FD v State of New South Wales & 2 Ors; Armidale & District Women's Centre v Waters (Costs)
[2007] NSWSC 78
•15 February 2007
CITATION: FD v State of New South Wales & 2 Ors; Armidale & District Women's Centre v Waters (Costs) [2007] NSWSC 78 HEARING DATE(S): 12 February 2007
JUDGMENT DATE :
15 February 2007JUDGMENT OF: Smart AJ at 1 DECISION: See para 32 CATCHWORDS: Alleged Calderbank letter. Indemnity costs refused after consideration of all the circumstances LEGISLATION CITED: Civil Procedure Act 2005 CASES CITED: Lemoto v Able Technical Pty Ltd & 2 Ors (2005) 63 NSWLR 300
Ridehalgh v Horsfield [1994] Ch 205PARTIES: FD v State of New South Wales & Armidale District & Women's Centre (The Centre); Armidale & District Women's Centre v Waters FILE NUMBER(S): SC 20584/02 COUNSEL: M Williams SC & S Hickey for Ms Waters
D Jordan for The CentreSOLICITORS: Abbott Pardy & Jenkins for Ms Waters
Kennedys for The Centre
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
SMART AJ
Thursday, 15 February 2007
FD v STATE OF NEW SOUTH WALES & ARMIDALE DISTRICT & WOMEN’S CENTRE (THE CENTRE)
ARMIDALE & DISTRICT WOMEN’S CENTRE v WATERS
JUDGMENT
1 On 18 December 2006 I delivered judgment dealing with the costs of some issues. I declined to order that Ms Waters, FD’s former solicitor, pay the Centre’s costs thrown away due to the vacation of the hearing date of 4 April 2005 and adjournment of the Centre’s application on 29 September 2005. I also declined to make an order that the State pay the Centre’s costs of the proceedings save for those payable by Ms Waters. I ordered the Centre to pay the costs (including the reserved costs) of its application that Ms Waters pay its costs thrown away as earlier mentioned.
2 Ms Waters now seeks an order that the costs order in her favour be on an indemnity basis.
3 The Centre’s application for an order that Ms Waters pay its costs thrown away, although ultimately unsuccessful, was based on grounds of some substance.
4 One further motion needs to be dealt with, namely, that of 1 May 2006 and the costs relating to it which were reserved. I will not repeat the facts set out in my judgment of 13 April 2006. and 18 December 2006.
5 In support of her application for indemnity costs Ms Waters of Abbott Pardy & Jenkins (APJ) relied on her FAX of 24 March 2006 to Minter Ellison, which her counsel described as a Calderbank letter. It is headed “Without Prejudice As To Costs”. Perhaps the word “Save” was intended to be inserted after the word “Prejudice”. The terms of the letter suggest that it was to be taken into account on the question of costs.
6 After a reference to the terms of s 99 of the Civil Procedure Act 2005 the letter stated:
“… in the event that your application fails indemnity costs will be sought against your client”.
7 The letter stated that the costs incurred by APJ (in resisting The Centre’s application) have been and would be “incurred without reasonable cause and in circumstances which are the making of your firm and/or your Counsel.”
8 The letter further stated “We are prepared to resolve this application on the basis that each party bear its own costs.”
9 The offer was stated to remain open until 5.00pm on 10 April 2006. The Centre’s application was, at that stage, due to be heard on 12 April 2006. The letter does not state whether the application should be struck out, withdrawn (discontinued) or dismissed. The alternative chosen may not have mattered practically if no order for indemnity costs was sought and The Centre and APJ each bore their own costs of the Centre’s application, but in theory the differences between these alternatives has some significance. The offer in the letter of 24 March 2006 was hard to accept without further elucidation.
10 It was not disputed that the offer was a purely Calderbank offer and that any decision to make a special costs order on the basis of the letter was purely discretionary.
11 The Centre relied on its FAX dated 24 March 2006 and sent early on 27 March 2006 (a Monday) referring to the impending hearing of the Centre’s costs applications on 12 April 2006 and noting that it would be seeking these orders against APJ:
1. Orders in accordance with the notice of motion filed on 22 April 2006 (which relates to the costs thrown away by your client as a result of the vacation of the 4 April 2005 hearing date); and
2. Costs orders arising out of your application for an adjournment at the hearing of various motions in the matter on 29 September 2005.
12 The FAX recorded that The Centre understood that APJ would be seeking to rely on the affidavits of P Waters of 31 August 2005 and 7 February 2006 and asked to be advised if APJ intended to rely on any other material. Ms Waters was given notice to attend for cross-examination.
13 The Centre submitted that when it made its application for costs against APJ, with Ms Waters being a partner, there did not appear to be any satisfactory explanation for APJ telling the Court the matter was ready to proceed in August/September 2004 and seeking a hearing date and then seeking in early March 2005 to vacate the hearing which was to take place from 4 April 2005.
14 The affidavit and oral evidence of Mr Cross, who handled the matter during 2004 was of importance and explained many of the difficulties experienced. His assessment of one of the Centre’s counsellors was that her evidence would assist FD. His affidavit was sworn on 5 July 2006.
15 The principal affidavit of Ms Waters was sworn on 11 April 2006 and superseded an earlier sworn version. This provided explanatory material.
16 I do not regard the affidavit of Mr Pardy of 5 July 2006 as being of importance in a costs context.
17 In the judgment of 18 December 2006 I endeavoured to explain why the costs orders sought by the Centre against Ms Waters should not be made. Amongst other matters, I thought that because of FD’s condition and her evidence being taken orally, the complex medical and treatment issues and the shortage of funds available to conduct her case a conventional approach could not be taken to the preparation of her case and the leading of the evidence. There were further complications of an alternate case based upon Dr Milton’s report and anticipated evidence and the large volume of documentary material.
18 Senior counsel for Ms Waters stressed that the hearing was vacated about one month before the hearing date of 4 April 2005 and that with that degree of notice the costs thrown away by the vacation of that hearing date were likely to be relatively small. The Centre replied that this should not be assumed. Dr Phillips was based in Adelaide and there were country witnesses. Senior counsel’s point was that it was probable that the costs thrown away by the vacation of the hearing date of 4 April 2005 and the costs thrown away by the adjournment on 29 September 2005 were likely to be significantly less than the costs of The Centre’s application that Ms Waters pay these costs. That submission is probably correct.
19 Senior Counsel for Ms Waters relied on two further points:
ii) The Centre had made serious allegations against Ms Waters without a sufficient base. The allegations were serious but I thought that despite mistakes being made what had happened had been sufficiently explained and that there had not been serious neglect, serious incompetence or serious misconduct. I also thought that Ms Waters had not improperly or without reasonable cause in circumstances for which she was responsible incurred unnecessary costs. However, the circumstances did call for an explanation.
i) The Centre had failed to give adequate particulars of its case against APJ and Ms Waters until 12 April 2006 when the matter was raised in Court. This was contrary to existing authority. Particulars should have been given. APJ and Ms Waters did not write or ask for them prior to 12 April 2006 despite the matter being before the Court on a number of occasions. See Ridehalgh v Horsfield [1994[ Ch 205 per Bingham MR and Lemoto v Able Technical Pty Ltd & 2 Ors (2005) 63 NSWLR 300 per McColl JA at [91] – [92]
20 It was, to put it mildly, unfortunate that the application that Ms Waters pay The Centre’s costs thrown away by the vacation of the hearing date and the adjournment on 29 September 2005 was fought so hard on both sides and at such length.
21 Counsel have referred me to and I have read and applied:
- Jones v Bradley (No 2) 2003 NSWCA 258
Leichhardt Municipal Council v Green [2004] NSWCA 341
Smec Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37]
22 I have considered all the circumstances and reached the conclusion that this is not a case in which the Court should order that The Centre pay the costs of Ms Waters on an indemnity basis, but she is entitled to an order that The Centre pay her costs on an ordinary basis. Ms Waters’ costs include those of APJ up to the date she was substituted for APJ.
23 Ms Waters sought orders that the application for costs against her be dismissed and that The Centre be confined to particulars of claim provided on 12 April 2006. The Motion was supported by Ms Waters affidavit of 1 May 2006. That covered some of the history of the matters. In response to the complaint of APJ, The Centre formulated and served particulars of its claim by 2pm on 12 April 2006. Thereafter, APJ objected that they were not the proper party and The Centre applied to amend its application by substituting Ms Waters for APJ. This was done to avoid any technical arguments. Ms Waters opposed the application. On 13 April 2006 I delivered judgment granting leave to amend and reserved the costs of the application. I gave these directions:
The Centre is to supply within 14 days, particulars of conduct, misconduct, omissions or defaults on which it relies to support its claim that Penelope Waters pay its costs as sought.
Penelope Waters is to seek any further particulars which she desires within 14 days thereafter (11 May 2006).
The Centre is to reply thereto on or before 25 May 2006.
- The Centre is to serve any further evidence on which it seeks to rely within 14 days.
- Penelope Waters is to serve any further affidavits on which she wishes to rely on or before 7 July 2006.
- Liberty to apply on 2 days notice. List the matter for mention on 14 July 2006 at 9.30am.
24 On 27 April 2006, Ms Waters sent a FAX seeking advice whether The Centre intended to serve any further material by 5pm that day or at all. By FAX dated 27 April 2006 Minter Ellison replied that The Centre relied on the particulars delivered on 12 April 2006.
25 The alleged right of The Centre to provide further particulars after Ms Waters gave evidence was reserved.
26 Minter Ellison pointed to the Easter and Anzac Day holidays as hampering their ability to comply with the timetable and advised that they expected to supply any further evidence on or before 5 May 2006.
27 Ms Waters, amongst other things, complained that The Centre had unilaterally sought to extend the Court’s timetable and was in breach of the Court’s orders. Thereafter the motion of 1 May 2006 was filed. It came on for hearing on 9 May 2006 before an Assistant Registrar who stood the motion over before me on 14 July 2006.
28 On 14 July 2006 the motion of 1 May 2006 was mentioned very briefly with Senior Counsel for Ms Waters asking that the costs of the motion of 1 May 2006 be reserved.
29 The costs of the Motion of 1 May 2006 are likely to be small and the matter was not adverted to by either counsel or by me at the hearing in October 2006 or when judgment was delivered on 18 December 2006. I raised the omission with counsel on 12 February 2007 during the argument as to indemnity costs.
30 An order should be made dismissing the motion of 1 May 2006. As to costs the Centre was in breach of the directions given on 13 April 2006 but in the circumstances, the taking out of the motion was precipitate. There should be no order as to the costs of either party of that motion; each should bear their own costs.
31 The orders made on 18 December 2006 have not been passed and entered. There is a clerical error in Order 2 of paragraph 153 of my judgment and “again” should read “against”. Order 6 in that paragraph is withdrawn and the following substituted:
6. The Centre pay the costs of Penelope Waters (including the reserved costs, other than those relating to the motion of 1 May 2006 of Penelope Waters) of its application that Penelope Waters pay The Centre’s costs thrown away due to the vacation of the hearing date of 4 April 2005 and to the adjournment of the hearing of The Centre’s amended motion of 23 July 2005 on 29 September 2005; such costs to be payable on the ordinary (party/party) basis. The costs of Penny Waters include those of APJ up to the date she was substituted on 13 April 2006.
6A. Dismiss the Motion of 1 May 2006 of Penelope Waters (strike out of The Centre’s application); no order as to the costs of either The Centre or Penelope Waters of that Motion.
32 Orders 1, 2 (as corrected), 3, 4, 5, 7 and 8 of 18 December 2006 stand. I make the following further orders:
2. Penelope Waters pay the costs of the Centre of her application for indemnity costs.
1. Application by Penelope Waters for costs on an indemnity basis in respect of The Centre’s application for a costs order against her personally in respect of costs thrown away dismissed.
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