Doble Express Transport Pty Ltd (Administrator Appointed) v John L Pierce Pty Ltd (No 2)

[2017] NSWCA 45

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Doble Express Transport Pty Ltd (Administrator Appointed) v John L Pierce Pty Ltd (No 2) [2017] NSWCA 45
Hearing dates:	On the papers
Decision date:	15 March 2017
Before:	Ward JA, Sackville AJA
Decision:	1.   Dismiss the Notice of Motion filed by the respondent (Pierce) on 22 December 2016. 2.   Pierce pay the costs of the appellant (Doble) of the Motion.
Catchwords:	COSTS – indemnity costs – offer of compromise – reasonable time – notice of contention filed after offer of compromise – time to assess reasonableness of offer
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A, 51.47
Cases Cited:	Doble Express Transport Pty Ltd (Administrator Appointed) v John L Pierce Pty Ltd [2016] NSWCA 352 Taheri v Vitek (No 2) [2014] NSWCA 344 Toyota Finance Australia Ltd v Gardiner (No 2) [2016] NSWCA 181
Category:	Costs
Parties:	Doble Express Transport Pty Ltd (Administrator Appointed) (Appellant) John L Pierce Pty Ltd (Respondent)
Representation:	Counsel: N/A   Solicitors: Fraser Clancy Lawyers (Appellant) Rankin Ellison Lawyers (Respondent)
File Number(s):	2015/377020
Decision under appeal	Court or tribunal: District Court of New South Wales Citation: [2015] NSWDC 285 Date of Decision: 4 December 2015 Before: Hatzistergos DCJ File Number(s): 2013/324778

Judgment

1. THE COURT: The respondent (Pierce) has filed a Notice of Motion seeking an order for indemnity costs against the appellant (Doble) as from the date of an Offer of Compromise. Doble did not accept the Offer of Compromise and its appeal from a decision of a Judge of the District Court (Hatzistergos DCJ) was dismissed with costs. [1]

   1. Doble Express Transport Pty Ltd (Administrator Appointed) v John L Pierce Pty Ltd [2016] NSWCA 352 (Appeal Judgment).

2. The parties have agreed that the motion should be determined on the papers by two members of the Court following the retirement of Hall J.

3. The proceedings arose out of a collision between two prime movers on the Hume Highway in April 2012. Doble claimed damages in respect of damage to its truck and consequential losses. Pierce cross-claimed alleging that Doble’s negligence had damaged two trailers attached to Pierce’s prime mover.

4. The primary Judge found that Doble bore 40 per cent of the responsibility for the collision, while Pierce’s share of responsibility was 60 per cent. Accordingly, Doble recovered 60 per cent of its economic loss ($103,220.86 after deduction of the 40 per cent) and Pierce recovered 40 per cent of its economic loss ($63,815.32 after deduction of the 60 per cent).

5. Doble filed its Notice of Appeal on 11 March 2016, marginally out of time. The Court subsequently granted an extension of time for the filing of the Notice of Appeal. [2]

   2. Appeal Judgment at [79].

6. Doble served its written submissions in support of the appeal on 14 July 2016.

7. On 10 August 2016, Pierce’s solicitors served an Offer of Compromise said to be in accordance with Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 20.26 as modified by r 51.47. [3] Pierce offered to compromise the whole of the claim (being an appeal commenced by Doble) on the following terms:

“1.   Judgment for [Pierce].

2.   No order as to costs.”

3. UCPR r 51.47(1) provides that in any proceedings in the Court of Appeal, a party may make a written offer to compromise any claim in the proceedings. The provisions of Pt 20 Div 4, subject to any necessary modifications, apply to any such offer of compromise: UCPR r 51.47(2). UCPR r 20.26(2) specifies the requirements that an offer of compromise must satisfy.

8. The Offer of Compromise was to remain open until 9 September 2016 in accordance with UCPR r 20.26(5). [4]

   4. UCPR r 20.26(5)(a) provides that the closing date for acceptance of an offer made two or more months before a scheduled hearing is to be no less than 28 days after the date the offer is made.

9. The covering letter from Pierce’s solicitors asserted that Pierce had incurred costs of approximately $13,700 (inclusive of GST) since the filing of the Notice of Appeal. No breakdown of costs was provided.

10. The Offer of Compromise was not accepted by Doble. Pierce says that since it obtained a more favourable order on the appeal than the terms of the Offer of Compromise, it is entitled under UCPR r 42.15A to an order for indemnity costs as from 11 August 2016. [5]

    5. Rule 42.15A specifies the consequences of an appellant failing to accept an offer of compromise in circumstances where the respondent obtains an order no less favourable than the terms of the offer.

11. Doble takes no point about the form of the Offer of Compromise, insofar as it offers to compromise the proceedings in terms that judgment be entered for Pierce. Presumably Pierce intended to propose an order dismissing the appeal from the decision of the District Court.

12. Doble’s principal contention is that it did not have sufficient time to consider the Offer of Compromise because Pierce served a Notice of Contention on 23 August 2016 and its submissions on 31 August 2016. According to Doble, the Notice of Contention was confusing and it was entitled to seek counsel’s advice. Doble says that it required more than one day to consider whether to invoke UCPR r 20.26(4), which enables an offeree, in certain circumstances, to give notice to the offeror within 14 days of the offer being made, that it cannot assess the reasonableness of the offer because it lacks particulars. In any event, so Doble argues, it did not have sufficient time to evaluate the Offer of Compromise, particularly taking into account that Pierce must have known that it would shortly file a Notice of Contention raising fresh issues as well as its written submissions.

13. Doble further submits that the Offer of Compromise was not a genuine offer because it did not involve a significant element of compromise.

14. In Taheri v Vitek (No 2) [6] this Court held that an offer of compromise made by the respondent soon after the Notice of Appeal had been filed and before the respondent had incurred significant costs did not involve any significant element of compromise. In the present case the Offer of Compromise was made after Pierce had been served with Doble’s submissions. Pierce would have incurred some costs in considering the Notice of Appeal and Doble’s submissions, but it is difficult to see how the costs of doing so could have amounted to over $12,000. In the absence of evidence explaining the basis for the estimate, it is a fair inference that some of the costs related to the preparation of Pierce’s Notice of Contention and its submissions, both of which were filed within 21 days of the service of the Offer of Compromise.

    6. [2014] NSWCA 344 at [9]-[11]. See also Toyota Finance Australia Ltd v Gardiner (No 2) [2016] NSWCA 181 at [13]-[19] per curiam.

15. It is also a fair inference that, as Doble submits, Pierce was aware when it served the Offer of Compromise that it proposed to file a Notice of Contention and that it would be serving its submissions before the time for acceptance of the Offer of Compromise had expired. However, no reference was made to the proposed Notice of Contention in the covering letter from Pierce’s solicitors.

16. Pierce could have served the Offer of Compromise after it filed the Notice of Contention and its written submissions. It had ample time to do so since the appeal was not heard until 17 December 2016. Had Pierce adopted this course, Doble would have been allowed at least 28 days to consider the Offer of Compromise having regard to the new issues raised by the Notice of Contention and to Pierce’s arguments in its written submissions.

17. The effect of UCPR r 42.15A is that Pierce is entitled to the order for indemnity costs it seeks unless the Court orders otherwise. It is appropriate that the Court order otherwise in this case because Doble was not given the 28 days contemplated by UCPR r 20.26(5) to consider the Offer of Compromise in the light of Pierce’s Notice of Contention and submissions. Pierce has not established that it would have been prejudiced by postponing service of the Offer of Compromise until its Notice of Contention and submissions had been filed. Had it adopted this course, Doble would have had a fair opportunity to make a fully informed decision on the merits of the Offer of Compromise within the period contemplated by the rules.

18. The following orders should be made:

1.   Dismiss the Notice of Motion filed by the respondent (Pierce) on 22 December 2016.

2.   Pierce pay the costs of the appellant (Doble) of the Motion.

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Endnotes

Decision last updated: 15 March 2017