Pollard v Baulderstone Hornibrook Engineering Pty Ltd (No 2)

[2007] NSWSC 486

CITATION:	Pollard v Baulderstone Hornibrook Engineering Pty Ltd & anor (No 2) [2007] NSWSC 486 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	23 March 2007
JUDGMENT DATE :	16 May 2007
JUDGMENT OF:	Hislop J
DECISION:	1. The application is dismissed; 2. The defendants to pay the plaintiff’s costs of the application.
CATCHWORDS:	Personal injury - Damages - Calderbank offer - Plaintiff's non acceptance of offer not unreasonable.
LEGISLATION CITED:	Civil Liability Act 2002
CASES CITED:	Crump v Equine Nutrition Systems Pty Limited (No 2) [2007] NSWSC 25 Gretton v The Commonwealth of Australia [2007] NSWSC 149 Jones v Bradley (No 2) [2003] NSWCA 258 Leichhardt Municipal Council v Green [2004] NSWCA 341 MGICA (1992) Pty Ltd v Kenny and Good Pty Ltd (1996) 70 FCR 236 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
PARTIES:	Plaintiff - Clint Pollard First Defendant - Baulderstone Hornibrook Engineering Pty Ltd Second Defendant - Bilfinger Berger AG
FILE NUMBER(S):	SC 20465/04
COUNSEL:	Plaintiff - Mr D.A. Wheelahan QC with Mr A.P.L. Naylor First and Second Defendants - Mr R.A. Cavanagh
SOLICITORS:	Plaintiff - RTW & Associates Solicitors First and Second Defendants - Moray & Agnew Solicitors

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HISLOP J

16 May 2007

20465/04 Clint Pollard v Baulderstone Hornibrook Engineering Pty Ltd and Bilfinger Berger AG (No 2)

JUDGMENT

Introduction

1 The plaintiff recovered a verdict and judgment in the sum of $229,150.08 in this action for personal injuries arising out of an accident on a construction site.

2 The defendants seek an order that the plaintiff pay their costs on an indemnity basis from the date of the making by them of an offer in a Calderbank letter together with such other costs orders as may be appropriate.

3 The Calderbank letter relied upon is dated 21 July 2006. It made an offer of $280,000.00 plus costs but exclusive of workers compensation payments to settle the matter. The letter stated “This offer will expire at 10am on 24 July 2006”. The letter was received by the solicitors for the plaintiff by fax at 11am on Friday 21 July 2006. The hearing of the proceedings was listed to, and did, commence at 10am on the following Monday.

4 The defendants’ offer was not accepted by the plaintiff. The only prior settlement offer of which I was informed by the parties was an offer of compromise in the sum of $695,000 plus costs. That offer was dated 14 July 2006 and was made by the plaintiff. It was expressed to remain open until 4pm on 21 July 2006.

Principles

5 Rule 42.1 of the Uniform Civil Procedure Rules 2005 (“the rules”) provides “Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.”

6 Rule 42.15 of the rules provides, relevantly, that where an offer of compromise is made by a defendant pursuant to rule 20.26, and the plaintiff does not accept that offer and recovers a judgment less favourable to him or her than the terms of the offer then, unless the Court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs until the beginning of the date following the day on which the offer was made from which date the defendant is entitled to its costs assessed on an indemnity basis. In the case of an offer pursuant to rule 20.26 the court’s discretion to “order otherwise” will, in general, be exercised only in an exceptional case - Leichhardt Municipal Council v Green [2004] NSWCA 341 and it is for the plaintiff to prove that the court should “order otherwise” - Gretton v The Commonwealth of Australia [2007] NSWSC 149 at [9].

7 The court may also make an order that a defendant is entitled to indemnity costs where an offer has been made in a Calderbank letter and the judgment obtained by the plaintiff is less favourable to him or her than the terms of the offer.

8 Unlike a notice of offer of compromise under rule 20.26 “…the mere making of an offer by a “Calderbank letter” and its non-acceptance followed by a result more favourable to the offeror (less favourable to the offeree) than that represented by the offer will not automatically lead to the making of an order for payment of costs on an indemnity basis” - MGICA (1992) Pty Ltd v Kenny and Good Pty Ltd (1996) 70 FCR 236 at 239.

9 The court may have regard to a Calderbank letter when deciding questions of costs but “In the end the question is whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure” – SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37], Jones v Bradley (No 2) [2003] NSWCA 258. Relevant factors are whether the rejection of the compromise offer was reasonable in the circumstances and the timeframe in which the offeree had to consider the offer – Crump v Equine Nutrition Systems Pty Limited (No 2) [2007] NSWSC 25 at [40]. It is for the defendant to persuade the court that the plaintiff acted unreasonably in rejecting the Calderbank offer - Gretton at [16]. Circumstances to be considered in determining whether the failure to accept the offer was unreasonable or not include the making of an assessment of the strengths and weaknesses of the plaintiff’s case looking at the claim prospectively at the time the offer was made. This task is not to be determined with the benefit of hindsight - Gretton at [24].

The defendants’ submissions

10 The defendants submitted that the orders sought by them should be made essentially because:

a) The offer was a reasonable one;

b) The plaintiff had failed, by a significant margin, to exceed the offer;

c) The offer had been made at a time when all parties appreciated the nature and arguments to be raised on hearing when all the evidence going to be relied on had been served;

d) There was ample opportunity to consider the merits of the offer, the time frame was not too small to allow a proper consideration of the offer;

e) The court would infer that the plaintiff met with his counsel on the morning of the hearing and there was ample opportunity to discuss the offer.

Consideration

11 The determination of the damages in this case involved the assessment of a number of heads of damage in respect of which the possible range was quite wide. It also involved a consideration of contributory negligence and the contribution of the employer’s negligence to the damages. The claim was subject to capping under the Civil Liability Act 2002 with the consequence that small increments in the percentage assessment of non-economic loss could result in significant increases in the monetary sums recovered. These factors rendered the task of prospectively assessing damages a difficult one.

12 In my opinion, the defendants’ offer was a reasonable one when viewed prospectively and was one which required full consideration by the plaintiff.

13 The plaintiff is a young man. At the relevant time, he lived outside Sydney. He was not well educated. There was evidence he had settled a workers compensation claim previously but no evidence that he otherwise was experienced in the settlement of legal proceedings or the weighing of considerations relevant to so doing.

14 There was no evidence as to when the plaintiff was informed of the Calderbank letter or when he met with his legal advisers to discuss it. It was submitted I would infer he met with his legal advisers on the morning of the hearing and that there was ample opportunity to discuss the offer. Whilst I am prepared to infer that the plaintiff met with his legal advisers on the morning of the hearing (but not before) I do not accept there was ample opportunity to discuss the offer before it expired.

15 In my opinion the time afforded to the plaintiff to consider the defendants’ offer, in the circumstances, was neither ample nor sufficient. The time allowed was insufficient to discuss the offer, obtain appropriate advice upon it, fully consider that advice and reflect upon the many considerations relevant to whether the offer should be accepted or not.

16 The onus is upon the defendants to establish the plaintiff acted unreasonably in not accepting the offer. In my opinion they have failed to do so. Accordingly the application must be dismissed with costs.

17 The orders of the court are:

1. The application is dismissed.

2. The defendants to pay the plaintiff’s costs of the application.


**********

16/05/2007 - Judgment date inserted. - Paragraph(s) Coversheet