the date the offer was made. 2. In the correspondence, the Owners admitted that they were the registered Owners of the premises, which premises they had leased to Coles (reference was made to a copy of the lease earlier forwarded to the plaintiff). It was asserted that Coles was the occupier of the premises at the time of the incident and had care, control, and management of the premises, including the carpark in which the incident occurred. The defendants stated they had no knowledge that the drainage cap was missing. 3. The solicitors for the Owners also stated, "It is the Defendant's position that any liability for the Plaintiff's incident should lie with Coles". 4. The solicitor's for the Owners stated that in the event that the Offer of Compromise was "formally defective", then the Owners made a Calderbank Offer in the same terms as the first offer. 5. By a letter dated 2 April 2019 from the solicitors for the Owners the second offer was conveyed to the solicitors for the plaintiff. By that offer, the first offer (including the Calderbank offer). 6. The third offer was made on 28 August 2020, During the course of the proceedings Mr Turnbull SC contended that, irrespective of issue under r 20.26(5)(a) to which I have earlier referred, the offer could not attract the provisions of r 42.15 because the plaintiff had obtained judgment more favourable than the terms of the offer. No issue was raised by the defendants in that respect, noting the third offer being a joint position by the defendants. The submission by the plaintiff must be accepted or having regard to the terms of the offer and judgment for the plaintiff and in the Coles proceedings. Accordingly, the third offer may be put aside for the purposes of the balance of these considerations. I further note in that respect, as will be discussed below, that the Owners did not rely upon that offer in support of their contentions under r 42.15A, and Coles put aside the offer for the purposes of triggering r 42.34(1), save to the extent that the amount was identified as giving an indication of the defendant's assessment of the case. 7. On 19 October 2020, the solicitors for the defendants forwarded the fourth offer in the Pike proceedings in the sum of $500,000 inclusive of payments made totalling $157,941.80. The sum consisted of medical expenses in the sum of $137,941.80 plus $20,000 as an advance on damages for non-economic loss. The offer was conveyed at 10am on 19 October 2020 and remained open until 5pm on 21 October 2020, a period of approximately two and a half days. The proceedings commenced on 27 October 2020; eight days after the making of the fourth offer. 8. It should be noted that the issues as to costs of the proceedings concerned the various Offers of Compromise and not various Calderbank Offers.
5. Having regard to these preliminary assessments, and in the light of the foregoing statements of principle, I will now turn to consider the question of costs in the Solomon proceedings and the Coles proceedings respectively.

The Solomon Proceedings

1. Judgement was entered in favour of the Owners and, in the result, they are entitled to an order for costs as costs following the event pursuant to r 42.1 of the UCPR.
2. The Owners sought indemnity costs based upon the first and the second offers predicated upon the provisions of r 42.15A of the UCPR. The Owners sought ordinary costs from up to 28 September 2018 and indemnity costs thereafter.
3. The first offer and the second offer were caught by the provisions of r 42.15A because the offers were made by a defendant but not accepted by the plaintiff and the defendant obtained a judgment on the claim no less favourable to the defendant than the terms of the offer.
4. The plaintiff contended that the Court should order otherwise than provided for in r 42.15A(2)(b)(i) because, even though the communication from the Owners accompanying the Offers of Compromise attributed liability to Coles, and that the Owners were the registered owners of the premises, Coles had not, itself admitted liability.
5. In my view, the Owners were correct to submit that it was not reasonable to reject (or to use the words of r 42.15A(1), "to not accept"), these offers because another defendant, namely Coles, did not admit liability.
6. Subject to considerations which arise with respect to the making of a Bullock order or a Sanderson order, r 42.15A(2)(b)(i) provides that the unsuccessful Owners should have indemnity costs against the plaintiff from the making of the offer of 28 September 2018.
7. However, I do not accept the submission of the defendants that the circumstances relied upon by the plaintiff in this respect do not warrant the making of a Bullock order or a Sanderson order.
8. The defendants submitted that no conduct of Coles had caused or encouraged the plaintiff to sue the Owners and that the plaintiff had sued the Owners for the entirety of the proceedings. It was contended that simply denying liability could only constitute conduct encouraging a plaintiff to sue another defendant where the cases were truly dependant on each other and in the alternative. Here, the provision of the lease providing for a contractual allocation of responsibilities, as between Coles and the Owners, made clear the legal contractual allocation of responsibilities, notwithstanding the general denial of liability by Coles.
9. Whilst it is true that the Owners had made the plaintiff aware of the terms of the lease and there was a distribution of liabilities thereunder, I accept the submission for the plaintiff that neither the pleadings of the defendants nor their conduct of the proceedings (at least until very late) made clear the delineation as to who was a responsible party. Both the Owners and Coles had responsibilities for the supermarket and the carpark. Ultimately both accepted they owed a duty of care to the plaintiff.
10. Further, the drain hole which was the source of the incident could potentially have been a capital works expenditure of the Owners, notwithstanding the ultimate findings of the Court to the contrary. Notwithstanding senior counsel appearing at the matter for all defendants, no concession of liability was ever made by Coles relevant to these offers. Nor did the case for the defendants indicate whether the hole into which the plaintiff fell was created by the negligence of Coles or the Owners. The approach taken by Coles did not concede that there was a cover over the hole for which Coles was responsible and did not concede that Coles would, in the circumstances, have had an obligation to repair the hole and make it safe by putting over a new cover.
11. Those circumstances create, in my view, a proper basis for the making of a Bullock order or a Sanderson order. The plaintiff did successfully bring proceedings against Coles. In my view, Coles, should indemnify the plaintiff for costs incurred in the proceedings, against the successful defendant, namely the Owners. At all relevant times for the purposes of r 14.15A, the allocation of responsibility between the defendants remained uncertain, making it a reasonable course for the plaintiff to proceed through to trial against the defendants.
12. This is not to suggest that the mere denial of liability by Coles is sufficient to attract the making of a Bullock order or a Sanderson order but rather the conduct of the unsuccessful defendant is in my view such as to make it fair to impose liability on it for the costs of the successful defendant because it caused or necessitated the plaintiff prosecuting its claims against both defendants.
13. Where the claim against a successful defendant and the claim against an unsuccessful defendant exhibit a relevant connection or dependence it may be readily concluded that it was reasonable for the plaintiff to have brought the action, later in time, against the successful defendant. Otherwise, the plaintiff would hazard the risk of "falling between two stools" depending upon the ultimate findings of the Court: (see Popiovic v ACN 098054678 Pty Ltd [2012] VSC 612 at [14] per Kaye J).
14. I do not consider the fact that of there being separate proceedings brought against the defendants to be a barrier to the making of a Bullock order or Sanderson order given the connections between the proceedings.
15. I do not accept the submission of the defendants that there was absence a substantial connection between those actions as against the defendants. The causes of action are the same. There was a common factual substratum. For the reasons I have given, it was, therefore, reasonable for the plaintiff to bring the further proceedings against the defendant.
16. This leaves open the question of the significance of the 19 October 2020 Offer of Compromise but as that offer was made jointly by the defendants, I will turn to that issue in the consideration of the Coles proceedings.

UCPR Rule 42.34

1. The provisions of r 42.34 are triggered in the Coles proceedings because the plaintiff obtained a judgment against Coles in an amount less than $500,000. Further, as the defendants correctly contended, the damages awarded to the plaintiff were significantly below the jurisdictional limit of the District Court.
2. It follows that an onus falls upon the plaintiff to establish why a costs order in her favour should be warranted having regard to the provisions of r 42.34(2)(a).
3. I have earlier discussed the principles applicable in that context. It is sufficient to note that in those circumstances, a costs order will not ordinarily be made in favour of the plaintiff, although, the court retained a discretion to nonetheless award costs. The submission of the defendants may also be accepted that the purpose of the rule is to ensure that proceedings are prosecuted in the correct jurisdiction to promote efficiency in the administration of justice in civil proceedings.
4. In substance, the defendants contended that the matter only proceeded in this Court because the plaintiff had misled her medical practitioners and legal representatives as to the extent of her disabilities.
5. I have earlier extracted my findings of credit adverse to the defendant in that respect.
6. However, it does not follow, that the factual issues in the proceedings were not such, by their nature and complexity, as to warrant the proceedings being commenced in this Court.
7. The Schedule of Damages recorded a claim of $1,650,068.86.
8. I agree with the submissions advanced by senior counsel for the plaintiff that the Offer of Compromise made by the defendants on 19 October 2020 was demonstrative of the assessment made by the defendants as to damages shortly before the hearing of the plaintiff's claims.
9. I do not accept the submissions for the defendants that the true estimation of the defendants estimate of damages was the sum of $350,000 offered on 28 August 2020. That offer was made earlier in time and was actually elevated by the later offer. The defendants may describe the fourth offer as a "last ditched bid" to settle the proceedings, but it does not follow, as a matter of logic, that the $500,000 did not represent as genuine assessment of damages by the defendants. After all, the offer was made at a time when the defendants were well seized of the prospects of their case including, evidence which they intended to lead if a Marcus application they intended to bring, would be granted in the trial. That evidence was instrumental in the credit findings ultimately made by the Court.
10. In the circumstances, I do not consider that the provisions of r 42.34 are a barrier to an award of costs in favour of the plaintiff as against Coles.

Offer of Compromise 19 October 2020

1. As the plaintiff obtained a judgment on her claim against Coles no more favourable to the plaintiff that the terms of the offer of 19 October 2020 made by Coles then prima facie r 42.15(1) entitles Coles to an order that its costs at first instance incurred after the date of the offer would be assessed on an indemnity basis.
2. The plaintiff's sole response in that respect was that the time allowed to respond to the Offer of Compromise was not reasonable. In considering the question of reasonableness, the plaintiff primarily attached significance to the provisions of r 20.26(5)(b). In any event, as I have discussed, the question of reasonableness may arise for consideration under r 42.15(2) in considering whether the Court may order "otherwise". Both considerations would seem to be available (see Gray).
3. In Gray, the Court of Appeal considered, with respect to UCPR r 42.14 that the test applied by Basten JA in Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 ("Kooee Communications") at [20] was applicable in considering the sufficiency of a period for which an offer had been made shortly before a hearing. In Kooee Communications, Basten JA stated at [20]: 20 In considering whether the time allowed for acceptance is "reasonable in all the circumstances" once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.
4. In reliance upon Gray, and having regard to what was contended to be a similar factual scenario as between Kooee Communications and this case, Coles contended that the period allowed for the 19 October 2020 Offer of Compromise was reasonable because the parties had a clear perception of the strengths and weaknesses of their positions and were armed with sufficient information to make a reasoned judgment of offer. It was further contended that significant costs would be accruing on a daily basis and that the plaintiff had not sought an extension of time to consider the offer.
5. It is true that there are similarities in the factual circumstances underpinning the decision in Gray. However, there are some significant points of distinction. Gray was concerned with an offer made in the context of an appeal, where the issues involved, and the likelihood of success might be more sharply defined than shortly before the commencement of a trial. Further, Gray concerned the operation of r 42.14 of the UCPR where an offer had been made by the plaintiff on the day of a mediation between the parties. The respondent to the proceedings had made his own Offer of Settlement.
6. In this case, Mr Turnbull submitted that he was not able to turn his mind to the Offer of Compromise until after the closure of the offer. However, whilst I would not wish to cast doubt on the veracity of the statement made by senior counsel the weight that may be given to it may be affected by the absence of evidence to that effect.
7. What may be taken into account, however, is that the offer was made not on the eve of the hearing as such, but early in the week before the hearing when it may be expected that counsel was not only attending to preparation for the trial, but other work, urgent or otherwise, occupying counsel and their instructing solicitors (even though it may be accepted that the plaintiff may have been more readily available).
8. Mr Turnbull correctly submitted that the offer made was inconsistent with the intent of the rule which was generally designed to provide for an adequate time to consider Offers of Compromise made.
9. The defendants also relied upon the failure by the plaintiff to ask for additional time to provide a response to the Offer of Compromise of 19 October 2020.
10. In that respect, I consider the plaintiff to be correct in contending that the consideration of whether a period allowed, to consider an offer for the purposes of r 20.26(5)(b) is reasonable or not is to be judged against the terms of the offer itself. That is not to say however that the absence of a request for an extension of time for acceptance of an offer is not relevant to the exercise of the Courts discretion under r 42.15. Plainly, it is (see Gray at [7]); Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union (NSW Branch) (No 2) (2014) 88 NSWLR 471; [2014] NSWIC 3 at [38]). Just as Mr Turnbull for the plaintiff may submit that the defendant should have properly allowed seven days to consider the offer, so it may be said that the plaintiff may have requested the same.
11. In my view, the balancing of these considerations should result in the conclusion that the time allowed to respond to the fourth offer provided by the defendants was not reasonable. In the circumstances of this matter, I consider that the absence of a reasonable time is sufficient to engage the provisions of r 42.15 which provide that the Court, in its discretion may order "otherwise", such that the Court would not order indemnity costs in favour of the defendant from the date of the offer.
12. It is not suggested that there is any disentitling conduct on the part of the plaintiff that would warrant the Court not make an order that costs will follow the event with respect to the Coles proceedings and in the circumstances, it is appropriate that an order for ordinary costs be made in those terms.

CONCLUSION

1. The Court has concluded that by virtue of the operation of r 42.15A, the Owners should be entitled to an order as against the plaintiff for the Owner's ordinary costs up to the making of the first offer and thereafter an order against the plaintiff for costs on an indemnity basis.
2. However, I consider that, it is just in the circumstances, of these proceedings that a Bullock or Sanderson order should be made with respect to costs payable to the Owners from the unsuccessful defendant, Coles.
3. The defendants contended that the Court should, if it was inclined to make a Bullock order or a Sanderson order, make a Bullock order as a Sanderson order was for the protection of the owners. The plaintiff opposed that course. In my view, it is appropriate that a Sanderson order be made, whereby Coles will pay the costs awarded to the Owners directly to the Owners instead of those costs being recovered from the plaintiff who must, in turn, recover them from Coles.
4. This conclusion is reached on a number of bases. First, the defendants are represented by the same solicitor. Secondly, this is not a case where the unsuccessful defendant is insolvent or there are particular aspects of the costs awarded which make a Bullock order more appropriate. The making of the Sanderson order would result in the successful defendant negotiating directly with the unsuccessful defendant.
5. It follows then that the general position favouring a Sanderson order applies in this case. The Sanderson order is less circuitous (see Babcock v Carr (1981) 127 DLR (3d) 77 at [87] (per Rutherford J) and represents a practice which should be adhered to wherever practicable to do so (see Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544 at [572] and Vance v Cheynes Beach Whaling Co [1996] WAR 16 at [24] (per D'Arcy J)).
6. In respect of the Coles proceedings, Coles shall pay the ordinary costs of the plaintiff as agreed or in default as assessed.
7. Neither party suggested the ultimate form of a Bullock order or a Sanderson order and accordingly it is appropriate that a direction be made that the plaintiff bring in Short Minutes of Order reflecting the terms of the decision after discussion with the defendants.

Direction

1. The plaintiff shall bring in Short Minutes of Order reflecting this decision within 14 days of its publication.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 September 2022