Russell v City of Melbourne (No. 2)

[2022] VCC 1086

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

 Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-19-01463

JOHN (JACK) RUSSELL	Plaintiff
v
CITY OF MELBOURNE	Defendant

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JUDGE:	HIS HONOUR JUDGE PILLAY
WHERE HELD:	Melbourne
DATE OF HEARING:	Determined on the papers
DATE OF RULING:	18 July 2022
CASE MAY BE CITED AS:	Russell v City of Melbourne (No. 2)
MEDIUM NEUTRAL CITATION:	[2022] VCC 1086

RULING
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Subject:COSTS – CALDERBANK OFFER

Catchwords:              Costs – Application for indemnity costs – Defendant made Calderbank offers to the Plaintiff – Whether refusal of offers in Calderbank letters unreasonable – Application of factors set out in Hazeldene’s Chicken Farm – Plaintiff is a self-represented litigant – Plaintiff’s claim devoid of merit – Indemnity costs awarded

Cases Cited:Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No. 2) (2005) 13 VR 435

Ruling:  Application granted

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person
For the Defendant	M Latham	Hunt & Hunt Lawyers

HIS HONOUR:

1On 1 June 2022, I handed down reasons for judgment (‘reasons’)[1] dismissing the Plaintiff’s claim. The Defendant now makes an application for costs on both a standard and indemnity basis.

[1] Russell v City of Melbourne [2022] VCC 746 (“Reasons”)

The Calderbank offers

2In its first Calderbank letter of 25 November 2021 (‘the first offer’), the Defendant made an offer to settle the proceeding for the amount of $25,000 inclusive of costs. The Defendant restated this offer and reasons in its second Calderbank letter of 27 January 2022 (‘the second offer'). The Defendant’s application for costs on an indemnity basis is from 26 November 2021, the date of the first offer or otherwise from 15 February 2022, the expiration date of the second offer. I find no reason to deviate from the usual course that costs should follow the event in this proceeding. The question to be determined is whether indemnity costs should be awarded and if so, from what point in time.

3For the below reasons, I find that the Defendant should be paid costs on an indemnity basis from 15 February 2022.

Principles

4The costs principles surrounding Calderbank offers are well established.[2] The critical question is whether it was unreasonable for Mr Russell to reject the offer in the circumstances.[3] The relevant considerations include the following:

(a)   the stage of the proceeding at which the offer was received;

(b)   the time allowed to the offeree to consider the offer;

(c)   the extent of the compromise offered;

(d)   the offeree’s prospects of success, assessed at the date of the offer;

(e)   the clarity with which the terms of the offer were expressed;

(f)    whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.[4]

[2] Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) (2005) 13 VR 435 (“Hazeldene’s Chicken Farm”)

[3] Hazeldene’s Chicken Farm at [23]

[4] Hazeldene’s Chicken Farm at [25]

The Form of the Calderbank Letters

5The first and second offers set out the common law principles and statutory defences upon which the Defendant sought to rely, together with the reasons as to why it considered that the Plaintiff would fail. The wording of the first offer is replicated in the second offer, save for the period of time during which the offers are open. 

6The Plaintiff was afforded four business days to accept the first offer and 14 business days to accept the second offer. I note that the Plaintiff is self-represented. I consider the brevity of this time period in the context of the Plaintiff’s circumstances to be unduly short. Accordingly, I will not award the Defendant indemnity costs from 26 November 2021.

7It now remains as to consider whether this Court will award indemnity costs from the expiration of the second offer.

Assessment

8First, the second offer was provided within one month of the trial which commenced on 28 February 2022. Given that the proceedings were initiated in September 2018, the parties were in a position to have considered the merits of their respective positions to a substantial degree as at the date of the second offer.

9Second, the Plaintiff was afforded 14 business days to accept the second offer which I consider to be sufficient. This is because the litigation was well advanced and he clearly knew the case against him. It was also the second time an offer in this form had been made.

10Third, the Defendant offered $25,000 by way of compromise. This is a substantial compromise, being significantly better than the final result achieved by the Plaintiff at trial.

11Fourth and importantly, the Plaintiff was in an unmeritorious position with little prospects of success as I have set out in my reasons. I have received no information to suggest that he had any greater prospects of success as at the time of the second offer than as at the time of trial. The pleadings filed by the Plaintiff were vague and as at the time of the second offer, he had not addressed the arguments or statutory defences proffered by the Defendant. In connection with this is the Defendant’s articulation in the offers of the Plaintiff’s unmeritorious position. The wording of the second offer set out the Defendant’s view that the Plaintiff was likely to have failed in his claim due to his failure to take reasonable care when using a public road and the way in which this Court would be likely to find that he failed to take reasonable care, as well as the statutory defences upon which it sought to rely. These arguments are indeed reflected in my reasons and I consider that the second offer set out the basis as to which the Plaintiff was likely to fail.

12Fifth, the terms of the second offer were sufficiently clear. I make the point that the Plaintiff is self-represented and is not expected to be familiar with the principles surrounding Calderbank offers. Nor is he expected to have understood the details of the legal principles and defences upon which the Defendant sought to rely. However, the terms of the offer were unambiguous and I have not received any information indicating that the Plaintiff sought to clarify the offers or sought more time to consider or respond to the offers.

13Sixth, the Defendant submits that because its second offer expressly foreshadowed an application for indemnity costs, the Plaintiff’s failure to accept the offer is more unreasonable in turn. It is not apparent to me that the Plaintiff appreciated the implications of the Defendant’s notice that it would seek indemnity costs, nor that he pressed on with his case in spite of this. Accordingly, I do not consider this to be a significant factor in assessing whether indemnity costs are to be awarded.

14Finally, I make the additional point of finding that the Plaintiff unilaterally bore the knowledge of the factor that ultimately led to his failing. He unreasonably persisted with litigating his claim despite knowing that he could not identify the position of his feet at the time of the fall which was imperative to establishing causation. His claim was plainly devoid of merit and its continuation in the face of the second offer needlessly increased costs and time on the part of the parties and the Court. This factor, in conjunction with the reasons I have articulated above lead me to find that the Plaintiff unreasonably rejected the second offer.

Orders

15The Plaintiff is ordered to pay the Defendant’s costs of the proceeding, including reserve costs, on a standard basis and on an indemnity basis from 15 February 2022.