Walsh v KC & WL Brain Pty Ltd (No. 8)

[2024] NSWDC 338

District Court

New South Wales

Medium Neutral Citation:

Walsh v KC & WL Brain Pty Ltd (No. 8) [2024] NSWDC 338

Hearing dates:

27 – 29 May 2024

Date of orders:

29 May 2024

Decision date:

29 May 2024

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

I order the plaintiff/cross-defendant to pay the defendant’s/cross-claimant’s costs on the ordinary basis until 20 October 2023 and thereafter on an indemnity basis.

Catchwords:

COSTS – Whether Defendant (Cross-Claimant) entitled to indemnity costs and, if so, from when.

Legislation Cited:

Uniform Civil Procedure Rules 2005.

Cases Cited:

Calderbank v Calderbank (1976) Fam 93; (1975) 3 WLR 586; (1975) 3 All ER 333

Commonwealth of Australia v Gretton [2008] NSWCA 117

Thomas William Vale v Timothy David Eggins (No 2) [2007] NSWCA 12

Texts Cited:

Nil.

Category:

Costs

Parties:

Plaintiff – Alan David Walsh
Defendant – KC & WL Brain Pty Ltd

Representation:

Counsel:
Plaintiff – Mr Gunning, M.
Defendant – Mr O’Connor, J.

Solicitors:
Plaintiff – Rural Law
Defendant – Walsh & Blair Solicitors

File Number(s):

2020/00107856

Publication restriction:

Nil.

Judgment

Costs

1. HIS HONOUR: The remaining issue concerns costs. This is the 30th year in which I have observed, from the Bench, that nothing excites the zeal, the ardour and the passion of members of the legal profession more than an argument about costs.

2. These proceedings were commenced on 9 April 2020. Prior thereto, there was correspondence between the parties upon which the defendant relies seeking indemnity costs. Rural Law, of which the principal is Mr Peter Long, wrote to both the defendant and Mr and Mrs Brain personally on 20 December 2019, a four-page letter. It has been tendered and marked Exhibit V. It sets out in embryonic form many of the claims made by the plaintiff in these proceedings. It relies upon the contract for the sale of Dalree and an allegation that the Dalree rice crop, being fructus industriales, remained the property of the plaintiff, contrary to the finding that I made in my principal judgment, and maintains that the proposed joint venture was actually made, and makes a claim for a “grand total” of $2,123,188.52.

3. However, the letter also contains an offer that the plaintiff would accept $606,600 inclusive of costs as a full and final settlement of all of his claims against them. That offer was said to be made in accordance with the principles arising in Calderbank v Calderbank (1976) Fam 93; (1975) 3 WLR 586; (1975) 3 All ER 333.

4. That letter was answered by one sent by Walsh & Blair to Mr Long on 17 February 2020. That letter became Exhibit 19, and like Mr Long’s letter of 20 December 2019, it was marked without prejudice save as to costs. That largely set out the position taken by the defendant/cross‑claimant and set out in the first four and a half pages the defendant’s position about the dispute between the defendant and the plaintiff.

5. There was then a specific response to matters contained in Mr Long’s letter of 20 December 2019. On page 6, it is pointed out that the plaintiff’s offer did not take into account the amounts which the defendant alleged were owed by the plaintiff to the defendant. It points out that those amounts had previously been included in correspondence sent by Mr Walsh’s representatives Peppin Planners and Mr Glowrey, the plaintiff’s personal solicitor who has not acted for the plaintiff in these proceedings. The end of the nine-page letter contains a counteroffer, it is this:

“40. The Brains are prepared to resolve this matter on a commercial basis on the following terms to be contained in a Deed of Release executed by both parties:-

(a) The parties release each other from all claims arising from, relating to, or in connection with:

i. The purchase of “Dalree”;

ii. The input costs for the crops on “Dalree”;

iii. The input costs for the crops on “Hawkers”;

iv. Work performed by each party on “Dalree”;

v. Work performed by each party on “Hawkers”;

vi. The alleged joint venture.

(b) Each party will bear their own costs, liabilities, expenses and fees associated with the Deed of Release and the matters it relates to.

41. The above offer represents a compromise of the Brains [sic] position, in that they will not pursue Walsh for payment of their costs and losses, notwithstanding that they consider these amounts exceed any amounts owing to Walsh. In addition, the Brains are foregoing their right to pursue interest. This offer is made in good faith in an attempt at resolution of the matter. However, if the offer is not accepted, we confirm that the Brains will pursue all claims.

42. We confirm this offer is made in accordance with the principles of Calderbank v Calderbank [1976] Fam 93 and is open to be accepted until 4:00pm on Friday, 28 February 2020 at which time it will lapse.”

6. As I said earlier, the proceedings were commenced on 9 April 2020. The originating process claims this principal relief:

“Damages for the value of the chattels as assessed and damages for their detention and/or conversion.”

7. The pleading contains 12 numbered paragraphs. The final paragraph merely reiterates the relief claimed earlier in the Statement of Claim. Paragraphs 3 and 4 refer to the contract for the sale of Dalree by the plaintiff to the defendant. The pleading then continues thus:

“5. At the time of entering into the Dalree contract, there was a rice crop growing on the property (‘the Dalree rice crop’).

6. The plaintiff did not agree to transfer the Dalree rice crop to the defendant.

7. On 22 March 2017 the property together with the improvements and inclusions set out in the schedule of improvements and inclusions to the Dalree contract were transferred to the defendant.

8. In or about April and May 2017, the Dalree rice crop was harvested.

9. The defendant subsequently sold the grain harvested from the Dalree rice crop and has wrongfully detained the sale proceeds from the Dalree rice crop.”

8. The tenth paragraph of the pleading refers to demands made by the plaintiff “from about June 2017” for the defendant to pay to him the sale proceeds of the Dalree rice crop. The eleventh paragraph of the statement of claim merely quantifies the loss based upon the plaintiff's estimate as to what the rice harvested from Dalree in 2017 would have returned to the plaintiff, plus interest thereon at 7.12% on overdraft applied to the plaintiff’s business bank account. In other words, the original pleading only sought the return of the proceeds of the sale of the Dalree rice crop.

9. There was then, what I referred to in my principal judgment as, a duel of affidavits. The plaintiff swore an affidavit on 31 August 2020. It became Exhibit A. Both Mr Brain and Mrs Brain swore affidavits on 23 October 2020 which became Exhibit 1 and Exhibit 2. The plaintiff swore a further affidavit on 17 November 2020 which became Exhibit B. Each of Mr Brain and Mrs Brain then swore affidavits on 22 February 2021 which became Exhibits 3 and 4. The next development was the filing of an Amended Statement of Claim dated 20 August 2021.

10. The first eleven paragraphs of that heading are much the same, except that there were changes in the quantum of the moneys claimed for the value of the Dalree rice crop. Paragraph 12 reiterating the relief claimed at the commencement of the Statement of Claim was withdrawn and the relief claimed in paragraph 1 of the relief claim was changed to this:

“Damages for the value of the Dalree rice crop (as defined herein) and damages for its detention and/or conversion.”

11. There was a new paragraph 2 and there was a claim also for interest, but a further claim for interest on costs as well as the usual claim for costs. Added to the pleading were paragraphs 13 to 29 which bore a heading “Further or alternative claim for restitution or unjust enrichment”, that contained in essence the plaintiff’s “quantum meruit claim”, as it was constantly described in shorthand form by counsel.

12. When the matter came before me at Wagga Wagga on 1 March 2022, I was handed up a copy of the Amended Statement of Claim which had further amendments on it. The copy which was given to me still bore the seal of the Court placed on the Amended Statement of Claim and the date of the filing of the Amended Statement of Claim. I struck those out and re-sealed the document and added to it. That that was filed in Court on 1 March 2022.

13. The amendments made to that document were merely to give further particulars of input costs for the Dalree rice crop and further particulars of harvesting and cartage costs, as well as other particulars going to the quantum of the plaintiff’s quantum meruit case. It can be seen therefore that there was a substantial change in the pleading brought about by the filing of the Amended Statement of Claim on 20 August 2021. That initiated a further duel of affidavits.

14. The plaintiff swore a further affidavit on 20 October 2021 which became Exhibit C. Both Mr Brain and Mrs Brain swore further affidavits on 20 December 2021 which became Exhibits 5 and 6. That was answered by an affidavit sworn by the plaintiff on 16 February 2022 which became Exhibit J. The defendants then swore further affidavits, Mr Brain on 3 March 2022 and Mrs Brain on 25 February 2022, which became Exhibits 8 and 9. Finally, there was a further affidavit of the plaintiff sworn on 28 February 2022 which became Exhibit K. That was the day before the hearing commenced at Wagga Wagga on 1 March 2022.

15. There were some further affidavits introduced from Mrs Brain going to an issue concerning water which I referred to in my principal judgment as the “water issue” commencing at [84] of my principal judgment. In [86] I said this:

“The attack on the Plaintiff’s credit was wholly unsuccessful and ought not to have occurred. The issue was raised late. If it had been raised earlier, the Plaintiff may have been able to have the evidence from Mr Moore and from himself that was eventually led, and the matter would not have taken Court time. The Defendant must pay the costs thrown away by raising this issue.”

16. In due course, I will make an order to embody that decision.

17. In addition to the offer contained in the letter of Walsh & Blair of 7 February 2020, which is Exhibit 19, the defendant relies on an offer of compromise which became Exhibit 20. The offer of compromise bears date 29 June 2021 and is in these terms:

“The defendant/cross-claimant offers to compromise the whole of these proceedings on the following terms:

1. In relation to the claim, judgment for the defendant with no order as to costs;

2. In relation to the cross-claim, judgment for the cross-defendant with no order as to costs.”

18. The offer of compromise was open for acceptance until 4pm on 28 July 2021. The offer also contains a note that should the offer fail to comply with the Uniform Civil Procedure Rules 2005 that the offer would be relied upon as being a Calderbank offer. One will note that that offer made on 29 June 2021 was open until 28 July 2021, but given all that happened in the interim it clearly was not accepted. It appears, however, to have engendered the Amended Statement of Claim which was filed on 20 August 2021.

19. The final evidence relied upon by the defendant is a Calderbank offer made by Walsh & Blair by letter dated 20 October 2023. That letter is Exhibit 21. It is to be recalled that in [4] of my principal judgment, being available at [2023] NSWDC 38, I set out the curial history of the matter and pointed out that I was invited by counsel on 18 August 2021 to reserve my decision on the major issue in the case, as suggested by counsel. My reserved judgment was delivered on 3 March 2023.

20. The Calderbank offer was clearly long after my initial decision. The offer is contained in the third numbered paragraph of the letter which is Exhibit 21. It is this:

“In relation to the Plaintiff’s Further or Alternative Claim, and the defendant’s cross-claim:

(a) The defendants will pay to the plaintiff a sum of $150,000 in full and final settlement;

(b) The said sum of $150,000 is payable within 14 days of acceptance of this offer;

(c) The parties agree to bear their own costs.”

21. That offer was open for acceptance until 10am on Wednesday, 25 October 2023. It was open therefore for five days. However, as the letter points out, the matter was listed to recommence before me on 30 October 2023. It did so, and I made rulings on what was referred to as the plaintiff’s quantum meruit claims during that period. Those rulings can be found at [2023] NSWDC 624. Although the offer was only open for a short while, it would have been received almost immediately because it was sent by email to Mr Long at Rural Law. I assume the letter was sent by email, because Walsh & Blair’s letter of 7 February 2020 was sent to Mr Long by email, so it would have been received probably on 20 October 2023.

22. Clearly the result of the plaintiff’s accepting the defendant’s offer would have meant that he would be much better off now that he actually is since I directed the entry of judgment against him for the sum of $174,789.31. I look upon all the offers as being Calderbank offers, because in my view Exhibit 20 the formal offer of compromise, does not appear to me to comply with UCPR 20.26.

23. Mr Gunning, for the defendant, referred me to Thomas William Vale v Timothy David Eggins (No 2) [2007] NSWCA 12. The principal judgment in that case was delivered by Beazley JA (as her Excellency then was) with whom McColl JA agreed. Bryson JA was in dissent. The plaintiff in that case was the appellant in the Court of Appeal. The plaintiff’s claim was an action for damages for personal injury resulting from a motor vehicle accident. In the principal judgment, the judgment commences thus:

“1. The Court gave judgment in this matter on 11 December 2006, in which it allowed the appellant’s appeal and ordered a verdict and judgment in favour of the appellant. Damages had been agreed between the parties, so that the judgment sum ordered in favour of the appellant, after taking into account the Court’s assessment of contributory negligence at 75 per cent was $925,000 together with interest calculated from the date of trial.”

24. At [3] her then Honour said this:

“The respondent served two separate offers of compromise upon the appellant on 18 February 2005, in accordance with Pt 19A of the District Court Rules 1973 (NSW) (the DCR). The first offer was to compromise the issue of liability on terms that the appellant was to be held 70 per cent responsible for the accident and the respondent 30 per cent responsible (the liability offer).

4. The second offer of compromise was one in which the respondent would consent to judgment for the appellant for $1,080,000 plus costs, subject to there being statutory and other deductions. The payment of interest was also provided for (the damages offer).”

25. At [8] her Honour recorded that the appellant submitted that at the time that the offers of compromise were made, the respondent had served only one medical report, that of Associate Professor Richard Jones dated 21 January 2004, despite the fact that the respondent had in its possession expert reports from a consultant occupational therapist, from Dr Robert Pryor a vocational psychologist, there being two reports from him, and a report from Dr Spira a consultant neurologist. Those reports were served on the appellant after, and in some cases shortly after, the offer of compromise was made. Her Honour also pointed out that the respondent subsequently served additional expert medical evidence that it had obtained but did not renew the offers of compromise which had expired.

26. At [9] her Honour recorded that the appellant relied upon the fact that at the time of the offer of compromise, the appellant had not served any reports relating to liability. Her Honour then continued thus:

“However, on 9 August 2005, just over a month prior to trial, the respondent served an expert report which dealt with the capacity of the respondent to react in time to avoid an accident after he saw the appellant stumbling on the road. The respondent’s expert concluded that it was impossible for the respondent to react in time to avoid hitting the appellant. It was on the basis of this evidence that the respondent contended that he was not negligent. The appellant submits that this evidence had a profound effect on the conduct of the trial. This submission should be accepted. The trial judge placed considerable emphasis upon the expert evidence called at the trial.”

27. Her Honour went on to say this:

“11 The appellant contends, therefore, that he should not now be subjected to a costs order when the case significantly changed after the date of the offers: see South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [84]-[85]. That case involved an offer of compromise made by a plaintiff to a defendant pursuant to Pt 22 of the Supreme Court Rules 1970 (NSW) (the SCR). The consequence of a failure to accept an offer of compromise under Pt 22 was governed by Pt 52A r 22 of the SCR. Its terms were different from Pt 39A r 25 of the DCR in that Pt 22 did not specify that exceptional circumstances or the interests of justice require the making of some other order. However, r 22 has been interpreted as attracting the same principle: see Fowdh v Fowdh (Court of Appeal, 4 November 1993, unreported).

12 The appellant also contends that the result on appeal is not sufficiently different from the offers of compromise as to deprive him of his costs: see Connor v Hatgis (No 2) (Court of Appeal, 7 December 1995, unreported); BC 9501810. This submission can be approached by looking at each offer. First, on the ‘liability offer’ the difference between the offer and the result is 5 per cent. On the damages offer the difference between the offer and the result was $155,000 or 14.4 per cent. On the liability offer, the difference is not large and although it is debatable whether it could be considered to be marginal, the difference in the result on the damages offer could not be so considered. I would not, therefore, accede to this submission.

13 That leaves for consideration whether the case significantly changed so as to warrant some other order. In South Eastern Sydney Area Health Service v King, Hunt AJA, Mason P and McColl JA agreeing, stated at [85]:

“… However, the fact that the plaintiff’s case had changed significantly between the date of the plaintiff’s offer and the trial in which the judgment obtained is higher than the amount of the offer does provide a sufficient basis for an order denying the plaintiff’s entitlement to indemnity costs: Maitland Hospital v Fisher [No 2] (at 725). The very nature of the situation itself demonstrates that it would be unfair to a defendant to make an order for indemnity costs when the evidence at the trial is different from that known to the defendant at the time of the offer. Whether or not this is an “exceptional” situation does not matter.”

…..

15 In relation to liability the respondent’s case changed significantly just prior to trial. This Court, by majority, determined liability essentially on the basis of the case as originally conceived by the appellant, namely, that having seen him at a distance of some 90 metres, the respondent had ample time to react so as to avoid the accident. On that determination, the expert evidence essentially became irrelevant. The introduction of the expert evidence just prior to trial was such as to require the appellant to meet a quite different case at trial than that which was under consideration at the time that the offer was made and, in my opinion, constitutes exceptional circumstances within the meaning of Pt 39A r 25(6) of the DCR.

16 However, that does not necessarily mean that the Court ought to deny the respondent its costs. The test under r 25(6) is that the costs are governed by the terms of the rule unless the Court, in exceptional circumstances and for the avoidance of substantial injustice, orders otherwise. In my opinion, given the exceptional circumstance that I have found, a different order ought to be made so as to avoid substantial injustice. The question is what that different order ought to be. The existence of the alternate damages offer is relevant to that determination. But in any event, whatever final order as to costs is made after a consideration of the alternate offer, the respondent should not have his costs in relation to the liability expert evidence.”

28. Her Honour then turned to the damages offer. Her Honour went on to say this:

“18 The appellant contends, first, that as medical and other expert evidence on damages was served after the offers of compromise were made, it was not possible for the appellant to assess the merits of the respondent’s offer when it did not have any significant evidence contrary to that which had already been obtained and served in his case. In this regard, it was submitted that the appellant, having regard to the strength of his own medical evidence, was entitled to take the view that his damages would be more than that offered by the respondent. In those circumstances, it was submitted that it would be unfair to penalise the appellant for rejecting an offer which appeared to be significantly at odds with his own case on damages. It was submitted that there was at that stage no good reason to doubt the strength of his own assessment of damages.

19 The appellant further relies, by way of analogy, upon the provisions of Pt 19A r 2 of the DCR. That rule provided that a plaintiff is unable to take advantage of the provisions of Pt 19A and make an offer of compromise unless he has supplied the defendant with such particulars of his claim and copies of documents that are available to him and which were necessary to enable the defendant to fully consider any offer of compromise. The appellant accepts that there is no similar rule governing offers made by defendants, but submits that in principle, the same rule should apply. Thus, in circumstances where the defendant has not provided all relevant documents in his possession to enable a plaintiff to properly assess the merits of any offer, it was submitted that the offer should not be used to trigger an entitlement to costs for the unsuccessful defendant.

20 The appellant further relies upon the fact that the trial judge had also determined the case favourably to the respondent by a wrong application of s 50 of the Civil Liability Act 2002 (NSW). On the appeal, the Court held that her Honour erred in the application of that provision.

21 Finally, it was submitted that the offer of damages was uncertain, because it made reference to statutory or ex gratia deductions, as well as for the amount of any fee paid or payable as a result of the appellant failing to attend medical appointments. I do not consider that this last submission carries much weight. The appellant would know what medical appointments he failed to attend and the amount involved would, it seems to me, be likely to be very small – and at least not accounting for the difference between the award made by the Court and the offer of settlement. The offer also quantified the amount of the deduction, in a way that appears to be sufficiently certain.

22 However, the other matters raised by the appellant do warrant further consideration. In my opinion, there is merit in these points. As I have already indicated, the respondent, at the time that he made the offer of compromise, had not served all the medical reports which he already had in his possession. In those circumstances, when the respondent already had material in his possession which he did not serve, and which was relevant to an assessment of the offer made, he ought not to be entitled to the favourable costs provisions under the Rules. It is not an answer, as submitted by the respondent, that the appellant could have himself made an offer of compromise once all the evidence was in his possession.”

29. It is in particular on paragraph 22 of that judgment that Mr Gunning relies. He also relied on Commonwealth of Australia v Gretton [2008] NSWCA 117, where Mason P did not perceive any significant difference between the reasons of Beazley JA (as her Excellency then was) and Hodgson JA and he therefore agreed with both. Mr Gunning relied upon what fell from her Honour in paragraph 11.

30. The facts of the case are quite interesting. They are contained at the commencement of the judgment of Beazley JA:

“2  BEAZLEY JA: The respondent, Cecil Eric Gretton (Mr Gretton), was serving as an engineering mechanic, first class, aboard HMAS Melbourne when it collided with HMAS Voyager on 10 February 1964, in Sydney Harbour. On 9 October 2001, Mr Gretton commenced proceedings against the Commonwealth, claiming damages for injuries he alleged he sustained in the collision. The principal injury that he claimed he suffered was a Post Traumatic Stress Disorder (PTSD) or possibly some other psychiatric injury. It is sufficient for the purposes of this judgment to refer to Mr Gretton’s claimed PTSD.

3 The proceedings were commenced some 37 years after the collision and more than 30 years after the expiration of the limitation period.

4 By order made on 27 April 2005, after a two day hearing, McDougall J extended the limitation period in which the proceedings could be commenced to 9 October 2001: Gretton v The Commonwealth [2005] NSWSC 437 (the extension application). Thereafter, the Commonwealth admitted liability and the matter proceeded to a hearing before a jury on the question of damages. At trial, the question whether Mr Gretton had suffered a psychiatric condition (Post Traumatic Stress disorder (PTSD)) was in issue, as was the extent of any ongoing disability arising from PTSD, if Mr Gretton established that he suffered from such condition.

5 The matter was first listed for hearing on 16 October 2006 but was “not reached” on that day. It was then listed for a three-week-plus hearing to commence on 20 November 2006. The matter commenced on that date and concluded on 13 December 2006, when the jury returned its verdict, awarding Mr Gretton damages in the sum of $50,000. With interest added, the award of damages was $77,600.

6 The Commonwealth applied to the trial judge for an order that Mr Gretton pay its costs on an indemnity basis or, alternatively, on the ordinary basis, from 1 June 2006, being the date upon which it had made an offer of settlement to Mr Gretton. The offer was in the form of a Calderbank offer and included an offer to settle the claim in the sum of $150,000, plus the costs of the trial. Mr Gretton opposed the Commonwealth’s application for costs and sought an order in his favour on the basis that costs should follow the event: Pt 42, r 42.1 of the Uniform Civil Procedure Rules 2005 (the UCPR).

7 The trial judge, Studdert J, refused the Commonwealth’s application and ordered that it pay Mr Gretton’s costs of trial. The order specifically excluded the Commonwealth’s costs of the extension application, that McDougall J had previously ordered Mr Gretton to pay.

8 The Commonwealth now seeks leave to appeal from Studdert J’s costs order that it pay Mr Gretton’s costs of the trial. The application for leave to appeal and the appeal have been heard concurrently.”

31. At [9] her Honour set out the Commonwealth’s Calderbank offer in which the defendant offered to make a payment to the plaintiff of $150,000 less any statutory refunds, and the defendant offered to pay the plaintiff’s party/party costs, save for any cost orders that had previously been made in favour of the defendant. That clearly included the costs of the application to extend the limitation period before McDougall J. Her Honour went on to say this:

“11 At the time that the Commonwealth made its Calderbank offer, it had in its possession medical reports from Dr Roldan, consultant psychologist, dated 2 December 2005 and Dr David Alcorn, consultant psychiatrist, dated 30 January 2006. These reports were served on Mr Gretton’s solicitors on 6 June 2006. Those reports also supported Mr Gretton’s claim that he was suffering from PTSD, but again with the qualification that the diagnosis was dependent upon the accuracy of his history.

12 On 10 October 2006, a pre-hearing settlement conference took place between the parties, at which time the Commonwealth reinstated its Calderbank offer. Mr Gretton’s solicitor asked whether the “offer [was] clear of costs of the extension of time proceeding”. Upon receiving a negative reply, Mr Gretton’s solicitor responded, “Well, that’s not an offer of settlement at all”. The relevance of these discussions, which took place on a “without prejudice” basis: cf s 131 of the Evidence Act 1995, will be dealt with later in these reasons. Mr Gretton’s solicitor then responded with an offer of $550,000 plus costs.

13 At the time that the Commonwealth made its Calderbank offer, 1 June 2006, it had not advised Mr Gretton’s solicitors of the quantum of the costs it was claiming, pursuant to the costs order made by McDougall J. The Court was informed that, recently, the Commonwealth has made a claim for those costs in the sum of approximately $120,000.”

32. Again, in this case Mr Gunning relied upon [11] of that judgment which I have cited.

33. The offer made by Mr Long prior to the commencement of proceedings, the offer contained in Exhibit V, was clearly very wide of the mark. Equally, the offer made by Walsh & Blair on 7 February 2020 could be seen as being extremely sensible. However, it is to be noted that Mr Long’s initial offer contained in Exhibit V also indicated that the action that might commence would be against Mr and Mrs Brain personally. When the action was commenced, it was only against KC & WL Brain Pty Limited, not against Mr and Mrs Brain individually. It also did not contain the plaintiff’s quantum meruit case.

34. Furthermore, there was no detailed itemisation of the plaintiff's “quantum meruit claim”, nor was there any evidence to support the monetary allegations made. Indeed, one might be forgiven for thinking that all the relevant evidence only became available essentially very shortly before the hearing commenced. For example, Exhibit C bears the date of 20 October 2021, Exhibits 5 and 6 each bear the date of 20 December 2021, Exhibit J was sworn on 16 February 2022, and Exhibits 8 and 9 were sworn by Mr Brain on 3 March 2022, on the third day of hearing. Mrs Brain’s affidavit Exhibit 9 was sworn on 25 February 2022 in the week before the hearing commenced. As I pointed out already, Exhibit K was sworn by the plaintiff on 28 February 2022, the day before the hearing commenced.

35. There was a lot of material to consider, but there was a lot of material made after the plaintiff filed the Amended Statement of Claim, that was well after Exhibit 20 the formal offer of compromise which I can only take to be a Calderbank offer. However, at the time of the defendant’s offer of 20 October 2023 everyone knew what the case was about. I had delivered my primary judgment on 3 March 2023, and all the relevant evidence was available, each could consider it, and I made certain findings as to credibility in my primary judgment which should have alerted the parties to the way in which the case was heading.

36. I accept that it would have been reasonable and indeed prudent for the plaintiff to have accepted the offer of compromise contained in Exhibit 21, the letter from Walsh & Blair of 20 October 2023. I cannot accede to the submission made to me by Mr Gunning that each party should pay his or its own costs. The net result of the proceedings is a judgment in favour of the defendant/cross-claimant for a substantial sum of money.

37. It can be expressly stated that the plaintiff lost the case. He lost the case which he initially commenced that was the subject of my principal judgment. In the duel between the plaintiff’s quantum meruit case and what was referred to repeatedly as the defendant's quantum meruit case, the extent of the defendant's quantum meruit case was much larger than the plaintiff's quantum meruit case. It would, in my view, be completely unjust not to apply the ordinary principle that costs follow the event.

38. For those reasons, I order the plaintiff/cross-defendant to pay the defendant’s/cross-claimant’s costs on the ordinary basis until 20 October 2023 and thereafter on an indemnity basis.

39. Those orders are subject to an order that the defendant pay costs to the plaintiff of what I described as “the water issue” between [84] and [88] of my principal judgment [2023] NSW DC 38 for the reasons I gave at [86].

40. Any other orders sought?

41. O’CONNOR: No, thank you.

42. GUNNING: No, your Honour.

**********

Decision last updated: 12 August 2024