Rapuano (t/as RAPS Electrical) v Karydis-Frisan - [2013] SASCFC 93

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
RAPUANO (TRADING AS RAPS ELECTRICAL) v KARYDIS FRISAN & ANOR
[2013] SASCFC 93
Judgment of The Full Court
(The Honourable Justice Vanstone, The Honourable Justice David and The Honourable Justice Peek)
17 September 2013
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - OTHER MATTERS - COSTS
PROCEDURE - COSTS - APPEALS AS TO COSTS - MISTAKE OF LAW OR FACT
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT
PROCEDURE - INFERIOR COURTS - SOUTH AUSTRALIA - DISTRICT COURT
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - DEMAND, OFFER AND CONSENT
EVIDENCE - ADMISSIBILITY AND RELEVANCY
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - MISCONDUCT, ETC - IN PROCEEDINGS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
The plaintiff (the appellant) was successful in his quantum meruit claim in the District Court, and sought an order for costs. The defendants (the respondents) resisted that application on the basis that the plaintiff had not bettered a number of offers of settlement, both formal and informal, made prior to, and during the course of, the action. The Judge found that an offer dated 2 December 2009 fell within r 187, District Court Civil Rules 2006 and that the plaintiff had not bettered that offer. His Honour had made adverse findings at trial that the plaintiff had materially exaggerated aspects of his claim and the defendants had also engaged in misconduct in the course of the trial. The Judge ordered that the defendants pay 70 per cent of the plaintiff's costs up to and including 16 December 2009 and that the plaintiff pay 85 per cent of the defendants' costs subsequent to 16 December 2009. The plaintiff appealed and the defendants cross-appealed.
Held (Peek J; Vanstone J and David J agreeing, allowing the appeal and cross-appeal in part):
(1) The defendants' offer of 2 December 2009 was not a valid r 187 offer.
(i) Rule 187 specifically envisages the entry of a judgment by consent upon the acceptance of a complying offer. Inconsistently with this, the offer required the plaintiff to file a Notice of Discontinuance upon acceptance. This was not a mere procedural irregularity and it deprived the offer of any status under r 187.
(ii) A complying r 187 offer cannot purport to resolve claims not raised in the subject proceedings. Paragraph 4 of the offer required the parties upon acceptance to enter into "a Deed of Release and Discharge releasing each other from any further claims in respect of works carried out by the Plaintiff at 28 Mellor Avenue Lockleys, South Australia". The offer required resolution of claims or possible claims separate to the extant proceedings as a condition of acceptance and did not comply with r 187.
(iii) Paragraph 4 was uncertain as to the terms and consequences of acceptance of the offer and as a consequence did not comply with r 187.
(iv) The offer was not in an approved form. It purported to settle not only the extant action but matters outside its purview, contrary to Form 23. It did not permit the entry of a consent judgment, contrary to Form 24. It was also expressed to be open for a limited period only, after which the offered sum could only be accepted after the amount of a proposed counterclaim and an additional $5,000 in costs was deducted from the offered sum.
(2) The Judge was correct in ruling that the plaintiff's pre-action offer and the defendants' counter-offer thereto were not admissible pursuant to r 33(7)(b).
(i) The plaintiff's offer and the defendnant's counter-offer did not on their face purport to be a r 33 offer and none of the associated correspondence referred to them as such.
(ii) The withdrawal of the plaintiff's offer after only 12 days was signficant. Rule 33 is a beneficial provision and the requirements as to the timing of offers and responses thereto exist to encourage parties to make genuine offers to settle which allow the other side ample opportunity to consider them, rather than using offers open for short periods to take advantage of the costs provisions.
(iii) Neither the plaintiff's offer nor the defendants' counter-offer was filed in a sealed file as would be required by r 33(6)(b).
(3) The Judge was correct in finding that none of the offers proffered by the defendants were rendered admissible by s 67C(2), Evidence Act 1929.
(4) The costs discretion should be exercised afresh given the finding that the Judge erroneously took the 2 December 2009 offer into account in making his costs order.
(5) The plaintiff should be deprived of a full order for costs due to misconduct in the course of the action.
(6) The defendants failed to establish an entitlement to an order for costs as they too had engaged in misconduct in the course of the trial.
(7) The plaintiff is awarded 50 per cent of his costs of the action on a party-party basis.
District Court Act 1991 s 42(2); District Court Civil Rules 2006 rr 4, 12, 33, 38(3)(a), 107, 108, 117(2)(d), 187, 188, 227(3), 263, 264, 285; District Court Practice Directions 2006 Part II - Approved Forms; District Court Civil Rules 2006 (Amendment No 20) cl 5; District Court Civil Rules 2006 (Amendment No 23) cl 5; Supreme Court Civil Rules 2006 r 288(1)(b); Evidence Act 1929 ss 67C(1), 67C(2), 67C(2)(c), 67C(2)(d), 67C(2)(b), 67C(2)(f), referred to.
Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd (2009) 261 LSJS 434; Haylock v Amaca Pty Ltd (2005) 242 LSJS 389; Jaber v City of Woodville (1990) 156 LSJS 454; New South Wales v Dueeasy Pty Ltd (Unreported, Supreme Court of New South Wales, Giles J, 28 February 1992); Australian Medical Innovations v Go Medical Industries Pty Ltd (Unreported, Supreme Court of Western Australia, Wallwork J, 22 April 1996); Duncan and Weller Pty Ltd v Mendelson [1989] VR 386; Grbavac v Hart [1997] 1 VR 154; Cretazzo v Lombardi (1975) 13 SASR 4, applied.
Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122; Rapuano T/A Raps Electrical v Karydis-Frisan (No 2) [2012] SADC 177; Rapuano v Karydis-Frisan [2013] SASCFC 8; Fowler v Renmark and Paringa District Hospital Inc (1988) 51 SASR 506; Davies & Nicol as Joint & Several Liquidators of Harris Scarfe Ltd v Chicago Boot Co Pty Ltd (No 2) [2011] SASC 197; John Goss Projects Pty Ltd v Thiess Watkins White Constructions Limited (in liq) [1995] 2 Qd R 591; A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) (2010) 78 ATR 925; Taske v Occupational & Medical Innovations Ltd [2007] QSC 147; Deeson Heavy Haulage Pty Ltd v Cox (No 2) [2009] QSC 348; Mair v Mazzitti (No 1) (2003) 231 LSJS 186; Public Trustee as Litigation Guardian for Pinter v Newman (2012) 112 SASR 299; District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258; Adam v Noack [1999] FCA 1606; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; Oshlack v Richmond River Council (1998) 193 CLR 72, discussed.
Southern Resources Ltd v Residues Treatment & Trading Co Ltd (1990) 56 SASR 455; Sheahan v Northern Australia Land and Agency Co [1995] SASC 5363; NE Perry Pty Ltd v Judge (No 2) [2003] SASC 364; Flinders Diamonds Ltd v Tiger International Resources Inc (No 2) [2006] SASC 180; Reid v London Fire Insurance Co (1883) 49 LT 468; Ellendale v Graham Mathews Pty Ltd (1986) 11 FCR 347; Waterfall v Antony (No 2) [2012] VSC 467; Armstong v Mitchell-Smith and Allianz Australia Insurance Limited (No 2) [2012] QSC 370; White v Director of Housing [2003] VSC 124; Balnaves v Smith [2012] QSC 408; Benton v Noye (1990) 101 FLR 18; State Government Insurance Commission v Lane (1997) 68 SASR 257; Duke Group Ltd (in liq) v Pilmer (No 8) [1998] SASC 6699; Isotomic Pty Ltd v Adelaide International Raceway Pty Ltd (No 2) [2007] SASC 230 ; H Stanke & Sons Pty Ltd v Von Stanke [2008] SASC 56; Robinson v Australian Association of Social Workers Ltd (2000) 210 LSJS 73; Mattner v Director of Public Prosecutions (Cth) (2011) 252 FLR 239, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"formal offer", "informal offer", "Calderbank offer", "judgment by consent", "consent judgment", "claims involved in the proceedings", "the relevant action or claim", "Deed of Release and Discharge", "uncertain terms", "pre-action offer", "partial disclosure", "disclosure of the substance of the evidence", "indemnity costs", "solicitor-client costs", "misconduct"

RAPUANO (TRADING AS RAPS ELECTRICAL) v KARYDIS FRISAN & ANOR
[2013] SASCFC 93
Full Court: Vanstone, David and Peek JJ

VANSTONE J: I agree with the orders proposed by Peek J and with his reasons.
DAVID J: I agree with the judgment of Peek J and the orders he proposes.
PEEK J: Appeal and cross-appeal against costs order made in the District Court.
PART A: INTRODUCTION
Franco Rapuano, an electrician trading as Raps Electrical (to be referred to as the plaintiff) was retained by Antonia Karydis-Frisan and Joe Frisan (to be referred to as the defendants) in July 2007 to perform electrical work for a house being built by them at Lockleys.
On 24 November 2009, the plaintiff commenced an action against the defendants seeking to recover outstanding fees for his services and the cost of materials supplied. At trial, the plaintiff’s claim as a quantum meruit was successful and he was awarded $34,996 plus $3,500 interest. The District Court Judge provided lengthy reasons for judgment on 16 August 2011 (the principal reasons)[1] and there is no appeal by either side against that judgment.
[1] See Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
However, there followed a protracted argument as to the awarding of costs, particularly having regard to the fact that prior to, and over the course of, the action a number of documents relating to possible settlement had passed between the parties.
Background facts
It is necessary to refer briefly to some of the matters discussed in the Judge’s principal reasons in order to understand the factual background to the costs arguments.
It is important to note that there was never an express contract between the plaintiff and the defendants. The scope of the work to be performed was ascertained from piecemeal instructions from the defendants on various occasions, which included several “walk arounds” at the site during which the first defendant identified to the plaintiff the various items of electrical work to be done. Over the course of the working relationship until 7 November 2008 (when the Judge found that the plaintiff’s access to the site was terminated by the first defendant), the plaintiff rendered three invoices. The defendants paid the whole of the first in the amount of $6,845; $5,000 of the second in the amount of $54,065; and none of the third in the amount of $15,235.
At trial, the plaintiff sought to recover an amount of $83,473 (or alternatively an invoiced amount of $64,300) for those outstanding invoices and the cost of materials provided. The defendants, while agreeing that the plaintiff was entitled to claim the value of his work on a quantum meruit basis, resisted his claim on the grounds that the plaintiff had overstated his hours, the hours of his offsider (Mr Curry), and the cost of the materials the plaintiff had provided. They further alleged that the plaintiff’s work was overall of a poor standard.
The Judge gave judgment for the plaintiff but found that he was not a credible or reliable witness and made adverse findings, including that he had:
·overstated the hours worked in the timesheets of both himself and Mr Curry;
·overstated the cost of the materials provided;
·falsified at least the first 12 dated timesheets (which appeared on printed forms containing an ABN number which only came into existence after the date of the last of those 12 timesheets); and
·given vague and uncertain evidence in relation to his personal liability for GST.
These matters are referred to in detail below in the context of the defendants’ cross-appeal. However, it is to be noted that the Judge was also “very unimpressed” with the evidence given by each of the defendants, both of whom he found to lack credibility and reliability; again, these matters are considered in detail below.
Ultimately, the trial Judge relied on the evidence of Mr Curry,[2] Mr Lister (the standards officer from the Office of the Technical Regulator),[3] and that of the various expert witnesses proffered by each side;[4] his Honour found each of these witnesses to be credible and reliable.[5] On the basis of this evidence, his Honour awarded the plaintiff $34,996 plus $3,500 interest (a total of $38,496).
[2]    Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [318]-[321].
[3]    Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [329].
[4]    Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [147].
[5]    Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [386], [398].
The Judge’s decision as to costs
The plaintiff applied for costs and submitted that, in accordance with the general prima facie rule, an order for costs should follow the event of judgment being entered in his favour. The defendants resisted the plaintiff’s application and submitted that they were entitled to an award of costs on the basis that the plaintiff had not bettered a number of offers of settlement (both formal and informal) made prior to, and during the course of, the action.
The costs argument largely turned on the precise nature of documents sent by the defendants to the plaintiff, including as to whether they complied with r 187, District Court Civil Rules 2006 (the Rules) or, if not, whether they could nevertheless be taken into account on the question of costs on some other basis. The defendants also submitted that the Judge’s findings as to the lack of reliability and credibility of the plaintiff and his conduct of the litigation should lead to an award on an indemnity basis.
The Judge delivered separate reasons on the issue of costs.[6]
[6] See Rapuano T/A Raps Electrical v Karydis-Frisan (No 2) [2012] SADC 177.
The Judge rejected the defendants’ submission that a pre-action offer made by the plaintiff dated 18 February 2009 was to be properly characterised as an offer within the terms of r 33 and hence that the defendants’ counter-offer to that offer, dated 23 February 2009, itself fell within r 33(7). His Honour found that the plaintiff’s offer was not one within r 33[7] and accordingly that the counter-offer could not be considered under r 33(7) and was therefore inadmissible.
[7] Rapuano T/A Raps Electrical v Karydis-Frisan (No 2) [2012] SADC 177 [41]-[49].
The Judge also rejected the defendants’ submission that the various informal offers were admissible pursuant to s 67C(2), Evidence Act 1929. His Honour found that they were not so admissible.
However, the Judge found that the defendants had made one relevant offer (“the 2 December 2009 offer”) that did comply with r 187. The primary submission of the defendants was that three offers had been validly filed in accordance with r 187. They were summarised by his Honour thus:[8]
[51]   The defendants filed three Rule 187 offers.
1.    On 23 March 2009 the defendants offered $25,000 to settle the principal claim and $1000 in respect of costs. The offer noted that the plaintiff could accept the offer to settle the principal relief without accepting the offer for costs. (“the first offer”)
2.    On 2 December 2009 the defendants offered $45,000 to settle the claim and $5000 in respect of costs, but that the plaintiff could not accept the offer to settle the principal relief without accepting the offer for costs. (“the second offer”)
3.    On 7 July 2010 the defendants offered $30,000 to settle the claim and $10,000 in respect of costs but that the plaintiff could not accept the offer to settle the principal relief without accepting the offer for costs. (“the third offer”)
[8]    Rapuano T/A Raps Electrical v Karydis-Frisan (No 2) [2012] SADC 177.
The Judge found that the plaintiff had clearly bettered the first and third offers and therefore it was only necessary to consider the 2 December 2009 offer. His Honour rejected a number of objections by the plaintiff and found it to be a valid offer within the terms of r 187[9] and that the plaintiff had not bettered that offer at trial.
[9] These objections (only some of which were expressly addressed by the Judge) are considered below.
The Judge accordingly took into account rr 187 and 188 as activated by the 2 December 2009 offer (as well as all of the surrounding circumstances, including his adverse findings as to the credibility and reliability of each of the plaintiff and the two defendants) and proceeded to make a “‘broad axe’ assessment of costs”. He ultimately made the following orders:
1.    The Plaintiff be awarded 70 percent of its taxed costs up until 14 days after the filed offer.
2.    The Defendants be awarded 85 percent of its taxed costs after 14 days after the filed offer.
3.    All costs to date stand.
4.    The Defendants have liberty to apply at short notice to His Honour Judge Stretton should it receive notice from the Plaintiff to enforce the judgment.
The plaintiff appeals and the defendants cross-appeal against those orders.
PART B: THE APPEAL BY THE PLAINTIFF
An appellate court will be reluctant to interfere with a Judge’s order for costs and will only interfere when it is positively demonstrated that the exercise of the discretion has miscarried.[10] Permission was granted by the Full Court on 27 February 2013 to the plaintiff to appeal and to the defendants to cross-appeal.[11]
[10] For example see Southern Resources Ltd v Residues Treatment & Trading Co Ltd (1990) 56 SASR 455; Sheahan v Northern Australia Land and Agency Co [1995] SASC 5363; NE Perry Pty Ltd v Judge (No 2) [2003] SASC 364.
[11] Rapuano v Karydis-Frisan [2013] SASCFC 8 [8] (Gray, Sulan and Anderson JJ). This being an appeal confined to a question of costs, the parties required permission to appeal: Supreme Court Civil Rules 2006 r 288(1)(b).
The plaintiff submits that the Judge erred in finding that the defendants’ offer of 2 December 2009 constituted a valid offer within r 187 and consequently erred in ordering him to pay 85 per cent of the defendants’ costs subsequent to 16 December 2009. The plaintiff further submits that he should not pay any of the defendants’ costs and seeks an order that the defendants pay the whole of the plaintiff’s costs on a party-party basis at the rate of 70 per cent as adopted by the Judge.
Overview of the plaintiff’s contentions as to the invalidity of the 2 December 2009 offer
In overview, the plaintiff principally submits that the 2 December 2009 offer was contrary to r 187 in that it:
·did not permit entry of judgment by consent on acceptance by the plaintiff;
·involved the settling of rights of action unrelated to matters alleged in the present proceedings;
·was uncertain in effect and required entry into a deed the terms of which had not been identified; and
·was not in complying form contrary to r 187(3)(a).
I proceed to set out the terms of the 2 December 2009 offer and the relevant legislation and Rules and then consider the above contentions against that background.
The defendants’ offer of 2 December 2009
The full terms of the offer of 2 December 2009 were as follows:
OFFER OF SETTLEMENT
The defendants, Antonia Karydis-Frisan OFFER pursuant to Rule 187 to settle the whole of the Plaintiff’s claim on the following terms:
1.The defendants will pay to the Plaintiff the sum of $50,000.00 in total inclusive of interest and costs (offer).
2.Of the total amount of the offer, $45,000.00 relates to the principal relief sought by the Plaintiff (including interest) and $5000.00 relates to costs.
3.The offer as to the principal relief may not be accepted without accepting the offer as to costs and vice versa (the offer as to costs cannot be accepted without accepting the offer in respect of the principal relief).
4.Subject to paragraphs 6 and 7, the parties will enter into a Deed of Release and Discharge releasing each other from any further claims in respect of works carried out by the Plaintiff at 28 Mellor Avenue Lockleys, South Australia.
5.The Plaintiff’s claim in action No. 300 of 2009 will be discontinued with no order as to costs.
6.The offer does not relate to the counterclaim which the defendants intend to bring against the Plaintiff, however if the Plaintiff accepts this offer before close of business on 18 December 2009, the defendants will not institute any counterclaim.
7.After the Defendants’ counterclaim has been filed and served, this offer may be accepted up until the relevant date as prescribed by the Rules (unless withdrawn pursuant to 6R.187(7) on the basis that the amount of the counterclaim plus $5,000 in respect of the Defendants’ costs is deducted from the total amount of the offer.
(Signed – solicitor for the defendants – dated 2/12/09)
Legislation and Rules relevant to costs in the present case

While the starting point is that an order for costs usually follows the event,[12] the Court has a broad general discretion as to the awarding of costs. Thus, s 42, District Court Act 1991 provides as follows:
(1) Subject to subsection (2) and the rules, costs in any proceedings in the Civil Division will be in the discretion of the Court and may be awarded against any person (whether a party to or a witness in the proceedings or not).
[12] Flinders Diamonds Ltd v Tiger International Resources Inc (No 2) [2006] SASC 180 [27] (Layton J).
The District Court Civil Rules 2006 supplement this provision:
263—Court’s discretion as to costs
(1)     As a general rule, costs follow the event.
…
(3)     In exercising its discretion, the Court may (subject to any other relevant rule) have regard to any offer to consent to judgment or other attempt to settle the action or an issue involved in the action.
…
264—Basis for awarding costs
(1)     The Court may, in the exercise of its discretion as to costs, award costs on any basis the Court considers appropriate.
(2)     As a general rule, however, costs are awarded as between party and party (that is, on the basis that the party entitled to the costs will be reimbursed for costs reasonably incurred by the party in the conduct of the litigation to an extent determined by reference to the scale of costs in force, under these rules or the previous rules, when the costs were incurred).
…
(5)     In exercising its general discretion as to costs, the Court may—
(a)award costs as between solicitor and client (that is, on the basis that the party will be fully reimbursed for costs reasonably incurred by the party in the conduct of the litigation); or
(b)award costs on the basis of an indemnity (that is, on the basis that the party will be fully reimbursed for costs incurred by the party in the conduct of the litigation except to the extent that the party liable for the costs shows them to have been unreasonably incurred); or
(c)award costs by way of lump sum; or
(d)award costs on any other basis the Court considers appropriate.
(6)     The Court may award different components of costs on different bases.
(7)     The Court may include in an award of costs an amount representing interest.
…
District Court Civil Rules 2006 relating to offers of settlement
The District Court Civil Rules 2006 contain specific provisions relating to the costs consequences of the making of offers of settlement.[13] Rules 187 and 188 relevantly provide as follows:
[13] Pursuant to r 263(3) the court is permitted to have regard to other attempts to settle, not falling within r 187. This matter is discussed below.
187—Offers of settlement
(1)     A party may, before the relevant date, file an offer of settlement in the Court (a formal offer of settlement).
(2)     The relevant date is—
(a)the date falling 21 days before the first, or any subsequent, date fixed for the trial to commence; or
(b)if the offer relates only to costs and is made in proceedings relating only to the adjudication upon costs, the date falling four days before the date appointed for the adjudication.
(3)     The offer must—
(a)     be in an approved form; and
(b)if the offer relates to some, but not all, of the claims involved in the proceedings—state to which claims it relates; and
(c)state whether the offer relates to costs and, if so, the amount of the offer so far as it relates to costs; and
(d)if the offer relates both to principal relief and costs—state whether the party to whom the offer is made may accept the offer of principal without also accepting the offer as to costs,
and a copy of the offer must be served on all other parties to the action.
(4)     A formal offer of settlement must be filed in a suppressed file and must not be disclosed to the trial judge (or the adjudicating officer) unless—
(a)     all questions to which the offer is relevant have been determined; or
(b)     a defence of tender before action is raised; or
(c)the defendant relies on the offer (together with an apology or apologies) as a defence to an action for defamation and the plaintiff, by pleading, denies the defence; or
(d)a declaratory judgment determining liability has been made and the Court permits the disclosure of the offer.
(5)     If a defendant makes an offer of settlement for a specified amount, the offer may be accompanied by a payment into Court of the relevant amount.
(6)     An amount paid into Court may be increased but cannot be withdrawn in whole or part unless—
(a)     the plaintiff consents; or
(b)     the Court permits its withdrawal.
(7)     A formal offer of settlement may be withdrawn at any time before it has been accepted by the filing and service on each party to the proceeding of a notice of withdrawal and in such cases, subject to any Court order to the contrary, the offer will be treated as if it had never been made.
188—Consequences of filing offer of settlement in Court
(1)     A party to whom a formal offer of settlement is made may, before the relevant date—
(a)     accept the offer; or
(b)if the offer relates to both the principal relief and costs and the offeror has not indicated that the offer may only be accepted in its entirety—accept the offer so far as it relates to principal relief.
(2)     In subrule (1), the relevant date is—
(a)the date falling 7 days before the first, or any subsequent, date fixed for the trial to commence; or
(b)if the offer relates only to costs and is made in proceedings relating only to the adjudication upon costs—the date falling two days before the date appointed for the adjudication.
(3)     The acceptance of a formal offer of settlement—
(a)     must be in an approved form; and
(b)     takes effect on the filing of the acceptance in the Court.
(4)     A copy of the acceptance of a formal offer of settlement must be served on all other parties to the proceedings as soon as practicable after it is filed in the Court.
(5)     If a formal offer of settlement is accepted, judgment may be entered, by consent, determining the relevant action or claim on a basis reflecting the terms of the offer.
(6)     If a formal offer of settlement so far as it relates to principal relief is not accepted by the party to whom the offer is made and the Court determines the relevant action or claim on terms (as to principal relief) that are no more favourable to the party than the terms of the offer, then, subject to the Court's order to the contrary—
(a)the party to whom the offer was made is not to be entitled to costs referable to the period falling after the relevant date; and
(b)     the party that made the offer—
(i)if a defendant—is entitled to costs referable to the period falling after the relevant date; and
(ii)if a plaintiff—is entitled to the whole of the party's costs of action on a solicitor/client basis and the defendant is not entitled to any costs not otherwise ordered.
(6A) If, after the relevant date, a plaintiff accepts a formal offer of settlement insofar as it relates to principal relief, the Court may, on the application of any other party, order that the plaintiff pay the costs of action incurred by that other party during some or all of the period after the relevant date.
(7)     In subrules (6) and (6A), the relevant date is the date falling 14 days after the date of service of the offer.
(8)     If a formal offer of settlement in proceedings relating only to the adjudication upon costs is not accepted by the party to whom the offer is made and the Court determines the proceedings on terms that are no more favourable to that party than the terms of the offer, then, subject to the Court's order to the contrary, the costs of the adjudication upon costs are to be borne on a solicitor/client basis by that party.
The plaintiff’s contention that the offer did not permit the entry of a judgment by consent
The plaintiff submits that the offer was inconsistent with r 187 in that its terms precluded the entry of a consent judgment; the plaintiff particularly relies on paragraph 5 of the offer under which the plaintiff was required to file a Notice of Discontinuance (pursuant to r 108) and submits that that of itself would prevent the entry of a judgment by consent.
There is substance in these submissions. Rule 188(5) specifically envisages the entry of a consent judgment upon the acceptance of an offer as an essential part of a stand-alone regime which is not dependent upon the formation of a contract between the parties.[14]
[14] The application of the Rules produces a number of results different to those that would flow from the application of contractual principles. One example is furnished by the facts in Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd (2009) 261 LSJS 434. Another example is that under contract law an original offer will be revoked by a later offer but under the Rules the original offer will remain operative (as well as the later offer). Such differences highlight the necessity for a consent judgment since there could be no contract to enforce in such situations.
This approach was emphasised in Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd,[15] where the Court undertook a close analysis of rr 187 and 188, Supreme Court Civil Rules 2006 (identical to their District Court counterparts) in the context of the question as to whether a filed offer could be accepted after a withdrawal of the offer had been filed in the Registry but through inadvertence had not been served on the offeree.
[15] (2009) 261 LSJS 434.
The Court held that, whereas the application of the law of contract would require service of the notice of the withdrawal on the offeree, the rules regime was not dependent on contractual principles and filing of the withdrawal under r 187(7) becomes effective when it is filed in the Registry irrespective of service on the other party. In the course of his reasons, White J (with whom Duggan J and Bleby J agreed) observed:[16]
[23]… The rules are not concerned with the bringing of a contract into existence. Instead, if a formal offer of settlement is accepted, the consequence is that judgment may be entered, by consent, determining the relevant action or claim on a basis which reflects the terms of the offer (r 188(5)). This does not mean that a contract may not be brought into existence by the process of filing an acceptance of an offer under rr 187 and 188, but simply that that is not the primary purpose or focus of the rules.
…
[26]Rather than relying on common law principles, I consider it preferable to construe r 187(7) by reference to its own text, context and purpose.[17] (Emphasis added)
[16] Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd (2009) 261 LSJS 434, 439.
[17] Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at 83.
It may be noted that under the 1987 Rules an offer which was not in a form capable of producing a judgment for the plaintiff upon acceptance was a nullity for the purpose of the 1987 Rules.[18] This effectively remains the position under the 2006 Rules; rr 187 and 188 specifically envisage the entry of a judgment by consent as the consequence of the acceptance of a complying offer.
[18] See Haylock v Amaca Pty Ltd (2005) 242 LSJS 389, 393 [14] (Judge Lunn); Jaber v City of Woodville (1990) 156 LSJS 454, 455 (Judge Lunn).
The plaintiff’s construction of the Rules is supported by a consideration of the different practical consequences of an entry of a consent judgment and the discontinuance of an action. As r 227(3) indicates, the normal consequences which flow from a judgment handed down after a full trial (including issue estoppel, res judicata and a right to have the judgment enforced) will apply to a consent judgment. By contrast, the rules as to discontinuance provide as follows:
107—Discontinuance of action etc
(1)     A plaintiff may discontinue an action by filing a notice of discontinuance.
(2)     A party may discontinue a claim or defence by—
(a)filing a notice of discontinuance identifying a claim or defence previously asserted by the party that the party now wants to abandon; or
(b)     making an appropriate amendment to the party’s pleadings.
(3)     If the Court has ordered that the action proceed to trial, a plaintiff may only discontinue the action or a claim in the action with the Court’s permission or the written consent of all other parties.
(4)     Unless the parties agree or the Court orders to the contrary, the party against whom the action, or a claim or defence in the action, is discontinued is entitled to costs arising from the action, or the claim or defence (as the case may require) up to the time of receiving notice of the discontinuance.
108—Discontinuance not generally bar to future action
Subject to the following exceptions, a party who discontinues an action or a claim is not prevented from bringing a further action based on the same or substantially the same claim.
Exceptions—
1If a party to the later action is entitled to costs in relation to the earlier action, the Court may, on the application of that party, stay an action based on the same or substantially the same claim until the costs have been paid.
2The Court may order that the discontinuance of an action or a claim is to have the same effect as a final judgment against the party discontinuing.
The finality resulting from a consent judgment does not flow from the mere filing of a Notice of Discontinuance which is not generally a bar to the plaintiff bringing future action in relation to the same matter in the future.[19] Quite apart from the plaintiff starting again (if he can), it is also to be noted that in some circumstances the original action can be revived by the withdrawal of the Notice of Discontinuance under r 117(2)(d) with the permission of the Court. Thus, Cox J said of the predecessor to that rule:[20]
There is no doubt that the effect of a discontinuance is to bring an action to an end. …
In my opinion, par (b) of r 3.04 should not be interpreted in a way that would deny the Court’s power to allow a notice of discontinuance to be withdrawn. No doubt there is a sense in which, the action being at an end, the different steps that were taken while it was extant are thereby, in effect, obliterated, so that no order can now be made effectually with respect to them. However, it is also correct to say that, if the notice of discontinuance was a step in the proceeding at the time it was filed and delivered, nothing done thereafter can deprive it of that historic character. It is of the nature of par (b) of r 3.04 that it will always operate retrospectively, in the sense of acting upon something that has happened in the past, and there is no obvious justification for excluding from its operation a step that was taken in an action that is no longer on foot. Of course, when it comes to the exercise of a discretion to permit the step to be withdrawn the Court will give much weight to the general principle that there must be an end to litigation, but that is another matter. So far as the power is concerned, it is large enough, in my judgment, to permit the withdrawal of a notice of discontinuance, even though that means that the Court will be making an order that has the effect of reviving a dead action. A liberal construction of r 3.04 — if that is what it is — is more likely to allow justice to be done, and is certainly consonant with the general purpose of the Supreme Court Rules as explained in Rule 2.
[19] Under r 108, the Court may specifically order that the discontinuance have the same effect as a final judgment, but that requires that the matter be brought before a Judge for such order to be applied for. This is to be contrasted with the r 187 procedure which will result in a consent judgment without the attendance of the parties. Further, it should be noted that the r 108 procedure appears only to apply against the party discontinuing; this may have the discordant result in cases such as the present that an existing or foreshadowed counterclaim or cross-action might be able to be revived by the other party. Also see generally: Reid v London Fire Insurance Co (1883) 49 LT 468; Ellendale v Graham Mathews Pty Ltd (1986) 11 FCR 347.
[20] Fowler v Renmark and Paringa District Hospital Inc (1988) 51 SASR 506, 507-508. See also Mattner v Director of Public Prosecutions (Cth) (2011) 252 FLR 239, 243-246 [23]-[31] (Kelly J).
Finally, it is also to be noted that a party wishing to enforce a settlement following an action being discontinued might be forced to commence a fresh action with its associated costs, delays and uncertainties.
In my view, the terms of the offer of 2 December 2009 were inconsistent with permitting the entry of a judgment by consent in requiring that the plaintiff lodge a Notice of Discontinuance. This was not a mere procedural irregularity;[21] rather, it produced the result that the offer of 2 December 2009 could not have the status of an offer under r 187. The position is the same as that referred to by Judge Lunn in Haylock v Amaca Pty Ltd in respect of an offer (purporting to be under the predecessor to r 187) which in its terms could not be converted into a consent judgment:[22]
[14]The Rule envisages an offer which will produce a judgment for the plaintiff … The defect is not a mere irregularity under R 3.05, but something which is quite outside of R 41 and of no effect under it: Normington v Frost (1982) 104 LSJS 180 at 181; Benton v Noy (1990) 101 FLR 18.
[21] District Court Civil Rules 2006 rr 4 (definition of ‘procedural irregularity’), 12.
[22] Haylock v Amaca Pty Ltd (2005) 242 LSJS 389, 393.
It is also to be remembered that r 187(3)(a) states that a Rule 187 offer “must be in an approved form” and r 188(3)(a) states that the acceptance of a formal offer of settlement “must be in an approved form”. The respective approved forms for offer and acceptance are Forms 23 and 24.[23]
[23] District Court Practice Directions 2006 Part II – Approved Forms.
The approved Form 24 in which r 187 offers must be accepted appears thus:[24]
FORM 24 Rule 188
[24] District Court Practice Directions 2006 Part II – Approved Forms.
ACCEPTANCE OF OFFER
The [Nature of Party/Parties] ACCEPTS pursuant to Rule 188 the offer made by the [Nature of Party/Parties] filed on [date] and seeks judgment by consent in terms of that offer.
[Signed] ………………………………………..…..
[Solicitor for the [Nature of Party/Parties]]
[OR]
[Name(s)], [Nature of the Party/Parties]
(Emphasis added)
As can be seen, Form 24 specifically adverts to the fact that a r 187 offer must have the capacity to form the basis for a judgment by consent.
The plaintiff’s contention that the offer required the settling of rights of action unrelated to the present case
The plaintiff also submits that the 2 December 2009 offer did not comply with r 187 for the further reason that it required the settling of rights of action unrelated to the present case. The plaintiff emphasises paragraph 4 of that offer which refers to the parties entering into “a Deed of Release and Discharge releasing each other from any further claims in respect of works carried out by the plaintiff at 28 Mellor Avenue Lockleys, South Australia”.
The words of r 187(3)(b) – an offer relating to claims involved in the proceedings – indicate that a complying offer cannot purport to resolve claims not involved in the proceedings. Similarly, r 188(6) refers to the Court making an assessment of the offer after it has determined the relevant action or claim – which action or claim can hardly be other than that relied upon in the extant proceedings.
Again, reference may be made to the prescribed Form 23 in which r 187 offers must be made pursuant to r 187(3)(a). It too conveys that r 187 offers cannot purport to resolve claims not raised in the subject proceedings and appears as follows:[25]
FORM 23 Rule 187(3)
[25] District Court Practice Directions 2006 Part II – Approved Forms.
OFFER OF SETTLEMENT
The [Nature of Party/Parties] OFFER pursuant to Rule 187 to settle the action (or if a particular claim in the action such as costs, specify it) as follows:
[Insert terms of offer with precision]
[If applicable] Under Rule 187(5) this offer is accompanied by a payment into Court of $ ………
[Signed] ………………………………………..…..
[Solicitor for the [Nature of Party/Parties]]
[OR]
[Name(s)], [Nature of the Party/Parties]
(Emphasis added)

As the text in emphasis indicates, Form 23 contemplates only the settling of the action before the Court, and no other action.
A similar issue arose in New South Wales v Dueeasy Pty Ltd.[26] The applicant, the Minister for Public Works NSW, had retained the respondent, Dueeasy Pty Ltd, to construct portion of a sewerage scheme. Disputes arose and were referred to arbitration in accordance with the contract. On 26 November 1991, the arbitrator published an interim award whereby he found the applicant liable to pay $144,640.26 to the respondent and ordered that the applicant pay the respondent’s costs and the costs of the arbitration.
[26] (Unreported, Supreme Court of New South Wales, Giles J, 28 February 1992).
The applicant subsequently appealed against the award of costs. The dispute centred on a putative Calderbank[27] offer from the applicant to the respondent dated 23 August 1991 which was rejected by the respondent on 27 August 1991. It read in part:[28]
The [applicant] is prepared to pay your company $190,000 in full settlement of all claims under or arising out of the Contract, including but not limited to those raised by your company in the arbitration.
[27] Calderbank v Calderbank [1975] 3 All ER 333.
[28] New South Wales v Dueeasy Pty Ltd (Unreported, Supreme Court of New South Wales, Giles J, 28 February 1992) 3.
The applicant submitted that the respondent had not bettered the offer and should therefore be deprived of its costs. The arbitrator accepted the respondent’s submission that no regard should be had to that offer since it did not purport to be in settlement solely of the matters in the arbitration. In upholding that decision of the arbitrator, Giles J stated:[29]
… There has been no evidence presented to the effect that no other claims are contemplated by the Claimant outside those that were the subject of the arbitration.
The words contained in the letter ‘All claims under or arising out of the Contract’ together with ‘Not limited to those raised by your Company in the Arbitration’ are singularly wide and would encompass not only direct claims by the Claimant for work done under the Contract, but any other claims that may be contemplated by the Contractor as related to or incidental to the making of the Contract or the execution of the works thereunder.
It is apparent that the Respondent’s offer made on 23rd August was not in settlement solely of the matters in Arbitration. It is accordingly not a valid offer of compromise in respect of these proceedings. (Emphasis added)
[29] New South Wales v Dueeasy Pty Ltd (Unreported, Supreme Court of New South Wales, Giles J, 28 February 1992) 3-4.
The judgment of Giles J was subsequently approved by Wallwork J in Australian Medical Innovations v Go Medical Industries Pty Ltd.[30] In that case, several letters passed between the parties offering to settle on the basis that the parties agree to waive any claim that they may have against each other arising out of the agreement of 4 May 1993 “or howsoever arising”.[31] Wallwork J referred to the above passage from the judgment of Giles J and stated:[32]
The words “or howsoever arising” refer to matters outside the scope of the action itself which action was only concerned with the agreement of 4 May 1993 and the counterclaim allegedly arising from it. It could not strictly be described as a true Calderbank letter …
…
It is my opinion that the letters offering to settle this matter which passed from the defendant to the plaintiff cannot be regarded as true Calderbank letters due to the fact that they covered matters which were not involved in the action instituted by the plaintiff against the defendant being CIV 2219 of 1994, the reasons for judgment which were delivered by me on 31 October 1995.
[30] (Unreported, Supreme Court of Western Australia, Wallwork J, 22 April 1996) 4-5.
[31] Australian Medical Innovations v Go Medical Industries Pty Ltd (Unreported, Supreme Court of Western Australia, Wallwork J, 22 April 1996) 4-7.
[32] Australian Medical Innovations v Go Medical Industries Pty Ltd (Unreported, Supreme Court of Western Australia, Wallwork J, 22 April 1996) 4, 7.
Finally, the decision of Sulan J in Davies & Nicol as Joint & Several Liquidators of Harris Scarfe Ltd v Chicago Boot Co Pty Ltd (No 2),[33] although dealing with an offer of settlement made in respect of two separate legal actions, is in the same vein. The plaintiff there had made a number of combined offers relating to the defendant, Chicago Boot Co Pty Ltd, and to Windsor Smith, a party in separate proceedings but involving the same plaintiff.[34] Two of the offers failed to distinguish between the amounts offered in respect of each action. The plaintiff contended that the defendant could and should have accepted these offers in satisfaction of both actions and that the defendant could have thus settled both actions for a more favourable result than the total of what was received in the action against Chicago Boot Co Pty Ltd and what would be received in the action against Windsor Smith. Sulan J rejected that submission and stated:[35]
[31]Furthermore, I find that it is not appropriate to compare the offered amounts made to Chicago Boot, to the judgment award received in the Chicago Boot claim in addition to an estimated amount to be received in the Windsor Smith claim. To do so would be to hypothesise as to how the proceedings in the Windsor Smith action might result. As already noted, this is an entirely separate action from the Chicago Boot action. Chicago Boot and Windsor Smith have separate corporate identities. One cannot assume that the plaintiffs will be wholly successful in the action against Windsor Smith. Each case turns upon its own facts and circumstances.
…
[34]The third and fourth offers were combined offers in respect of Chicago Boot and Windsor Smith. It is a futile exercise to seek to compare these offers to the final judgment awards without a basis for apportioning the amount in relation to each entity.
[33] [2011] SASC 197.
[34] Windsor Smith and Chicago Boot Co Pty Ltd were related companies with common employees and directors and a common place of business.
[35] Davies & Nicol as Joint & Several Liquidators of Harris Scarfe Ltd v Chicago Boot Co Pty Ltd (No 2) [2011] SASC 197. See also Jaber v City of Woodville (1990) 156 LSJS 454, 455 (Judge Lunn).
In the present case, the 2 December 2009 offer clearly referred to other actions outside of the immediate scope of the plaintiff’s quantum meruit claim by requiring the parties to enter into “a Deed of Release and Discharge releasing each other from any further claims in respect of works carried out by the Plaintiff at 28 Mellor Avenue Lockleys, South Australia”. Since a consideration of this offer required resolution of claims or possible claims quite separate to the present action, the offer did not comply with r 187.
The plaintiff’s contention that the offer was uncertain in its effect
The plaintiff further contends that the 2 December 2009 offer was uncertain in its effect and therefore could not constitute an offer complying with r 187.
This issue was considered by the Full Court of the Victorian Supreme Court in Duncan and Weller Pty Ltd v Mendelson.[36] In that case, the plaintiffs sued the defendant for professional negligence in valuing a property and were awarded damages of $162,965.58 plus costs. That judgment was subsequently set aside on appeal and the defendant was ordered to pay the plaintiffs $92,778 plus costs. Prior to the commencement of the appeal hearing, the defendant made an offer under r 262, Supreme Court Rules to the plaintiffs in these terms:[37]
This is an offer of compromise served in accordance with Pt 2 of O.26 of the General Rules of Procedure in civil proceedings. The defendant’s offer is that the plaintiffs’ claim be compromised on the basis that the defendant pay to the plaintiffs the sum of $115,000.
[36] [1989] VR 386.
[37] Duncan and Weller Pty Ltd v Mendelson [1989] VR 386, 400 (Kaye J).
That offer was rejected by the plaintiffs but was not bettered on the appeal. Kaye J (with whom Southwell J and Hampel J agreed) stated:[38]
The offer, therefore, was in the form required by r 262(3). It is noted however, that the offer was restricted to the plaintiffs’ claim. Acceptance of the offer by the plaintiffs would have constituted a binding contract between the parties. Like any contract, to be binding its terms were required to be reasonably certain.
It may be that in a simple action claiming a liquidated or unliquidated demand, an offer of compromise made simply in the appropriate form would not require anything further. However, the litigation in which the offer of compromise was made was not merely a claim by the defendant against the plaintiff.
By the second third party notice, as I have noted, the defendant claimed contribution and/or indemnity from the third parties, two of whom were the plaintiffs in the action. The offer did not state whether it was made in respect of the liability of the plaintiffs in the third party proceedings as well as in discharge of the defendant’s liability for damages in the claim.
As I have noted, the offer was restricted to compromise of the plaintiffs’ claim. It follows that the offer by its terms was not reasonably certain. The offer of compromise, in my view, ought not to have left the plaintiffs (offerees) in any reasonable doubt about the consequences of its acceptance. (Emphasis added)
[38] Duncan and Weller Pty Ltd v Mendelson [1989] VR 386, 400-401.
Kaye J went on to hold that the offer should not be considered.
This decision has been applied to a rule similar to r 187 in Queensland. In John Goss Projects Pty Ltd v Thiess Watkins White Constructions Limited (in liq), Williams J held:[39]
There is no doubt that by the letter of 1 November 1993 the applicant made an offer in writing specifically stating that it was made pursuant to O 91 r 89. It was also served in accordance with the provisions of the rule. There can also be no doubt that in order to comply with the requirements of that rule the offer must be certain and not vague; it must be clear as to the benefit the party receiving the offer is to obtain if it is accepted. Whilst there are no specific authorities to that effect on O 91 r 89 there are such authorities dealing with offers to settle pursuant to O 26 generally (see, for example, Duncan & Weller Pty Ltd v Mendelson [1989] Vic Rep 36; [1989] V.R. 386 and Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17).
[39] [1995] 2 Qd R 591, 595.
Similarly, in Grbavac v Hart, Winneke P held with respect to offers made purportedly under O 26 of the Victorian Supreme Court Rules: [40]
I can readily accept that there may be cases where the court, in the exercise of its general costs discretion, will be prepared to pay some regard to an offer of compromise which purports to be in accordance with the rules but which, for some reason or other, is technically deficient: Schulte-Hordelhoff v Patons Brake Replacements Pty Ltd [1965] VR 369. But, in my view, it ought not to do so unless the terms of the offer are such as to leave the offeree in no reasonable doubt as to the nature and extent of what is being offered: Prior v Lansdowne Press Pty Ltd [1977] VR 65; Veeken v Rosella Foods Pty Ltd [1978] VR 71; Dajak v Riebe [1985] VR 561 at 568.
[40] [1997] 1 VR 154, 155.
Finally, in A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2), Beach AJA (delivering the judgment of the Court) held:[41]
[32]In Duncan & Weller v Mendelson,[42] Kaye J[43] said[44] an offer of compromise ought not leave an offeree in any reasonable doubt about the consequences of its acceptance. Further, the terms of an offer of compromise should be reasonably certain.[45] …
[41] (2010) 78 ATR 925, 933. See also Waterfall v Antony (No 2) [2012] VSC 467 [12] (Beach J).
[42] [1989] VR 386.
[43] With whom Southwell and Hampel JJ agreed.
[44] At [1989] VR 401.
[45] See further John Goss Projects Pty Ltd v Thiess Watkins White Constructions Ltd [1995] 2 Qd R 591 at 595 and Gove v Black [2006] WASC 298, [58].
In the present case, the 2 December 2009 offer leaves considerable doubt as to its terms and as to the consequences of its acceptance. Paragraph 4, which refers to the settling of “any further claims” and to a deed of release and discharge does not define what the further claims may be, their value, or the precise terms of the deed. No draft deed was appended to the offer and nor were its terms delineated elsewhere.
In Taske v Occupational & Medical Innovations Ltd,[46] Moynihan SJA considered an offer of settlement which included a term that there was to be a deed of settlement including terms as to no adverse comments being made by either party or comments being made to the media. His Honour said of that offer:[47]
[16]… the parties may not have agreed the terms of the deed and there was no agreed mechanism to settle them. The terms I have referred to were not terms which would be part of any judgment in the action and so the offers are not more favourable than the judgment.
[46] [2007] QSC 147.
[47] Taske v Occupational & Medical Innovations Ltd [2007] QSC 147.
A similar offer of settlement was examined by McMeekin J in Deeson Heavy Haulage Pty Ltd v Cox (No 2).[48]In that case, the defendants applied for costs against the successful plaintiff on the basis that they had filed an offer of settlement under the Queensland Uniform Civil Procedure Rules 1999 and which the plaintiff had not bettered at trial. The offer included the following condition:[49]
The parties will enter into an appropriate Deed of Settlement and Release to include mutual releases and discharges from all claims arising in these proceedings and any claim howsoever arising from the plaintiff’s employment of the first, second and third defendants and any conduct of any party since termination of the employment relationship and including any claim the defendants may have against the plaintiff or Mr Strathdee for defamation of the defendants.
[48] [2009] QSC 348.
[49] Deeson Heavy Haulage Pty Ltd v Cox (No 2) [2009] QSC 348 [32].
McMeekin J acknowledged that the offer, in monetary terms, was more favourable to the plaintiff than the judgment obtained.[50] Despite this, his Honour concluded:[51]
[45]That the deed proposed went beyond the issues raised by the pleadings is plain on the face of the terms of the offer. The reference to the possible claim that the defendants had or may have had against the plaintiff or Mr Strathdee for defamation strongly suggests that the terms that the defendants had in mind would have extended well beyond any ‘Anshun estoppel.’
…
[48] … [I]n order to take advantage of the effect of the provisions in the rules it is first necessary that the party making the offer demonstrate that the offer falls within those rules. Thus the onus is on the defendant to demonstrate that the judgment is “not more favourable to the plaintiff than the offer to settle” or that the judgment it obtained on its counterclaim was “no less favourable than the offer to settle”.
[49]Given that terms of the proposed deed were not spelled out, and that there are arguments available to the plaintiff to demonstrate that potentially the deed proposed, as at the relevant date, was more onerous than any judgment could have been, I am not persuaded that the offer made satisfies the precondition necessary to attract the benefit of the rules.
[50] Deeson Heavy Haulage Pty Ltd v Cox (No 2) [2009] QSC 348 [33].
[51] Deeson Heavy Haulage Pty Ltd v Cox (No 2) [2009] QSC 348. See also Taske v Occupational & Medical Innovations Ltd [2007] QSC 147 [16] (Moynihan SJA); Armstrong v Mitchell-Smith and Allianz Australia Insurance Limited (No 2) [2012] QSC 370 [14] (McMeekin J); White v Director of Housing [2003] VSC 124 [17]-[19] (Gillard J). In Balnaves v Smith [2012] QSC 408, Byrne SJA adopted a different approach but I prefer the views of Moynihan SJA, McMeekin J and Gillard J. Importantly, it is to be noted that the Queensland Rules are significantly different to the South Australian Rules in a number of important respects; one is that the Queensland Rules do not use the mechanism of a consent judgment but rather rely on the filing of a discontinuance following offer and acceptance based on contractual principles.
It is to be noted that in the present case, paragraph 4 of the 2 December 2009 offer was in terms very similar to those considered by McMeekin J and raised the same concerns. I conclude that the uncertainty of the present terms had the consequence that the offer did not comply with r 187, and therefore no regard should have been had to it.[52]
[52] Grbavac v Hart [1997] 1 VR 154, 155 (Winneke P).
The plaintiff’s contention that the offer was not in an approved form as required by r 187(3)(a)
The plaintiff further contends that the 2 December 2009 offer contravened in a number of respects the requirement in r 187(3)(a) that the offer be in an approved form.
First, the offer sought to settle not only the present action but also matters outside its purview. This is contrary to the terms of Form 23[53] which uses the words: “OFFER pursuant to Rule 187 to settle the action”. (As discussed above, this also constituted non-compliance with r 187(3)(b).)
[53] The prescribed form for the making of a rules offer for the purposes of r 187(3)(a): District Court Practice Directions 2006 Part II – Approved Forms.
Second, the offer could not give rise to a judgment by consent, contrary to Form 24.[54] (As discussed above, this also constituted non-compliance with r 188(5).)
[54] The prescribed form for the acceptance of a rules offer for the purposes of r 188(3)(a): District Court Practice Directions 2006 Part II – Approved Forms.
Third, the effect of paragraphs 6 and 7 of the offer was that if the plaintiff did not accept the offer of $50,000 by 18 December 2009, the defendants would institute a counterclaim and thereafter the offer could only be accepted on the basis that the amount of the counterclaim plus an additional $5,000 in costs would be deducted from the $50,000. Thus, the offer for $50,000 was open for only the limited period of 16 days until 18 December 2009 and thereafter reduced in value very significantly.
It is, of course, the case that it is usually the wording and content of the Rules themselves that is important, rather than the content of forms to be used in conjunction with the Rules.
The present situation is a little different in that the Rules themselves specify that offers must be made and accepted “in an approved form” and accordingly the appellant is entitled to make reference to the content and nature of the “approved forms”. Nevertheless, I consider that the importance of the submissions concerning the forms is primarily to throw light on the correct construction of the Rules themselves rather than as a primary objection.
Thus in my view, the offer was couched in terms inconsistent with both Form 23 and with the terms of rr 187 and 188 themselves.[55] This conclusion is in accordance with the following observation by White J in Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd:[56]
[24]… the 2006 Rules do not appear to contemplate formal offers of settlement which are expressed to be open for a limited period only. Instead, offers should be able to be accepted at any time before the “relevant date” fixed by r 188(2).
[55] Cf Benton v Noye (1990) 101 FLR 18, 19 (Asche CJ).
[56] Rule Chambers Pty Ltd v Badge Constructions (SA) Ltd (2009) 261 LSJS 434, 439.
In the present case, the Judge appears to have considered that the fact that a counterclaim was never filed in some way cured the offer’s defects.[57] With respect, I disagree; the fact that a counterclaim was never filed does not alter the position that the terms of the offer plainly placed a limitation on its life and precluded its acceptance “at any time before the ‘relevant date’ fixed by r 188(2)”.
[57] Rapuano T/A Raps Electrical v Karydis-Frisan (No 2) [2012] SADC 177 [57], [77]-[83], [89].
Conclusion: the 2 December 2009 was not a valid r 187 offer

For all of the above reasons, I conclude that the 2 December 2009 offer was not a valid r 187 offer and should not lead to the costs consequences prescribed in r 188(6).
The effect of the success of the plaintiff’s contentions as to the invalidity of the 2 December 2009 offer must await consideration of a number of matters raised by the defendants by way of cross-appeal.
PART C: THE CROSS-APPEAL
The defendants raise by way of cross-appeal a variety of arguments the acceptance of which might lead to the same or a better result than that ordered by the Judge at trial. A number of the matters should strictly have been raised by a Notice of Contention[58] rather than cross-appeal but I am prepared to address the substance of the various arguments without attempting to categorise their precise status or holding the defendants to the precise words used in the Notice of Cross-Appeal.
The defendants’ contention that their counter-offer of 23 February 2009 to an unfiled plaintiffs offer dated 18 February 2009 came within r 33
[58] See District Court Civil Rules 2006 r 285.
The admissibility of pre-action offers of settlement is governed by r 33, District Court Civil Rules 2006, which at the relevant time provided:[59]
[59] Note that as from 1 October 2012, r 33 offers are only required to be open for 14 days: See District Court Civil Rules 2006 (Amendment No 20) which amends r 33(4).
33—Offers of settlement before action
(1)     This rule applies to a primary action based on a monetary claim, other than—
(a)     an action in which urgent relief is sought; or
(b)     an action brought in circumstances where the plaintiff—
(i)reasonably believes there is a risk that the defendant will take action to remove assets from the jurisdiction; and
(ii)intends to seek an injunction to prevent the defendant from removing assets from the jurisdiction; or
(c)an action excluded from the application of this rule by direction of the Court.
(2)     A plaintiff must, at least 90 days before commencing an action to which this rule applies give the defendant—
(a)an offer to settle the plaintiff's claim on a basis set out in the notice; and
(b)sufficient details of the claim, and sufficient supporting material, to enable the defendant to assess the reasonableness of the plaintiff’s offer of settlement and to make an informed response to that offer; and
(c)if the plaintiff is in possession of expert reports relevant to the claim—copies of the expert reports.
(3)     If the plaintiff believes the defendant to be insured against the relevant liability by an insurer whose identity is known to the plaintiff, the plaintiff must send a copy of the notice and the accompanying materials to the insurer.
(4)     The defendant must, within 60 days after receiving the notice, respond in writing to the notice by–
(a)     accepting the plaintiff’s offer of settlement; or
(b)making a counter-offer; or
(c)     stating that liability is denied and the grounds on which it is denied.
(5)     If the defendant is in possession of expert reports relevant to the claim, the defendant's response must be accompanied by copies of the expert reports.
(6)     When an action to which this rule applies is commenced—
(a)the originating process must include an endorsement stating whether the plaintiff has complied with the requirements of this rule and, if not, why not; and
(b)the plaintiff's notice to the defendant and the defendant's response (if any) to the notice must be filed in the Court in a suppressed file.
(7)     In awarding costs of the action, the Court may take into account—
(a)whether the parties have complied with their obligations under this rule; and
(b)the terms of any offer or counter-offer, or of any response to an offer or counter-offer, made under this rule and the extent to which it was reasonable or unreasonable in the circumstances.
(8)     A plaintiff may commence a primary action in anticipation of obtaining an exclusionary order under subrule (1)(c).
(9)     If an action is commenced under subrule (8) but the court decides against making an exclusionary order, the action is stayed until the plaintiff complies with the requirements of this rule.
The defendants submitted that the offer by the plaintiff dated 18 February 2009 came within the terms of r 33 and hence the defendants’ counter-offer to that offer itself fell within r 33(7) and was therefore admissible.[60]
[60] The relationship between s 67C(1), Evidence Act 1929 and the predecessor to r 33 (previously r 6A) was outlined by Judge Lunn in Mair v Mazzitti (No 1) (2003) 231 LSJS 186, 191 [14]:
This construction of subs (g) is demonstrated by the application of s 67C to notices under Rule 6A.
Subsection (g) makes communications under Rule 6A admissible where the giving of a Rule 6A notice
affects the rights of a party to the dispute. As mentioned above, Rule 6A only affects rights in relation
to costs.Hence at the point in an action where a party seeks some costs order in his or her favour by
reason of the operation of Rule 6A, but not otherwise, subs (g) operates to make the Rule 6A notice
admissible because it is the fact of its making which then affects the right to costs. When subs (g) so
operates, but only at that point, and only on that issue in the action, s 67C(1) no longer bars the
admissibility of the Rule 6A notice.
The Judge observed that the plaintiff’s offer of 18 February 2009 did not purport to be a r 33 offer; it was open only between that date and 3 March 2009 (a period much shorter than the 60 days required by r 33(4)); it had been withdrawn without warning by the plaintiff on 3 March 2009; and importantly, no sealed r 33 offer (or counter-offer) was ever filed at Court as is required by r 33(6)(b). His Honour stated:
[45]Then a settlement deed reflecting a suggested settlement sum of $40,000 is simply sent by the plaintiff attached to a brief letter, for the defendants’ consideration. In reply to that, on 23 February the defendants proposed amendments which sought to preserve liability by the plaintiff to the defendants for the quality of the work per the Electricity Act, and the plaintiff refused to accept a settlement on that basis, but agreed to a term to the effect that they were not purporting to contract out of their responsibilities pursuant to the Electricity Act including their enforcement by the Office of the Technical Regulator. The defendants did not reply by 3 March 2009 when the plaintiff withdrew the $40,000 offer.
[46]In effect, this represents an offer by the plaintiff to accept $40,000 in full and final settlement by letter dated 18 February 2009, which is rejected by the defendants’ counter-offer of 23 February to pay $40,000 while preserving their rights to claim pursuant to the Electricity Act, which is itself in turn rejected that same day by the plaintiffs (sic). The plaintiff writes on 25 February, indicating it will settle (inferentially for the agreed sum of $40,000) if its obligations per the Electricity Act are phrased in a slightly different way but that otherwise the resolution is to be a full and final settlement between the parties. This constitutes another offer by the plaintiff to settle for $40,000, which is then not accepted by the defendants for a week, after which the plaintiffs (sic) withdraw their offer on 3 March 2009.
…
[48]I find that this correspondence did not amount to a Rule 33 Notice and response, and it is accordingly not admissible on that basis.
[49]And, also relevant is that the plaintiff simply did not file the required Rule 33 notice at all, which the Rules of Court plainly require it to do. Per Rule 33(7) the Court may take into account that the plaintiff did not comply with the rule. If, for example it had done so, and the offers it made were left open for the 60 days the rule allows for the defendant to reply, there would have been considerably more time for the contemplation and resolution envisaged and encouraged by the rule.
The requirements of r 33
The requirements of r 33 were considered in Public Trustee as Litigation Guardian for Pinter v Newman[61] which involved an appeal against a ruling by the trial Judge that a pre-action offer by the plaintiff did not constitute a valid r 33 Notice. The Court dismissed the appeal and upheld the trial Judge’s characterisation of the offer. Kourakis CJ, Gray and Blue JJ observed:[62]
[33]The parties did not, before the action was instituted, treat the letter of 10 December 2008 as a notice under r 33. The letter did not describe itself as a notice under r 33. The letter made no reference at all to r 33. The solicitor for the insurer had the belief that the letter was not a r 33 notice. An affidavit from the solicitor was tendered and there was no challenge to the assertion of the solicitor’s belief. In a case like the present where a letter or notice is not expressly endorsed under r 33, the question whether it is a notice under the rule is an objective question which must be assessed through the eyes of a reasonable recipient, having regard to its contents and to the context in which, and the background against which, the notice is issued.[63]
[34]Even if one were to accept that the 10 December 2008 letter purported to be a r 33 notice, it failed in many respects to meet the terms of r 33. It did not contain an offer to settle capable of acceptance. As observed above, in many respects it was open-ended. It made reference to the preparation of a schedule of disputed care accounts and other past special damages. It made no reference to past payments for care and whether the total amount referred to in the letter was in addition to those past payments. It failed to provide the expert report of Mr Donato in accordance with r 33(2)(c). This was no mere technicality; it would appear to be the only report supporting a substantial claim of $754,000 in relation to a purpose-built home. It is to be observed that these matters also lend support to the defendant’s contentions that the letter was never intended to be a r 33 notice.
…
[37]There are a number of other respects in which the rule was not complied with. As found by the trial judge, neither the letter nor the response to that letter was filed in a suppressed file, as required by r 33(6)(b). The endorsement on the inter partes summons stated that the claim had not been notified in accordance with r 33. Although these might be described as matters of a technical nature, the cumulative effect should be addressed. At the very least, they support the defendant’s contention that the 10 December 2008 letter was never intended to be a r 33 notice.
[61] (2012) 112 SASR 299.
[62] Public Trustee as Litigation Guardian for Pinter v Newman (2012) 112 SASR 299, 309-310.
[63] In the context of consideration of the meaning of “offer”, see Bartolo v Hancock [2010] SASC 305 at [12] (Doyle CJ), citing Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40].
In the present case the plaintiff’s offer of 18 February 2009 does not purport to be an offer pursuant to r 33. It was couched in the following terms:
Dear Sir/Madam
RE: RAPS ELECTRICAL
We enclose the Settlement Deed for your consideration. Please note that we have provided for a sunset period in the deed of 48 hours to avoid any unnecessary delay. The sunset periods apply to all parties.
Nowhere in this offer, or in any of the associated correspondence which passed between the parties, was it suggested that the offer was made pursuant to r 33 or attention directed to its requirements. The endorsement on the inter partes summons in effect conceded that there had not been a r 33 offer.[64]
[64] “This summons has the following statutory endorsements under Rule 38 of the District Court Rules. The Plaintiff has not strictly complied with Rule 33 of the District Court Rules however the Plaintiff through his solicitor has endeavoured to settle this matter with the Defendants without success for a period in excess of 90 days …”.
The withdrawal of the offer on 3 March 2009 is a particularly significant matter. Rule 33 is a beneficial provision which is intended to encourage and facilitate the settlement of civil disputes. The requirements as to the timing of offers and responses thereto exist to encourage parties to make genuine offers to settle which allow the other side ample opportunity to consider them, rather than simply using offers open for much shorter periods in order to take advantage of the costs provisions. In the present case, not only was the plaintiff’s offer withdrawn after only 12 days, but the settlement deed itself required execution “within 48 hours of receiving this deed”.
In my view, it is quite obvious that the Judge was correct in deciding that the plaintiff’s offer of 18 February 2009 was not a r 33 offer and that a defendants’ counter-offer accordingly did not fall within r 33(7)(b), which permits the Court to consider “the terms of any offer or counter-offer … made under this rule”.[65] The submission that the defendants’ counter-offer was admissible pursuant to r 33(7) was both opportunistic and doomed to failure. Perhaps the more important comment to make is that it was never the case that the defendants were in some way required to “piggy back” on the plaintiff’s efforts to settle prior to the issuing of proceedings. The defendants were entirely free at the time of the making of the counter-offer of 23 February 2009, and prior to the issuing of proceedings to make valid Calderbank offers. Their failure to do so is not to be in some way attributed to conduct by the plaintiff.
[65] It may be added that there was nothing about the defendants’ counter-offer of 23 February 2009 which identifies it as having been made pursuant to r 33 and, of course, it was not filed in a suppressed file in accordance with r 33(6)(b).
The Judge’s decision as to further informal offers
The defendants also submitted that other informal offers were admissible pursuant to s 67C(2), Evidence Act 1929. This submission constitutes an alternative position in relation to the offers which were primarily contended to constitute formal offers under r 187 as well as applying to other informal offers which could only be admissible if found to be within an exception to the exclusionary rule under s 67C(1), Evidence Act 1929.
The general principle of inadmissibility of informal offers
Section 67C(1), Evidence Act 1929 creates a general rule that informal communications directed at settling an action are inadmissible, with s 67C(2) then creating a number of limited exceptions to that rule:
67C—Exclusion of evidence of settlement negotiations
(1)     Subject to this section, evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute, or of a document prepared in connection with such an attempt, is not admissible in any civil or criminal proceedings.
(2)     Such evidence is, however, admissible if—
(a)     the parties to the dispute consent; or
(b)the substance of the evidence has been disclosed with the express or implied consent of the parties to the dispute; or
(c)the substance of the evidence has been partly disclosed with the express or implied consent of the parties to the dispute, and full disclosure of the evidence is reasonably necessary to—
(i)enable a proper understanding of the other evidence that has already been adduced; or
(ii)     avoid unfairness to any of the parties to the dispute; or
(d)the communication or document included a statement to the effect that it was not to be treated as confidential; or
(e)the proceeding in which the evidence is to be adduced is a proceeding to enforce an agreement for the settlement of the dispute or a proceeding in which the making of such an agreement is in issue; or
(f)the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or
(g)the making of the communication, or the preparation of the document, affects the rights of a party to the dispute; or
(h)the communication was made, or the document was prepared, in furtherance of—
(i)    the commission of a fraud or an offence; or
(ii)the doing of an act that renders a person liable to a civil penalty; or
(iii)    the abuse of a statutory power.
(3)     Subsection (1) does not apply to parts of a document that do not concern attempts to negotiate a settlement of a dispute, if it would not be misleading to adduce evidence of only those parts of the document.
Section 67C(2)(c): Partial disclosure
The defendants submit that each of the pre-action offers could be admitted under s 67C(2)(c) as their substance was partly disclosed with the express or implied consent of the parties to the dispute by the reference to endeavours to settle in the plaintiff’s endorsement on the summons pursuant to r 38, District Court Civil Rules 2006. The defendants submit that full disclosure of the evidence is reasonably necessary to avoid unfairness to them.[66]
[66] Evidence Act 1929 s 67C(2)(c)(ii).
Section 67C(2)(c) was considered by Judge Lunn in Mair v Mazzitti (No 1).[67]His Honour made the following observations:[68]
[11]… When referring to “the substance of the evidence” and “full disclosure of the evidence” subs (2)(c) is referring to “evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute” as referred to in subs (1). It is not referring to the evidence of the circumstances of the dispute but evidence of the communication. A similar interpretation also applies in respect of subs (2)(b) and other subparagraphs of subsection (2). If subs (2)(c) meant that once some evidence of the matters in dispute had been given by consent then everything said about the matters in dispute in negotiations would become admissible provided either subparagraphs (i) or (ii) of subsection (2)(c) were satisfied, it would mean that parties to settlement negotiations would need to be very careful and circumspect about what was said and disclosed in negotiations and this would be likely to inhibit settlements. That is not the intention of s 67C. Rather, in the light of the purpose of s 67C, and in its context, subs (2)(c) means only that if part of the communication is put into evidence by consent then neither party can prevent the balance of the communication being put into evidence if subparagraphs (i) or (ii) are satisfied. (Subs (2)(c) was considered by the Full Court in Chapman v Allan (1999) 74 SASR 274, but the issue raised in this matter was not addressed there.)
[67] (2003) 231 LSJS 186.
[68] Mair v Mazzitti (No 1) (2003) 231 LSJS 186, 190.
It is obvious that the first limb of s 67C(2)(c) has not been satisfied here. The statement made on the summons was made on the originating process for the limited purpose of issuing process.[69] If such statements were held to make the communications to which they refer admissible, the Calderbank letter mechanism and the exceptions in s 67C(2)(d) would be rendered otiose. As White J held in District Council of Mallala v Livestock Markets Ltd:[70]
[25] The underlying purpose of s 67C is to preclude from admission into evidence matters said by parties to civil disputes in the course of attempts to settle those disputes or documents prepared for use in such attempts. In this way, the parties are encouraged to be frank in their discussions by the knowledge that nothing which they say may, in the ordinary course, be admitted into evidence. Thus a party may be willing to disclose information, or to make a concession, which would not otherwise be the case if they knew that the matter disclosed, or the concession, could be introduced later into evidence. …
Section 67C(2)(b): Disclosure of the substance of the offers
[69] District Court Civil Rules 2006 rr 34, 38(3)(a) Example 2(a), 33(6).
[70] (2006) 94 SASR 258, 264.

The Judge then recounted his impressions of the plaintiff’s evidence subsequent to his recall for further cross-examination:[81]
[143]In short, when recalled the plaintiff told the court that he had filled out other job sheets at the time of the work reflected in the first 12 job sheets tendered, and transferred that information to the new job sheets that were tendered in this trial. He said he did that when he got his new ABN number and formatted a newly designed job sheet. He said he performed this transfer at “sort of the same time”. It was observed by the defendants’ counsel and put to the plaintiff that 4 different colour pens were variously used on those 12 sheets so as to give the false impression they were drawn up at different times. The plaintiff denied that. The plaintiff then said that he might have done it over a couple of nights. He said he transferred the information from his old job sheets to his new ones “because I had a new structure and a new ABN”.
[144]These responses were quite unconvincing. There would be little reason to transfer all the old job sheet information onto new job sheets where, as here, the job sheets performed no role apart from being an internal record of work done, particularly so when most of the work reflected in those first 12 sheets had already been invoiced and paid without reference to GST, per the plaintiff’s first invoice dated 8 February 2008. Secondly, if the plaintiff for some reason had a genuine reason to transfer the information from 12 old sheets to 12 new sheets, it is likely he would have done it all over the space of a few minutes to update his records, rather than in different colours for different invoices over several sittings.
[145]It was then put to the plaintiff that his new evidence revealed that his earlier evidence that all the job sheets were filled out at the time of the work done in them was false. The plaintiff admitted that his earlier evidence at page 187 was accurately recorded, but said that he hadn’t meant that the job sheets he was referring to in this trial were the actual ones he filled out at the time. He repeated this in response to other passages of evidence he had given that appeared to specifically deny filling in any of the job sheets in this trial at a later time. When the plaintiff was asked why he had not told the court about the old job sheets and transferring the information from them to new job sheets when it had been put to him that the tendered job sheets had been filled in at a later time, he responded “Just I didn’t understand the question to be like that”.
[146]The plaintiff was taken to his earlier evidence at pages 330-331 where he had told the court that he filled in the job sheet relating to 9 April 2008 at or around that time. The plaintiff responded that that was not what he meant. There was further cross-examination and responses along similar lines.
[147]Ultimately the plaintiff’s evidence in this topic seriously affected his credibility. His earlier evidence was plainly to the effect that the tendered job sheets were filled out by him at or around the time the work was done, and that was plainly not possible in light of the ABN number printed on the first 12 job sheets. His response and explanations when he was recalled simply did not adequately explain his earlier evidence. This casts serious doubt over the accuracy of the job sheets as a reliable record of the work done, and the honesty and credibility of the plaintiff’s evidence in this matter. [Footnotes omitted]
[81] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
His Honour subsequently concluded thus:[82]
[394]The plaintiff’s evidence was initially straightforward, but his explanations for the apparent inconsistencies between his claimed hours and his phone records were unconvincing. His evidence purporting to explain his earlier evidence that his first 12 job sheets were filled out at the same time of the work, when at that time the ABN on the job sheets had not been created, was not credible. The whole thrust of his initial evidence was that they had all been filled out at or around the time of the claimed work, and his subsequent explanations that in fact there were earlier job sheets which he had used to transcribe information onto the tendered job sheets after the ABN was generated were not credible explanations of his earlier evidence. The plaintiff’s evidence was also contradicted in several significant respects by his assistant on the job, Mr Curry. I found Mr Curry to be an honest and straightforward witness whose evidence I accept. Mr Curry said he would leave the work site at 4.00 or perhaps 4.15pm, whereas the plaintiff claimed his attendance on most days to the hours of 4.30pm, 5pm or 5.30pm. Further, Mr Curry said he was paid $200 a day by the plaintiff whereas the plaintiff says he paid Mr Curry $250 cash per day. In each respect I accept what Mr Curry said and reject the contrary version given by the plaintiff. I also find the plaintiff’s evidence that he kept no records, financial or otherwise of what he paid Mr Curry not credible. I refer to without repeating the other aspects of concern about the plaintiff’s evidence mentioned earlier in these reasons.
[82] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
The Judge was also highly critical of the plaintiff’s evidence as to his GST liability: [83]
[83] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
[136]I find that it is impossible to be satisfied that the plaintiff’s own billings for the year 2007-2008 prior to 3 May 2008 or for the whole tax year were at or above the $75,000 threshold. The plaintiff’s evidence on this topic was vague, based on the hearsay of what his accountant had told him and his income for the tax year was also entirely dependant on what structure the accountant set up upon GST Registration part way through the tax year. No financial records were tendered, nor was there any explanation from the accountant. One might think that the plaintiff’s tax returns could easily have been provided.
…
[140]In all there are so many uncertainties and so much lack of clarity, and in the absence of any of the financial records or even the GST returns which might easily cast light on the issue, I am also unable to find established on the balance of probabilities that the plaintiff reached the registration turnover threshold and hence had any personal liability for GST during the 2008-2009 tax year.
[141]As to credit, I was not satisfied with the vagueness and uncertainty of the plaintiff’s answers on this topic, and I also find that it is unlikely that the plaintiff would know as little about the financial structure, detail and income of his own business as he said he did.
…
[413]Taking into account the independent evidence I do accept; in particular the location of the plaintiff as revealed by his phone records indicating exaggeration of hours, the plaintiff’s exaggeration of Mr Curry’s hours as revealed by Mr Curry, the adverse conclusions I formed as a result of my findings concerning the composition of the first 12 job sheets, the inconsistency between the plaintiff’s evidence and daylight hours concerning his 13 September 2007 attendance, and the other matters concerning his credibility earlier discussed I find that the plaintiff exaggerated both his and Mr Curry’s hours throughout the job.
[414]… I find that Mr Curry by and large worked a full day on most days where a full day is claimed on the job sheets, starting on time, but left at approximately 4pm on each of those full days rather than at the later times shown on the job sheets.
…
[416]In terms of materials, after closely considering all the evidence, including that of the experts, again adopting a broad bush approach I conclude that the plaintiff likely took the same approach to materials as he did to charging Mr Curry’s hours, and that on balance the plaintiff has proven that 90% of the claimed materials supplied were supplied. Whilst Mr Curry said he did not see excess materials used, he could not see or assess the quantities claimed in the job sheets, or therefore give an opinion as to their accuracy.
There is no appeal by either side against his Honour’s factual findings of misconduct by all parties. It is clear that these matters were all strongly relied upon by the defendants at trial and that his Honour had close regard to them.
Should the plaintiff be deprived partly or wholly of an order for costs?
The first threshold question (as referred to above) concerning the defendants’ application for indemnity costs is whether the above findings of misconduct by the plaintiff should result in the plaintiff being deprived partly or wholly of an order for costs against the defendants.
In the case of Cretazzo v Lombardi,[84] the appellant had sued the respondent for personal injuries. The respondent admitted liability. The appellant complained that he suffered from continual headaches and a number of psychological ailments. The respondent denied these allegations and claimed that the appellant was a malingerer. The trial Judge found that there was no organic basis for the appellant’s complaints subsequent to a time commencing a few weeks after the accident; that the appellant was “consciously exaggerating his symptoms to a very large degree, perhaps almost entirely”; and that the appellant had not been completely truthful, particularly with respect to his claims that he had been disabled from working.
[84] (1975) 13 SASR 4.
Having regard to the above credibility findings, the Judge awarded the appellant costs on a limited basis and ordered him to pay other costs to the respondent.[85] The Full Court allowed the appellant’s appeal. Bray CJ (with whom Zelling J and Jacobs J agreed) referred to the offer of settlement made by the respondent (which was less than the judgment sum) and concluded thus:[86]
Looking at the case for myself, I think that the appellant should suffer some penalty in costs for the groundless and conscious exaggeration of his claim which has been found against him. … I think the appellant should be deprived of some of his costs, but that he should not be ordered to pay any of the respondent’s costs. After all, the respondent fixed the amount of his offer in conscious possession of the artillery which blew up the appellant’s case on the question of malingering. He must have thought that $2,000 was enough for the appellant if he were a malingerer. He was wrong.
[85] The Judge assessed damages at an amount which was within the jurisdiction of the Local Court. However, his Honour declined to deprive the appellant of his costs on that basis.
[86] Cretazzo v Lombardi (1975) 13 SASR 4, 14.
I consider that the plaintiff here should be deprived of a full order for costs against the defendants. The extent of that reduction will depend on a number of matters to be considered in a cumulative way.
Are the defendants entitled to an order for costs against the plaintiff?
Once it is concluded that the plaintiff should be deprived of a full order for costs against the defendants, the second question is whether the defendants are entitled to an order for costs against the plaintiff on a party-party basis.
In addressing this question in the present case it is necessary to remember that while the Judge found that the plaintiff had materially exaggerated both his and Mr Curry’s hours, his Honour did not find that the contents of the job sheets were pure fabrications. Ultimately, his Honour found established on the balance of probabilities that the plaintiff had performed 80 per cent of his claimed hours, that Mr Curry had performed 90 per cent of the claimed hours and that the plaintiff had supplied materials to the value of 90 per cent of the claimed amount.[87] The defendants did not appeal against these findings by the Judge.
[87] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [415]-[416].
Further, it is necessary to have close regard to the findings made by the Judge that the evidence of the defendants lacked credibility and reliability.
The Judge’s findings as to the evidence of the defendants
As to the first defendant, the Judge found that she had made strong and unfounded assertions that the plaintiff had abandoned the site. He concluded:[88]
[252]The first defendant was cross-examined about the claims in her affidavit and her letter of 25 November 2008 that the plaintiff abandoned the site, but was forced to agree she had in fact terminated his access to the site and declined his quote to complete the work.
[88] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
His Honour further found that the first defendant had minimised the complexity of the job and the uncertainties in her instructions to the plaintiff.[89]
[89] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [254].
His Honour made the following general conclusions about the first defendant’s evidence:[90]
[253]I had a number of concerns with the evidence given by the first defendant. She gave her evidence in a shrill and didactic way, and particularly in cross-examination with increasing levels of aggression and non-responsiveness to the cross-examiner. In the course of her evidence she would throw in criticisms of the plaintiff’s work almost randomly, some of which were almost inherently incredible. For example, she said that of the 180 down lights in her house installed by the plaintiff, about 30 of them were left unclipped by the plaintiff and the globes are simply falling away from the ceiling. This is inherently improbable … I concluded that this was one of many gratuitous criticisms thrown in by the first defendant simply for the purpose for criticising the plaintiff.
[254]I consider it inherently unlikely that electrical requirements of this considerable ultimate complexity could have been, let alone were, accurately identified by the first defendant to the plaintiff prior to first fix. Plainly, even the “Electrical Needs” document, revised as it was over time, did not approach that, and it is inherently unlikely that the full details for all the fixtures, fittings, and lights comprising the final electrical layout were all verbally, accurately predicted and conveyed to the plaintiff months before by the first defendant, all well before the work concerned was commenced, as claimed by the first defendant.
[255]The undisputed eight and a half hours of phone calls from the second defendant to the plaintiff are much more likely to represent an evolving iterative process of coming to an eventual, complex, detailed electrical layout. The fact that the plaintiff gave the defendants a detailed and competitively priced quote in November 2008 to finish the job, sits far more comfortably with the plaintiff’s evidence that that was the first time he was asked to do so, than with the first defendant’s evidence that they had repeatedly asked for it for over a year, but that suddenly the plaintiff changed his non-quote-providing habits only in November 2008 to quote for the small, final portion of the job.
[256]The first defendant’s accusation on 3 December 2008 that the plaintiff had intentionally delayed her project was without any objective foundation identifiable in any of the evidence in this matter. Further, it was plainly unconvincing to suggest that the defendants never expected to pay for the work done by Mr Curry, when Mr Curry was obviously an offsider to the electrical contractor that had been retained to do the job. The first defendant admitted she saw him doing wiring, clipping and other works of an electrical nature.
[257]Also of minor concern was the provision by the first defendant of a schedule asserting specific massive wrongful claiming of hours in almost every respect, whether it be start time, finish time, working on other jobs, for periods when neither of the defendants were even in the state to observe the plaintiff, and which is largely unsupported in its particularity by their evidence even for the periods when the defendants were both in the state. As it happens, based on the totality of the evidence including the phone records and the job sheet issue I am not satisfied as to the plaintiff’s claimed hours, however the particularity asserted by the defendants is not justified on the basis of their evidence. I am however prepared to accept that these schedules were to some extent the defendants’ theories and extrapolations of their own claimed observations, rather than first hand assertions of every particular therein.
[258]The first defendant’s evidence about the excessiveness of the plaintiff’s quote to complete the job, and her explanations that the identical quote from Mr Kourtesis was in fact not for the job in its entirety, were unconvincing.
[90] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
The Judge made similar findings with respect to the evidence of the second defendant. His Honour found that the second defendant was “totally unconvincing”, particularly in regard to his evidence that the plaintiff was continually working on other jobs and in relation to what he perceived were the deficiencies in the plaintiff’s work.[91] His Honour stated:[92]
[91] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [292], [294]-[301].
[92] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122.
[292]He was cross-examined about the alleged deficiencies in the plaintiff’s hours represented in the schedules at page 390-391 of P1, and said that he could remember the hours. He was asked how he could say, as indeed he said he could assert in those schedules, that the plaintiff and his offsider continually worked on other jobs. He responded that that was when the plaintiff was talking to him, touching things, and so forth. This evidence was totally unconvincing. At another stage he said he knew that because the plaintiff was “marking on the walls of our house”. These answers were again totally unconvincing.
…
[294]The second defendant went on to say that on 22 May, where he claimed an early morning break of a quarter of an hour, the plaintiff was pointing to the switchboard and was pretending to talk about the job. He went on to say that the plaintiff and his offsider did that on 70% of the days. I found this evidence unconvincing.
[295]The second defendant was cross-examined extensively about these issues. The second defendant said he did not complain to the plaintiff about the quality of the work or his processes or techniques, although he did query whether he was using too much materials. He did it not raise this a second time because he did not think he could win a battle with him.
…
[297]The second defendant was asked about the plaintiff’s quote to finish the job and said that maybe his wife asked for that, although he knew that the plaintiff had been asked for a quote. The second defendant said he hoped that the plaintiff would finish the job off. He said the plaintiff’s quote was not accepted because when the plaintiff left the job he said he left the job. He reiterated that the plaintiff had told him he could charge what he wanted and he said that the plaintiff said that he did not even know if he would come back and that he did not care, so they found someone else. This evidence was completely at odds with the first defendant’s account of why and how the plaintiff’s work concluded.
…
[300]Provisionally I was not impressed with the evidence given by the second defendant. As described, it was often inconsistent both internally and with the first defendant, and contained continual criticism and insults directed at both the plaintiff and Mr Curry’s work practices. Indeed the criticism and insults were so trenchant that even if a proportion of them had been true, I have no doubt that the plaintiff would have been sacked from the job at a very early stage.

His Honour found that the evidence of both defendants that they were constantly complaining as to the quality of the work and constantly requesting a quotation was inconsistent with the fact that there was not a single note or email on those topics until after the respective dates of 29 October 2009 and November 2008.[93] His Honour found that the evidence of the two defendants was “completely at odds” concerning the circumstances under which the plaintiff’s work concluded.[94]
[93] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [396].
[94] Rapuano (Trading as Raps Electrical) v Karydis-Frisan [2011] SADC 122 [297].
Conclusion
Subject to the more detailed analysis above, a broad summary as to the position relevant to consideration of the extent to which the plaintiff should be deprived of the usual award of costs appears to be as follows:
·First, the plaintiff brought an action in the District Court and claimed $83,473. The matter proceeded to trial and he was awarded an amount of $34,996 plus $3,500 for interest.
·Second, the effect of s 42(2), District Court Act 1991[95] taken with r 263(2)(h), District Court Civil Rules 2006[96] is to provide that if an action of the present type might have been brought in the Magistrates Court, and the plaintiff recovers less than the amount fixed by the rules (being at the relevant time $15,000), no order for costs will be made in favour of the plaintiff unless the Court is of the opinion that it is just in the circumstances of the case that the plaintiff should recover the whole or part of the costs of action. Clearly the plaintiff exceeded the threshold amount of $15,000 by a substantial amount.
·Third, the defendants had paid over only $11,845 ($6,845 plus $5,000) in response to invoices rendered. Thus, they had paid only $11,845 of the eventual total of $46,841 ($11,845 plus the $34,996 judgment sum) to which the plaintiff was eventually found to be entitled.
·Fourth, the defendants paid nothing into Court.
·Fifth, it has been determined that the defendants made no offer of settlement that is admissible for consideration.
·Sixth, the general rule that costs follow the event is a most important one as noted by McHugh J in the passage in Oshlack v Richmond River Council[97] referred to above.
·Seventh, this is not a case where costs might be apportioned by reference to separate legal issues. The question at trial was basically how much work the plaintiff performed and how much he should be paid for it.
·Eighth, in the present circumstances, the plaintiff is only to be denied a full award of costs by reference to findings of misconduct in the conduct of the litigation by the plaintiff. In assessing the ultimate effect of such findings on the overall outcome as to costs, attention must also be paid to findings of misconduct in the conduct of the litigation by the defendants.
[95] Section 42(2), District Court Act 1991 provides:
If –
(a)an action for the recovery of damages or any other monetary sum is brought in the Court; and
(b)the action might have been brought in the Magistrates Court; and
(c)the plaintiff recovers less than an amount fixed by the rules for the purposes of this paragraph,
no order for costs will be made in favour of the plaintiff unless the Court is of the opinion that it is just in the circumstances of the case that the plaintiff should recover the whole or part of the costs of action.
[96] Rule 263(2)(h), District Court Civil Rules 2006 fixed the relevant jurisdictional limit at the relevant time at $15,000. Note that as from 4 July 2013, the jurisdictional limit imposed by r 263(2)(h) has been increased from $15,000 to $40,000: See District Court Civil Rules 2006 (Amendment No 23).
[97] (1998) 193 CLR 72, 97 [69]. See also Kirby J at 120-123 [134].
On appeal, the defendants put broad submissions to the effect that the defendants had “succeeded” in the action because the plaintiff recovered substantially less than he had claimed and the defendants were “vindicated” by the Judge’s adverse findings concerning the plaintiff; it was submitted that the defendants had been successful overall in the action on a “commonsense” view and costs should have followed the event of that “success”.
Such submissions are largely misguided for the reasons stated above. Importantly, the defendants always had the means to protect themselves against adverse costs consequences, namely to file formal offers of settlement in valid form or (as a second best) to make informal offers in admissible form. If neither course was taken, tendentious claims by the defendants of “unfairness” can carry little weight; if the defendants have a remedy, it does not lie against the plaintiff.
Taking all of the circumstances into account, I consider that the plaintiff should be awarded less than a full award of his party-party costs on the basis of his misconduct at trial but I would not deprive him of a partial award of costs. I would allow the cross-appeal only to that extent.
As for an award of costs to the defendants (indemnity or otherwise), the defendants have also been guilty of misconduct at trial although not as serious as that of the plaintiff. I consider that a substantial reduction of the plaintiff’s award of costs, with no award in favour of the defendants (on a party-party or indemnity basis), will do justice in all of the circumstances of the case.[98]
[98] Among these circumstances is the plaintiff’s failure to comply with r 33, District Court Civil Rules 2006. In the judgment of the Full Court (Kourakis CJ, Gray and Blue JJ) in Public Trustee as Litigation Guardian for Pinter v Newman (2012) 112 SASR 299, 312 [48] it was stated: “In the event that a plaintiff or a defendant fails to meet the r 33 stipulation, r 33(7) provides that the court may have regard to that failure when exercising its discretion as to costs. The rule does not suggest that non-compliance with the rule gives rise to any entitlement or presumption in respect of costs. The rule says nothing about the weight to be given to any matter of non-compliance. So understood, the rule does no more than draw attention to matters that may be considered by the court in the exercise of its general discretion”.
Accordingly, I would award the plaintiff 50 per cent of his costs of the action on a party-party basis. I would otherwise dismiss the cross-appeal and make no award of costs to the defendants.
Proposed Orders
1That the appeal be allowed in part.
2That the cross-appeal be allowed in part.
3That the following orders made by Judge Stretton on 7 December 2012 be set aside:
1.The Plaintiff be awarded 70 percent of its taxed costs up until 14 days after the filed offer.
2.The Defendants be awarded 85 percent of its taxed costs after 14 days after the filed offer.
4That the plaintiff be awarded 50 per cent of his costs of the action on a party-party basis.
5That all awards of costs made prior to the final award made by Judge Stretton on 7 December 2012 are to remain unaffected.