Bennett v Newcastle City Council (No. 3)

[2023] NSWDC 666

District Court

New South Wales

Medium Neutral Citation:	Bennett v Newcastle City Council (No. 3) [2023] NSWDC 666
Hearing dates:	25 May 2023
Date of orders:	25 May 2023
Decision date:	25 May 2023
Jurisdiction:	Civil
Before:	Neilson DCJ
Decision:	The application for indemnity costs is refused.
Catchwords:	CIVIL – COSTS – APPLICATION FOR INDEMNITY COSTS – COSTS ON THE ORDINARY BASIS – Judgment was $966 less than the Plaintiff’s offer of compromise – No principle of propinquity.
Legislation Cited:	Uniform Civil Procedure Rules 2005, rr 42.2 & 42.14.
Cases Cited:	Nil.
Texts Cited:	Nil.
Category:	Costs
Parties:	Plaintiff – Linda Karen Bennett Defendant – Newcastle City Council
Representation:	Counsel: Plaintiff – Mr Anderson, E. Defendant – Ms Williams. Solicitors: Plaintiff – Law Partners Personal Injury Lawyers Defendant – Moray & Agnew
File Number(s):	2022/00088033
Publication restriction:	Nil.

Judgment

1. HIS HONOUR: This is an application for indemnity costs since 24 April 2023. The Plaintiff commenced proceedings in this Court on 28 March 2022. At that time, the maximum civil jurisdiction of this Court was $750,000. The maximum civil jurisdiction of this Court is now $1.2 million.

2. The hearing was conducted between Wednesday, 26 April and Friday, 28 April 2023 in Sydney. That is despite the fact that the cause of action arose here in Newcastle, but a few hundred metres from this courthouse, that the Plaintiff was a resident of Newcastle, that every lay witness called was from Newcastle, that because the witnesses were giving evidence in Sydney most of them were required to give their evidence by AVL, which was a wretched nuisance as it is always is, because people often do not know how to use the machinery correctly and that prolonged the hearing of the matter.

3. The one witness who did not come from Newcastle in fact came from Wollongong, but that was an expert qualified by the Plaintiff's solicitor. Why, when the cause of action arose in Newcastle, it was necessary to qualify an expert in Wollongong has never been adequately explained. When the hearing finished on Friday 28 April 2023, I told the parties that I would deliver judgment here in Newcastle on 2 May 2023 because I was sitting in this city that week. I gave judgment on 2 May 2023 for the Plaintiff in the sum of $49,034.05.

4. The Plaintiff relies upon an offer of compromise served on 24 April 2023 in which the Plaintiff offered to accept $50,000 and that offer was open for acceptance until 9am on Wednesday, 26 April 2023. In other words, the offer was made on Monday. The hearing was due to commence on Wednesday, and the actual evidence completed on the following Friday, and I gave judgment here in Newcastle on the following Tuesday.

5. The quantum of the judgment was within the jurisdiction of the Local Court. Despite that fact, I made an order for costs on the ordinary basis. As I have said, the Plaintiff now seeks to have her costs on an indemnity basis because of the offer of compromise dated 24 April 2023. It must be recalled that the Uniform Civil Procedure Rules 2005 rule 42.2 provides this:

“Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis.”

6. The words "ordinary basis" are a new description of the traditional order for the payment of party-party costs. Uniform Civil Procedure Rules 2005 rule 42.14 provides this:

“(1) This rule applies if the offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer.

(2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim—

(a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and

(b) 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.”

7. I asked counsel for the Plaintiff whether there was any learning on the phrase "an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer", but he could refer me to no case in which some principle of propinquity was advanced, that is, near enough is good enough.

8. It is true that the judgment which I entered was only $966 less than the amount of the formal offer of compromise made by the Plaintiff but, as I said, there is no principle of propinquity of which I know, and Uniform Civil Procedure Rules 2005 rule 42.14(1) mandates that the judgment on the claim be at least equal to or greater than the amount of the judgment actually entered.

9. Nevertheless, the Plaintiff persists with the submission that because no offer other than a verdict for the Defendant was made by the Defendant, I should give the Plaintiff an order for indemnity costs because, if I were to do so, that would in some way encourage a Defendant to at least acknowledge the Plaintiff's offer of compromise.

10. However, the Court must be disciplined in awarding costs. The Plaintiff should consider herself lucky that I made an order on the ordinary basis because the matter was clearly within the jurisdiction of the Local Court even at the time that the proceedings were commenced. People who invoke the civil jurisdiction of this Court should realise that they are setting in sequence a very expensive process, and that should not be lightly encouraged.

11. The claim was only a minor one. To order indemnity costs would, in my view, not be reasonable in light of the quantum of the judgment made, in light of the extent of the jurisdiction of this Court, in light of the extent of the jurisdiction of the Local Court, and because of the way in which the case was conducted.

12. There has never been any adequate explanation for why the proceedings were not commenced in Newcastle and presented in Newcastle. It appears that the only reason that the case was heard and determined in Sydney was that the Plaintiff's solicitors commenced the proceedings in Sydney for their own benefit, they being a Sydney law firm.

13. The application for indemnity costs is accordingly refused.

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Decision last updated: 07 April 2025