Express Cargo Services Pty Ltd v Mysko (No 2)

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
EXPRESS CARGO SERVICES PTY LTD v MYSKO (No 2)
[2023] SASC 133
Judgment of the Honourable Justice Stein
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - UNREASONABLE CONDUCT OR DELINQUENCY RELATING TO PROCEEDINGS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - HOPELESS CASES
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - INFORMAL OFFERS AND CALDERBANK LETTERS - UNREASONABLE REFUSAL OF OFFER
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - OTHER PARTICULAR CASES
At trial, the applicant was largely successful. It sought its costs of and incidental to the proceedings on an indemnity basis on three grounds:
1.The respondent’s conduct, including in sending excessive and unnecessary email correspondence, was unreasonable.
2.Aspects of the respondent’s case were hopeless.
3.The respondent imprudently refused an offer of settlement and ultimately achieved a worse result at trial.

The applicant had sought costs thrown away on an indemnity basis as a consequence of the late adjournment of the trial in December 2021.
Held, allowing the application for indemnity costs in part:
1.The respondent is to pay the applicant’s costs thrown away in consequence of the adjournment of the trial on 21 December 2021 on an indemnity basis.
2.The respondent is to pay the applicant’s costs of perusing and responding to the respondent’s correspondence from 11 October 2021 on an indemnity basis.
3.The respondent is to pay the remainder of the applicant’s costs of and incidental to the proceedings on a standard costs basis.

Corporations Act 2001 (Cth) s 1317AA; Supreme Court Act 1935 (SA) s 40(1); Uniform Civil Rules 2020 (SA) rr 3.1, 194.1, 194.5, 194.6, referred to.
Hamod v New South Wales (2002) 188 ALR 659; Bhagat v Global Custodians Ltd [2002] FCA 223; du Boulay v Worrell [2009] QCA 63; Chattaway v Minister for Health (No 2) [2021] SASC 89; TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828; Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159; Spalla v St George Motor Finance Ltd (No 8) [2006] FCA 1537; Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594; Woodley v Woodley (No 2) [2017] WASC 94; Aistrope v South Australian Housing Trust [2019] SASC 214; Raptis v City of Melbourne [2017] VSC 488; Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41; Quach v Health Care Complaints Commission (No 2) [2015] NSWCA 311; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Calderbank v Calderbank [1976] Fam 93; Giller v Procopets (2009) 24 VR 1; BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2007] VSC 441; Secretary to the Department of Business and Innovation v Murdesk Investments Pty Ltd (No 2) [2012] VSC 586; Whitney v Dream Developments Pty Ltd (2013) 84 NSWLR 311; Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141; Edmonds v Barrington Winstanley Group Pty Ltd (No 2) [2023] NSWCA 197; Roads Corporation v Love [2010] VSC 581; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2005] NSWSC 481; E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296; Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1; Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435; Love v Victoria (No 2) [2009] VSC 531; Ceko v Ceko (No 2) [2023] SASC 130; Roberts v Roberts (No 2) [2021] SASC 91; Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; Ghunaim v Bart (No 2) [2006] NSWCA 82; McKerlie v New South Wales (No 2) [2000] NSWSC 1159; Vasram v AMP Life Ltd [2002] FCA 1286; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) (2002) 201 ALR 618; Northern Territory v Sangare (2019) 265 CLR 164; Machado v Underwood (No 2) [2016] SASCFC 123, considered.

EXPRESS CARGO SERVICES PTY LTD v MYSKO (No 2)
[2023] SASC 133
Civil: Application
STEIN J.
Introduction

Following a trial in which Express Cargo Services Pty Ltd (“ECS”) largely succeeded against the respondent, ECS seeks its costs of and incidental to the proceedings on an indemnity basis or, in the alternative, on a solicitor/client basis.
Some explanation of the proceedings is necessary to understand this costs application. ECS is a company providing logistical freight management services primarily to the oil, gas and mining sectors. ECS employed the respondent as a compliance manager for approximately two weeks before terminating her employment. Following her termination, the respondent engaged in a series of communications with ECS’ clients, competitors and business partners in which she asserted that ECS was failing to comply with relevant safety obligations. The communications also in some cases conveyed ECS’ confidential information. ECS commenced proceedings against the respondent alleging the respondent’s conduct constituted breaches of contractual obligations and equitable duties of confidence, injurious falsehood and tortious interference with contractual relations. I found some causes of action proved and granted ECS the relief sought in the form of declarations and permanent injunctions.
The respondent represented herself from October 2021. The respondent conducted her defence strenuously. The respondent, at times, asserted that her contract with ECS was not binding. She also persisted with arguments that she was contractually obliged to send the impugned communications. With particular vigour, the respondent asserted that she was a whistleblower within the meaning of s 1317AA(1) or (2) of the Corporations Act 2001 (Cth) (“Corporations Act”) and was therefore immune from liability in sending the impugned communications. The respondent engaged in prolific correspondence during the course of the proceedings.
Applicant’s submissions
ECS submitted that it was successful in making out the majority of its allegations and obtaining the preponderance of the relief it sought. Counsel for ECS relied on three bases to advance its application for indemnity costs:
·The respondent’s conduct in the litigation was unreasonable.
·The respondent should have been aware that she had no chance of success.
·The respondent failed to accept an offer of compromise made by ECS to resolve the proceedings and ECS subsequently obtained an outcome better than the compromise contained in the offer.
Counsel for ECS submitted that if any of the above grounds individually did not rise to the level required to justify an order for indemnity costs, the Court could consider the bases in combination to be satisfied that the threshold was met.
In submitting that the respondent conducted the litigation in an unreasonable manner, counsel for ECS referred to the respondent sending hundreds of emails, many of which were extremely long, repetitive, unfortunate in tone and lacking apparent relevance, as a feature of the respondent’s conduct that warranted an order for indemnity costs. Counsel for ECS submitted that its representatives were required to peruse the emails to determine whether their content was actually relevant, resulting in considerable time and cost incurred by ECS as a direct consequence of the respondent’s conduct. Counsel for ECS referred to one trial exhibit,[1] 658 pages in length. It contained a selection of 455 emails sent by the respondent to the solicitors of ECS between September 2021 and April 2022, many copied to the Court, together with replies. Many of the emails contained allegations of harassment and intimidation levelled by the respondent at ECS’ legal representatives and intimations that she would report them to the Legal Profession Conduct Commissioner,[2] often repeated across multiple lengthy emails.[3] Counsel for ECS submitted that the quantity, content and tone of the emails combined to demonstrate that the respondent was motivated by anger and a desire for revenge rather than legitimately attempting to ventilate her legal rights. Counsel for ECS submitted that it was unreasonable for the respondent to subject ECS to the extraordinary expenditure involved in reading hundreds of pages of communications in circumstances where the communications were largely repetitive, irrelevant and demonstrated the respondent’s primary motive was not legitimate and did not comply with the overarching obligations in r 3.1 of the Uniform Civil Rules 2020 (SA) (“UCR”).
[1]    Exhibit A17.
[2]    For example, Exhibit A17 at 195-199, 255-256, 360-361, 437, 444-445.
[3]    See the examples provided in the footnote above.
In support of the submission that aspects of the respondent’s defence were so unreasonable as to amount to a hopeless case, counsel relied in particular on the respondent’s denial of the existence of a contract with ECS, and to her motivation in sending some of the impugned communications, which counsel contended were plainly in breach of the respondent’s contractual obligation to promote the best interests of ECS. ECS submitted that any attempt to deny the existence of a contract or defend sending the communications in the context of breach of contract was so bound to fail as to warrant an order for indemnity costs.
ECS did not rely on the hopeless case argument in relation to the balance of the causes of action at trial. ECS conceded that as the respondent was unrepresented at trial, it was not unreasonable for her, as a layperson, to ventilate whether she fell within statutory whistleblower protections in the Corporations Act or had committed the tort of injurious falsehood, given the complexity of those topics.
The third basis founding ECS’ application was the respondent’s failure to accept an offer of compromise in circumstances where ECS obtained an outcome better than the compromise offered.
On 26 August 2021, ECS made an offer to compromise the proceedings on the basis that the respondent sign and adopt a letter of retraction, pay $40,000 towards ECS’ costs and agree to a permanent injunction to restrain the respondent from making any contact or communications with clients, contractors or customers of ECS. The letter conveying the offer set out instructions to seek an order for indemnity costs. The offer lapsed without acceptance.
An email containing a similar offer of compromise, made on a without prejudice basis, was sent to the respondent on 27 November 2021, the weekend before the trial was due to commence. This second offer largely repeated the contents of the August offer. However, it omitted the requirement for a letter of retraction and reduced the costs sought by ECS to $10,000. The respondent did not accept the second offer.
Counsel characterised the second offer as seeking agreement to orders which were simpler than those I ultimately made. Counsel for ECS submitted that the respondent would have fared better had she accepted the second offer because she would have faced a simpler suite of orders and would only have had to pay $10,000 towards ECS’ costs, a sum far lower than the amount the respondent will ultimately be liable to pay even on a standard costs basis.
Counsel for ECS submitted that if I am not satisfied it is appropriate to award indemnity costs for the whole of the proceedings, I ought to consider such an order for costs incurred by ECS after the respondent’s refusal of the second offer. Counsel acknowledged that the second offer was made two days before trial, but submitted the respondent had enough time to consider this offer because the November offer amounted to an adjustment to the offer made in August (which was open for 28 days) and the terms of the compromise were relatively simple.
Counsel for ECS relied on Hamod v New South Wales[4] for the proposition that indemnity costs orders are not punitive and do not serve to punish a party for arguments that may be attended by uncertainty. However, they are awarded where an argument advanced, or the conduct of a party, reaches a level of unreasonableness such that the other side ought not to incur costs in dealing with it. A party put to such expense deserves greater compensation than that achieved by a standard costs order.
[4] (2002) 188 ALR 659.
ECS submitted, on the basis of several authorities including Bhagat v Global Custodians Ltd[5] and du Boulay v Worrell[6] (“du Boulay”), that the usual costs principles apply to unrepresented litigants. However, the fact a litigant is unrepresented can be taken into account when the Court is exercising its discretion. ECS conceded that while indemnity costs can be awarded against a self-represented litigant, generally the Court will not award indemnity costs for conduct reflecting a party’s lack of familiarity with court processes and the law. However, indemnity costs can be awarded for conduct evidencing a lack of respect for the Court and its processes. ECS submitted in general terms, without relying on specific examples, that the respondent repeatedly failed to comply with orders, refused to take advantage of opportunities to remedy failures, abandoned applications at the last minute and repeatedly made unsubstantiated allegations. It submitted such matters were instances of a lack of respect for the Court and its processes.
[5] [2002] FCA 223.
[6] [2009] QCA 63.
Respondent’s submissions
The respondent’s primary response to the application for indemnity costs was to criticise the trial judgment and actions of ECS and maintain that ECS, its lawyers and the Court had bullied her. The respondent objected to the Court addressing costs before her appeal from the trial judgment had been determined. She sought to raise again the argument that she was obliged to send the impugned communications, and contended that because that obligation existed, her case was not hopeless. The respondent criticised what she perceived to be the Court’s lack of understanding of safety standards in the transport industry which she believed she was upholding.
The respondent took issue with a number of submissions made by counsel for ECS. The respondent criticised the tone with which ECS’ representatives had communicated with her in attempting to reach a settlement. She asserted she had been bullied, intimidated and blackmailed and complained that at the time the November offer was made and throughout December she had been experiencing illness. The respondent submitted that she should not be liable for costs because of the effect the trial had on her life and wellbeing.
The respondent said that her reason for sending so many emails to ECS and Chambers was that otherwise her applications were ignored by the Court, whereas she said ECS’ were heard “immediately”. The respondent said that while she had previously been represented, she could not “be responsible if [her solicitors] didn't do what they should have done in [the respondent’s] best interests”.[7]
[7] T16.37-T17.2.
The respondent indicated by email in advance of the hearing that a number of documents emailed to Chambers were relevant to the question of costs. These documents were not accepted for filing as they purported to institute a cross claim after the delivery of judgment. The materials, including the cross claim and affidavit, did not address ECS’ application for costs and largely repeated the respondent’s assertions at trial, in addition to purportedly counter claiming against ECS for $100 million.
Discussion
Section 40(1) of the Supreme Court Act 1935 (SA) provides that the power of the Court to award costs of and incidental to proceedings is discretionary. The Court has the power to determine by whom and to what extent costs are paid. The only fetter on the Court’s exercise of its general costs jurisdiction is that any order must be made in the interests of justice having regard to the circumstances of the particular litigation.[8]
[8] Chattaway v Minister for Health (No 2) [2021] SASC 89 at [9] per Stanley J.
Rule 194.1(1)(a) of the UCR provides for the award of costs on a standard costs basis, a solicitor/client basis, an indemnity basis or another basis specified by the Court. Pursuant to the UCR, costs usually follow the event.[9] Discretionary factors include any unreasonable conduct by a party, a breach of the overarching obligations or the non-acceptance by one party of an offer to resolve the proceedings.[10]
[9] Uniform Civil Rules 2020 (SA) r 194.5(2).
[10] Uniform Civil Rules 2020 (SA) r 194.6(2).
ECS is entitled to an award of costs as ECS was largely successful in its claims and in obtaining the relief it sought. I turn to consider the question whether, and if so to what extent, the award of costs should be made on an indemnity basis.
The respondent’s conduct
The kind of conduct that warrants an award of indemnity costs has been considered in a number of authorities.
In TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3),[11] Davies J held that the award of indemnity costs is premised on some special or unusual feature of the case. Her Honour said:[12]
It is well-settled law that indemnity costs should not be ordered unless there is some special or unusual feature of the case that justifies departure from the ordinary practice… The cases illustrate the appropriateness of awarding costs on an indemnity basis where there has been particular misconduct that caused a loss of time to the Court and to other parties, where proceedings were commenced or continued in wilful disregard of known facts or clearly established law, where allegations were made which ought never to have been made, or where the proceeding was unduly prolonged by groundless contentions…
[11] [2016] FCA 828.
[12] TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828 at [7].
In Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd,[13] Hodgson CJ in Eq said:[14]
Dealing with his other submissions, I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they otherwise would be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event.
[13] [2000] NSWSC 159.
[14] Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13].

In other authorities there is reference to a reluctance to award indemnity costs against an unrepresented litigant which is nevertheless sometimes overcome by the extreme conduct of an unrepresented litigant.[15]
[15] Spalla v St George Motor Finance Ltd(No 8) [2006] FCA 1537 at [26] per Kenny J; Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594 at [7] per Heerey J; Woodley v Woodley (No 2) [2017] WASC 94 (S) at [33] per Pritchard J. See also Aistrope v South Australian Housing Trust [2019] SASC 214.
In du Boulay, Muir JA said:[16]
It may be that self-represented litigants should be afforded a degree of indulgence and given appropriate assistance. But if a self-represented person wishes to litigate, he or she is as much bound by the rules of Court as any other litigant. Those rules exist to facilitate efficient, fair and cost-effective litigation. The Court’s duty is to act impartially and ensure procedural fairness to all parties, not merely one party who may be disadvantaged through lack of legal representation. The other party to the litigation is entitled to protection from oppressive and vexatious conduct regardless of whether that conduct arises out of ignorance, mistake or malice.
(citations omitted)
[16] Du Boulay v Worrell & Ors [2009] QCA 63 at [69].
As set out above, ECS relied significantly on the volume and content of email communication sent by the respondent in the course of the litigation in support of its submissions concerning the unreasonableness of the respondent’s conduct.
An unrepresented litigant, in contrast with a solicitor, may sometimes not appreciate when correspondence or communication with the other side is irrelevant or unnecessary. A relative lack of objectivity is a common trait of an unrepresented litigant[17] and that may, to some extent, explain the production of material that is repetitive, irrelevant, or contains allegations which cannot ultimately be supported. However, even making allowances for the respondent’s lack of representation from October 2021, the degree to which the respondent engaged in email correspondence went far beyond reasonable limits. The respondent engaged in very prolific email correspondence. The emails were frequently lengthy, often repeated the content of earlier correspondence, sometimes in slightly different terms, and many emails raised irrelevant matters. The respondent made frequent and unsupported allegations about ECS and its lawyers. Much of the email correspondence was unnecessary and cannot be characterised as correspondence sent in aid of legitimate attempts to ventilate the respondent’s legal rights. The respondent’s manner and method of communicating from the time she ceased to be represented was unreasonable and put ECS to significant, unnecessary and unreasonable additional cost.
[17] Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594 at [7] per Heerey J.
I do not accept the respondent’s submission that she sent many of her emails because it was the only way to ensure her interlocutory applications were heard. That is not accurate and does not explain the significant volume of emails which did not relate to any existing or foreshadowed interlocutory application.
While the respondent was unreasonable in her correspondence, ECS has not persuaded me that the unreasonable email correspondence of itself should result in an order for indemnity costs in relation to the whole of the proceedings. ECS’ general references to other aspects of the respondent’s conduct were not sufficient to persuade me that I ought to order indemnity costs in relation to the entirety of the proceedings. Unreasonableness of conduct also founded ECS’s application for indemnity costs arising from the adjournment of the trial on 21 December 2021. I address that application separately below.
The “hopeless case” basis
If an indemnity costs order is sought on the basis that a party’s case lacked merit, a party’s knowledge of their likelihood of success will be relevant. The Court will consider the litigant’s conduct against various matters including the facts known, or which ought to have been known, inquiries a litigant ought reasonably to have made and legal advice which a litigant ought reasonably to have obtained.[18] This exercise may be qualified to some extent in the case of a self-represented litigant.[19]
[18] Raptis v City of Melbourne [2017] VSC 488 at [25] per Croft J; Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41 at [15] per Redlich JA and Beach AJA; Quach v Health Care Complaints Commission (No 2) [2015] NSWCA 311 at [10]-[12] per Meagher JA.
[19] Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41 at [15] per Redlich JA and Beach AJA.
I consider that the respondent ought to have realised the position she adopted in relation to her employment contract, that is, that her written acceptance of the offer of employment did not constitute a contract, was bound to fail. That position was inconsistent with the documents she had signed and with the defence filed on her behalf while represented. At times during the trial the respondent contended the contract was not binding, at times that it was not binding on ECS but was binding on her and at times she conceded it was binding and relied upon the terms of the contract and position description in her defence. The respondent’s lack of representation does not explain the prosecution of several obviously inconsistent arguments which plainly lacked coherence.
Counsel for ECS properly conceded that the injurious falsehood cause of action and the statutory whistleblower protection arguments were complex and the respondent could not be expected to understand that her position on these topics lacked merit. I do not consider that the respondent could have been expected to have understood the low likelihood of success of her defence to the injurious falsehood claims or the low prospects of success in establishing the application of the “whistleblower” protections in the Corporations Act given the complexity of those topics. Aspects of the claims for breach of the contractual obligations of confidence were also complex and depended upon the interpretation of the contractual provisions.
While I consider the respondent ought to have known that the aspect of her defence relating to the existence of a binding contract lacked any reasonable foundation, given the complexity of other aspects of the claim, I do not consider that of itself would be sufficient to warrant an order for indemnity costs of the proceedings in their entirety. Further, the question whether the contract was binding was only one aspect of the issues to be addressed on the breach of contract claim and the respondent’s “whistleblower” allegations were an aspect of the respondent’s defence to that claim.
The respondent has, since 11 October 2021, repeatedly made reference to receiving advice from lawyers and judicial officers despite representing herself in Court in these proceedings during that time. She made such claims in the hearing of this application. Counsel for ECS in reply submitted that the respondent should have known that the “whistleblower” case was hopeless if in fact she was receiving legal advice. I do not consider there is sufficient foundation for me to reach such a conclusion.
I do not consider that in the circumstances of this matter, the respondent persisting with a hopeless case on aspects of the claim in contract warrants an order for indemnity costs of the entirety of the proceedings given the complexity of the other issues which were litigated.
The respondent’s refusal of offers to settle
In Colgate-Palmolive Co v Cussons Pty Ltd,[20] Sheppard J said that the imprudent refusal of an offer of compromise can ground an order for indemnity costs.[21] His Honour continued to say that the power to award indemnity costs nevertheless lies within the discretion of the trial judge, subject to the qualification that the trial judge is bound to exercise that discretion having regard to established principles and the circumstances of the case.[22]
[20] (1993) 46 FCR 225.
[21] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
[22] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 234.
The offer dated 27 November 2021 was not an offer filed in compliance with the UCR.
When considering whether a Calderbank v Calderbank[23] (“Calderbank”) offer has been made, the Court does not take a technical approach[24] and will consider if it is established that the offeror intended that non-acceptance may be used as a basis for seeking a special costs order if ultimately successful at trial.[25] The details of a Calderbank offer can be set out in multiple documents which are intended to be read together.[26]
[23] [1976] Fam 93.
[24] Giller v Procopets (2009) 24 VR 1 at [13] per Maxwell ACJ, Ashley and Neave JJA, referring to BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2007] VSC 441 at [4] per Pagone J. An offer made without prejudice save as to costs was treated as a Calderbank offer in Secretary to the Department of Business and Innovation v Murdesk Investments Pty Ltd (No 2) [2012] VSC 586 at [31] per Emerton J.
[25] Whitney v Dream Developments Pty Ltd (2013) 84 NSWLR 311 at [57] per Barrett JA.
[26] Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [233] per Tate ACJ, Kyrou and Ferguson JJA.
In Edmonds v Barrington Winstanley Group Pty Ltd (No 2)[27] Meagher, Leeming and Stern JJA said that there is no presumption that a party who does not obtain a more favourable judgment after not accepting a Calderbank offer will necessarily be ordered to pay indemnity costs from the date of the offer. Whether or not there should be an order for indemnity costs will depend on factors including whether the offer was a genuine offer of compromise and whether the recipient acted unreasonably in refusing the offer in all of the circumstances. That question is not considered with the benefit of hindsight, knowing the outcome, but tested at the time the offer is made.[28] The reasonableness of non-acceptance is to be considered from an objective viewpoint.[29] The factors which are relevant to the question of unreasonableness include the stage of the proceeding at which the offer was made, the time allowed to consider the offer, the extent of compromise offered, the recipient’s prospects of success at the date of the offer, the clarity of the offer and the complexity of the issues in the proceedings.[30] It may not be unreasonable to reject an offer left open only for a short period of time immediately prior to trial and whether or not it is unreasonable will depend on the particular circumstances of the litigation and factors such as those referred to above.[31] The onus is on the applicant for indemnity costs to establish the refusal of an offer is unreasonable.[32]
[27] [2023] NSWCA 197 at [5].
[28] Edmonds v Barrington Winstanley Group Pty Ltd (No 2) [2023] NSWCA 197 at [6] per Meagher, Leeming and Stern JJA.
[29] Roads Corporation v Love [2010] VSC 581 at [69] per Vickery J; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2005] NSWSC 481 at [31] per McDougall J.
[30] Edmonds v Barrington Winstanley Group Pty Ltd (No 2) [2023] NSWCA 197 at [7] per Meagher, Leeming and Stern JJA, quoting from E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296 at [59]-[60] per Ward CJ in Eq; Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1 at [18]-[19], [23] per Buss JA (with whom Wheeler JA agreed), referring to Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [23] per Warren CJ, Maxwell P and Harper AJA; Love v Victoria (No 2) [2009] VSC 531 at [22] per Cavanough J; Ceko v Ceko (No 2) [2023] SASC 130 at [23] per Kourakis CJ, quoting from Roberts v Roberts (No 2) [2021] SASC 91 at [21] per Blue J.
[31] Northwest Capital Management v Westate Capital Ltd [2012] WASC 121 (S) at [43]-[44] per Edelman J; Ghunaim v Bart (No 2) [2006] NSWCA 82 at [28] per McColl JA (with whom Ipp and Giles JJA agreed).
[32] Edmonds v Barrington Winstanley Group Pty Ltd (No 2) [2023] NSWCA 197 at [8] per Meagher, Leeming and Stern JJA.
In this case it is clear that the orders ultimately obtained are more onerous than the terms proposed in the offers. The injunctive orders are broader and the respondent also faces an order for costs that, even on a standard basis, would far exceed the amount sought in the second offer made in November 2021.
Submissions were not made in relation to the proper characterisation of the two offers. The August letter expressly drew attention to instructions to seek indemnity costs, but the November email, while expressed on a without prejudice basis, did not reiterate that position. Further, there may be some question whether the offers should properly be characterised as genuine offers of compromise enlivening the Calderbank principles.[33] However, it was not necessary for me to consider these issues given the conclusion I have reached below.
[33] See, eg, McKerlie v New South Wales(No 2) [2000] NSWSC 1159 at [9]-[10] per Dunford J; Vasram v AMP Life Ltd [2002] FCA 1286 at [12] per Stone J; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) (2002) 201 ALR 618 at [59]-[60] per Hill J.
In this case, the first offer made in August was substantially similar to the second offer, was open for a longer period of time and was made while the respondent was represented.[34] The second offer predominantly constituted an adjustment to the August offer, but it was made very shortly before the trial was set to commence on 29 November. The second offer was clear and readily comprehensible. The second offer compromised the quantum of costs sought from the respondent. The respondent had a very short window of time to consider the second offer, as it was sent at 11.56 am on 27 November 2021 and only remained open until 4.00 pm that day.[35]
[34] See affidavit of David Elix dated 15 March 2023 at pages marked 7-8.
[35] Affidavit of David Elix dated 15 March 2023 at [6]-[7].
At the time the second offer was made, the respondent had extremely poor chances of success at trial given the inevitable difficulties that she would face in light of the terms of the contract, the communications she had authored and the absence of a proper “whistleblower” defence. However, as I have concluded above, I do not consider it was unreasonable for her, as a self-represented litigant, to fail to appreciate the weakness of her defence, particularly to claims of injurious falsehood, given the complexity of the cause of action and the complexity of the statutory whistleblower provisions. Given that conclusion, I do not consider it was unreasonable for the respondent to refuse an offer made the weekend before trial and which was only open for a few hours.
Accordingly, in the particular circumstances, I do not consider that the respondent’s failure to accept the offer made on 27 November 2021 was sufficiently unreasonable to entitle ECS to indemnity costs of the proceedings in their entirety or from that date.
Application for indemnity costs resulting from the adjournment of the trial
On 21 December 2021, the trial was adjourned a second time in the circumstances set out in Schedule A to my reasons for judgment. ECS sought an order for costs on an indemnity basis.
The respondent did not formally apply for an adjournment of the trial but sent a number of emails to Chambers (without carbon copying the applicant) from early December asking for an adjournment. The respondent based the informal requests for an adjournment on medical reasons. However, the respondent refused to disclose to ECS the medical certificates obtained by her, and repeatedly insisted the Court must act on those medical certificates and adjourn the trial without ECS, or its solicitors and counsel, being provided with any information or being given an opportunity to make submissions to the Court. The Court made clear, through repeated communications, that the Court was obliged to accord procedural fairness, would not address the application in private and that the respondent could ask the Court to make confidentiality orders to limit the provision of the medical certificates to the counsel and solicitor for ECS. The respondent nevertheless continued to press her application, assert the Court must determine it in the absence of ECS and refuse to provide an unredacted copy of supporting certificates to ECS’ solicitor and counsel, even on a confidential basis. On the morning the trial resumed, the respondent provided the supporting medical information to ECS’ solicitor and counsel pursuant to confidentiality orders made by the Court. Once aware of the content of the medical certificates, ECS’ counsel forthwith acknowledged it was appropriate for the trial to be adjourned.
ECS sought its costs thrown away on an indemnity basis, primarily because the supporting medical documents were dated 8 and 9 December 2021 and it was unreasonable of the respondent to have not provided them until immediately before the trial resumed, including in circumstances in which the Court had explained to the respondent the availability of confidentiality orders to protect the information. As a consequence, the managing director of ECS had travelled to Adelaide for the trial on 21 December and ECS’ solicitors and counsel spent the weekend preparing for the trial.
The respondent opposed the application for indemnity costs on grounds including that she maintained the Court should have been sympathetic to the respondent’s position and acted on the medical certificates in private, she had been advised the Court would do so by lawyers informally assisting her and ECS had bullied her.
It was completely reasonable for the respondent to seek the adjournment given the nature of her medical issues. However, the manner in which she went about addressing the request for an adjournment, including providing the supporting information to the counsel and solicitor for ECS only shortly before the resumption of the trial, was unreasonable even allowing for her health issues and the fact she was self-represented. This was particularly the case taking into account the respondent’s ability to seek, and the Court’s willingness to make, confidentiality orders in relation to the medical certificates. The unreasonableness of her conduct resulted in ECS incurring unnecessary and avoidable costs. While making allowance for the respondent being self-represented, I nevertheless consider the respondent’s conduct in relation to the last minute adjournment of the trial on 21 December was sufficiently unreasonable to warrant an order for costs thrown away on an indemnity basis.
Other matters
The respondent, at times throughout the proceedings and in the hearing of this application, referred to her relative impecuniosity and being unable to afford a lawyer. This is not sufficient basis for refusing to make an order for costs.[36]
[36] Northern Territory v Sangare (2019) 265 CLR 164; Machado v Underwood (No 2) [2016] SASCFC 123 at [45] per Kourakis CJ and Nicholson J (with whom Gray J agreed).
In January 2022, the respondent sought by FDN 95 and FDN 100, among other things, the immediate dismissal of the action against her. I refused the applications in the circumstances set out in Schedule A to my reasons for judgment. ECS sought indemnity costs in relation to FDN 95 on the basis there was no proper evidence in support of it, the application had no prospects of success and ECS had made an offer on 11 January 2022 that if the respondent consented to the application being dismissed, ECS would not seek its costs. I reserved costs on the basis that the respondent ought to be given an opportunity to put forward any materials and submissions in opposition to the application. It does not appear that the application for indemnity costs was thereafter addressed by the respondent. I did not seek submissions from the respondent on the application for indemnity costs of FDN 95 because I have determined to refuse it. I do not consider the respondent as a self-represented litigant should be expected to have understood the extremely poor prospects of success of her interlocutory application which to some extent was based on her “whistleblower” assertions. In addition, the offer was made to her on 11 January and only open for acceptance until 12 January 2022. While I dismissed the applications brought by the respondent, there were aspects of the hearing of the interlocutory applications that assisted the Court in understanding the defence the respondent was to present at trial.
Conclusion

ECS is entitled to indemnity costs in relation to costs thrown away by reason of the adjournment on 21 December and to indemnity costs in relation to dealing with the respondent’s email communications. It is otherwise entitled to costs on a standard costs basis.
Orders
I make the following orders:
1.The respondent is to pay the applicant’s costs thrown away in consequence of the adjournment of the trial on 21 December 2021 on an indemnity basis.
2.The respondent is to pay the applicant’s costs of perusing and responding to the respondent’s correspondence from 11 October 2021 on an indemnity basis.
3.The respondent is to pay the remainder of the applicant’s costs of and incidental to the proceedings on a standard costs basis.

[2023] SASC 133

18 September 2023