Hardwick v Jankowski (No.2)

[2019] NSWDC 108

District Court

New South Wales

Medium Neutral Citation:	Hardwick v Jankowski (No.2) [2019] NSWDC 108
Hearing dates:	On the papers
Date of orders:	08 April 2019
Decision date:	08 April 2019
Jurisdiction:	Civil
Before:	Abadee DCJ
Decision:	See paragraph 16.
Catchwords:	PRACTICE AND PROCEDURE – costs – plaintiff’s service of offer of compromise – plaintiff obtains more favourable outcome than the settlement sum offered – application for indemnity costs – whether ‘exceptional circumstances’ applied.
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	South Eastern Area Health Service v King [2006] NSWCA 2 Vale v Eggins (No.2) [2007] NSWCA 12
Category:	Costs
Parties:	Thomas Peter Hardwick (Plaintiff) James Jankowski (Defendant)
Representation:	Counsel: B Tzatzagos (Plaintiff) D Hanna (Defendant) Solicitors: Brydens Lawyers (Plaintiff) Moray & Agnew (Defendant)
File Number(s):	2018/52201
Publication restriction:	Nil

Judgment

1. I gave judgement in this matter on 1 April 2019 (Hardwick v Jankowski [2019] NSWDC 90), hereafter “the principal reasons”). I gave the parties the opportunity to make submissions as to costs.

2. The dispute as to costs is as follows. The plaintiff submits that following service of a rules offer on 22 February 2019, it should be entitled to receive its costs on an indemnity basis from 23 February 2019. The defendant submits that “exceptional circumstances” have arisen which should preclude the plaintiff from obtaining the presumed benefit of having obtained a monetary verdict no less favourable than the rules offer it had made.

3. It will be recalled from the principal reasons that the plaintiff obtained a monetary verdict for the sum of $95,229.10.

4. On 22 February 2019 solicitors for the plaintiff sent an offer of compromise to the solicitors for the defendant.

5. The terms of that offer were as follows:

“(1)   Verdict and judgement for the plaintiff for the sum of $75,000.

(2)   This offer shall remain open for acceptance until 5:00 pm on 15 March 2019.

(3) This offer is made pursuant to rule 20.26 of the Uniform Civil Procedure Rules 2005.”

6. There was no suggestion by the defendant that this offer of compromise did not comply with the requirements in rule 20.26. There was no suggestion that the defendant did not have sufficient time to consider the offer. There was no suggestion, and the defendant did not complain, that it did not have sufficient information to consider the offer.

7. The defendant, however, submitted that there were “exceptional circumstances” arising from the plaintiff’s late service of evidence, which meant that the plaintiff should not receive a partial order for indemnity costs arising from the defendant’s rejection of the rules offer and the circumstance that the plaintiff bettered the settlement sum it offered to the defendant.

8. In this regard, the defendant relied upon the authorities of South Eastern Area Health Service v King [2006] NSWCA 2 (at [85]) and Vale v Eggins (No.2) [2007] NSWCA 12 at [15], where the New South Wales Court of Appeal identified, as one category of case where “exceptional circumstances” arose, the situation where an offeree is required to meet a different case at trial to that which it expected to meet at the time it was considering the rules offer.

9. In particular, the defendant submits that the liability reports from the plaintiff’s expert, Ms Gaffney, the last of which attached previously unseen photographs, as well as the joint report from an expert liability conclave just before the trial, meant that the defendant was required to meet a different case than that which was under consideration at the time the offer was made. It says that it was entitled to assess the plaintiff’s offer based upon the admissible evidence that had been served to this time: this included, at that point, expert liability evidence (from Mr Griffiths) which it had itself served, which was not challenged. Reference was made to the plaintiff’s delayed service of Ms Gaffney’s evidence, contrary to earlier Court directions. It had every reason, it says, to regard the likely outcome of the proceeding as being more favourable, from its perspective, then the offer that had been made by the plaintiff.

10. I do not agree that the plaintiff had ‘changed its case’. The procedural chronology which the defendant relied upon in its submissions itself makes clear that Ms Gaffney’s expert liability report in chief was served before the plaintiff’s offer of compromise had been served. From the date that that liability report was served, the defendant ultimately had over 3 weeks to consider it before the offer of compromise lapsed.

11. It is true, as the defendant submits, that the evidence of Ms Gaffney was significant. But the defendant’s complaint that the plaintiff had not stated its position as to the resting position of the cars after the collision until after the rules offer was made is of no substance: the matter was referred to in Ms Gaffney’s primary report served before the rules offer had been served.

12. It is also true that Ms Gaffney’s supplementary report was served after the rules offer had been served, but still three business days prior to the expiry of the offer. I do not regard the supplementary evidence as amounting to a ‘change’ of the plaintiff’s case and, at any rate, at this point in time, with the trial being relatively imminent, I would have expected the parties to have been in a period of intense preparation such that it would also be expected that the defendant or his legal representatives would have been sufficiently attuned to the significance of the supplementary evidence and still had a reasonable period of time to consider the plaintiff’s offer in the light of that evidence.

13. I reiterate that there is no evidence before me to suggest that the defendant’s solicitors corresponded to the plaintiff’s solicitors complaining that the timing for the service of either of Ms Gaffney’s reports meant that the defendant did not have sufficient time to consider the rules offer.

14. The only matter that the defendant could not fairly be said to have time to consider prior to the expiration of the rules offer was the joint expert report prepared by the experts in conclave. It is, in retrospect, somewhat unfortunate that the joint conclave was conducted only just before the trial. Nevertheless, that is not unprecedented in litigation in this Court and, in any event, the plaintiff was at just as much ‘risk’ (in terms of the joint findings) as to the outcome of that joint conclave report as the defendant.

15. Accordingly, I do not find that the defendant has established ‘exceptional circumstances’ that would militate against the ordinary operation of the rules.

16. I make the following orders:

1. Subject to order 3, the defendant is to pay the plaintiff’s costs on an ordinary basis up to and including 22 February 2019.

2. Subject to order 3, the defendant is to pay the plaintiff’s costs on an indemnity basis from 23 February 2019.

3. The costs orders made in earlier notices of motion heard on 21 September 2018 and 8 March 2019 remain unaltered.

4. Exhibits may be returned.

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Decision last updated: 09 April 2019