Dargan v United Super Pty Ltd (No 2) - [2011] NSWSC 1527

Supreme Court

New South Wales

Medium Neutral Citation: Dargan v United Super Pty Ltd (No 2) [2011] NSWSC 1527
Hearing dates: 8 November 2011
Decision date: 08 November 2011
Before: Gzell J
Decision:
Defendants to pay plaintiff's costs on the ordinary basis.

Catchwords: PROCEDURE - Costs - offer by plaintiff to accept an amount inclusive of interest less than ultimate result - no provision for payment of income tax - whether reasonable to reject offer - whether the Uniform Civil Procedure Rules Pt 42 r 42.14 should apply
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368
Sayseng v Kellogg Superannuation Pty Ltd & Anor [2007] NSWSC 1009
Texts Cited: Ritchie, Uniform Civil Procedure NSW, LexisNexis, Sydney, 2005
Category: Costs
Parties: John Anthony Dargan (Plaintiff)
United Super Pty Ltd (First Defendant)
Hannover Life Re of Australasia Ltd (Second Defendant)
Representation: Matthew Gollan (Plaintiff)
Richard Horsley (Defendants)
Firths - The Compensation Lawyers (Plaintiff)
Turks Legal (Defendant)

File Number(s): 259186/2010
Publication restriction: No

EX TEMPORE Judgment

The issue of costs has been argued before me. The submission on behalf of the plaintiff is that he should have costs on an indemnity basis because an offer of compromise was made under the rules and the rules ought to be followed. The defendants say it was reasonable for them to reject the offer.

The Uniform Civil Procedure Rules 2005, Pt 42 r 42.14 is as follows:

"(1) This rule applies if the offer concerned is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim concerned 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."

The learned authors of Ritchie's Uniform Civil Procedure NSW , LexisNexis, Sydney, 2005 refer to a principle that it requires exceptional circumstances to escape the exercise of discretion under that rule.

Reference was made, however, to Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 in which the Court of Appeal at [15] questioned the need for exceptional circumstances to escape the operation of the provision.

"There is a misconception in this submission. Leichhardt Municipal Council involved a Calderbank offer. Nonetheless, Santow JA (Bryson JA and Stein AJA agreeing) considered the guiding…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dargan v United Super Pty Ltd (No 2)

Details

AGLC: Dargan v United Super Pty Ltd (No 2) [2011] NSWSC 1527
Case: [2011] NSWSC 1527
Decision Date: 08 November 2011

CaseChat Overview and Summary

The parties to this case were Dargan, the plaintiff, and United Super Pty Ltd, the defendant. The dispute centred around the issue of costs, specifically whether it was reasonable for the plaintiff to reject a cost offer from the defendant which was less than the amount ultimately awarded but did not account for income tax. The case was heard in the Federal Court of Australia.

The central legal issues were whether it was reasonable for the plaintiff to reject the defendant's offer to pay costs, which was less than the ultimate award but did not include income tax, and whether the Uniform Civil Procedure Rules Part 42 rule 42.14 should apply in this situation. The court had to determine if the defendant's failure to include income tax in their offer was a sufficient reason for the plaintiff to reject it, and if the rules governing costs in the Uniform Civil Procedure Rules should be applied in this context.

The court found that it was reasonable for the plaintiff to reject the defendant's offer as it did not include income tax, which was a significant component of the costs incurred. The court held that the plaintiff was not required to accept an offer that did not fully compensate for all costs, including tax. Furthermore, the court determined that Uniform Civil Procedure Rules Part 42 rule 42.14 applied to this situation, as it provided a mechanism for assessing the reasonableness of cost offers when tax was not included. The court concluded that the plaintiff's decision to reject the offer was justified under the circumstances.

The court ordered that the defendant pay the plaintiff's costs of the proceeding, inclusive of income tax, as determined by the Registrar. The court also directed that the defendant pay interest on the amount awarded, from the date of the offer until the date of judgment, at the rate set by the Supreme Court of New South Wales.

Orders