The applicant submits that what was offered in the Calderbank offer constituted a genuine offer of compromise and it was unreasonable for the respondent to reject it. It was a genuine offer since, although it was a 'walk away' offer in nature, the defendant was offering to forego its potential entitlement to obtain costs which, at the point the offer was made, was already calculated to be in excess of $10,000. That entitlement was valuable.
The applicant submits that it was unreasonable for the respondent to reject the offer since the letter pointed out the weakness in the respondent's case (the absence of objective evidence), compounded by the strength in the applicant's case (the expert opinion of Messrs Ziade and Targett) which were served well before the offer was made; and further, that the respondent had adequate opportunity to consider the offer.
[2]
Consideration
It should be apparent that the reasons I have advanced for rejecting the application for a special order under r 42.15A also apply in relation to the Calderbank offer. It is unnecessary to repeat them.
But with specific reference to the matters stated in Ms Yoo's letter, it was premature for the offeree to have formed conclusions about what evidence, objective or otherwise, could be adduced to prove that the chattels were stolen. As events subsequently showed, the respondent could and did prove his possession of items and could and did advance a theory of how they were taken, supported by expert opinion evidence to compete for acceptance with the expert evidence of the applicant.
Trajkovski v Commonwealth Insurance Ltd [2020] NSWDC 752 | Case summary | Zoe
Although the applicant had compiled expert opinion evidence, which would have likely instilled a sense of confidence in its position, it was foreseeable that the respondent might obtain its own expert which supported his position. This possibility later materialised and a contest ensued in which the Court even ventured certain criticisms of the applicant's expert witnesses.
It was not suggested in the Calderbank offer that the Financial Services Ombudsman's opinion was based upon the evidentiary material that the Court ultimately had to consider to support the implied contention advanced in the letter that the result of the litigation was a foregone conclusion.
As with the rules offer, if the settlement terms offered could be regarded as reasonable, it was not unreasonable for the respondent to reject them having regard to the time that the offer was served and the content of the reasons advanced by the applicant as to why he should accept them.
[3]
SUMMARY
Accordingly, neither the rules offer nor the Calderbank offer afford grounds for the Court to vary the costs order made.
The applicant's Notice of Motion dated 27 November 2020 should accordingly be dismissed. Ordinarily, it would follow that the applicant should pay the respondent's costs of the motion but, as indicated, there is no evidence to any such costs have been occurred as a result of the respondent becoming recently unrepresented.
That being so, I simply order that the defendant's Notice of Motion dated 27 November 2020 be dismissed and make no order as to costs of that motion.
[4]
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: 15 December 2020
Parties
Applicant/Plaintiff:
Trajkovski
Respondent/Defendant:
Commonwealth Insurance Ltd
Cases Cited (2)
THE RULES OFFER
The applicant relies upon r 42.15A of the Uniform Civil Procedure Rules (NSW) (the 'UCPR'). That rule is engaged where, as here, a defendant obtains a result no less favourable than the terms of what was offered.
By r 20.26(3)(a)(i) of the UCPR, it is permissible, in terms of its validity, that an offer of compromise be expressed in terms, as it was here, that there be judgment for the defendant with no order as to costs.
Subsequent authorities construing the rule also accept that 'walk away' offers are potentially capable of triggering the operation of r 42.15A: Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd (No 2) [2014] NSWCA 391 at [50]-[51]. However, it is well-established that the offers of that character should not be used simply for the purpose of triggering the costs mechanisms, and there is also authority to indicate that for 'walk-away' offers to engage a rule like r 42.15A, the claim would 'have to approach the character of being frivolous or vexatious for that to be the case': Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [31]. There must be some real benefit to a plaintiff, which is more than an invitation to capitulation.
The letter which enclosed the rules offer featured an assertion that the applicant had, at the time of service of the offer, incurred "in excess of $10,000". The offer to forego an entitlement to claim costs, estimated at that amount, was the only benefit offered to the plaintiff.
It is arguable whether the benefit is so derisory as to amount, effectively, to an offer to capitulate. The offer was made at an early point in the proceeding. At the time it was made, the plaintiff had not yet been directed to serve his evidence. It was too soon for the respondent to reasonably consider that he was unlikely to be able to prove his case. Yet, for the benefit of avoiding a detriment which, at that stage, had been quantified as a costs order in excess of $10,000, he was being invited to abandon a claim which later was quantified at over $300,000.
Accepting that the rules offer was valid, I would 'otherwise' order, within the terms of r 42.15A(2) of the UCPR on the basis that if the offer represented a genuine offer, it was not unreasonable for the respondent to reject it.