Chitts v Hamied (No. 2)

[2023] NSWDC 226

District Court

New South Wales

Medium Neutral Citation:

CHITTS v HAMIED (No. 2) [2023] NSWDC 226

Hearing dates:

16 June 2023

Date of orders:

28 June 2023

Decision date:

28 June 2023

Jurisdiction:

Civil

Before:

Lerve DCJ

Decision:

The applicant defendant to pay the costs of and incidental to the Notice of Motion.

Catchwords:

COSTS – ‘indulgence principle’ – disentitling behaviour - whether letter from defendant to plaintiff constituted a Calderbank offer

Legislation Cited:

Uniform Civil Procedure Rules (UCPR)

Cases Cited:

Chint Australasia Pty Ltd v Cosmoluse Pty Ltd [2008] NSWSC 768

Fordham v Fordyce [2007] NSWCA 129

Holt v Wynter [2000] NSWCA 143

Judd v Warwick (2007) 6 CDLR 243

Chitts v Hamied [2023] NSWDC 188

Category:

Costs

Parties:

Mark Anthony CHITTS
Sadek HAMIED

Representation:

Counsel:
Mr N Hogan (Applicant/Defendant)
Mr M Inglis (Respondent/Plaintiff)

Solicitors:
Avant Law (Applicant/Defendant)
Commins Hendriks Solicitors (Respondent/Plaintiff)

File Number(s):

2021/289113

Publication restriction:

No

Judgment

1. On 5 June 2023 before the Court embarked on the hearing of a criminal trial, four civil Notices of Motion were heard. Three of those matters were resolved by Consent Orders. This matter however proceeded to hearing over about two hours. On 9 June 2023 I gave judgment on the Notice of Motion. The Solicitor appearing for the Defendant for the purposes of taking the judgment indicated that there was an issue as to costs. This second judgment in the matter relates to the issue of costs of the Motion.

2. The substantive matter is one that relates to a claim for professional negligence, and in particular a claim by the plaintiff that the defendant, who at the relevant time was the plaintiff’s treating general practitioner, was negligent in failing to properly diagnose and treat a compression fracture to the lower back.

3. The Notice of Motion involved an application by the defendant to seek leave pursuant to Part 31.28(4) of the Uniform Civil Procedure Rules (UCPR) to rely on two expert’s reports which had not been served in a timely fashion. To say that those reports had not been served in a timely fashion was very much a euphemism in this case. The procedural history is set out in the judgment of 9 June 2023, Chitts v Hamied [2023] NSWDC 188.

4. For reasons set out in the judgment of 9 June 2023 the defendant was granted leave to rely on those experts’ reports. However, I also made clear that because of the failures in the office of the solicitor appearing for the defendant in all the circumstances the defendant should bear the costs of the Motion.

5. The defendant maintains that because of what is purported to be a Calderbank Letter of 1 June 2023 the defendant maintains that the plaintiff should bear the costs of the Motion, or in the alternative that each party pay their own costs. The plaintiff maintains that the order for costs should be the one I proposed in my reasons of 9 June 2023.

General Rule

6. Part 42.2 of the UCPR provides:

“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”.

7. However, as counsel for the defendant submits at paragraph 9 of his submissions as to costs, I found that there was conduct by the defendant that justifies a departure from the general rule. At [48] of the judgment of 9 June 2023 I observed:

“The motion was necessary because of inadequate file management and supervision in the office of the defendant’s solicitors. Some personnel at Avant Law should engage in some introspection as to the manner in which this matter was managed. In the circumstances of this matter it is difficult to be critical of the respondent plaintiff opposing the Motion”.

8. I do not resile from those comments.

General Principles

9. I accept that given that the defendant was the successful party on the Motion it is for the plaintiff to establish a basis for the departure from the general rule. Mr Hogan, counsel for the defendant at paragraph 3 of his submissions as to costs accepts that where an indulgence has been granted to a party it may be appropriate to depart from the general rule. The decision of Holt v Wynter [2000] NSWCA 143 is cited as authority. That was a decision about leave to commence proceedings. Priestly JA, who gave the lead judgment on the issue of whether leave should be granted would have ordered that costs be costs in the cause. The remaining members of the court (Meagher, Handley & Sheller JJA, Brownie AJA) agreed with Priestly JA as to leave but ordered that the applicant pay the costs.

10. Mr Hogan also attaches to his submissions the judgment of his Honour Judge Johnstone of this court in Judd v Warwick (2007) 6 CDLR 243. His Honour at [6] said, “In my view the superior courts have made it clear in a number of recent judgments that the indulgence principle is not one of inflexible application”. One of the cases cited by Johnston DCJ is Fordham v Fordyce [2007] NSWCA 129 at [50]. Ipp JA gave the lead judgment with whom Basten JA and Young CJ in Eq agreed. At [51] Young CJ in Eq said, “but I do not think one can say there is an overarching principle known as ‘The Indulgence Principle’ which is to apply unless it is inappropriate”.

11. Johnstone DCJ in Judd v Warwick at [11] found that the discretion to depart from the usual rule will usually only be exercised where there has been some sort of misconduct or other disentitling behaviour on the part of the moving party. In the matter presently under consideration I am firmly of the view that the delay in the serving of the reports on which the defendant has leave to rely amounted to “disentitling behaviour”.

12. In the Calderbank letter, to which I will go shortly, the solicitors for the defendant maintain that the reports the subject of the motion pose no prejudice to the plaintiff. I observe that it occurred to me having read all of the pleadings and the reports that the plaintiff would have been in a stronger forensic position without those reports. Clearly, the decision by the plaintiff to resist the Motion could not be said to be unreasonable. I said as much in my judgment of 9 June 2023.

Calderbank Letter

13. The defendant relies upon what is described as a Calderbank Letter. That letter was not before me when I made the original decision as to leave. I note that the Notice of Motion was filed on 17 March 2023. The Calderbank letter is dated 1 June 2023, i.e. the Thursday before Monday 5 June 2023, on which date the Motion was heard. The letter is in the following terms:

“We refer to the defendant’s Notice of Motion seeking leave for the Defendant to rely on the supplementary report of Dr Deirdre O’Dea dated 7 February 2023 and the report of Dr Seamus Dalton dated 31 October 2022.

We consider the reports pose no prejudice to the Plaintiff.

We are instructed to resolve the Motion on the following terms:

1. Pursuant to Rule 31.28(4)(b) of the UCPR the defendant is granted leave to rely on the supplementary report of Dr Deirdre ‘Dea dated 7 February 2023.

2. Pursuant to Rule 31.28(4) of the UCPR the defendant is granted leave to rely on the report of Dr Seamus Dalton dated 31 October 2022

3. The plaintiff to serve any reports in reply by 10 July 2023.

4. Time for the parties to attend and complete a mediation extended to 31 July 2023.

5. Proceedings referred to hearing in the District Court sittings at Wagga Wagga commencing on 14 August 2023 with an estimate of 3 – 4 days.

6. The defendant to pay the plaintiff’s costs of the Notice of Motion as agreed or assessed.

Noting the Notice of Motion’s return date of 5 June 2023 this offer remains open until 12.00pm on 2 June 2023 after which time the offer is withdrawn.

If the question of costs arises, the defendant intends to rely upon this letter to seek costs.”

14. Mr Hogan on behalf of the defendant at paragraph 17 of his costs submissions puts that the effect of the plaintiff’s rejection of the letter of offer is therefore to have made his continued contest unreasonable and the plaintiff should therefore should not obtain the beneficial effect of the conduct.

15. A little earlier Mr Hogan submitted that the offer by the defendant provided a means to mitigate risk for the plaintiff and a way of ameliorating any prejudice to him that might result from the grant of leave. It is then submitted that the application had considerable merit.

16. In response to that I note that Mr Potter, solicitor for the plaintiff, noted that at [44] of the judgment of 9 June 2023 I found that although exceptional circumstances were made out it was a borderline case. I do not resile from observation and indeed indicate that I did engage in some prevarication as to the ultimate result. It is not hyperbole or exaggeration to say that the delay and reason for the delay in serving the contested reports was truly egregious.

17. Mr Potter also submits generally that the letter of 1 June 2023 does not amount to a Calderbank letter because (as I understand the submission) the very limited period of time the offer was open and that the proposal did not represent a compromise on the part of the defendant as in the ordinary course of events the defendant would have been required to pay the plaintiff’s costs in any event.

18. To my mind there is some substance to the submission that the letter of 1 June 2023 does not amount to a Calderbank offer. When analysed the offer did not make any significant compromise.

19. The of course, there is the limited time the offer was open. The offer remained open for a period which would have been approximately, and probably even slightly shorter than 24 hours, in circumstances where the Motion had been filed some months beforehand. What is an appropriate or acceptable period for the offer to remain open will depend on the facts and circumstances and complications of each case.

20. The matter presently under consideration involved a Notice of Motion on a procedural issue. Without the contested reports being in evidence the plaintiff was in a much stronger forensic position. In the circumstances of this case noting the date on which the Motion was filed I do not regard the period (again, probably less than 24 hours) to be sufficient time for the plaintiff to consider the proposal put forward by the defendant.

21. In this regard I note that the learned authors of Ritchie’s Uniform Civil Procedure NSW on this issue refer to the decision of Einstein J in Chint Australasia Pty Ltd v Cosmoluse Pty Ltd [2008] NSWSC 768. His Honour also observed at [7] in that decision that it was for the claimant (for costs) to establish that it was unreasonable for the offeree to reject the offer.

Conclusion and Orders

22. Given the effect on his forensic position it was not unreasonable for the plaintiff to resist the orders sought in the Notice of Motion. The defendant established exceptional circumstances but it was “close run”. I need comment no further on the delay in serving the reports and the reasons for that delay. I am not of the opinion that the letter of 1 June 2023 said to be a Calderbank letter was in fact a Calderbank letter. Even if I am wrong in that in the circumstances and in particular the very limited time the plaintiff had to consider the offer, such as it was, it was not unreasonable for the plaintiff to refuse the offer.

23. In these circumstances, my initial decision relating as to costs should stand. The applicant defendant is to pay the costs of and incidental to this Notice of Motion.

24. As the parties have not sought to be heard on the other proposed orders, the orders of the court will be as set out at [51] of my judgment of 9 June 2023.

**********

Decision last updated: 06 November 2023