Walker Corporation Pty Ltd v Liu (No 2)
[2014] NSWSC 539
•07 May 2014
Supreme Court
New South Wales
Medium Neutral Citation: Walker Corporation Pty Ltd v Liu (No 2) [2014] NSWSC 539 Hearing dates: On written submissions Decision date: 07 May 2014 Before: McCallum J Decision: Application for plaintiff to pay defendant's costs on an indemnity basis refused.
Catchwords: COSTS - Calderbank offer - whether unreasonable of plaintiff not to accept - whether costs should be assessed on an indemnity basis Cases Cited: Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
Leichhardt Municipal Council v Green [2004] NSWCA 341
Walker Corporation Pty Ltd v Liu [2013] NSWSC 1480Category: Costs Parties: Walker Corporation Pty Ltd (plaintiff)
Xiuyun Liu (defendant)Representation: Counsel:
AJJ Renshaw (plaintiff)
G Carolan (defendant)
Solicitors:
Sparke Helmore (plaintiff)
MCK Lawyers (defendant)
File Number(s): 2012/140909 Publication restriction: None
Judgment
HER HONOUR: The plaintiff appealed from a decision of the Local Court sitting in its General Division. The appeal was dismissed and the plaintiff was ordered to pay the defendant's costs: Walker Corporation Pty Ltd v Liu [2013] NSWSC 1480. The only remaining matter to be determined in the proceedings is an application by the defendant for an order that those costs be assessed on an indemnity basis.
The proceedings in the Local Court arose out of a car accident. The plaintiff claimed $14,222.49 for repairs. The defendant admitted causing the accident and did not deny doing so negligently but denied the particulars of damage claimed by the plaintiff.
The Magistrate was not satisfied that the repairs were attributable to damage caused in the collision. His Honour determined that there should be a verdict for the plaintiff in a nominal amount. Judgment was entered for the plaintiff in the sum of $200. On the strength of an offer of compromise that had been made by the defendant before the hearing in the Local Court, his Honour ordered that the plaintiff pay the defendant's costs as agreed or assessed on the ordinary basis up until 30 March 2012 and thereafter on an indemnity basis.
The appeal was commenced on 3 May 2012. At 2.28pm on 11 October 2012, the day before the appeal was heard, the defendant offered to pay the sum of "$5,000 inclusive of costs and interest in full and final settlement of these proceedings". The offer was expressed to have been made in accordance with the principles stated in Calderbank v Calderbank and was open for acceptance until 5.30pm that day. By that time all of the evidence had been served and each party had provided a written outline of submissions.
The plaintiff's solicitor responded immediately (his email is also recorded as having been sent at 2.28pm on 11 October 2012) seeking clarification as to whether the defendant was offering to pay $5,000 and also to waive the costs order made against the plaintiff in the Local Court. A response sent at 3.37pm stated that the offer was only in relation to the appeal. What was proposed was that, if the offer were accepted, the appeal would be dismissed and the judgment entered in the Local Court would remain on foot.
The failure to accept a Calderbank offer does not give rise to a prima facie entitlement to costs on an indemnity basis. The onus lies upon the party seeking a special order to persuade the Court that, in all the circumstances, his opponent's failure to accept the offer was "unreasonable" under the general law: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [44] to [46] per Santow JA, Bryson and Stein JJA agreeing; approved in Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [20] and [26].
The defendant submits that the refusal to accept the offer was unreasonable in the present case because, at the time the offer was made, the plaintiff knew or ought to have known that the appeal had poor prospects of success. I do not accept that submission. As I think is revealed by the content of the principal judgment, the appeal raised issues of substance. The fact that the plaintiff was not successful does not mandate the conclusion that its prospects of success were always poor.
I have also had regard to the circumstances in which the offer was made. It was communicated on the afternoon before the hearing, by which time all of the preparation for the hearing ought to have been well and truly complete. It was initially expressed in terms the import of which was not clear, having regard to the outcome of the proceedings at first instance. After the offer was clarified, it remained open for acceptance for less than two hours. As was the case in Evans, the claim in the present case was relatively small and the offer was made at a point when the parties had reached the stage of being completely prepared to argue the appeal. Most if not all of the legal costs associated with the appeal had probably already been incurred by that point.
In all the circumstances, I am not persuaded that the plaintiff's failure to accept the offer was unreasonable so as to warrant a special costs order. The order that the plaintiff pay the defendant's costs as agreed or assessed on the ordinary basis is confirmed.
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Decision last updated: 07 May 2014
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