New South Wales Land and Housing Corporation v Quinn (No 4)
[2016] NSWDC 447
•15 April 2016
District Court
New South Wales
Medium Neutral Citation: New South Wales Land and Housing Corporation v Quinn (No 4) [2016] NSWDC 447 Hearing dates: 15 April 2016 Date of orders: 15 April 2016 Decision date: 15 April 2016 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Confirm order (2) made on 18 March 2016.
(2) No order as to the costs of the defendant's notice of motion filed 31 March 2016.
(3) No order as to the costs of the plaintiff's application for variation of the earlier costs order made on 18 March 2016.Catchwords: COSTS — party/party — exceptions to general rule that costs follow the event — offers of compromise/Calderbank offers Legislation Cited: Uniform Civil Procedure Rules 2005, r 36.16 Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333
Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Ltd (No 18) [2011] NSWIRComm 87
New South Wales Land and Housing Corporation v Quinn [2016] NSWDC 27Category: Costs Parties: New South Wales Land and Housing Corporation (plaintiff)
Robert Quinn (defendant)Representation: Counsel:
Solicitors:
Mr A Di Francesco (plaintiff)
Mr R Dalgleish (defendant)
Legal Services Branch, Housing NSW (plaintiff)
John Byrnes & Associates (Legal) Pty Ltd (defendant)
File Number(s): 2014/232539 Publication restriction: None
Judgment
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On 18 March 2016 I made final orders in the proceedings as follows:
“(1) Proceedings dismissed for want of jurisdiction.
(2) Plaintiff to pay the defendant’s costs.
(3) Entry of order (2) stayed for 14 days.”[1]
1. New South Wales Land and Housing Corporation v Quinn [2016] NSWDC 27 at [34].
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The judgment stayed the costs order for 14 days to enable the Corporation to consider if it wished to seek an alternative costs order. [2]
2. At [33].
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On 31 March 2016 Mr Quinn filed a notice of motion seeking an order for indemnity costs. The Corporation filed no motion, but gave notice to Mr Quinn that it too would seek to vary the costs order made on 18 March 2016, seeking an order that each party bear their own costs. The Corporation did not contend that leave to seek an alternative costs order extended only to the Corporation. [3]
3. Cf [33] and UCPR 36.16(3A).
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As to Mr Quinn's application for indemnity costs, he relies on an offer to settle the proceedings contained in an email dated 15 May 2015. The email was marked "Without Prejudice except as to Costs". It also stated:
"This offer is made pursuant to the principles of Calderbank v Calderbank. If the offer is not accepted and my client achieves a more favourable result from the court, this letter will be tendered in any costs application and my client will seek an order that his costs be paid by the plaintiff on an indemnity basis from the date of this offer."
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The substance of this offer was that because Mr Quinn was impecunious he would agree to a "verdict" for $20,000 with no order as to costs. The offer suggested that this amount offered was based upon moneys offered to be provided by Mr Quinn's family to assist him.
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The offer was not accepted by the Corporation. Mr Quinn does not argue that the offer of settlement is an offer of compromise under the rules. That concession seems to be well made: the offer does not expressly refer to the rules, it provides no date for acceptance, it includes a settlement of costs and it is not in the standard form.
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Mr Quinn submits that it is a genuine offer of compromise under the principles in Calderbank v Calderbank,[4] and that it was unreasonable for the Corporation not to accept it.
4. [1975] 3 All ER 333.
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No point is taken by the Corporation that it is not a genuine offer of compromise: the offer consents to a judgment of a not insignificant sum and offers to forgo any entitlement to costs. The real issue is whether it was unreasonable for the Corporation not to accept it. Mr Quinn's primary point is that the unreasonableness of the Corporation's conduct can be seen in the circumstance that its position would have been more favourable had it accepted the offer. The Corporation would then have had a judgment for $20,000 and it would not be liable for costs. But this argument overlooks the circumstance that if the Corporation had accepted the offer, it would also have lost the opportunity to commence proceedings elsewhere and seek judgment for a much larger sum. There has been as yet no determination on the merits of the other factual and legal issues in the proceedings. And the Corporation has always claimed an entitlement to a much larger sum than that proposed in the offer.
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In my view, the remaining potential entitlement in the Corporation is a proper basis for the Corporation not to accept the offer. The Court cannot conclude that the Corporation is now in a more unfavourable position than it would have been had it accepted the offer. The rights of the Corporation remain. They have not merged in the judgment which would have resulted from acceptance by the Corporation of Mr Quinn's offer of settlement.
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I also take into account that Mr Quinn did not mention the jurisdictional issue in his offer. The justification for the settlement was solely because of Mr Quinn's alleged impecuniosity, a matter which was not common ground before me. Had Mr Quinn identified the jurisdictional issue in his offer of settlement he may have had a stronger basis for a special costs order.
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The Corporation, as indicated, seeks to vary the costs order to an order that each party pay their own costs. It relies on the circumstance that Mr Quinn did not raise a jurisdictional point and that he ventilated other factual legal issues in his defence, all of which took time in court. No motion was filed by the Corporation; it submitted that Mr Quinn's motion was sufficient to satisfy the procedural requirement in r 36.16(3A) for a motion to be filed.
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The Corporation relied on the decision of Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Ltd (No 18). [5] In that case, the President of the New South Wales Industrial Relations Commission determined that each party should pay their own costs. The defendant in that case, who succeeded on the jurisdictional issue on appeal, was found to have engaged in some disentitling conduct in delaying the outcome of the proceedings, and failed on a number of factual legal issues ventilated at first instance and in several interlocutory hearings.
5. [2011] NSWIRComm 87, especially at [71], [117] and [247]-[253].
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The same cannot be said of Mr Quinn. He has not, as yet, failed on any factual or legal issue and it was not suggested that he was guilty of disentitling conduct other than that he did not object to jurisdiction and he raised defences based on the merits. I do not regard this as disentitling conduct. Nor do I regard it as fair to deprive a defendant in Mr Quinn's position of his costs where he has been forced to defend litigation that is found to have been wrongly brought.
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In these circumstances, it is unnecessary to determine whether the Corporation otherwise satisfied the requirements of subr 36.16(3A). Each party failed on their respective applications. There should be no order for the costs of these applications.
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Accordingly, the orders of the Court are:
Confirm order (2) made on 18 March 2016.
No order as to the costs of the defendant's notice of motion filed 31 March 2016.
No order as to the costs of the plaintiff's application for variation of the earlier costs order made on 18 March 2016.
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Endnotes
Decision last updated: 06 June 2019
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