Kubica v Hussein (No.2)

In *Kubica v Hussein (No.2)*, the Supreme Court of New South Wales was asked to determine whether a plaintiff, who had been awarded damages for personal injuries, was entitled to an order for the recovery of costs incurred in obtaining expert reports that were not ultimately relied upon at trial. The defendant had made a formal offer of compromise pursuant to Part 42 of the *Supreme Court Rules 1970* (NSW) which the plaintiff had rejected. The plaintiff subsequently obtained a judgment in their favour, but for an amount less than the defendant's offer.

The central legal issue before the Court was whether the costs associated with the non-relied-upon expert reports fell within the scope of costs recoverable by the plaintiff, notwithstanding the fact that the judgment obtained was less favourable than the defendant's offer of compromise. Specifically, the Court had to consider the application of the costs rule in Part 42, which generally dictates that a plaintiff who obtains judgment for an amount less than a defendant's offer of compromise is liable for the defendant's costs incurred after the making of the offer, and may only recover their own costs up to the date of the offer.

Judge Raphael reasoned that the costs of expert reports, whether ultimately relied upon or not, were incurred in the preparation for trial and were therefore costs that would ordinarily be recoverable by a successful party. The Court held that the wording of the costs rule in Part 42 did not exclude the recovery of such costs. The rule focused on the quantum of the judgment relative to the offer, and the general principle that a party who rejects a favourable offer and obtains a lesser judgment should bear the costs of the litigation from that point forward. The Court found that the costs of the non-relied-upon reports were incurred prior to the making of the offer and were therefore recoverable by the plaintiff.

The Court ordered that the plaintiff was entitled to recover the costs of the expert reports, subject to the usual principles of assessment and taxation.