Sazzi v Chang (No 3) - [2014] SADC 48

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SAZZI v CHANG AND ORS (No 3)
[2014] SADC 48
Judgment of His Honour Judge Slattery
21 March 2014
PROCEDURE - COSTS
Costs – discretion of the Court – defendants sought an order for elevated amount of costs – letter of offer sent by defendants to plaintiff not received until just prior to commencement of the trial - whether letter of offer should be taken into account – defendants contend that no costs orders should be made in favour of a plaintiff that had achieved a judgment upon one claim in the sum of $15,210.30 inclusive of interest and had failed on a number of its claims.
Held: Letter of offer from defendants to the plaintiff came too late in the proceedings – defendant entitled to an order for costs on the counterclaim to be taxed or agreed – plaintiff entitled to an order for costs in its favour of the amount of 25% of costs of its action to be taxed or agreed.
District Court Act sub-s 42(2) ; District Court Rules 6R 263(2)(h), referred to.
Cretazzo v Lombardi (No 2) (1975) 13 SASR 4; Calderbank v Calderbank [1975] 3 All ER 333; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, applied.
BHP Billiton Limited v Parker [2012] SASCFC 73; Nominal Defendant v Dighton (No 2) [2012] SASCFC 97 , considered.

SAZZI v CHANG AND ORS (No 3)
[2014] SADC 48
JUDGE SLATTERY

The judgment entered in favour of the plaintiff, including interest totals the sum of $15,210.30. The defendants have succeeded on their counterclaim to the extent of $8,910.43 and this sum been set off against the claim of the plaintiff to which amount interest has been applied to achieve the sum of $15,210.30. Both parties seek orders for costs. The defendants seek an order that no order for costs be made in favour of the plaintiff and that the plaintiff pay the defendants’ costs on an indemnity basis, or alternatively, on a party/party basis up to and including 30 August 2013 and thereafter on an indemnity basis or alternatively on a party and party basis.
Both parties agree that costs should follow the event and it is on that basis that both parties seek orders for costs. However, there are a number of bases upon which the defendants seek an order for an elevated amount of costs. I will deal with each in turn.
The defendants’ initial contentions were that, on their calculations, the plaintiff did not achieve a judgment of an amount of $15,000.00 or more. The defendants referred to District Court Act sub section 42(2) and District Court Rules 6R 263(2)(h). Based upon the calculations that I have made, this ground is no longer available to the defendants.
The second contention of the defendants in this regard was that the plaintiff was really only successful on one issue in the litigation, namely liability in relation to the defendants taking possession of the goods and it failed on other issues, including quantum of the goods and did not press other pleaded issues such as exemplary or aggravated damages. On the basis of the principles discussed in Cretazzo v Lombardi (No 2) (1975) 13 SASR 4 at 11-12, the plaintiff should be excluded from the benefit of a costs.
In relation to the quantum of the costs, the defendants seek an order for elevated costs based upon a letter of offer dated 23 August 2013, delivered by the defendants to the plaintiff under the principle enunciated in Calderbank v Calderbank [1975] 3 All ER 333. That letter contained an offer to settle the action for the sum of $80,000.00 inclusive of costs and interest and the payments to the plaintiff of the amount that had been paid into Court as security for costs ($9,000.00). The defendants referred to and relied upon the Full Court of the Supreme Court of South Australia decisions in BHP Billiton Limited v Parker [2012] SASCFC 73 at [261] – [265] and Nominal Defendant v Dighton (No 2) [2012] SASCFC 97 at [8] – [9]. The defendants contended that it was unreasonable or imprudent for the plaintiff to refuse the defendants’ offer.
I will deal with those matters in reverse order. I do so because there is a real controversy in relation to the question of the offer delivered by the defendants to the plaintiff. The defendants read and relied upon an affidavit of Girish Patel, solicitor sworn 20 January 2014. That affidavit disclosed (Exhibit GP2) a copy of the letter of 23 August 2013 referred to in the defendants’ submissions and which I have described above.
In his affidavit, Mr Patel said that the letter had been sent and was in response to an earlier offer of 21 August 2013 from the plaintiff to the defendants. That letter of offer by the plaintiff followed a mediation of 15 August 2013 which was unsuccessful.
In response to the affidavit filed by Mr Patel (FDN 153), the plaintiff filed two affidavits of the solicitor Harry Franklin Lambert being affidavit sworn 20 January 2014 (FDN 154) and affidavit sworn 26 February 2014 (FDN 156). The affidavit of 20 January 2014 discloses that the letter of offer of 23 August 2013 was not seen by Mr Lambert until it was shown to him by Mr Ross-Smith, counsel, on 29 August 2013. He says that the letter was received by his office electronically (but not seen by him) on 28 August 2013. In the second affidavit (FDN 156) of 26 February 2014, Mr Lambert explains that as early as April 2013 he had changed address, he had notified the Court and Mr Patel of his change of address and that the correspondence from Mr Patel that had been sent to a fax number, had been sent to his previous fax number that was no longer operable. Mr Lambert had operated under a different fax number since April 2013. Mr Lambert had no record of having received into his office the letter of offer prior to 28 August 2013. It follows that at about the time the offer was received, the parties were in the throes of final preparations for trial which commenced on 5 September 2013.
There was no application by the plaintiff for cross examination of Mr Patel on his affidavits and there was no application on behalf of the defendants for cross examination of Mr Lambert on his affidavits.
I am satisfied that the letter of 23 August 2013 was not received by or seen by those advising the plaintiff until no earlier than 28 or 29 of August 2013. I do not need to resolve which date is applicable because in my opinion, the offer came too late to serve the intended purposes of the defendants in putting costs pressure upon the plaintiff. In my opinion, if an offer was to be made within the Calderbank principles and to have effect according to those principles, then it should have been provided much earlier. In my opinion, there was insufficient time for the plaintiff to deal with the question of the offer and to be providing final instructions to solicitors and counsel in and about the preparation for the commencement of the trial, when the offer was received on 28 or 29 August 2013. It is therefore unnecessary for me to give consideration to the question of the prudence or imprudence of refusing to accept that offer because in the exercise of my discretion, I am not prepared to give any weight to that offer in and about the determination of the question of costs in this matter. I am aware that on occasion some Judges have given particular importance to offers delivered shortly before trial. It is sufficient to say that those judgments do not create any particular rule or guiding principles about how a Court may approach the exercise of its discretion in any particular case. Those cases appear to have turned on their own peculiar facts. And in my view, there are very sound reasons why the parties to proceedings must have sufficient time to give proper mature reflection to any offer made. Advisors must have the opportunity to calmly and completely advise their clients in a manner that is detached and objective. Offers received on the eve of trial or close thereto often tend to aggravate the pressing (subjective) issues then operating and rarely permit the necessary detached objective assessment that is required to be given to such offers.
For the same reasons, I am of the view that there are no specific or unusual features of this case that amount to good reason to more fully compensate the defendants for their legal costs.[1]
[1] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
In my opinion, the defendants are entitled to an order for costs on the counterclaim to be taxed or agreed.
The important issue in this matter is the question of the costs of the plaintiff and the defendants in relation to the claim. I have had regard to all of the submissions made to me on this matter, both oral and written and I have had regard to my reasons for decision delivered on 20 December 2013. In the circumstances, and in the exercise of my discretion, the plaintiff is entitled to an order for costs in its favour of the amount of 25% of its costs of action to be taxed or agreed.
I so order.