Perisher Blue Pty Limited v Castle

[2020] NSWSC 1943

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Perisher Blue Pty Limited v Castle [2020] NSWSC 1943

Hearing dates:

04 December 2020

Date of orders:

04 December 2020

Decision date:

04 December 2020

Jurisdiction:

Common Law

Before:

Cavanagh J

Decision:

(1) The plaintiff pay the defendant’s costs on an ordinary basis up to 22 May 2019.

(2) The plaintiff pay the defendant’s costs on an indemnity basis from 23 May 2019.

Catchwords:

COSTS – Party/Party – Bases of quantification – Factors relevant to the court’s discretion when quantifying costs

Legislation Cited:

Civil Liability Act 2002 (NSW)

Competition and Consumer Act 2010 (Cth) Sch 2 – Australian Consumer Law

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Calderbank v Calderbank [1975] 3 ALL ER 333

Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391

Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368

Category:

Costs

Parties:

Perisher Blue Pty Limited (Applicant)
Deborah Janice Castle (Respondent)

Representation:

Counsel:
J Dodd (Applicant)
G Smith (Respondent)

Solicitors:
HBA Legal (Applicant)
Lough & Wells Lawyers (Respondent)

File Number(s):

2017/248566

Publication restriction:

None

REVISED EX TEMPORE Judgment

1. This matter comes before me today on an application of the defendant seeking a variation of the costs order I made in the judgment which I delivered on 20 November 2020.

2. On that day, I entered a judgment for the defendant, essentially on the basis that the defendant was entitled to rely on the dangerous recreational provisions of the Civil Liability Act 2002 as a defence to the plaintiff’s claim in negligence.

3. As is apparent from the judgment, I accepted that the plaintiff established that the defendant was negligent and accepted that the exception set out in s 139A(4) of the Australian Consumer Law would apply to the benefit of the plaintiff, but none of those matters displace the defence which was available to the defendant under the Civil Liability Act 2002.

4. The defendant seeks indemnity costs on the basis of a number of offers which it made during the course of the proceedings as follows:

1. On 2 October 2018 it made an offer in accordance with Calderbank v Calderbank [1] offering a judgment for the defendant with each party to pay its own costs. Accompanying that offer was a letter from the solicitors for the defendant setting out why the defendant considered that the plaintiff would not succeed. That offer was not limited as to time in the sense that it remained open and capable of acceptance at any time, obviously subject to any withdrawal or counter-offers being made.

2. On 7 May 2019 the defendant served another Calderbank offer on this occasion offering a judgment for the plaintiff in the sum of $100,000 with each party to pay its own costs. Again, the defendant set out in its letter the reasons why it considered that the plaintiff would not succeed. That offer was said to remain open for a period of 10 days.

3. On 11 June 2019 the defendant served a further Calderbank offer offering judgment for the plaintiff in the sum of $100,000 with each party to pay its own costs. That offer was said to remain open for a period of 7 days.

4. Then on 19 May 2020 the defendant served a further Calderbank offer offering a judgment for the defendant with each party to pay its own costs. That offer was said to remain open for a period of seven days.

5. Then on 19 May 2020 the defendant served an Offer of Compromise offering a judgment for the defendant with each party to pay its own costs.

   1. [1975] 3 All ER 333.

5. Mr Smith of counsel appears for the plaintiff on the application and Mr Dodd of counsel appears for the defendant. Mr Smith does not dispute that the defendant would be entitled to indemnity costs from the day after the Offer of Compromise was served by the defendant on 1 June 2020.

6. The issue on the application is whether the defendant should obtain an order for indemnity costs from any earlier point, having regard to the Calderbank offers made by the defendant.

7. It is well settled that a party may serve a valid Offer of Compromise even though the offer is, in effect, a judgment for the other party without any payment of costs: see, for example, Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd (No 2) [2014] NSWCA 391. The defendant did not avail itself of the Offer of Compromise process when making its first offer in October 2018. Whilst, when considering a valid Offer of Compromise, the onus is on the party which did not accept the offer to rebut the presumption which arises, the approach is different in respect of a consideration of the consequences of a Calderbank offer.

8. It is the party which seeks to rely on the offer which bears the onus of convincing the Court that there should be some variation of the ordinary rules as to costs. The offer made by the defendant on 2 October 2018 was, in effect, a request that the plaintiff capitulate. It was made at a relatively early stage of the proceedings whilst the solicitors for the defendant set out in some detail why they considered that the plaintiff would not succeed. That is not the determining feature.

9. Indeed, I do not consider that the validity of any Calderbank offer or Offer of Compromise and the costs consequences which follow should be determined with reference to the view of the parties, set out in correspondence or otherwise, as to why the other party would not succeed or, indeed, why the other party should accept an offer.

10. As is apparent from this case, and most other cases, it is sometimes difficult to predict what the outcome of a case might be and, in a case involving complex issues of tort, contract and statutory construction, it is almost inevitable that there will be some variation in the judgment of the Court from what one or other party might have thought would happen. Whether or not the defendant succeeded on the basis of the dangerous recreational provisions or s 5M does not seem to me to be determinative. However, I adopt what was said by the Court of Appeal in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [32].

11. If it is merely sufficient for a party to serve a Calderbank offer at a relatively early stage of the proceedings, which, in effect, asked the other party to give up or capitulate, then almost in every matter the natural consequence would be an order for indemnity costs.

12. As I have already indicated, if a party wishes to avail itself of the procedures under the UCPR and serve a valid Offer of Compromise, different considerations will arise but I do not consider that it was unreasonable for the plaintiff not to have accepted that first offer made on 2 October 2018 and it does not matter whether the defendant outlined in great or little detail why it thought it might succeed at that time. I am not engaged in some sort of after the event analysis of whether the defendant or the plaintiff accurately predicted what the Court might find.

13. The defendant then made offers on 7 May 2019 and 11 June 2019. On this occasion the defendant offered to pay the plaintiff the sum of $100,000. Whilst Mr Smith points out that that might not have covered all the costs at that stage, it must be borne in mind that by this stage the defendant had also incurred substantial costs so that it can be seen that the offer of a payment of $100,000 represented a genuine attempt at compromise by the defendant. The plaintiff did not respond to either of those offers.

14. The plaintiff has not adduced any evidence as to why she did not respond to the offers. She is not compelled to do so but, in circumstances in which valid Offers of Compromise which reflected a real compromise were served, the ordinary principles set out in Calderbank and always applied would apply in this matter.

15. However, the offers were expressed to remain open only for periods of 10 days and then 7 days. I must say that it seems somewhat unreasonable to put to a plaintiff that she should accept such a heavily compromised offer and make a decision in only seven days.

16. It is not clear to me why the defendant would not have left those offers open for a reasonable period, such as 28 days. If those offers were made in a vacuum, in the sense that they were simply made out of the blue by the defendant, I would not have been satisfied that it was reasonable to expect the plaintiff to respond to them within the period allowed by the defendant.

17. I must be conscious of the risk that parties might put offers not as a real attempt to settle the matter but merely for costs protection. The risk in putting offers such as those made in May and June 2019 and leaving them open for such short periods is that the Court may ultimately not consider that they were left open for a reasonable period. Having said that, in this matter Mr Dodd reminds me that those offers were put subsequent to an informal settlement conference which was attended by Mr Smith and Mr Dodd, both of whom are very senior and experienced counsel.

18. I do not know what occurred at the settlement conference but I would infer that there were discussions about the matter and that Mr Smith attended with his client for the purposes of advising his client about the merits of settlement and what sort of settlement might be reasonable.

19. No evidence was adduced by the plaintiff to the effect that nothing happened at the settlement conference. Accordingly, in the context that these offers of May and June were really follow-up offers from the settlement conference, I accept Mr Dodd’s submission that it was reasonable for the defendant to place a time limit on the offers of the periods nominated by the defendant and that it was not unreasonable to expect the plaintiff to have been in a position to respond to the offers.

20. Of course, responding to the offers would necessarily involve the plaintiff being properly advised as to the merits of the offers and the pros and cons of taking or rejecting the offers. However, again, as these offers were made subsequent to and proximate to an informal settlement conference, I accept that the offers were capable of acceptance and that it was not unreasonable for the plaintiff to have responded to the offers within the time in which the offers were open.

21. The proceedings were well advanced by that stage. The offers represented a genuine compromise. As I have said, I do not think the application for indemnity costs should be determined on the basis of which solicitor accurately predicted the outcome of the matter or which solicitor was right in his or her views as to the law and what the Court might find.

22. In all the circumstances, I am satisfied that the usual order for costs should be varied.

23. I make the following orders

1. The plaintiff pay the defendant’s costs on an ordinary basis up to 22 May 2019.

2. The plaintiff pay the defendant’s costs on an indemnity basis from 23 May 2019.

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Endnote

Amendments

05 March 2021 - Endnote adjusted.

Decision last updated: 05 March 2021