4 In my opinion, the legislature has made it clear that in appropriate cases a costs order can be made against an applicant, and some of the old cases must now be approached with care. The old rule which, as I say, was a common practice not to award costs against the plaintiff who failed, can no longer be accepted as a general proposition. However, it is unnecessary for me to say anything more about the effect of s.97(7) because the plaintiff has been successful.
5 After indicating that I was prepared to make the costs orders in favour of the parties, Mr Goldblatt of counsel who appears for the executors sought time to enable him to place before the Court a number of documents which he submitted would justify a different order being made for costs. The matter was stood down and this day counsel returned to make submissions on the question of costs.
6 The first matter to which Mr Goldblatt drew my attention was a series of documents relating to what appears to have been a settlement reached at mediation between the parties, which was then referred to a Master. Evidently, Master Evans took the view that he could not make orders in accordance with the settlement and the result was that no orders were made. Thereafter, correspondence passed between the parties, and by the end of April 2005 it was clear that the matter would proceed to trial.
7 I was requested to look at the correspondence and proposed orders and having done so I stated that it was my view that the correspondence exchanged was on a without prejudice basis as there was a bona fide attempt to settle the proceeding. Accordingly the Court should not give any effect to them. I so rule. However, I do note, as I indicated in the course of argument, that I will take notice that there were discussions in February-March 2005 and the inference I draw from that is that the parties because of the discussions were in a good position to make some assessment of the strengths and weaknesses of their respective cases.
8 What then happened was a letter dated 12 July 2005 which was sent by the solicitors acting for the executors which contained a Calderbank offer.[3] The offer was not accepted. It was expressed to be open for seven days and it was not accepted before 19 July 2005. Some seven days later the proceeding came on before me for hearing on 26 July 2005 and was heard that day. In the meantime, on 21 July 2005, the solicitors acting for the executors sent an offer of compromise pursuant to Order 26 of the Rules of Court. In my opinion, the provisions of Order 26 relating to an offer of compromise apply to a proceeding such as the present. Mr Goldblatt referred me to two decisions of judges of this Court where their Honours held that Order 26 applied to Part IV proceedings. Be that as it may, the Rules require a minimum period of 14 days in which to accept the offer and because the document was not served until 21 July 2005, the period for acceptance expired well after the conclusion of the hearing. Accordingly I do not propose to consider the terms of that offer. I do note, however, that it was another attempt by the executors to settle the proceeding and avoid the cost of a hearing.
9 I come back to the letter of 12 July 2005 which is the Calderbank offer. The letter notes that if the offer was not accepted and the plaintiff obtained a judgment less favourable than the offer set out in the letter, the defendants reserved the right, "to produce this letter to the Court on the question of costs. At that time we will seek an order that the plaintiff pay the defendants' costs on either an indemnity basis or a solicitor/client basis from the date of this letter." Reference was made to the Calderbank and Cutts cases.
10 The offer can be analysed in this way. The offer was to transfer the estate's half interest in the joint property at Kangaroo Flat to the plaintiff. The evidence revealed a valuation of $290,000 which meant that the estate was prepared to transfer property valued at $145,000. The offer was conditional upon the plaintiff paying the sum of $50,000 to the estate. In addition, it was conditional upon an indemnity being given by the plaintiff in respect of any debt owed by the deceased or the partnership of the deceased and the plaintiff, to Mrs Cashmore, the mother of the plaintiff. The evidence revealed that the debt owed by the plaintiff and the deceased to her mother was in the order of $32,000, made up of $25,000 principal and $7,000 accrued interest. The offer further stated that there would be an indemnity in respect of any other debts owed by the deceased or the partnership to anybody, and that each party bear his or her own costs. The evidence before the Court was that the total costs would be in the vicinity of $50,000. On that basis I think that the costs to the end of the proceeding would be in the order of $25,000 for each party.
11 One must, of course, take into account that it would have been anticipated that there would be costs after 19 July which would be something in the order of about $9,000 on each side. Accordingly, the offer represents after analysis $145,000 less what the plaintiff had to pay, which was in the order of about $98,000. If one subtracts that sum from $145,000 the offer represented about $47,000 in the plaintiff's hands. The offer makes no mention of the superannuation that she had in fact received and since I have taken that into account in determining the final result in this proceeding it means that the offer represented about $67,000 plus the value of the car. In other words, a total offer of about $71,000.
12 The orders I was proposing to make would give her $30,000 plus keeping the superannuation of $20,000 together with the half interest in the car, so there is a difference of about $17,000 between the offer that was made and what the plaintiff has recovered under this judgment. On any view, the end result is that Ms Gillies has received substantially less than what the offer was. Mr Harrison on behalf of Ms Gillies submits that I should not give any effect to this offer made on 12 July because it only gave seven days for her to accept the offer, whereas the rules require 14 days, and he submitted that the judges of this Court in their wisdom have thought that 14 days is appropriate. I note the argument, but in the end it is a matter for the Court to make an assessment as to whether the parties had sufficient time to make and consider offers. By 12 July the parties had clearly given much and anxious thought to the likely outcome of the proceeding and to determine the strength or otherwise of their cases and in my view, seven days from 12 July was more than ample to make a decision whether or not to accept the offer. Indeed, realistically, it required a conference of the legal team and Ms Gillies to consider whether or not to accept the offer.
13 It was then submitted by Mr Harrison that the offer was not clear and unequivocal in its terms and was ambiguous, and he made reference to the fact that the offer refers to the Holden Sandman panel van without noting that it was only a half interest in the vehicle that was being transferred. In my view, the argument has no substance. The offer could not have been misunderstood by Ms Gillies or her advisers. It was further submitted that the offer was not capable of being accepted. In my view, it was. If it had been accepted, it would have resulted in an agreement. The fact that it did not say a half interest in the panel van is beside the point. The offer was made in circumstances where it was fully understood by the parties that the proposed transfer was a half interest in the panel van and any contract which came into existence as a result of acceptance would be construed taking into account the matrix of facts.
14 I think it was capable of being accepted and in my view, in the circumstances, effect should be given to the offer. The plaintiff proceeded knowing that the estate would seek costs if she recovered less than the offer made.
15 It may not be an easy task in Part IV litigation to make a proper evaluation of the worth of an offer. It may also be very difficult to make some assessment of the worth of the judgment. Accordingly, there may be difficulty in making the comparison in some cases. I do not think that is the position here.
16 As I have stated, I propose to give effect to the offer. It was to remain open for a period of seven days and in my view the plaintiff is entitled to have the benefit of that so that any costs that she incurred up to and including 19 July should be paid out of the estate. However, it appears to me that it would be appropriate that she should pay any costs incurred by the estate post 19 July 2005 on a solicitor-client basis.
17 If there is some uncertainty about an offer in litigation, I remind everybody of what I said in the Aquamax case about parties bona fide attempting to settle their disputes and to open discussions on offers and seek to clarify same if there is some degree of uncertainty. In my view, the offer of 12 July should have been looked at seriously by the plaintiff and if there were any doubts about some aspects of it, they should have been at least the subject of some discussion. I think that it is appropriate that I should make orders giving effect to the fact that the offer was not accepted. However, in order to avoid further costs in this very small estate, I would be prepared to fix the amount of costs which the executors incurred after 19 July 2005.
18 Mr Goldblatt, as I expected of him in any event, frankly stated that he had been briefed by 19 July so the costs involved for the day's hearing would be the costs that would be paid to his solicitor being present in court throughout and any other expenses such as any contribution to transcript. Unfortunately, Mr Goldblatt could not assist me in regard to these matters, and I am not being critical of him, because there is no reason why he should know what a solicitor is entitled to under the Supreme Court Rules for the costs of a day in Court.
19 What I propose to do is that I will make orders, but I will fix the costs and I ask the parties to discuss it with their respective solicitors and work out what is a fair amount to be awarded to the executors for that day in Court, and I would have thought it would not be much more than $2,000.
20 I will make the orders in the proceeding, leaving blank the amount of the agreed costs, which can be inserted when the parties have agreed.
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