Ford Motor Company of Australia Ltd v Lo Presti - [2009] WASCA 115

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: FORD MOTOR COMPANY OF AUSTRALIA LTD -v- LO PRESTI [2009] WASCA 115

CORAM: WHEELER JA
BUSS JA

HEARD: 15 APRIL 2009

DELIVERED : 26 JUNE 2009

FILE NO/S: CACV 25 of 2008

BETWEEN: FORD MOTOR COMPANY OF AUSTRALIA LTD
Appellant
AND
ANTONINO LO PRESTI
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :BEECH J
Citation  :LO PRESTI -v- FORD MOTOR COMPANY OF AUSTRALIA LTD [No 2] [2008] WASC 12 (S)
File No  :CIV 1583 of 2003

Catchwords:

Costs - Indemnity costs - Calderbank offer made by respondent before trial - Offer rejected by appellant - Respondent obtained a better result by judgment after trial - Test for determining whether indemnity costs should be awarded - Whether appellant's rejection of the Calderbank offer was unreasonable

Legislation:

Nil

Result:

Cross-appeal dismissed

Category: A

Representation:

Counsel:

Appellant: Mr T P Mitchell & Ms J Linsten
Respondent: Mr J R C Gordon

Solicitors:

Appellant: Clayton Utz
Respondent: Slater & Gordon

Case(s) referred to in judgment(s):

Alpine Holdings Pty Ltd v Warwick Entertainment Centre Pty Ltd [2003] WASC 53 (S)
Berrigan Shire Council v Ballerini (No 2) [2006] VSCA 65
Black v Lipovac [1998] FCA 699; (1998) 217 ALR 386
Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246
Carroll v The Queen [2009] HCA 13; (2009) 83 ALJR 579
Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353
Christofidellis v Zdrilic [2000] FCA 679
Commonwealth of Australia v Gretton [2008] NSWCA 117
Coulthard v Ford, No 8723 of 2002, Supreme Court of Victoria
Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Ghunaim v Bart (No 2) [2006] NSWCA 82
Gove v Black [2006] WASC 298 (S)
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
House v The King [1936] HCA 40; (1936) 55 CLR 499
Imbree v McNeilly [No 2] [2008] HCA 47; (2008) 82 ALJR 1501
Jones v Bradley (No 2) [2003] NSWCA 258
Leichhardt Municipal Council v Green [2004] NSWCA 341
Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12
Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12 (S)
MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236
Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425
Ofria v Cameron (No 2) [2008] NSWCA 242
Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007] VSC 516
Seven Network Ltd v News Ltd [2007] FCA 1489; (2007) 244 ALR 374
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
The Sanko Steamship Company Ltd v Sumitomo Australia Ltd (Unreported, FCA, 7 February 1996)
Townsend v Collova [2005] WASC 4
University of Western Australia v Gray (No 21) [2008] FCA 1056; (2008) 249 ALR 360

WHEELER JA: I agree with Buss JA.
BUSS JA: The respondent was an employee of the appellant. The appellant manufactures motor vehicles and the respondent had worked as a motor mechanic for two Ford dealerships from 1970 to 1987. The respondent suffers from fibrosis of the lungs, and he claimed this was caused by exposure to asbestos in the course of his employment. He claimed damages from the appellant in negligence.
On 19 February 2008, after a trial in the Supreme Court, Beech J entered judgment for the respondent (as plaintiff) against the appellant (as defendant). The judgment was for damages of $840,000. Quantum had been agreed between the parties in the course of the trial. See his Honour's reasons on liability: Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12.
The respondent then made application to the learned judge for an order that the appellant pay his costs of the action on an indemnity basis, or alternatively on a solicitor and own client basis. His Honour refused to make an order on the basis sought. Instead, he made the usual order that the appellant pay the respondent's costs, including any reserved costs, to be taxed if not agreed. See Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12 (S).
The appellant filed an appeal notice against the learned judge's decision on liability. However, on 24 December 2008, it discontinued the appeal.
The respondent filed a cross‑appeal against the learned judge's decision on costs. He asserts that his Honour erred in failing to make an order for indemnity costs.

The background facts

On 12 September 2007, the respondent offered to settle his claim for $450,000, plus indemnities for certain repayments he was obliged to make to Medibank Private and the Health Insurance Commission, plus the costs of the action to be taxed if not agreed. The offer was contained in a letter dated 12 September 2007 from the respondent's solicitors to the appellant's solicitors. After setting out the respondent's offer to settle for $450,000 plus the indemnities and costs, the letter read:
This offer of settlement is open to 5 pm on 21 September 2007. This offer is made 'without prejudice' save for the question of costs. Please contact your client for instructions. Please also acknowledge receipt of this letter.

In the event that the Defendant does not accept this offer and the matter proceeds and settles or results in judgment more favourable than the amount of $450,000 then this letter will be produced and the Plaintiff will apply for costs on a solicitor-own‑client basis from the date of this letter in accordance with the principles applied in Calderbank v Calderbank [1975] 3 All ER 333 (GAB 3).

By letter dated 13 September 2007, the appellant's solicitors rejected the respondent's offer.
The trial commenced on 24 September 2007.

The learned judge's reasons on costs

The learned judge outlined in his reasons on costs some general principles relevant to the exercise of the court's discretion.
His Honour said:
(a)An order for indemnity costs will be made only if there is some special or unusual feature in the case to justify departure from the usual order [8].
(b)The categories of cases in which the discretion to award indemnity costs may be exercised are not closed [9].
(c)Most of the cases in which indemnity costs have been awarded have involved some element of improper or unreasonable conduct by the party against whom the order is made (or their advisers) in the conduct of the proceedings [10].
The learned judge expressed the view that the rejection by a defendant of an offer of compromise which, in the events which happen, is more favourable to the defendant than the outcome of the trial 'does not necessarily or presumptively lead to an award of indemnity costs for the plaintiff' [11]. According to his Honour, all the circumstances must be considered in determining whether justice requires the exceptional exercise of the power to award indemnity costs [11]. Further, the making of an offer of settlement which is more favourable to the offeree than the result of the trial does not give rise to any prima facie entitlement to indemnity costs [17].
His Honour referred to the decision of Templeman J in Gove v Black [2006] WASC 298 (S). Templeman J held that a failure to accept an offer of settlement may give rise to an award of indemnity costs if the failure to accept the offer was so unreasonable in all the circumstances that an order for costs on a party and party basis would not be just [45] ‑ [46]. In the present case, the learned judge adopted this formulation.
The learned judge decided that, in the circumstances of the case, the appellant's rejection of the respondent's offer fell 'well short of being so unreasonable as to mean that it is just to order indemnity costs' [21]. His Honour then set out his process of reasoning to this conclusion, as follows:
The defendant had a case of substance, supported by a substantial body of expert evidence. In some instances (Mr Rogers, Associate Professor McKenzie), the evidence of the defendant's experts conflicted directly with the plaintiff's experts. In other cases, the questions were as to the weight to be given to expert evidence on a subject (for instance, epidemiology), in determining the cause of the plaintiff's fibrosis.
The defendant cannot be expected to have been able to predict what my findings would be in determining the various issues regarding the expert evidence. Many of the plaintiff's submissions in support of an award of indemnity costs seem to me to involve, implicitly, expecting the defendant to have been able to do so.
The defendant's conduct in deciding to have the court decide the substantial issues arising from the expert evidence was, in my opinion, not unreasonable and certainly not so unreasonable as to make it just to order indemnity costs.
The plaintiff submitted that the defendant ought to have recognised that it faced a real risk in the litigation. I accept that that is so, but that fact alone does not provide an adequate basis for the award of indemnity costs.
Nor, in my opinion, is the question to be determined (as some of the plaintiff's submissions suggest), by whether the defendant reasonably held the view that it was 'likely' to succeed in its defence. That is a judgment which the court is not well placed to make, in that the views expressed by those who advised the defendant are not available. (The defendant's submissions contain various statements as to what the defendant 'believed' prior to trial, in various respects. As these assertions are not supported by evidence I have not had regard to them.) In any event, a decision to litigate a case of substance which had a reasonable prospect of success (albeit that such prospects were thought to be less than 'even money') in the face of an offer to settle, would not, in the absence of further facts, give rise to a sufficient ground to order indemnity costs.
It follows that I do not accept the plaintiff's submission that 'the defendant having chosen to take the risk of litigating, there ought to be a price to pay beyond party/party costs'. The 'price to be paid' by the defendant includes the excess of its liability under the judgment compared to the settlement offer, its own costs after the offer was rejected, as well as its liability for the plaintiff's costs on a party-party basis. In any case, for the reasons I have sought to explain, I do not consider that the plaintiff's submission in this regard reflects a proper basis for the award of indemnity costs.
This was not an instance where a party's case was doomed to fail, or suffered from a fatal flaw which was pointed out by the other party in the Calderbank offer; see NMFM [87].
The plaintiff emphasised that the defendant rejected his offer within one day of receiving it. In the circumstances of this case I do not consider that that fact affords any support for a conclusion that the rejection was hasty or pre-emptory and so unreasonable in the sense that I have explained.
The plaintiff also submitted that the relative ability of the parties to bear the additional costs of the trial is relevant. I do not accept that the differing means of the parties provides any ground for ordering indemnity costs.
In my opinion, neither the defendant's rejection of the offer of settlement, nor any other aspect of the defendant's conduct referred to in the plaintiff's submissions provides any sufficient basis to order indemnity costs.
The plaintiff seeks, in the alternative, costs on a solicitor-own client basis. No separate submissions were made in support of that application.
For the reasons already stated I am not satisfied that it is appropriate in this case to depart from the usual order for costs on a party-party basis [22] ‑ [33].

The respondent's amended grounds of cross‑appeal

The respondent's amended grounds of cross‑appeal are prolix. They read:
In ruling that the defendant's rejection of the plaintiff's 'Calderbank' offer was, in light of the outcome of the case, not unreasonable or not so unreasonable so as to warrant an order for indemnity costs, his Honour erred:
1.In law, in acting on wrong principle, in that his Honour applied the wrong test to determine the plaintiff's entitlement to indemnity costs. His Honour required the plaintiff to demonstrate the inherently or excessively unreasonable nature of the defendant's conduct when the correct test is whether, in all the circumstances, giving weight to the objective conduct of both parties, taking account of the defendant's subjectively unreasonable conduct, recognising and applying the public policy imperatives and recognising the breadth of difference between the compromise offered and the outcome achieved, justice required the imposition of the special costs order from the date of the offer.
2.In law, in failing to give any weight to the public policy considerations as to the resolution of litigation which judges of the High Court, the WA Supreme Court and other superior courts have held to be a most important consideration in determining whether a party has behaved reasonably in rejecting an offer and the consequences which should follow from such rejection;
3.In mixed fact and law, in giving weight or undue or excessive weight to extraneous and irrelevant matters including;
(a)the amendment to the Rules of Court relating to offers of compromise;
(b)the (wrongly) assumed effect of the said amendment on the decisions of Roberts-Smith J in Alpine Holdings Pty Ltd v Warwick Entertainment Centre Pty Ltd [2003] WASC 53, and Le Miere J in Townsend v Collova [2005] WASC 4, on the basis of which his Honour determined not to follow the approach set forth in those decisions;
(c)the approach to the resolution of the issue in the case of Gove v Black [2006] WASC 298 (S) [45] ‑ [46] which was a very different type of case where plaintiffs had been invited to wholly discontinue their claims [19];
(d)the fact that the defendant's case was supported by expert evidence [22], (which evidence was, in any event, ultimately rejected or not preferred);
(e)the inability of the defendant to predict his Honour's findings [23] (when only one of two findings on each issue was possible); and
(f)the defendant's wish to have the court make findings on the issues [24].
4.In mixed fact and law, in failing to give any or sufficient weight to important considerations including;
(a)the approach to resolution of the question of the proper order for costs in the circumstances approved by Roberts‑Smith J in Alpine Holdings following Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425;
(b)his Honour's acceptance that the defendant ought to have recognised that it faced a real risk in the litigation [25];
(c)his Honour's recognition that the defendant might have assessed its prospects of success as unlikely or less than 'even money' [26];
(d)failing to distinguish that the price to be paid for failing to accept a reasonable offer which was ultimately bettered is different to (and ought to have been something more than) the price to be paid for litigating and losing (in the absence of any, or any reasonable offer) [27];
(e)the defendant's conduct in the course of the litigation;
(f)the peremptory rejection of the plaintiff's offer within 24 hours of receipt as evincing its intention to litigate the claim whatever its prospects [29];
(g)failing to consider or give weight to the consequences to the plaintiff of having to bear the additional costs that should have been avoided by acceptance of the substantial compromise he offered;
(h)the possibility that the defendant had earlier settled or lost similar claims;
(i)the defendant's prospects, objectively assessed, of succeeding in its defence to the claim;
(j)the reasonableness or otherwise of the defendant's reasons (including the alleged potentially adverse consequences for its business) for litigating the claim in the face of the offer made;
(k)the reasons given by the defendant for rejecting the offer and the reasonableness of those reasons at the time of the rejection of the offer;
(l)the defendant's failure to put on evidence of its beliefs and reasoning at the time of the offer (see [26]) and justifying its conduct in response to the evidence adduced by the plaintiff;
(m)that the defendant must have realised that the offer made represented a substantial deduction ‑ of the order of 50% ‑ on the potential outcome based on a reasonable assessment of damages, the defendant ultimately substantially agreeing to the quantum of damages sought.
5.In law in failing to accord natural justice in denying the plaintiff the opportunity to make further submissions responsive to the defendant in circumstances where his Honour required the plaintiff to discharge the burden of demonstrating the inherently or excessively unreasonable conduct of the defendant (WAB 9 ‑ 11).

The relevant principles governing an award of indemnity costs

A Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable. See Jones v Bradley (No 2) [2003] NSWCA 258 [7] ‑ [9]; Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 [4]; Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 [23]; Berrigan Shire Council v Ballerini (No 2) [2006] VSCA 65 [10]; Ofria v Cameron (No 2) [2008] NSWCA 242 [20].
All of the relevant facts and circumstances must be considered in determining whether a party's rejection of a Calderbank offer was unreasonable. See SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 [37]; Jones v Bradley (No 2) [7] ‑ [9]; Leichhardt Municipal Council v Green [2004] NSWCA 341 [46]; Hazeldene's Chicken Farm [23]; Berrigan [10]; Ghunaim v Bart (No 2) [2006] NSWCA 82 [23].
The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable. See SMEC [37].
As the Court of Appeal of Victoria noted in Hazeldene's Chicken Farm, deciding whether conduct is 'reasonable' or 'unreasonable' always involves matters of judgment and impression [24]. Although it is neither possible nor desirable to enumerate exhaustively all circumstances which must be taken into account, in a particular case, in deciding whether the rejection of a Calderbank offer was unreasonable, the Court of Appeal said that, ordinarily, regard should be had to, at least, the following:
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree’s prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for … indemnity costs in the event of the offeree's rejecting it. [25].
In Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007] VSC 516, Byrne J made these observations in relation to the meaning of 'unreasonable' in the context of the rejection of a Calderbank offer:
A decision to accept or not an offer of this kind will ordinarily be based upon the offeree’s perception of its ultimate chances of success, that is, it involves a prediction as to the likely outcome of the trial. At the time the debate about costs occurs the trial will normally be over; the event will have demonstrated that the prediction which underlay the decision was not fulfilled, that it was erroneous or even imprudent (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 228, per Sheppard J). I put to one side the case where the decision was one based on factors other than the prospect of success. A decision to commence or to press on with litigation which is based on the desire to grind a less resourced opponent into capitulation or to put it out of competitive business could hardly be countenanced by the court. If an offeree sought to justify its decision to refuse an offer by reference to some consideration other than the prospect of success, this would be a matter for it to raise, leaving always the ultimate onus on the issue upon the offeror. In the same way that the failure to achieve a more advantageous result will not automatically put the offeree at risk, so too it is not sufficient for it to avoid the consequence of its erroneous prediction that it says only that the outcome was uncertain. The outcome of almost all litigation is uncertain. The erroneous prediction may not, however, be an unreasonable one if the predictor was not, at the time, for good reason in possession of sufficient information to make an assessment or if the circumstances upon which it was based later changed. It must be acknowledged that it is part of the ordinary function of a lawyer to make predictions of this kind. The lawyer must make them at the outset and during the litigation in order to enable the client to make responsible and informed decisions to commence the litigation, to pursue it and to make the various decisions in the course of the proceeding’s progress to trial and judgment [13].

The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in his or her favour. See Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 [26]; Ghunaim [25]; Commonwealth of Australia v Gretton [2008] NSWCA 117 [46], [74].
In Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353, the Court of Appeal of New South Wales, after reviewing a number of authorities, said:
While the general rule remains that costs should be assessed on a party and party basis, it is important that the standard to be applied in awarding indemnity costs not be allowed to diminish to the extent that an unsuccessful party will be at risk of an order for costs assessed on an indemnity basis, absent some blameworthy conduct on its part. A test of unreasonableness should not be upheld on other than clear grounds [113].
Decisions of Australian intermediate courts of appeal in recent years have established that the critical question in deciding whether to award indemnity costs against a party who has rejected a Calderbank offer is whether the rejection was unreasonable in the circumstances. This is the test which must be applied in Western Australia.
As I have mentioned, the learned judge, in the present case, accepted the formulation of Templeman J in Gove, namely, that indemnity costs may be awarded if the failure to accept a Calderbank offer was 'so unreasonable in all the circumstances that an order for costs on a party and party basis would not be just'. Templeman J had adopted this approach after considering and approving the decisions in TheSanko Steamship Company Ltd v Sumitomo Australia Ltd (Unreported, FCA, 7 February 1996) and Christofidellis v Zdrilic [2000] FCA 679. In Sanko, Sheppard J said that the usual order that the losing party pays the successful party's costs on a party and party basis should be made where the losing party has rejected a more favourable Calderbank offer unless the rejection of the offer was 'plainly unreasonable'. In Christofidellis, Einfeld J referred to various authorities including Sanko, and held:
The effect of this case law is that the respondents are only entitled to an order for costs on an indemnity basis if the applicant's failure to accept one of their [Calderbank] offers was so unreasonable in all the circumstances of this case that an order for costs on a party and party basis will not do them justice [25].
In Black v Lipovac [1998] FCA 699; (1998) 217 ALR 386, however, the Full Court of the Federal Court expressed reservations about the view of Sheppard J in Sanko that the conduct of a party who has rejected a Calderbank offer must be 'plainly unreasonable'. Miles, Heerey and Madgwick JJ said:
[W]e would not, with respect, necessarily endorse the view of Sheppard J in Sanko that the conduct of the offeree has to be 'plainly unreasonable'. To adopt an especially high standard of unreasonableness would operate as a fetter on the discretion to award indemnity costs and diminish the effectiveness of the Calderbank offer as an incentive to settlement. There is in our view force in the comments of Byrne J in the Supreme Court of Victoria in Mutual Community Ltd v Lorden Holdings Pty Ltd (unreported, SC(Vic), Byrne J, No 10561/90, 28 April 1993, BC9303878) at 12 ‑ 13:
'The policy of the court is to encourage litigating parties to undertake genuine settlement negotiations and, for that purpose, to face up to serious offers of settlement …
The response of a litigant in receipt of an offer of settlement will always be affected by the prospect that the sum which the court might order including party and party costs may be less advantageous than the terms of the offer. Experience, however, shows that this prospect alone is not always sufficient to compel a litigant to face up to the offer. The further prospect of a super‑added costs penalty if a reasonable offer be not accepted is a salutary inducement to an offeree to undertake this often painful task' [218].
More recently, in Seven Network Ltd v News Ltd [2007] FCA 1489; (2007) 244 ALR 374, Sackville J said that the policy reasons given in Black for avoiding the word 'plainly' were persuasive [62], and in University of Western Australia v Gray (No 21) [2008] FCA 1056; (2008) 249 ALR 360, French J observed:
On the question of the level of unreasonableness necessary to attract the discretion, I respectfully agree with the comment of Sackville J in Seven Network Ltd v News Ltd (2007) 244 ALR 374; [2007] FCA 1489 at [62] questioning the utility of substituting a requirement that rejection be 'plainly unreasonable' for the requirement that it be 'unreasonable'. Given the evaluative character of the judgment involved the addition of the word 'plainly' which is itself evaluative, has no useful function [36].
Although it is reasonably arguable that there is no real distinction between a refusal of a Calderbank offer that is 'plainly unreasonable' as distinct from 'merely unreasonable' (see Seven Network [62]), the Court of Appeal of Victoria in Hazeldene's Chicken Farm thought there was a distinction of substance between these formulations. Warren CJ, Maxwell P and Harper AJA observed:
We see no justification for a more stringent test such as 'manifestly' or 'plainly' unreasonable [23].
In my opinion, the weight of recent authority at the level of Australian intermediate courts of appeal is against qualifying the concept of 'unreasonableness' by words such as 'manifestly', 'plainly' or 'so' which, on one view, suggest (if not require) a more stringent test.
In the present case, the learned judge may have thought there was a distinction of substance between 'mere unreasonableness' on the one hand, and conduct that is 'so unreasonable' as to make it just to order indemnity costs on the other. This is apparent from the following statement in his Honour's reasons:
The defendant's conduct in deciding to have the court decide the substantial issues arising from the expert evidence was, in my opinion, not unreasonable and certainly not so unreasonable as to make it just to order indemnity costs [24]. [emphasis added]
But, however that may be, the point is not of any consequence in this appeal in that, as I explain at [35] below, at the hearing of the appeal counsel for the respondent expressly disavowed any suggestion that the learned judge had applied the wrong test. Further and in any event, even if there is a distinction of substance between 'mere unreasonableness' on the one hand, and 'so unreasonable' as to make it just to order indemnity costs on the other, I am satisfied that on the test of 'unreasonableness', without gloss or qualification, the respondent's application for indemnity costs should (properly) have failed.
Australian intermediate courts of appeal have disapproved the view expressed by Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 that unreasonableness is, on the face of it, to be found in the rejection by an offeree of a Calderbank offer which is not bettered on judgment (451). It has been established that there is no presumption of an entitlement to an award of indemnity costs in this situation. The unreasonableness of the rejection of the offer is not determined by a presumption. Rather, it depends on the circumstances of the particular case. The decision in Multicon was overruled in Jones v Bradley (No 2) [6] ‑ [9]. See also the observations in Leichhardt Municipal Council [56].
None of the principles I have set out is inconsistent with the decision of the High Court in Imbree v McNeilly [No 2] [2008] HCA 47; (2008) 82 ALJR 1501. That decision, in which the High Court awarded indemnity costs in the context of a rejected Calderbank offer, turned on its own facts. The High Court did not state any new principle.

The merits of ground 1

Ground 1 asserts that the learned judge applied the wrong test in determining the respondent's application for indemnity costs.
However, counsel for the respondent, in effect, abandoned ground 1 at the hearing of the appeal.
At the hearing, counsel said
we are happy to proceed on the basis of endeavouring to persuade your Honours that the test adopted by his Honour is the test that we should meet in endeavouring to persuade your Honours that there was an error made (appeal ts 5).
He then confirmed that he was proceeding on the basis that the learned judge had postulated the correct test, but had misapplied it. Counsel expressly disavowed any challenge to the correctness of the test formulated by his Honour (appeal ts 5, 15).
It is therefore unnecessary to consider ground 1. The ground is dismissed.

The merits of ground 2

Ground 2 asserts that the learned judge made an error in that he failed to give 'any weight to the public policy considerations as to the resolution of litigation'.
No doubt, the settlement of pending proceedings as soon as possible and, in any event, before trial, is an important aspect of public policy in contemporary litigation. It is an objective which the courts endeavour to promote, including by mediation and procedures for the making of settlement offers through rules of court and the Calderbank rule.
The court's encouragement of the early resolution, where possible, of litigious disputes, is at least part of the underlying rationale for the availability of special costs orders where a party's rejection of a Calderbank offer was unreasonable in the circumstances. This public policy consideration is part of the context in which the court evaluates the reasonableness or unreasonableness of a party's rejection of a Calderbank offer. The consideration does not, however, require separate or individual attention in deciding whether to make an award of indemnity costs in a particular case. A judge does not make an error if he or she fails to accord separate or individual attention to the consideration.
Ground 2 fails.

The merits of ground 3

Ground 3 asserts that the learned judge gave 'weight or undue or excessive weight' to irrelevant or extraneous matters. The matters relied on are set out in six paragraphs.
The learned judge's decision not to award indemnity costs to the respondent involved the exercise of a judicial discretion. The principles of law which regulate the circumstances in which an appellate court may review a primary judge's exercise of discretion therefore apply. It is necessary for the respondent to establish an express or inferred error. See House v The King [1936] HCA 40; (1936) 55 CLR 499, 504 ‑ 505; Carroll v The Queen [2009] HCA 13; (2009) 83 ALJR 579 [7] ‑ [8].

Paragraphs (a) and (b) of ground 3

Paragraph (a) of ground 3 asserts that the learned judge made an error in that he gave weight, or undue or excessive weight, to an extraneous and irrelevant matter, namely, the amendment of the rules of court relating to offers of compromise. Paragraph (b) of the ground asserts that his Honour made an error in that he gave weight, or undue or excessive weight, to an extraneous and irrelevant matter, namely, 'the (wrongly) assumed effect of the said amendment' on the decisions in Alpine Holdings Pty Ltd v Warwick Entertainment Centre Pty Ltd [2003] WASC 53 (S) and Townsend v Collova [2005] WASC 4.
The learned judge took into account the amendments to O 24A of the Rules of the Supreme Court of Western Australia 1971 (WA), which were made after the decision in Alpine Holdings and before the Calderbank offer in the present case, in determining the principles which should govern the exercise of his discretion. His Honour noted (correctly, with respect) that there was considerable force in the matters referred to by Lindgren J in MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236, 240, in support of the proposition that (contrary to the view of Rolfe J in Multicon) the rejection of a Calderbank offer does not give rise to a prima facie entitlement to an award of indemnity costs [13]. His Honour then said that, in any event, in view of the amendments to O 24A which took effect on 1 March 2007, it was unnecessary to decide whether he should follow the approach of Roberts-Smith J in Alpine Holdings. His Honour explained that this was because Roberts-Smith J's approach was founded upon the then prima facie entitlement of a plaintiff who had made an offer under O 24A to indemnity costs in the circumstance that the result of the trial was less favourable to the defendant than the terms of the offer. The amendments to O 24A mean that there is now no such prima facie entitlement under that provision. Accordingly, the foundation for Roberts-Smith J's view that the rejection of a Calderbank offer can give rise to a presumption in favour of indemnity costs no longer applied [14].
As I have mentioned, counsel for the appellant expressly disavowed any suggestion that the learned judge had applied the wrong test. On that basis, I am of the opinion that his Honour adopted the correct approach to the exercise of his discretion. He correctly, with respect, analysed and distinguished Alpine Holdings. His taking into account the amendments to O 24A was not productive of any error. There is no substance in pars (a) and (b) of ground 3.

Paragraph (c) of ground 3

Paragraph (c) of ground 3 asserts that the learned judge made an error in that he gave weight, or undue or excessive weight, to an extraneous and irrelevant matter, namely, the approach to the resolution of the costs issue in Gove, 'which was a very different type of case where plaintiffs had been invited to wholly discontinue their claims'.
The learned judge referred to Gove in formulating the principles to be applied in the exercise of his discretion. As I have mentioned, counsel for the appellant expressly disavowed any suggestion that his Honour had applied the wrong test. The approach to the resolution of the costs issue in Gove was not, in the sense referred to in House, a factual matter to which his Honour gave weight in the exercise of his discretion. There is no substance in par (c) of ground 3.

Paragraphs (d), (e) and (f) of ground 3

Paragraphs (d), (e) and (f) of ground 3 assert that the learned judge made an error in that he gave weight, or undue or excessive weight, to extraneous and irrelevant matters, namely, the fact that the appellant's case was supported by expert evidence (which evidence was, in any event, ultimately rejected or not preferred); the inability of the appellant to predict his Honour's findings (when only one of two findings on each issue was possible); and the appellant's wish to have the court make findings on the issues.
As to pars (d) and (e), the learned judge, in deciding upon the manner in which he should exercise his discretion, examined whether the appellant's rejection of the Calderbank offer was unreasonable. His Honour engaged in this task, correctly in my respectful opinion, by assessing the relative strength of the appellant's defence as at the time the offer was made. This necessarily required a consideration of the evidence adduced at the trial and the certainty or otherwise, at the time the offer was made, of the outcome of the trial. I am not satisfied that his Honour's exercise of discretion was vitiated by any express or inferred error, as alleged by the respondent.
As to par (f), the learned judge found, correctly in my respectful opinion, that the appellant's conduct in deciding to have the court adjudicate on the substantial issues arising from the expert evidence was not unreasonable [24]. His Honour did not make a finding as to the existence of any subjective desire by the appellant to seek the court's advice.
Paragraphs (d), (e) and (f) of ground 3 are without substance.

The merits of ground 4

Ground 4 asserts that the learned judge made an error in failing to give any or sufficient weight to thirteen 'important considerations', which are then enumerated in separate paragraphs.

Paragraph (a) of ground 4

Paragraph (a) of ground 4 asserts that the learned judge made an error in failing to give any or sufficient weight to the approach to the resolution of the question of the proper order for costs 'in the circumstances approved by Roberts‑Smith J in Alpine Holdings following Rolfe J in Multicon'.
As I have mentioned, counsel for the appellant expressly disavowed any suggestion that the learned judge had applied the wrong test.
In any event, as I have observed in considering pars (a) and (b) of ground 3, the learned judge correctly distinguished Alpine Holdings. Also, the view expressed by Rolfe J in Multicon has been disapproved. See [31] above.
Paragraph (a) is without substance.

Paragraphs (b), (c), (d) and (f) of ground 4

Paragraphs (b), (c), (d) and (f) of ground 4 assert that the learned judge made an error in failing to give any or sufficient weight to the following:
(a)his Honour's acceptance that the appellant ought to have recognised that it faced a real risk in the litigation [25]: par (b);
(b)his Honour's recognition that the appellant might have assessed its prospects of success as unlikely or less than 'even money' [26]: par (c);
(c)failing to distinguish that the price to be paid for failing to accept a reasonable offer which was ultimately bettered is different from (and ought to have been something more than) the price to be paid for litigating and losing (in the absence of any, or any reasonable offer) [27]: par (d); and
(d)the pre‑emptory rejection of the respondent's offer within 24 hours of receipt as evincing its intention to litigate the claim whatever its prospects [29]: par (f).
It is plain from the learned judge's reasons that each of the considerations enumerated in pars (b), (c), (d) and (f) of ground 4 were taken into account by him. They are expressly referred to in his reasons at [25], [26], [27] and [29].
The learned judge's reasons do not reveal any error. I am not satisfied that the weight given by his Honour to the considerations in question was wrong. Paragraphs (b), (c), (d) and (f) are without substance.

Paragraph (e) of ground 4

Paragraph (e) of ground 4 asserts that the learned judge was in error in failing to give any or sufficient weight to the appellant's conduct in the course of the litigation.
The respondent's written submissions in support of par (e) read, relevantly:
(i)In its draft statement of issues provided to the plaintiff (dated 25 September 2007, which is 13 days after it received the offer), the defendant stated that 'no claim of asbestos‑linked disease consequent upon occupational exposure of motor mechanics has been accepted by any common Law Court in the western world'. In its Statement of Issues (dated 26 September 2007) the defendant said it was 'not aware of any case in which a mechanic has succeeded in a court claim against a car manufacturer arising out of exposure from some toxic element therein'. The defendant at the time it made these statements must have known them to be untrue. Its parent company had lost a number of such cases. Moreover, it had settled such a claim in Victoria.
(ii)The defendant argued in the costs application that it was entitled to believe that the evidence of Dr Paustenbach and Dr Goodman would be preferred to evidence adduced for the plaintiff. Dr Paustenbach's (and Dr Goodman's) links to the United States car companies, including the defendant's parent company Ford US, were readily ascertained by the plaintiff. Most of the major research on which they relied in their expert reports was paid for by Ford US and the other US car companies, and acknowledgement of this funding was included in those papers. Yet despite the links between Dr Paustenbach (and Dr Goodman) and the defendant's parent company, and the fact of Dr Paustenbach's extensive financial relationship with the defendant's parent company, and the fact that Dr Paustenbach's initial involvement in asbestos/mechanic issues came at the behest of the defendant's parent company, no reference to any of these issues was included in the expert reports. Dr Paustenbach told the court that he understood that Australian courts required a greater degree of independence for expert witnesses than did US courts. The defendant, which must have known of Dr Paustenbach's extensive relationship with the United States car industry and which should have seen that the Court was made aware of this relationship, ought to have contemplated the possibility of adverse assumptions about the evidence and the reduced weight that might be accorded to such evidence. The defendant's submission made clear that no such consideration was engaged in. The defendant's level of confidence that the witnesses would be accepted and preferred was objectively unreasonable conduct.
(iii)On 14 September 2007 the defendant served its lay witness statements; Gary Pettit and Peter Cattley (former Anderson Ford employees), David Ford, a former senior engineer at Ford Australia and Ford US, and an unsigned statement for Lenny Commons, the plaintiff's employer at Col Commons where Mr Lo Presti worked from 1975 to 1987. The statements for Mr Cattley and Mr Pettit were dated September 2006; Mr Ford's statement was dated 9 September 2007. The defendant's lay witness statements supported the plaintiff's case in many respects, especially with respect to the dust in the Quick Service, and the lay witnesses, with the exception of Mr Ford, were not called by the defendant at trial. Mr Ford's witness statement provided confirmation for the plaintiff of the frequent communication between Ford US and Ford UK and demonstrated the ease with which Ford Australia could have accessed information held by Ford US (which information had earlier been made available by the plaintiff to the defendant) about the dangers of asbestos in brakes for mechanics. If the defendant's swift rejection of the plaintiff's offer was due to the allegation in Mr Commons' statement that there was an alternate exposure, then such confidence was not reasonable. Indeed, there are sound reasons for concluding that the defendant's advisers were well aware that the allegation was unfounded and the service of it should be taken into account in considering the reasonableness of the defendant's conduct. That unsigned witness statement was served on the plaintiff on 14 September 2007. It contained an allegation that Mr Lo Presti had spent time working on the weekends carting asbestos cement sheets. Mr Commons said the work had been organised by a Mr John Kuhne. The plaintiff's lawyers spent many hours over the next days searching for Mr Kuhne who was eventually located working on a mine site near Southern Cross. The circumstances of this episode are set out in the affidavit, sworn by Michael Magazanik, Mr Lo Presti's solicitor. Mr Kuhne instructed that he knew Mr Lo Presti, that Mr Lo Presti to his knowledge had never worked with asbestos cement sheets, and that he had never organised such work. Mr Kuhne added that he had told a lawyer from Perth this information. The plaintiff's solicitors then contacted the defendant's solicitor Dr Maxwell who confirmed that Clayton Utz had interviewed Mr Kuhne. On Friday 21 September, the last weekday before the trial, and the day the Calderbank offer would have expired had it not already been rejected, Dr Maxwell advised that the reference to carting asbestos cement sheets would be dropped from Mr Commons' witness statement. The provision of this witness statement, with the reference to carting asbestos cement sheets, caused an unnecessary diversion of the plaintiff's resources on the eve of the trial, and caused great distress to the plaintiff, under circumstances where the allegation should never have been included in the witness statement and never served. Further, the defendant had had the material relating to the alternative exposure scenario for years and did not put the matter to the plaintiff until a few days before the trial (WAB 27 ‑ 29).

Some of these allegations are unsupported by the material before this court in the appeal.
In any event, there is a distinction between whether a party's conduct in the course of litigation should result in an award of indemnity costs on the one hand and whether a party has unreasonably rejected a Calderbank offer on the other. An award of indemnity costs may be made where there has been improper or unreasonable conduct by a party or his legal advisers. As Pullin J noted in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95:
An order for an indemnity costs order is a mark of disapproval on the part of the court about the improper or unreasonable conduct of litigation [25].
There was no submission made to the learned judge, and there was no submission made in the appeal, as to the items of work undertaken by the respondent that were unnecessary or were required by reason of the appellant's alleged improper conduct. This court was informed by counsel for the appellant that if any such submission had been made it would have been opposed.
Paragraph (e) is without substance.

Paragraph (g) of ground 4

Paragraph (g) of ground 4 asserts that the learned judge made an error in that he failed to give any or sufficient weight to the fact that the respondent would have to bear the additional costs that should have been avoided by the appellant accepting the substantial compromise he offered.
Paragraph (g) involves, in substance, a re‑statement of the potential consequences for the respondent if he is not awarded indemnity costs. The submission appears to be based on the proposition that the respondent has a prima facie entitlement to indemnity costs. There is no such prima facie entitlement.
I am not satisfied, on the material before this court in the appeal, or on my examination of the learned judge's reasons, that his Honour made the alleged error.
Paragraph (g) is without substance.

Paragraph (h) of ground 4

Paragraph (h) of ground 4 asserts that the learned judge made an error in failing to give any or sufficient weight to the possibility that the appellant had earlier settled or lost similar claims.
The respondent's written submissions in support of par (h) read, relevantly:
[H]is Honour was prepared to accept [24] the defendant's asserted position that it genuinely wished to submit the contested issues to adjudication. His Honour did not question the genuineness of this intention in light of the defendant's parent having done so and lost and the defendant having foregone the opportunity to do so in the earlier case of Coulthard, where its uncompromising position was apparently not adopted. Nor did his Honour find inconsistency in that determination and a belated offer to resolve the case during trial (WAB 30).
The appellant's written submissions to the learned judge on this point were:
56.Prior to the trial of this matter, it was the defendant's understanding that no 'asbestos' claim brought by a mechanic against a car manufacturer had been successful anywhere in the world. In that sense, the plaintiff's claim was unprecedented. The cases to which the plaintiff draws attention to argue against that view (see [58], [59] & [61] of the plaintiff's submissions), are 'mesothelioma' claims which are quite different (see par 26, defendant's response to plaintiff's closing submissions, dated 8 November 2007) (GAB 99).
However this may be, the fact that the appellant's holding company had apparently litigated unsuccessfully similar proceedings in the United States of America and that the appellant had previously settled similar proceedings in Australia (Coulthard v Ford, No 8723 of 2002, Supreme Court of Victoria), does not vitiate the learned judge's finding, in the present case, that the appellant's conduct in deciding to have the court decide the substantial issues arising from the expert evidence was not unreasonable in the circumstances [24].
Paragraph (h) is without substance.

Paragraph (i) of ground 4

Paragraph (i) of ground 4 asserts that the learned judge made an error in failing to give any or sufficient weight to the appellant's prospects, objectively assessed, of succeeding in its defence to the claim.
The learned judge presided over a lengthy trial between the parties. He gave careful and detailed reasons for decision on liability which are not now challenged. His Honour was well placed to evaluate the appellant's prospects, objectively assessed, as at the time of the Calderbank offer, and to decide upon the weight that should be accorded to this matter in the context of the respondent's application for indemnity costs.
The learned judge evaluated the appellant's prospects of succeeding in its defence at [21] ‑ [28] of his reasons. His Honour found (and, in my opinion, was entitled to find) that the appellant had a case of substance which was supported by a substantial body of expert evidence [22]. His Honour's reasons do not disclose the error alleged.
Paragraph (i) is without substance.

Paragraphs (j) and (k) of ground 4

Paragraphs (j) and (k) of ground 4 assert that the learned judge made an error in that he failed to give any or sufficient weight to:
(a)the reasonableness or otherwise of the appellant's reasons (including the alleged potentially adverse consequences to its business) for litigating the claim in the face of the offer made: par (j); and
(b)the reasons given by the appellant for rejecting the offer and the reasonableness of those reasons at the time of its rejection: par (k).
The appellant, in its written submissions to the learned judge on costs, set out its reasons for rejecting the Calderbank offer and litigating the respondent's claim to judgment. The reasons are as follows:
52.The defendant has the same right as other members of the community to have significant disputes to which it is a party adjudicated in an appropriate forum and according to law. Despite what the plaintiff's submissions assert, the defendant is not required to pay out claims for which it believes it has a valid defence simply because of the risk of an adverse outcome at trial or because it is a successful company.
53.A fortiori, a claim which the defendant concluded was likely to result in significant adverse implications for the defendant.
54.The defendant has not suggested that it regarded the offer as 'an insubstantial discount on the plaintiff's claim' (see [65], plaintiff's submissions). To the contrary, the defendant knew at the time that the offer represented a substantive monetary discount to the plaintiff's claimed damages, which were not substantively in issue and were ultimately agreed at $840,000. However, the defendant submits that considerations concerning the significance of the outcome to its business (whether by judgment or settlement) coupled with its strong view as to the prospects of defending the case on its merits contributed to a reasonable decision to reject the offer (GAB 98 ‑ 99).
The reasons advanced by the appellant in its written submissions to the learned judge were not supported by admissible evidence. His Honour ruled, correctly, that these reasons should not be taken into account [26].
The learned judge was required to assess the reasonableness or unreasonableness of the appellant's rejection of the Calderbank offer on the basis of the admissible evidence before him. His Honour did not make an error in not taking into account disputed contentions of fact that were not supported by admissible evidence. It was not open to him to consider such material.
Paragraphs (j) and (k) are without substance.

Paragraph (l) of ground 4

Paragraph (l) of ground 4 asserts that the learned judge made an error in that he failed to give any or sufficient weight to the appellant's failure to adduce evidence of its beliefs and reasoning at the time of the offer, and justifying its conduct in response to the evidence adduced by the respondent.
The respondent's written submissions in support of par (l) read, relevantly:
[H]is Honour rejected (at [26]) assertions in the submissions about what the defendant believed prior to trial. This left the court without any explanation of, or justification for, the rejection of the offer and without any answer to the allegations of misconduct made by the plaintiff. Absent such evidence the Court was entitled to infer that the sworn explanation might not support its asserted position, and left the plaintiff's submissions and evidence substantially unanswered (WAB 31).
The learned judge found that 'in any event (that is, notwithstanding the absence of admissible evidence from the appellant) a decision to litigate a case of substance which had a reasonable prospect of success … in the face of an offer to settle, would not, in the absence of further facts, give rise to a sufficient ground to order indemnity costs' [26]. His Honour was entitled to make that finding. He did not make an error in failing to draw an adverse inference in relation to the subjective views held by the appellant or its legal advisers as to the prospects of its defence. His Honour based his decision on an objective characterisation of the appellant's prospects at the material time. That approach was proper. He was not bound to draw any adverse inference as a result of the appellant's submissions as to its subjective views not being supported by evidence in admissible form.
Paragraph (l) is without substance.

Paragraph (m) of ground 4

Paragraph (m) of ground 4 asserts that the learned judge made an error in that he failed to give any or sufficient weight to the consideration that the appellant 'must have realised' that the Calderbank offer represented a substantial deduction ‑ of the order of 50% ‑ on the potential outcome based on a reasonable assessment of damages, the appellant ultimately agreeing substantially with the quantum of damages sought.
As the learned judge rightly noted, the assessment of the unreasonableness of the rejection of a Calderbank offer must be made without the benefit of hindsight [20]. It would be contrary to this approach to determine the issue of unreasonableness by adopting the judgment sum ultimately awarded as a yardstick to measure the reasonableness or unreasonableness of the rejection of the offer.
In any event, it does not follow, in my opinion, that a defendant who receives a Calderbank offer in an amount which is about 50% of the plaintiff's claim will necessarily be acting unreasonably if it rejects the offer. The amount of the offer is merely one factor to be considered, with all other relevant circumstances, in forming the requisite judgment and impression. The learned judge referred in his reasons to the quantum of damages agreed in the course of the trial and to the amount of the Calderbank offer.
In general, a party is entitled to take into account its private interests (including the effect of the litigation on its broader business operations) in deciding whether to reject a Calderbank offer, including an offer which represents a substantial deduction on the amount claimed in the proceedings. However, although a party is entitled to take these matters into account, the court may also have regard to them in forming its judgment or impression as to whether, in all the circumstances, the rejection of the offer was unreasonable.
I am not persuaded that the learned judge made the alleged error.
Paragraph (m) is without substance.

The merits of ground 5

Ground 5 alleges that the learned judge made an error in that he failed to accord procedural fairness to the respondent by denying him the opportunity to make further submissions in reply to the appellant's submissions, in circumstances where his Honour required the respondent to discharge the burden of demonstrating 'the inherently or excessively unreasonable conduct of [the appellant]'.
The respondent's submissions in support of ground 5 read:
His Honour required the plaintiff to discharge the onus of establishing the defendant's conduct to be unreasonable. In such circumstances his Honour ought to have permitted the plaintiff to make oral submissions or to submit its prepared reply in response to matters raised (and to point out matters not addressed) in the defendant's written submissions, some of which matters his Honour was prepared to accept (GAB 32).
On 19 February 2008, the learned judge made orders, relevantly, as follows:
(a)The costs of the action be the subject of written submissions, as follows:
(i)the respondent file and serve his written submissions by 5.00 pm on 25 February 2008; and
(ii)the appellant file and serve its written submissions by 4.00 pm on 28 February 2008.
(b)The parties have liberty to apply in writing by 29 February 2008 if they wish to make oral submissions in respect of costs.
On 25 February 2008, the respondent sent his written submissions on costs to the learned judge and on 26 February 2008, served them on the appellant.
On 29 February 2008, the appellant sent its written submission on costs to the learned judge and served them on the respondent.
On 29 February 2008, at the request of the respondent, the learned judge extended the time limited for applying to make oral submissions from 29 February 2008 to 4.00 pm on 5 March 2008. On 5 March 2008, again at the request of the respondent, his Honour granted a further extension to 4.00 pm on 6 March 2008.
On 6 March 2008, at 3.57 pm, the respondent's solicitors sent an email to the learned judge's associate, as follows:
The plaintiff wishes to apply for the opportunity to make oral submissions on the question of costs.
The plaintiff has asked the defendant whether it will allow the plaintiff to make brief written submissions in lieu of oral submissions but by email this afternoon the defendant's lawyers have said they do not think further written submissions are appropriate.
The plaintiff therefore asks that the court schedule a hearing at which brief oral submissions can be made. The plaintiff's submissions are not likely to require more than 20 minutes.
On 10 March 2008, the learned judge dismissed the respondent's application for an oral hearing on costs.
On 11 March 2008, at 1.37 pm, the respondent's solicitors sent an email to the learned judge's associate stating, relevantly, that the respondent had prepared 'a short reply that, inter alia, corrects a number of factual assertions in [the appellant's] submissions'. The solicitors then inquired whether it was appropriate for them to provide the reply to the court.
On 11 March 2008, at 2.00 pm, the learned judge's associate informed the respondent's solicitors that his Honour did not wish to receive further submissions.
On 12 March 2008, the learned judge published his reasons for decision on costs.
The respondent's solicitors did not, in their communications with the learned judge's associate, indicate the topics or issues on which it was desired to make oral submissions, or written submissions in reply.
In my opinion, the learned judge gave the respondent ample opportunity to make a proper application for an oral hearing. The respondent's solicitors, belatedly, sent an email to his Honour's associate three minutes before the time limit (which had been extended twice by his Honour) expired. The request for an oral hearing was not accompanied by any particulars of the matters on which the respondent wished to make oral submissions. There was no identification even of the general topics or issues. In the circumstances, his Honour was entitled to decline to hold an oral hearing. Further, a party has no right to file supplementary written material in these circumstances, except as permitted by an order of the court. See Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246, 258. The respondent has no basis for complaint. His Honour did not, on any reasonable view, deny the respondent procedural fairness.
Further and in any event, the respondent's written submissions to this court on ground 5 did not specify the particular matters on which he wished to make submissions to the learned judge by way of reply.
Eventually, and in response to questions from the court, counsel for the respondent indicated in his oral submissions the particular matters in question. They concerned:
(a)paragraphs 53 and 54 of the appellant's written submissions to the learned judge (see [80] above); and
(b)paragraph 56 of the appellant's written submissions to his Honour (see [72] above).
Although counsel for the respondent also referred in his oral submissions to pars 38 and 39 of the appellant's written submissions to the learned judge, he accepted, in response to questions from this court, that the essence of his complaint related to pars 53 ‑ 56 of those submissions, which deal with the potential wider implications for the appellant of any adverse judgment either by settlement or otherwise in relation to a claim of the kind litigated between the parties.
I am satisfied that any points the respondent wanted to make arising from pars 53 ‑ 56 of the appellant's written submissions to the learned judge would not have had any material bearing on the outcome of the respondent's application.
Ground 5 is without substance.

Conclusion

I would dismiss the cross‑appeal.