Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 (No 2)

[2019] NSWDC 604

District Court

New South Wales

Medium Neutral Citation:	Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 (No 2) [2019] NSWDC 604
Hearing dates:	18 October 2019 (Close of written submissions: 25 October 2019)
Date of orders:	29 October 2019
Decision date:	29 October 2019
Jurisdiction:	Civil
Before:	Judge Levy SC
Decision:	The defendant is to pay the plaintiff’s costs of the proceedings on the ordinary basis until 21 November 2018 and on the indemnity basis from 22 November 2018.
Catchwords:	COSTS – order for indemnity costs
Legislation Cited:	Civil Liability Act 2002 (NSW), Part 1, s 5B, s 5D Legal Profession Uniform Law Application Act 2014 (NSW), Sch 1 cl 2(1)(a) Uniform Civil Procedure Rules 2005, r 20.26, r 42.35
Cases Cited:	Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 [2019] NSWDC 578
Category:	Costs
Parties:	Wenting Jiang (Plaintiff) BCDS International Pty Limited t/as Serendipity Miss Beauty ACN 603 133 991 (Defendant)
Representation:	Counsel: Mr C Hickey (Plaintiff) Ms L Kerley - Solicitor (Defendant)   Solicitors: Beilby Poulden Costello (Plaintiff) Holman Webb (Defendant)
File Number(s):	2018/340045
Publication restriction:	None

Judgment

Costs

1. The principal judgment in these proceedings was delivered on 18 October 2019. A verdict and judgment was entered in the plaintiff’s favour in the sum of $24,557 plus costs: Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 [2019] NSWDC 578.

2. At that time, the defendant made an application for the plaintiff’s costs to be limited to regulated costs as the judgment was for an amount less than $100,000 as provided by the Legal Profession Uniform Law Application Act 2014 (NSW), Sch 1 cl 2(1)(a).

3. In contrast, the plaintiff made an application for indemnity costs based on a series of offers of compromise. In view of the relative size of the judgment, and in view of the disproportionate amount that would otherwise be involved in filing formal applications and further appearances, it was agreed that the submissions on those costs applications would be determined on the papers on the basis of written submissions.

Offers of compromise

4. Prior to the hearing that commenced on 29 August 2019, the plaintiff made the following four historical offers of compromise:

1. 21 November 2018 - $19,000 plus costs;

2. 25 February 2019 - $18,000 plus costs;

3. 22 April 2019 - $18,000 plus costs;

4. 4 May 2019 - $4,900 plus costs;

5. None of those offers were accepted. Each of those offers constituted a valid and reasonable offer of compromise in compliance with UCPR r 20.26. Plainly the plaintiff has obtained a more favourable monetary outcome in the proceedings in comparison to any of the offers of compromise that had been made on her behalf.

Written submissions

6. The plaintiff’s written submissions on costs were provided on 22 October 2019. The defendant’s written submissions on costs were provided on 25 October 2019. The plaintiff sent submissions in reply within the hour on 25 October 2019. The consideration of the costs applications and the related submissions now follows.

Defendant’s costs submissions invoking UCPR r 42.35

7. In the principal judgment the question of whether the plaintiff’s costs should be governed by UCPR r 42.35 was considered and rejected: Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 [2019] NSWDC 578, at paragraphs [209]-[210].

8. Although at the outset of the trial the question of the application of UCPR r 42.35 was identified by the defendant as an issue to be decided, the defendant advanced no submissions on that issue. Nevertheless, the issue was considered and in the principal judgment it was determined that there should be no restriction on the plaintiff’s ability to recover costs for the reasons then provided.

9. The defendant’s costs submissions now assert that no submissions were directed to that question at the conclusion of the trial because there had been no damages assessment at that time which would have triggered the operation of UCPR r 42.35 thereby disentitling the plaintiff to an order for costs as the amount recovered was less than $100,000.

10. I reject that submission as spurious for several reasons. First, the defendant identified the issue at the outset and then did not address it. Secondly, the damages submissions made by all parties at trial made it abundantly clear that any damages award in the plaintiff’s favour would be for an amount less than $40,000 which would have enlivened an argument based on UCPR r 42.35 at that time. Thirdly, it was therefore incumbent on the defendant to agitate the issue in its final submissions, having identified it at the outset.

11. In further justification for an application of the costs limits raised pursuant to UCPR r 42.35, the defendant argued that there were no particular complexities in the matter and the evidence was relatively brief. I reject that submission. The application of Part 1 of the Civil Liability Act 2002 (NSW) to the facts of this case and in particular s 5B and s 5D, cannot be reasonably said to involve no particular complexity: Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 991 [2019] NSWDC 578, at paragraphs [42]-[178].

12. I therefore decline to revisit my findings relating to UCPR r 42.35. I consider that paragraphs [209]-[210] of the principal judgment deal adequately with the issue of costs up to the trial, including the provisions of UCPR r 42.35.

Plaintiff’s costs application

13. The plaintiff now seeks an order that the defendant pay her costs on the ordinary basis up until 21 November 2018, and on the indemnity basis from 22 November 2018. The defendant opposes that application.

14. It is undisputed that on 5 December 2017 the plaintiff’s solicitor forwarded photographs of the plaintiff’s facial scarring to the defendant’s solicitor. On 10 April 2018, the plaintiff’s solicitor forwarded further photographs of the plaintiff’s face to the defendant’s solicitor. On 22 March 2019, the defendant’s solicitor advised the plaintiff’s solicitor that the photographs were “very difficult to see clearly”.

15. Consequently, on 26 March 2019, a further set of photographs taken on 24 March 2015, were forwarded to the defendant’s solicitor, along with the suggestion that if the defendant’s solicitors considered the quality of the most recent photographs was not satisfactory, arrangements could be made for further photographs to be taken by a professional photographer. Instead, the defendant arranged for the plaintiff to be examined by Associate Professor Allan Meares on 21 May 2019. He took a series of photographs of the plaintiff’s face and provided them to the defendant’s solicitor along with his report dated 23 May 2019, which was served on the plaintiff’s solicitor on 12 June 2019. At that time, the plaintiff’s most recent offer of compromise in the sum of $4,900 plus costs to be agreed or assessed, remained open for acceptance until 4.00pm on 14 June 2019. It then lapsed.

16. The defendant’s costs submissions now assert that the quantum of the offers of compromise when viewed in the penumbra of the state of the particulars (annexed to the submissions), and the quality of the then available photographs, preclude a conclusion that the defendant was able to adequately understand the nature and the extent of the plaintiff’s injury until Associate Professor Meares examined the plaintiff and his report was obtained on 23 May 2019.

17. I do not accept that submission. The argument based on the state of the particulars was an artifice in the context of what must always have been seen as a small claim. Furthermore, the plaintiff’s costs submissions in reply show that the defendant withheld presenting some relevant replies to requests for particulars where those replies adequately addressed questions as to the nature of the plaintiff’s case. It was always open to the defendant, at any reasonable time, to seek an inspection of the plaintiff’s facial skin defects and form an early impression of her stated problems for the purpose of assessing the plaintiff’s settlement offers and the potential for a damages award.

18. The defendant argued that the plaintiff’s abandonment of aspects of her claim was relevant to the costs question. In my view, it is not to the point that the plaintiff ultimately abandoned her claims for loss of earnings and for psychological injury. These are vagaries of litigation where issues evolve and develop into an expanded form, or recede, or are abandoned. A global overview is required, especially in a relatively small claim. I consider the defendant’s argument that the plaintiff ultimately pursued a claim that was of a lesser extent to that pleaded, to be non-substantive and non-determinative.

19. In a relatively small claim the defendant unreasonably declined to accept a series of reasonable offers of compromise that did not involve capitulation. Prima facie, this entitles the plaintiff to an order for indemnity costs from the expiry of the first offer of compromise that the defendant declined to accept.

Defendant’s application for regulated costs

20. The defendant’s primary application on costs was that as the plaintiff had obtained a judgment in an amount less than $100,000, the costs of her claim are regulated by Sch 1 to the Legal Profession Uniform Law Application Act 2014 (NSW) to a maximum of 20 per cent of the amount recorded, or $10,000, whichever is the greater: cl 2(1)(a).

21. The terms of Sch 1 cl 2(1)(a) of the Legal Profession Uniform Law Application Act 2014 (NSW), are as follows:

Schedule 1 Maximum costs in personal injury damages matters

…

2 Maximum costs fixed for claims up to $100,000

(1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows:

(a) in the case of legal services provided to a plaintiff—maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater,

22. In my opinion, that provision for capped or regulated costs does not apply from the date when the plaintiff is otherwise entitled to indemnity costs.

23. The fact remains that in a relatively small claim with complex liability and causation elements requiring consideration, the defendant declined, not once, not twice, not thrice, but four times, to accept reasonable offers of compromise. It is not to the point that the ambit of the plaintiff’s claim receded or contracted over the course of time. The plaintiff is entitled to an order for her costs to be paid on the ordinary basis until 21 November 2018 according to the requirements of Sch 1 cl(1)(a) and on the indemnity basis from 22 November 2018, and not limited by Sch 1 cl 2(1)(a).

Orders

24. I order that the defendant pay the plaintiff’s costs of the proceedings on the ordinary basis until 21 November 2018 and on the indemnity basis from 22 November 2018.

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Decision last updated: 29 October 2019