Busa v South Eastern Sydney Local Health District Trading as Sydney Eye Hospital (No 2)

[2025] NSWSC 486

Supreme Court

New South Wales

Medium Neutral Citation:

Busa v South Eastern Sydney Local Health District Trading as Sydney Eye Hospital (No 2) [2025] NSWSC 486

Hearing dates:

On the papers

Date of orders:

19 May 2025

Decision date:

19 May 2025

Jurisdiction:

Common Law

Before:

Davies J

Decision:

Vary order 2 made on 16 April 2025 as follows: The plaintiff is to pay the defendant's costs on the ordinary basis until 15 July 2024 and on the indemnity basis from 16 July 2024.

Catchwords:

COSTS – party/party – exceptions to general rule that costs follow the event – offers of compromise – where judgment for defendant entered - whether it was reasonable for the plaintiff to refuse two offers of compromise – where the first offer was made before a defence had been filed – where the first offer was a walk-away offer – not unreasonable to refuse the first offer – where second offer (not a walk-away offer) made following service of defendant’s experts reports and after mediationj - not reasonable to refuse the second offer – costs order varied

Legislation Cited:

Civil Liability Act 2002 (NSW) s 5O

Uniform Civil Procedure Rules 2005 (NSW) r 42.15A

Cases Cited:

Busa v South Eastern Sydney Local Health District Trading as Sydney Eye Hospital [2025] NSWSC 130

Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109

Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391

Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368

Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170

The Uniting Church v Takacs (No 2) [2008] NSWCA 172

Texts Cited:

Nil

Category:

Costs

Parties:

Giovanni Busa (Plaintiff)
South Eastern Sydney Local Health District t/as Sydney Eye Hospital (Defendant)

Representation:

Counsel:
A Campbell & M Causbrook (Plaintiff)
B Bradley (Defendant)

Solicitors:
Bellissimo Lawyers (Plaintiff)
Makinson d’Apice (Defendant)

File Number(s):

2020/7945

Publication restriction:

Nil

Judgment

1. In these proceedings I entered judgment for the defendant and I ordered the plaintiff to pay the defendant’s costs: Busa v South Eastern Sydney Local Health District Trading as Sydney Eye Hospital [2025] NSWSC 130.

2. The defendant now seeks an order to vary the costs order made as follows:

That the plaintiff pay the defendant's costs on an ordinary basis until 21 June 2022, or alternatively 15 July 2024, and on an indemnity basis on and from 22 June 2022, or alternatively 16 July 2024.

3. The plaintiff, acting for himself, filed a statement of claim on 9 January 2020. It contained no pleading nor particulars but sought $2 million as loss of wages and medical fees and $8 million for pain and suffering. The statement of claim was not even signed let alone verified.

4. On 15 January 2020 an amended statement of claim was filed by the plaintiff acting for himself. It was in identical terms to the original statement of claim except for the fact that it was now signed and verified by the plaintiff.

5. On 20 February 2020 the defendant filed a defence which said only that the defendant denied that the plaintiff was entitled to the relief claimed and noted that the plaintiff had not provided any pleading or particulars.

6. Notwithstanding the absence of any pleading or particulars, the defendant had been made aware in 2017 what the plaintiff’s complaints were in general terms. At some time prior to July 2021, the plaintiff served the first report of Dr Morelli dated 19 April 2021.

7. On 7 July 2021, Makinson d'Apice Lawyers acting for the defendant sent a letter to the plaintiff serving an evidentiary statement of Dr Andric (the doctor who performed the impugned procedure) dated 8 February 2021 and an expert report from Dr Gurmit Uppal dated 6 July 2021 together with a letter of instruction to Dr Uppal. At that time the plaintiff was acting for himself.

8. On 31 August 2021 the plaintiff's present solicitor, Francesco Bellissimo, filed a notice of appointment of solicitor for the plaintiff.

9. On 20 September 2021 Makinson d'Apice Lawyers sent a letter to Mr Bellissimo attaching all correspondence with the plaintiff in the proceedings. That correspondence included the letter to the plaintiff dated 7 July 2021 with its annexures.

10. Subsequently on 4 November 2021, Mr Bellissimo filed on the plaintiff's behalf what amounted to a further amended statement of claim (although it was entitled simply “Amended statement of claim”) which appropriately pleaded and particularised the plaintiff's claim. However, the defendant did not file a defence to that amended statement of claim until 30 August 2022. The defendant denied an breach of duty and, amongst other pleadings, it relied on s 5O of the Civil Liability Act 2002 (NSW).

11. On 21 June 2022 Makinson d'Apice Lawyers served an Offer of Compromise offering to resolve the plaintiff's claim on the basis of judgment for the defendant with no order as to costs (“the First Offer of Compromise”).

12. On 30 August 2022 Makinson d'Apice Lawyers sent a letter to Mr Bellissimo serving a supplementary report of Dr Uppal dated 25 August 2022.

13. On 12 May 2023 Makinson d'Apice Lawyers sent a letter to Mr Bellissimo serving two expert reports of Dr Geoffrey Cohn and the report of Dr Virgona.

14. On 28 June 2024 a mediation was held before the mediator, Jeremy Gormley SC. The plaintiff was represented by senior and junior counsel.

15. On 15 July 2024 Makinson d'Apice Lawyers served a further Offer of Compromise, offering to resolve the matter for the payment by the defendant of the sum of $250,000.00 (“the Second Offer of Compromise”).

16. The relevant rule is r 42.15A which provides:

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 is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less 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.

17. The onus is here on the plaintiff to demonstrate why the Court should depart from the consequence of his rejection of the offer: Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 at [35]; Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [45].

18. A party does not have to show that exceptional circumstances exist before the Court will otherwise order: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [15]; Leach at [47]. Rather, the discretion is one that has to be exercised having regard to all the circumstances of the case. The reasonableness of the rejection is not an irrelevant consideration: The Uniting Church v Takacs (No 2) [2008] NSWCA 172 at [15].

19. A walk-away offer is one “where the offeror expresses its willingness to settle on the ground that each party bears its own costs": Leach at [50]. A walk-away offer can successfully trigger the indemnity costs mechanisms under the rules. However, the claim or defence would have to approach something of the character of being frivolous or vexatious for that to be the case: Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [20]; Regency Media at [31]; Leach at [51].

20. The First Offer of Compromise in the present case was a walk-away offer.

21. In considering the reasonableness of the plaintiff in rejecting the First Offer of Compromise, it is necessary to have regard to the procedural history, briefly set out above.

22. In my opinion, there are two reasons why it was not unreasonable for the plaintiff to refuse the First Offer of Compromise. First, the defendant had not filed a defence to the further amended statement of claim filed by Mr Bellissimo. Although reports had been served by Dr Uppal and a statement of Dr Andric had been served, in the absence of a defence the plaintiff did not know what the defendant’s position was in respect of the claim pleaded in the further amended statement of claim. Significantly, the plaintiff did not know that the defendant would rely on s 5O of the Civil Liability Act.

23. Secondly, the offer made was a walk-away offer. As noted above, for such an offer to trigger successfully the indemnity costs mechanism under the rules, the claim would have to approach something of the character of being frivolous or vexatious. On the face of the pleading in the further amended statement of claim, such a conclusion could not be reached. As McColl JA said in Leach at [55]:

…The Offer did involve an element of compromise, but only on costs. It offered the appellant nothing by way of damages on account of his injuries. It did not serve the public policy of encouraging settlement.

Her Honour held that it was not unreasonable in those circumstances for the appellant in that case not to accept the offer.

24. The Second Offer of Compromise was made following service of all of the defendant’s expert reports and, significantly, after a mediation had taken place where the plaintiff was represented by senior and junior counsel.

25. Although the Second Offer of Compromise did not on its face specify the time it was open for acceptance, the covering letter made clear that the offer remained open for 28 days. The plaintiff accepts on the basis of what was said in Leach at [39] that this does not render the offer inefficacious.

26. The plaintiff points to the following matters to submit that the Court should otherwise order in terms of r 42.15A(2):

(a)   the complexity of the legal, factual and medical issues involved in the case;

(b)   The fact that the only direct evidence surrounding the primary factual contest (the number of taps used) came from the plaintiff;

(c)   The fact that when the offer was made, the defendant had not completed service of its evidentiary statements;

(d)   The fact that when the offer was made, the conclave of doctors had not been completed;

(e)   The fact that the plaintiff alleged failure of the defendant to properly document the tap and inject procedure;

(f)   The fact that the position that the failure of the defendant to document the tap and inject procedure was not a breach of the doctor's duty of care was novel and unexplained in the authorities to date; and

(g)   That it was reasonable to argue that the failure of the hospital to document the procedure had caused additional loss which was separate to the allegations surrounding the tap and inject procedure.

27. I do not consider that those matters, even regarded collectively, are sufficient for the Court to order costs other than what r 42.15A provides. All of the matters except (c) were of a type that would occur in any litigation. It would not be at all unusual for a case to involve complex legal, factual and medical issues in a medical negligence case, nor would it be unusual that a conclave of doctors had not been completed before an offer of compromise was made. The fact that some novel proposition or breach of duty was raised by the plaintiff would not of itself be sufficient to make it reasonable to refuse an offer of compromise.

28. The only matter that requires additional comment is the matter raised in paragraph (c), that at the time of the offer the defendant had not completed service of its evidentiary statements. There is an obvious reason for that. The plaintiff's first evidentiary statement is only dated 27 November 2024 and that of his sister, Ms Tomassa, was only signed on 9 December 2024. That was despite orders made on 9 August 2024 for service of the plaintiff’s statement by 19 September 2024.

29. I have already noted earlier that, notwithstanding the absence of any statements from the plaintiff, Dr Andric, who performed the procedure, had served his statement in July 2021. It should be noted in this regard that notwithstanding that the plaintiff had not served his statements, a mediation took place in June 2024 when it can reasonably be inferred that the factual disputes between the parties were appropriately aired.

30. None of the matters put forward by the plaintiff leads to the conclusion that the refusal by the plaintiff to accept the second offer of compromise was reasonable.

31. In those circumstances, the costs order made on 16 April 2025 should be varied to provide:

1. The plaintiff is to pay the defendant's costs on the ordinary basis until 15 July 2024 and on the indemnity basis from 16 July 2024.

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Decision last updated: 19 May 2025