Buljat v Coles Supermarkets Australia Pty Ltd (No 2)
[2023] ACTCA 12
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Buljat v Coles Supermarkets Australia Pty Ltd (No 2) |
Citation: | [2023] ACTCA 12 |
Hearing Date: | Decided on written submissions |
DecisionDate: | 24 February 2023 |
Before: | Elkaim, Mossop and Kennett JJ |
Decision: | See [24]. |
Catchwords: | PRACTICE AND PROCEDURE – COSTS – Calderbank offer and offer of compromise – where appellant successful on appeal – where respondent seeks to rely upon offer of compromise and Calderbank offer – where offers made prior to first instance trial – where offer of compromise is relied upon in the alternative – where respondent’s failure to accept Calderbank offer said to justify indemnity costs – consideration of Calderbank offers in circumstances where rules dictate cost consequences – orders made giving effect to offer of compromise – order that appellant pay costs of the respondent below up to date of offer of compromise. APPEAL – COSTS – Effect of offer of compromise made at trial on appeal – where respondent submits that offer of compromise made prior to trial has effect on appeal – Koundouris v Owners Units Plan 1917 (No 2) [2017] ACTCA 47 applied. |
Legislation Cited: | Court Procedures Rules 2006 (ACT), pt 2.10, rr 1011, 1721, 1833, 5001 |
Cases Cited: | Cooper v Singh [2017] ACTCA 21 |
Parties: | Zlata Buljat (Appellant) Coles Supermarkets Australia Pty Ltd (Respondent) |
Representation: | Solicitors Maliganis Edwards Johnson (Appellant) McCulloch & Buggy Lawyers (Respondent) |
File Number: | ACTCA 15 of 2022 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Balla AJ Date of Decision: 18 March 2022 Case Title: Buljat v Coles Supermarkets Australia Pty Ltd Citation: [2022] ACTSC 47 |
THE COURT:
Introduction
On 16 December 2023 the Court allowed an appeal by Ms Buljat against the dismissal of her personal injury claim and ordered that judgment be entered in her favour in the sum of $27,309. A costs order was made in her favour but was subject to the parties choosing to make written submissions on costs. Both parties have filed written submissions in relation to costs.
Respondent’s submissions
The respondent (the defendant below) relied upon a letter dated 4 January 2022 which made both an offer of compromise pursuant to pt 2.10 of the Court Procedures Rules 2006 (ACT) (the Rules) and also a Calderbank offer. Both offers were in the sum of $120,000 plus costs. Each of them was open for acceptance until 1 February 2022. The trial before the primary judge took place between 2 and 4 March 2022.
First, the respondent submitted that based upon the non-acceptance of the Calderbank offer it should pay the appellant’s costs of the trial on a party and party basis up to and including 4 January 2022 but that the appellant should pay its costs on an indemnity basis thereafter. It also submitted that the appellant should pay the respondents costs of the appeal on an indemnity basis. The respondent referred to the various considerations described in Hulanicki v Walton (No 2) [2015] ACTCA 45. It submitted that the offer was made one year and four months after the appellant had commenced the proceedings and just prior to the commencement of the hearing. Therefore the appellant had the benefit of all of the liability and quantum evidence. It submitted that the time allowed was generous and that the offer involved a substantial compromise. It submitted that objectively assessed at the time of the offer, if the appellant succeed on liability she was most unlikely to have achieved a better outcome than the respondent’s offer. It submitted that the offer was clear and explicitly foreshadowed an application for indemnity costs.
Second, it submitted that if an order for indemnity costs was made in its favour then it also sought an order that: “The judgment sum awarded to the plaintiff be set off against any costs owing to the respondent by virtue of these costs orders”. The submissions put in support of this position were more confined and contemplated a set off of costs orders in favour of and against the appellant pursuant to r 1833 rather than the setting off of costs owing against the judgment.
Third, it sought, in the alternative to an order based upon the Calderbank offer, an order based upon the failure to accept the offer of compromise that the respondent pay the appellant’s costs of the trial on a party and party basis up until 7 December 2017 and that there be no order as to costs thereafter. The date referred to must be an error, the relevant date being 4 January 2022. It submitted that there was no proper basis to depart from the consequences set out in the rules arising from the appellant’s non-acceptance of the offer. It identified the consequence of r 1011 to be that each party would bear its own costs.
Appellant’s submissions
The appellant (the plaintiff below) sought that the respondent pay the appellant’s costs of the appeal and that, in relation to the trial, that the respondent pay the appellant’s costs up until 4 January 2022 and that there be no order for costs thereafter.
So far as the costs of the appeal were concerned, the appellant submitted that the Court of Appeal upheld each of the substantive grounds of appeal, relating to breach of duty of care, causation and the date that the appellant’s compensable injury ceased. She referred to the discretion provided by r 1721 and that the Court of Appeal noted in Hulanicki at [11] that it is settled practice that, absent any special circumstances, a successful litigant is entitled to recover costs from the opposing party. She referred to the decision in Koundouris v The Owners - Units Plan No 1917 (No 2) [2017] ACTCA 47 (Koundouris) about the ongoing effect of an offer of compromise.
In relation to the respondent’s reliance upon the offer of compromise and Calderbank letter, she submitted that in Koundouris at [33] the Court of Appeal held that effect should be given to the offer of compromise in preference to the Calderbank offer “because the rules based offer has been made in accordance with the court process and is designed specifically to encourage compromise in litigation.”
If, contrary to that submission, the court gave effect to the Calderbank offer then regard needed to be had to the evidentiary circumstances surrounding the expert report of Professor Paul Myers which indicated that the appellant’s blood clot was most likely related to the fall. She pointed to the fact that it was only during the expert conclave, which occurred during the trial and led to a joint report being prepared, that the position changed as a result of Professor Myers discovering that his earlier opinion had been based on inaccurate instructions as to the location of the DVT. The position in the joint report was that it was unlikely or very unlikely that the DVT was related to the initial fall. It is in those circumstances that the appellant submitted that the respondent had failed to show that her rejection of the Calderbank offer was unreasonable.
The appellant accepted that if effect was given to the offer of compromise then, so far as the trial was concerned as a result of the operation of r 1011(2) the appropriate order was that there be no order as to costs after 4 January 2022.
Consideration and decision
Costs of the trial
So far as the costs of the trial are concerned, it is appropriate to give effect to the offer of compromise in a manner that is consistent with the Rules. The Rules set out the consequences that flow from a refusal to accept an offer of compromise. It would not be appropriate to take an offer that is not made in accordance with the Rules and give to the party making the offer a more favourable costs outcome than available under the Rules.
Calderbank offers have become an accepted institution because courts were prepared in the exercise of their discretion in relation to costs to provide incentives for reasonable attempts to settle the proceedings through a compromise even in circumstances where the rules of court relating to payment into court did not apply or had not been followed.
Particularly in a jurisdiction such as the ACT where, until 2015, the Rules did not make provision for the making of offers of compromise, Calderbank offers have been the principal tool by which courts provided incentives for reasonable settlement behaviour. After the introduction of offers of compromise, Calderbank offers have retained a degree of popularity despite the advantages of making an offer of compromise. It may be that, in personal injury proceedings, this popularity is based upon a misconception that Calderbank offers will achieve more favourable outcomes. That is reflected in the submission made in this case that seeks to achieve a costs outcome much more favourable to the defendant pursuant to a Calderbank offer than would be available pursuant to an identical offer of compromise. Such an outcome would be an anomaly.
The rationale for the regime of costs consequences of offers of compromise made in personal injury proceedings introduced in 2015 is explained in Singh v Cooper (No 2) [2015] ACTSC 368 . This was described as “a considered policy that distinguishes the circumstances of personal injury cases from other cases in the Court”: Singh at [29]. In those circumstances it was appropriate to take into account the existence of the regime under the Rules in determining how to exercise the costs discretion in a matter which was not governed by the Rules. It was recognised that it was desirable to maintain some consistency between the outcomes of rules-based offers and Calderbank offers: Singh at [30]. An appeal against this decision and the manner in which it dealt with the relationship between Calderbank offers and the Rules was dismissed: Cooper v Singh [2017] ACTCA 21.
Having regard to the regime reflected in the rules and the rationale for that regime it would be incorrect, in the exercise of the costs discretion, to attribute to the Calderbank offer in this case a different consequence than that which would follow from the offer of compromise.
Further, given that the Calderbank offer and the offer of compromise were identical there would be an inconsistency between the outcome determined by the Rules and an order in the terms that the respondents sought unless the court exercised its power under r 1011(2) to “otherwise order”. There are no factual matters which would indicate that the court should do so.
These conclusions are consistent with the preference of the court, expressed in Koundouris at [33] to give effect to an offer of compromise made under rules rather than a Calderbank offer which, by definition, is made outside the rules.
Therefore, the appropriate order is to the effect that the appellant receive her costs of the hearing below up until 4 January 2022 but there be no order as to the costs incurred in the proceeding below after that date.
Costs of the appeal
So far as the costs of the appeal are concerned, the contest between the parties is as to whether or not the offer of compromise and Calderbank offer should continue to have effect in relation to the appeal.
The respondent contends that they should, although it did not explain why or provide any authority that might have assisted the court on the point. Its implied submission presumably relied upon the logic that had one of the original offers been accepted then no proceedings by way of appeal would have been required and hence all of the costs incurred were as a result of the failure to accept that offer.
On the other hand, the appellant treats the appeal proceedings as separate proceedings in relation to which she was successful. In the absence of an offer having been made in the appeal proceedings then costs should follow the event.
Whether or not offers of compromise continue to have effect for the purposes of a subsequent appeal has been considered by this court previously and resolved in favour of the appellant’s position. In Koundouris an offer of compromise had been made and the successful respondent to the appeal asserted that it was equally applicable to the costs of the appeal. This submission was rejected. The court noted that rule 5001 specifically allowed for the rules relating to offers of compromise to be applied to appeals. The court then followed the decision of the New South Wales Court of Appeal in Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 which in turn followed earlier authority in that court rejecting the proposition that offers of compromise continued to have effect for the purposes of an appeal: Coombes v Roads & Traffic Authority (NSW) (No 2) [2007] NSWCA 70 at [79]-[82]; Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [37]-[43]. The approach adopted in Koundouris is correct. The respondent sought to defend the outcome that it achieved before the primary judge. It chose not to remake the offer that it had earlier made. That is understandable having regard to the change in the landscape resulting from the judgment of the primary judge but it means that, following the exercise by the appellant of her right to appeal, the respondent cannot point to any offer of compromise which would justify a departure from the usual rule as to costs. The existence of both a Calderbank offer as well as the offer of compromise does not warrant any different approach.
Having regard to the conclusion reached and the result that there are no costs orders in favour of the respondent, it is not necessary to consider the issue of set off. It is only necessary to observe that r 1833 is a power of the registrar not of the court.
The orders of the Court are:
1.Order 4 made on 16 December 2022 is set aside.
2.The respondent is to pay the appellant’s costs of the proceedings below up to and including 4 January 2022 and there is no order as to the costs of those proceedings after that date.
3.The respondent is to pay the appellant’s costs of the appeal.
| . | I certify that the preceding twenty-four [24] numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: Date: 24 February 2023 |
0
7
0