Prichard v M 6:8 Legal Pty Ltd - [2024] WADC 63 (S)

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   PRICHARD -v- M 6:8 LEGAL PTY LTD [2024] WADC 63 (S)
CORAM:   GETHING DCJ
HEARD:   ON THE PAPERS
SUBMISSIONS FILED 22 AUGUST 2024

DELIVERED          :   4 OCTOBER 2024
FILE NO/S:   CIV 1857 of 2019
BETWEEN:   GABRIELLE MARY PRICHARD
Plaintiff
AND
M 6:8 LEGAL PTY LTD
First Defendant
MABEL LAI FUN CHUA
Second Defendant

Catchwords:

Costs - Plaintiff's claim dismissed summarily - Whether defendants are entitled to indemnity costs having made a Calderbank offer and an offer pursuant to Rules of the Supreme Court 1971 (WA) O 24A

Legislation:

District Court Rules 2005 (WA), r 42A
Rules of the Supreme Court 1971 (WA), O 24A

Result:

Indemnity costs awarded

Representation:

Counsel:

Plaintiff	:	In person
First Defendant	:	Mr J L Winton
Second Defendant	:	Mr J L Winton

Solicitors:

Plaintiff	:	Not applicable
First Defendant	:	MDS Legal
Second Defendant	:	MDS Legal

Case(s) referred to in decision(s):

Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S)
Calderbank v Calderbank [1976] Fam 93
Cooper Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36 (S)
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Godden v Alford [1960] WAR 235
Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Italiano v The Water Corporation [No 2] [2020] WASC 112 (S)
Latoudis v Casey (1990) 170 CLR 534
Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers [2020] WADC 27 (S)
Marindi Metal Ltd [2017] WASC 189 (S)
McKay v Commissioner of Roads [No 7] [2011] WASC 223 (S)
Naidoo v Williamson [2008] WASCA 179 ; (2008) 37 WAR 516
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Pritchard v M 6:8 Legal Pty Ltd [2024] WADC 63
Pritchard v Pritchard [2015] WASC 170 (S)
Shephard v Tuanie Paul Galea as executor and trustee of the estate of The Late Joseph Galea [2020] WASCA 152
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
Sulub v Tyres4U Pty Ltd [2018] WADC 139 (S)
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
X (a pseudonym) v Y (a pseudonym) [2022] WADC 85

GETHING DCJ:

Introduction

In the primary decision, reported as Pritchard v M 6:8 Legal Pty Ltd, I dismissed the plaintiff's claim.[1] The formal orders made on 9 August 2024 were that:
1.The statement of claim filed 4 November 2020 be struck out.
2.The plaintiff be refused leave to file an amended or substituted statement of claim.
3.The plaintiff's claim be dismissed.
4.By 23 August the defendant's file and serve any submissions, or any evidence, in support of their application for costs.
5.By 6 September the plaintiff file and serve any submissions, and any evidence, in response to the defendant's application for costs orders.
6.Unless either party requests an oral hearing in their submissions, the defendant's applications for costs be determined on the papers.
7.The costs of today be reserved.
[1] Pritchard v M 6:8 Legal Pty Ltd [2024] WADC 63, which I will refer to as the 'Pritchard DC2'.
On 22 August 2024, the defendants filed a minute of proposed orders setting out the costs orders it contended should be made in the following terms:
1.The plaintiff pay the defendants' costs of the action up to and including 8 June 2021 (including any reserved costs), on a party and party basis, to be taxed if not agreed.
2.The plaintiff pay the defendants' costs of the action from 9 June 2021, except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exclusions the defendants are completely indemnified by the plaintiff for their costs from 9 June 2021, including the costs of this application for costs, to be taxed if not agreed.
At the same time the defendants also filed an outline of submissions and an affidavit in support sworn by Ashley Macknay (Macknay Affidavit). Mr Macknay is a director of the solicitors for the defendants. The defendants did not request an oral hearing.
The plaintiff did not file any submissions or evidence in response to the defendants' application for costs orders by 6 September 2024, and the court has not received any material between then and the date of this decision. Nor has the court received any correspondence from the plaintiff in which she either sought an extension of the time in which to file submissions and evidence, or in which she requested an oral hearing.
The plaintiff was in court when the orders in [1] were made. I am satisfied that she has had a reasonable opportunity to make submissions and file evidence in opposition to the orders sought by the defendants.
For the reasons which follow, the defendants are entitled to the orders which they seek.

Evidence in the Macknay Affidavit

The following evidence is set out in the Macknay Affidavit.
The defendants were first notified of the plaintiff's claim by letter dated 29 June 2017 from her former solicitors (Ryan & Durey). The claim set out in this letter is essentially as set out in the statement of claim ultimately filed by the plaintiff in this action dated 4 November 2020.
Mr Macknay commenced acting for the defendants in September 2017 on instructions from their insurer. On 14 September 2017 he sent a letter to Ryan & Durey in relation to issues with the plaintiff's claim. The thrust of the letter was that due to the operation of Supreme Court Act 1935 (WA) (SCA) s 71 the plaintiff would not be able to tender evidence of the Siblings Offer (as defined in Pritchard DC2 [2]) in any proceedings against the defendants, so would be unable to prove essential parts of the claim.[2]
[2] Macknay Affidavit, ATM-2.
The writ in the action was filed on 20 May 2019 by the plaintiff's then solicitors, Ilberys Lawyers.
On 21 October 2019, Mr Macknay wrote to Ilberys Lawyers. This letter is in response to a letter from Ilbery Lawyers marked 'Without Prejudice Save as to Costs' dated 17 September 2019. In his letter, Mr Macknay in essence reiterated his view that the plaintiff would not be able to tender evidence of the Siblings Offer in any proceedings against the defendants, so would be unable to prove essential parts of the claim.
On 23 November 2020, Mr Macknay attended a without prejudice meeting with the plaintiff at the offices of MDS Legal. It appears that by the time of this meeting, the plaintiff was a litigant in person. At this meeting, he explained to the plaintiff the reasons why SCA s 71 meant that the plaintiff would be unable to prove her claim. He wrote to the plaintiff on 24 November 2020 enclosing a detailed paper setting out the defendants' position in relation to the claims she had made. This paper reiterated the position that SCA s 71 precluded her from being able to make a claim, along with some other reasons why her claim would fail.
On 21 April 2021, Mr Macknay caused a without prejudice offer to settle the action to be emailed to the plaintiff (April 2021 Offer). The April 2021 Offer was marked 'Without Prejudice Save as to Costs'. It read:
M 6:8 Legal Pty Ltd and Ms Chua offer to settle your claim against them in the Action for the sum of $140,000, plus costs to be taxed if not agreed, inclusive of GST. This offer is made on the following terms:
1. the offer is open for acceptance for 28 days from the date of this letter, following which it will lapse without further notice;
2. acceptance of the offer must be communicated to me in writing; and
3. upon acceptance of the offer, I will draft a deed of settlement and release (Deed) in the usual Law Mutual (WA) format and provide it to you for your review and signing.
For the avoidance of doubt, a binding agreement will only come into effect upon the delivery of signed counterparts of the Deed.
Mr Macknay did not receive a response to the April 2021 Offer.
On 11 May 2021, Mr Macknay caused a without prejudice notice of offer of compromise (May 2021 Offer) to be emailed to the plaintiff. The May 2021 Offer was expressed to be made pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 24A and District Court Rules 2005 (WA) (DCR) r 42A. The terms of the May 2021 Offer were:
1.This offer of compromise is served in accordance with rule 42A of the Rules of the District Court 2005 (WA) and Order 24A of the Rules of the Supreme Court 1971 (WA) (RSC).
2.The defendants offer to compromise the plaintiff's claim against them on the following terms:
a.the defendants pay the plaintiff the sum of $140,000 (Settlement Sum);
b.the defendants pay the plaintiff's costs of the plaintiff's claim, to be taxed if not agreed; and
c.the Settlement Sum is inclusive of all interest.
3.This offer is open for acceptance within a period of 28 days of service of this notice.
Mr Macknay did not receive acknowledgement of receipt of the May 2021 Offer from the plaintiff by 14 May 2021 as required by RSC O 24A r 3(4) or at all. Nor has he received any response to, or communication of acceptance of, the May 2021 Offer.
As proof of service, Mr Macknay deposes (par 15):
[The May 2021 Offer] was emailed to **@**, which is the email address specified on the amended writ of summons filed on 18 February 2020 by the plaintiff in this matter. The plaintiff also sent me an email from **@** at 4.51pm on 11 May 2021, conferring in relation to proposed orders. Attached and marked 'ATM‑7' is a true copy of the plaintiff's email sent at 4.51pm on 11 May 2021. Further, I am informed by my secretary Elaine Tang, and I verily believe, that based on her review of communications between the plaintiff and MDS Legal in this matter, MDS Legal has sent approximately 200 emails to **@** without any indication that any of them have not been successfully delivered.
The email address in the preceding paragraph is the email address provided in the Form 5AA Notice of change in representation filed by the plaintiff on 18 February 2020 when she became a litigant in person.
I am satisfied that the plaintiff was properly served with the April 2021 Offer and the May 2021 Offer.

Are the Defendants entitled to an order for party and party costs?

In dealing with the issues of costs I continue to bear in mind that the plaintiff is a litigant in person and reiterate the principles which I set out in the Pritchard DC2, at [17] and [18].
Costs of actions and proceedings in the District Court are to 'be paid by or apportioned between the parties in such manner as the District Court judge directs'.[3] In default of such a direction, the costs shall 'abide the event'.[4] Aside from the default position, the court's discretion is unconfined in the sense that there are 'no positive indication of the considerations upon which the court is to determine by whom and to what extent costs are to be paid'.[5] The discretion is very wide.[6] However, it must be exercised judicially, that is, in accordance with established principles and factors directly connected with the litigation, and not arbitrarily, capriciously or so as to frustrate the legislative intent.[7] It must be exercised so as to achieve what is fair and just between the parties according to the circumstances of the particular case.[8] The court 'should carefully examine the realities of the case in hand, and should so frame its order that justice shall, so far as costs are concerned, be nearly as possible done between the parties'.[9] Nevertheless, 'practices or guidelines have developed, one of which is that, generally speaking, a wholly successful party should receive his or her costs unless good reason is shown to the contrary'.[10]
[3] District Court of Western Australia Act 1969 (WA) (DCA) s 64(1).
[4] DCA s 64(1).
[5] Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5] (reasons of the court) (Hughes).
[6] Strzelecki Holdings Pty Ltd v Jorgensen[2019] WASCA 96 [48] (judgment of the court) (Strzelecki).
[7] Northern Territory v Sangare[2019] HCA 25; (2019) 265 CLR 164 [24] (judgment of the court); Strzelecki [48].
[8] Latoudis v Casey (1990) 170 CLR 534, 558 (Dawson J) (Latoudis); Godden v Alford [1960] WAR 235, 237 (judgment of the court) (Godden).
[9] Godden (237).
[10] Hughes [5]; Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S) [5] (judgment of the court).
In the present case, as the plaintiff's claim has been dismissed, the defendants have been wholly successful. There is no good reason why they should not receive their costs, at least assessed on a party and party basis.[11]
[11] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] (reasons of the court); Cooper Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36 (S) [14] (Gething DCJ) (Ellis).

Are the Defendants entitled to an order for indemnity costs?

The May 2021 Offer was made in reliance on the regimes in both DCR r 42A and RSC O 24A.
DCR r 42A only applies to an offer made by a plaintiff, and excludes the applicable rules in RSC r 10(4) and r 10(5A).[12] The rule does, however, confirm the application of the remainder of RSC O 24A.
[12] By amendment taking effect on 11 December 2020, DCR r 42A(2) was amended to expressly provide that RSC O 24A r 10(5A) does not apply to the District Court. This follows decisions to the effect that this rule was substantively inconsistent with the terms of DCR r 42A(4): Lawrence [55] - [66]; Sulub v Tyres4U Pty Ltd [2018] WADC 139 (S) [20] ‑ [26] (Glancy DCJ); ]; Ellis [21], [39].
The May 2021 Offer complied with the requirements set out in RSC O 24A r 3A.
The May 2021 Offer was not accepted by the plaintiff.
The costs consequences where an offer is made by a defendant and not accepted by a plaintiff are set out in RSC O 24A r 10(5) and r 10(7A):
(5)Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was made, taxed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter, taxed on a party and party basis, except as provided in subrule (7A).
…
(7A)If the Court is satisfied that the failure by the plaintiff to accept the offer made by the defendant was unreasonable, the defendant's costs are to be taxed on an indemnity basis, unless the interests of justice require otherwise.
However, RSC O 24A r 10(5) does not apply in the present case as the plaintiff did not obtain judgment on her claim. Rather, her claim was dismissed.
RSC O 24A r 10(7A) does apply. When assessing if an O 24A offeree has acted unreasonably, like principles apply as to when the court is assessing whether a party has acted unreasonably in not accepting a Calderbank[13] offer.[14] The defendants bear the onus of proof to show that the plaintiff's failure to accept their O 24A offer was unreasonable.[15]
[13] Calderbank v Calderbank [1976] Fam 93 (Calderbank).
[14] Marindi Metal Ltd [2017] WASC 189 (S) [44] (Kenneth Martin J) (Marindi).
[15] Marindi [44] - [45].
The defendants, in addition, marked the April 2021 Offer 'without prejudice save as to costs'. This is sufficient to invoke the principles outlined in Calderbank.
The principles are those governing the costs consequence of a party failing to accept a Calderbank offer are well established and may, for present purposes, be summarised in the following terms:[16]
[16] Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 [19] (judgment of the court); Shephard v Tuanie Paul Galea as executor and trustee of the estate of The Late Joseph Galea [2020] WASCA 152 [192] (judgment of the court); McKay v Commissioner of Roads [No 7] [2011] WASC 223 (S) [92] ‑ [130] (Beech J); Italiano v The Water Corporation [No 2] [2020] WASC 112 (S) [36] - [47] (Martin CJ).
(a)Calderbankoffers are informal offers made on terms expressed to be without prejudice save as to costs;
(b)a Calderbank offer can be considered as a relevant factor in the exercise of the costs discretion;
(c)the court's approach takes into account the private and public benefits of encouraging reasonable settlements, including by possible costs consequences for the party rejecting the offer;
(d)the policy of encouraging reasonable settlement of an action is a factor in the exercise of discretion on costs;
(e)the party who makes a Calderbankoffer takes the chance that, when the court exercises its discretion in all the circumstances, the offer will lead to costs consequences;
(f)the weight to be given to a Calderbank offer is a matter for the discretion of the court in all the circumstances of the case;
(g)a Calderbank offer may be used in support of an application for indemnity costs or for an order that the party who rejected the offer pay the costs of the party who made offer on a party and party basis;
(h)a Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable;
(i)there is a lower threshold for an award of party and party costs than for indemnity costs, the power to order which is exceptional in character;
(j)a finding that a Calderbank offer was unreasonably rejected, judged at the time of the offer, is not a precondition to the power to award party and party costs based on a Calderbankoffer;
(k)however, the reasonableness, or otherwise, the conduct of a party in rejecting a Calderbank offer may be relevant to determining whether and to what extent the Calderbankoffer sustains an exercise of the costs discretion adverse to the party who rejected the offer;
(l)the assessment of the unreasonableness of the rejection of a Calderbank offer is to be made at the time that the offer is considered, and without the benefit of hindsight, so that the issue of unreasonableness is not to be determined by adopting the judgment sum as a yard stick;
(m)the mere fact that the recipient of a Calderbankoffer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable;
(n)more specifically, a Calderbankoffer in an amount that exceeds the judgment sum does not give rise to a presumptive entitlement to indemnity costs;
(o)all the relevant facts and circumstances must be considered in determining whether the rejection of the offer was unreasonable; and
(p)in assessing whether the rejection of the offer was unreasonable relevant facts include the stage of the proceeding at which the offer was received, the time allowed to the offeree to consider the offer, the extent of the compromise offered, the offeree's prospects of success, assessed as at the date of the offer, the clarity with which the terms of the offer were expressed and whether the offer foreshadowed an application for costs (including indemnity costs) in the event of the offeree's rejecting it.
Both the April 2021 Offer and the May 2021 Offer were made at an early stage in the life of the action. Each was made after the defendants had filed a detailed defence on 18 January 2021. Each was made well before the application the subject of the decision which I refer to in Pritchard DC2 as Pritchard DC, which was not heard until 28 February 2022.[17]
[17] Reported as X (a pseudonym) v Y (a pseudonym) [2022] WADC 85.
The 28 days allowed by the April 2021 Offer for the plaintiff to respond was, in my view, reasonable, particularly so given the correspondence which I have set out at [11] and [12]. The May 2021 Offer was open for not less than 28 days as required by RSC O 24A r 3(3).

The defendant's prospects of success as at mid 2021 were very strong, as set out in the correspondence at [11] and [12].
The plaintiff plainly was worse off than she would have been had she accepted either the April 2021 Offer or the May 2021 Offer.
The amount of each offer, $140,000 plus costs to be taxed if not agreed, in my assessment, represented a substantial compromise by the defendants. As I observe in Pritchard DC2 at [5], in essence, the plaintiff's claim is that, had the defendants not been negligent or in breach of contract, there would have been a binding agreement in terms of the Siblings Offer and she would not have suffered the loss in broad terms comprising the difference between what she would have received under the Siblings Offer and what she did receive following the decision in the Testamentary Proceedings. The Siblings Offer was $350,000.[18] As a result of the Testamentary Proceedings in the Supreme Court her final distribution was $156,000.[19] So her loss in broad terms was $194,000. Although the plaintiff claimed well in excess of this amount, in my view, the amount of $194,000 was a realistic best case outcome. $140,000 is about 72% of this amount.
[18] Pritchard v Pritchard [2015] WASC 170 (S) [15] - [16] (Jenkins J).
[19] Proposed SC, par 107.
The plaintiff had been on notice since September 2017 of the defendants' position that her claim could not be maintained due to the application of SCA s 71. She had ample time to obtain advice on the defendants' position.
The defendants have satisfied me that the failure by the plaintiff to accept either the April 2021 Offer or the May 2021 Offer was unreasonable. By RSC O 24A r 10(7A), the defendants are entitled to have their costs taxed on an indemnity basis, unless the interests of justice require otherwise. The interests of justice do not require otherwise.

What are the appropriate final orders?

The appropriate final orders are:
1.The plaintiff pay the defendants' costs of the action up to and including 8 June 2021 (including any reserved costs), on a party and party basis, to be taxed if not agreed.
2.The plaintiff pay the defendants' costs of the action from 9 June 2021, except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exclusions the defendants are completely indemnified by the plaintiff for their costs from 9 June 2021, including the costs of this application for costs, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
OS
Associate
3 OCTOBER 2024

Naidoo v Williamson [2008] WASCA 179 ; (2008) 37 WAR 516 [39] (Steytler P, with whom Pullin JA & Murray AJA agreed); Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers [2020] WADC 27 (S) [14] (Herron DCJ) (Lawrence).