Skinner v Byrnecut Mining Pty Ltd - [2001] WADC 103

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: SKINNER -v- BYRNECUT MINING PTY LTD & ANOR [2001] WADC 103

CORAM: VIOL DCJ

HEARD: 30 MARCH 2001

DELIVERED : 10 MAY 2001

FILE NO/S: CIV 4638 of 1998

BETWEEN: PAUL BERNARD SKINNER
Plaintiff
AND
BYRNECUT MINING PTY LTD
Defendant
BORAL RESOURCES (SA) LTD
Third Party

Catchwords:

Practice and procedure - Application for special order for costs - Whether "Calderbank" offer made by defendant sufficient - Circumstances in which "Calderbank" offer recognised by Court - Turns on own facts

Legislation:

Rules of the Supreme Court 1971

Result:

Application granted

Representation:

Counsel:

Plaintiff:     In person
Defendant:     Ms E C McLennan
Third Party                   :     Mr P P McCann

Solicitors:

Plaintiff:     In person
Defendant:     Jackson McDonald
Third Party                   :     Phillips Fox

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

Australian Medical Innovations Pty Ltd v Go Medical Industries Pty Ltd, unreported; SCt of WA; Library No 960214; 22 April 1996
Connect.com.au Pty Ltd v Goconnect Australia Pty Ltd 178 ALR 348
Dobb v Hackett & Ors (1993) 10 WAR 532
Koh v Tay [1999] WASC 228
Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425
Murcia Holdings Pty Ltd & Ors v City of Nedlands & Ors [1999] WASC 270
Unioil International Pty Ltd & Ors v Deloitte Touche Tohmatsu & Anor (No 2) (1997) 18 WAR 190

Case(s) also cited:

Nil

VIOL DCJ: In this matter, consequent upon the decision in this matter being handed down on 7 March 2001, the defendant sought a number of orders relating to costs. These were the subject of a minute (undated) which was considered by me in chambers on 30 March 2001.
The only order sought remaining in issue between the parties is a special order for costs as requested in the Minute par 3 ie. "the third party pay the defendant's costs of the third party proceedings such costs to be on a solicitor/client basis from 17 October 2000 to the date of judgment and to include an allowance for costs of and associated with lay and expert witnesses".
On 30 March 2001, counsel for the third party generally opposed this order but noted that as to that part of the order concerning an allowance for the costs of and associated with lay and expert witnesses, he did not consent to, nor opposed the making of that order. In all the circumstances of the case, it is my view that such an order should be made.
The remaining issue, therefore, is the request for a special order as to costs.
It is common ground that the offer of settlement made by the defendant of the third party on 17 October 2000 was not in accordance with O 24A of the Rules of the Supreme Court 1971 ("the Rules"). The offer which had been made was, in fact, a "Calderbank" offer. The submission of the defendant is that the circumstances of this case, including the circumstances in which the offer was made, are such that a special costs order can be made under O 66 r 1 of the Rules. The third party opposed the making of such an order.
It is clear that, notwithstanding the failure to make an offer under O 24A of the Rules, a "Calderbank" offer can be made outside the ambit of the Rules and that can be considered by the courts in the exercise of its general discretion under O 66 r 1 of the Rules.
In Dobb v Hackett & Ors (1993) 10 WAR 532 at 540, Murray J considered the making of a "Calderbank" offer and opined that such offer should be supported by the courts in order to "foster the public interest in the desirability, not only from the point of view of the particular litigants in the case in question, but from the point of view of litigants generally, of the court so behaving as to encourage the achievement of reasonable and timely settlements". This case was followed and applied by Wallwork J in Australian Medical Innovations Pty Ltd v Go Medical Industries Pty Ltd, unreported; SCt of WA; Library No 960214; 22 April 1996.
The matter was taken further by Rolfe J in the Federal Court in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425. His Honour stated "that when an offer of compromise is made in either of the forms to which I have referred, in circumstances where there can be no doubt that if the offeree does not accept it the making of the offer will be called in aid of an application for an award of indemnity costs if the offer is not bettered" (see page 440 to page 441). His Honour also confirmed that the offer must be an unambiguous offer.
The third party has submitted that on the authority of Koh v Tay [1999] WASC 228 per Scott J at par 428, the offer made in the present case was inappropriate. A reading of Scott J's opinion does not, in my view, rule out the making of orders outside the ambit of O 24A, although his Honour obviously preferred the more formal procedure allowed by the Rules. I also agree with the submissions of counsel for the defendant that the circumstances of Koh v Tay (supra) can be distinguished from those in the present case.
Assuming that the defendant's "Calderbank" offer can be considered, it is upon the third party to satisfy me that a special order should not be made (see Multicon Engineering Pty Ltd v Federal Airports Corporation (supra) per Rolfe J at page 440 to page 441). I must be satisfied that the offer was not unambiguous, and that there was not some "special or unusual feature" of the case which would justify the making of the special order (see Unioil International Pty Ltd & Ors v Deloitte Touche Tohmatsu & Anor (No 2) (1997) 18 WAR 190 per Anderson J at page 191 and also Connect.com.au Pty Ltd v Goconnect Australia Pty Ltd 178 ALR 348 per Emmett J at par 66 to par 71).
The affidavit evidence discloses that the defendant had difficulty making an offer under O 24A of the Rules because of the time constraints imposed by that order for the reasons, in particular, attested by Elisa Clare McLennan in her affidavit sworn on 23 March 2001 and, in particular, par 3 to par 15. The third party had ample time to consider the offer made by the defendant and, I am satisfied, was well aware of the issues likely to arise at trial from an early stage. As explained and made clear in the affidavit sworn by Ms McLennan on 23 March 2001, the amendments to the statement of claim (which provided a basis for the defendant's success at trial) did not disclose or give rise to issues of which the third party was not aware. I am satisfied that the third party was aware of these issues that at least seven months before the "Calderbank" offer was made.
In my view, the third party was in a good position to assess the offer made by the defendant in this case and its rejection of that offer (bettered at trial) was unreasonable in the circumstances. This, of course, can constitute a "special or unusual feature" (Unioil v Deloitte Touche Tohmatsu (supra) at par 8), I am of the view that the third party, being in possession of all the necessary information and with knowledge of the potential issues at trial, refused to accept the plaintiff's offer for mere tactical reasons, choosing to let the matter go to trial and adopting a "wait and see" policy as to the evidence. There was not, in my view, a bone fides consideration of the offer made by the defendant by the third party. In the circumstances, the defendant has failed to satisfy me that it had a good reason for not accepting the offer (see Murcia Holdings Pty Ltd & Ors v City of Nedlands & Ors [1999] WASC 270).
I am satisfied that in this case, the special order as to costs sought by the defendant should be granted.