Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown (No.3)

[2019] NSWSC 185

Supreme Court

New South Wales

Medium Neutral Citation:	Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown (No.3) [2019] NSWSC 185
Hearing dates:	01 March 2019
Date of orders:	01 March 2019
Decision date:	01 March 2019
Jurisdiction:	Common Law
Before:	Garling J
Decision:	(1)   In each of the proceedings, the order for costs will be that the cross-claimants pay QBE’s costs of the cross-claims.
Catchwords:	COSTS – application for costs on an indemnity basis – where the successful cross defendant made an offer of settlement prior to trial commencing – whether it was unreasonable for the cross-claimants not to accept the offer – where scant evidence is available to make a finding about whether the offer was a genuine Offer of Compromise at the time – application for costs on an indemnity basis was unsuccessful
Legislation Cited:	Not Applicable
Cases Cited:	Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown (No.2) [2019] NSWSC 88
Texts Cited:	Not Applicable
Category:	Principal judgment
Parties:	Thi Le Le (P1) Cindy Xuan Vy Nguyen (P2) Van Diep Tran (P3) Rachel Monica (P4) Stephen Huggett (P5) Edwin Christopher Brown (D1) Zurich Australian Insurance Limited (D2) Futurewood Pty Ltd (D3) QBE Insurance (Australia) Limited (X-D)
Representation:	Counsel: R O’Keefe (D1, Substituted D2) B Hull (D3) M McCulloch SC and R Perla (X-D)   Solicitors: Vardanega Roberts Solicitors (D1, D2) Holman Webb Lawyers (D3) Gillis Delaney Lawyers (X-D)
File Number(s):	2014/271370; 2014/347492; 2014/358521; 2015/172536; 2015/263637
Publication restriction:	Not applicable

EX TEMPORE Judgment

1. This judgment deals with an application for costs made by QBE, on an indemnity basis as and from 3 February 2017.

2. The background to these proceedings is set out in a lengthy judgment which the Court delivered on 14 February 2019: Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown(No.2) [2019] NSWSC 88. I will not repeat the entirety of the facts and circumstances set out in that judgment. I will use the descriptions given to the parties in that judgment, to which I refer to as Le (No.2).

3. QBE, the active cross-defendant in the proceedings, was successful. The cross-claims as against it were all dismissed.

4. The cross-claimants, Brown and Futurewood, accept that they should pay QBE's costs but contest the proposition that any part of those costs should be paid on an indemnity basis.

Relevant Facts

5. The claim for the payment of costs on an indemnity basis relies upon a letter written by the solicitors for QBE on 3 February 2017.

6. That letter informed the solicitors for the cross-claimants that QBE contended that the cross-claims against it would not succeed.

7. The basis upon which QBE contended that the cross-claims would not succeed was two-fold: First, the particular terms of clause 5.20 of the QBE policy; and, secondly, that the insured, ENG, pursuant to the QBE policy, would not be found to have breached its duty of care to the plaintiff, and was not a joint tortfeasor from which contribution could be recovered.

8. In the Court's principal judgment, Le (No.2), the Court found that it was satisfied that ENG was negligent and that that negligence contributed to the happening of the relevant accident and the consequent injuries to the plaintiffs. It was a joint tortfeasor.

9. The argument, shortly outlined in the letter contained reasoning which advanced a proposition that the QBE policy did not respond to the claim articulated, which was not ultimately put to the Court in final submissions. True it is that the clause 5.20 of the policy was the clause that the Court considered, but the basis articulated in the letter did not reflect the arguments ultimately put to the Court, nor the basis upon which QBE succeeded.

10. The offer of settlement which was made in the letter of 3 February 2017 was that there be judgment for the second cross-defendant (QBE) and that each party pay its own costs. The offer was made in respect to cross-claims which had been commenced in September 2016 and in respect of which a trial on all issues had been fixed for hearing in May 2017. The offer was also made prior to a mediation which occurred in April 2017.

Discernment

11. The principles upon which the court determines whether or not costs should be ordered on an indemnity basis are not in dispute.

12. The first question is whether the offer which was made is one which is capable of acceptance and one which represents a genuine offer to compromise the proceedings. In broad terms, the second question is whether or not it was unreasonable for the offerees, here the cross-claimants, not to accept the offer.

13. There is no doubt that the offer was one which was capable of being accepted. Whether or not it represented a genuine Offer of Compromise is a matter of some doubt.

14. The material put before the Court on this Notice of Motion is sparse. There is no indication of what work had been undertaken by QBE or its lawyers, at the time the offer was made. There is no information that indicates what QBE was giving up in its offer, by way of its claim for costs. The Court does not know how much by way of costs QBE had incurred or was likely to incur. The letter did not reveal that information to the cross-claimants.

15. In the absence of that evidence, it is not possible to make a finding that the offer was a genuine compromise at that time. Of course, by the time the hearing had been conducted and judgment reserved, it is clear that significant costs had been incurred by QBE, but, as the authorities show, that is not the time at which the genuineness of any compromise is to be assessed.

16. Even if, contrary to my view, it was a genuine offer to compromise the proceedings in the circumstances which existed at the time, namely that the claims of the plaintiffs were undetermined and could constitute significant sums of money, and that there were differences of views as to how the accident had occurred which involved the consideration of relatively complex expert evidence, it was reasonable for the cross-claimants to form the view that ENG was a joint feasor, and that they had significant prospects of recovering against ENG, and derivatively QBE.

17. I am not at all persuaded that it was unreasonable of the cross-claimants not to have accepted the offer. In those circumstances, I am unpersuaded that the court should make an indemnity costs order.

18. It follows that in each of the proceedings the order for costs will be that the cross-claimants pay QBE's costs of the cross-claims.

Orders

19. I make the following orders:

1. In each of the proceedings, the order for costs will be that the cross‑claimants pay QBE’s costs of the cross-claims.

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