Nouf El Hajjar bht NSW Trustee and Guardian v Georgoulopoulos (No. 2) - [2018] NSWDC 5

District Court

New South Wales

Amendment notes

Medium Neutral Citation: Nouf El Hajjar bht NSW Trustee and Guardian v Georgoulopoulos (No. 2) [2018] NSWDC 5
Hearing dates: In Chambers
Date of orders: 19 January 2018
Decision date: 19 January 2018
Jurisdiction: Civil
Before: Wilson SC DCJ
Decision:
I make the following orders:
(a) I vacate order 1(b) made 16 November 2017 that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017;
(b) in its place, I order that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017, save for the costs thrown away by reason of the vacation of the hearing of the Notice of Motion before Judge Neilson on 22 June 2017;
(c)   I dismiss the plaintiff’s Notice of Motion filed 23 November 2017;
(d)   I order that the plaintiff pay the defendant’s costs of the Notice of Motion filed 23 November 2017;
(e)   I note that the order as to costs made by Neilson DCJ on 22 June 2017 stands;
(f)   I note that the order as to costs of the plaintiff’s Notice of Motion made by me on 16 November 2017 (paragraph 2(c)) stands.

Catchwords: COSTS – relief sought by plaintiff for procedural breaches of the Motor Accidents Compensation Act 1999
Legislation Cited: Civil Procedure Act 2005
Limitation Act 1969
Motor Accidents Compensation Act 1999
Uniform Civil Procedure Rules 2005
Cases Cited: Commonwealth of Australia v Smith [2005] NSWCA 478
Holt v Wynter (1999-2000) 49 NSWLR 128
Texts Cited: None
Category: Costs
Parties: Nouf El Hajjar bht NSW Trustee and Guardian v George Georgoulopoulos
Representation:
Counsel:   Mr P Semmler QC with Mr A Campbell          (Plaintiff)
      Mr B Wilson (Defendant)
Solicitors:   Carroll and O’Dea Lawyers (Plaintiff)
      Sparke Helmore Lawyers (Defendant)

File Number(s): 2016/38229-002, 003
Publication restriction: None

Judgment

Introduction

Background

The Costs Orders Previously Made

Variations of Costs Orders Pursuant to Leave

The Evidence

The Plaintiff’s Submissions

The Defendant’s Submissions

Consideration

Orders

Judgment

INTRODUCTION

This judgment relates to the question of costs.
On 16 November 2017, I handed down judgment in this matter in relation to two Notices of Motion filed by each of the parties. I made costs orders in respect of both Motions but granted both parties leave to apply to vary those costs orders within 14 days. Both parties seek to vary the orders.

background

The plaintiff was injured in a motor vehicle accident on 28 November 2012. Pursuant to s72 of the Motor Accidents Compensation Act 1999 (“MACA”) she was obliged to give notice of claim within six months of the date of the accident. This did not occur. There is provision in s73 of the Act for the late making of claims so long as certain criteria are met. In the substantive Judgment on the Notices of Motion, I was satisfied that the circumstances justified the exercise of the Court’s discretion and I granted the plaintiff leave to continue with the proceedings notwithstanding the fact that the Personal Injury Claim Form was served on the CTP insurer out of time.
The second issue raised by the Notices of Motion concerned the plaintiff’s failure to provide relevant particulars of claim following receipt of a direction from the insurer to do so. If the plaintiff failed to comply with the direction regarding particulars within three months after it was given, the plaintiff is taken to have withdrawn the claim (s85B(3)).
A remedy is, however, provided within s85B. Section 85B(7) requires the plaintiff to demonstrate a full and satisfactory explanation for the failure to provide the required particulars and also that the total damages of all kinds likely to be awarded to the claimant are not less than 25% of the maximum amount that may be awarded for non-economic loss as at the date of the motor accident.
For reasons which are exposed in the earlier Judgment, I was comfortably satisfied that the plaintiff had met both criteria. Accordingly, the plaintiff’s claim was reinstated.
In the end, the plaintiff succeeded on both points. That is, she was permitted to proceed on a late claim pursuant to s73 and her claim was reinstated in accordance with s85B(7).

the costs orders previously made

As mentioned, there were two Notices of Motion before the Court. The defendant’s Amended Notice of Motion filed 22 June 2017 sought dismissal of the proceedings on the basis that the plaintiff had failed to provide a full and satisfactory explanation for the delay in lodging the notice of claim and that she failed to meet the dual criteria under s85B(7) concerning the late particulars.
When the matter came before Judge Neilson, I gather that his Honour expressed some concern about the state of the evidence resulting in an application by senior counsel for the plaintiff to adjourn the hearing of the defendant’s Motion. On that occasion a specific costs order was made by Judge Neilson that the plaintiff was to pay the defendant’s costs thrown away by reason of the Motion not proceeding on 22 June 2017. That order stands.
In accordance with orders also made on 22 June 2017, the plaintiff filed a Notice of Motion on 4 August 2017. This was required as it is for the plaintiff to seek the relief under s85B: reinstatement of the claim.
Following determination of the Notices of Motion I made what I believed to be appropriate costs orders and gave the parties liberty to apply to vary those orders if the circumstances warranted such application.
In respect of the defendant’s Amended Notice of Motion filed 22 June 2017 I dismissed the Motion and ordered that the defendant pay the plaintiff’s costs of it (I was not, at that stage, aware of the earlier cost order of Neilson DCJ).
In respect of the plaintiff’s Notice of Motion filed 4 August 2017 I granted the plaintiff leave to proceed under s73 on the late claim and also reinstated of her claim notwithstanding the delay in the provision of particulars.
The costs order made in respect of the plaintiff’s Notice of Motion was that the costs be costs in the cause.

variations of costs orders sought

The variation sought by the plaintiff relates to the costs order made in respect of the plaintiff’s Notice of Motion filed 4 August 2017.
The Notice of Motion filed 23 November 2017 seeks the following order:

Should the Plaintiff obtain a verdict or settlement in her favour, the Defendant to pay the Plaintiff’s costs of the Plaintiff’s Notice of Motion filed on 4 August 2017 on a party/party basis, up to and including 18 September 2017 and on an indemnity basis thereafter.

That order contemplates a variation in the order made by Judge Neilson which I will not entertain.
In support of the Notice of Motion the plaintiff relies upon the following:

an affidavit of Olivia Mailian affirmed 23 November 2017;

the plaintiff’s Written Submissions (“PS”) dated 8 December 2017.

The defendant, or respondent to the Notice of Motion, relies upon the following:

an affidavit of Alison Jury affirmed 18 December 2017;

the defendant’s Written Submissions (“DS”) dated 18 December 2017.

The evidence

The evidence relied upon by the plaintiff in support of the Notice of Motion consists of an Offer of Compromise dated 18 September 2017 served on the defendant under cover of letter of the same date. Those documents are annexure A to the affidavit of Ms Mailian.
The covering letter indicates that the documents were sent by email, on 18 September 2017, the letter expressly refers to the enclosure as being an Offer of Compromise but states that, in the event that the offer is for some reason “non-compliant with the Uniform Civil Procedure Rules” then the plaintiff relies upon Calderbank v Calderbank [1975] 3 All ER 333. The offer is expressed to remain open until 10am on Thursday 21 September 2017, being the day prior to the date set for the hearing of the Motions.
The offer is expressed in the following terms:

The Plaintiff offers to compromise part of the Plaintiff’s claim as far as it relates to the Plaintiff’s Notice of Motion filed on 4 August 2017 on the following terms:
(i) pursuant to s73(1) of the Motor Accidents Compensation Act 1999, the Plaintiff be granted leave to make a late claim;
(ii) pursuant to s85B(7) of the Motor Accidents Compensation Act 1999, this claim be reinstated;
(iii)   the parties to bear their own costs of the Plaintiff’s Motion filed on 4 August 2017;
(iv)   this offer is made in accordance with Uniform Civil Procedure Rules 2005 and pursuant to Rule 20.26;
(v)   this offer is open for acceptance until 10am on Thursday 21 September 2017.

The evidence relied upon by the defendant was attached to the affidavit of Ms Jury and essentially raised two factors for consideration.
In reverse order, the first arises from a letter from Sparke Helmore Lawyers to Carroll and O’Dea Lawyers dated 27 November 2017 pointing out that a costs order was made by Judge Neilson on 22 June 2017 and that it should stand. The order made by Judge Neilson was in respect of the defendant’s Notice of Motion which was before him on that occasion. By the letter of 27 November 2017 the solicitor for the defendant put the plaintiff’s solicitor on notice that they intended to seek a variation of the costs orders made 16 November 2017 to the extent that they were inconsistent with the orders made by his Honour Judge Neilson. Plainly the costs orders made 16 November 2017 should be varied at least to that extent so as to preserve the order made for the reasons given by his Honour on 22 June 2017.
The second matter raised by the affidavit of Ms Jury is by way of submission. In a letter of 19 September 2017 (annexure B to the affidavit) Sparke Helmore Lawyers notified the plaintiff’s solicitor that they intend to object to the Offer of Compromise. I take that to mean that they intended to submit that the offer ought not operate in the ordinary way.
The reasons advanced by the solicitors for the defendant were four-fold. First, it was said that the plaintiff was “making an offer within proceedings that do not currently have the Court’s leave to exist”.
Secondly, the defendant’s solicitors suggested that the purported Offer of Compromise did no more than seek the defendant’s “capitulation on a binary issue that is incapable of a compromise position”.
The third matter relied upon by the defendant’s solicitors was that the s85B breach issue required the leave of the Court, irrespective of the defendant’s position. That is to say that an application seeking reinstatement of the claim would have been necessary regardless of the position adopted by the defendant on that question.
The fourth reason relied upon by the defendant’s solicitor encapsulated the preceding factors and was premised on the basis that in all of the circumstances the offer did not propose a genuine compromise of an issue that is capable of being compromised.

the plaintiff’s submissions

The plaintiff’s argument proceeded on the premise that the applications could have been dispensed with if the plaintiff’s offer had been accepted by the defendant.
So far as the s73 issue is concerned that may have been the case if the insurer either declined to take the point or had accepted that it lost its right to reject the late claim on the ground of delay by not rejecting the explanation within two months of its receipt.
After compiling the Chronology in the Judgment on the Motions, it became apparent that it was arguable that the insurer had lost its right to take the point. I then directed the parties to address a number of specific questions relating to the Statutory Declaration of Ms Yelena Prodanovic declared 9 November 2015 and the insurer’s purported rejection of it on 15 February 2016. I took the view that the lengthy Statutory Declaration of Ms Prodanovic provided an explanation for the delay in the lodgement of the claim form. It was then incumbent upon the insurer to reject the explanation within two months of it being provided. That is, on or before 9 January 2016. It was not until 15 February 2016, after the appointment of Sparke Helmore Lawyers, that the explanation was formally rejected.
For the reasons provided in the primary Judgment on the Notices of Motion, I was satisfied that the Statutory Declaration of Ms Prodanovic provided a full and satisfactory explanation for the plaintiff’s delay in bringing the claim. It followed, therefore, that the insurer’s failure to reject it within time, caused the insurer to lose the right to do so.
Accordingly, the proceedings commenced on 5 February 2016 could not have been the subject of an application for dismissal by the insurer. Nor was it necessary for the plaintiff to seek leave to proceed on the late claim as the Court’s power to dismiss proceedings only arises in circumstances where the insurer has preserved its right to object.
The insurer took issue with the explanation which was provided on behalf of the plaintiff in relation to the late claim. As is plain from the first Judgment, I was satisfied that the plaintiff had provided an explanation which was both full and satisfactory resulting in the conclusion that even if I was mistaken about the s73(4)(b) point (that is, that the insurer lost the right to reject the claim) then the insurer’s application for dismissal failed in any event.
Section 85B operates differently. First, there is no dispute that the plaintiff was late in providing the particulars required by the direction made by the insurer. The fact that the period of delay was short is immaterial. The mere fact of the plaintiff’s failure to comply with the insurer’s direction made it necessary for the plaintiff to make an application for reinstatement of the claim and to satisfy the Court of the two factors specified in s85B(7)(a) and (b).
In relation to the Offer of Compromise itself, the plaintiff’s Written Submissions sought to establish the validity of the offer as made. Essentially, it was submitted on behalf of the plaintiff that the Offer of Compromise was served after all evidence and had been exchanged and at a time when both parties were in a position to make an informed assessment as to the likely outcome of the application. The plaintiff also relied upon the fact that the defendant did not at any stage seek an extension for acceptance of the Offer of Compromise in order to further consider its position.
In view of the staunch position adopted by the defendant in opposing the plaintiff’s Motion, I do not consider that the fact that the offer was only open for a very short period of time bears upon the efficacy of the offer.
The plaintiff’s submissions next deal with whether or not the Offer of Compromise represented a “true compromise”. In support of the submission that it did represent a true compromise, the plaintiff relies upon the obvious, but largely flawed, submission that had the offer been accepted by the defendant then the costs incurred in the hearing and determination of the Notices of Motion would have been spared. That is simply not the case.
Even had the insurer accepted that it had lost its right to reject the late claim (which at no stage it did accept) then the defendant would most likely have maintained its opposition to the reinstatement of the claim under s85B. I expect that the defendant would have argued against the propositions that the plaintiff had provided a full and satisfactory explanation for the delay in providing the particulars and that it was unlikely, in the circumstances, that the value of the plaintiff’s ultimate claim would satisfy the threshold required for the reinstatement of a claim.
Little, if any, time would have been spared even had the defendant accepted the plaintiff’s Offer of Compromise.
Commencing at paragraph 11 of the plaintiff’s Written Submissions, it is put that even if the Notice of Motion to vary the costs order failed, then the Court should exercise its discretion to award indemnity costs to the Plaintiff based on the Defendant’s persistent denial of the explanation for the late service of the Personal Injury Claim Form and the provision of the s85A particulars. It was further put that “had the Defendant not opposed the Plaintiff’s Motion filed on 4 August 2017 then the Hearing would have been vacated, or at least, significantly shortened, resulting in a substantial saving of time and costs”.
I am not prepared to make such order. The relevant period of delay in relation to the particulars was not explained by any of the evidence served by the plaintiff on the application. It was only through leave being granted for the plaintiff’s solicitor to give oral evidence in circumstances where the defendant did not oppose that course that there was any evidentiary basis for a finding as to the reasonableness or otherwise of the delay by the plaintiff in respect of the particulars.
It was through the defendant’s conduct in acquiescing to the plaintiff’s solicitor giving evidence other than on affidavit, that a further vacation of the hearing was avoided and additional costs inevitably incurred.

the defendant’s submissions

Counsel for the defendant commenced the Written Submissions by helpfully setting out the legal principles regarding the determination of costs in respect of applications such as those which came before the Court.
Whilst pursuant to s98 of the Civil Procedure Act 2005 (“CPA”) the costs remain in the discretion of the Court, Rule 42.1 of the Uniform Civil Procedure Rules 2005 (“UCPR”) provides for the general and long standing rule that costs follow the event.
Reference was made to the provisions of the Limitation Act 1969 which, whilst acknowledging the Court’s discretion, provides that the Court may reduce costs payable to a successful plaintiff on account of the expense to which the defendant has been put by reason of the plaintiff’s failure to comply with the relevant limitation provisions.
Reference was made to a number of decisions including Holt v Wynter (1999-2000) 49 NSWLR 128 at [147] – [148] and Commonwealth of Australia v Smith [2005] NSWCA 478 at [219]. Whilst the appellant courts have grappled with different combinations of costs orders, given the circumstances which create the need for an application such as an extension of time, the law always recognises the discretion of the trial judge to award costs as he or she sees fit. It is, of course, a discretion to be exercised in the interest of justice and on the evidence.
There are numerous examples of cases in which plaintiffs seeking an extension of time have been ordered to pay the defendants’ costs where the defendants’ opposition to the relief is justified and reasonable.
On the question of discretion, the defendant’s ultimate submission is that the Court retains its wide discretion but should have regard to the reasonableness or otherwise of each party’s actions. For reasons which I will elaborate upon below, I undertook that exercise in determining the costs on the basis upon which I did in the original Judgment.
The defendant’s Written Submissions go on to set out in some detail its opposition to the ordinary operation of the Offer of Compromise or Calderbank offer but for reasons which will be apparent below, I do not intend to traverse those arguments.

consideration

Before turning to the question of costs of 22 September 2017 when the Notices of Motion came on for hearing before me, I repeat that the order made by his Honour Judge Neilson on the prior occasion will stand. This will be reflected in the orders which I will make below.
Dealing first with the defendant’s Notice of Motion filed 22 June 2017 the only variation to be made is to reflect the earlier order of Judge Neilson.
The plaintiff’s Notice of Motion to vary the costs orders in respect of its own earlier Motion filed 4 August 2017 requires greater consideration.
Whilst it is true that the s73 point may have been disposed of by way of consent between the parties, assuming it even arose, the same cannot be said of the s85B point which raises matters of equal, if not greater complexity. Accordingly, it cannot be said that an acceptance of the plaintiff’s Offer of Compromise would have avoided the parties incurring the costs which they did. It may be that the costs would have been slightly less but that is not of such significance as to warrant intervention.

In my opinion, it was not open to the defendant to accept the plaintiff’s Offer of Compromise as it would not have relieved the Court of the need to consider and be satisfied of the matters required under s85B(7).
In respect of the first matter, prior to Ms Prodanovic giving evidence, there was no evidentiary basis whatsoever for the Court to make any assessment as to the fullness or reasonableness of the plaintiff’s explanation for delay in providing the particulars. Whilst the period of delay was quite short, it had the effect of disentitling the plaintiff to the reinstatement of her claim for damages. As evidence as to what occurred during that period was not provided until given orally in Court, it cannot be said that the defendant was aware of the evidence going to all the issues at the time the Offer of Compromise was served. Without filling that gap there was a real chance that the plaintiff’s application for reinstatement would have failed.
Accordingly, other than to make variations to the costs orders to accommodate those previously made by Judge Neilson, I do not intend to accede to the plaintiff’s application to vary the costs orders based upon the Offer of Compromise.
Some of the considerations bearing upon the exercise of the Court’s discretion include, as against the plaintiff, the fact that no explanation was provided for the critical period prior to the provision of the s85A particulars. Further, that in respect of each of the orders sought by the plaintiff, the plaintiff was seeking the indulgence of the Court for her failure to act in a manner required under the relevant legislation. Of course, her psychological and intellectual difficulties are a matter which would also be relevant to that consideration.
As against the defendant, the exercise of the Court’s discretion is influenced by the fact that the defendant’s own Notice of Motion failed and costs ought to follow the event. I have also taken into account the fact that, on the findings which I have made, the insurer lacked standing to make the application for dismissal pursuant to s73.
In my opinion, the interests of fairness and justice between the parties are best served by maintaining the costs orders previously made with the variation referred to above.

orders

I make the following orders:

I vacate order 1(b) made 16 November 2017 that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017;

in its place, I order that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017, save for the costs thrown away by reason of the vacation of the hearing of the Notice of Motion before Judge Neilson on 22 June 2017;

(d) I order that the plaintiff pay the defendant’s costs of the Notice of Motion filed 23 November 2017;

(e) I note that the order as to costs made by Neilson DCJ on 22 June 2017 stands;

(f) I note that the order as to costs of the plaintiff’s Notice of Motion made by me on 16 November 2017 (paragraph 2(c)) stands.

**********

ADDENDUM TO REASONS FOR JUDGMENT ON COSTS

On 16 January 2018, after finalising this judgment, I received a further, unexpected affidavit by Olivia Mailian affirmed 16 January 2018.

I have read the contents of that affidavit and it does not cause me to alter my reasons for judgment.

Amendments

19 January 2018 - Paragraph numbers amended.

Decision last updated: 19 January 2018

Medium Neutral Citation:	Nouf El Hajjar bht NSW Trustee and Guardian v Georgoulopoulos (No. 2) [2018] NSWDC 5
Hearing dates:	In Chambers
Date of orders:	19 January 2018
Decision date:	19 January 2018
Jurisdiction:	Civil
Before:	Wilson SC DCJ
Decision:	I make the following orders: (a) I vacate order 1(b) made 16 November 2017 that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017; (b) in its place, I order that the defendant pay the plaintiff’s costs of the defendant’s Amended Notice of Motion filed 22 June 2017, save for the costs thrown away by reason of the vacation of the hearing of the Notice of Motion before Judge Neilson on 22 June 2017; (c) I dismiss the plaintiff’s Notice of Motion filed 23 November 2017; (d) I order that the plaintiff pay the defendant’s costs of the Notice of Motion filed 23 November 2017; (e) I note that the order as to costs made by Neilson DCJ on 22 June 2017 stands; (f) I note that the order as to costs of the plaintiff’s Notice of Motion made by me on 16 November 2017 (paragraph 2(c)) stands.
Catchwords:	COSTS – relief sought by plaintiff for procedural breaches of the Motor Accidents Compensation Act 1999
Legislation Cited:	Civil Procedure Act 2005 Limitation Act 1969 Motor Accidents Compensation Act 1999 Uniform Civil Procedure Rules 2005
Cases Cited:	Commonwealth of Australia v Smith [2005] NSWCA 478 Holt v Wynter (1999-2000) 49 NSWLR 128
Texts Cited:	None
Category:	Costs
Parties:	Nouf El Hajjar bht NSW Trustee and Guardian v George Georgoulopoulos
Representation:	Counsel: Mr P Semmler QC with Mr A Campbell (Plaintiff) Mr B Wilson (Defendant) Solicitors: Carroll and O’Dea Lawyers (Plaintiff) Sparke Helmore Lawyers (Defendant)
File Number(s):	2016/38229-002, 003
Publication restriction:	None