Botany Bay City Council v Latham (No 2)
[2013] NSWCA 450
•23 December 2013
Court of Appeal
New South Wales
Case Title: Botany Bay City Council v Latham (No. 2) Medium Neutral Citation: [2013] NSWCA 450 Hearing Date(s): On the papers Decision Date: 23 December 2013 Before: Ward JA at [1]
Leeming JA at [2]
Adamson J at [3]Decision: Vary order (6) made on 31 October 2013 to order the respondent to pay the appellant's costs at first instance and on appeal on an ordinary basis to 11am on 14 October 2013 and on an indemnity basis thereafter
Catchwords: COSTS -offers of compromise made at different times -element of compromise -offer that each party bear own costs sufficient when made after substantial costs incurred Legislation Cited: Civil Liability Act 2002, s 5G, s 5I, s 42, s 45
Civil Procedure Act 2005, s 98
Uniform Civil Procedure Rules 2005, r 20.26, r 36.16(3A), r 42.15, r 42.15(2)(b)(ii)Cases Cited: Botany Bay City Council v Latham [2013] NSWCA 363 Category: Costs Parties: Botany Bay City Council (Appellant)
Pamela Latham (Respondent)Representation - Counsel: Counsel:
JE Sexton SC and JC Lee (Appellant)
MJ Cranitch SC and AD Campbell (Respondent)- Solicitors: Solicitors:
McCulloch and Buggy (Appellant)
Gerard Malouf and Partners (Respondent)File Number(s): 2012/376697 Decision Under Appeal - Court / Tribunal: District Court - Before: Olsson SC DCJ - Date of Decision: 08 November 2012 - Court File Number(s): 2011/281887
JUDGMENT
WARD JA: I agree with Adamson JA.
LEEMING JA: I agree with Adamson JA.
ADAMSON J: On 31 October 2013 the appeal in this matter was allowed with costs: Botany Bay City Council v Latham [2013] NSWCA 363. The appellant, by notice of motion filed on 14 November 2013, sought a variation of the order that the respondent pay the costs at first instance and on appeal. The variation sought is that the respondent pay the appellant's costs on an ordinary basis to 2 May 2012, or, in the alternative, to 13 October 2013, and on an indemnity basis thereafter. The appellant relies on the Court's power to vary orders under Uniform Civil Procedure Rules, 36.16(3A).
The application is supported by an affidavit of Jennifer Ann Dawes sworn 13 November 2013 and written submissions filed 14 November 2013. The respondent did not wish to be heard against the appellant's application.
UCPR 20.26 provides for the making of offers of compromise. The appellant made two offers of compromise: the first, dated 3 May 2012, which expired on 25 May 2012; and the second, dated 14 October 2013, which expired on 21 October 2013. The substance of both offers was that the proceedings be resolved on the basis of judgment in favour of the appellant with each party to bear its, or her, own costs. Neither offer was accepted. It is not disputed by the respondent that both offers complied with the requirements of UCPR 20.26.
In that regard, it was not suggested that the inclusion in the offer of the term that each party pay her or its own costs failed to comply with UCPR 20.26(2)(c) and it is to be noted that the offer did not include an amount for costs nor was it expressed to be inclusive of costs. Moreover, the letter under cover of which the offer of compromise was served made it clear that reliance was also placed on the offer as one made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.
The appeal was resolved in the appellant's favour. The judgment at first instance in favour of the respondent in the sum of $87,167.84 was set aside.
UCPR 42.15 applies to the present application since the offers were not accepted and the respondent obtained judgment no more favourable to it than the terms of the offer. It relevantly provides:
(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise:
(a) the plaintiff is entitled to an order against the defendant for the plaintiff'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.The Court's power to award costs is discretionary: s 98 of the Civil Procedure Act 2005.
The time at which the offers were made is material. On 3 May 2012, when the first offer of compromise was made, the following had occurred:
(1)The statement of claim had been filed on 1 September 2011.
(2)The defence had been filed on 12 October 2011 in which ss 5G, 5H, 5I, 42 and 45 of the Civil Liability Act 2002 were raised, as well as contributory negligence.
(3)The particulars relating to liability and quantum sought by the appellant by letter dated 10 October 2011 had been supplied by letter dated 31 October 2011.
By 14 October 2013, when the second offer of compromise was made, the following had occurred:
(1)The matter had been heard at first instance on 31 May 2012 and 1 June 2012.
(2)Judgment had been delivered in the respondent's favour on 8 November 2012 in the sum of $87,167.84 with costs.
(3)A summons for leave to appeal had been filed on 11 February 2013 and the matter had been listed for hearing on 22 October 2013.
(4)The appellant had served its summary of argument in this Court.
In my view, it would not be appropriate in the circumstances of the present case for the non-acceptance of the first offer of compromise to lead to the consequences provided for in UCPR 42.15 since the offer required almost complete capitulation. Although the appellant's offer contained a measure of compromise in that it did not seek its costs, these costs are unlikely to have been substantial at that stage.
However, I see no reason why the respondent's non-acceptance of the second offer of compromise ought not lead to the consequences for which UCPR 42.15 provides. The substance of the appellant's challenge to the decision at first instance was apparent from its summary of argument. The appellant would have incurred substantial costs for the hearing at first instance and additional costs in applying for leave to appeal. Accordingly, the second offer involved a significant element of compromise on the appellant's part since it offered to bear its own costs and it was unreasonable of the respondent not to accept it. In my view, the appellant is entitled to have its costs on an indemnity basis from 11am on 14 October 2013, being the date after the offer was made, in accordance with UCPR 42.15(2)(b)(ii) or otherwise in accordance with the Calderbank principles.
Proposed order
I propose the following order:
(1)Vary order (6) made on 31 October 2013 to order the respondent to pay the appellant's costs at first instance and on appeal on an ordinary basis to 11am on 14 October 2013 and on an indemnity basis thereafter.
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