Toomey v Scolaro's Concrete Constructions Pty Ltd and Ors (No4)
[2002] VSC 28
•27 February 2002
| SUPREME COURT OF VICTORIA AT MELBOURNE | |
| COMMON LAW DIVISION | Not Restricted |
MAJOR TORTS LIST
No. 4130 of 1997
| CAMERON JOHN TOOMEY | Plaintiff |
| v | |
| SCOLARO’S CONCRETE CONSTRUCTIONS PTY LTD (In Liquidation) and ORS | Defendants |
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JUDGE: | Eames J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 February 2002 | |
DATE OF JUDGMENT: | 27 February 2002 | |
CASE MAY BE CITED AS: | Toomey v Scolaro’s Concrete Constructions Pty Ltd and Ors (No.4) | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 28 | |
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Costs – costs thrown away by defendants by virtue of joinder of additional defendant – refusal of one defendant to make admissions which would have rendered joinder unnecessary.
Costs – offer of compromise – action for personal injuries – contribution proceedings – ten defendants – offers of contribution – Rules of Supreme Court, r.26.10 – Calderbank offer – r.63.02 – section 24 Supreme Court Act.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | No appearance | |
| For the First Defendant | No appearance | |
| For the Second Defendant | Mr Ross Gillies QC with Mr Brendan Griffin | Middletons |
| For the Third Defendant | Mr Chris Blanden | Ebsworth & Ebsworth |
| For the Fourth Defendant | Mr Mark Settle | Solomon & Associates |
| For the Fifth Defendant | No Appearance | |
| For the Sixth Defendant (Andrew Young) | Mr Ross Gillies QC | Connery – Partners |
| For the Seventh Defendant | Ms E. Patrick, Solicitor | Phillips Fox |
| For the Eighth and Ninth Defendants | Mr D. Curtain QC with | Ligeti Partners Dibbs Barker Gosling |
| For the Tenth Defendant (Hudson Conway Management Ltd). | No Appearance |
HIS HONOUR:
I have delivered a number of judgments and rulings in this case and I now deal with some remaining costs issues.
Costs Thrown Away by Joinder of Tenth Defendant
On 4 April 2001 I acceded to an application by the plaintiff that the tenth defendant Hudson Conway Management Ltd. be joined as a defendant in the action.[1] The application was opposed by counsel for the seventh defendant Davidson Hughes Estate Pty. Ltd. but was supported by all counsel who appeared before me on behalf of the other defendants. The application was opposed by counsel for HCML.
[1][2001] VSC 96.
By virtue of the joinder of the tenth defendant the trial which was then in its 34th day was required to be adjourned in order to allow counsel for the tenth defendant to become acquainted with the evidence given to date and to prepare the defence of the tenth defendant.
On 11 December 2001 I ordered that the plaintiff's costs of joinder of HCML should be paid solely by Davidson Hughes. I ruled that HCML would not have been joined as a party save for the refusal of Davidson Hughes Estate Pty. Ltd. to admit agency. I ruled that although the joinder of the tenth defendant was to the benefit of the other defendants, they should not be obliged to pay the costs of the joinder when the joinder application would have been abandoned had the seventh defendant admitted agency.
Mr Gillies has pointed out that in the course of the submissions which led to that ruling he had applied on behalf of the second defendant (and had been supported by counsel for the other defendants) for an order that the costs thrown away by those defendants other than the seventh defendant should be paid by the seventh defendant.
It is clear that I did overlook that submission and failed to rule on it.
Having heard further oral submissions (which on the part of Mr Gillies involved merely an adoption of those submissions previously made) and considered both the oral submissions made on the earlier occasion and written submissions now received from the seventh defendant, I conclude that the reasons for ordering that the plaintiff's costs thrown away by virtue of the joinder of HCML[2] are equally valid with respect to the application on behalf of the defendants with respect to their own costs. Whilst those defendants gained the benefit of the joinder they would not have incurred the costs thrown away but for the refusal of the seventh defendant to admit agency, and it was that refusal which caused the joinder application to proceed.
[2]See [2001] VSC 477 at par. 34-37.
Accordingly, I rule that the costs thrown away by the defendants by virtue of the joinder of the tenth defendant should be paid on a party/party basis by the seventh defendant.
Offer of Compromise between defendants
This was an action for damages brought by a plaintiff who was severely injured in a fall from a balcony in an apartment block. There were ten defendants to the action which occupied some 56 days of evidence and led to judgment in favour of the plaintiff delivered by me on 17 August 2001[3]. I entered judgment for the plaintiff in the sum of $2,248,259 together with interest in the sum of $109,812 a total of $2,358,071.
[3]Toomey v Scolaro's Concrete Constructions Pty Ltd and Ors (No. 2) [2001] VSC 279.
The various defendants to the action had issued notices of contribution and indemnity as between each other and I ruled on the questions of contribution as between the joint tortfeasors in a judgment delivered 11 December 2001[4]. I held that the eighth and ninth defendants (who I will refer to as "the wrestling defendants") were jointly responsible as to 50% for the plaintiff's injuries, loss and damage. As to the balance of 50% I held that responsibility for the plaintiff's loss and damage was as follows:
First Defendant: 20%
Second Defendant/Sixth Defendant: 20%
Third Defendant: 20%
Fourth Defendant: 20%
Seventh Defendant/Tenth Defendant: 20%
[4]Toomey v Scolaro's Concrete Constructions Pty Ltd and Ors (No. 3) [2001] VSC 477.
I made orders that the first, second and fourth defendants were liable to make contribution to the seventh defendant to the extent, each, of 20%. I also made orders as to contribution as between the second defendant and the sixth defendant.
During the course of the proceedings many of the defendants caused notices to be served constituting offers of compromise pursuant to r.26.10 or delivered letters making offers of compromise in the form known as a Calderbank offer.[5] Offers in a Calderbank form are accepted and given weight by this Court.[6]
[5]See Calderbank v Calderbank [1975] 3 All ER 333.
[6]See Mideco v Tate [1989] VR 50; VSLR Pty Ltd v Sefa (Appeal Division, unreported, 26 July 1995).
The proceedings in this case raised a number of extremely complex issues. Whilst the builder defendants were united in contending that the plaintiff's fall from the landing was occasioned solely by the actions of the wrestler defendants they were divided as between themselves insofar as it was to be concluded that any deficiency in the height of the balustrade rail over which the plaintiff fell was occasioned by the negligence of any of the defendants.
Settlement of this case presented a considerable challenge to counsel for the parties. The prospect of reaching agreement between the defendants was complicated by the fact that the first defendant was in liquidation and was unable to contribute and the sixth defendant was insured by HIH Insurance and counsel for that defendant was forced to withdraw from the action. One other defendant, Davidson Hughes, was also said to be insured by HIH. Whilst the parties would have wanted to obtain a contribution from the first and sixth defendants it must have become apparent that no contribution was likely, at that time.
There were good commercial reasons why the case should have settled. The complexity and multiplicity of issues meant that the trial was likely to be long and costly. There were actually 56 sitting days prior to judgment and many more days since have been occupied in dealing with various applications. Whilst liability was strongly contested by all defendants on their own behalf there were clear divisions as between defendants. In particular, the builder defendants contended that the plaintiff’s injuries were caused by his own negligence and/or also by the negligence of the wrestler defendants. The wrestler defendants contended that the injuries were due to the negligence of the builder defendants (with possibly some contributory negligence by the plaintiff).
The complications were even more pronounced however, because as among the builder defendants while they were generally (but by no means universally) united on topics such as the requirements of the Building Code, and the mechanism and location whereby the plaintiff fell, they were in substantial disagreement as to whether the role of any of them contributed to the plaintiff’s fall. The wrestler defendants were in agreement that it was the fault of the builder defendants, but (although they put an offer of compromise which assumed equal liability) they were in disagreement as to how great was their individual roles, if they jointly did play a part in the accident.
These factors, and others, meant that reaching agreement between defendants as to apportionment was never going to be easy. With the exception of the non participant defendants, all of the defendants sought to protect their position as to costs by making either Calderbank or Rule 26 offers of compromise. An analysis of those offers however suggests to me that only some of them can be regarded as constituting serious attempts to settle the case, rather than as being fairly hollow attempts to protect their interests on costs.
Offers of compromise were made in one form or other, and in some cases by more than one offer, by the second defendant (Offers on 9 March 2001, and 20 April 2001), third defendant (22 February, 13 March, 17 April), fourth defendant (13 March), sixth defendant (8 March), seventh defendant (21 March, 18 April), eighth and ninth defendants (26 February, a joint offer) ninth defendant (14 February, 26 February), and by the plaintiff (10 April 2001).
Save for the offer made by the second defendant on 20 April 2001 and, to a lesser extent, the offer by the third defendant on 17 April 2001, there were significant deficiencies in all of the offers which had been made, if the purpose of the offer was to achieve a settlement and to put an unreasonable defendant on notice that he was at risk of a cost penalty if he did not take a realistic view of the likely outcome of the case, and if his continued refusal to contribute to a joint approach by the defendants to settle the case caused the defendants to incur costs unnecessarily.
Whilst it is undoubtedly the case that the question of imposing a penalty on costs when an offer has been unreasonably rejected must be determined without undue regard for technical objections as to the form of the offer, it remains the case that the offer must be in unambiguously clear terms[7], leaving no reasonable doubt as to the nature and extent of what was being offered[8].
[7]Grbavac v Hart [1997] 1 VR 154, at 160, per Tadgell JA.
[8]Grbavac v Hart [1997] 1 VR 154, at 155 per Winneke P.
In Henderson v Simon Engineering (Australia) Pty Ltd[9] Murphy J discussed the effect of r. 26.10 and decided in that case that a penalty as to costs would not be ordered by virtue of an offer of compromise served by one of three defendants on the other defendants. The offer of compromise in that case was that the third defendant would contribute "35% of any verdict or settlement obtained by the plaintiff".
[9][1988] VR 867.
Murphy J held[10] that the purpose of r. 26 was "to provide a spur to enable a defendant to bring litigation to an end, to lessen costs and to shorten litigation. It also enables a reasonable defendant to protect itself against incurring costs occasioned by the unreasonable conduct of a fellow defendant."
[10]At p.869.
Murphy J pointed out that there would be occasions where it was relatively simple to ascertain that an offer of compromise had been unreasonably rejected and had caused the defendant making the offer to incur unnecessary costs when the outcome was less disadvantageous to that defendant than the offer which it had made as to its percentage contribution towards the plaintiff's damages. His Honour noted that the situation would not always be so clear cut, however, and he held, at 869:
"In a case in which liability is accepted as being clear against both or more defendants and only the issue as between defendants as to their proportionate contribution and the amount to be paid to the plaintiff remains to be settled, a defendant may offer to his co-defendant to contribute a nominated percentage, either of the specified amount or of any sum that the plaintiff obtains by way of verdict, and if by a verdict the proportion of liability awarded against him is less than that proportion offered by him to his co-defendant, then again he would seek to be protected against further costs on the liability issue by an order for such costs against his co-defendant. The amount that the offeror has in mind to offer the plaintiff need not in these circumstances be relevant, if the plaintiff was only prepared to settle for an unreasonable amount which neither defendant would pay.
However, if the defendant proposed to be protected as to costs both on the issue of liability and damages, he would no doubt in his offer specify an amount to be offered to the plaintiff.
But nonetheless the rule would operate to assist in cutting down costs if the issue as to liability between defendants and between the plaintiff and the defendants could be eliminated. Where there are several defendants the permutations of course may vary a great deal." (My emphasis.)
Complications which were deemed pertinent in Henderson were similar to those in the present case. Murphy J noted, at 870:
"In the first place there were three defendants. The negligence of each defendant to the plaintiff was always an issue, and causation also remained a live issue apropos any breach of duty owed by any one of the defendants to the plaintiff. The plaintiff's case was unusually lengthy and was designed to establish each element of the tort of negligence against each one of the defendants. They in turn endeavoured to blame one another, although it is perhaps truer to say that Esso and the SEC each attempted to escape liability whilst saying that liability if any should fall on the employer Simon Carves. The latter attempted to shelve responsibility and to blame the other two defendants.
I have no doubt but that the length of the trial and thus the very high costs incurred were incurred to an overwhelming extent on the issue of the liability of the defendants to the plaintiff, rather than on the issue as to the proportionate responsibility of the defendants (if any)."
Murphy J held that r. 26 should be interpreted according to the spirit of the rule rather than by treating its words as a code.
In Henderson's case Murphy J concluded that the offer of contribution of 35% would have had no impact in reducing costs even if accepted as to that percentage of liability. There would still have been a necessity for all three parties to be represented by counsel and the case would not have resolved by virtue of that offer; it may however, have been a step on the way. In the present case it seems to me that the parties were very close to settlement as at 20 April 2001. The contrast may be seen with what occurred in Henderson by reference to a passage of the judgment of Murphy J at 872:
"It is implicit in the notice that in so far as the issue of liability was concerned, had the defendants Esso and Simon Carves each realistically assessed its own percentage liability to contribute to the plaintiff's damages, the matter might have proceeded with one counsel representing all defendants. It is speculative whether or not the chances of settlement with the plaintiff would have been enhanced. Perhaps it may be said that as a matter of practical reality it would have been a step only on the way to settlement."
The purpose of the Rule, in my view, is to encourage genuine attempts to resolve an action. In Mutual Community Ltd v Lorden Holdings Pty Ltd[11] Byrne J held:
"The policy of the Court is to encourage litigating parties to undertake genuine settlement negotiations and, for the purpose, to face up to serious offers of settlement. It is for this reason that the power to refer the parties to mediation, recently conferred on the Court in 1990 by Supreme Court Act 1986, Section 25(1)(ea), is now widely exercised under O. 50, particularly in the Building Cases List. The same philosophy underlies the very flexible offer of compromise procedure now found in O. 26 and the realistic approach of the Court to informal offers of compromise in determining orders for costs."
[11](Unreported) Byrne J, 28 April 1993 at p. 12 (tab 4).
The fact that the offer of compromise was unlikely to be accepted by one or more of the other defendants, or that the defendant making the offer, knowing full well that it would not be accepted, was simply trying to set up position for a later costs argument, does not necessarily deprive the offer of effect. In Lend Lease Retail Projects Pty Ltd v Construction Engineering (Aust) Pty Ltd[12] Callaway JA held:
"[13]Let it be assumed in favour of the respondents that, by reason of the position adopted by one or other or both of them, there was no prospect of their agreeing on the three points in the appellant's offer. To my mind, that was no concern of the appellant's. It was contended below and before us that the offer was made in the knowledge that the respondents would not accept it, but that was their problem, not the appellant's. Each respondent could have protected itself by an offer to the other."
[12][2000] VSCA 114 (Phillips, Charles and Callaway JJA)
In Lend Lease Retailing one of three defendants made an offer to contribute 51% towards the judgment or settlement sum and costs, on condition of an admission of liability and proceedings continuing thereafter with one counsel only. That defendant was held to be only 40% liable. The fact that it was improbable that the offer would have been accepted, given the gulf in opinions between the defendants, was held not to be of importance.
In that case no offer was made to the plaintiff, so the offer of contribution of 51% was not itself an attempt to compromise the plaintiff’s action but to reduce the length and costs of the trial. The Court held that the defendant who made the offer should have had the benefit of the offer because he did better than the offer he made, thus demonstrating that his assessment was reasonable, and had his offer been accepted the case would have been reduced in length and cost. In the present case had the offers only been by way of asserting the percentage liability of the defendant making the offer, it could not have shortened the case unless the other defendants had all agreed on proportions which combined to total the sum being proposed to offer the plaintiff.
In my view, the primary purpose of the rule is directed to encouraging unreasonable defendants to see reason, by accepting what turns out later to have been a sensible offer, thereby avoiding the incurring of unnecessary costs by the defendant making the offer. It is a rule which is not directed to rewarding the defendant whose counsel proves to have been closest in estimating the probable outcome of the case, but is directed to encouraging an unreasonable litigant to contribute to settlement of a case where his unreasonableness has caused other defendants to unnecessarily incur costs. In my view, if the offers in this case were to be regarded as genuinely seeking to achieve settlement then they had to address the fact that it was unlikely that the first and sixth defendants would make any contribution to a settlement offer. Furthermore, they had to be made in circumstances where acceptance of the offer had reasonable prospects of settling the case.
In my view, those elements did not apply to the earlier offers. In the first place, that was so because apart from the last offers of the second and third defendants the offers had all expired, having, in many instances, been left open for such a short time as to strongly suggest that they were nothing more than preserving positions lest other defendants later gain an advantage by virtue of their own offers. These earlier offers do not seem to me to have been realistic attempts to produce a settlement, the proposals not being sufficiently comprehensive to achieve resolution.
If in offering a percentage a defendant was doing no more than identifying his best estimate of the outcome of the case, (in effect, placing his bet for later “bragging rights” about the perspicacity of counsel) and the “offer” had no bearing on the costs and length of the case, then it does not seem to me that the statements in Lend Lease have direct relevance. That was a case where the percentage liability which was asserted was coupled with a costs saving if agreed to, because it provided the two other defendants with the ability to resolve the question of liability both to the plaintiff and as between themselves. In the present case many of the offers, as I have said, were little more than “bragging rights” predictions. Only the second defendant’s second and final offer, and, to a lesser extent, the third defendant’s final offer, amounted to proposals which went further.
Only the second defendant’s second offer constituted what Callaway JA described as being a “comprehensive” offer to the other defendants. That offer not only stipulated the second defendant’s percentage liability (which estimate proved to be greater than was determined by me) but also proposed a sum of money to be offered to the plaintiff. The offer challenged the other defendants to reach agreement as to the balance of the sum to be offered, by reaching agreement as to their respective liability and by having regard to the fact that they would have no contribution from the first and sixth defendants.
The terms of the offer made on 20 April 2001 by the second defendant did, therefore, constitute a serious attempt to settle the case and to place the obligation squarely on all defendants to carefully consider their position. In my view, there then being only the offer of the third defendant still on the table it was only that defendant that could be said to have responded positively. The terms of the second defendants’ offer were as follows:
“4.Our client has instructed us that it will contribute the sum of $550,000 inclusive of costs to an offer made to the plaintiff of $3.5 million inclusive of costs. Our client’s offer is conditional upon the following:
(a)That the third defendant also contribute $550,000 to the settlement;
(b)that the fourth defendant also contribute $550,000 to the settlement;
(c)That the eighth defendant also contribute $550,000 to the settlement
(d)That the ninth defendant also contribute $550,000 to the settlement;
(e)That the seventh defendant also contribute $750,000 to the settlement;
(f)That each of the contributing defendants acknowledge that in funding the settlement they in part are funding the liability of the first and sixth defendants, such defendant being insured by HIH Insurance Ltd or a related insurer now placed in provisional liquidation.
(g)That if the proposed offer is made to the plaintiff and accepted that all contribution proceedings between the contributing defendants would be resolved.
(h)That the contributing defendants would be at liberty to pursue any liability on the part of the first or sixth defendant as joint tortfeasors to contribute.
The offer is made by our client to afford it protection on the question of costs. Our client will rely on the above proposal on two grounds, namely
(a)If the plaintiff is awarded an amount which equates to an amount of less than $3.5 million inclusive of costs; and/or
(b)If the plaintiff is awarded an amount greater than $3.5 million inclusive of costs and the second defendant is found to be liable for an amount equating to less than $550,000.”
The offer made by the third defendant on 17 April of 15.1% of $3 Million and of costs, which remained open, would have been very close to the proposed contribution sought from that defendant by the second defendant’s offer. The third defendant’s offer although not addressing the situation of the first and sixth defendants was also comprehensive in its scope, and addressed fully the considerations which militated in favour of settlement of the case.
Mr Curtain QC submitted on behalf of the eighth and ninth defendants that the offers of the second and third defendants were incapable of acceptance because they left unresolved the position of the first and sixth defendants, against whom the plaintiff would have wanted judgment entered, and as against whom the offer by the second defendant contemplated that the other defendants would continue to seek contribution. There also remained a question whether any offer by the seventh defendant would be valuable since it was insured by HIH. He submitted that no costs savings would have resulted had the offers been accepted, as the offers did not contemplate an admission of liability. I accept that the seventh defendant’s own offer was too vague and uncertain to itself justify a costs penalty under r. 26, but for purposes of assessing whether the second defendant’s offer of compromise should have been accepted the uncertainties of the seventh defendant’s position did not render the offer of compromise by the second defendant any less effective as against the eighth and ninth defendants.
I do not consider that the objections advanced by Mr Curtain as to the effectiveness of the second defendant’s offer have weight. In my view, having regard to the fact that the plaintiff had expressed willingness to settle in a sum which was very close to the “ballpark” figure which all defendants had obviously accepted as the reasonable outcome which the plaintiff might expect (and which, before a discount for contributory negligence that I made, was very close to the sum which I later awarded the plaintiff), it is clear that the case might have been settled at this point. The fact that contribution had not been made by the first and sixth defendants was unlikely to have prevented the plaintiff settling the case as against all of the other defendants, and the case would not have proceeded on liability, at all, certainly not in a way that would have required any participation by the defendants. The uncertainty of the seventh defendant’s financial position would also not have prevented resolution of the case.
The moment had arrived for the defendants to make their most reasonable assessments of the likely contribution which would be awarded against their clients and the likely sums for damages and costs to the plaintiff which their clients would have to bear, in contrast to the certain costs which would continue to be borne by the defendants. In fact, the case continued for a further 19 days.
The eighth and ninth defendants continued to maintain their position that their joint liability was in the order of 20%, whereas I held that their joint liability was 50%. The other defendants got the estimates right.
In my view, all of the defendants, other than the third defendant should be regarded as having failed to adequately respond to the offer of 20 April 2001 made by the second defendant. It may be that the position of the eighth and ninth defendants as to their percentage responsibility was the primary factor holding up a combined offer of settlement being made, but the others, as at that time, had not signalled their acceptance, either. Such a difference in position of defendants was recognised by Callaway JA in Lend Lease:
"[14]There is less difference than at first appears between an offer made by one defendant to the other in a proceeding where there are only two defendants and an offer made by one defendant to all the others in a proceeding where there are three or more defendants. There is still an offer by A to B. The difference is that B consists of a group. If significant costs would have been saved by acceptance of the offer, it is by no means a conclusive answer to say that the other defendants could not agree among themselves. The intransigence of a particular defendant may mean that the burden of costs falls more heavily on that defendant, as between the other defendants, but in a case such as the present they should be jointly liable to compensate the defendant who made the offer.
[15]I hasten to say that the foregoing is not a rule. There are too many possible factors in a case with three or more defendants and, in any event, the discretion should not be fettered. It is simply an indication of the way in which the discretion is likely to be exercised in most cases where one defendant makes a comprehensive offer to the others. The offers made in Henderson's Case were far from comprehensive. There may be cases where the group or one or more of its members have legitimate reasons for refusing such an offer that would not have been available to a single defendant, but they will not ordinarily include inability to agree among themselves."
In this case the second and third defendants do not seek to have a costs sanction imposed on any defendant other than the eighth and ninth defendants. Indeed, many of the other defendants seek to impose their own costs penalty on those defendants. Having chosen only to seek orders against the eighth and nine defendants, I do not consider it would be appropriate in those circumstances that the eighth and ninth defendants bear all of the penalty for the second and third defendants’ offers not being accepted.
Rule 26.10 is expressly directed to the situation of co-defendants. The complexities of the application of the principles of Rule 26 are potentially much greater in the case of offers as between defendants, than in the case of offers as between plaintiff and defendants. In the present case, even more so than in the case of Henderson, such complications were apparent.
Counsel for the eighth defendant submitted that the offer could not have led to the conclusion of the case, but, in my view, there was the important new factor, namely, that the plaintiff had offered to accept $3m plus costs by an offer he made on 10 April 2001. It is true that the offer of 20 April by the second defendant was towards a $3.5M “all in” figure, but the costs would have been substantially lower at that time than the costs now estimated, and would have been capable of estimation.
There are no fixed rules as to how the discretion on costs might be exercised in such complex situations. In Grbavac v Hart[13] Tadgell JA held:
"That case was towards the van of a series of decisions during the last 20 to 30 years which, in one way or another, have recognised that offers to compromise not directly authorised by Rules of Court, if reasonably made but unreasonably ignored, may properly influence the exercise of judicial discretion as to costs. (Authorities cited). I find it difficult to discern in these decisions a specific principle of general application, save that a successful party may appropriately be deprived of full costs, and indeed may properly be ordered to pay costs, if in the circumstances it seems just so to order."
[13][1997] 1 VR 154 at 160 (Winneke P, Tadgell and Hayne JJA) per Tadgell, JA referring to Calderbank v Calderbank.
In my view, the wrestler defendants should be liable as from 20 April 2001 to pay 70% of the party/party costs of the second and third defendants in the trial to the date of judgment. The second and third defendants are obliged to contribute to the plaintiff’s costs in the percentages which I found to represent their responsibility for the plaintiff’s injuries loss and damage. Their offers of compromise should be rewarded not by an order that the wrestler defendants assume all of their liability towards the plaintiff’s costs after 20 April, but by an additional percentage. As to the sum which the second and third defendants will be liable to pay to the plaintiff for costs incurred after 20 April to date of judgment, they should be indemnified as to 70% of that sum by the wrestler defendants.
Counsel for the second and third defendants sought costs on a solicitor client basis. Both Rule 26 and Rule 63.28 enable an order to be made for costs on a solicitor client basis, but the power on costs is unfettered: see s.24 Supreme Court Act 1986. Whilst recognising that the effectiveness of Rule 26 should be facilitated I do not consider it appropriate in the unusual circumstances of this case that indemnity costs should be awarded. In my view, this was a case where the penalties for getting it wrong, were unlikely to be any less comprehended by virtue of knowledge that the defendants were risking solicitor client costs rather than just party/party costs if their refusal to compromise was unreasonable.
The second offer made by the seventh defendant was no longer open when the open offer of the second defendant was made, and it also had the deficiency that it was vague and uncertain. In a written submission made to me by the seventh defendant reliance was placed on the first offer, made 21 March 2001 (and expiring 23 March), rather than on the second offer, made on 18 April and expiring 20 April 2001. In neither case was it clear how the offer was to be funded, nor did the offer reflect a comprehensive attempt to resolve the case, rather than merely a fairly transparent attempt to avoid being in any worse position than other defendants in the event that a costs argument such as this was advanced. For reasons earlier discussed I consider the offers of the seventh defendant to have lacked the degree of clarity and to have been too uncertain to support an order for costs under r. 26.
Although the offer of the third defendant was dated 17 April 2001, it is appropriate that its costs benefit derive from the time of the offer of the second defendant, since it was at that time that a fully comprehensive proposal for settlement was advanced which addressed the position of the first and sixth defendants. The third defendant’s offer remained open and was, in effect, embraced by the second defendant’s offer.
As to the costs of this application, it was an omission on my part that left unresolved the question of the defendants’ costs thrown away by the joinder of the tenth defendant. That application took little time and I consider that all parties should bear their own costs with respect to that issue. As to the costs arising on the application as to Rule 26 and the Calderbank offers I order that the eighth and ninth defendants pay the costs of the second and third defendants on a party/party basis and that all other parties bear their own costs.
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