His Honour proceeded to quote with approval, and apply, the observations contained in paragraph 25 of the judgment in Hazeldene's case.
11 In the present matter I have considered the letter of 12 May 2006 against the factors referred to in paragraph 25 of Hazeldene's case and I have considered generally whether the sending of the letter warrants an exercise of the discretion of the Court to make an order for indemnity costs.
12 The first factor, (a), is the stage of the proceeding at which the offer was received. I think in this case that that factor is essentially neutral. The offer was made at a time that was quite close to the trial. By then the plaintiff must have invested heavily in the case and was presumably concentrating on getting ready for the imminent hearing. On the other hand, by that time the plaintiff should have been better apprised of how the case might turn out than she may have been at an earlier stage. So there are pointers both ways in relation to the stage of the proceeding.[6]
13 As to factor (b), the time allowed to the offeree to consider the offer, I consider that the offer made in this case allowed an unduly short time for consideration. The letter of offer was sent at 2.24 pm by fax on Friday 12 May 2006. It was stated to be open for acceptance until 4 pm on Monday 15 May, after which it would lapse. The period allowed was barely in excess of one working day, which I regard as quite a short period in the circumstances of this case. Indeed I think it would be regarded as a short period in most cases, particularly by comparison to the time which is allowed under the rules applicable to formal offers of compromise pursuant to Order 26 of the Supreme Court Rules. The minimum time to be allowed under those rules is 14 days. That period is, I recognise, no more than a guide or a yardstick and of course it is not applicable in its own terms to an informal offer, but nonetheless I think there is a significant difference between the time allowed in this case and the time that would be the minimum required under a formal offer of compromise.
14 I do not have any evidence before me as to any particular difficulties that may have attended the obtaining of instructions in response to the offer on the Friday or over the weekend or on the Monday, but I do note that the plaintiff herself, in giving evidence, required the use of an interpreter. Whether there would have been an interpreter available, by way of her family or anyone else, to enable the offer to be conveyed to her and duly considered and to enable instructions to be received in time, is perhaps questionable.
15 The next factor is (c), the extent of the compromise offered, and here one has the problem that there was perhaps little scope for compromise in this case. It was in a sense an all or nothing case. The claim was for an easement of way over the laneway in question. There was no additional or alternative claim for a lesser right, and it would probably not have been open to the Court to have granted any different or lesser right than the right claimed in the proceeding.
16 The offer was that there be orders by consent that the proceeding be dismissed and that each party bear their own costs of the proceeding. This was either no compromise or only a limited compromise, depending upon whether one should treat an offer to bear one's own costs as containing a compromise for present purposes. There are authorities which suggest that such a proposal should not be regarded as any kind of compromise at all[7], and other authorities which do recognise an offer to bear one's own costs as a kind of compromise, albeit not necessarily a large compromise[8]. Certain observations in Berrigan Shire Council v Ballerini tend to suggest that such a proposal should be regarded "not so much as an offer of compromise as a demand to capitulate".[9]
17 The plaintiff says that the extent of the compromise offered (if any) was too low to warrant any special order as to costs. The defendants say, "What more could we have offered?" The plaintiff responds, "Well, it would have been open to the defendants to have offered to pay some or all of our costs or to have made some sort of substantive offer, albeit of benefits that the Court may not have been able to award in the proceedings, such as a right to park in the laneway, and corresponding alterations to titles to allow that. The abortive settlement of the 1982 proceedings involved something similar". The plaintiff points out that in Nolan v Nolan (No 2)[10] the defendant had offered to give up the benefit of an order in her favour for the costs of an interlocutory injunction hearing, which had been taxed at $19,659. This was something the Court could not have ordered her to do. Moreover, in Nolan the defendant's offer to give up even those costs and to bear her own costs of the proceeding as well was described by the Court as involving only a "relatively modest" element of compromise.[11] On the other hand, there may be some unreality about the suggestion of an offer of parking rights, albeit that that is so, in part, because the defendants themselves, without waiting for the result of this case, had gone ahead and built decking and piping, et cetera, on the laneway in 2004.
18 It seems to me that this is a case in which very little was offered by way of compromise and whilst that may have been, in a sense, inevitable, I think in the end that this factor tends in favour of the plaintiff. It may just be that in certain kinds of cases (such as the present) there is little or no room for relevant compromise and so the ordinary party-party rule may be very difficult to displace by the sending of a Calderbank letter.
19 The next factor (d) is "the offeree's prospects of success, assessed as at the date of the offer". This was a case that may have been difficult to predict because it turned on credibility. I take into account that the letter of 12 May 2006 itself did not rely on the outlines of evidence of the defendants' proposed witnesses but rather asserted that the plaintiff should withdraw her claim because her own witness statements tended to indicate that she would be unable to make out her case. I think that in the end Mr Wallis conceded that the evidence which was foreshadowed in those witness statements would not necessarily have been insufficient, had it been accepted, to make out the plaintiff's case. In reality, the case failed because I accepted the evidence of the defendants' witnesses in preference to that of the plaintiff's witnesses. I cannot know what was actually in the minds of the plaintiff and her family at the time but I can, I think, take into account that the very letter relied upon did not purport to rely on the evidence that in the end proved most decisive.
20 The fifth factor (e) is the clarity with which the terms of the offer were expressed. There is no question here that the offer was a clear one.
21 The sixth factor (f) is whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it. Again, clearly, the offer did foreshadow such an application.
22 I need to weigh up each of those factors and come to a conclusion as to whether the ordinary rule that party and party costs should apply is displaced. I am not satisfied that there is sufficient reason supplied by the letter of 12 May 2006 to displace that rule. I am not satisfied that it was unreasonable of the plaintiff to reject the offer. No other feature of the case is relied upon. It is not suggested that the plaintiff's case was hopeless. Nor is it suggested that there was any misconduct in the litigation on the part of the plaintiff. For these reasons I would reject the application for indemnity costs.