MTH v State of New South Wales (No 2)

[2024] NSWSC 1681

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

MTH v State of New South Wales (No 2) [2024] NSWSC 1681

Hearing dates:

18 December 2024

Date of orders:

18 December 2024

Decision date:

18 December 2024

Jurisdiction:

Common Law

Before:

Cavanagh J

Decision:

See [35]

Catchwords:

COSTS — Application for indemnity costs — Offer of Compromise — Joint offer

CIVIL PROCEDURE — Interim preservation — Freezing orders — Application to vary orders — Where plaintiff intends to appeal against primary judgment

Legislation Cited:

Uniform Civil Procedure Rules 2005, rr 20.26, 42.15A

Cases Cited:

Calderbank v Calderbank [1976] Fam 93

MTH v State of NSW [2024] NSWSC 1517

Category:

Costs

Parties:

MTH (Plaintiff)
State of New South Wales (First Defendant)
Estate of the late Geoffrey Croft (Second Defendant)
Sandra Croft (Third Defendant)

Representation:

Counsel:
C P O’Neill (First Defendant)
P Tierney (Third Defendant)

Solicitors:
Makinson d'Apice Lawyers (First Defendant)
Keypoint Law (Second Defendant)
Moin Morris Schaefer Lawyers (Third Defendant)

File Number(s):

2020/00113788

Publication restriction:

Statutory non-publication orders pursuant to s 578A of the Crimes Act 1900 (NSW) and s 15A of the Children (Criminal Proceedings) Act 1987 (NSW)

EX TEMPORE JUDGMENT

1. On 28 November 2024, I entered judgment in favour of each of the defendants as against the plaintiff. I also granted liberty to apply should any party seek a variation of the costs orders I made.

2. The matter comes back before me today to deal with the following applications:

1. A variation of the costs orders sought by each of the first, second and third defendants.

2. Orders sought by the second and third defendants in respect of freezing orders over five properties held in part by the second and third defendants, and in part solely by the third defendant.

3. I will deal first with each of the defendants’ applications in respect of costs, before turning to the applications seeking freezing orders.

The first defendant’s application

4. The first defendant seeks a variation of the costs order I made to the effect that:

1. the plaintiff pay the first defendant’s costs on an ordinary basis until 30 July 2020 and on an indemnity basis thereafter; or alternatively

2. the plaintiff pay the first defendant’s costs on an ordinary basis until 12 April 2024 and on an indemnity basis thereafter.

5. In support of the application, the first defendant relies on the affidavit of Camille Faunt sworn 10 December 2024.

6. On 30 July 2020, the first defendant served an Offer of Compromise on the plaintiff in the sum of $125,000 plus costs. The offer was served on the then solicitors for the plaintiff, Greg Walsh & Co. I accept the evidence of Ms Faunt that there was no response to the offer. Whether it was in any way responded to by the plaintiff to her solicitors is unclear.

7. A further offer was then served by the first defendant on 12 April 2024 in accordance with the principles set out in Calderbank v Calderbank [1976] Fam 93 (“Calderbank”). That offer was in the sum of $350,000 inclusive of costs. Accompanying that offer was a letter headed “without prejudice save as to costs” from Makinson d’Apice Lawyers to Carroll & O’Dea Lawyers dated 12 April 2024. The letter purported to set out the reasons why the offer should be accepted by the plaintiff.

8. The plaintiff opposes any variation of the costs order for two reasons. Firstly, she is pursuing an appeal and submits that it is premature and retaliatory of the first defendant to be making this application. Secondly, she is entitled to have a full assessment of the accounts and record of charges before any such order should be made.

9. Plainly, the plaintiff did not do better than the Offer of Compromise made by the first defendant on 30 July 2020. No explanation has been offered by the plaintiff as to why there was no response to the Offer. The Offer has been made in accordance with UCPR rr 20.26 and 42.15A(2) such that the first defendant is entitled to have its costs on an indemnity basis from 31 July 2020.

10. There is no evidence suggesting that the rejection or non-acceptance of the offer was in some way reasonable. There is no evidence of any exceptional circumstances.

11. In the circumstances, order 4 is varied as follows:

4. the plaintiff pay the first defendant’s costs on an ordinary basis on and until 30 July 2020 and on an indemnity basis thereafter.

The second and third defendants’ costs applications

12. The second defendant seeks a variation of the costs order in their favour on two bases:

1. the second defendant served an offer in accordance with Calderbank on 30 May 2024; and

2. previously, the second and third defendants had made a joint offer on 21 December 2023.

13. In support of the application, the second defendant relies on the affidavit of Monica Ross-Maranik sworn 5 December 2024. The second defendant relies on the joint offer sent to the plaintiff on 30 May 2024 under the letterhead of Keypoint Law. The letter is headed “without prejudice as to costs.” The general terms of the offer are set out in paragraphs 1 to 9 of that letter.

14. The offer involved a judgment for the plaintiff as against the second defendant in the sum of $600,000 with the second defendant to pay the plaintiff’s legal costs as agreed in the sum of $200,000. There was a further condition that the second defendant be entitled to deduct from the amount referred to any moneys owing or payable to victim services.

15. The joint offer then included an offer by the third defendant to pay an additional $150,000 without any admission of liability. There were further terms of the offer, including that all previous costs orders be vacated; the second defendant’s costs be paid out of the estate; and the proceedings otherwise be dismissed.

16. The second and third defendants then purported to explain the basis of the offer. As is well known, an offer made in accordance with Calderbank principles may attract the same approach as an offer of compromise made in accordance with the UCPR, but that is not always the case.

17. In my view, if a Calderbank offer is to attract the same approach as an Offer of Compromise, it must be an offer that is made in the same simple terms and one that is capable of acceptance as by that particular party. The problem with the offer made on 30 May 2024 is that it is a joint offer. To accept the offer as against the second defendant, the plaintiff also would have been required accept the offer made by the third defendant.

18. Whatever view might be taken about this case, the cases against the second and third defendants were quite different. The case against the second defendant was that Mr Croft committed a number of acts of what I have described in the judgment as sexual abuse of the plaintiff, involving physical abuse and acts of sexual intercourse against the plaintiff. The case against the third defendant was that she had a duty to protect or take steps to prevent Mr Croft performing these acts, and that she ought to have known of his conduct. As is apparent from the judgment, I did not accept either case.

19. However, before the principles which would ordinarily apply to an offer of compromise should be applied to a Calderbank offer, it would be necessary to be satisfied that it is not unreasonable for the plaintiff to have rejected the offers. Although I do not accept the plaintiff’s submissions that I should not vary the costs orders until after her appeal, it seems to me that, if the plaintiff was represented in these proceedings, a submission would have been made that it was not unreasonable for the plaintiff not to accept the offers, bearing in mind the differing cases against the second and third defendants.

20. In the end, I am not satisfied that I should vary the original costs orders I made. I am not satisfied that the joint offer made on 30 May 2024, is such that I should order the plaintiff to pay indemnity costs from the date of that offer. In the circumstances, the application of both the second and third defendants for a variation of the costs orders is rejected.

21. As such, the order I make is that in respect of the second and third defendants, as set out in my judgment of 28 November 2024, the plaintiff is to pay the costs of the second and third defendant as agreed or assessed.

The applications in respect of the freezing orders

22. The second defendant seeks a variation of the existing freezing orders only for the purposes of allowing the reasonable costs and disbursements incurred by the second defendant to be paid. The third defendant seeks a variation of existing freezing orders, in essence discharging any freezing orders against her.

23. The plaintiff opposes any variation of the freezing orders. She does so on the basis that no such variation should take place until her appeal proceedings have been finalised. She makes various submissions about the conduct of the second and third defendants and their previous approach to resisting these freezing orders. None of those submissions have any bearing on the outcome of this application.

24. The real issue in terms of discharge of freezing orders after a judgment has been entered relates to whether I am satisfied that any appeal pursued by the plaintiff is such that I should keep the freezing orders in place. Unfortunately, the plaintiff, being self-represented, has at this stage only filed a notice of intention to appeal. There is no detail as to the substance of the appeal.

25. As against the second defendant, I entered judgment for the second defendant because I was not satisfied that the abuse occurred. That finding was essentially a factual finding having regard to my assessment of the evidence. I am unable to understand the basis of or the likely strength of any appeal on the material presented to me today.

26. As against the third defendant, the case was quite different. That is, whilst the case against the third defendant was dependent upon the plaintiff establishing that the abuse occurred, the plaintiff also needed to establish that the third defendant knew or ought to have known of the abuse.

27. I indicated in the judgment that, even if I had accepted that the abuse occurred, I would not have accepted that the plaintiff had established that the third defendant knew or ought to have known of it. In particular, the plaintiff suggested that when she told the third defendant about the abuse, she was immediately removed from the Crofts’ farm and sent to another property.

28. If I had accepted that occurred, which I did not, that would mean that the third defendant responded to the suggestion of abuse by having the plaintiff taken out of harm’s way such that the plaintiff would not have succeeded against the third defendant, even if she had succeeded against the second defendant.

29. The other factor to have regard to in determining whether freezing orders should be discharged is the potential quantum of the claim. Again, whilst it was not strictly necessary to assess damages, I did so on the basis that the plaintiff might appeal.

30. As I indicated in the judgment, the plaintiff had a very good work history for 30 years after 1979. There was no evidence that she had suffered any loss of income in that 30 year period referable to the abuse. On my findings, the value of her claim would only include general damages interest. There would be no allowance for economic loss.

31. Even if I am wrong in that assessment, I am unable to understand how the plaintiff could recover anything for economic loss for periods when she was working full-time and for periods when on her own evidence she was unfit for work for other reasons.

32. In the circumstances, there are important factors which bear on my decision in respect to the freezing orders. Importantly, the second defendant is not seeking a full discharge of the freezing orders but is only seeking a variation so that the legal costs and disbursements may be paid. I understand that the value of moneys held in accounts would still exceed $1 million. The second defendant does not seek a discharge of any order requiring that moneys be held.

33. Next, the third defendant has succeeded. The third defendant would ordinarily be entitled to a discharge of the freezing orders. I am not aware of any basis on which there are any reasonable prospects of success against the third defendant on appeal.

34. Having regard to the fact that, in my view, sufficient moneys will be held in the accounts by the second defendant, I am satisfied that any freezing orders made in respect of property held by the third defendant should be discharged or removed.

35. The orders I make are as follows:

1. Order 4 of my judgment of 24 November 2024 in MTH v State of NSW [2024] NSWSC 1517 is varied as follows:

“The plaintiff pay the first defendant’s costs on an ordinary basis on and until 30 July 2020 and on an indemnity basis thereafter.”

2. The second and third defendants’ application for a variation of those costs orders is dismissed.

3. As against the second defendant:

1. That the freezing order of the court dated 28 July 2020 as varied by consent on 6 December 2020 and 12 July 2024 be varied in relation to paragraph 2(c)(iv) to read:

“The balance of the proceeds of sale, after payment out to the solicitor for the second defendant for reasonably incurred costs and disbursements incurred by the legal representatives of the second defendant in the preparation and hearing of proceedings MTH v State of NSW [2024] NSW SC 1517 and with respect to the administration of the estate are to be held in an appropriate interest bearing deposit account with a major bank, to be held in the names of the solicitors respectively for the second and third defendants and to be held there pending further court order.”

2. That the freezing order of the court dated 28 July 2020 as varied by consent on 6 December 2020 and 12 July 2024 be varied in relation to paragraph 3(c)(iii) be varied to read:

“The balance of the proceeds of sale, after payment out to the solicitor for the second defendant for reasonably incurred costs and disbursements incurred by the legal representatives of the second defendant in the preparation and hearing of proceedings MTH v State of NSW [2024] NSWSC 1517 and with respect to the administration of the estate are to be held in an appropriate interest bearing deposit account with a major bank, to be held in the names of the solicitors respectively for the second and third defendants and to be held there pending further court order.”

4. In respect of the third defendant:

1. That 50% of the funds held in the controlled monies account, in accordance with order 3 made on 12 July 2024, be paid to the credit of the third defendant.

2. That the freezing order of the Court dated 28 July 2020 as varied by consent on 6 December 2020 and 12 July 2024 be discharged to the extent that it imposes obligations on the third defendant.

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Amendments

04 January 2025 - inserted "ex tempore" above [1].

Decision last updated: 04 January 2025