Cook v City of Sydney (No 2)

[2016] NSWSC 148

Supreme Court

New South Wales

Medium Neutral Citation:	Cook v City of Sydney (No 2) [2016] NSWSC 148
Hearing dates:	Written submissions
Date of orders:	04 March 2016
Decision date:	04 March 2016
Jurisdiction:	Common Law
Before:	Bellew J
Decision:	The first defendant is to pay the plaintiff’s costs of the proceedings, as agreed or assessed.
Catchwords:	PRACTICE AND PROCEDURE – Costs – Offer of compromise – Whether offer was a genuine compromise – Whether order should be made for indemnity costs
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586 Cook v City of Sydney [2015] NSWSC 1904 Hobartville Stud v Union Insurance Company (1991) 25 NSWLR 358 Miwa Pty Limited v Siantan Properties Pte Limited (No. 2) [2011] NSWCA 344 Tickell v Trifleska Pty Limited (1990) 25 NSWLR 353
Category:	Procedural and other rulings
Parties:	Jamie Adrian Cook - Plaintiff City of Sydney - First Defendant John Wynyard, Dr Robert Gertler and Professor Nicholas Glozier, as members of the Appeal Panel of Workers Compensation Commission of NSW - Second Defendant Registrar of the Workers Compensation Commission of NSW - Third Defendant
Representation:	Counsel:    M Allars SC – Plaintiff M Blount – First Defendant   Solicitors: Carroll & O’Dea – Plaintiff Bartier Perry – First Defendant
File Number(s):	2015/37120
Publication restriction:	Nil

Judgment

INTRODUCTION

1. In this matter I delivered judgment on 18 December 2015: Cook v City of Sydney [2015] NSWSC 1904. On that occasion, I ordered that the decision of the second defendant, along with the Medical Assessment Certificate issued by the second defendant in respect of the plaintiff, be quashed. I further ordered that the matter be remitted to the third defendant, the Registrar of the Workers Compensation Commission of NSW, to be further dealt with according to law.

2. At the time of handing down judgment I was informed by senior counsel for the plaintiff that an application would be made for a special costs order. In those circumstances, I ordered the parties to provide written submissions. Those submissions having been received, I am now in a position to deliver judgment.

THE OFFERS OF COMPROMISE

3. On 17 June 2015 the first defendant made an offer to the plaintiff pursuant to Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (“the Rules”). That offer was in the following terms:

“1. The summons is dismissed.

2. An order in the nature of mandamus in respect of grounds of 4 and 6(iv) of the Summons only, remitting grounds 4 and 6(iv) to a Medical Appeal to determine according to law.

3. The first defendant to pay the plaintiff’s costs and disbursements of these judicial review proceedings incurred up to the date of this offer on a party-party basis as agreed or assessed.

4. Pursuant to Part 20.26(2)(b)(ii) of the Uniform Civil Procedure Rules 2005, if this offer is not accepted, the first defendant will defend the balance of the Summons.

5. This offer is made under Part 20.26 of the Uniform Civil Procedure Rules 2005.

6. This offer is open for 28 days from the date of this offer.”

4. On 23 June 2015, the plaintiff’s solicitors wrote to the solicitors for the first defendant in the following terms:

“In response to your letter of 17 June 2015 we are instructed to reject your Offer.

The Court would not make order in (2) set out in your Offer. Mandamus will not be issued unless certiorari is issued to quash his Decision. Further Mandamus will not be issued so as to trespass upon the merits of any fresh exercise of discretion by an Appeal Panel. Since you admit in your Response that the Appeal Panel fell into error, where the jurisdictional or error of law on the face of the record, it is appropriate for the Court to issue an order in the nature of certiorari to quash the whole Decision.

We enclose by way of service our offer under Rule 20.26 of the UCPR. Please note that if the enclosed Offer of Compromise is found for some reason to be non-compliant with the Uniform Civil Procedure Rules, then the offer is to operate additionally as a Calderbank” Offer.

This Offer is open for acceptance for 28 days from the date of this letter.”

5. The accompanying offer which was made by the plaintiff was in the following terms:

“1. An order in the nature of certiorari quashing the whole of the decision made by the Second Defendant, the Appeal Panel of the Worker’s Compensation Commission of NSW on 9 February 2015 pursuant to s. 328(5) of the Workplace Injury Management and Worker’s Compensation Act 1998 (NSW) revoking a medical assessment certificate issued by Dr Patrick Morris, on 15 April 2014 and quashing the medical assessment certificate issued by the Appeal Panel.

2. An order remitting the matter to the Third Defendant.

3. The First Defendant to pay the plaintiff’s costs and disbursements of these proceedings as agreed or assessed.

4. This offer is made under Part 20.26 of the Uniform Civil Procedure Rules 2005.

5. This offer is open for 28 days from the date of this offer.”

6. On 20 July 2015 the solicitors for the first defendant wrote to the solicitors for the plaintiff in (inter alia) the following terms:

“We were (sic) instructed to reject your client’s offer as your client’s offer does not make a genuine compromise.

We repeat that if your client agrees to the Summons being dismissed, our client will agree to the errors identified in grounds 4 and 6(iv) of the Summons being corrected by the Worker’s Compensation Commission by consent. In other words, if your client makes an application for this error on the face of the record to be rectified under s. 378 of the Workplace Injury Management Act 1998, we confirm that our client will consent to that application so the additional 1% WPI assessed by the AMS in relation to the effects of treatment is added to the Appeal Panel’s assessment and the final Medical Appeal Panel assessment becomes 8% WPI.

This is an offer made under the principles in Calderbank v Claderbank.

If your client does not accept this offer within 28 days, our client will rely on this letter and our previous letter dated 12 June 2015 on the question of costs.

Our client maintains that the other grounds of the plaintiff’s Summons are unmeritorious. The error which is conceded is an obvious error on the face of the record and an error within the jurisdiction of the Commission. It is therefore an error which can be expediently and cost effectively corrected by way of a consent application to the Medical Appeal Panel under s. 378 of the Workplace Injury Management Act 1988.”

SUBMISSIONS OF THE PARTIES

Submissions of the plaintiff

7. Senior counsel for the plaintiff submitted that costs should follow the event and that an order should be made that the first defendant pay the plaintiff’s costs. However, senior counsel submitted that the plaintiff should be the beneficiary of an order that the first defendant pay his costs on an indemnity basis on and from 23 June 2015, that being the date of the offer of compromise which was not accepted.

8. It was submitted that the provisions of r. 42.14 applied because the plaintiff, by virtue of my previous orders, obtained a judgment no less favourable to him than the terms of the offer. It was submitted that in these circumstances the plaintiff was entitled, pursuant to r. 42.14(2), to an order that the first defendant pay his costs assessed on the ordinary basis up to and including 23 June 2015, and on an indemnity basis thereafter up until the date of my final orders.

9. It was further submitted that the offer made on 23 June 2015 had also been expressed as a Calderbank offer (see Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586) and that, the defendant not having accepted it, the same principles applied and the plaintiff was entitled to the orders sought.

Submissions of the first defendant

10. The first defendant submitted that its offer represented a genuine compromise because it:

1. conceded the obvious error;

2. offered to support the plaintiff to have the error corrected; and

3. offered to pay the plaintiff’s costs.

11. It was submitted that the plaintiff’s purported offers, irrespective of the basis on which they were said to have been made, contained no real and genuine element of compromise but “simply demanded everything that the plaintiff sought to achieve under the Summons”. It was further submitted that the terms in which such offers had been expressed, namely that “the first defendant pay the plaintiff’s costs and disbursements of these proceedings as agreed or assessed”, did not specify the exact nature of those costs, or the precise period over which the costs would be payable, and therefore lacked the requisite certainty.

12. It was submitted that in these circumstances no special order for costs should be made.

THE RELEVANT LEGISLATION

13. Rule 20.26 of the Rules is in the following terms:

20.26 Making of offer

(1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.

(2) An offer under this rule:

(a) must identify:

(i) the claim or part of the claim to which it relates, and

(ii) the proposed orders for disposal of the claim or part of the claim, including, if a monetary judgment is proposed, the amount of that monetary judgment, and

(b) if the offer relates only to part of a claim in the proceedings, must include a statement:

(i) in the case of an offer by the plaintiff, as to whether the balance of the proceedings is to be abandoned or pursued, or

(ii) in the case of an offer by a defendant, as to whether the balance of the proceedings will be defended or conceded, and

(c) must not include an amount for costs and must not be expressed to be inclusive of costs, and

(d) must bear a statement to the effect that the offer is made in accordance with these rules, and

(e) if the offeror has made or been ordered to make an interim payment to the offeree, must state whether or not the offer is in addition to that interim payment, and

(f) must specify the period of time within which the offer is open for acceptance.

(3) An offer under this rule may propose:

(a) a judgment in favour of the defendant:

(i) with no order as to costs, or

(ii) despite subrule (2) (c), with a term of the offer that the defendant will pay to the plaintiff a specified sum in respect of the plaintiff’s costs, or

(b) that the costs as agreed or assessed up to the time the offer was made will be paid by the offeror, or

(c) that the costs as agreed or assessed on the ordinary basis or on the indemnity basis will be met out of a specified estate, notional estate or fund identified in the offer.

(4) If the offeror makes an offer before the offeree has been given such particulars of the offeror’s claim, and copies or originals of such documents available to the offeror, as are necessary to enable the offeree to fully consider the offer, the offeree may, within 14 days of receiving the offer, give notice to the offeror that:

(a) the offeree is unable to assess the reasonableness of the offer because of the lack of particulars or documents, and

(b) in the event that rule 42.14 applies to the proceedings, the offeree will seek an order of the court under rule 42.14 (2).

(5) The closing date for acceptance of an offer:

(a) in the case of an offer made two months or more before the date set down for commencement of the trial-is to be no less than 28 days after the date on which the offer is made, and

(b) in any other case-is to be such date as is reasonable in the circumstances.

(8) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer.

(9) An offer is taken to have been made without prejudice, unless the notice of offer otherwise provides.

(10) A party may make more than one offer in relation to the same claim.

(11) Unless the court orders otherwise, an offer may not be withdrawn during the period of acceptance for the offer.

(12) A notice of offer that purports to exclude, modify or restrict the operation of rule 42.14 or 42.15 is of no effect for the purposes of this Division.

14. Rule 42.14 is in the following terms:

42.14 Where offer not accepted and judgment no less favourable to plaintiff

(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.

CONSIDERATION

15. The schemes for offers of compromise, and for cost consequences in the event that such offers are not accepted, were intended to promote true compromise. True compromise connotes that a party gives something away: Hobartville Stud v Union Insurance Company (1991) 25 NSWLR 358 at 368 per Giles J. Accordingly in determining the present question, what the Court is required to do is to determine whether, in all of the circumstances, the offer of compromise made by the plaintiff represented any true element of compromise: Tickell v Trifleska Pty Limited (1990) 25 NSWLR 353 at 355 per Rogers CJ Comm D. The same principles apply to the Calderbank offer made by the plaintiff: Miwa Pty Limited v Siantan Properties Pte Limited (No. 2) [2011] NSWCA 344 at [8] per Basten JA (McColl and Campbell JJA agreeing).

16. In my view, the offer made on behalf of the plaintiff on 17 June 2015 contained no element of compromise at all. Rather, as the first defendant submitted, the offer represented what was, in fact, an offer to settle the proceedings on the basis of the very relief of the plaintiff sought to obtain by commencing the proceedings.

17. In these circumstances, no special costs order is warranted.

ORDERS

18. For the forgoing reasons, I make the following order:

1. The first defendant is to pay the plaintiff’s costs of the proceedings, as agreed or assessed.

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Decision last updated: 08 March 2016