Baycorp Capital Ltd v Dex Consulting Pty Limited (No 2)

[2015] NSWSC 975

Supreme Court

New South Wales

Medium Neutral Citation:	Baycorp Capital Ltd v Dex Consulting Pty Limited (No 2) [2015] NSWSC 975
Hearing dates:	24-28 June 2013, 1-5, 22-26 July 2013
Decision date:	21 July 2015
Jurisdiction:	Common Law
Before:	Adams J
Decision:	The plaintiff is to pay the defendants’ costs on an ordinary basis up to and including 12 March 2010 and on an indemnity basis from 13 March 2010.
Catchwords:	COSTS – general rule that costs follow the event – offer of compromise made by the defendants and rejected by plaintiff – judgment more favourable than terms of offer – costs on indemnity basis from date of offer of compromise
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Baycorp Limited v Dex Consulting Pty Limited [2014] NSWSC 1298
Category:	Costs
Parties:	Baycorp Capital Ltd (Plaintiff) Dex Consulting Pty Limited (First Defendant) Michael James Dutton (Second Defendant)
Representation:	Counsel: T J Morahan (Plaintiff) S Docker (Defendants) Solicitors: Lander & Rogers (Defendants)
File Number(s):	2009/297619

Judgment

Introduction

1. On 22 September 2014 I gave a judgment for the defendants in the principal action and ordered costs to be determined following submissions: Baycorp Limited v Dex Consulting Pty Limited [2014] NSWSC 1298. The defendants’ submissions on costs were made on 12 November 2014. Despite communications from my Chambers to the plaintiff seeking submissions, none have been forthcoming. It is evident that it does not intend to make submissions on the matter and, accordingly, it is to be determined in their absence.

2. The defendants relied on the affidavit of the defendants’ solicitor, Mr Hunt, annexing three offers made to the plaintiff to settle the proceedings, respectively dated 12 March 2010, 23 December 2011 and 11 February 2013, together with other correspondence seeking the agreement of the plaintiff to proposed costs orders. This was not forthcoming.

The relevant Rules

3. The Uniform Civil Procedure Rules 2005 (NSW) provide –

Rule 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.

4. The Rules make provision for other orders where offers of compromise have been made: Division 3, Part 42. Relevant here, also, are amendments taking effect on 7 June 2013. The effect of the transitional provisions in Part 1 of Schedule 12, is that the pre-amendment version of rr 20.25-20.26 and 42.13-42.15A apply to offers made on or before 6 June 2013 and the current versions of those rules apply to offers made on or after 7 June 2013. The earlier version of rule 42.15A was as follows –

42.15A    Where offer not accepted and judgment no less favourable to defendant

(cf SCR Part 52A, rule 22; DCR Part 39A, rule 25; LCR Part 31A, rule 20)

(1)   This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim concerned as favourable to the defendant, or more 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. On or about 12 March 2010 the defendants conveyed an offer of compromise in the following terms –

(i)   Verdict for the defendants with each party to bear their own costs.

(ii) This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules.

(iii)   This offer shall be open for a period of 28 days only.

6. It is not necessary to set out here r 20.26 as it then stood. It is sufficient to note that the offer complied with this rule, in particular being in writing, providing for a verdict for the defendants, with the parties to bear their own costs and contained a statement to the effect that it was made in accordance with the rule and expressed to be open for 28 days. This offer was not accepted by the plaintiff and, as is obvious, the defendants obtained a judgment more favourable to them than the terms of the offer. The defendants submit, and I agree, that r 42.15A applied so that, unless the court otherwise orders, the appropriate order is that the plaintiff must pay the defendants’ costs on an ordinary basis up to and including 12 March 2010 and on an indemnity basis from 13 March 2010. As mentioned, there is no submission from the plaintiff that, for some reason, the order sought by the defendants should not be made.

7. For completeness, I should mention that the defendants made a subsequent offer of compromise complying with r 20.26 of the UCPR in its amended form, expressed to be open for the period of 28 days. That offer was to settle the plaintiff’s claim by consenting to judgment for the plaintiff against the defendants in the sum of $75,000. It was not accepted. The defendants having obtained a judgment more favourable to them than the offer, r 42.15A would have required an order for costs in favour of the defendants on an ordinary basis up to and including 11 February 2013 and on an indemnity basis from 12 February 2013.

8. It seems to me that this matter should be determined by reference to the plaintiff’s declining to accept the offer of 12 March 2010. Accordingly, I make the following order –

1. The plaintiff is to pay the defendants’ costs on an ordinary basis up to and including 12 March 2010 and on an indemnity basis from 13 March 2010.

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