Diamond v Simpson (No 4) - [2004] NSWCA 57

NEW SOUTH WALES COURT OF APPEAL

CITATION: Diamond v Simpson (No 4) [2004] NSWCA 57

FILE NUMBER(S):
40962/01

HEARING DATE(S): 09/03/04

JUDGMENT DATE: 11/03/2004

PARTIES:
Robert Diamond (A)
Calandre Simpson by her tutor William Charles Simpson (1R)
Trustees of the Sisters of St Joseph (2R)

JUDGMENT OF: Meagher JA Ipp JA Young CJ in Eq

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): 12791/87

LOWER COURT JUDICIAL OFFICER: Whealy J

COUNSEL:
P L G Brereton SC and I F Butcher (A)
R Monteith (S) (1R)
P Hall QC and S A Woods (2R)

SOLICITORS:
Blake Dawson Waldron (A)
Harris Hyde Page (1R)
Makinson & d'Apice (2R)

CATCHWORDS:
PROCEDURE- Costs- Indemnity costs- Offer of contribution with condition- How reasonableness of rejection to be viewed.

LEGISLATION CITED:
Supreme Court Rules Pt 22, Pt 52A, rr 22 and 24

DECISION:
Under slip rule, supplement orders previously made; grant indemnity costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40962/01
MEAGHER JA
IPP JA
YOUNG CJ in EQ
Thursday 11 March 2004

ROBERT DIAMOND v CALANDRE SIMPSON AND TRUSTEES OF THE SISTERS OF ST JOSEPH (NO 4)

Judgment

MEAGHER JA: I agree with Young CJ in Eq.
IPP JA: I agree with Young CJ in Eq.
YOUNG CJ in EQ: The Court gave judgment on the second tranche of the appeals in this matter on 16 December 2003.
According to para 228 of my judgment, the Court said:
"The formal orders of the Court are thus:
1. Appeal allowed;
2.Declare that the cross defendant is liable to pay to the cross claimant one-half of the amount paid or payable to the plaintiff in respect of orders made against the cross claimant in these proceedings.
3.Liberty to apply to a Master to certify the amount of such amount if the same cannot be agreed.
4. Cross appeal dismissed with costs."
A formal order was taken out on 13 January 2004 which included orders 1 and 4 which were renumbered 1 and 2 and a declaration 3(a) close to No 2. There was no mention of order 3, nor has there been in subsequent submissions. I thus assume that the parties have agreed on the relevant amount.
The appellant to whom I will refer as "the Doctor" contends that the form of orders were inadequate fully to carry out the decision of the Court and that they should be amended and supplemented under the slip rule, see Shaddock (L) & Associates Pty Ltd v Parramatta City Council (1982) 43 ALR 473.
The second respondent, whom I will call "the Hospital" does not challenge the contention that the orders as taken out were inadequate and ought to be amended but does not agree with the amendments proffered by the Doctor.
The contentions having been raised, the parties made submissions in writing. The Court considered these and then listed the matter on 9 March 2004 when senior counsel for both the Doctor and the Hospital spoke to…

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 Diamond v Simpson (No 4)

Details

AGLC: Diamond v Simpson (No 4) [2004] NSWCA 57
Case: [2004] NSWCA 57
Decision Date: 11 March 2004

CaseChat Overview and Summary

The case of *Diamond v Simpson (No 4)* concerned an application for indemnity costs by the plaintiff, referred to as the Doctor, against the defendant, the Hospital. The dispute arose from the Doctor's claim for contribution from the Hospital, which the Doctor argued should entitle him to indemnity costs due to the Hospital's rejection of settlement offers.

The central legal issue before the court was whether the Doctor was entitled to an order for indemnity costs. This required the court to determine the nature and validity of the offers of contribution made by the Doctor, and whether the Hospital's rejection of these offers was unreasonable, thereby justifying an award of indemnity costs. Specifically, the court had to consider the distinction between offers of compromise under Part 22 Rule 1A and offers of contribution under Part 22 Rule 12 of the Rules, and how offers of contribution should be assessed in the context of costs.

The court reasoned that while offers of contribution under Part 22 Rule 12 do not carry the same automatic consequences as offers of compromise under Rule 1A, they can still be taken into account by the court when determining costs, similar to a *Calderbank* letter. The court found that the Doctor's offers to accept a 50% contribution were not merely requests for instructions or demands for the full claim amount, but rather constituted genuine compromises, given the inherent uncertainty of liability between zero and one hundred percent for each party. The court rejected the Hospital's assertion that the "Syntocinon theory" had been destroyed at the time of the offers, noting that litigants often assess offers with significant unknowns. The court also accepted the Doctor's submission that there was a distinction between offers of compromise and offers of contribution, and that Rule 12 was not intended to be linked to Rule 1A.

The court ultimately granted the Doctor's application for indemnity costs, supplementing its previous orders.

Orders

Orders of the court

Under slip rule, supplement orders previously made; grant indemnity costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

YOUNG CJ

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: YOUNG CJ

B. As to indemnity costs, this claim was made on 7 January 2004 on the basis that it is appropriate for an indemnity costs order to be made where a party obtains a judgment no better than a prior settlement offer by the other party. The decision of Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 is relied on for this proposition. The Doctor says that he offered to accept 50% contribution on 10 July 2000 and again on 31 October 2000 and made an offer to accept only 30% contribution on 16 March 2001. He says that he is entitled to indemnity costs at the very least from 16 March 2001. The Hospital says that the so-called offer of 10 July 2000 was not an offer at all but was merely a request to consider obtaining instructions. It then says that the offer of 31 October 2000 was not a true compromise as it did not involve any element of compromise and that in any event it was not expressed to have been made pursuant to Part 22 of the Rules. As to the offer to accept 30% contribution, it is put that this was a conditional offer in that it required the Hospital to agree not to seek costs from the plaintiff in relation to the discontinuance which was an unreasonable condition. As to the Hospital's objection to the form of the offer, the Doctor says that there is a distinction between an offer of compromise under Part 22 Rule 1A and an offer of contribution under Part 22 Rule 12. It would seem to me that this submission is correct. This follows from the structure of Part 22 and the fact that Rule 12 was added three years after the rest of the Part without any attempt being made to link it into offers of compromise. However, it must also follow that no automatic consequence flows from the non-acceptance of an offer to contribute and that one must deal with such offers in much the same way as an offer under a Calderbank letter. Part 52A Rule 24 provides that "The Court may take an offer to contribute into account in determining" questions of costs; cf Part 52A Rule 22 with respect to offers of compromise. It is certainly true that the authorities say that a demand that the opponent pay the full amount of the claim or even close to the full amount of the claim is not to be considered as an offer of compromise; see eg Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353. The Hospital says that the 50% offers were in this category. I do not consider this to be so. The Hospital and the Doctor each had a likelihood of being found liable to the plaintiff of between zero and one hundred percent, and a 50/50 contribution can be considered as a compromise. The Hospital has said that at the time of the offers the "original Syntocinon theory had been virtually destroyed". For the reasons I have given earlier, I am not prepared to hold that that is so. It is not the case that a litigant must have all the facts that might come out at the trial in its possession when assessing offers of contribution. In many cases counsel and solicitors have to evaluate chances whilst there are still very big X factors involved.